Multi-product cost and value stream modelling in support of business process analysis

To remain competitive, most Manufacturing Enterprises (MEs) need cost effective and responsive business processes with capability to realise multiple value streams specified by changes in customer needs. To achieve this, there is the need to provide reusable computational representations of organisational structures, processes, information, resources and related cost and value flows especially in enterprises realizing multiple products. Current best process mapping techniques do not suitably capture attributes of MEs and their systems and thus dynamics associated with multi-product flows which impact on cost and value generation cannot be effectively modelled and used as basis for decision making. Therefore, this study has developed an integrated multiproduct dynamic cost and value stream modelling technique with the embedded capability of capturing aspects of dynamics associated with multiple product realization in MEs. The integrated multiproduct dynamic cost and value stream modelling technique rests on well experimented technologies in the domains of process mapping, enterprise modelling, system dynamics and discrete event simulation modelling. The applicability of the modelling technique was tested in four case study scenarios. The results generated out of the application of the modelling technique in solving key problems in case study companies, showed that the derived technique offers better solutions in designing, analysing, estimating cost and values and improving processes required for the realization of multiple products in MEs, when compared with current lean based value stream mapping techniques. Also the developed technique provides new modelling constructs which best describe process entities, variables and business indicators in support of enterprise systems design and business process (re) engineering. In addition to these benefits, an enriched approach for translating qualitative causal loop models into quantitative simulation models for parametric analysis of the impact of dynamic entities on processes has been introduced. Further work related to this research will include the extension of the technique to capture relevant strategic and tactical processes for in-depth analysis and improvements. Also further research related to the application of the dynamic producer unit concept in the design of MEs will be required

Methods and algorithms for integrated multi-scale optimisation of production planning and scheduling

Imperial Users onl

Batch sizing strategy and production load leveling in a multi-step chemical manufacturing process

Thesis (M.B.A.)--Massachusetts Institute of Technology, Sloan School of Management; and, (S.M.)--Massachusetts Institute of Technology, Dept. of Chemical Engineering; in conjunction with the Leaders for Manufacturing Program at MIT, 2005.Includes bibliographical references (p. 111).In the last couple of years Eastman Kodak Company went through major changes in its strategic direction. The same disruptive technologies that they helped develop for digital imaging have shaped a new industry, and the market requirements and preferences for photography have changed dramatically. Some of the tightly held complementary assets that gave Kodak a competitive advantage are no longer as critical as were in the past. Kodak management has set a very strong emphasis on running a lean operation. At the same time, executive management has set very aggressive targets for inventory reduction and productivity increase in the manufacturing units. Demand for chemicals used in film and paper for silver halide-based photography has steadily decreased in the last decade. There is growing pressure to increase inventory turns in production processes that are not as profitable as they were ten to twenty years ago. Management is faced with the need to implement aggressive tactics that minimize inventories and lower costs. Continuous batch size reduction is one of the lean manufacturing principles that manufacturers of discrete parts have successfully used to drive operational improvements and that Kodak is pursuing as well. This thesis takes a closer look at the differences between discrete and batch chemical manufacturers. It describes the considerations and real challenges in analyzing batch sizing decisions for chemical plants that have been operating for several years. In general, for Kodak's chemical manufacturing processes, large batches are needed to reduce total manufacturing costs.(cont.) These cases serve as an example for Kodak's management and lays out the steps that have to be taken to support the decision-making process. A tool to support batch sizing strategies that are aligned with inventory objectives is presented. The need for continuous revision of batch sizing policies in the face of declining demand in some products and increased growth in others is emphasized. Finally, the thesis touches upon the application of production load leveling and its potential benefit in a chemical plant. This concept that has been implemented in several forms within lean factories should be taken very seriously at the chemical plants of Eastman Kodak Company. The example of the work done for one high-volume chemical will support the conclusions on production load leveling.by Carlos Mazariegos.S.M.M.B.A

Paints supply chain optimisation

Imperial Users onl

Production Scheduling

Generally speaking, scheduling is the procedure of mapping a set of tasks or jobs (studied objects) to a set of target resources efficiently. More specifically, as a part of a larger planning and scheduling process, production scheduling is essential for the proper functioning of a manufacturing enterprise. This book presents ten chapters divided into five sections. Section 1 discusses rescheduling strategies, policies, and methods for production scheduling. Section 2 presents two chapters about flow shop scheduling. Section 3 describes heuristic and metaheuristic methods for treating the scheduling problem in an efficient manner. In addition, two test cases are presented in Section 4. The first uses simulation, while the second shows a real implementation of a production scheduling system. Finally, Section 5 presents some modeling strategies for building production scheduling systems. This book will be of interest to those working in the decision-making branches of production, in various operational research areas, as well as computational methods design. People from a diverse background ranging from academia and research to those working in industry, can take advantage of this volume

Conceptual design and simulated operation of economies of scope and scale manufacturing enterprises

Much of industry is seeking scope economies, but this requires more complex and flexible product realisation. Modelling technologies have potential to support the life cycle engineering of both Economies of Scope and Scale (EoSS) manufacturing systems. However when companies operate in dynamic environments it is not sufficient to model manufacturing systems in isolation. Rather a holistic modelling methodology is needed which can create structural and behavioural models of dependencies between the manufacturing systems, and the business and engineering environments in which they operate; so that a suitable balance between economies of scope and scale can be achieved. This thesis describes the conception and development of a step wised Extended Modelling Methodology (EMM) which facilitates reasoning, and related decision making, about EoSS manufacturing systems. The EMM was conceived from exploratory research in two SMEs, following which it was applied and case tested in a large manufacturing company. Little academic attention to date has been paid to theorising about the link between ‘Economies of Scope and Scale (EoSS) phenomenon' and ‘manufacturing systems design'. Hence many questions about EoSS manufacturing remain unanswered, such as: (1) academic communities need to know what EoSS actually means and how state-of-the-art modelling can support qualitative and quantitative analysis of EoSS system phenomenon; and (2) industry needs to know how they can benefit from EoSS, what attended costs they might incur, and what best balance between scope and scale economies can be achieved. With these general requirements in mind the thesis reports on the conception and industrial application of the EMM. This has: (A) developed new ideas about EoSS, which can be used to characterise EoSS phenomenon; (B) introduced a new way of visualising architectural aspects of EoSS at multiple-levels of abstraction; and (C) with reference to case studies has illustrated the use of multi-level modelling to enable predictions to be made about EoSS benefits and costs.EThOS - Electronic Theses Online ServiceGBUnited Kingdo

Design and Management of Manufacturing Systems

Although the design and management of manufacturing systems have been explored in the literature for many years now, they still remain topical problems in the current scientific research. The changing market trends, globalization, the constant pressure to reduce production costs, and technical and technological progress make it necessary to search for new manufacturing methods and ways of organizing them, and to modify manufacturing system design paradigms. This book presents current research in different areas connected with the design and management of manufacturing systems and covers such subject areas as: methods supporting the design of manufacturing systems, methods of improving maintenance processes in companies, the design and improvement of manufacturing processes, the control of production processes in modern manufacturing systems production methods and techniques used in modern manufacturing systems and environmental aspects of production and their impact on the design and management of manufacturing systems. The wide range of research findings reported in this book confirms that the design of manufacturing systems is a complex problem and that the achievement of goals set for modern manufacturing systems requires interdisciplinary knowledge and the simultaneous design of the product, process and system, as well as the knowledge of modern manufacturing and organizational methods and techniques

Optimal operation of a water distribution network by predictive control using MINLP.

Thesis (M.Sc.Eng.)-University of Natal, Durban, 2004.The objective of this research project is to develop new software tools capable of operational optimisation of existing, large-scale water distribution networks. Since pumping operations represent the main operating cost of any water supply scheme, the optimisation problem is equivalent to providing a new sequence for pumping operations that makes better use of the different electricity tariff structures available to the operators of distribution systems. The minimisation of pumping costs can be achieved by using an optimal schedule that will allow best use of gravitational flows, and restriction of pumping to low-cost power periods as far as possible. A secondary objective of the operational optimisation is to maintain the desired level of disinfectant chlorine at the point of delivery to consumers. There is a steady loss of chlorine with residence time in the system. If the level drops too low there is a risk of bacterial activity. Re-dosage points are sometimes provided in the network. Conversely, too high a level produces an unacceptable odour. The combinatation of dynamic elements (reservoir volumes and chlorine concentration responses) and discrete elements (pump stati and valve positions) makes this a challenging Model Predictive Control (MPC) and constrained optimisation problem, which was solved using MINLP (Mixed Integer Non-linear Programming). The MINLP algorithm was selected for its ability to handle a large number of integer choices (valves open or shut / pumps on or off in this particular case). A model is defined on the basis of a standard element, viz. a vessel containing a variable volume, capable of receiving multiple inputs and delivering just two outputs. The physical properties of an element can be defined in such a way as to allow representation of any item in the actual network: pipes (including junctions and splits), reservoirs, and of course, valves or pumps. The overall network is defined by the inter-linking of a number of standard elements. Once the network has been created within the model, the model predictive control algorithm minimises a penalty function on each time-step, over a defined time horizon from the present, with all variables also obeying defined constraints in this horizon. This constrained non-linear optimization requires an estimate of expected consumer demand profile, which is obtained from historical data stored by the SCADA system monitoring the network. Electricity cost patterns, valve positions, pump characteristics, and reservoir properties (volumes, emergency levels, setpoints) are some of the parameters required for the operational optimisation of the system

Design for Flexibility in the Forest Biorefinery Supply Chain

Le climat d’affaires de industrie papetière nord américaine et européenne change présentement. La baisse de la demande, la volatilité des prix, l’augmentation de la compétition pour l’accès aux matières premières et le contrôle du marché, ainsi que des couts énergétiques passablement élevés poussent les entreprises forestières à rechercher de nouveaux modèles d’affaires afin d’être plus compétitives sur le long terme. Une des alternatives pour ces entreprises est de se tourner vers le secteur émergent de la bioéconomie et du bioraffinage. Possédant déjà un système d’utilité, un réseau d’approvisionnement de matières premières, un réseau de distribution de produits ainsi qu’un savoir-faire technique ouvrant la porte à de nombreuses possibilités d’intégration massique et énergétique, l’industrie forestière possède plusieurs avantages compétitifs pouvant améliorer la performance économique de l’implantation du bioraffinage. Plusieurs stratégies différentes peuvent être adoptées pour implanter des activités de bioraffinage au sein d’une entreprise. Par contre, en raison des risques technologiques et des risques de marché associés aux nouveaux procédés et produits, et le manque en capital des entreprises forestières, l’implantation du bioraffinage devrait être effectuée par phase. Des outils d’analyse appropriés sont toutefois requis afin d’identifier les stratégies possibles et les phases d’implantation. Puisque la chaine logistique (SC) d’une entreprise est critique pour la compétitivité à long terme des bioraffineries, un outil d’analyse de la SC peut donc jouer un rôle clé pour une transformation d’entreprise réussie. Une analyse de la SC calcule le bénéfice pour l’ensemble de la chaine logistique et prend en compte les différents contributeurs de couts qui sont typiquement ignorés dans les analyses économiques, tel que les couts d’inventaire, de transition, etc. Elle peut aussi être utilisée pour prendre en considération la volatilité du marché, et détermine comment la flexibilité inhérente d’un système de production peut être exploitée pour atténuer les risques et maximiser le profit. À cet effet, une analyse de la SC peut aussi être utilisée pour cibler le niveau de flexibilité souhaité d’un système afin d’atténuer les risques de volatilité du marché. De plus, cette analyse offre une meilleure compréhension des couts et de la rentabilité d’une stratégie d’implantation donnée. Ainsi, une analyse de la SC peut être utilisée à deux fins différentes : v • Pour la prise de décision au niveau de conception, et plus précisément, pour cibler le niveau de flexibilité d’un procédé de fabrication, • Pour comparer différentes stratégies pouvant être poursuivies par une entreprise, en évaluant leur performance selon différentes conditions de marché. L’objectif de cette recherche est d’illustrer une telle méthodologie de conception, soit une méthodologie qui cible un niveau de flexibilité manufacturière préférable à avoir, qui aide à concevoir le réseau de la SC, et qui permet d’évaluer différentes stratégies de bioraffinage pour transformer une entreprise forestière. Cette méthodologie est démontrée en utilisant une étude de cas qui inclut deux options de produits/procédé, dont des procédés thermochimiques et biochimiques, et plusieurs stratégies d’implantation à implanter au fil du temps. Le point d’ancrage de cette méthodologie est basé sur les principes de gestion de la chaine logistique centrée sur les marges. Plutôt que d’appliquer une approche traditionnelle centrée sur la production, où la gestion de la capacité des équipements et la minimisation des couts de production prime, une approche centrée sur les marges vise plutôt à maximiser le profit. Pour ce faire, tous les couts encourus au long de la SC doivent être considérés de façon intégrée. De même, le potentiel de flexibilité au sein de la SC, particulièrement au niveau de la production, doit être exploité pour maximiser le profit. Une formulation mathématique d’optimisation est développée pour représenter une telle mentalité. Selon cette dernière, une méthodologie de conception est proposée afin d’aider le processus de prise de décision stratégique reliée au design de la chaine logistique du bioraffinage. Cette méthodologie est alimentée par d’autres méthodologies qui identifient un ensemble d’options de procédés/produits prometteurs. Elle comprend quatre étapes principales : 1. La définition des alternatives de procédés représentant différents potentiels de flexibilité, 2. La définition d’options de réseau de SC, en tenant compte des caractéristiques des alternatives de procédés, de même que les politiques, les forces et les faiblesses de l’entreprise étudiant ces alternatives procédés/produits, 3. Le ciblage d’un degré de flexibilité manufacturière et d’un réseau de SC associé, 4. L’analyse de stratégies d’implantation des alternatives procédés/produits retenues vi Un ensemble d’indicateurs de performance représentant la rentabilité de la SC, la robustesse et la flexibilité des différentes options de bioraffinage est utilisé pour évaluer la performance de stratégies de bioraffinage selon différents scénarios de marchés. Les résultats montrent que lorsque la flexibilité d’un système est améliorée, le profit augmente. Cependant, cela ne mène pas nécessairement à une amélioration de la rentabilité. Pour que la rentabilité d’un système flexible augmente, les investissements supplémentaires déboursés pour augmenter le degré de flexibilité doivent être compensés par une amélioration au niveau des profits. Ainsi, pour certains cas, la rentabilité augmente avec la flexibilité du procédé, et dans certains cas non. De plus, la robustesse d’une option est directement liée à sa flexibilité. Plus le degré de flexibilité augmente, plus le système devient robuste envers la volatilité du marché. De même, les résultats montrent l’importance de l’analyse de la SC lors de la prise de décision reliée à la conception. Ils illustrent le fait qu’un changement dans le degré de flexibilité manufacturière d’un procédé affecte directement les opportunités de l’entreprise. Ainsi, des stratégies de marché et des degrés de flexibilité différents impliquent une configuration de réseau de SC et une stratégie de gestion spécifiques. Il devrait donc y avoir une intégration entre la conception de procédés et la conception du réseau de la SC. Il est aussi montré que les produits chimiques à valeur ajoutée sont prometteurs pour le succès futur du bioraffinage. Les options de procédés fabriquant ces derniers obtiennent une rentabilité en termes de taux de retour interne considérablement plus élevée que les options fabriquant des produits de commodités.---------- The pulp and paper industry business environment in North-America and Europe is changing. Declining and volatile product price and demand, increased competition for feedstock and market share, growing competition from global low-cost producers and considerably high energy cost are driving companies to seek alternative business models to be competitive over the longer term. One alternative is to enter the bio-energy and biorefinery sectors that have been emerging in recent years. Having the required utility systems in place and the engineering know-how, existing feedstock supply chain networks and product delivery systems as well as the potential for mass and/or energy integration between existing processes and new processes imply competitive advantages for the forestry companies to improve their economic performance via implementing biorefinery. Many different strategies can be pursued for implementing the biorefinery. Due to a lack of capital for implementing such strategies, technological risks and product market immaturities, the implementation should be executed in a phase-wise manner. Proper analysis tools are required to identify feasible strategies and their implementation phases. The design and management of supply chain (SC) is critical for the long-term competitive advantage of companies who would like to implement the biorefinery. In this regard, SC analysis can be used to evaluate the potential SC performance of different biorefinery strategies. It calculates the profit across the entire SC and accounts for cost contributors that are typically ignored in economic analyses, e.g. inventory cost, changeover cost, etc. It can also be used to take into consideration market volatility, and determine how the flexibility of the manufacturing system can be exploited to mitigate market risks in order to maximize profit. In this way, SC analysis can be used to target the desired level of flexibility of a manufacturing system needed to mitigate the impact of market price volatility. Moreover, these capabilities provide better insight into the costs and profit incurred by an implemented strategy. Thus, an SC analysis can be used for two different purposes: • For making design decisions, and more specifically, for targeting the level of flexibility of a system and designing the SC network configuration • For comparing several strategies by evaluating their performance for different market conditions viii The objective of this thesis is to develop a design methodology for targeting the required level of flexibility, designing the SC network configuration, and evaluating different FBR strategies for transforming a forest company. The methodology is demonstrated using a case study that involves two product/process options, including thermochemical and biochemical processes, with several implementation strategies, implemented over the years. The pivot of this methodology is the margins-based thinking used as an operating policy. It is discussed that, instead of applying the traditional manufacturing-centric approach in production which focuses on capacity management and tries to minimize the costs, the margins-based policy must be implemented, which has the following specifications: • It maximizes the profit instead of minimizing costs • It considers all costs incurred by SC activities in an integrated manner and doesn’t only focus on production cost • It exploits the potential for flexibility in the SC, especially in production, to maximize profit A SC optimization formulation is developed to represent such thinking. Using this formulation, a design methodology is proposed for making strategic decisions related to biorefinery SC design. This methodology is fed by separate methodologies which identify the most promising set of product to produce and technologies to employ. Given that, the methodology involves four major steps: • Defining process alternatives representing different potentials for flexibility • Defining SC network alternatives based on the defined process alternatives as well as the policies, advantages and restrictions of the company • Targeting the level of flexibility of processes and determining its associated SC network • Analyzing different implementation strategies for the proposed product/processes with their targeted level of flexibility and defined SC network A set of performance metrics that represents SC profitability, robustness and flexibility is used to evaluate the performance of biorefinery strategies for several market scenarios. The results show that when the flexibility of a system is enhanced, its profit increases. But this does not necessarily end in profitability improvement. For the profitability of a flexible system to ix improve, the extra capital cost paid for increasing the level of flexibility must be compensated by the profit improvement. Thus, for some cases profitability increases with flexibility and for some cases it does not. Moreover, robustness has a direct relationship with flexibility. As flexibility increases, the system becomes more robust against market volatility. The results reveal the importance of SC analysis in making design decisions. They illustrate that changes in the level of flexibility will directly affect the company’s opportunities and strategies in the market, and thus, each level of flexibility implies a specific SC network configuration and management strategy. Therefore, there must be integration between process design and SC network design. It is also shown that added-value chemicals are promising for the long-term success of biorefineries. Their profitability, in terms of internal rate of return (IRR), is considerably higher than that of commodities