Title: Trading off inventory, capacity and customer service in semi-process industries: a case study at SEPPIC

Authors: Inneke Van Nieuwenhuyse; Mohammed Hadi Mahihenni; Sylvain Baudelocq

Addresses: Research Center for Operations Management, Department of Decision Sciences and Information Management, KU Leuven, Naamsestraat 69,3000 Leuven, Belgium ' Air Liquide, Claude Delorme, Research and Development Center (CRCD), Chemin de la Porte des Loges 1, F-78354 Les Loges-en-Josas, France ' 19 rue Rémy Dumoncel, 75014 Paris, France

Abstract: This article presents a straightforward production/inventory model that can capture the trade-offs among average inventory, production capacity and customer service levels in a semi-process industry setting. The model is based on well-known approximations from queuing literature, and it supports midterm planning procedures at SEPPIC, a large specialty chemicals company. Different features are specific to a semi-process setting, such as differences in reactor yield, variations in quality requirements across products, the need for cleaning reactors when switching between product types, and the requirement to produce products in campaign sizes that are integer multiples of the reactor's batch size. This article discusses how SEPPIC's operational reality is reflected in the model and illustrates the resulting insights with real-life data from two SEPPIC product families. [Received 22 September 2011; Revised 2 March 2012, 15 June 2012; Accepted 24 June 2012]

Keywords: queueing; campaign sizing; semi-process industries; integrated production-inventory systems; midterm planning; decision support; industrial engineering; capacity management; customer service; inventory management; case study; SEPPIC; modelling; trade-offs; production capacity; specialty chemicals; product families.

DOI: 10.1504/EJIE.2014.059351

European Journal of Industrial Engineering, 2014 Vol.8 No.1, pp.90 - 111

Available online: 18 Feb 2014 *

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