Balancing inventory levels and setup times - An analysis and outline of a decision-making model

Sammanfattning: Background and Research Question Historically, Lindab has largely focused its efforts on the production, but as a part of recent development in company strategy, supply chain management has gained more attention. In this regard, more attention has been given to stock reduction and minimizing total setup times to get a leaner production. Therefore, the company wants to investigate the current production scheduling and sequencing in two well-defined production lines to analyze parameters influencing inventory management and production planning decisions. Furthermore, based on the findings, a model is outlined to support planners in decision making within production. Methodology The presented analysis and model outline was conducted in cooperation with Lindab AB. The study followed an abductive research approach and focused on collecting qualitative as well as quantitative data through several methods. The quantitative data collected originated from several databases and was supplemented with semi-structured interviews. Theoretical Framework This study is based upon the established theory on inventory management and production scheduling and sequencing. Furthermore, approaches described in theory are used to investigate the company and outline a production planning model. Conclusion Throughout the analysis, it could be shown that the company bases their inventory management as well as production scheduling and sequencing on the most relevant parameters. However, the values of these parameters are often not optimal and improvements could be made to further reduce the costs associated with this area. Although, the current approach of utilizing the experience of production operators to improve a production lines performance shows some potential, the obtained results vary between operators and could be improved by further structuring their approach to production scheduling and sequencing. A standardized approach is suggested by this study, to increase savings in the areas of average inventory levels and total setup time.