Optimal usage of FujiFilm's supply chain

The following report presents the results of the logistics design project carried out in FujiFilm B.V. in the plant of PS-plates (P3) in Tilburg. The project was conducted from September 2008 to July 2009. FujiP3, one of the most important production units of FujiFilm, manufactures and sells aluminium pre-sensitized plates called PS-plates, in a very competitive and dynamic market. The unit is undergoing some important changes with the objective of solving two major problems faced by the company; long lead times and high stock levels. These changes include providing a service level of 96%, the reorganization of the material flow, the designation of the warehouses capacities and the reorganization of the finishing plant. This will have a significant impact on the future operations, and requires the definition of new procedures and ways of working. The company has a make-to-order production system which provides a very broad assortment of finished products with a high level of efficiency. The production process is completed in two phases: the processing phase and the finishing phase. In the processing phase the aluminium is coated with chemicals and cut into master sheets. These master sheets are cut and packed in the second phase. The production planning has a strong focus on minimizing the material losses since material costs are the main determinant of the cost price of PS-plates. This project has the objective to reduce the customer lead time to 4 weeks at minimum overall costs while maintaining 96% delivery reliability. The asssignment of this project is to design and implement a logistic control system for FujiP3, in the form of operational procedures at higher levels and to define a model which can describe different scenarios by varying different sensitivity parameters. An optimal logistics design has to be defined by determining lot sizes, commonalities in terms of master sheets and by allocating the capacities. To achieve the objectives we proceed in four steps. The first step is to redefine the position of the customer order decoupling point and to classify the products into four classes. At the higher planning level, the products are classified by considering the product life stage, the cost reductions in the supply chain, the risks incurred by FujiP3 and the technical characteristics of each product. Four classes were defined; A-items stocked as finished products, B1-items and B2-items as semi- finished products and C-items as raw material. Different strategies are chosen for each class of items. It is obvious that the make-to-order situation cannot provide the required lead time as the production lead time are bigger than desired lead time. The possible solution in the case of FujiFilm is to mix the make-to-order concept with the make-to-stock concept. This is due to the complexity of the product variant. Therefore, for each class we will usa a different concept. The second step involves the design of a suitable and efficient way to manage each of the product class. Inventory management and the production cycle times are the main aspects considered. Inventory of Master sheets is given special attention as the intermediate warehouses presents a bottleneck in the supply chain. An (R, S) control system is chosen to control the warehouses. The order--up-to-level and the safety stocks are calculated with especially programmed simulation model. The capacity coordination in the processing plant defines the number of setups per month and coordinates with the warehouses capacities. The third step is to analyze the requirement for the actual implementation of the design. Two aspects will be considered. The first aspect is the allocation of finished products to the master sheets and determines the required warehousing capacities. The second aspect is to analyze the effects of finishing lead time on the warehouses. We found that there is a real shortage in the warehousing capacities and high finishing lead time when the product has to be slit. The warehouses capacities are c considering different scenarios in the finishing plant and in the processing plant.The fourth step is to generate of procedures to keep the design updated an to determine the technical and the requirement for the feasibility of the project. And some recommendations are given for optimizing the production system.