Process Improvement Case Study
Door Assembly Process

Purpose

Plant Background

Process Discription

Video of Process

Problem Statement

Process Data

Door Assembly Schedule

Your Assignment

Scenario 1

Scenario 2

Scenario 3

Simulation Model

Scenario 3

Because of the long setup times, a third way to improve costs for the door assembly process is to increase the batch sizes and reduce the number of setups. To assess the impact of larger batches, you first need a little background on the scheduling process within the plant.

Background: The door assembly schedule is based on the the cabinet line schedule. For example, a model 9350 cabinet require two 2-panel and two 1-panel doors. So, if the cabinet line schedule called for 50 of the 9350 cabinets, a demand for one-hundred 9350 model 2-panel and one-hundred 9350 model 1-panel doors is generated for the door assembly schedule. A representative for a single day of the door assembly schedule has been included in the base simulation model. In addition, the plant manufacutes up to thirty different cabinets, which translates to approximately 50 different doors. Therefore the representative door assembly schedule may not repeat for a week or more.

Currently, the door assembly schedule is synchronized with the cabinet line schedule. In otherwords, just enough doors are made to meet next days cabinet line schedule. So, if the batch size for the door assembly line is increased without increasing the batch size of the cabinet line, doors must typically be carried in inventory for at least a week before another build of that model will be called for by the cabinet line.

Your task: Your task is to use the following data to determine how large to make the batch size. Assume the representative door assembly schedule requires no inventory control because the doors are immediately installed on the cabinets. Also, assume that the cabinet line schedule can not be manipulated. Thus, increasing the batch sizes for the representative door assembly schedule requires a new mechanism (and cost) for managing assembled door inventory. Also, assume for simplicity sake that batch sizes can only be increased in integer multiples.

Two costs are associated with carrying doors in inventory. The first cost is a one time fixed cost for the equipment, procedures and controls put in place to establish the ability to physically carry doors in inventory. The table displays these costs as a function of the increase in the size of the representative daily door assembly schedule. Assume that there is only enough floor space to hold three weeks of inventory (quadruple the batch size).

The second cost is associated with carrying the inventory. This is often referred to as a holding cost (h). The table below show the yearly holding cost for a single door by type.

You need to determine:

1. Costs associated with the base schedule
2. Costs of doubling the batch sizes
3. Costs of tripling the batch sizes
4. Costs of quadrupling the batch sizes

Note: Don't forget that by increasing the batch size and reducing the number of setups, overtime and overtime costs will be reduced.