Extending ConWIP by flexible capacity and WIP-Cap adjustment for a make-to-order multi-item multi-stage production system

Constant-Work-In-Process (ConWIP) is a promising production planning and control method for make-to-order production systems, exhibiting notable potential in attaining reduced tardiness alongside effective management of work in process and finished goods inventories, as demonstrated in various studies. Furthermore, several papers show that the negative effects of high demand uncertainty, which occur when applying a make-to-order approach, can be mitigated by providing flexible capacity to coordinate demand and throughput. Therefore, in this paper the workload-based ConWIP method is combined with a flexible capacity setting method, to enable a better fit between demand and throughput. To fully capitalize on the benefits of flexible capacity and enable the production system to adapt to changes in throughput potential, an adjustment of the WIP-Cap is integrated to avoid machine starvation or unused overcapacity. To evaluate the system performance, a multi-stage multi-item make-to-order flow shop production system with stochastic demand, processing and customer required lead times is simulated. The results of a broad numerical study show a high improvement potential of the extended ConWIP version in comparison to workload-based ConWIP.