Towards integrated manufacturing planning with common tool and information sets

The role of hierarchical production planning in food manufacturing SMEs

Purpose

– In recent years there has been an increasing interest in make-to-stock and make-to-order combined strategies in food manufacturing operations. However, most scholarly work to-date has neglected the role of hierarchical production planning (HPP) in guiding small- and medium-sized enterprise (SME) implementation of such strategies. The purpose of this paper is to address food SME manufacturers’ readiness to adopt such strategies, in terms of internal integration and their capability to adopt formalised planning approaches.

Design/methodology/approach

– This study adopted an action research methodology to explore the potential impact of HPP in SME food manufacturers. Selected companies had identified product variety management as a challenge and also had recognised the need to enhance internal integration. Given this, the research team, from a theoretical perspective, proposed the use of HPP set within a broader decision-making conceptual framework to improve internal integration and planning.

Findings

– This paper adopts the fundamental position that HPP provides a useful framework in the establishment of strategic and tactical level constraints and priorities which then act as specific guides at the operational level, and presents empirical evidence in a food SME manufacturing context. In the cases the authors studies, the cascading effect of this decision-making framework focused attention on key metrics, encouraged greater internal integration and delivered tangible, significant improvements in performance. This was greatly facilitated by the provision of new key data on the cost of certain managerial trade-offs which these firms faced.

Originality/value

– SMEs are of a scale that requires a formalised planning approach; however production planning systems are typically designed for large scale enterprises. This paper addresses the need of SMEs in this regard. Well-established supply chain metrics were used to establish the benefits of both HPP and resulting improvement in internal integration and beyond, in terms of improvement in the quality of planning decisions.

Using systems dynamics to evaluate the tradeoff among supply chain aggregate production planning policies

Purpose

– The purpose of this paper is to explore different aggregate production planning (APP) strategies (inventory levelling, validation of the workforce and flexible production alternatives: overtime and/or outsourcing) by using a system dynamics model in a two-level, multi-product, multi-period manpower intensive supply chain (SC). Therefore, the appropriateness of using systems dynamics as a research method, by focusing on managerial applications, to analyse APP policies is proven. From the combination of systems dynamics and APP, recommendations and action strategies are considered for each scenario to understand how the system performs and to improve decision making on APP in the SC context.

Design/methodology/approach

– The research design analyses a typical factory setting with representative parameter settings for five different conventional APP policies – inventory levelling, workforce variation, overtime, outsourcing and a combination of overtime and outsourcing – through deterministic systems dynamics-based simulation. In order to validate the simulation model, the results from published APP models were replicated. Then, optimisation is conducted for this deterministic setting to determine the performance of all these typical policies with optimal parameter settings. Next, a Monte Carlo stochastic simulation is used to assess the robustness of such performances in a variety of demand settings. Different aggregate plans are tested and the effect that events like demand variability and production times have on the SC performance results is analysed.

Findings

– The results support the assertion that the greater the demand variability, the higher the flexibility costs (overtime, outsourcing, inventory levelling, and contracts and firings). As greater inter-month oscillations appear, which must be covered with additional alternatives, the optimum number of employees must be determined by analysing the interchanges and marginal costs between capacity oversizing costs (wages, idle time, storage) and the costs to undersize it (penalties for lowering safety stocks, delayed demand, greater use of overtime and outsourcing). Accordingly, controlling the times to avoid increased costs and penalties incurred by delayed demand becomes an essential important task, but one that also depends on the characteristics of this variability.

Practical implications

– This paper has developed a modelling approach for APP in a manpower intensive SC by applying system dynamics. It includes a simulation model, the analysis of several scenarios, the impact on performance caused by variability events in the parameters, and some recommendations and action strategies to be subsequently applied. The modelling methodology proposed can be employed to design-specific models for each SC.

Originality/value

– This paper proposes an APP system dynamics approach in a two-level, multi-product, multi-period manpower intensive SC for the first time. This model bridges the gap in the literature relating to simulation, specifically system dynamics and its application for APP. The paper also provides a qualitative description of the various pros and cons of each analysed policy and how they can be combined.

Value Stream Mapping in Project Management: A Case Study

This article describes the application of value stream mapping to analyze and redesign the way of managing the materials procurement stage of a project. A framework based on integrated definition (IDEF) methodology, the stream analysis approach, activity-based costing, and discrete event simulation is presented. The stream analysis approach is used to analyze, diagnose, and manage process changes represented using an IDEF model. A dynamic simulation is used to evaluate the impact of the changes considered, to support the analysis of the process, and to model the performance of the proposed process. The overall methodology is demonstrated by applying it to a company whose core business is the design and construction of offshore oil rigs. The company specializes in engineering, procurement, and construction projects and has an annual portfolio of about six projects. Many of these projects have common features in terms of design and components, and they are all also characterized by a short “time to delivery.” For this reason, this study was aimed at assessing the possible effects that the application of new materials management policies could have on reducing both project completion time and the resources required.