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Over the past two decades, Lean Production has begun to replace traditional manufacturing techniques around the world, mainly due to the success of the Toyota Motor Company. One key to Toyota's success that many American companies have not been able to emulate is the transformation of their suppliers to the lean philosophy. This lack of supplier transformation in America is due to a variety of reasons including differences in supplier proximity, supplier relationships, supplier performance levels, and the ordering policies used for supplied parts. The focus of this research is analyzing the impact of ordering policies for supplied parts of a manufacturing cell utilizing Lean Production techniques. This thesis presents a simulation analysis of a multi-stage, lean manufacturing cell that produces a family of products. The analysis investigates how the ordering policy for supplied parts affects the performance of the cell under conditions of demand variability and imperfect supplier performance. The ordering policies evaluated are a periodic-review inventory control policy (s, S) and two kanban policies. The performance of the cell is measured by the flowtime of the product through the cell, the on-time-delivery to their customer, the number of products shipped each week, the amount of work-in-process inventory in the cell, the approximate percentage of time the cell was stocked out, and the average supplied part inventory levels for the cell. Using this simulation model, an experimental analysis is conducted using an augmented central composite design. Then, a multivariate analysis is performed on the results of the experiments. The results obtained from this study suggest that the preferred ordering policy for supplied parts is the (s, S) inventory policy for most levels of the other three factors and most of the performance measures. This policy, however, results in increased levels of supplied part inventory, which is the primary reason for the high performance for most response variables. This increased inventory is in direct conflict with the emphasis on inventory and waste reduction, one of the key principles of Lean Production. Furthermore, the inflated kanban policy tends to perform well at high levels of supplier on-time delivery and low levels of customer demand variability. These results are consistent with the proper conditions under which to implement Lean Production: good supplier performance and level customer demand. Thus, while the (s, S) inventory policy may be advantageous as a company begins transitioning to Lean Production, the inflated kanban policy may be preferable once the company has established good supplier performance and level customer demand. / Master of Science

Purpose: This study aims to find how the integration between marketing and operations can improve demand management in order to have efficient inventory level and avoid excess inventory. Method used: In order to have optimize inventory level and managing demand, integrating business process between marketing, supply planning and inventory management team was considered in this study. Qualitative data from nine interviews among three direct sales cosmetics companies was gathered. Findings: Empirical findings address excess inventory is caused by several issue in the company as poor management of demand forecasting, wide product portfolio, long lead time, the lack of sharing information between the company and its suppliers and ineffective strategy to avoid excess inventory within the company. Regarding to improve forecast accuracy and manage demand, findings indicate the role of marketing in obtaining knowledge about customer insight is not good enough. Practical Implication: It is critical that works and plans from each function be integrated to optimize inventory. In order to support optimize inventory strategy all pertinent departments must continue reviewing meeting with the aim to reach a consensus about the products planning for the both side of demand and operation align with overall strategic goals of the company. Contribution: Empirical data demonstrate the best way for effective implication of demand management occurs when marketing can provide demand information in time, as well as supply chain management can react flexibly to demand changes in time. Moreover, the lack of integration between marketing and supply chain management is a major barrier in optimizing inventory.

Approved for public release; distribution in unlimited. / Management of the Naval integrated supply system depends on data to provide reliable information on the quantities of items in stock at any given time. Because of the high volume of transactions that continually alter data in the inventory system, inventory record errors are practically unavoidable. The purpose of this thesis is to determine the effects of inventory data errors on both cost and effectiveness of operations at a Naval inventory site. The methodology adopted for research consists of a series of multiple-item, single-warehouse, Monte Carlo simulations, focused on one U.S. Navy inventory site, using estimates of inventory data accuracy obtained at that site. Results of the simulations show that inventory costs can be decreased and customer demand effectiveness increased by decreasing the magnitude of inventory record errors to less than ten percent. It is therefore recommended that the Navy expand its inventory accuracy goal to require that no item have an inventory record error magnitude greater than ten percent. Inventory costs and effectiveness in meeting demand for Naval material were not found to be substantially affected by inventory record inaccuracy if the magnitude of error is less than ten percent. / Lieutenant Commander, United States Navy

Estoques são comuns a qualquer empresa, visto que são necessários para amortecer impactos de demandas não programadas e evitar rupturas entre processos, adicionando segurança entre diferentes elos de uma cadeia. Problemas de gerenciamento de estoques são corriqueiros, dado que as suas causas podem ser múltiplas, estando presentes em diferentes nós de uma cadeia e sendo originados por questões vinculadas ao fornecimento, à demanda, à informação, além de outros fatores possíveis. Devido à importância dos estoques para uma empresa, seja financeira, como concentração de ativos, ou seja por mitigar riscos no processo de suprimento, problemas de gerenciamento de estoques são periodicamente tratados na literatura. Entretanto, não existe consenso sobre o que são os problemas de gerenciamento e um método difundido para sua identificação e análise. Esta pesquisa concentra-se nesta lacuna, propondo um método de identificação e análise dos problemas de gerenciamento de estoques. Este método está ancorado em seis distintas etapas que foram aplicadas, na forma de um estudo de caso, em uma empresa da serra gaúcha. As etapas compreendem a identificação dos causadores do problema de gerenciamento de estoques, a modelagem e simulação do ambiente proposto e análises das iterações sob a perspectiva de três variáveis chave: saldo de estoques, escassez e uma função custo. Entre os resultados desta pesquisa encontram-se uma classificação de causadores de problemas de gerenciamento de estoques e o método proposto. Foi possível observar no estudo de caso que, entre as variáveis de entrada utilizada, quando manipulada a média aritmética da distribuição destas variáveis estocásticas, elas causaram maior variação sistemática ao resultado do modelo quando comparada a variação sistemática causada pela alteração da variância da distribuição desta mesma variável estocástica. / Inventories are common to any businesses, as they are needed to cushion impacts from unscheduled demands and avoid ruptures between processes, adding security between different tiers in a supply chain. Inventory management problems are common, as their causes can be multiple, and being present on different nodes of a chain, which can be caused by issues related to supply, demand, information, and other possible factors. Due to the importance of inventories for a business, whether financial - as assets - or its role in mitigating risks in the supply process, inventory management problems are frequently approached in the literature. However, there is no consensus on what are inventory management problems and there is no widespread method for identification and analysis of inventory management problems. This research focus on this gap by proposing a method of identification and analysis of inventory management problems. This method is anchored in six distinct steps that have been applied in the form of a case study on a company in south of Brazil. The steps include the identification of the causes of the inventory management problem, the modeling and simulation of the proposed environment and analysis of iterations from the perspective of three key variables: inventory balance, inventory shortages and a cost function. Among the results of this research are a classification of inventory management problems originators and the proposed method. It was observed in the case study that among the input variables, when manipulated the arithmetic mean of the stochastic distribution of these variables, they increased the systematic variation output of the model more than when were manipulated the variance of the stochastic distribution of the same variable.

Vendor Managed Inventory (VMI), Consignment Inventory (CI) and a combination of both (C&VMI) are supply-chain sourcing agreements between a vendor and customer. VMI allows the vendor to initiate orders on behalf of the customer. In CI, the customer pays for the goods supplied by the vendor only upon use. The vendor under C&VMI decides customer-replenishments, and owns the goods replenished until they are deployed by the customer. Our thesis studies these agreements in three essays. <br /><br /> The first essay considers a vendor <em>V</em> that manufactures a particular product at a unique location. That item is sold to a single retailer, the customer <em>C</em>. Three cases are treated in detail: Independent decision making (no agreement between the parties); VMI, whereby the supplier <em>V</em> initiates orders on behalf of <em>C</em>; and Central decision making (both Vendor and Customer are controlled by the same corporate entity). <br /><br /> Values of some cost parameters may vary between the three cases, and each case may cause a different actor to be responsible for particular expenses. Under a constant demand rate, optimal solutions are obtained analytically for the customer's order quantity, the vendor's production quantity, hence the parties' individual and total costs in the three cases. Inequalities are obtained to delineate those situations in which VMI is beneficial. <br /><br /> The problem setting in the second essay is the same with that of Essay 1, but the sourcing agreements investigated are now CI and C&VMI. In CI, as in the usual independent-sourcing approach, the customer has authority over the timing and quantity of replenishments. CI seems to favour the customer because, in addition, he pays for the goods only upon use. Under a C&VMI agreement, the vendor still owns the goods at the customer's premises, but at least can determine how much to store there. <br /><br /> The second essay thus contrasts the cases CI and C&VMI, and compares each of them to a no-agreement case. General conditions under which those cases create benefits for the vendor, the customer and the whole chain are determined. <br /><br /> Essay 3 investigates VMI and C&VMI separately for a vendor and multiple customers who face time-varying, but deterministic demand for a single product. In any of those agreements, the vendor seeks the best set of customers to achieve economies of scale. MIP models are developed to find that set of customers, and to determine the vendor's optimal production, transportation, and customer-replenishment quantities. The model for VMI is solved using a heuristic that produces two sub-models, and uses hierarchical solution approach for production, customer-replenishment and transportation decisions. C&VMI model is solved using Lagrangian relaxation. Various numerical examples are used to test the solution approaches used. <br /><br /> In the mean time, the customers can guarantee to be no worse off under VMI or C&VMI than the no-agreement case by setting the right levels of maximum inventory. A model to determine those levels and a solution algorithm are also proposed in Essay 3. <br /><br /> The first two essays can help a vendor or customer in a supply chain to determine the least costly sourcing option, which depends on the relative values of various cost parameters. A vendor with multiple customers can make use of the results in the third essay, which reveal the best possible economies of scale under VMI or C&VMI. Those customers can guarantee to be no worse of than traditional sourcing when they set the proposed levels of maximum inventory.

The companies ought to care about OEE because it is a measure that shows the effect of the performance and quality related losses on the system or equipment. In order to improve OEE, they focus on defining the losses under each OEE elements and try to eliminate these losses.This study aims to enhance raw material inventory management in order to eliminateinventory management related losses and improve OEE.  Lack of raw material and improperstorage of raw material are main problems related to inventory management. A model isdeveloped and tested in order to prevent these problems and eliminate these losses.Performance rate can be improved by preventing idle time due to lack of raw material, andquality rate can be improved by standardization and improving raw material storageprocedure. In the result of model testing, it is shown that raw material inventory managementhas an effect on OEE and OEE can be improved by enhancing raw material inventorymanagement.

Vendor Managed Inventory (VMI), Consignment Inventory (CI) and a combination of both (C&VMI) are supply-chain sourcing agreements between a vendor and customer. VMI allows the vendor to initiate orders on behalf of the customer. In CI, the customer pays for the goods supplied by the vendor only upon use. The vendor under C&VMI decides customer-replenishments, and owns the goods replenished until they are deployed by the customer. Our thesis studies these agreements in three essays. <br /><br /> The first essay considers a vendor <em>V</em> that manufactures a particular product at a unique location. That item is sold to a single retailer, the customer <em>C</em>. Three cases are treated in detail: Independent decision making (no agreement between the parties); VMI, whereby the supplier <em>V</em> initiates orders on behalf of <em>C</em>; and Central decision making (both Vendor and Customer are controlled by the same corporate entity). <br /><br /> Values of some cost parameters may vary between the three cases, and each case may cause a different actor to be responsible for particular expenses. Under a constant demand rate, optimal solutions are obtained analytically for the customer's order quantity, the vendor's production quantity, hence the parties' individual and total costs in the three cases. Inequalities are obtained to delineate those situations in which VMI is beneficial. <br /><br /> The problem setting in the second essay is the same with that of Essay 1, but the sourcing agreements investigated are now CI and C&VMI. In CI, as in the usual independent-sourcing approach, the customer has authority over the timing and quantity of replenishments. CI seems to favour the customer because, in addition, he pays for the goods only upon use. Under a C&VMI agreement, the vendor still owns the goods at the customer's premises, but at least can determine how much to store there. <br /><br /> The second essay thus contrasts the cases CI and C&VMI, and compares each of them to a no-agreement case. General conditions under which those cases create benefits for the vendor, the customer and the whole chain are determined. <br /><br /> Essay 3 investigates VMI and C&VMI separately for a vendor and multiple customers who face time-varying, but deterministic demand for a single product. In any of those agreements, the vendor seeks the best set of customers to achieve economies of scale. MIP models are developed to find that set of customers, and to determine the vendor's optimal production, transportation, and customer-replenishment quantities. The model for VMI is solved using a heuristic that produces two sub-models, and uses hierarchical solution approach for production, customer-replenishment and transportation decisions. C&VMI model is solved using Lagrangian relaxation. Various numerical examples are used to test the solution approaches used. <br /><br /> In the mean time, the customers can guarantee to be no worse off under VMI or C&VMI than the no-agreement case by setting the right levels of maximum inventory. A model to determine those levels and a solution algorithm are also proposed in Essay 3. <br /><br /> The first two essays can help a vendor or customer in a supply chain to determine the least costly sourcing option, which depends on the relative values of various cost parameters. A vendor with multiple customers can make use of the results in the third essay, which reveal the best possible economies of scale under VMI or C&VMI. Those customers can guarantee to be no worse of than traditional sourcing when they set the proposed levels of maximum inventory.

<p>Today many companies face problems with inventory management. The importance of adequate inventory management has become more evident, while organizations try to reduce their costs and increase their service level.</p><p>This master thesis was conducted at VSM Group AB in Huskvarna, which is a manufacturer that produces and delivers sewing machines to a worldwide market. VSM Group AB has problems with the management and the refilling of the work-in-process (WIP) inventories and also with lack of information about component balance and location in the production and material planning system.</p><p>Therefore, the purpose of the thesis was to improve the control of the WIP inventories and the information about the components in the production and material planning system. In order to achieve the purpose, interviews and observations were performed, theories in inventory management were reviewed and the production process was studied.</p><p>Afterwards solutions for improvements were proposed. To solve the management and refilling problem, a kanban ordering system was proposed, which would use kanban cards to order components from the storages to the WIP inventories. To develop the component information displayed in the production and material planning system, an additional feature was proposed to the system. So instead of showing one inventory balance for each component, the system would display balances for three different places in the factory: the goods arrival and quality control area, the storage and the production.</p><p>The proposed solutions can provide several benefits to the company. The kanban ordering system can increase the material handlers’ efficiency, set a standard refilling quantity and be a tool for reducing the WIP inventory levels. The more detailed information in the production and material planning system can improve the decision making for the purchasers and planners and give the ability to measure the flow and level of material inside the factory.</p><p>These solutions will provide a more appropriate inventory management to the company, with better control of the components and improved information quality.</p>

Today many companies face problems with inventory management. The importance of adequate inventory management has become more evident, while organizations try to reduce their costs and increase their service level. This master thesis was conducted at VSM Group AB in Huskvarna, which is a manufacturer that produces and delivers sewing machines to a worldwide market. VSM Group AB has problems with the management and the refilling of the work-in-process (WIP) inventories and also with lack of information about component balance and location in the production and material planning system. Therefore, the purpose of the thesis was to improve the control of the WIP inventories and the information about the components in the production and material planning system. In order to achieve the purpose, interviews and observations were performed, theories in inventory management were reviewed and the production process was studied. Afterwards solutions for improvements were proposed. To solve the management and refilling problem, a kanban ordering system was proposed, which would use kanban cards to order components from the storages to the WIP inventories. To develop the component information displayed in the production and material planning system, an additional feature was proposed to the system. So instead of showing one inventory balance for each component, the system would display balances for three different places in the factory: the goods arrival and quality control area, the storage and the production. The proposed solutions can provide several benefits to the company. The kanban ordering system can increase the material handlers’ efficiency, set a standard refilling quantity and be a tool for reducing the WIP inventory levels. The more detailed information in the production and material planning system can improve the decision making for the purchasers and planners and give the ability to measure the flow and level of material inside the factory. These solutions will provide a more appropriate inventory management to the company, with better control of the components and improved information quality.