An integrated simulation–optimization study for consolidating production lines in a configure-to-order production environment

Abstract

This study investigates production lines consolidation in a configure-to-order production environment using simulation and optimization strategies. The current production environment has three separate production lines that will be consolidated into two production lines. Two production line configurations are analyzed: product and process layouts. Product layout has a continuous smooth flow, small work-in-process (WIP), short total production time per unit of product, and reduced material handling requirements. On the contrary, process layout offers more flexibility, allows for higher utilization of machines, and requires higher grades of operators’ skills. A simulation-based comparison of the current and future systems is conducted considering lead time, throughput, utilization, and WIP. A mixed integer programming model that optimizes the transportation cost and waiting time is then formulated based on the selected process layout. Simulation results provide recommendations to improve the system level performance measures and support management decisions. The current transportation schedule is ineffective, and hence a real-time dashboard based on the optimization model is suggested. The dashboard will improve communication and transportation between the two production lines.