This article illustrates the problem of planning material flows for geographically dispersed enterprises that jointly execute a production order using their available production capacities.
The planning problem boils down to determining permissible flows, both within individual company systems and between individual participants in the product manufacturing process. The question being asked is whether it is possible to organize production flow in a network of enterprises –
cooperators, that guarantees timely execution at assumed costs under conditions of resource constraints? These constraints include the production capacities of geographically dispersed cooperators, route structures, the number and capacity of transport means, and available financial resources.
Significant shortening of supply cycles, high production specialization, and high product assortment variability forced by technical progress, continuous quality improvement, and demand volatility are the foundations for outsourcing parts of the production process, which results in the activation of the small and medium-sized enterprise sector. This means the need for cooperation with many business entities executing orders for the needs of the final product manufacturing process. The idea of production boils down to joint manufacturing, within the framework of sharing production capacities available to enterprises or utilizing resources offered by various enterprises. Resources necessary for the production of a given type of product. Such a solution provides the possibility of executing orders by a group of specialized enterprises in a situation where the execution of a given order significantly exceeds the capabilities of each of them individually.
The considered problem boils down to planning the organization of material flows, both within individual enterprises and between individual companies forming a cooperation network. In logistical terms, it boils down to delivering the right services and/or products to the right recipient, in the expected quantity and appropriate quality, at the right place and at the right time, at the lowest possible costs.
The solution to this problem boils down to developing a methodology for designing work flow organization, i.e., selecting partner companies (supplier, manufacturer, distributor) whose production capacities and production flow schedules allow for the execution of joint ventures (production orders). Its implementation requires the ability to quickly specify and assess the degree of integration of requirements imposed on the execution of a production order (e.g., size of raw material deliveries, size of production and transport batches, deadlines, production routing, execution costs) with the available potential of partner companies. This means that having, on one hand, a set of cooperating enterprises with known production capacities, service and product offerings, possessed know-how, certificates, etc., and on the other hand, knowing the market needs (production order) in terms of the size and assortment of expected production and/or services, the answer is sought to the question: does such an organization of production flow exist in a network of enterprises –
cooperators, which guarantees timely execution of a new order at assumed costs, given existing resource constraints? The conducted research focuses on developing a series of procedures aimed at creating an “ideal” network of cooperating enterprises, improving workflow in this network to increase network liquidity and efficiency, shortening supply cycles, and reducing inventory levels throughout the system, thanks to which cheaper products reach the end customer. Creating an ideal network requires proposing mechanisms of dependency between companies that encourage them to become part of a chain of cooperative dependencies, referred to in the subject literature as an integrated supply chain. This requires subordinating their load schedules, inventory levels, and supply cycles to the requirements of the dependency chain. At least in theory, it is possible to create a huge network of suppliers, manufacturers, distributors, and customers, thanks to which all its participants would optimize their operations in terms of cost levels, inventory, and the load on their systems, similar to what happens in Japanese Keiretsu systems.
The article comes from the magazine “Logistyka”, no. 1/2006.