Abstract
This paper presents a procedure to calculate the added value of a process, through a pull manufacturing approach. The procedure allows calculating the selling price, the added value for each operation and the capital required to purchase the raw material. Additionally, the procedure sets the added value of the product for each operation, analyzing its increase or decrease based on the difference between the raw material cost and the purchasing budget. Finally, the results of its application in a medium-voltage fuse industry in the Cuban Republic are shown.
Highlights
This paper presents a procedure to calculate the added value of a process, through a pull manufacturing approach
The proposed procedure is based on a pull manufacturing approach and it consists of six steps described as follows
By applying Equation 10, it is possible to calculate the net added value to product k in operation i (Xnik), where XFk represents the final value of product k and Cpk is the production cost of product k, which can be obtained by applying Equation 11 (Cmpk is the initial raw material cost and n is the total number of operations in the process)
Summary
This paper presents a procedure to calculate the added value of a process, through a pull manufacturing approach. The pull concept implies that the production rate of a certain operation is controlled by the rate of the subsequent operation This approach allows the company to improve its inventory level, but to synchronize its system production rate according to the lower-capacity operation (bottleneck) (Ohno, 2011). Organizing operations based on the desired customer service level is not an easy task; likewise, identifying operations that generate greater added value to the process, is an even more difficult task. Sathre and Gustavsson (2009) estimated the added value based on a detailed analysis of each operation, but without setting the input and output values for each of them
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