Finished goods inventory reduction by advance production control and shipping schedule incorporated planning
Date of Issue2009
School of Mechanical and Aerospace Engineering
Singapore-MIT Alliance Programme
An opportunity for reduction in finished goods inventory level of the Singapore operations of a multi-national food products packaging company was identified during a study of the system in accordance with the World Class Manufacturing philosophy. Changes in planning policy were proposed to remedy the problem and simulation models were used, on the make- to-order, serial production system to test two potential solutions to the problem. The models used showed great promise for reduction in finished goods and annual holding costs. The advance production control and incorporating shipping schedules into the weekly production planning demonstrated significant results in reducing finished goods inventories.