Analysis of parts requirements variance for a JIT supply chain

Abstract

Metrics used to assess level parts usage for some JIT supply chains are based on the product-unit by product-unit launch of products on the assembly line. However, many automobile assembly plants require parts suppliers to deliver parts to the assembly line by using a constant order cycle, non-constant order quantity framework. The paper proposes metrics that are suited to this parts delivery framework. Through extensive simulation over a wide range of assembly parameter values, it assesses the ability of supplier plants to match assembly requirements at each supply epoch. Among other things, the study finds that the conventional JIT scheduling framework also works well in general under this parts delivery arrangement, but acute parts stockout conditions could sometimes occur. Therefore, managers need to consider this in determining appropriate inventory levels for each part. This will prevent stockouts and reduce supply chain costs.

Acknowledgements

This work was supported by a summer research fellowship award from Oakland University. The author wishes to thank the two anonymous referees for their helpful comments which significantly improved the paper.