Improvement of Material Flow in the Production and Supply Chain of ...

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5.3.2 Inventory and suppliers’ selection Under the circumstance of supply chain management, the ideal goal of inventory management is managing to reduce the inventory with low cost as well as satisfy the production and market requirement. Achieving an optimization is from both the area of inventory control and supply chain management. Giannocaro et al. (2003) defined a supply chain inventory management policy utilizing fuzzy set theory to model uncertainty of demand and costs. Since inventory cost could up to seventy percentage of the total cost of a production line, procedures that combine minimization of inventories or inventory costs, and coverage of satisfactory service levels have attracted significant attention (Skintzi et al., 2007). Figure 5.6 Net Inventories in Supply Chain One method to resolve the problem of inventory is sharing information among cooperators. Traditionally, the management of information has been somewhat neglected. Information management system is separate for different roles in the supply chain. Now the global market develops increasingly. It is widely recognized the importance of sharing information in the whole supply chain. More and more cases prove that advancements of technologies in the fields of information, manufacturing, and distribution systems have driven much change through the supply chain. Especially, improving information technology enable follow instantaneous global information sharing with more powerful information processing (Byrne & Heavey 2006). Figure 5.6 (Machuca & Barajas, 2004) shows the inventory problem clearly. This is also a performance of Bullwhip Effect, which is caused by lack of information sharing. For the factory, selecting a supplier who can share information effectively and efficiently in the supply chain is necessary and important to solve the inventory problem. Come to the situation of Haldex, the problem is that there is no enough space to deposit the products. This problem can be solved from several points of view, for example, reducing the warehouse occupancies from both raw material and finished 46
products. Selecting suitable suppliers is the first choice. For the current suppliers, the factory could construct a benefit sharing system with them. Ask the suppliers increase the delivery frequency in order to save the space used to store raw material for the production of ADB. Furthermore, the factory can evaluate suppliers and discuss with them and then trying to improve the assembly line work under an environment similar with JIT (Just In Time) system. “Just In Time (JIT) is an inventory strategy implemented to improve the return on investment of a business by reducing in-process inventory and its associated carrying costs” (Wikipedia, viewed Feb.2008). This method can lead to huge improvement in the areas of inventory, quality, investment, efficiency and so on. The key of the JIT system is that, items should arrive when the production system needs, neither earlier nor later. By this way the raw inventory level can be reduce to very low. So it can help the factory improve the inventory problem. However, the requirements towards the suppliers are higher. The factory has to pay much more attention on this point. Under this situation, suppliers should manufacture the products in high quality and low cost. Reliability and flexibility are also very important factors when selecting suppliers because only reliably and flexible suppliers can reduce the lost caused by unpredictable disaster furthest. Considering the risk of applying JIT system in the workshop, the ordering quantity by Haldex should lower than half of the production volume of the supplier in order to garentee the timly supply. Otherwise in case there is anything wrong with the supplier, the production in the workshop will be disastrous. There should be two to three suppliers offer the same components. If there are too many suppliers, the cost will high. The suppliers do not stand at the same level. They are divided into major and minor. Then the factory can reduce the management cost while increase the management effect and keep a stable source of raw materials. (Sun, 2005) 5.4 Integrative selection of suppliers Based on the discussions above when select suppliers the factory should consider several kinds of factors. Table 5.3 concluded most of the factors above-mentioned. Because the distribution covered a huge scope and detail information is lack, this paper only discuss on the level of continent. In this table the supplier will get a plus if he takes an advantage on the factor, otherwise there is a minus. At the end an integrative estimate will be received. According to the total score in the future the selected suppliers should mainly locate in Europe. The followed are Asia and North America. For the detail information about which countries selected will depend on the practical information. 47
Page 1 and 2:
ROYAL INSTITUTE OF TECHNOLOGY Impro
Page 3 and 4: Needs to be pointed out is that in
Page 5 and 6: TABLE OF CONTENTS ABSTRACT.........
Page 7 and 8: List of Tables Table 3.1 Descriptiv
Page 9 and 10: CHAPTER 1 INTRODUCTION OF THE RESEA
Page 11 and 12: 1.2 Present problems Haldex faces i
Page 13 and 14: CHAPTER 2 RESEARCH THEORY AND METHO
Page 15 and 16: mindset simply does not accurately
Page 17 and 18: the customers. Both of them are pri
Page 19 and 20: processing in station 5b. In the re
Page 21 and 22: After deleting the un-normal data i
Page 23 and 24: data of preassembly line accords wi
Page 25 and 26: Standard Deviation 68.49 Standard D
Page 27 and 28: Table 3.6 Values of Parameters of T
Page 29 and 30: line. In order to simplify the mode
Page 31 and 32: Table 4.3 Output Date Come From the
Page 33 and 34: Table 4.5 Current Production Volume
Page 35 and 36: Table 4.7 listed the simulation res
Page 37 and 38: 4.3.3 Increasing the operation time
Page 39 and 40: ottlenecks. Obviously, from the poi
Page 41 and 42: the first one. For the third soluti
Page 43: and unforeseen events by keeping sa
Page 46 and 47: separately and the supply chain emp
Page 48 and 49: 5.2.1 Current distribution of suppl
Page 50 and 51: Table 5.2* Delivery Information of
Page 52 and 53: ecause this only gets from experien
Page 56 and 57: Table 5.3 Integrative Estimation of
Page 58 and 59: CHAPTER 6 INVENTORY REDUCTION AND D
Page 60 and 61: How to get the best value from a su
Page 62 and 63: calculation, 420 pallets can be suc
Page 64 and 65: each day. The maximum load of one t
Page 66 and 67: and can also overworking during wee
Page 68 and 69: CHAPTER 7 CONCLUSION AND FUTURE WOR
Page 70 and 71: Reference Books and papers • Ahma
Page 72 and 73: y Chapman&Hall. • Vickery, Shawne
Page 74 and 75: Appendix A Table 1 TTF & TTR Data o
Page 76 and 77: Table 5.1 Suppliers & Suppliers’
Page 78 and 79: Appendix B Figure 1 Assembly line M
Page 80 and 81: Figure 3 Current Assembly Line Mode
Page 82 and 83: Figure 5 Assembly Line Model in Sol
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