Quality Improvement, Inventory Management, Lead Time ...

Quality Improvement, Inventory Management, Lead

Time Reduction and Production Scheduling in

High-mix Manufacturing Environments

by

Sean Daigle

B.S., Mechanical Engineering, U.S. Air Force Academy (2015) Submitted to the Department of Mechanical Engineering in partial fulfillment of the requirements for the degree of

Master of Engineering in Advanced Manufacturing and Design at the

MASSACHUSETTS INSTITUTE OF TECHNOLOGY February 2017

c Massachusetts Institute of Technology 2017. All rights reserved.

Author . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Department of Mechanical Engineering January 13, 2017

Certified by . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Dr. Stanley Gershwin

Senior Research Scientist Thesis Supervisor

Accepted by . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Rohan Abeyaratne

Professor of Mechanical Engineering Chairman, Department Committee on Graduate Theses

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Quality Improvement, Inventory Management, Lead Time Reduction and Production Scheduling in High-mix Manufacturing Environments

by Sean Daigle

Submitted to the Department of Mechanical Engineering on January 13, 2017, in partial fulfillment of the requirements for the degree of

Master of Engineering in Advanced Manufacturing and Design

Abstract

This thesis is a compilation of the analysis and recommendations gathered from two industry projects conducted at Applied Materials Varian Division in Gloucester, MA and at the MIT Lincoln Laboratory in Lexington, MA. This thesis addresses the improvement of a quality metric used at Applied Materials through the means of material shortage reduction and lead time reduction of system sub-assemblies. Manufacturing quality was found to be impacted by material shortages across the facility and capacity constraints in an area of the facility that manufactures equipment subassemblies. Implementing a new inventory policy would result in an expected 74% to 80% reduction in material shortage occurrences. The capacity increase recommended in this thesis would reduce average lead time for sub-assemblies from about 5-6 days to under 2 days. At the MIT Lincoln Lab, this thesis addresses a possible approach to improving the accuracy of production scheduling and delivery date quotes through the use of job shop scheduling software and historical data analysis. The recommended fabrication request delivery date prediction process involves using a scheduling software to find the optimal delivery date for a job, and then adding a Shop Capacity Buffer time that is calculated using historical data on schedule delays. Schedule delays can be caused by a variety of random events that occur in machine shops, such as machine failures or operators falling ill. By selecting a Shop Capacity Buffer of 90%, a 90% on-time completion rate should be observed. This new method would achieve improved results from the 75% on-time completion rate at present. The final recommendation is a policy change that aims to characterize sources of delay and accurately compensate for the delay using the Shop Capacity Buffer in the delivery date quote process.

Thesis Supervisor: Dr. Stanley Gershwin Title: Senior Research Scientist

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DISTRIBUTION STATEMENT A. Approved for public release: distribution unlimited. This material is based upon work supported under Air Force Contract No. FA8721-05-C-0002 and/or FA8702-15-D-0001. Any opinions, findings, conclusions or recommendations expressed in this material are those of the author(s) and do not necessarily reflect the views of the U.S. Air Force. The views expressed in this thesis are those of the author and do not reflect the official policy or position of the United States Air Force, Department of Defense, or the U.S. Government.

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