Supply chain models for an assembly system with preprocessing of raw materials

An assembly line that procures raw materials from outside suppliers and processes the materials into finished products is considered in this research. An ordering policy is proposed for raw materials to meet the requirement of a production facility, which, in turn, must deliver finish products in a fixed quantity at a fixed time interval to the outside buyers. Two different types of raw materials, ‘unfinished’ and ‘ready-to-use’, are procured for the manufacturing system. The ‘unfinished raw materials’ are turned into ‘processed raw materials’ after preprocessing. In the assembly line, the ‘processed raw materials’ and the ‘ready raw materials’ are assembled to convert into the final products. A cost model is developed to aggregate the total costs of raw materials, Work-in-process, and finished goods inventory. Based on the product design and manufacturing requirement a relationship is established between the raw materials and the finished products at different stages of production. A non-linear integer-programming model is developed to determine the optimal ordering policies for procurement of raw materials, and shipment of assembly product, which ultimately minimize the total costs of the model. Numerical examples are presented to demonstrate the solution technique. Sensitivity analysis is performed to show the effects of the parameters on the total cost model. Future research direction is suggested for further improvement of the existing results

EOQ in a Just in Time (JIT) World: An Empirical Analysis of the Impact of EOQ Variables on Operating Profit: The Case of Nigerian Bottling Company Plc

With today’s uncertain economy, companies are searching for alternative methods to keep ahead of their competitors by effectively driving sales and by cost reduction. Big manufacturing companies – as well as other companies, do not stand a chance in today’s environment if they do not have an appropriate inventory control model intact. The Economic Order Quantity (EOQ) and Just in Time (JIT) have been used for many years, but yet some companies have not taken advantage of it. An Economic order quantity could assist in deciding what would be the best optimal order quantity at the company’s lowest price. Similarly JIT focuses on providing customers with stocks at the right time and with the right quantity thereby reducing in process inventory and carrying costs and maximizing profits at the same time (Gonzalez and Gonzalez, 2010). All these in place in any organization are known as its inventory management system which invariable needs to be as efficient as possible in other to reduce costs and translate in profit maximization. In recent times there has been a clarion call to abandon EOQ model in place of JIT.  Perhaps this is because of the perceived benefits of JIT which includes:  time reduction as well as improved flow of goods from warehouse to shelves which in turn leads to regular replenishment of stock amongst others.  However, one might be tempted to ask: is this call for abandonment justifiable? Using JIT does it actually reduce costs as well as lead to profit maximization in the organization?. This study looks at the relevance of EOQ Variables – Cost of goods purchased and overheads in impacting on the profitability of the firm. In doing this,  the relationship of increase in cost of goods purchased against Operating profit  as well as increase in Overhead against Operating profit  of  manufacturing  companies in Nigeria were compared. Using Nigerian Bottling Company (NBC) Plc as a case study, Twenty – Nine (29) Years financial statements (1980-2009) were analyzed and the relationships between these variables were compared using regression analysis.  It was found out that there is a relationship amongst these variables in NBC PLC.  This paper thereafter, suggests that rather than abandon EOQ for JIT, they should complement each other for effective inventory management and ultimately lead to profit maximization. Keywords: Economic Order Quantity (EOQ), EOQ Variables, Just In Time (JIT), Nigerian Bottling Company Plc and Regression Analysis

Development of a novel lot sizing model with variable lead time in supply chain environment

Supply chain management (SCM) addresses the management of materials and information across the entire chain from suppliers to producers, distributors, retailers, and customer. The theory of supply chain management suggests that lead time reduction is a pioneer to the use of market mediation to reduce transaction uncertainty in the chain, which can be conceptualized as the primary goal of supply chain management. In the past few decades, scholars gave ample attention about the impact of inventory on SCM. This paper relates to the development of a lot sizing model for a single component multiple delivery system with variable demand and lead time of a multinational transformer company. Two models and the modification were developed on the basis of the following assumptions. For first model distribution of demand is normal, distribution of procurement lead time is exponential and the quantity is coming in a single lot. For second model distribution of demand is normal distribution of ‘procurement’ and ‘administrative delay’ lead time is exponential and the quantity is coming in a single lot. Modification of the first model has been done by taking the effect of multiple deliveries in the models and correcting the Re-order point as obtained from the previous models. The results were observed by the second model and analysis has been done for different parametric conditions. The effect of multiple deliveries is also taken into account. The optimum re-order point and economic ordering quantity with various different inputs have been discussed

Método de implantação de sistema de abastecimento enxuto para a montagem de eletrodomésticos: um estudo de caso

Dissertação (mestrado) - Universidade Federal de Santa Catarina, Centro Tecnológico, Programa de Pós-Graduação em Engenharia Mecânica, Florianópolis, 2014A implantação de um sistema de abastecimento enxuto apresentará várias vantagens para a empresa, proporcionando um arranjo físico eficiente, porque ele facilita na comunicação das pessoas nas operações, ajuda na movimentação das pessoas e dos materiais, utiliza de forma eficiente o espaço físico, a fim de gerar maior agilidade e eficiência em todo o processo. A presente dissertação teve como objetivo desenvolver um método de projeto e implantação de sistema de abastecimento enxuto para a montagem de bens de consumo duráveis. O método apresentará um sequenciamento formalizado para implementação. Sua estrutura básica foi adaptada da proposta de Harris, R. (2004) para o processo de montagem de eletrodomésticos por fluxo com arranjos de linhas e/ou células apoiadas por supermercado central de peças fabricadas e compradas. Este método de abastecimento enxuto prevê como mecanismo para alimentar eficientemente as células o desenvolvimento de um sistema de abastecimento baseado em rotas de entregas precisas que movimentem todos os materiais na planta. Além disso, pressupõe um sistema puxado por meio de sinais visíveis como o Kanban e o contêiner vazio, fundamental para integrar o novo sistema de movimentação de materiais ao sistema de gerenciamento de informações. Esta iniciativa prevista na sistemática assegura que somente peças consumidas pelas linhas de montagem sejam reabastecidas. O estudo de caso mostra como na Empresa em estudo o método foi implantado até chegar a seu estágio atual na substituição das embalagens pelas embalagens do tipo KLT padronizadas, mudança no projeto de Supermercado, estoque no bordo das células, rota de abastecimento, solução de movimentação de materiais, definição dos sistemas de puxada e planejamento para implantação do nivelamento na montagem, que será possível quando o Supermercado estiver funcionando em sua totalidade.Abstract: Implementing a lean supply system will have several advantages for the company, providing an efficient physical arrangement, because it facilitates the communication of people in operations, helps in the movement of people and materials efficiently utilizes the physical space in order to generate greater agility and efficiency throughout the process. This work aimed to develop a method of design and implementation of lean supply system for the assembly of consumer durables. The sequencing present a formalized method for implementation. Its basic structure was adapted from the proposed Harris, R. (2004) for the assembly process by streaming appliances with layouts of rows and/or cells supported by central supermarket manufactured and purchased parts. This method provides for supply of lean as a mechanism to efficiently feed the cells develop a supply system based on precise delivery routes that handle all materials in the plant. It also means a pull through visible signs such as Kanban, essential to integrate the new system of materials handling the information management system. This provided the systematic initiative ensures that only consumed by assembly lines parts are replenished. The case study shows how the Company in the study method was implemented to reach its current stage in replacement packaging for packaging of standard type KLT design change Supermarket, stock board in the cells, the supply route, handling solution materials, definition of pull and planning for implementation of the leveling assembly that will be possible when the supermarket is operating systems in their entirety

Supply chain models for an assembly system with preprocessing of raw materials: A simple and better algorithm

Recently, Rahman and Sarker [1] formulated a nonlinear cost function to include the costs of inventories, ordering, shipping and deliveries for a manufacturing system where raw materials enter into the assembly line from two different channels. In order to find the best integer solutions to the variables, they proposed an algorithm that uses the branch and bound concept. The authors claim that their algorithm finds an optimal solution. In this paper, we present a simple and better heuristic algorithm that provides better solutions with a lower number of evaluations than Rahman and Sarker's algorithm. © 2013 Elsevier Inc