OR contributions to flexibility improvement in production/inventory systems

Abstract

Recently the notion of flexibility (especially with respect to Flexible Manufacturing Systems) has attracted considerable attention of OR workers. The majority of the contributions is focussed on operational aspects of production systems. A further very important issue concerns the design of production systems and investment decisions with respect to these systems. The aim of this paper is to illustrate how OR models can contribute to quantify effects of, for instance, investment in set-up time reduction or investment in supply leadtime reduction on logistic performance of production systems. Of course there are many more opportunities to improve logistic performance. The approach in this paper offers the opportunity to quantify the integral effects of these improvements and shows the direction for logistic innovation. In this way both design of production systems and quality of related investment decisions can be improved significantly. Some simple examples are worked out in order to illustrate the ideas and to give impetus for further research in this field.