Improved inventory and production control on a multi-product production line : seasonality analysis, inventory supermarket, and Kanban design

Abstract

This research creates a system to help PDAP Electronics Singapore control its inventories and achieve demand-driven production on a multiple-product production line. One stage is chosen for study in this thesis. An inventory supermarket combined with a Kanban visualization system is proposed to control the total inventories and schedule production. An ANOVA test is used to first decide the seasonality of demand. Then the inventory levels of the supermarket during each season are determined respectively using the safety stock model. The Kanban system will record the inventory and demand levels and direct daily production accordingly. The simulation results show that the proposed system is capable of controlling the inventory levels and delivering high customer service levels (>95%) at the studied stage. In addition, it could reduce the inventory cost of selected products by 10-15%. It is also suggested that the use of small batch sizes in production will significantly reduce the total inventory cost at the stage. The performance of the system also proves satisfactory in a multi-stage simulation. It is therefore recommended that PDAP implement and further fine-tune this system in its operation.