Background
Simulation Dynamics built a model to help a chemical manufacturer assess alternative bagging line configurations. In addition to initial experimentation done by SDI, the manufacturer has used the model on an ongoing basis for schedule and production assessments.
Model Purpose
- Determine tradeoff between cost of alternative bag line configurations and overtime cost
- Evaluate alternative scheduling parameter combinations in terms of inventory levels and overtime cost.
Key model inputs
- Alternative demand and forecast scenarios; i.e., a stream of customer orders drives the model.
Key Experiment Factors
- Alternative demand scenarios; e.g.,
Alternative scheduling parameters
Alternative bagging line configurations. In the current setup, bag lines are tied to bulk manufacturing lines:
The "To-Be" configuration decoupled this tie, by introducing some short-term storage:
Critical Measurement: Overtime required under each bagging line scenario.
System Performance Measures
- Total inventories
- Customer order fill rate
- Overtime hours
Plot of Bag Line Activity
Average weekly hours (production, repair, changeover, idle, overtime for a 10-year experiment horizon):
Project Results
The modeling revealed options for business growth that weren't readily apparent through traditional analysis methods. Our ability to handle both manufacturing complexity and supply chain interactions provided comprehensive insights for the restructuring decisions.
"We have uncovered additional options for low capital cost business growth, some of which were not readily apparent beforehand." — Rick Dougherty, Senior Manufacturing Analyst, Rohm & Haas (Dow Chemical)
Strategic Assessment
The following list provides links to articles within this document that address the strategic assessment issues related to this case study:
- Production Capacity
A central issue in the chemical packaging model was the need for overtime. The tradeoff between capital cost of increased capacity and the cost of overtime was assessed. - Safety Stock Design
Safety stock was set at customer facing inventories using the basic calculation, without modification. - Postponement
In the current production scenario, packaging lines are dedicated to bulk production lines and must pack off product as it is produced. The future scenarios being considered introduce bulk storage between bulk production and packaging, with new high speed packaging lines that could operate on a different schedule from bulk production. This form of postponement allows greater flexibility in scheduling of production and packaging resources.
Documentation
SDI Industry: An Extend-Based Tool for Continuous and High-Speed Manufacturing; Andrew J. Siprelle, Richard A. Phelps, M. Michelle Barnes, Simulation Dynamics. 1998 Winter Simulation Conference.