Inventory reduction based on the example of a German SME in the steel wire rope industry

Sammanfattning: The purpose of this master thesis is to point out possibilities for reducing the inventory of semi-finished products based on the example of a German SME (small and medium-sized enterprises) in the steel rope industry. Inventory reduction increases the flexibility of the company and decreases tied up capital. Therefore it is necessary to identify the factors which are influencing the inventory level. Theory provided market related, product related and pro-duction related factors. These factors have been analysed by collecting empirical data and comparing these results with theory. Product delivery strategy, decoupling point strategy and postponement strategy are the theo-retical frame work used to answer the main research question: How can the decrease of inventory of semi-finished products be exemplified without reducing the ability to deliver based on product delivery strategies? The main result of this thesis is that Drako is not able to move the decoupling point dramatically because this change would increase the set-up times. Therefore postponement strategies have to be applied to delay the point of product definition. This can be achieved on the one hand by ensuring that components are useable for other products. Nowadays this point of product definition occurs in the first production step when the chosen wire is fixed in the stranding machine. On the other hand it is easily possible to use free capacity so that the production process can be split up on more machines. The utilisation of the relevant machines for producing elevator steel wire rope is very low. Based on the value stream analysis, which was the major source for collection of the empirical data, waste in the production has been identified. Quality checks at the end of a process are not sufficient, because it is not possible to repair errors. Also the rewinding of the wire is wasted time for the company because the supplier is able to deliver the raw material also on bobbins, which avoids the rewinding process. All in all it can be said that the current production strategy of Drako allows many proposals for inventory reduction.