Abstract
Although global manufacturers can produce most of their final products in local plants, they need to source components or parts from desirable overseas manufacturing partners at low cost in order to fulfill customer orders. In this global manufacturing environment, capacity information for planning is usually imprecise owing to the various risks of overseas plants (e.g., foreign governments’ policies and labor stability). It is therefore not easy for decision-makers to generate a global production plan showing the production amounts at local plants and overseas manufacturing facilities operated by manufacturing partners. In this paper, we present a new global production planning process considering the supply risk of overseas manufacturing sites. First, local experts estimate the supply capacity of an overseas plant using their judgment to determine when the risk could occur and how large the risk impact would be. Next, we run a global production planning model with the estimated supply capacities. The proposed process systematically adopts the qualitative judgments of local experts in the global production planning process and thus can provide companies with a realistic global production plan. We demonstrate the applicability of the proposed process with a real world case.
Highlights
In recent years, most global manufacturers have pursued distributed manufacturing by cooperating with manufacturing partners to increase responsiveness to customer demand and avoid lost sales
In this uncertain global production environment, global production planning (GPP) considering both local plants owned by the manufacturer and global manufacturing sites operated by manufacturing partners located in foreign countries has become an important issue
We focused on how the local experts judge the upcoming risks and tried to provide a systematic approach to reflect their opinions on the supply capacity estimation
Summary
Most global manufacturers have pursued distributed manufacturing by cooperating with manufacturing partners to increase responsiveness to customer demand and avoid lost sales. Maintenance, labor strikes, and political instability are some of the major risks when trying to generate global production plans for upcoming planning periods. A quick, rough estimation of the production capacities of foreign manufacturing sites for the upcoming planning periods is required to generate a global production plan. Local experts who can better anticipate upcoming risks might be able to provide their opinions to the manufacturer when generating the global production plan. We propose a new GPP process considering the supply risks of overseas manufacturing sites. In the proposed planning process, first, local experts estimate the supply capacity of the overseas plant using their judgment of when the risk could occur and how big the risk’s impact would be.
Sign-in/Register to view highlights & summary Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a call
