Advanced Manufacturing and Sustainable Logistics - 8th International Heinz Nixdorf Symposium, IHNS 2010, Paderborn, Germany, April 21-22, 2010, Proceedings (Lecture Notes in Business Information Processing, Vol 46)

"A Concept for an Accurate and Closely Coordinated Production (p. 1-2)

Abstract. Shorter delivery times can be utilized best, if the ordered goods are already in stock. With an increasing product range companies can no longer manage to guarantee the immediate availability of each product variation, which would solve any kind of supply problems. The remaining stocks have to be placed with utmost effectiveness and the available factors of production need to be applied efficiently time and again. This article presents methods of resolution by means of selected practical examples.

Keywords: production planning, variant complexity, decomposition approach, online optimization.

1 Introduction

Shorter delivery times can be utilized best, if the ordered goods are already in stock. With an increasing product range companies can no longer manage to guarantee the immediate availability of each product variation, which would solve any kind of supply problems. The remaining stocks have to be placed with utmost effectiveness and the available factors of production need to be applied efficiently time and again. This article presents methods of resolution by means of selected practical examples.

2 Reducing the Diversity of Variants in Production Networks

Like many other sectors as well, consumer industry is facing the ever increasing requirements in product differentiation. International manufacturers are attempting to meet the customer demands of the target markets by specially adapted products and packaging. The growing complexity of assortment has a great impact on the underlying production and distribution system. With regard to the costs incurred, particularly the effects on production planning and inventory management have to be mentioned.

A higher number of materials on all production and distribution stages create additional setup and scrap costs within the production process as well as higher inventory stocks. The need for higher security stocks can be explained due to the fact, that sales forecasts are becoming more difficult with increasing diversity of variants and the greater level of demand uncertainty. Existing approaches for evaluating the cost effects may not reflect the fact, that a modification of the assortment at first affects the optimal configuration of the existing production and distribution processes.

By standardizing the products as well as by extending the assortment, parameters like lot-sizes, production cycles, stock points and stock levels have to be readjusted to ensure the optimal configuration of the underlying production and distribution network. Only if this configuration is known, the correct quantification of all costs caused by a certain assortment can be given."