Lockout/tagout and operational risks in the production control of manufacturing systems with passive redundancy

This paper addresses problems associated with production control and occupational safety in a manufacturing system prone to failure involving two machines working in passive redundancy. Machines turning out one part experience two modes of failure and repair: firstly, where failure occurs when a machine remains in fair condition; and, secondly, where such failure results in outright breakdown. Accordingly, we examine both modes of failure for their impact on a flexible manufacturing system (FMS) with respect to production control in terms of costs associated with lockout/tagout procedures and corrective maintenance. This study seeks to identify optimal costs related to backlogs, inventories and maintenance over an infinite planning horizon, along with levels of occupational risk where production control includes efficient planning of lockouts/tagouts. Our study offers numerical methods which may be employed to achieve optimal conditions in setting control policies. A numerical example and sensitivity analysis support this approach.     

Production planning of a hybrid manufacturing-remanufacturing system under uncertainty within a closed-loop supply chain

This paper deals with the production planning and control of a single product involving combined manufacturing and remanufacturing operations within a closed-loop reverse logistics network with machines subject to random failures and repairs. While consumers traditionally dispose of products at the end of their life cycle, recovery of the used products may be economically more attractive than disposal, while remanufacturing of the products also pursues sustainable development goals. Three types of inventories are involved in this network. The manufactured and remanufactured items are stored in the first and second inventories. The returned products are collected in the third inventory and then remanufactured or disposed of. The objective of this research is to propose a manufacturing/remanufacturing policy that would minimize the sum of the holding and backlog costs for manufacturing and remanufacturing products. The decision variables are the production rates of the manufacturing and the remanufacturing machines. The optimality conditions are developed using the optimal control theory based on stochastic dynamic programming. A computational algorithm, based on numerical methods, is used for solving the optimal control problem. Finally, a numerical example and a sensitivity analysis are presented to illustrate the usefulness of the proposed approach. The structure of the optimal control policy is discussed depending on the value of costs and parameters and extensions to more complex reverse logistics networks are discussed.     

Model and analysis of integrated production–inventory system: The case of steel production

The study originated from an industrial case study in the field of steel production, but it presents a larger interest, as many other manufacturing fields have similar concerns (e.g. foundries, food, textile and paper industries). A significant phase of steel manufacturing is the product cooling (likewise, drying in paper and textile production, or maturing in food production). This phase may be completed in different ways, but (1) it must be carried out in the finished product warehouse and (2) it must meet both production optimisation and customer needs. The latter requirement acquires a strategic relevance in JIT environments. The present study proposes a mathematical model to find the optimal production schedule of steel billets, based on the relevant parameters of the productive system (set-up and processing times, demand profile). In the industrial case examined, the negative impact of holding costs on cash flows is also linked to the space required by the cooling process, which depends on the production schedule adopted. In other words, the finished product storage can be considered a part of the manufacturing cycle and impacts on it. In the case of steel plants operating in JIT environments, the warehouse must be promptly emptied and carefully managed to exploit the available space. Thus, the effect of inventory costs is examined in a production–inventory system with finite capacity, where products are made to order and share the same manufacturing facility. The study is completed by an experimental analysis to investigate the effect of variations in the relevant parameters of the problem.     

The trade-off between production and transportation costs in determining optimal plant size

An important element of manufacturing strategy is to decide on the shipping radius and the size of a geographically focused plant. This decision involves a trade-off between exploiting economies of scale in production by building a large plant and decreasing transportation costs by building a small plant. The paper presents a model for analysing this trade-off. It is shown that scale economies in transportation facilitate the exploitation of production economies of scale. For an optimal sized plant, the ratio of transportation to production costs does not depend on the absolute cost levels in production and transportation, but only the economies of scale present in production and in transportation.     

Design of the optimal feeding policy in an assembly system

This paper describes an innovative and integrated approach to component management optimization within a production/assembly system. In a mixed-models assembly process the handling of parts and components for each work station represents a substantial variable that can greatly affect job duration and efficiency. This paper is strictly related to Assembly to Order/Manufacturing to Order (ATO and MTO) systems, where lead time has to be very short and flexibility is at its maximum level. In Assembly to Order (ATO) or Make to Order (MTO) systems, the production is increasingly getting more customized in response to the demand, thanks to the progresses reached in both manufacturing and information technologies. It is becoming increasingly possible to assemble or make products specifically in response to the requests of either end customers or retailers. As a consequence of such customization, the design of the whole system must take into direct account several elements: parts warehouses location, feeding policies and feeding systems. In some cases the collection of parts and components required picking activities, in other the movement of entire units load.In several instances experts have analyzed the problems about material centralization/decentralization, storage policies and assembly feeding problem in different and independent ways, while the problem needs an integrated approach. While many researches regarding components allocation problems in ATO and MTO systems, did not consider feeding policies, material picking, packing activities and vehicles optimization, this paper cover focuses on filling such gap using an integrated framework that considers both aspects of the problem: the centralization/decentralization of components in order to minimize the total storage costs and the right feeding policies.Feeding problems in assembly lines are some of the most important aspects to consider during the analysis and design of an assembly system, to allow the maximization of efficiency and flexibility. To reach such goals, a multi-factorial analysis has been carried out during this experiment and will validate the introduced framework. An industrial application of the introduced framework is illustrated to explain its real significant production implication.     

Quantifying the effects of product family decisions on material selection: A process-based costing approach

Product designers must continually assess trade-offs among various performance attributes and cost. Materials choice can play an important role in that decision-making process. Product platforms are used to meet the demand for increased product variety, while also managing costs. Because of their interdependent effects, it is possible that platforming strategies may alter preferred material choice. This paper examines the interrelationship of these early stage design choices through the application of process-based cost modeling.A case study is detailed concerning two alternative material options for an automotive instrument panel beam: a die-cast magnesium design and a conventional design (i.e., discrete stamped steel components) which allows for more component sharing than the integrated magnesium design. The effects of component sharing on product family costs are analyzed. It is shown that the magnesium design is less competitive in platformed scenarios.     

REAL OPTION MODELS FOR MANAGING MANUFACTURING SYSTEM CHANGES IN THE NEW ECONOMY

The manufacturing environment is becoming increasingly dynamic with upsurges in electronic-commerce, supply chain management, forecasting, and procurement and resource planning. It also includes trends toward more process data acquisition and analysis, shorter production runs, and more stringent quality requirements. These drivers lead to an opportunity for companies to collect and use information to identify changes that will affect their manufacturing systems. In conjunction with an industry partner who produces home fashion products, we developed a case-study that highlights four major manufacturing transitions: new product introduction; moving a product from research and development (R&D) to commercialization: new plant location; and starting or restarting production of existing products. These types of changes cross many levels of the operation - including the product level, plant level, and organizational level - and typically present significant operational challenges. We use this case-study to motivate the theoretical and applied research needed to support a real option framework for system changes in manufacturing. The key elements of our framework are to quantify manufacturing changes, develop a real option model for these activities, value the options to identify the best scenarios, and integrate these elements so that we can monitor and manage the overall process. The advantage of this approach is that it allows us to directly incorporate a market driven perspective, tying the manufacturing operations with the organizational economic goals.     

Optimal production–inventory strategies for a HMMS-type reverse logistics system

The aim of the paper is to find optimal inventory policies in a reverse logistics system with special structure. It is assumed that demand is a known continuous function in a given planning horizon and return rate of used items is a given function. There is a constant delay between the using and return process. We investigate two stores. The demand is satisfied from the first store, where the manufactured and remanufactured items are stored. The returned products are collected in the second store and then remanufactured or disposed. The costs of this system consist of the quadratic holding costs for these two stores and the quadratic manufacturing, remanufacturing and disposal costs.The model is represented as an optimal control problem with two state variables (inventory status in the first and second store) and with three control variables (rate of manufacturing, remanufacturing and disposal). The objective is to minimize the sum of the quadratic deviation from described inventory levels in stores and from described manufacturing, remanufacturing and disposal rates. In this form, the model can be considered as a generalization of the well-known Holt et al. (Planning Production, Inventories, and Work Forces, Prentice-Hall, Englewood Cliffs, NJ, 1960) model with two warehouses. After solving the problem, we give some numerical examples to represent the optimal path in dependence of the demand rates.     

Integrated product specifications and productivity decision making in unreliable manufacturing systems

This paper considers joint production control and product specifications decision making in a failure prone manufacturing system. This is with the knowledge that tight process specifications, while leading to a product of more reliable quality and higher market value, are at the same time associated with higher levels of non-conforming parts, a higher rate of parts rejection and thus a lowering of overall plant productivity. The decision making is further complicated by the lack of reliability of the production process, which imposes that an adequate, also to be designed, level of inventory of finished parts be maintained. The overall optimal decision policy is defined here as one that maximizes the long term average per unit time profit of a combined measure of quality and quantity dependent sales revenue, minus inventory and backlog costs, in the presence of random plant failures and random repair durations. Policy optimization is achieved via a revisited model of the Bielecki–Kumar theory for Markovian machines and a simulation and experimental design based methodology for the more general cases.     

Integrated multi-period cell formation and subcontracting production planning in dynamic cellular manufacturing systems

In this paper, an integrated mathematical model of the multi-period cell formation and production planning in a dynamic cellular manufacturing system (DCMS) is proposed with the aim of minimizing machine, inter/intra-cell movement, reconfiguration, partial subcontracting, and inventory carrying costs. This paper puts emphasis on the effect of the trade-off between production and outsourcing costs on the re-configuration of the cells in cellular manufacturing systems (CMSs) under a dynamic environment, in which the product mix is different from a period to another resulting in the operational dynamism in the cells. The proposed model is verified by a number of numerical examples and related sensitivity analysis.     

Technology Choice and Market Structure: strategic aspects of flexible manufacturing

This paper shows that the adoption of flexible manufacturing techniques by firms leads to a tougher price regime. However, consumers may not benefit since the tougher regime deters entry. Flexible manufacturing's ability to deter entry is moderated by two factors: non-prohibitive costs of re-anchoring flexible manufacturing processes and the possibility that entrants choose to produce niche products using designated technologies rather than adopt flexible manufacturing. Market preemption that deters entry will be characterized by excessive product variety. Alternatively, flexible manufacturers may prefer to accommodate entry by small-scale, niche firms. Moreover, ownership matters in determining equilibrium product configurations.     

Postponed product differentiation with demand information update

This paper studies the problem of how to coordinate postponed product differentiation and forecast update to improve manufacturing efficiency. We consider a two-stage model of multiple products with a common component. In stage 1, the manager obtains a prior demand distribution of each product and decides the production quantity of the common component. In stage 2, the demand forecast is updated and the common component is differentiated into various final products. Then the final demand of each product is realized and inventory leftover (shortage) is assessed. We use stochastic programming to model this problem, and propose an optimal bundle-type algorithm to solve it. Furthermore, we develop some simple and effective approximation algorithms for several special cases. Extensive numerical experiments are conducted to show the effectiveness of the approximation algorithms, to compare the performance between the traditional production model and the postponement production model, and to examine the impact of parameters on the performances of the two systems.     

A mathematical programming approach to evaluating alternative machine clusters in cellular manufacturing

Cellular manufacturing systems achieve the economies of scope and scale approaching that of flexible and high-volume production when the machine/part clusters are totally independent of each other. However, most real systems contain bottleneck machines and exceptional parts (exceptional elements) that reduce these economies. Many grouping methods have been proposed for creating the initial machine/part cells where the presence of exceptional elements may greatly affect their performance. Furthermore, multiple alternative solutions are often possible for a given grouping algorithm. In this paper, the previous work dealing with exceptional elements is reviewed. A mathematical programming model used for comprehensively dealing with exceptional elements is investigated. The effect of alternative initial machine/part clusters on the total cost is evaluated. It is demonstrated that the mathematical programming model can provide useful information in making trade-off decisions when exceptional elements are present.     

Effort rewarding incentive mechanisms for public enterprise managers

Management incentive schemes leading to welfare optimal pricing and efficient production of public enterprises have so far been mainly concerned with the information advantages that public enterprise managers hold over their supervising government or central planning agency. Managers under these schemes are induced to improve their firm's performance in adjustment processes which in the limit lead to optimal firm decisions. Such managers are supposed to be income maximizers disregarding any personal effort which could influence their performance and utility. In this paper I show that two incentive schemes recently proposed by Tam (1981) and Finsinger and Vogelsang (1982) can also help to induce managers to provide an optimal level of effort. Here effort is assumed to reduce managers' utility and the firm's costs. The result depends crucially on myopic managerial utility maximization. Once managers maximize the discounted value of future utility levels they will deviate from the optimal behavior. Under Tam's scheme, this can hold independent of the optimal effort level. Under the Finsinger-Vogelsang performance index managers will always show suboptimal effort levels in a steady state equilibrium, because the index only rewards welfare improvements.Effort, however, has to be rewarded even with no improvement in behavior. An improved performance index, which provides cumulative rewards is shown to be strategy proof and lead to a welfare optimum. This reward structure basically treats managers as if they were private entrepreneurs. It looks extremely generous in that it gives managers the fruits of all costs reductions due to increases in effort. Suggestions are made to mitigate this income distributional impact.     

Short-term decision support system for maintenance task prioritization

Maintenance operations have a direct influence on production performance in manufacturing systems. Short-term production analysis is imperative to enable manufacturing operations to optimally respond to dynamic changes in the system behavior. However, most of the conventional decision support systems for production and maintenance focus on long-term statistic analysis, which is usually not applicable to a short-term period. Maintenance task prioritization is crucial and important for short-term analysis to reduce unnecessary or improper maintenance activities, especially when availability of maintenance resources is limited. The existing methods for maintenance priority assignment are often through heuristic methods or experience, which could cause unscheduled downtime and production losses. In this paper, a short-term decision support system for maintenance task prioritization based on the system operating conditions is introduced. The impact factor for priority assignment is obtained theoretically. A case study based on the simulation of an automotive assembly line illustrates that the proposed short-term system improves the system performance with a lower cost than the long-term method.     

Measuring maintenance performance – in search for a maintenance productivity index

A partial maintenance productivity goal is that the firm should seek to maximize its maintenance productivity in economic terms, and should aim at producing any level of output which is decided upon at minimum maintenance cost with respect to the production system's state. The state of objects or production systems is such a property, i.e., a multidimensional property. In this paper we amalgamate these various dimensions into a single measure of the property involved. All things considered it would seem, that in measuring partial maintenance productivity, minimization of maintenance costs is incorporated as a subgoal, based on the maintenance inputs called for an “optimal budget”. These imputed maintenance costs do not have to be calculated separately, but emerge as a by-product of finding a high productivity index. In our partial productivity model, the output prices of the produced products and input prices (maintenance costs) will change over time. Expected changes in the prices of outputs and of current inputs would be built into the model.     

Just-in-time: A cross-sectional plant analysis

This paper uses a data base of quantitative and qualitative plant-level cross-sectional data to analyze the relative performance of Just-in-time (JIT) and non-JIT plants operating in two distinct manufacturing industries: electronic components and auto-parts. A number of conjectures made by the literature concerning the relationship between JIT manufacturing and plant inventory holdings, costs and profits are tested. Consistent with many of these conjectures, the results suggest that JIT manufacturing at the plant level is associated with greater productivity in inventory usage, lower total and variable costs, but not fixed costs, and higher profits. The success of JIT plants along these dimensions is found to be related to the length of experience with JIT manufacturing, and process quality and leanness but unrelated to product quality, quality control or the extent of plant unionization.     

Manufacturing with item-level RFID information: From macro to micro quality control

Radio Frequency IDentification (RFID) tags have gained wide-spread popularity in a wide variety of application domains. However, their use in the manufacturing environment still remains at a low level. Despite maturity of related technologies, the lack of managerial understanding of potential benefits has been a major impediment to RFID tag's inroad in the manufacturing domain. In addition to their item-level identification capability, RFID tags enable local storage and retrieval of relevant features associated with each item. We consider the dynamic associated with the availability of item-level information in a mass manufacturing context, propose and develop a knowledge-based adaptive learning system for this scenario, and present related managerial insights. We use modeling as well as manufacturing process simulation to illustrate the proposed framework. Results from this study indicate that the benefits for manufacturing with item-level information increases, although bounded, with increasing variance present in the manufacturing process.     

The manufacturing/design interface

The paper explains why the traditional relationship between design and manufacturing needs to be changed and what it should be replaced with. Traditionally, the relationship has been sequential. At the beginning of the innovation process design goes ahead alone, manufacturing's input being largely overlooked. Only after the design has been completed does manufacturing take over responsibility, and only then may it emerge that re-design is necessary to make production feasible. The results can be high costs, late delivery and disappointing performance. The changes that have made this practice less supportable include shortened product lifecycles, Japanese competition, customers becoming increasingly quality-conscious, need to deliver exactly on time, and minimization of inventories. Fortunately, new technologies such as CAD/CAM and FMS have come along that can help to rectify these deficiencies; how far they are taken up and effectively used depends on the sharp distinction between the functions being discarded and replaced by their substantial integration. Possibilities that each enterprise could explore include ensuring continuous communication and cooperation between the functions, joint problem solving, replacement of functional management by project management, supplier involvement, elimination of the status differential between design and manufacturing, design for manufacturability, and better understanding by the design function of the realities of the business world. The author warns that integration may not be a universal cure. In particular, he suggests that the innovations closely linked with scientific advances may need some degree of functional differentiation. Changes in the competitive environment require manufacturing organizations to change their view on the relationship between manufacturing and design, and on the way the interface between these two functions has to be managed. In this paper we will first describe the traditional view. Afterwards we will describe the environmental changes that make us question the effectiveness of this view. Finally in a third part we will describe the characteristics of the new approach.     

Does ICT create a new driving force for manufacturing?—Evidence from Chinese manufacturing firms

The Internet has changed the global economic landscape. In particular, the fast-changing Information and Communication Technology (ICT) has directly led to a far-reaching impact on the production and operation of firms. Many previous studies have discussed the relationship of ICT and the total factor productivity (TFP) of firms, but failed to reach a consistent conclusion. This paper, based on the data of Chinese listed manufacturing firms from 2010 to 2019, explores the impact of ICT on manufacturing firms' TFP and its mechanism, and concludes that ICT have positive correlation with the TFP of manufacturing firms. According to the estimated results of this paper, TFP will increase by about 1.8 % for every 1 % of additional ICT investment. Through channel analysis, this paper finds that the positive effect can be achieved through the following four channels: cutting information search costs, enhancing information processing capabilities, reducing internal capital misallocation, and promoting R&D efficiency. This paper is a supplement to research on firm TFP, provides new micro-evidence for exploring the relationship between ICT and TFP of manufacturing firms, and brings important implications for understanding the role of ICT in firm production activities.