Beyond lean: production and inventory policy for the old economy
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Authors
Yoho, Keenan D.
Rappold, James A.
Subjects
lean
inventory management
process industries
inventory management
process industries
Advisors
Date of Issue
2011
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Abstract
Lean manufacturing has fundamentally changed the way business leaders think about the production of manufactured goods and services. Over the past three decades, firms have dedicated considerable resources to reducing production setup times, shrinking inventories, and organizing work into cellular flows. Discrete parts manufacturing has benefited from production planning schemes that smooth production and level-load the plant to reduce idle time and overtime. But in the process industries, where production occurs 24 hours a day, seven days a week, what does it mean to level-load the production facility? In those industries, capacity stabilization is defined as creating production cycles that are predictable, and level-loading consists of stabilizing manufacturing lead times. In this article, we describe the differences between what we call inventory-centric versus capacity-centric modes of production and inventory control, and we present data collected from a large chemical plant operation that illustrates a mismatch between inventory policy and capacity characteristics. We also describe policies appropriate for old economy firms in the face of increasing consolidation and pressures to reduce costs and increase responsiveness.
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Article
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Format
13 p.
Citation
Production and Inventory Management Journal, vol. 47; no.2; 2011
Distribution Statement
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This publication is a work of the U.S. Government as defined in Title 17, United States Code, Section 101. Copyright protection is not available for this work in the United States.