Suppliers are adjusting from the order-to-order manufacturing production mode toward demand forecasting. In the meantime, customers have increased demand uncertainty due to their own considerations, such as end-product demand frustration, which leads to suppliers’ inaccurate demand forecasting and inventory wastes. Our research applies ARIMA and LSTM techniques to establish rolling forecast models, which greatly improve accuracy and efficiency of demand and inventory forecasting. The forecast models, developed through historical data, are evaluated and verified by the root mean squares and average absolute error percentages in the actual case application, i.e., the orders of IC trays for semiconductor production plants. The proposed ARIMA and LSTM are superior to the manufacturer’s empirical model prediction results, with LSTM exhibiting enhanced performance in terms of short-term forecasting. The inventory continued to decline significantly after two months of model implementation and application.

Demand forecasting plays a crucial role in a company’s operating costs. Excessive inventory can increase costs and unnecessary waste can be reduced if managers plan for uncertain future demand and determine the most favorable decisions. Managers are demanding increasing accuracy in forecasting as technology advances. Most of the literature discusses forecasting results’ inaccuracy by suspending the model and reloading the data for model retraining and correction, which is extensively employed but causes a bottleneck in practice since users do not have the sufficient ability to correct the model. This study proposes an error compensation mechanism and uses the individuals and moving-range (I-MR) control chart to evaluate the requirement for compensation to solve the current bottleneck using forecasting models. The approach is validated using the case companies’ historical data, and the model is developed using a rolling long short-term memory (LSTM) to output the predicted values; then, five indicators are proposed for screening to determine the prediction statistics to be subsequently employed. Root mean squared error (RMSE), mean absolute percentage error (MAPE), and mean absolute error (MAE) compare the LSTM, rolling LSTM combined index, and LSTM-autoregressive moving average (ARMA) models. The results demonstrate that the RMSE, MAPE, and MAE of LSTM-ARMA are smaller than those of the other two models, indicating that the error compensation mechanism that is proposed in this study can enhance the prediction’s accuracy.

Electric-mechanical equipment manufacturing industries focus on the implementation of intelligent manufacturing systems in order to enhance customer services for highly customized machines with high-profit margins such as electric power transformers. Intelligent manufacturing consists in using supply chain data that are integrated for smart decision making during the production life cycle. This research, in cooperation with a large electric power transformer manufacturer, provides an overview of critical intelligent manufacturing (IM) technologies. An ontology schema forms the terminology relationships needed to build two intelligent supply chain management (SCM) modules for the IM system demonstration. The two core modules proposed in this research are the intelligent supplier selection and component ordering module and the product quality prediction module. The intelligent supplier selection and component ordering module dispatches orders that match the best options of suppliers based on combined analytic hierarchy process (AHP) analysis and multiobjective integer optimization. In the case study, the intelligent supplier selection and component ordering module demonstrates several acceptable Pareto solutions based on strict constraints, which is a very challenging task for decision makers without assistance. The second module is the product quality prediction module which uses multivariate regression and ARIMA to predict the quality of the finished products. Results show that the R square values are very close to 1. The module shortens the time for the company to accurately judge whether the two semifinished iron cores for the product meet the quality requirements. The component supplier selection module and the finished product quality prediction module developed in this research can be extended to other IM systems for general high-end equipment manufacturers using mass customization.

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