Minimizing Supply Chain Impact in a Synchronous Build Operation: Optimizing Buffer Size 2002-01-2111
Automotive operations experience substantial financial losses when any one item, from a set of vehicle-specific sequenced parts, is unavailable. Justifying the appropriate buffer size using “heuristics” is increasingly difficult as “lean” advocates push for smaller inventories. One costly scenario is the painted body buffer in operations where the sequence of parts for final assembly is determined prior to the start of the paint process.
To provide an objective methodology for determining buffer building capacity and target fill level, we developed a cost optimization model. This demonstrates, graphically, the criticality of proper buffer sizes and the cost effectiveness of designing the final assembly operations with the capability of short-term storage for a small amount (2 - 10) of sequenced parts, when the expected painted body is not available. The model is easily modified to suit a particular situation, by revising the input parameters to more appropriate values.