Switchgear component commonality design based on trade-off analysis among inventory level, delivery lead-time and product performance

Abstract

The shortening of product delivery lead-times can usually be achieved by keeping high-level components in inventory, however in small-volume production systems, maintaining such inventories is often a costly as well as a risky business strategy. If the risk of maintaining unsold inventory can be decreased, even small-volume manufacturers may be able to justify holding more significant quantities of versatile inventory. This paper discusses a component commonality effect to breakthrough the trade-off relationship between inventory levels and delivery lead-times for such small-volume production systems. By using the same component in different products, inventory maintenance costs can be dramatically reduced, but component commonality design problems are inherently complex, since excessive module commonality may lead to lower product performances, and there are trade-off relationships between product performance and cost reductions obtained through component commonality. In this paper, such a design problem is formulated as a multiobjective component commonality design optimisation problem considering inventory level, delivery lead-time and product performance, and the optimal solutions are obtained as a Pareto optimal solution set. Detailed procedures concerning the proposed design method, including inventory simulation, are discussed and developed for a switchgear design problem. Finally, an example switchgear design problem is solved to illustrate that optimal use of component commonalities across different modules can significantly reduce inventory costs, while also shortening product delivery lead-times.