Track: Inventory Management

Abstract

A pull production system is a make-to-order environment where manufacturing is started only after customer order is received and hence demand is confirmed. In an environment having dominant flow path for the products, it offers challenging scope for the management and control of raw material, work-in-process and finished goods inventory. Literature and industrial practice suggests a variety of heuristic models used to control inventory to optimal levels. Estimating and knowing the current and future inventories to be maintained is essential to sustain the material flow throughout the planning period. In this paper, we develop an integrated inventory control model integrating the demand and component material flows in a multi-customer, multi-product environment using system dynamics simulation modeling. We have simulated the model in a pull production system where the complete cycle depends on the customer order. The inventory level and structure are linked to delivery service and in effect to competitive advantage.