An MADM Framework toward Hierarchical Production Planning in Hybrid MTS/MTO Environments

Transcription

1 World Academy of Scence, Engneerng and Technology Internatonal Journal of Industral and Manufacturng Engneerng An MADM Frameork toard Herarchcal Producton Plannng n Hybrd MTS/MTO Envronments H. Rafe, M. Rabban Internatonal Scence Index, Industral and Manufacturng Engneerng aset.org/publcaton/5435 Abstract Ths paper proposes a ne decson makng structure to determne the approprate product delvery strategy for dfferent products n a manufacturng system among make-to-stock, make-toorder, and hybrd strategy. Gven product delvery strateges for all products n the manufacturng system, the poston of the Order Penetratng Pont (OPP) can be located regardng the delvery strateges among hch locaton of OPP n hybrd strategy s a cumbersome task. In ths regard, e employ analytc netork process, because there are varetes of nterrelated drvng factors nvolved n choosng the rght locaton. Moreover, the proposed structure s augmented th fuzzy sets theory n order to cope th the uncertanty of udgments. Fnally, applcablty of the proposed structure s proven n practce through a real ndustral case company. The numercal results demonstrate the effcency of the proposed decson makng structure n order parttonng and OPP locaton. Keyords Hybrd make-to-stock/make-to-order, Mult-attrbute decson makng, Order parttonng, Order penetraton pont. I. INTRODUCTION N the face of global competton, a manufacturng frm s I survval ncreasngly depends on ho best t can desgn, manage and restructure ts producton system to deal th product dversty, mprove delvery relablty and also reduce system costs [1]. To cope th these ssues, manufacturng companes often use dfferent producton systems. These producton systems can be classfed nto to maor categores: Make-To-Stock (MTS) and Make-To-Order (MTO) based on market demands response polcy [2]. The man advantage of MTS system s the short delvery tme, snce the fnal products are already n stock even before the customer order enters [1]. In an MTO system, an order s fulflled only hen t enters the system. Ths knd of producton systems supples a de varety of products, usually n small quanttes. Hence, ablty to manufacture dverse orders and hgh producton flexblty are the maor advantages of ths producton system [2]. Recent years have shon a number of changes n H. Rafe s an MSc student at Department of Industral Engneerng, College of Engneerng, Unversty of Tehran, Tehran, Iran M. Rabban s an Assocate Professor at Department of Industral Eng., College of Engneerng, Unversty of Tehran, Tehran, Iran, P.O. Box (Correspondng author: mraban@ut.ac.r, phone: , fax: ). companes producton polcy and they are gradually movng toard hybrd MTS/MTO producton. In MTS/MTO system, a porton of the system operates upon MTS and the remanng operates n an MTO mode [1]. A proper combnaton of MTO and MTS can explot the advantages of both loer nventory and short delvery tme. In such systems, some sem-fnshed products are mantaned at one stockng pont, so the producton delay s ust the tme needed for the MTO stage to be accomplshed. In the related lterature, ths stockng pont s called Order Penetraton Pont (OPP) or Customer Order Decouplng Pont (CODP) n the producton lne. Generally speakng, OPP s a pont n the manufacturng value chan for a product, here the product s lnked to a specfc customer order and also dvdes the manufacturng stages that are forecast-drven from those customer-order-drven ones [3]. As dscussed n [4], snce MTS/MTO s a combnaton of to producton systems, a varety of ssues than those requred n a pure MTS or a pure MTO system are arsng n a hybrd producton stuaton, dffcult to handle smultaneously. In ths regard, a herarchcal decson-makng s a reasonable approach. The poneer of the applcaton of Herarchcal Producton Plannng (HPP) n hybrd MTS/MTO system s due to Soman et al. [4]. They proposed HPP th three decson makng levels. These levels are MTS/MTO decson, capacty co-ordnaton and schedulng and control thout any decson makng models to specfy the outputs. In ths paper, e focus on the frst level of the proposed HPP frameork by Soman et al. [4], hch deals th determnaton of the approprate product delvery strategy for dfferent products n a manufacturng system (MTS/MTO parttonng). Moreover, e attempt to locate the poston of the OPP for all products th respect to ther determned delvery strateges. To make the to above strategc decsons n MTS/MTO systems, e propose a ne comprehensve decson makng structure. The proposed structure results n three delvery strateges: MTS, MTO and hybrd MTS/MTO. Addtonally, for properly locatng the OPP, e apply Analytc Netork Process (ANP) [5] as a sutable multcrtera decson makng tool hch consders both qualtatve and quanttatve crtera affectng the problem. The proposed ANP structure s enhanced th the fuzzy sets theory [6] to tackle the vagueness and ambguty of experts udgments. The rest of the paper s organzed as follos. The relevant Internatonal Scholarly and Scentfc Research & Innovaton 3(10)

2 World Academy of Scence, Engneerng and Technology Internatonal Journal of Industral and Manufacturng Engneerng Internatonal Scence Index, Industral and Manufacturng Engneerng aset.org/publcaton/5435 lterature s presented n Secton 2. In Secton 3, the proposed decson-makng structure applyng for MTS/MTO parttonng and OPP locaton s llustrated n detals. To sho the applcablty of the proposed structure, a real ndustral case study s presented n Secton 4. Fnally, the concludng remarks and some future research drectons are provded n Secton 5. II. LITERATURE REVIEW The herarchcal producton plannng (HPP) approach s one of the most appled methodologes for MTS companes because of ts several advantages n practce (e.g. see [7]). In contrary to MTS systems, the producton system n MTO frms actvates only hen a ne order enters the system. Hence, the producton plannng and schedulng ssues are dfferent from those of MTS. The MTO man obectve s to manage the delvery dates of arrvng orders n order to reach short and relable delvery dates. To acheve ths goal, frms should apply approprate producton plannng [8]. The lterature reve on MTS/MTO systems reveals that there are only a handful of researches regardng producton plannng and control n these systems. To the best of our knoledge, the thorough ork n ths regard carred out by Soman et al. [4]. They proposed a comprehensve HPP frameork that covers the mportant producton management decsons for MTS/MTO stuatons n food processng. Ths frameork conssts of a three-level decson makng structure. At the frst level, the decsons are taken relatng to determnng hch products to be manufactured to order and hch products to stock. At the second level, the demand and the capacty are balanced. The relevant decson at ths level s allocaton of producton orders for both MTS and MTO products to plannng perods. At the thrd level, there are schedulng and control decsons n hch the producton orders are sequenced and scheduled. Chang et al. [9] developed a heurstc producton actvty control model to schedule and control afer manufacturng n a hybrd afer producton envronment (hybrd MTS/MTO), hle Mu [1] developed a mathematcal model as a decson tool to desgn hybrd MTS/MTO systems and sought the economcal base stock level and locaton necessary to meet specfed servce constrant. Also, he shoed ho to determne the optmal pont separatng the MTS and MTO operatons for both balanced and unbalanced flo lnes. Raagopalan [10] proposed a non-lnear nteger program th servce level constrants for MTS/MTO parttonng problem. He developed a heurstc procedure to solve ths problem. Addtonally, Zaerpour et al. [11] presented a novel hybrd methodology n MTS/MTO manufacturng systems for order parttonng as the most recent ork. They proposed fuzzy AHP-SWOT approach as a strategc decson makng methodology for product parttonng. One of the most mportant ssues n MTS/MTO system s the locaton of OPP as a strategc decson. Olhager [3] presented several factors that affect the poston of the OPP and dscussed the strategc ratonale of shftng OPP backards and forards. van Donk [12] developed a frameork for a decson manager n food processng ndustres n hch he adopted the general decouplng pont (DP) concept to support such decsons. After dentfcaton of nfluencng factors on DP, the effects of each factor are dscussed on the decouplng pont for a certan product/market combnaton. Wnker and Rudberg [13] developed a conceptual frameork for CODP by consderng both producton and engneerng aspects. As a concluson from the prevous research regardng MTS/MTO systems, there s not a decson makng frameork n hch both MTS/MTO parttonng and OPP locaton decsons are made comprehensvely. Also, there s a lack of holstc model to determne the exact locaton of OPP for the exstng products manufactured n the company. To tackle the to above drabacks n the MTS/MTO lterature, a comprehensve decson makng structure s proposed to choose rght delvery strategy for products n MTS/MTO manufacturng systems and also, to fnd the approprate locaton of OPP n hybrd MTS/MTO producton system usng fuzzy ANP. III. PROPOSED MODEL In ths secton, a comprehensve decson structure s proposed to tackle order parttonng as ell as OPP locaton n the hybrd MTS/MTO context. In MTS/MTO envronment, the adopted producton strategy benefts from the strengths of both pure MTS and pure MTO strateges by processng some operatons on a forecast-drven bass and fnshng the products th respect to the receved orders. Fg. 1 demonstrates the proposed structure hch s elaborated as follos. A. Lstng all possble products As the frst step, the scope of the frm s producton structure s defned. To do so, all products to be manufactured n the frm are lsted. The lst comprses current products and the products are planned to be produced n future. It s hghly recommended that experts from engneerng, marketng, R&D, manufacturng and procurement departments attend to decde hat products are ncluded n the lst. B. Pure MTS or pure MTO for lsted products Havng all products lsted, t s assessed hether a pure producton strategy can be adopted. To decde f pure MTS or pure MTO strategy s applcable, three crtera are selected; demand volatlty, P/D rato (producton lead-tme to delvery lead-tme rato), and product type. If all above three factors result n one of pure MTS or pure MTO, the correspondng producton strategy s adopted for the respected products. In the case of conflctng conclusons from above crtera, next step s skpped. C. OPP locaton for adopted strategy After decdng on producton strategy for some of products, Internatonal Scholarly and Scentfc Research & Innovaton 3(10)

3 World Academy of Scence, Engneerng and Technology Internatonal Journal of Industral and Manufacturng Engneerng Internatonal Scence Index, Industral and Manufacturng Engneerng aset.org/publcaton/5435 OPP can be located upon the selected strategy; n the case of MTS strategy, the frst ork center s determned as OPP and the last staton relates to OPP n the case of MTO strategy. OPP for adopted strategy OPP for adopted strategy Lstng all possble products Fg. 1 Proposed structure toard order parttonng and OPP locaton D. Famly formaton Wth respect to the remanng products have not been decded, a hybrd strategy of MTS and MTO s adopted, because the ntroduced crtera result n conflctng producton strateges. To have smpler and more controllable producton structure, the remanng products are categorzed nto famles of products. Dfferent methodologes have been developed so far to form product famles among hch some are notable; descrptve procedures [14], mathematcal programmng [15], cluster-based procedures [16], and artfcal ntellgence [17]. Hoever, mostly adaptng famly formaton methodology to the subect of ths paper s the recent method proposed by Galan et al. [18], snce stchng beteen producton strateges mght requre reconfguraton of the producton lne. For a broad study on the procedure and the mplementaton of ther method, readers are referred to Galan et al. [18]. E. Pure MTS or pure MTO for product famles Wth respect to the product famles, applyng pure MTS or pure MTO producton strateges s evaluated regardng three mentoned crtera; demand volatlty, P/D rato, product type. Agan, next step s skpped for the famles for hch producton strategy s not specfed. No Famly formaton No Pure MTS or pure MTO strategy? Pure MTS or pure MTO strategy? Hybrd MTS/MTO strategy OPP for hybrd MTS/MTO F. OPP locaton for product famles Smlar to the OPP locaton performed for ndvdual products, OPP s determned for product famles for hch pure producton strategy s decded. The frst and the last orkstatons are selected as the OPP for MTS-based and MTO-based processed products, respectvely. G. Hybrd MTS/MTO producton strategy In the proposed model, products for hch a pure MTS or pure MTO strategy s not decded are produced upon a hybrd MTS/MTO producton strategy n hch the OPP s located through the next step. H. OPP locaton for remanng products The most remarkng role of OPP locaton rses n the hybrd MTS/MTO, snce OPP s pre-defned n to other producton strateges. OPP concept as frstly ntroduced n [19]. In ths step, an ANP structure s developed to select the OPP for product famles passed to ths step. ANP [5] as frstly ntroduced n 90s as a general form of the ell-knon Analytc Herarchy Process (AHP) [20]. Ths methodology can model decsons th both qualtatve and quanttatve factors and udgments thn an nterrelated and dependent structure. To have a comprehensve study on dfferences beteen ANP and AHP, the comparatve paper by Taslcal and Ercan [21] s recommended. Snce the regarded factors are nterrelated, ANP methodology s adopted to cope th the complexty of the OPP locaton. TABLE I OPP LOCATION FACTORS Cluster Factor Cluster Factor Cluster Factor Delvery tme Delvery relablty Product customzaton Processng tme Process flexblty Human resource flexblty Marketrelated Processrelated Productrelated Holdng cost Backlog cost Rsk of obsolescence Alternatves of the developed ANP are the plannng ponts along the producton value chan. A plannng pont s a manufacturng resource or a set of manufacturng resources such as a orkstaton or a manufacturng cell that can be regarded as an entty from a producton plannng standpont [3]. Among the plannng ponts of the producton lne, bottlenecks are not sutable alternatves, because they yeld longer delvery tmes and more backorder costs. Also, decson factors upon hch the ANP structure s constructed are the ones presented n Table I th ther categorzed clusters structured n Fg. 2. Afterard, local comparsons of the elements of one cluster th respect to ther nfluencng elements are performed as ell as cluster comparsons smlar to the local comparsons. When comparsons are performed and comparson matrces are resulted, a method to elct eghts of each comparson element from comparson matrces must be appled. In ths paper, Weghted Least Squares (WLS) method [22] s utlzed Internatonal Scholarly and Scentfc Research & Innovaton 3(10)

4 World Academy of Scence, Engneerng and Technology Internatonal Journal of Industral and Manufacturng Engneerng Internatonal Scence Index, Industral and Manufacturng Engneerng aset.org/publcaton/5435 to elct relatve eghts of elements n a par-se comparson matrx. Supposng the relatve eght of element, / corresponds to the relatve mportance of element over element n a perfectly consstent comparson matrx;.e. a = / n hch a s the eght of comparson over n the relatve par-se comparson matrx [23]. Supposng comparson elements as symmetrc trangular fuzzy numbers, a =(l,m,u ), (1) must hold. Moreover, relatve eghts of elements sum one, as depcted n (2). l a = u (1) =1 (2) To have hgher level of consstency, the dstance beteen a and m =(l +u )/2 s mnmzed for all pars of and. The optmzaton model th respect to (1)-(2) s presented by (3). Mn u ( a ) + l, 0 = 1 Delvery tme Delvery relablty Product customzaton Process flexblty Work center processng tme Human resource flexblty 0 0 2,, Holdng cost Backorder cost Rsk of obsolescence Lst of plannng ponts of OPP n the producton lne Fg. 2 Netork of the proposed structure Applyng model (3) to all par-se comparson matrces results n relatve eghts of the elements n comparson matrces. Uneghted supermatrx s formed by puttng together the obtaned relatve eghts as blocks of a supermatrx and the resulted supermatrx s multpled by the relatve eghts of clusters hch are obtaned from the cluster comparson matrx. The resulted supermatrx from the multplcaton s the eghted supermatrx. Poerng the eghted supermatrx untl ro convergence leads to lmtng (3) supermatrx based upon OPP s located. IV. CASE STUDY In ths secton, e present the results of the proposed structure mplementaton n a real case study. The case study s an Iranan domestc applance manufacturer that produces refrgerator and ashng machne. Due to the tght competton n the market, the frm has to produce de range of products to compete th domestc and nternatonal companes. The frm produces ten dfferent knds of refrgerator varyng n sze and eght models of ashng machne varyng n color and sze. Wth respect to the predctablty of the customers demands, producton of standard products and the P/D rato larger than one, the management decded to manufacture all of these products n an MTS mode. Based on the change n the frm strategy, the management plans to produce ne products and add some knds of TV to ts exstng product portfolo. The frm has no hstorcal data about TV s demand trend and t s too dffcult to predct the demands for TVs on a detaled level. Therefore, utlzng the MTS strategy cannot be taken nto account for producng TVs. Furthermore, snce the man revenue of the frm earned by sellng refrgerators and ashng machnes, the bulk of the capacty s assgned to these products. Thus, the frm may be unable to delver TV products thn a short delvery tme. More mportantly, most of TVs have smlar electronc components n form of subassembly parts. Therefore, the frm can produce sub-assembly parts based on a rough-cut aggregate demand data for all TVs and then manufacture the sub-assembly parts (MTS base). Then, the rest of TV s manufactured based on the customers needs (MTO base). Moreover, the assessment revealed that t s not possble to produce all of products under pure MTS or pure MTO strategy th respect to dfferent characterstcs of TVs th other products. Overall, the frm decded to produce TVs under hybrd MTS/MTO producton polcy. To locate the OPP for TVs, e employed our proposed ANP structure to evaluate and choose the approprate locaton of OPP. In the consdered frm, the exstng products ere grouped nto fve product famles, called heren F1, F2, F3, F4 and F5. In the frst to famles, products belongng to each famly are refrgerator th dfferent szes but havng the same supplers for ther man assembly parts. Famles F3 and F4 are related to ashng machne and the last famly bear all of the TVs. The producton system of the frm conssts of four steps, to machnng steps, one assembly center and one pantng step. The assembly center ncludes fve assembly lnes, to lnes for assemblng refrgerator, to lnes for assemblng ashng machne and one for TV. To machnng orkstatons, called WS1 and WS2, are located before the assembly lnes. The WS1 s comprsed of fve machnes ncludng Eylet, Sequencers, Jumper, Axal and Radal nsert machnes. WS2 conssts of to SMD contnuous lnes. All of the products requre WS1 and WS2 to complete ther electronc board. Processng tmes of to machnng centers Internatonal Scholarly and Scentfc Research & Innovaton 3(10)

5 World Academy of Scence, Engneerng and Technology Internatonal Journal of Industral and Manufacturng Engneerng Internatonal Scence Index, Industral and Manufacturng Engneerng aset.org/publcaton/5435 are approxmately 1.13, 6.73, 3.07, 2.76 and 7.68 mnutes for product famles F1, F2, F3, F4 and F5, respectvely. Set up tmes for machnng processes are large and sequence dependent. Based on past experences, the Jumper machne and one of the SMD s lne act as the system's bottlenecks. In the proposed structure, therefore, these machnes are not desrable for the OPP and are removed from the lst of potental locatons for OPP. The producton process s relable n qualty and amount of output. Equpment s flexble enough to move around and also human resources are flexble n sklls and able to ork on any machne. Holdng cost for fnshed products s hgh and also, storage capacty s lmted for sem-fnshed products. There s a good relatonshp beteen customers and frm and so the backorder cost s relatvely lo. The producer has to guarantee hs customers a shelf lfe of at least 3 months. The proposed ANP model for choosng approprate locaton for OPP consttutes 9 crtera under three man crtera clusters and sx man alternatve locatons (Eylet machne, Sequences machne, Axal machne, Radal machne, SMD machne, and Assembly machne). The par-se comparsons ere made by takng the experts opnon orkng n the frm. After usng the geometrc mean method to aggregate ther evaluatons, e constructed the requred supermatrces. The obtaned overall eghts from the lmtng supermatrx are shon n Table II. Therefore, the most mportant factor s the delvery lead-tme and the best alternatve s the sxth one. TABLE II FINAL WEIGHTS OF CRITERIA AND ALTERNATIVES Decson element Overall eght Decson element Overall eght Delvery lead-tme Eylet machne Delvery relablty Sequences machne Product customzaton Axal machne Processng tme Radal machne Process flexblty SMD machne Human resource flexblty Assembly machne Holdng cost Backlog cost Rsk of obsolescence V. CONCLUSION AND FUTURE RESEARCH DIRECTION Wth global markets, ncreasng global competton and shorter product lfe cycles, makng decson on producng an tem under MTO, MTS or MTS/MTO strategy s noadays hghly mportant and strategc. In ths paper, e attempted to propose a ne decson makng structure to fnd solutons for to strategc ssues n MTS/MTO systems ncludng order parttonng and OPP locaton for each product famly by consderng the drvng factors nfluencng these ssues and fuzzy ANP as a decson makng tool for fndng the OPP locatons. The results obtaned from a real ndustral case study sho the effcency of the proposed structure, especally n fndng the OPP locaton. To extend the presented model, developng ne decson crtera ncludng e.g. suppler related ones n a more completed HPP structure s hghly recommended. In case of consderng some quanttatve data nto the structure such as frm s producton capacty and due dates, parttonng can be decded through an optmzaton model. REFERENCES [1] Y. Mu, Desgn of hybrd Make-to-Stock (MTS) - Make-to-Order (MTO) manufacturng system. M.Sc. Thess, The Unversty of Mnnesota, [2] M. Ebadan, M. Rabban, F. Jola, S. A. Torab, and R. Tavakkol- Moghaddam, A ne decson-makng structure for the order entry stage n make-to-order envronments, Int. J. Prod. Econ., vol. 111, no. 8, pp , [3] J. Olhager, Strategc postonng of order penetraton pont, Int. J. Prod. Econ., Vol. 85, pp , [4] C. A. Soman, D. P. van Donk, and G. Gaalman, Combned make-toorder and make-to-stock n food producton system, Int. J. Prod. 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