International Business Machines Corporation

Grace Yuh-Jiun Lin

Markus Ettl

Feng Cheng

David Da-Wei Yao

Brenda Lynn Dietrich

Ramesh Srinivasan

David Da-Wel Yao

A manufacturing process is migrated from an existing operation to a configure-to-order (CTO) system. As the CTO operation will eliminate the 'machine-type model' (MTM) inventory of the existing operation, the emphasis is shifted to the components, or 'building blocks', which will still follow the build-to-stock scheme, due to their long leadtimes, and hence still require inventory. The solution involves an inventory-service trade-off of the new CTO system, resulting in performance gains, in terms of reduced inventory cost and increased service level. Other benefits include better forecast accuracy through parts commonality and risk-pooling, and increased customer demand, as orders will no longer be confined within a restricted set of pre-configured MTMs.

Large inventory-service optimization in configure-to-order systems

A manufacturing process is migrated from an existing operation to a configure-to-order (CTO) system. As the CTO operation will eliminate the 'machine-type model' (MTM) inventory of the existing operation, the emphasis is shifted to the components, or 'building blocks', which will still follow the build-to-stock scheme, due to their long leadtimes, and hence still require inventory. The solution involves an inventory-service trade-off of the new CTO system, resulting in performance gains, in terms of reduced inventory cost and increased service level. Other benefits of the method include better forecast accuracy through parts commonality and risk-pooling, and increased customer demand, as orders will no longer be confined within a restricted set of pre-configured MTMs.

A method for determining procurement for parts (P) in a production system having constraints comprising at least one of constrained resources (r.sub.i) and known maximum demands (d.sub.j). The method comprises two steps. Step 1 includes constructing a production planning decision space comprising independent sets of hyperplanes defined by decision variables (q.sub.j) corresponding to product quantities for products (j). The constructing step subsumes steps of expressing a potential usage of part (p) as a linear combination of production quantities (q.sub.j) based on bill of material usage rules; limiting the production quantities (q.sub.j) so that each is less than or equal to the maximum demand quantity (d.sub.j); and limiting the production quantities (q.sub.i) so that the usage of each resource (r) is based on bill of material and bill of capacity usage rates less than or equal to the availability of that resource. For each part p, the second step includes locating a region in the decision space corresponding to a high level of usage of part (p).

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Grace Yuh-Jiun Lin