Tactical Planning in Flexible Production Networks in the Automotive Industry

Abstract

Today's automotive markets are characterized by high demand volatility. As a consequence, flexibility to re-allocate production volume within the production networks is required, to match the production capacity for specific models with market demand. The sustained re-allocation of models to production lines to adjust to market demand is no longer a vision, but virtually industry standard. Hence, model plant allocation decisions are no longer a one time long term decision but a more frequent mid term planning task, for which current strategic decision support models are inadequate. Modified planning models are required to handle the increased flexibility. A modeling framework will be presented.

Mid-Term Model-Plant Allocation for Flexible Production Networks in the Automotive Industry

“…Further, decomposition approaches like Benders decomposition (e.g. [1]), a temporal decomposition as in [12] or a decomposition into regions as proposed in [14] shall be applied to the mid-term planning model, to improve applicability to large scale problems.…”

“…This results in integrated models of allocation planning (where to produce) and master production planning (when and what product to produce). A corresponding model based on a double time index formulation was presented in [14], having a discounted cash flow oriented objective function (maximizing) covering revenues, production costs, inventory costs and re-allocation costs. Here, costs refer to actual costs i.e.…”

“…At the same time, technological advances standardize car models from a production point of view, resulting in allocation flexibility by multi-model lines. To capture the benefits of increased flexibility, decision support is required [14]. Having flexibility to re-allocate over time, the model-plant allocation decision moves from the strategic long-term to the mid-term planning level.…”

“…For overviews concerning flexibility and integration into the planning context in the automotive industry refer to [10] or [7] and the mid-term model-plant allocation problem for flexible networks in the automotive industry was introduced in [14].…”

“…Compared to strategic planning models e.g. [2] or [5], new requirements apply and have to be integrated into the models [14]. As in the strategic models, a multi-period problem is considered, requiring a time indexed formulation.…”