IDEAS home Printed from https://ideas.repec.org/a/eee/proeco/v181y2016ipap48-57.html
   My bibliography  Save this article

Integrated management of inventory and production systems based on floating decoupling point and real-time information: A simulation based analysis

Author

Listed:
  • Calle, Marcos
  • González-R, Pedro L.
  • Leon, Jose M.
  • Pierreval, Henri
  • Canca, David

Abstract

Globalisation has transformed market conditions reducing lead times and increasing both the degree of product differentiation and price competition. To cope with this issue, new hybrid order fulfilment strategies have emerged which integrate the Make to Stock (MTS) and Build to Order (BTO) strategies, and whose aim is to simultaneously improve opposite objectives, such as the stock level and the lead time. Furthermore, companies face frequent challenges of sharing updated information and avoiding the lack of coordination between the different company subsystems. This work focuses on relatively recent fulfilment strategies based on the Floating Decoupling Point (FDP) which uses real time information to operate. The main objectives of this work are the study of the influence of different sources of real-time information about the available products and select the most suitable configuration of these systems, regarding the inventory control policy and the source of real-time information. The stochastic nature of the process makes simulation an appropriate tool to achieve valuable results. The simulation studies have been carried out following a full factorial Design of Experiments (DoE). Experimental results show that the strategies based on the FDP are very sensitive to the real-time information. These systems achieve the best performance when the inventory control policy uses simultaneously demand forecasting and real-time information of available products corresponding to the Work-In-Process (WIP) and Finished Goods Inventory (FGI). In contrast, system performance deteriorates significantly when real-time information of available products in the WIP has not been taken into account.

Suggested Citation

  • Calle, Marcos & González-R, Pedro L. & Leon, Jose M. & Pierreval, Henri & Canca, David, 2016. "Integrated management of inventory and production systems based on floating decoupling point and real-time information: A simulation based analysis," International Journal of Production Economics, Elsevier, vol. 181(PA), pages 48-57.
    • Handle: RePEc:eee:proeco:v:181:y:2016:i:pa:p:48-57
    DOI: 10.1016/j.ijpe.2016.08.001
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0925527316301803
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.ijpe.2016.08.001?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Awi Federgruen & Ziv Katalan, 1999. "The Impact of Adding a Make-to-Order Item to a Make-to-Stock Production System," Management Science, INFORMS, vol. 45(7), pages 980-994, July.
    2. Brabazon, Philip G. & MacCarthy, Bart, 2006. "Fundamental behaviour of virtual-build-to-order systems," International Journal of Production Economics, Elsevier, vol. 104(2), pages 514-524, December.
    3. Jiang, Li & Geunes, Joseph, 2006. "Impact of introducing make-to-order options in a make-to-stock environment," European Journal of Operational Research, Elsevier, vol. 174(2), pages 724-743, October.
    4. Corti, Donatella & Pozzetti, Alessandro & Zorzini, Marta, 2006. "A capacity-driven approach to establish reliable due dates in a MTO environment," International Journal of Production Economics, Elsevier, vol. 104(2), pages 536-554, December.
    5. Kerkkanen, Annastiina, 2007. "Determining semi-finished products to be stocked when changing the MTS-MTO policy: Case of a steel mill," International Journal of Production Economics, Elsevier, vol. 108(1-2), pages 111-118, July.
    6. S. Rajagopalan, 2002. "Make to Order or Make to Stock: Model and Application," Management Science, INFORMS, vol. 48(2), pages 241-256, February.
    7. Meyr, H., 2004. "Supply chain planning in the German automotive industry," Publications of Darmstadt Technical University, Institute for Business Studies (BWL) 36062, Darmstadt Technical University, Department of Business Administration, Economics and Law, Institute for Business Studies (BWL).
    8. Brun, Alessandro & Zorzini, Marta, 2009. "Evaluation of product customization strategies through modularization and postponement," International Journal of Production Economics, Elsevier, vol. 120(1), pages 205-220, July.
    9. Soman, C.A. & van Donk, D.P. & Gaalman, G.J.C., 2007. "Capacitated planning and scheduling for combined make-to-order and make-to-stock production in the food industry: An illustrative case study," International Journal of Production Economics, Elsevier, vol. 108(1-2), pages 191-199, July.
    10. Da Silveira, Giovani & Borenstein, Denis & Fogliatto, Flavio S., 2001. "Mass customization: Literature review and research directions," International Journal of Production Economics, Elsevier, vol. 72(1), pages 1-13, June.
    11. Alford, Dave & Sackett, Peter & Nelder, Geoff, 2000. "Mass customisation -- an automotive perspective," International Journal of Production Economics, Elsevier, vol. 65(1), pages 99-110, April.
    12. Wu, Muh-Cherng & Jiang, Jr-Hsiung & Chang, Wen-Jen, 2008. "Scheduling a hybrid MTO/MTS semiconductor fab with machine-dedication features," International Journal of Production Economics, Elsevier, vol. 112(1), pages 416-426, March.
    13. Soman, Chetan Anil & van Donk, Dirk Pieter & Gaalman, Gerard, 2004. "Combined make-to-order and make-to-stock in a food production system," International Journal of Production Economics, Elsevier, vol. 90(2), pages 223-235, July.
    14. Chang, Sheng-Hung & Pai, Ping-Feng & Yuan, Kuo-Jung & Wang, Bo-Chang & Li, Rong-Kwei, 2003. "Heuristic PAC model for hybrid MTO and MTS production environment," International Journal of Production Economics, Elsevier, vol. 85(3), pages 347-358, September.
    15. Olhager, Jan & Rudberg, Martin & Wikner, Joakim, 2001. "Long-term capacity management: Linking the perspectives from manufacturing strategy and sales and operations planning," International Journal of Production Economics, Elsevier, vol. 69(2), pages 215-225, January.
    16. MacCarthy, Bart & Brabazon, Philip G. & Bramham, Johanna, 2003. "Fundamental modes of operation for mass customization," International Journal of Production Economics, Elsevier, vol. 85(3), pages 289-304, September.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Rezaei Somarin, Aghil & Chen, Songlin & Asian, Sobhan & Wang, David Z.W., 2017. "A heuristic stock allocation rule for repairable service parts," International Journal of Production Economics, Elsevier, vol. 184(C), pages 131-140.
    2. Bashir Salah & Mustufa Haider Abidi & Syed Hammad Mian & Mohammed Krid & Hisham Alkhalefah & Ali Abdo, 2019. "Virtual Reality-Based Engineering Education to Enhance Manufacturing Sustainability in Industry 4.0," Sustainability, MDPI, vol. 11(5), pages 1-19, March.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Beemsterboer, Bart & Land, Martin & Teunter, Ruud, 2016. "Hybrid MTO-MTS production planning: An explorative study," European Journal of Operational Research, Elsevier, vol. 248(2), pages 453-461.
    2. Laurent Lim, Lâm & Alpan, Gülgün & Penz, Bernard, 2014. "Reconciling sales and operations management with distant suppliers in the automotive industry: A simulation approach," International Journal of Production Economics, Elsevier, vol. 151(C), pages 20-36.
    3. Zhang, Zhe George & Kim, Ilhyung & Springer, Mark & Cai, Gangshu (George) & Yu, Yugang, 2013. "Dynamic pooling of make-to-stock and make-to-order operations," International Journal of Production Economics, Elsevier, vol. 144(1), pages 44-56.
    4. Beemsterboer, Bart & Land, Martin & Teunter, Ruud & Bokhorst, Jos, 2017. "Integrating make-to-order and make-to-stock in job shop control," International Journal of Production Economics, Elsevier, vol. 185(C), pages 1-10.
    5. Beemsterboer, Bart & Land, Martin & Teunter, Ruud, 2017. "Flexible lot sizing in hybrid make-to-order/make-to-stock production planning," European Journal of Operational Research, Elsevier, vol. 260(3), pages 1014-1023.
    6. Beemsterboer, Bart & Land, Martin & Teunter, Ruud & Bokhorst, Jos, 2017. "Reprint of “Integrating make-to-order and make-to-stock in job shop control”," International Journal of Production Economics, Elsevier, vol. 194(C), pages 3-12.
    7. Sato, Yutaro & Maeda, Hiroyuki & Toshima, Ryusei & Nagasawa, Keisuke & Morikawa, Katsumi & Takahashi, Katsuhiko, 2023. "Switching decisions in a hybrid MTS/MTO production system comprising multiple machines considering setup," International Journal of Production Economics, Elsevier, vol. 263(C).
    8. Wikner, Joakim & Naim, Mohamed M. & Spiegler, Virginia L.M. & Lin, Junyi, 2017. "IOBPCS based models and decoupling thinking," International Journal of Production Economics, Elsevier, vol. 194(C), pages 153-166.
    9. Fernandes, Nuno O. & Silva, Cristóvão & Carmo-Silva, S., 2015. "Order release in the hybrid MTO–FTO production," International Journal of Production Economics, Elsevier, vol. 170(PB), pages 513-520.
    10. Pereira, Daniel Filipe & Oliveira, José Fernando & Carravilla, Maria Antónia, 2022. "Merging make-to-stock/make-to-order decisions into sales and operations planning: A multi-objective approach," Omega, Elsevier, vol. 107(C).
    11. Lyons, Andrew Charles & Um, Juneho & Sharifi, Hossein, 2020. "Product variety, customisation and business process performance: A mixed-methods approach to understanding their relationships," International Journal of Production Economics, Elsevier, vol. 221(C).
    12. Sharda, Bikram & Akiya, Naoko, 2012. "Selecting make-to-stock and postponement policies for different products in a chemical plant: A case study using discrete event simulation," International Journal of Production Economics, Elsevier, vol. 136(1), pages 161-171.
    13. Soman, Chetan Anil & Pieter van Donk, Dirk & Gaalman, Gerard, 2006. "Comparison of dynamic scheduling policies for hybrid make-to-order and make-to-stock production systems with stochastic demand," International Journal of Production Economics, Elsevier, vol. 104(2), pages 441-453, December.
    14. Zhang, Min & Zhao, Xiande & Qi, Yinan, 2014. "The effects of organizational flatness, coordination, and product modularity on mass customization capability," International Journal of Production Economics, Elsevier, vol. 158(C), pages 145-155.
    15. Ng, Irene & Scharf, Kimberley & Pogrebna, Ganna & Maull, Roger, 2015. "Contextual variety, Internet-of-Things and the choice of tailoring over platform: Mass customisation strategy in supply chain management," International Journal of Production Economics, Elsevier, vol. 159(C), pages 76-87.
    16. Buergin, Jens & Hammerschmidt, Andreas & Hao, Han & Kramer, Sergej & Tutsch, Hansjoerg & Lanza, Gisela, 2019. "Robust order planning with planned orders for multi-variant series production in a production network," International Journal of Production Economics, Elsevier, vol. 210(C), pages 107-119.
    17. Volling, Thomas & Spengler, Thomas S., 2011. "Modeling and simulation of order-driven planning policies in build-to-order automobile production," International Journal of Production Economics, Elsevier, vol. 131(1), pages 183-193, May.
    18. Sun, X.Y. & Ji, P. & Sun, L.Y. & Wang, Y.L., 2008. "Positioning multiple decoupling points in a supply network," International Journal of Production Economics, Elsevier, vol. 113(2), pages 943-956, June.
    19. Shouyao Xiong & Yuanyuan Feng & Kai Huang, 2020. "Optimal MTS and MTO Hybrid Production System for a Single Product Under the Cap-And-Trade Environment," Sustainability, MDPI, vol. 12(6), pages 1-16, March.
    20. Martínez-Olvera, César, 2009. "Benefits of using hybrid business models within a supply chain," International Journal of Production Economics, Elsevier, vol. 120(2), pages 501-511, August.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:proeco:v:181:y:2016:i:pa:p:48-57. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/ijpe .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.