This is a Master’s Thesis that has been carried out at the Global Outbound Logistics department at Scania. Scania manufactures trucks, buses and engines. Some trucks and buses are delivered to markets where it, due to reduced customs duties and cheaper manpower, is more profitable to do the assembly locally at so called Regional Product Centres (RPCs). Since the components are produced far away from the RPC markets the lead times become long. In addition, the customers’ buying behaviour at the RPC markets is often not comparable to the European culture were a customer can accept to wait for weeks for a unit to be delivered. The long lead time in combination with the customer behaviour implies that the RPCs need to keep a certain selection of standard models of buses and trucks in stock. It has turned out to be difficult for the pipeline managers at the RPCs to place order volumes that correspond well to what will be delivered to the business units or distributors later on. The result of this is high stock levels at the RPCs, which leads to an important amount of tied up capital. Due to what is explained above, the purpose of this study is “to create a simulation model, based upon a process mapping, that visualises future volume levels in the pipeline due to different demand and ordering scenarios”. The short term target, which is also the target of this study, is to increase the RPCs understanding for how different demand and ordering scenarios influence the future volume levels in the pipeline. The long term target is to reduce tied up capital by adjusting buffer levels and lead times, while still ensuring a certain service level. The model should contribute to more accurate decision making with respect to the previous mentioned aspects. First, a high level process mapping was made in order to select which flows that were suitable for being subject for a detailed mapping. Second, a detailed mapping was made during which several RPC-, process- and function responsible were interviewed. After the detailed mapping, common denominators between the flows were identified and all activities were clustered into a solution that could be generalised and suitable for all flows. Factors such as lead times, deviation risks and capacity limitations were taken into account during the aggregation of activities. When a common view of the different RPC flows had been created, the mathematical relationships for how the goods can move throughout the process could be established. Then, the development and validation of the simulation model, which was an iterative process, could start. A directive was to build the simulation model in Microsoft Excel. Interviews were made with experienced model creators in order to find out how to create a user-friendly and robust model. The creation of the simulation model started with the development of a structure and then the content of each part was defined. A final validation, which consisted of sensitivity analysis and user trials, was finally done in order to ensure the simulation models functioning and accuracy. To conclude, a simulation model that will serve as a helpful tool for the RPCs when they are to decide which order volumes to place has been created. By clearly visualising the simulation results, the simulation model will hopefully increase the RPCs’ comprehension for how the pipeline works with respect to different ordering and demand scenarios. On top of this, the method used, the process mapping and the mathematical relationships that have been defined are important input for a possible future development of a more permanent and robust non-Microsoft Excel solution. This solution could probably be even more precise, automatically updated and have an even higher granularity.

Globalization and increased product variety have impacted the uncertainty in demand and supply. The recent financial instability adds another layer of uncertainty regarding financing and investment. The changes, while gradual, have accumulated over time and posed enormous difficulties in planning procurement. This thesis focuses on inventory procurement strategies that help firms tackle challenges due to uncertainties in the demand/supply and financial concerns. The first part is on employing dynamic inventory procurement strategies to achieve cost efficiency and tackle the uncertainties in demand and supply. The second and third parts focus on the interaction between Finance and Operations in both its analytic aspects and empirical aspects. A synopsis of the three parts of the thesis follows. Part 1: “Inventory Management and Stochastic Lead Time” This chapter analyzes a continuous time back-ordered inventory system with stochastic demand and stochastic delivery lags for placed orders. This problem in general has an infinite dimensional state space and is hence intractable. We first obtain the set of minimal conditions for reducing such a system’s state space to one-dimension and show how this reduction is done. Next, by modeling demand as a diffusion process, we reformulate the inventory control problem as an impulse control problem. We simplify the impulse control problem to a Quasi-Variation Inequality (QVI). Based on the QVI formulation, we obtain the optimality of the (s, S) policy and the limiting distribution of the inventory level. We also obtain the long run average cost of such an inventory system. Finally, we provide a method to solve the QVI formulation. Using a set of computational experiments, we show that significant losses are incurred in approximating a stochastic lead time system with a fixed lead time system, thereby highlighting the need for such stochastic lead time models. We also provide insights into the dependence of this value loss on various problem parameters. Part 2: “Inventory Financing and Trade Credit” In this chapter, we study the inventory performance of publicly listed retailers between 1980 and 2010 based on a panel dataset from COMPUSTAT, CRSP, I/B/E/S and a hand-collected dataset on bankruptcy. We quantify the effect of a carefully-defined financial holding cost on inventory decisions, after controlling for operational factors and considering access to trade credit. This finding provides empirical evidence of the failure of the Modigliani-Miller Theorem in the inventory management context. We are also able to infer several unobservable costs based on historical inventory decisions. For example, the average cost of trade credit is estimated to be about 20% per year, which matches the typical trade credit terms in the United States. We find that the cost of trade credit computed has a strong connection to inventory per- formance. Our findings are robust to alternative econometric specifications, alternative measures of variables and model estimates for subsets of data. Part 3: “Joint Inventory and Cash Management Decisions” In this chapter, we address this question by considering a general con- tinuous time model of a dynamic inventory system that incurs costs in both managing the inventory and managing the cash flow. To support its inventory and operational cost, this system has access to both the financial market and trade credit from suppliers. We show how the inventory procurement decision and financing decision are made jointly. Specifically, we show that, with friction of financing, not only does the Modigliani-Miller Theorem not hold but also the two decisions interact in a dynamic and complex manner. We are also able to show how the value of the inventory system can be improved by using trade credit. / text

abstract: Nowadays ports play a critic role in the supply chains of contemporary companies and global commerce. Since the ports' operational effectiveness is critical on the development of competitive supply chains, their contribution to regional economies is essential. With the globalization of markets, the traffic of containers flowing through the different ports has increased significantly in the last decades. In order to attract additional container traffic and improve their comparative advantages over the competition, ports serving same hinterlands explore ways to improve their operations to become more attractive to shippers. This research explores the hypothesis that lowering the variability of the service time observed in the handling of containers, a port reduces the total logistics costs of their customers, increase its competiveness and that of their customers. This thesis proposes a methodology that allows the quantification of the variability existing in the services of a port derived from factors like inefficient internal operations, vessel congestion or external disruptions scenarios. It focuses on assessing the impact of this variability on the user's logistic costs. The methodology also allows a port to define competitive strategies that take into account its variability and that of competing ports. These competitive strategies are also translated into specific parameters that can be used to design and adjust internal operations. The methodology includes (1) a definition of a proper economic model to measure the logistic impact of port's variability, (2) a network analysis approach to the defined problem and (3) a systematic procedure to determine competitive service time parameters for a port. After the methodology is developed, a case study is presented where it is applied to the Port of Guaymas. This is done by finding service time parameters for this port that yield lower logistic costs than the observed in other competing ports. / Dissertation/Thesis / M.S. Industrial Engineering 2011

This bachelor thesis was composed by the initiative of a large aluminium profile producer in southern Sweden. Together, the authors and the company analyzed and mapped the current production flow of a selected item. The lead time and total output for a selected article was determined in order to examine the possibility of reducing the amount of tied up capital and related costs. Findings showed that reducing tied up capital and associated costs could be done through adjustment of production layout, production efficiency as well as alterations of produced quantities. By combining these three proposals for improvement, an overall recommendation for future course of action for the company was composed. / Bakgrund: Det problem som utgör grunden för uppsatsen är förankrat i ProfilGruppens osäkerhet gällande vart i en artikels flödesväg kapitalbindning uppstår. Flödesvägar anses kunna ha onödiga delprocesser, samtidigt som använd lager- samt produktionskvantitet inte är teoretiskt förankrad. Potentiellt skulle kapitalbindning och kapitalkostnad kunna reduceras genom analys av dessa aspekter.   Syfte: Uppsatsens syfte är att utreda förbättringsmöjligheter i termer av reducerad kapitalbindning och kapitalkostnad inom en typartikels flödesväg.   Metod: Studien följer en kombination av de kvalitativa och kvantitativa forskningsstrategierna. Arbetet präglas av ett positivistiskt synsätt, eftersom målet är att nå en kvantitativ reduktion av företagets kostnader. Samtidigt är uppsatsen en fallstudie, en design tätt kopplad till kvalitativ forskning. Studien utmärks av ett ständig förhållande till teoretisk relevans, i syfte att kunna applicera genomförd analys på andra företag försatta i liknande situation.    Slutsats: Forskningens resultat visar att tre av de fyra analyserade förbättringsförslagen är av intresse att implementera i företagets verksamhet. Genom att kombinera samtliga förslag till en sammanställd rekommendation presenteras en övergripande framtida handlingsplan för ProfilGruppen att vidta.

Effektiviseringar inom företagen är en viktig del för företagens överlevnad, under de senaste decennierna har intresset för effektiva materialflöden ökat allt mer. Genom att ständigt effektivisera sparar företagen både tid och pengar. Denna studie fokuserar på att effektivisera ett produktionsflöde i ett företag. En litteraturstudie genomfördes för att lyfta fram olika nyckelfaktorer för en effektiv process, skapa förståelse för olika begrep och lade grunden för olika typer av analyser som senare används i studien. För att få en helhetsbild av den verkliga processen som skall studeras användes fallstudie som metod vilket innefattar intervjuer och observationer. Tre förslag på nya produktionsflöden arbetades fram genom att granska de nyckelfaktorer som togs fram under litteraturstudien, genom analysen av intervjuerna och analysen av observationerna. Faktorer som även beaktades var hur dessa nyckelfaktorer påverkar varandra. Förslagen utvärderades genom en Pugh-matris där ett av förslagen framträdde som det starkaste, som sedan rekommenderas till fallföretaget. Det rekommenderade produktionsflödet förväntas minska ledtiden från nuvarande produktionsflöden vilket är 114 respektive 196 minuter till den nya beräknade ledtiden på tolv minuter för respektive flöde. Med det rekommenderade produktionsflödet reduceras tiden för både transporter och hantering av detaljerna och detta motsvarar en minskning på 4,25 personer, vilka kan frigöras för andra arbetsuppgifter inom företaget samt att det frigörs mer uppställningsyta för inkommande gods. / Business efficiency enhancements are an important part of corporate survival, in recent decades, interest in efficient material flows has increased more and more. By constantly improving, companies save time and money. This work focusses on streamlining a production flow in a company. A literature study was conducted to highlight different key factors for an effective process, to create an understanding of different concepts and to lay the foundation for different types of analyzes later used in the study. In order to get an overall picture of the actual process to be studied, case study was used as a method which includes interviews and observations. Three proposals were dealt with by examining the key factors that emerged during the literature study, through the analysis of the interviews and the analysis of observations. Factors that were also considered were how these key factors relate to each other. The proposals were evaluated through a Pugh-matrix where one of the proposals emerged as the strongest, which is then recommended to use by the company. The recommended production flow is expected to reduce lead time from current production flows, which is 114 and 196 minutes to the new estimated lead time which is twelve minutes for each production flow. With the recommended production flow, both the transport and management of the part items decrease, and 4.25 people are released from the work stations, which means that these resources can be used to within other applications within the company and that more loading space for incoming goods is released.

Made available in DSpace on 2016-06-02T19:51:44Z (GMT). No. of bitstreams: 1 3120.pdf: 1379151 bytes, checksum: 666a216cfd62f5c4648ecf103e01efa4 (MD5) Previous issue date: 2010-06-18 / Financiadora de Estudos e Projetos / Nowadays, with the competitive environment dominating the world scene, companies need to be alert to continuous improvement opportunities. In this scene lead time reduction arises as one of the greatest goal to be accomplished. Within this context, the main goal of this research is to study the effect of continuous improvement in shop floor variables (such as variability, setup time, defect rate, among others) on lead time reduction for two productive environments: one with single machine and another flow shop environment. This is done using a quantitative model, which uses a hybrid System Dynamics factory Physics approach. This model was created by Godinho Filho and Uzsoy (2008a, 2008b, 2009). In this research this single machine model is extended by means of adding more workstations in order to create flow shop environment. Besides to the main goal, this research has the following specifics goals: (1) Check if the results found by Godinho Filho e Uzsoy (2008a, 2008b, 2009) are the same for scenes with different characteristics of productive system. (2) Determine if the positive effect in lead time of a continuous improvement action in the shop floor variables is sensitive to characteristics of productive system. If so, how is the relationship between the improvement action and the productive system. (3)Compare the results related with the two previous objectives for the single machine and flow shop cases. The results found in this research proved that conclusions made by Godinho Filho e Uzsoy (2008a, 2008b, 2009) are robusts for different characteristics of productive system in the single machine and flow shop environments studied in this research. In simulated scenes for these environments, the continuous improvements actions in processing time variability and setup time are the most effective in lead time reduction. Furthermore, the positive effect made by the improvement action in lead time is proved sensitive to almost the same characteristics of productive system for single machine and flow shop environments. For these environments, improvement actions in time to failures and repair time are the most sensitive to different characteristics and the most appropriate in productive systems with negative characteristics (e.g. high setup times, high processing time variability, among others). Results generated by quantitative model in this research were analyzed using design of experiments to obtain conclusions. / Nos dias de hoje, onde o ambiente competitivo domina o panorama mundial, as empresas precisam estar sempre atentas a oportunidades de melhoria contínua em suas funções. Nesse cenário a redução do lead time surge como um dos grandes objetivos a serem alcançados. É exatamente dentro deste contexto que este trabalho se insere, tendo como principal objetivo avaliar o efeito da implantação de ações de melhoria contínua em variáveis do chão de fábrica (variabilidade no tempo de processamento, tempo médio de setup, taxa de defeitos, dentre outras) na redução do lead time para dois ambientes produtivos: ambiente com máquina única e ambiente flow shop. Para isso pretende-se utilizar um modelo quantitativo que utiliza as abordagens Factory Physics System Dynamics de forma híbrida, modelo este originalmente criado por Godinho Filho e Uzsoy (2008a, 2008b, 2009). No presente trabalho esse modelo, que é de máquina única será ampliado por meio da inclusão de mais estações de trabalho para criação do ambiente flow shop. Além do objetivo principal, a presente pesquisa tem os seguintes objetivos específicos: (1) Verificar se os resultados encontrados por Godinho Filho e Uzsoy (2008a, 2008b, 2009) são os mesmos para cenários com diferentes características do sistema produtivo. (2) Determinar se o efeito positivo no lead time de uma ação de melhoria nas variáveis do chão de fábrica estudadas é sensível a características do sistema produtivo e se sim, como é o relacionamento entre a ação de melhoria e o sistema em questão. (3) Comparar os resultados com relação aos dois objetivos anteriores para os casos de máquina única e flow shop. Os resultados encontrados no presente trabalho mostram que as conclusões extraídas por Godinho Filho e Uzsoy (2008a, 2008b, 2009) são robustas para diferentes características do sistema produtivo nos ambientes de máquina única e flow shop simulados. Nos cenários simulados para esses dois ambientes, as ações de melhoria na variabilidade do tempo de processamento e no tempo de setup são as que se mostraram melhores para redução do lead time. Além disso, o efeito positivo no lead time de uma ação de melhoria mostra-se sensível a quase as mesmas características do sistema para os ambientes de máquina única e flow shop. Para esses dois ambientes, as ações de melhoria no tempo entre falhas e no tempo de reparo são as que se apresentam mais sensíveis a diferentes características do sistema produtivo, e também como melhores alternativas em sistemas com certas características negativas (por exemplo, altos tempos de setup, entre outras). Os resultados gerados pelo modelo quantitativo foram analisados por meio de técnicas de planejamento de experimentos para obtenção das conclusões.

Denna rapport utreder möjligheterna till att reducera ledtiden, med en uppskattning av minst 10%, för plockprocessen på den utlevererande avdelningen som kallas den ”avgående avdelningen” hos EJOT Sverige AB i Örebro. Företaget vill i dagsläget skapa sig en tydlig helhetsbild av processen samt få underlag, för eventuell framtida implementering, i form av förbättringsförslag för en ledtidsreducering. Under arbetets gång beskrivs nuläget utifrån datainsamling, intervjuer och observationer, i kombination med ett spagettidiagram som presenteras. De möjliga rotorsakerna till problemen kartläggs genom att skapa ett fiskbensdiagram som sedan analyseras. Analyserna visar på att processen är komplex och därmed även problemen. Orsaker som valts för vidare analys är: layout, körslinga och placering av låga gods.  Tre förbättringsförslag har tagits fram utifrån analyserna och dessa handlar om att skapa en ny optimerad layout, en ny optimerad körslinga samt att eliminera placeringen av låga gods.  Det fortsatta arbetet bör vara att optimera en ny lagerlayout samt se över och standardisera en ny körslinga. Företaget bör också se över möjligheterna att eliminera placeringen av gods på markplan. / This report investigates the possibilities of reducing the lead time, with an estimate of at least 10%, for the picking process at the delivery unit called the “outgoing department” at EJOT Sverige AB in Örebro. The company currently wants to create an overall picture of the process and get a basis, for possible future implementation, in the form of improvement proposals for a lead time reduction. During the work, the current situation is described based on data collection, interviews and observations, in combination with a spaghetti diagram that is presented. The possible root causes of the problems are mapped by creating an Ishikawa diagram which is then analyzed. The analyses show that the process is complex and thus also the problems. Reasons chosen for further analysis are: layout, driving loop and placement of low goods. Three improvement proposals have been developed based on the analyses and these are about creating a new optimized layout, a new optimized driving loop and eliminating the placement of low goods. The continued work should be to optimize a new warehouse layout and review and standardize a new driving loop. The company should also review the possibilities of eliminating the placement of goods on the ground floor.

The process of color-matching any color product is a process that can be quite complicated and requires great skill from a color analyst. As the name suggests color-matching is the process in which the color of a standard is obtained from a sample through careful inspection and precision in order for the colors to match up. It is a process that can vary in length dependent of the amount of pigments used.  Foundations are a type of liquid emulsion cosmetic and consist of five main pigments; white (titanium dioxide), red, brown, yellow and black iron oxides. These five pigments can when mixed together result in hundreds of shades. One of the greatest challenges for cosmetics companies is to successfully manufacture these shades often from a benchmark, a desired shade, as well as maintaining this same shade when the batch is scaled up from lab production to factory.  Oriflame is a direct-selling cosmetics company in which the Marketing department and Color Cosmetic department work closely in order to produce new products and shades for each catalogue. Liquid foundation shades are decided by the Marketing department and given to the Color Cosmetic department to color-match.  Currently the process of color-matching is carried out through the visual assessment by the color analyst. In order to improve the efficiency and lead - time of the current method, Oriflame has drawn inspiration from other sectors dealing with color and taken the decision to color-match with the use of a spectrophotometer coupled with color-appropriate software. The method was divided into four separate processes; confirming a sample method presentation to the spectrophotometer, colorant file set-up & process, color-matching process with the color-appropriate software and color match comparison. The results showed that with an adequate sized colorant file a method for color-matching with a spectrophotometer was established. The lead-time could be decreased by, as much as 66.6 % and providing strong evidence that this is a valuable tool for color analysts working at Oriflame.

Most construction companies want to deliver the best possible results for their customers while spending the least possible resources. Nevertheless, the construction industry has traditionally been full of unnecessary inefficiency regarding workflows. One of the most successful methods to prevent inefficiency workflow is lean construction. Lean construction consists of various methods that aim to streamline workflow as optimally as possible. Purpose: The purpose of the degree project is to use specific lean methods and tools to identify different waste and be able to use them to reduce downtime of a studied construction project. Method: A case study has been carried out where the project Heby - care homes has been studied. To gather more information a survey study has been done. To gather even further information about the project an interview was conducted with a person who has a leading role. Results: The result shows a analysis of the survey and the interviewe answers. It also includs working methods, transparency and waste minimization. Furthermore it includs solutions like identify problems, create order and structure, standardize and work on improvements. Conclusions: The conclusion that can be drawn is that standardizations in the form of checklists and guides need to be in each project. More openness and to review your chosen forms of agreement. To have a more dynamic working group that strives to achieve common goals and continuous improvements. These are the most important aspects of making a project effective.

Background: Continues improvements in production are essential in order to compete on the market. However, to be an active competitor on the market, companies need to know their strengths and weaknesses, and improve and develop their production continually. Today process industries generate enormous volumes of data and data are considered a valuable source for companies to find new ways to boost their operations' productivity and profitability. Data Mining (DM) is the process of discovering useful patterns and trends in large data sets. Several authors have pointed out data mining as a good data analysis process for manufacturing due to the large amount of data generated and collected from production processes. In manufacturing, DM has two primary goals, descriptive with the focus on discovering patterns to describe the data and predictive where a model is used to determine future values of important variables. Objectives: The objective of this study was to get a deeper understanding of how collected data from production can lead to insights regarding potential production economic improvementsby following the CRISP-DM methodology. In particular to the chosen production line if there were any differences in replenishment durations when it comes to different procedures. Duration in this study is the time the line is halted during a material replenishment. The procedures in question are single-replenishment versus double-replenishment. Further investigated was if there were any differences in the replenishment duration when it comes to which shift team and at what shift time the replenishment procedures were made. Methods: In this study the CRISP-DM methodology was used for structuring the collected data from the case company. The data was primarily historical data from a continues production process. To verify the objective of the study, three hypotheses derived from the objective was tested by using a t test and Bonferroni test.  Results: The result showed that the duration of a double-replenishment is lower compared to two single-replenishments. Further results showed that there is a significant difference in the single-replenishment duration between the different shift times and different working teams. The interpretation of the result is that in the short term there is a possibility that implementingdouble replenishments can reduce the throughput time and possibility also the lead time.  Conclusions: This study could contribute with knowledge for others who seek a way to use data to detect information or deeper knowledge about a continuous production process. The findings in this study could be specifically interesting for cable manufacturers and, in general, for continuous process manufacturers. Further conclusions are that time-based competition is one way for increasing the competitive advantage in the market. By using manufacturing generated data, it is possible to analyse and find valuable information that can contribute to continuous process improvements and increase the competitive advantage.