Production Planning for Products with Complex Product Structure – PDF Download

Manostaxx – Indusrial Management Consulting

The major difficulties when dealing with complex products are long lead times that
require long planning horizons and also that there are dependent demands and
multiplicative effects on the ingoing items in the products. Small disturbances on high
level can in the end give considerable problems on low level.

This paper shows an example of the difficulties with handling complex products with
long lead times and suggests a four step decision model to get smoother production
planning, mainly by simplifying the product structure. The decision model includes
the following steps:
1. The first step is to re-design the product in order to simplify it.
2. Next step is to identify the critical path and the cumulative lead-time by
sketching a dynamic bill of material.
3. After the dynamic bill of material is sketched, the possibilities to shorten some
lead times on the critical path should be analysed. Outsourcing of parts of the
production or creating a ”plant within a plant” configuration can reduce lead
times. Reduced batch-sizes on specific items along the critical path can also be
a way to do this.
4. When all possible lead times are reduced it is time to decide which planning
method to use.

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