The effect of ordering policies for a manufacturing cell changing to lean production

Abstract

Over the past two decades, lean production has been replacing traditional manufacturing techniques around the world, mainly owing to the success of the Toyota Motor Company. One key to Toyota's success that many Indian companies have not been able to emulate is the transformation of their suppliers to the lean philosophy. The focus of this research is analysing the impact of ordering policies for supplied parts of a manufacturing cell utilizing lean production techniques. This paper presents a simulation analysis of a multi-stage, lean manufacturing cell that produces a family of products. The analysis investigates how the ordering policy for supplied parts affects the performance of the cell under conditions of demand variability and imperfect supplier performance. The ordering policies evaluated are a periodic-review inventory control policy and two Kanban policies. The performance of the cell is measured by the flow time of the product through the cell, the on-time-delivery to the customer, the number of products shipped each week, the amount of work-in-process inventory in the cell, the approximate percentage of time the cell was stocked out, and the average supplied part inventory levels for the cell.