Abstract
M.Ing. (Engineering Management)
An industrial company has embarked on an expansion project to create more capacity to meet the growing demand for one of its high-end product ranges. The final step in the production process constitutes of packaging, local storage and distribution. A stochastic simulation model in Arena Simulation Software was developed to represent the packaging activities at the new plant (Section A), high-level production output from the old plant (Section B), transportation between the production facility (Section A and B) and an intermediate storage facility (Warehouse X) as well as supply chain demand from Warehouse X to the final storage facility (Warehouse Y) and the local market. The model further includes supply chain demand from Warehouse X to the exports market and local supply to the non-exports market. Production of Product 3 (packaged via pack line 2) has been suspended at end December 2016 and is consequently excluded from the study.
The base case was validated with production data of 1 April 2017 to 31 May 2017 and represents a realistic view of the actual operations. The model results were within 5% of the actual production and distribution volumes. Production personnel anticipated that that the lifts and forklifts at Section A would constrain the section’s throughput due to high utilisation. However, the model results showed that the lifts and forklifts at Section A do not constrain the plant’s throughput.
The model results indicated that the current staging buffer capacity of 284 pallets at Section A is inadequate. For the base case (Section A producing 165t/d on average) a staging buffer at Section A of 350 pallets is required.
For the rated capacity case (25t/d per belt for 5 newly commissioned belts) a staging buffer of 401 pallets is required (Section A producing 188t/d on average). An increased production rate of 220t/d requires a staging buffer of 500 pallets at Section A.
If the production rate remains below the rated capacity, a fleet of 4 super link trucks are sufficient to clear Section A’s daily production. A total fleet of 8 trucks are required to clear Section A and B’s daily production.
For a production rate of 220t/d a 5th super link truck is required. A total fleet of 9 trucks are required to clear Section A and B’s daily production.
A compelling business case is justified by the significant monthly revenue loss if production at Section A cut back by 234 pallets per day on average should the staging buffer capacity of 284 pallets not be increased.