Eliminating Inventory in a Series Facility Production System

Abstract

Zero inventory (ZI) and the related concepts of Just in Time and Kanban are innovative and powerful means to improve production efficiency. This paper applies these concepts to a series facility production system and, in particular, identifies which facilities will never hold inventory irrespective of product demand. Pinpointing beforehand that certain facilities will have no inventory can simplify such strategic decisions as facility design, site location, and space utilization, plus it eases production scheduling. Next, a procedure is developed which increases the number of facilities that will never hold inventory. This procedure implements the ZI philosophy of cutting set up costs to increase efficiency. The results of this paper impact three major areas of production research: (1) strategy and planning—by detecting beforehand facilities that need never hold inventory irrespective of demand; (2) operations—by simplifying day to day production scheduling; and (3) productivity improvement—by cutting set up costs to enhance efficiency.

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