Batch sizing in production : A case study on batch sizing at the press lines at Volvo GTO in Umeå

Abstract: Volvo GTO is currently interested in reducing their batch sizes at the press operation in Umeå. Where a large number of different cab parts are currently produced for trucks on two different production lines that interact with each other. The reason for wanting to reduce the batch sizes is to reduce their warehousing costs, free up factory space for other activities and to create a more dynamic production that can respond to market changes rapidly. In the thesis work, the effects of changes in batch size in the press lines has been anal- ysed with both qualitatively and quantitatively methods. The analyses have been based on finding the smallest possible batch size for the stamped articles. This follows lean production where unnecessary waste of resources should be avoided, and Just-In-Time production should be sought. By testing the current production using batch sizes close to the theoretical minimum, we obtain and can analyse the various processes that are affected by changed batch sizes. These analyses are delimited to the effects after the two press lines and then mainly on the different types of inventories and processes that occur after press lines. The conclusion we can draw from this analysis is that there are many parameters that weigh into the definition of an optimal batch size from a cost perspective. This is be- cause it is a large production organisation with many sub-processes. Results show that the setup costs increases from smaller batch sizes and are not matched by the profits from less inventory holding cost. But since inventory space in the plant is in high demand the gained space from smaller batch sizes could be profitable long term. There is several other advantages that could justify reduced batch sizes on both press lines like shorter lead times, less overproduction and movements. Smaller batch sizes may confront some problems in the QC control process, outer setup, quality issues and increase visibility.