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Dell Uses a New Production-Scheduling Algorithm to Accommodate Increased Product Variety

Author

Listed:
  • Jennifer L. Loveland

    (Dell, Inc., Americas Process Engineering, 1 Dell Way, Round Rock, Texas 78682)

  • Susan K. Monkman

    (Graduate School of Business and Public Policy, Naval Postgraduate School, 555 Dyer Road, Monterey, California 93943)

  • Douglas J. Morrice

    (McCombs School of Business, University of Texas at Austin, 1 University Station, Austin, Texas 78712)

Abstract

Early in 2003, with continually increasing product variety and production volumes, Dell, Inc. had reached the designed capacity limits of one of its main production facilities, the Morton L. Topfer Manufacturing Center (TMC). In 2004, TMC was facing a doubling of the number of product families it produced, with an anticipated degradation in production rates of nearly 20 percent. To help assuage this problem, we developed a new production-scheduling algorithm, which contains both optimization and heuristic components. The algorithm schedules product families on parallel, identical kitting lines to minimize the number of setups required and to reduce downtime and slow time during setups. Because of our work, Dell was able to accommodate the twofold increase in product variety, as well as an effective production-volume increase of over 35 percent. Furthermore, Dell realized a conservative cost avoidance of more than {$}1 million annually, primarily because it saved overtime costs that it would have required, in the absence of our solution, to handle the increases in production volume and product variety. This solution has been in operation at TMC since June 2004.

Suggested Citation

  • Jennifer L. Loveland & Susan K. Monkman & Douglas J. Morrice, 2007. "Dell Uses a New Production-Scheduling Algorithm to Accommodate Increased Product Variety," Interfaces, INFORMS, vol. 37(3), pages 209-219, June.
  • Handle: RePEc:inm:orinte:v:37:y:2007:i:3:p:209-219
    DOI: 10.1287/inte.1060.0264
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    References listed on IDEAS

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    1. Allahverdi, Ali & Gupta, Jatinder N. D. & Aldowaisan, Tariq, 1999. "A review of scheduling research involving setup considerations," Omega, Elsevier, vol. 27(2), pages 219-239, April.
    2. Scott Webster & Kenneth R. Baker, 1995. "Scheduling Groups of Jobs on a Single Machine," Operations Research, INFORMS, vol. 43(4), pages 692-703, August.
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    Cited by:

    1. Allahverdi, Ali, 2015. "The third comprehensive survey on scheduling problems with setup times/costs," European Journal of Operational Research, Elsevier, vol. 246(2), pages 345-378.
    2. Seokcheol Chang & Jaewoo Chung, 2013. "Optimization Models for Production Planning in LG Display," Interfaces, INFORMS, vol. 43(6), pages 518-529, December.
    3. Atan, Zümbül & Ahmadi, Taher & Stegehuis, Clara & Kok, Ton de & Adan, Ivo, 2017. "Assemble-to-order systems: A review," European Journal of Operational Research, Elsevier, vol. 261(3), pages 866-879.
    4. Moo-Sung Sohn & Jiwoong Choi & Hoseog Kang & In-Chan Choi, 2017. "Multiobjective Production Planning at LG Display," Interfaces, INFORMS, vol. 47(4), pages 279-291, August.
    5. Susan Heath & Jonathan Bard & Douglas Morrice, 2013. "A GRASP for simultaneously assigning and sequencing product families on flexible assembly lines," Annals of Operations Research, Springer, vol. 203(1), pages 295-323, March.

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