Strategic DDMRP’s Buffer Positioning for hybrid MTO/MTS manufacturing

Abstract

To make a product, many components: made inside a supply chain or provided by external suppliers, may be needed as specified in the bill of material (BOM). This variety exposes the production process to various risks as stock ruptures for instance. Due to companies efforts to face the volatile demand and market pressure, Work-in-process (WIP) inventories become redundant in flow production lines. Uncertainty became a major flaw of the system, to which many methods were developed and adopted to manage and optimize the use of resources. One of the most recent methods is Demand Driven Material Requirement Planning (DDMRP) that uses buffers: visual indicators of the net flow integrating the real stock, the actual demand and the expected provisions; This paper describes an approach to solve the optimization problem of minimizing the storing costs, under service time constraint for uncapacitated buffer positioning alongside with the buffer allocation following the DDMRP planning methodology in a hybrid MTO/MTS manufacturing system. Finally, numerical examples are applied to test the efficiency and the performance of the developed algorithm.