Journal of Korean Society of Industrial and Systems Engineering (산업경영시스템학회지)

Society of Korea Industrial and System Engineering (한국산업경영시스템학회)
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A Proposal for the Improvement Method of Order Production System in the Display Industry

디스플레이산업에서 수주생산방식의 개선 및 효율화 제고 방안

  • Cho, Myong Ho (School of Industrial Engineering, Kumoh Nat'l Institute of Technology) ;
  • Cho, Jin Hyung (School of Industrial Engineering, Kumoh Nat'l Institute of Technology)
  • 조명호 (금오공과대학교 산업공학부) ;
  • 조진형 (금오공과대학교 산업공학부)
  • Received : 2016.10.19
  • Accepted : 2016.12.16
  • Published : 2016.12.31
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Abstract

MTO (Make to Order) is a manufacturing process in which manufacturing starts only after a customer's order is received. Manufacturing after receiving customer's orders means to start a pull-type supply chain operation because manufacturing is performed when demand is confirmed, i.e. being pulled by demand (The opposite business model is to manufacture products for stock MTS (Make to Stock), which is push-type production). There are also BTO (Build to Order) and ATO (Assemble To Order) in which assembly starts according to demand. Lean manufacturing by MTO is very efficient system. Nevertheless, the process industry, generally, which has a high fixed cost burden due to large-scale investment is suitable for mass production of small pieces or 'mass customization' defined recently. The process industry produces large quantities at one time because of the lack of manufacturing flexibility due to long time for model change or job change, and high loss during line-down (shutdown). As a result, it has a lot of inventory and costs are increased. In order to reduce the cost due to the characteristics of the process industry, which has a high fixed cost per hour, it operates a stock production system in which it is made and sold regardless of the order of the customer. Therefore, in a business environment where the external environment changes greatly, the inventory is not sold and it becomes obsolete. As a result, the company's costs increase, profits fall, and it make more difficult to survive in the competition. Based on the customer's order, we have built a new method for order system to meet the characteristics of the process industry by producing it as a high-profitable model. The design elements are designed by deriving the functions to satisfy the Y by collecting the internal and external VOC (voice of customer), and the design elements are verified through the conversion function. And the Y is satisfied through the pilot test verified and supplemented. By operating this make to order system, we have reduced bad inventories, lowered costs, and improved lead time in terms of delivery competitiveness. Make to order system in the process industry is effective for the display glass industry, for example, B and C groups which are non-flagship models, have confirmed that the line is down when there is no order, and A group which is flagship model, have confirmed stock production when there is no order.

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