Capacity analysis in repetitive assemble-to-order manufacturing systems

The application of traditional make-to-stock planning tools to manufacturing to orders often gives poor results, as the strategic and tactical goals, the available control levers and the features of the markets may substantially differ in the two contexts. Alternatively, production to order has been organized and run by means of project management methods, such as precedence networks. However, also these classes of techniques often weaken their efficiency when applied in a repetitive manufacturing environment, as they do not fully exploit the specificity of assemble-to-order production systems. In this paper we develop a hierarchical planning approach for assemble-to-order capacity planning based on Lagrangean relaxation, which allows integration of the management of earlier production stages, in which inventories of subassemblies are maintained, with the final assembling stages, providing greater control over the lead times.