Industrial
Practice and New Directions
Robin
Roundy, MetinCakanyildirim, Woonghee
Timothy Huh, Feng Zhang
We
summarize a multi-year research effort designed to provide useful tools
for capacity planning decisions in the semiconductor industry.The
decisions are crucial and challenging.The
business environment is volatile, but equipment has long procurement lead
times and is extremely expensive. We will review and evaluate current business
practices.We present methods for
quantifying the errors in demand forecasts. We present a novel approach
for multi-dimensional demand modeling, and discuss practical and algorithmic
implications of different stockout cost
models.We present efficient algorithms
for provably solvable versions of the capacity planning problem.
Workforce
Agility: Models for gaining insight into when and how to use cross-training
Wallace J. Hopp
Northwestern
University
We
examine issues that affect the nature of the “best” strategy for cross-training
workers in serial production environments.Using
a combination of optimization and simulation models, we examine strategies
based on chaining, which enable labor capacity to be shared very
flexibly.Our results suggest that
chaining strategies work robustly well given a suitable task allocation
policy and that they offer promise as practical workforce management tools.
Using
Transaction Data for the Design of Sequential, Multi-unit, Online Auctions
Abraham Seidmann
Internet
auctions for consumers' goods are an increasingly popular selling venue.The
Internet's computational ability makes possible the sale of multiple units
of the same good in a single auction.We
found that many sellers, instead of offering the entire inventory at a
single auction, split it into sequential auctions of smaller lots, to reduce
the negative market impact of large lots.In
the short lecture we plan to show how the available inventory should be
split into multiple lots and how many sequential auctions should be run.We
also investigate how managers can leverage information technology to improve
the design of future auctions.
Assuming
a truth-revealing ascending auction model, we quantify the effect of auction
lot size on the closing price.We
then develop a stochastic optimization model for allocating inventory across
multiple auctions.Solving the dynamic
programming formulation, we prove that the lot size drops from period to
period.The intensity of the decline
increases in the holding costs and the website's traffic intensity, while
decreasing in the dispersion of consumers' valuations of the good.Finally,
we extend this model to dynamically incorporate the results of previous
auctions as feedback into the design of consecutive auctions, updating
the lot size and number of auctions.We
demonstrate how information signals from previous auctions should be used
to update the auctioneer's belief s about the customers' valuation distribution,
thereby significantly increasing the sellers' profit potential.We
conclude the seminar with several practical examples that show the economic
benefits of using detailed transaction data for the design of sequential,
multi-unit, online auctions and how these benefits are influenced by the
inventory holding costs, bid traffic, and the dispersion of consumers'
valuations.(Joint
research with Professors Pinker and Vakrat.)
RECENT
RESULTS ON TWO-MOMENT APPROXIMATIONS, SAFETY LEAD TIMES, AND HYBRID PUSH-PULL
SYSTEMS
RajanSuri
Center
for Quick Response Manufacturing
University of Wisconsin-Madison
Dr. Buzacott's
pioneering works in the areas of modeling job shops, analyzing safety stock
and safety lead times, and hybrid material control systems, have inspired
many researchers over the years. In this talk we will show some of the
latest results in these three areas: (i) simple
two-moment approximations for fork-join stations which can be used to model kanban
and other material control systems in job shops; (ii) numerical results
showing that safety lead times are better than safety stock for multi-product
systems over a wide range of parameters; (iii) case studies on implementations
of a hybrid push-pull system, called POLCA, at several factories, explaining
why the system was chosen and the performance results seen thus far. This
talk represents joint work with Ananth Krishnamurthy
and Mary Vernon at the University of Wisconsin-Madison.
I-CLIPS : One way to materialize a stochastic model of a manufacturing system
Building stochastic models that support operational and managerial decision making in manufacturing systems is an intriguing academic research activity. However, transferring these models to industry is even more challenging and it includes not only issues like software development, a dedicated IT-approach and the effective implementation but also a well-thought educational effort. We discuss the software I-CLIPS, which is the materialisation of a multi-product queuing network with embedded lot sizing optimisation. I-CLIPS serves three purposes: better planning, better tuning and better levers for improvement.
Spare
Parts Inventory Management at the Royal
dr.
W.H.M. Zijm
In
this talk we present models and techniques that have been developed to
support the design of a new spare parts management system at the Royal
Netherlands Navy. Since we focus on high system availability at ships,
failed components or subassemblies are initially replaced by spare items,
while the failed items are later repaired and then stored for future re-use.
Since military installations on ships often have a complex product structure,
and since spare parts are kept in stock both at the ships and at a central
facility, we deal with multi-echelon, multi-indenture inventory systems.
Our goal is to establishoptimal
base stock levels of all components at all sites in order to maximize system
availability given limited investment budgets. We extend the analysis to
repair shops with limited capacities, each modeled as a BCMP queuing network.
In addition, we present results for complex real life systems, indicating
that substantial improvements in system availability can be obtained, while
at the same time reducing inventory investments with more that 50 %, leading
to estimated savings of more than 25 million Euro
in inventory investment.
Kanban,
CONWIP, PAC, Information Flow, and Multiple
Department of Mechanical
Engineering
Massachusetts Institute
of Technology
In
many material flow systems (including kanban,
CONWIP and PAC), the flow of material is controlled by the presence or
absence of tokens.
In
such systems, a token is generated by the arrival of an order, the arrival
of an item of raw material, the departure of a finished item, or by the
completion of an operation.The presence
of this token is required before some other operation may occur.To
generalize, there may be many tokens taking different (but fixed) paths
in the system, and the space allowed for the storage of tokens at specific
points in the system may be limited.
We
describe a class of flow network models which can help the analysis and
design of such control mechanisms, and of the manufacturing systems controlled
by such mechanisms.Material flows
in one part of such a network and tokens flow in the rest of it, but no
distinction is made between material and token flow in the analysis.The
issuance of a token at the completion of an operation may be viewed as
a disassembly, and the requirement that a token be present for an operation
to take place may be viewed as an assembly.
These
networks are a generalization of more restricted systems that have been
analyzed by decomposition methods.In
such systems, buffers (links) are finite, machines (nodes) are unreliable,
machines may perform assembly and disassembly operations, but the network
is limited to acyclic or tree structures.In
the larger class, there is no such structural limitation.In
particular, there may be multiple loops.
Loops
create a new phenomenon that does not exist in acyclic systems: a strong
correlation among the quantities in buffers at any time. This is because
there is an invariant associated with each loop.(For
example, in closed loops where the material visits all the machines and
buffers in order, the population is constant.)
We
describe a new decomposition method for the performance analysis of these
systems.
On
the Value of Advance Demand Information in Production/Inventory Systems
FikriKaraesmen
Laboratoire
Genie Industriel
EcoleCentrale
Paris.
Inspired
by the earlier work of Buzacott and Shanthikumar,
we investigate the value of advance demand information in production/inventory
systems. For a single-stage make-to-stock queue, we assess the value of
using advance demand information under a variety of assumptions on the
cost of obtaining advance demand lead time, and on the delivery timing
requirements. This analysis enables us to identify conditions under which
advance demand information may bring significant benefits in capacitated
systems. (joint work with G. Liberopoulos
and Y. Dallery)
What
is Missing to Enable Optimization of Inventory
Deployment and Supply Planning?
Sridhar Tayur
GSIA
Tremendous
opportunity exists if we can bridge Top Academic Research and the commercial
marketplace. The timing is appropriate because investments in ERP and APS
have failed to provide the return, and the practitioners are getting frustrated
with existing vendors. Frankly, data is also available at an adequate level.
I would like to celebrate John's workshop by showcasing some significant
practical contributions that have been made when our community's research
has been appropriately applied. This may also lead to a discussion on how
to make our research more practically useful in a widespread manner.
This
talk outlines the way in which models of manufacturing systems have evolved
over the last 50-60 years. It is presented from a personal perspective:
how awareness of issues arose and how models developed. The role of direct
and indirect industry interactions combined with student originality and
commitment will be stressed.