Abstract

The objective of the present thesis is to explore a satisfying lead time management for companies that implement a Make-to-Order production system in a global supply chain network. A huge lead time waste caused by early arrival of parts dominates total inventory losses and accounts for 54% in entire process according to some statistical data. In the present thesis, a new theory named the Key-Part Based Lead Time Management (KPBLTM) was proposed to reduce non-value added waste. The contents of this thesis consist by constructing objective functions, proposing a practical methodology, comparing the satisfying solution with the optimal solution, proving the sufficient conditions of existence of the key part, demonstrating the robustness of the key part, applying to analyze the other production patterns, and building a connection between the Key-Part Based Lead Time Management and MRP system. A managerial solution derived from the Key-Part Based Lead Time Management is depicted as: once receiving orders from customers, Make-to-Order companies schedule the arrival of the purchased parts based on the lead time of the key part. Finally, the total inventory loss including the holding costs and the customer penalty will be dramatically reduced.