Lagre inventory-service optimization in configure-to-order systems
First Claim
1. A method of managing manufacturing logistics of end products comprising the steps of:
- maintaining an inventory of components, which components, termed “
building blocks”
, are built to stock, each said component having a cost;
configuring-to-order end products using said components;
establishing a base-stock level for each of said components; and
replenishing said components from suppliers in accordance with said base-stock levels so as to reduce a total cost of inventory of said components, wherein said cost of at least one component differs from said cost of at least one other component, and wherein said difference determines the result of said replenishing step.
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Abstract
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.
30 Citations
8 Claims
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1. A method of managing manufacturing logistics of end products comprising the steps of:
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maintaining an inventory of components, which components, termed “
building blocks”
, are built to stock, each said component having a cost;
configuring-to-order end products using said components;
establishing a base-stock level for each of said components; and
replenishing said components from suppliers in accordance with said base-stock levels so as to reduce a total cost of inventory of said components, wherein said cost of at least one component differs from said cost of at least one other component, and wherein said difference determines the result of said replenishing step. - View Dependent Claims (2, 3)
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4. (canceled)
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5. A system for managing manufacturing logistics of end products comprising:
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means for maintaining an inventory of components, which components, termed “
building blocks”
, are built to stock, each said component having a cost;
means for configuring-to-order end products using said components;
means for establishing a base-stock level for each of said components; and
means for replenishing said components from suppliers in accordance with said base-stock levels so as to minimize a total cost of inventory of said components, wherein said cost of at least one component differs from said cost of at least one other component, and wherein said difference determines the result produced by said replenishing means. - View Dependent Claims (6, 7)
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8-15. -15. (canceled)
Specification