Coping with the uncertainties of make-to-order production: a new approach for determining reliable delivery times with the throughput diagram

Abstract

Make-to-order companies have to deal with particular uncertainties in their offer processing. At the early stage of planning offers, it is particularly uncertain 1) which open offers will be accepted by customers and 2) what capacity these will require. Therefore, it is particularly challenging for make-to-order companies to determine and keep to binding delivery times, so that many companies have problems achieving a high delivery reliability. In this paper, we show a simple model-based procedure to determine delivery times using the throughput diagram with early available information such as the offer requests in the planning process. Simulation studies show that the procedure, especially in combination with a CONWIP order release and an EODD sequencing rule, achieves a high delivery reliability without sacrificing other logistic objectives such as utilisation. Furthermore, the procedure proves to be very robust against random deviations of the planning parameters.