University of Twente Student Theses




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Abstract:At Benchmark Electronics business is soaring and large customer orders are received, and Benchmark corporate indicated it wants to improve its European footprint by expanding business in Almelo. Due to the increasing number of customer orders the workload in the production process significantly and lead to Benchmark needing to focus more on managing their capacity resources. In the past Benchmark was only focused on its material requirements planning [MRP], because long lead times and high quality standards of production parts are the main constraint on their production planning. But due to the new flow of incoming production orders also capacity is becoming a game-breaking constraint. To manage this new constraint Benchmark started applying capacity planning techniques by expanding the use of their ERP system from just MRP applications to MRP II modules. Though Benchmark started on planning their capacity resources and control its production process, Benchmark still experiences difficulty on transforming their aggregated production planning and transform it into a detailed planning. This leads to lots of rescheduling actions and on-time-delivery dates not being met. Furthermore managing and controlling the work orders on the production floor is hard due to lack of insight in the production status and due to the fact that the production plan is adjusted and priorities changing on a daily basis. One of the main reasons for these problems is the absence of relevant and accurate information on many variables in the ERP system. Due to this production cannot be controlled using the system, and lots of human interference and actions are needed to control it. The problems stated above are widely recognized in the literature on production planning and control. Lots of companies, mainly small and medium sized companies, experience similar problems. The purpose of this research is to identify the underlying causes of the problems, and develop a conceptual model based on suggestions in academic literature regarding production planning and control systems that will help solve these problems. This led to the following (main) research question that needed to be answered; ‘’Which logistical concept model can Benchmark Electronics use best to improve production planning and control manageability and on-time-delivery performance, and which recommendations (based on this model) can we make regarding changes that Benchmark needs to make?’’ In this research we focused mainly on the Surface-Mounting-Device and Hand-mounting part of the production, and less on the box build and clean room departments. After reviewing the literature and analyzing the current Benchmark situation three causes for the problems regarding the production planning and controlling were identified. [1] The first is that there is a misfit between the production planning environment and the production planning and control method used to control the system. [2] The second is that Benchmark is making their production planning unnecessarily complex by fragmenting the process, by splitting the process and manage these parts independently. [3] And the third reason is the use of ERP for every aspect of the process, which makes managing the process very labor intensive. Based on these suggestions from the literature a conceptual model is constructed, which is presented in chapter 6, that suggests that the use of ERP should be constrained to just material requirements planning. Furthermore the concept of workload control approach should be used to plan production capacity and control the production process. This approach conceptualizes the job shop as a queuing system, and focuses on controlling the lengths of these queues. In this report an attempt is made to transform the conceptual model in a production planning and control methodology and a set of associated heuristics and rules. The theory of constraints is used to replace the sophisticated heuristics from the workload control concept, to make the concept more applicable to Benchmark. Though a lot of research has been performed on the concept of workload control, academic professionals have to do some sufficient research to bring theory closer to practice. The applicability of the workload control concept in the Benchmark environment is proven. A challenge for Benchmark regarding implementation is that no detailed roadmap is available in the literature. Lots of research regarding parameter setting still needs to be done. However this does not mean that implementation can be started. Regarding implementation we propose the following first steps that should be taken by Benchmark. [1] Benchmark supply chain management needs to decide whether or not they want to adapt their production planning and control approach. Top management support is one of the key factors for successful implementation. Support from top management can be achieved by focusing on the improvements that can be achieved by implementing workload control. For better understanding the link between the well know philosophy lean manufacturing and workload control need to be emphasized. We advise Benchmark Electronics to find other companies that have already implemented the concept, so the concept is clear and implications are known. [2] If Benchmark is willing to change this approach we advise an external consultant that helps to implement the presented approach. It is a major change within the Benchmark production planning and control approach, that requires a lot of effort from the Benchmark staff. The process of implementation takes around 2-4 years, and no implementation roadmap is available. This makes it very hard for Benchmark to successfully implement the proposed model. Some general implementation issues from other cases are gathered and mentioned in section 6.3. [3] Get control over the work-in-progress levels by planning the main bottlenecks in the system. The provided conceptual model can help Benchmark to further improve the production process, but is not able to solve the imbalance between production in- and outflow of orders. Therefore this imbalance should be resolved, this should be done based on information that is accurate, and can be done using simple tools in Excel. More detailed methodology for this is presented in section 6.2.3. Further recommendations are made regarding how the production planning and control processes should be managed. Even if Benchmark decides not to change their current approach some useful recommendations and suggestions are made in section 7.2.
Item Type:Essay (Bachelor)
Benchmark Electronics, Almelo, the Netherlands
Faculty:BMS: Behavioural, Management and Social Sciences
Subject:85 business administration, organizational science
Programme:Industrial Engineering and Management BSc (56994)
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