An analysis of process industry production and inventory management systems

Abstract

AbstractThe process industries — those firms that add value by mixing, separating, forming and/or chemical reactions by either batch or continuous mode — continue to lag behind the discrete industries in the identification and implementation of effective production and inventory management (P&IM) techniques. A contributing factor is that the process industries have traditionally been lumped together and contrasted from the discrete industries as a whole, thus leading to misunderstandings regarding individual process industries. From site interviews and the literature, we identified four critical dimensions — planning resource requirements (for materials and capacity), tracking resource consumption, control of work‐in‐process (WIP), and degree of computerization — represented by seven variables by which to contrast and analyze process industries. Based on in‐depth field studies of 19 diverse process plants, we find that there exist at least four distinct types of process industry P&IM systems: (1) simple, (2) common, (3) WIP‐controlled, and (4) computerized.