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A manufacturer reduces interruptions and waiting times in its production lines

Summary

A manufacturer, facing delays & interruptions in its production cycles, wants to identify & address the underlying reasons for such disruptions. Root Cause Analysis uncovers the principal reasons for production-line stoppages. A range of mathematical & statistical models are deployed to provide solutions to the different challenges, such as preventive maintenance to reduce equipment breakdowns, buffer stocks for raw materials to minimize shortages, and optimal re-ordering processes for raw materials. With such solutions in place, the manufacturer is able to achieve a disruption-free production process, ensuring optimal capacity utilization and better profitability.

Business Backdrop

A manufacturer wishes to reduce delays & interruptions in its product lines. The firm is facing unforeseen stoppages in its manufacturing process, caused by sudden shortages of raw materials & sub-assemblies as well as breakdown of equipment & machinery. Such stoppages are leading to unpredictable production cycle times as well as drops in capacity utilization, in turn hampering the firm’s profitability.

Manufacturers need to ensure seamless uninterrupted production cycles in order to fulfill market demand and achieve optimal capacity utilization levels. Failure to do so leads to loss of market reputation with consequent adverse effects on profitability and market share.

Streamlined manufacturing processes require careful planning of production schedules as well as robust inventory management systems that ensure timely availability of raw materials & intermediary items without stretching inventory holding costs. In addition, manufacturers need to institute effective preventive maintenance frameworks for equipment & machinery, so that unforeseen breakdowns do not hamper the orderly nature of a typical manufacturing process.

Analytical Approach

Exploratory analysis is conducted on historical data to identify the various reasons for delays & interruptions in the manufacturer’s production cycles. Various factors influencing such delays are uncovered, of which the principal are bottlenecks in the manufacturing process, unforeseen shortage of certain raw materials, delays in arrival of raw materials, sudden breakdown of equipment & machinery, etc.

Root Cause Analysis is carried out to zero-in on the driving factors responsible for each of the observed symptoms of delays. Various underlying causes are discovered, viz, lack of adequate buffer stocks for critical raw materials, absence of a preventive maintenance regime for major equipment & machinery, failure to anticipate delays in raw-material delivery by suppliers, etc.

Appropriate mathematical & statistical models are developed to address the challenges identified. Reliability analysis models are built to predict likely equipment failures ahead of time, so that adequate preventive maintenance schedules can be instituted. Forecasting models are put in place so that requirements for the various raw materials can be accurately estimated, and therefore planned for. EOQ / ROP models are built to streamline inventory management for the different raw materials. Safety stock estimation models are developed, so that adequate buffer stocks can be maintained, keeping in mind the likely variability in supplier delivery times.

Markov Chain modelling as well as Monte Carlo simulation techniques are deployed to test & validate the various models developed, in order to measure model performance & robustness under a range of likely scenarios.

Solution Framework

  • Exploratory Analysis
  • Root Cause Analysis
  • Lean & Six-Sigma methodologies
  • Markov Chain modelling
  • Monte Carlo simulation
  • Artificial Neural Networks

Business Benefits

The suite of mathematical & statistical models deployed enables the manufacturer to address the various challenges in the areas of raw-material availability as well as reliability of equipment & machinery. With such models in place, the manufacturer can achieve disruption-free production cycles, which ensures optimal capacity utilization levels as well as better profitability.

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