Evaluating focused factory benefits with queuing theory

Abstract

In this paper, we study the benefits of a focused factory using lead-time as a performance measure. Specifically, we model a production process, using multi-class (multiple product types), general interarrival and processing time distributions with multiple machines ( GI/G/c) queuing models for deriving each product’s mean lead-time. We also perform simulations for estimating the standard deviation of lead times. There are two product types: a standard and a customized product. The customized product has a more variable demand pattern than the standard product, and also requires additional processing time (setup and run time) in its production process. We assume that management is willing to sacrifice the lead-time performance of the customized product in favor of improved performance for the standard product. The paper shows that focusing the factory is more attractive for plants operating at higher utilization, and manufacturing products that have higher processing time and demand variability differentials between product types.