Reduction Customer-s Lead Time using Make to Stock and Make to Order Approach
Endang Prasetyaningsih(1*), Claudia Dwiriena Ardianto(1),Chaznin R Muhammad(1)
(1)Industrial Engineering Program Study, Universitas Islam Bandung
Bandung, Indonesia
*endangpras[at]gmail.com
Abstract
This paper discusses about a company that adopts make-to-order strategy because the company does not have enough fund to provide raw material. The raw material is ordered when the customer order has been received. It occurs a very long customer lead time. due to the production process must wait for the arrival of material. Consequently, the company can not meet the customer order according to the due date, and the company should give a discount of 25 - 30% of the total purchases. This research aim to propose an alternative solution to solve the problem. The customer lead time is reduced by determining a decoupling point, which is placed between the procurement of raw materials and the manufacturing process. The decoupling point denotes a boundary between the make-to-stock strategy in the previous process, and the make-to-order strategy for the process afterwards. The lead time customer, is then considered start from the decoupling point to the due date.
Keywords: MTS/MTO strategy, decoupling point, limited fund
Topic: Industrial Engineering