Inventory control through a CONWIP pull production system

Abstract

Production systems such as the constant work-in-process (CONWIP) pull production system have been widely studied by researchers to date. The CONWIP pull production system is an alternative to pure push and pure pull systems that lowers and controls inventory levels and reduces production lead time. In this study, a CONWIP pull production system was simulated in place of the current push production system at a food packaging company. ARENA 12.0 simulation software was used and a production system with two dedicated production lines was proposed to reduce the current system’s complexity. A method for obtaining the optimum CONWIP level was determined. Various advantages of the CONWIP pull production system were analyzed and it was found that besides a reduction in planning complexity, the proposed two dedicated lines with CONWIP pull production system can also help the company to greatly reduce their total WIP and achieve inventory holding costs savings. Savings of over S$38,000 per month for a monthly CONWIP system and over S$40,000 per month for a weekly CONWIP system can be obtained. In addition, the total customer lead time can also be reduced from 12 days to 10 days while still meeting customer demand.