Balancing Waiting Time and Work in Process at a Bottleneck Work Station : A Simulation Study at Gnutti Carlo Sweden

University essay from Linköpings universitet/ProduktionsekonomiLinköpings universitet/Tekniska fakulteten

Abstract:

In a constantly increasing and more demanding global market, companies must continuously improve and develop in order to stay competitive. A manufacturing company can have several goals in order to succeed in this, both strategically and internally within the production. Unfortunately, many goals conflict with each other due to the interrelationship between them. Decisions must be taken whether to focus on maximizing delivery precision, minimizing costs of tied-up capital, or minimizing production costs, which means that trade-offs are necessary to be made.

At Gnutti Carlo Sweden in Alvesta, this is their present reality, where a completely new production line is currently being installed. This is planned to start producing in the beginning of 2016, with successively increased volumes until reaching full production in 2018. Due to process constraints, inventories must be placed within the process in order to keep these utilized to the highest extent possible. On one hand, sufficient inventory must be kept in order to prevent waiting time in the constraining work station, and on the other hand, inventories within the process should be kept as small as possible, this in order to minimize holding costs and required space.

This conflict formed the purpose of the study, which was to achieve a suitable balance between minimizing waiting times in the constraining station and the level of inventories within the process, with main focus on waiting times.

In order to fulfill the purpose, the problem was approached using simulation as the main methodology. In addition to simulation, the study included elements of case studies, experimental methods and action research, which were present at different stages of the project. A nine-step simulation methodology was the inspiration in how the study was conducted, which included necessary mile-stones for reaching qualitative simulation results from a real system, meaning that the approach had a high focus on validation.

By creating a conceptual model, which is a reflection of the current state, a simulation model that represented the process was possible to create. By applying different aspects from existing philosophies and concepts, such as Lean production, Theory of Constraints, and other production concepts, it was possible to form a set of scenarios that corresponded to different potential approaches that were believed to fulfill the study purpose. Using the simulation model, several experiments were conducted, testing the effects from applying the different scenarios, which mainly consisted of different batching strategies to use in a non-constraining work station located prior to the inventory in the process.

The results showed that using smaller batches of similar sizes in the non-constraining work station, prior to the supermarket, is significantly decreasing inventory levels, this while not negatively affecting the waiting time in the constraint. The results showed decreased inventories up to approximately 50% when testing certain scenarios, however not considering some parameters that may affect the process. Important to consider is that the excess capacity of the process is what is controlling the minimum size of the batches, thus also the inventory size needed. Recommendations included to use different batching strategies for non-constraining stations, as well as to further investigate the process before production start, as some parts of the process are excluded in the study.

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