The encyclopedia · Strategy & Leadership · Operational decision · 2003–2007
Ford Otosan cut finished-goods waiting with an integer program in a spreadsheet
An integer program in a spreadsheet trimmed vehicles awaiting shipment at Ford Otosan, saving about $1.2M in 2003 and $2.6M in 2004.
Ford Otosan
the move
Ford Otosan, producer of light and medium commercial vehicles in Turkey, was expanding capacity but found finished vehicles piling up awaiting shipment. Order-to-delivery times grew while inventory cost money and space.
A six-sigma project built an integer-programming model in a spreadsheet environment to reduce the number of vehicles waiting to ship, plus a shop-floor control system to handle vehicles that needed additional parts or testing before release.
Implementing the new process cut waiting and inventory. Measured savings were about $1.2 million in 2003 and $2.6 million in 2004, while on-time shipping of orders was maintained during the capacity expansion.
why it works
- The model prioritizes release by due date and availability, so the yard empties in the right order.
- A spreadsheet-based model lowered the barrier to entry, so planners actually used it.
- Separate handling for vehicles needing rework kept exceptions from jamming the main flow.
what transfers
Inventory that sits waiting is a scheduling problem in disguise: model the release decision directly, and the same yard ships more without adding capacity.
what came after
Ford Otosan kept the integer-programming release model and shop-floor control running through its capacity expansion, and the paper reports savings of about $1.2 million in 2003 and $2.6 million in 2004.
references
- Ford-Otosan Optimizes Its Stocks Using a Six-Sigma Framework
- Ford-Otosan Optimizes Its Stocks Using a Six-Sigma Framework
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