This case study arose in a large plant manufacturing locks. The existing production control system involved partially a rudimentary MRP at the assembly level and a pull-system of an informal (r,Q) type for triggering component production. The expressed problem was: component shortages affecting assembly operations and load fluctuations as well as imbalances affecting component shops. Coordination between assembly shop loading and component shops’ loading was identified as crucial. The plant happened to have a considerable flexibility in production smoothing. A cyclic assembly planning system was considered, with minor variations from month to month. A policy for monthly joint planning of assembly and component shops’ production was obtained. Consideration was given to presence of lead times for component production. For load balancing over time certain bin-packing heuristics were considered. For sequencing in assembly lines certain flow-shop heuristics were used. The component inventory control policy involved a restoration of month-end inventories towards steady state target values. The operational feasibility of the policy was verified on actual data. The study includes approximate quantification of losses that would be caused in the original system due to component stockouts. Certain subproblems concerning component lot-sizing unde random tool failures were also settled adequately.
