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Ford-Otosan Optimizes Its Stocks Using a Six-Sigma Framework

Author

Listed:
  • Meltem Denizel

    (Faculty of Management, Sabancı University, Orhanlı/Tuzla 34956, İstanbul, Turkey)

  • Utkan Ekinci

    (Tire Industrial Zone, BAT Manufacturing Plant, 35900 Tire/İzmir, Turkey)

  • Güven Özyurt

    (Ford-Otosan Kocaeli Plant, Izmit--Gölcük Yolu 14.km, İhsaniye Gölcük/Kocaeli, Turkey)

  • Deniz Turhan

    (Engineering Management Program, Marmara University, Göztepe, Kadıköy 34722, İstanbul, Turkey)

Abstract

Ford-Otosan, a producer of light and medium commercial vehicles, wanted to improve order-to-delivery times while reducing costs in the course of expanding its capacity. It started a six-sigma project to reduce finished-goods inventory while ensuring on-time shipping of orders. Finished-goods inventory consists of vehicles ready for shipment and those needing additional parts or testing. We developed an integer-programming model in a spreadsheet environment to reduce the number of vehicles awaiting shipment and a shop-floor control system to handle perturbations caused by vehicles that require additional work. Upon implementing these systems, we obtained and analyzed data from the new process and found major improvements, including savings of about $1.2 million in 2003 and $2.6 million in 2004.

Suggested Citation

  • Meltem Denizel & Utkan Ekinci & Güven Özyurt & Deniz Turhan, 2007. "Ford-Otosan Optimizes Its Stocks Using a Six-Sigma Framework," Interfaces, INFORMS, vol. 37(2), pages 97-107, April.
    • Handle: RePEc:inm:orinte:v:37:y:2007:i:2:p:97-107
    DOI: 10.1287/inte.1060.0244
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    Cited by:

    1. David Scheinker & Margaret L. Brandeau, 2020. "Implementing Analytics Projects in a Hospital: Successes, Failures, and Opportunities," Interfaces, INFORMS, vol. 50(3), pages 176-189, May.

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