Process flow improvement proposal using lean manufacturing philosophy and simulation techniques on a modular home manufacturer

The United States housing market has significantly declined in the last few years. Moreover, moody’s economy.com chief economist, Mark Zandi (Nov. 2009) thinks the housing crisis is not over and expects to see another leg down. This crisis in the housing market has caused a reduction in the demand for new houses nationwide, thus, significantly impacting housing manufacturers. Improvements in the housing manufacturing systems are therefore needed in order to become more competitive and sustainable. This research is intended to develop a simulation model to improve the flow of modular housing manufacturing operations based on a time and processes study of a North Carolina modular homes manufacturer. Due to the housing market crisis this paper represents an alternative for those manufactures that require an upgrade in their production system to gain a competitive advantage. This research also studies the impact of lean manufacturing tools implementation with the use of a simulation model. Several alternatives were analyzed and simulated in order to identify the best option for the company. Results showed that several alternatives can be implemented in order to increase the production level by almost 40 percent; and labor cost per module can be considerably reduced. Moreover, operational cost can also be significantly reduced by the implementation of lean manufacturing tools and manufacturers can obtain competitive advantages by incorporating these changes to their manufacturing systems.