Production planning for remanufactured products

This paper presents a methodology for production planning within facilities involved in the remanufacture of products. Remanufacturing refers to the process of accepting inoperable units, salvaging good and repairable components from those units, and then re-assembling good units to be re-issued into service. These types of facilities are common, yet many suffer from the unpredictability of good and repairable component yields, as well as processing time variation. These problems combine to make it extremely difficult to predict whether overall production output will be sufficient to meet demand. Low yields of key components can lead to shortages which require the facility to purchase new components for legacy systems, often with long lead times, thus causing overall delays. The approach developed here is a probabilistic form of standard material requirements planning (MRP), which considers variable yield rates of good, bad, and repairable components that are harvested from incoming units, and probabilistic processing times and yields at each stage of the remanufacturing process. The approach provides estimates of the expected number of remanufactured units to be completed in each future period. In addition, we propose a procedure for generating a component purchase schedule to avoid shortages in periods with a low probability of meeting demand. The proposed methodology is applied to an antenna remanufacturing process at the Naval Surface Warfare Center (NSWC). In this case study the proposed methodology identifies a potential shortage of a key component and suggests a corrective action to avoid significant delay in the delivery of remanufactured units.     

Application of an MRP matrix-based hierarchical planning model to a furniture company

This paper is concerned with the definition of a feasible master schedule for operations management, obtained through an integrated planning system, using a hierarchical methodology (by means of different disaggregation stages) with an appropriate time horizon for connection with the manufacturing requirements planning unit (MRP II). The hierarchical model obtained considers not only product aggregation into types, families and items but also resources aggregation, structure of products aggregation or bill-of-materials aggregation, as well as temporary aggregation. It allows the creation of a master schedule for an adequate time horizon, that can be used as an     

MRP in a job shop environment using a resource constrained project scheduling model

One of the most difficult tasks in a job shop manufacturing environment is to balance schedule and capacity in an ongoing basis. MRP systems are commonly used for scheduling, although their inability to deal with capacity constraints adequately is a severe drawback. In this study, we show that material requirements planning can be done more effectively in a job shop environment using a resource constrained project scheduling model. The proposed model augments MRP models by incorporating capacity constraints and using variable lead time lengths. The efficacy of this approach is tested on MRP systems by comparing the inventory carrying costs and resource allocation of the solutions obtained by the proposed model to those obtained by using a traditional MRP model. In general, it is concluded that the proposed model provides improved schedules with considerable reductions in inventory carrying costs.     

A SYSTEMS PERSPECTIVE ON MATERIAL REQUIREMENTS PLANNING*

For many companies, the implementation of material requirements planning systems has failed to produce the expected improvements in manufacturing efficiency. This paper shows that MRP failure can occur in the common situation in which MRP is installed in a manufacturing environment that has evolved around manual methods of material control. A system dynamics simulation model is used to interrelate decision functions (policies) of a manufacturing firm. Simulation runs of the model operating with manual methods of material control show six- to seven-year fluctuations in production, ordering, and labor. A modified version of the model, changed only by the introduction of a requirements explosion to represent MRP, shows that MRP can actually cause more severe production fluctuations, resulting in lower average labor productivity and higher manufacturing costs. The major practical implication of the analysis is that the organizational environment that suits MRP (and utilizes its inherent strengths) is different from the environment that is likely to prevail at the time of implementation.     

An Experimental Analysis of Capacity-Sensitive Setup Parameters for MRP Lot Sizing

Most material requirements planning (MRP) systems apply standard costing (absorption costing) approaches to define setup costs that are used as fixed (time invariant) setup parameters in single-level lot-sizing methods. This paper presents a computationally simple approach for estimating more appropriate setup parameters based on estimates of work-center shadow prices. These setup parameters then are used in traditional single-level MRP lot-sizing procedures. The shadow price of capacity at each work center is calculated as the increase in the overall inventory carrying cost for each additional hour of capacity lost to setups. The opportunity cost of a setup for an order subsequently is determined based on the routing information for each order and is used by traditional MRP lot-sizing procedures to calculate lot sizes. A simulation experiment compares the performance period order quantity lot sizing with capacity-sensitive setup parameters with the fixed accounting-based setup parameters. The simulation replicates the planning and control functions of a typical MRP system. The results of the experiment show that capacity-sensitive setup parameters can make significant reductions in both carrying cost and lateness and can achieve many of the benefits of optimized production technology in the context of an MRP system.     

Material planning with uncertain product quality†

Traditional material requirement planning (MRP) is a system procedure to determine input quantities and ordering times to meet a specified demand in a deterministic framework. A variety of modifications to MRP have been proposed to incorporate different forms of uncertainty in production systems. In this paper, wc consider the case where the uncertainty is due to quality variations in the production process, and we develop an approach which links material planning with quality variations and control.     

Shelf Life Extending Packaging,Inventory Control and Grocery Retailing

Retailers of perishable goods are often faced with the choice between more expensive packaging that can extend shelf life of their products and less expensive packaging that cannot. Different choices will lead to different sales, costs, and waste, and different choices require different inventory control policies. In this paper, we study the coordination of inventory and packaging decisions in a retailing environment. Items in an active package have a longer lifetime than those in a regular package and cost more. Customers always pick items with a longer lifetime first. When items with a longer lifetime are out of stock, a portion of customers are willing to buy less fresh items as substitutes. Our study shows the optimality of a “separation” policy when the substitution rate is high. In the separation policy, as the initial inventory level increases, the optimal policy changes from using active packaging only, then to using regular packaging only, and finally to ordering nothing. These results are very specific to the way perishable inventories are depleted in retailing. Our numerical study shows that although it may not be optimal in terms of cost, the adoption of active packaging can consistently achieve substantial waste reduction.     

Order Management in the Customization‐Responsiveness Squeeze*

Make‐to‐order (MTO) products may be either customized or standard, and customization can occur either at the configuration or component level. Consequently, MTO production processes can be divided into three customization gestalts: non‐customizers, custom assemblers, and custom producers. In this article, we examine how the multilevel nature of customization affects order management in processes that produce complex MTO products. We first empirically validate the existence of the three customization gestalts and subsequently, analyze the order management challenges and solutions in each gestalt in a sample of 163 MTO production processes embedded in seven different supply chains. In the analyses, we follow a mixed‐methods approach, combining a quantitative survey with qualitative interview data. The results show that important contingencies make different order management practices effective in different gestalts. Further qualitative inquiry reveals that some seemingly old‐fashioned practices, such as available‐to‐promise verifications, are effective but commonly neglected in many organizations. The results also challenge some of the conventional wisdom about custom assembly (and indirectly, mass customization). For example, the systematic configuration management methods—conventionally associated with project business environments—appear to be equally important in custom assembly.     

Computational complexity of algorithms for MRP and JIT production planning problems in enterprise resource planning systems

An enterprise resource planning system (ERP) is the information backbone of many manufacturing companies. At the core of ERP is a conventional material requirements planning (MRP) production planning system or a variation of MRP when just-in-time (JIT) principles are used in manufacturing. MRP and JIT both organize production planning into a hierarchy of long-, medium- and short-range problems. In all there are eight different problems. Some are common to MRP and JIT, others are specialized for a particular system. This paper analyses the computational requirements of these problems. This is important for ERP because it plans for large numbers of products (e.g. 50 000 products at 3M Company and 44 000 products at States Industries in Oregon) at large numbers of locations (e.g. 82 locations in 21 countries for Visteon Automotive Systems of Michigan and 19 locations at Boeing). We show that adequate algorithms exist for some problems, but better algorithms are needed for other problems if ERP is to provide useful production plans.     

Engineering changes for made-to-order products: How an MRP II system should handle them

Engineering or design changes are an integral part of any design and manufacturing chain of activities. In a made-to-order environment, standard design changes are outnumbered by those emerging during the design and manufacturing stages of individual contracts. This paper discusses the peculiarities of engineering changes in such an environment and proposes an integrated approach to monitoring, controlling and reporting of related activities, using a combination of MRP II modules, enhanced with manual forms, aimed at minimizing the painful impact of numerous design updates throughout the in-house product life cycle.     

Production planning in a MRP/JIT repetitive manufacturing environment

Some literature suggests that the best approach to production planning is a complete implementation of just-in-time. It has also been suggested that JIT replaces material requirements planning, and computerized procedures are an unnecessary complex burden on management especially in a highly repetitive environment. This article examines the JIT programme at the John Deere Engine factory. In 1985 the factory began a JIT programme with the belief that it would replace their MRP system. The results of the JIT programme are examined and management's conclusion that the best approach is a blend of JIT and MRP is explored.     

Optimal Policies for Selling New and Remanufactured Products

Because of environmental and economic reasons, an increasing number of original equipment manufacturers (OEMs) nowadays sell both new and remanufactured products. When both products are available, customers will buy the one that gives them a higher (and non‐negative) utility. Thus, if the firm does not price the products properly, then product cannibalization may arise and its revenue may be adversely impacted. In this paper, we study the pricing problem of a firm that sells both new and remanufactured products over a finite planning horizon. Customer demand processes for both new and remanufactured products are random and price‐sensitive, and product returns (also called cores) are random and remanufactured upon receipt. We characterize the optimal pricing and manufacturing policies that maximize the expected total discounted profit. If new products are made‐to‐order (MTO), we show that when the inventory level of remanufactured product increases, the optimal price of remanufactured product decreases while the price difference between new and remanufactured products increases; however, the optimal selling price of new product may increase or decrease. If new products are made to stock (MTS), then the optimal manufacturing policy is of a base‐stock policy with the base‐stock level decreasing in the remanufactured product inventory level. To understand the potential benefit in implementing an MTO system, we study the difference between the value functions of the MTO and MTS systems, and develop lower and upper bounds for it. Finally, we study several extensions of the base model and show that most of our results extend to those more general settings.     

Decoupling thinking in service operations: a case in healthcare delivery system design

The notion of decoupling thinking has been well established in the manufacturing operations and supply chain management literature. This paper explores how this decoupling thinking can be applied in service operations and in particular in health care. It first reviews the relevant literature on decoupling fundamentals, the front- and back-office distinction, and new emerging decoupling thinking in service operations. Subsequently, a flow-based framework including content and process is developed for decoupling thinking in service operations. The framework provides an integrated perspective on customer contact, flow driver and flow differentiation (level of customisation). The framework hence, through flow differentiation, introduces the concept of standardisation versus customisation in a service context. This is followed by a health care case example to illustrate how the framework can be applied. The managerial implications are primarily in terms of a modularised approach to system design and management. The framework offers potential for benchmarking with other service systems as well as with manufacturing systems based on the shared foundation in decoupling thinking. Finally, suggestions are provided for further research opportunities derived from this research.     

PCB assembly scheduling through kit concept

This paper presents the design and test of a new scheduling environment dedicated to the off-line scheduling of PCB assembly shops. The main idea introduced is the employment of the 'kit concept' as a scheduling tool, as opposed to the traditional batch scheduling. In the kit approach, the basic PCB aggregations are kits composed of different PCBs matching finished products requirements, instead of homogeneous batches of identical boards. By introducing the kit approach, PCB assembly schedule is intended to be focused more towards the assembly of final products than towards the internal PCB assembly shop constraints and requirements. A simulation model and data from a real assembly system are used to compare the kit approach with traditional batch processing. Experimental results show that the proposed kit approach jointly achieves remarkable improvements in the effectiveness and efficiency performances of the assembly system, as compared to the batch approach. However, it is determined also that these advantages can only be achieved if a sufficiently advanced scheduling system is used.     

Long range planning for information services

An integrated method for the long range planning of information services is presented. The problems associated with such planning are discussed along with requirements for such planning. The method consists of six stages beginning with understanding the current environment and ending with the criteria evaluations of projects. An intermediate level, strategic information services planning, is proposed to develop a project slate to be activated through an action plan. An approach to implementation is suggested. Two applications are discussed.     

时间价格敏感型需求下的供应链决策模式研究

在定制产品的市场竞争中,需求不仅对价格敏感,对时间也十分敏感.本文以一个两阶段的供应链系统为背景,研究了分散决策和集中决策两种模式下的MTO供应链决策问题.分别分析了两种模式下的决策过程,进行了优化求解.并结合一个汽车行业定制供应链实例进行了数值分析,证明了对于时间价格敏感型需求下的供应链决策问题,集中决策模式能够实现更大的供应链整体收益.这些研究工作为供应链企业在时间价格敏感型市场上竞争提供了有效的决策工具和方法.     

Reference model for implementing an MRP system in a highly diverse component and seasonal lean production environment

Companies are currently choosing to integrate logics and systems to achieve better solutions. These combinations also include companies striving to join the logic of material requirement planning (MRP) system with the systems of lean production. The purpose of this article was to design an MRP as part of the implementation of an enterprise resource planning (ERP) in a company that produces agricultural implements, which has used the lean production system since 1998. This proposal is based on the innovation theory, theory networks, lean production systems, ERP systems and the hybrid production systems, which use both components and MRP systems, as concepts of lean production systems. The analytical approach of innovation networks enables verification of the links and relationships among the companies and departments of the same corporation. The analysis begins with the MRP implementation project carried out in a Brazilian metallurgical company and follows through the operationalisation of the MRP project, until its production stabilisation. The main point is that the MRP system should help the company's operations with regard to its effective agility to respond in time to demand fluctuations, facilitating the creation process and controlling the branch offices in other countries that use components produced in the matrix, hence ensuring more accurate estimates of stockpiles. Consequently, it presents the enterprise knowledge development organisational modelling methodology in order to represent further models (goals, actors and resources, business rules, business process and concepts) that should be included in this MRP implementation process for the new configuration of the production system.     

基于DEA的两阶段系统中间产品公平设定研究

在由两个子决策单元串联组成的两阶段系统中,公平设定中间产品目标对确保和激励两阶段相互合作以达到整个系统的最佳性能至关重要.数据包络分析(DEA)作为系统绩效评估的一种非参数方法吸引了众多学者的注意;基于此方法,本文提出一个考虑公平关切的两阶段DEA模型用于设定两阶段系统中间产品目标,并证明据此模型获得的设定方案正是一个纳什讨价还价博弈的均衡解.     

经济批量排产问题的一种排产方法

针对经济批量排产问题假定生产可以在库存降为0之前开始,并且提出新的算法求产品的生产顺序。结果表明,该排产方法成本要低于其他2种常用的经济批量排产问题的方法,并且给出了算法的时间复杂性。