Reducing internal lead times in MTO & job-shop production environments: a case study

This Master’s thesis has been carried out within the subject area of Production Development and Management and aims to reduce internal lead times in make-to-order (MTO) and job-shop production environments with the use of identified theoretical methods. The reason this particular production environment was chosen was the flexibility and satisfaction it provides its customers. Today, customers expect customised products, a situation which causes problems for manufacturers as they are unable to produce such products in large amounts. In order to investigate problems with these kinds of environments and the causes for long lead times, we have conducted a literature study where we identified the problems these particular kinds of production environments experience regarding production planning and control which are related to the immense amount of time consumed by changeovers because of high demand variance and high requirements for customisation. To affirm the theoretical findings, we opted to undertake a case study and chose Talent Plastics Gislaved AB as our case, because this company utilises an MTO and job-shop production environment for its production of highly customised products with high demand variance. In the analysis of our case, we found that the wastes in the organisation were similar to those identified in the theoretical findings. The current planning system and the current state of the manufacturing lead time system were evaluated and a theoretical framework using a combination of lean production, work load control and constant work-in-process theories was suggested. We claim that concentrating on the reduction of setup times can lead the job-shop towards drastically decreased lead times and a much more effective use of time throughout the organisation. Because the organisation will continue to face problems due to the ever-increasing demand variance and requirements for customisation, there are plenty of opportunities for further research in these kinds of production environments. Emerging theories, such as quick response manufacturing, may also be tested to construct an efficient framework