Management of a high mix production system with interdependent demands: Finished goods requirements and raw materials control

Founded in 1946, Instron® is the recognized worldwide market leader in the materials testing industry. Their products cover different areas of testing, and consist in combinations of machines and accessories, according to customers' requirements. The high level of customization and the demand correlation between different products required increased efficiency and effectiveness in inventory management, and represented a challenge for inventory control framework design."Management of a high mix production system with interdependent demands" addresses this challenge. At first, models of product line, demands correlation and customer expectation are obtained. Based on these models, two inventory control frameworks are proposed and validated using simulation: a fixed service level policy for the raw materials and an optimized policy for the finished goods. In addition to optimizing the service levels, the two proposed policies are expected to reduce the inventory value on hand by 30% and 35%, respectively.