Valuation of increased production system performance by integrated production systems

Since the 1990s a transition from mass production systems to integrated production systems has been taking place. Realising the potential of integrated production systems to reduce costs by avoiding waste, more and more companies follow the example of Toyota and try to increase their production systems’ performance by applying lean elements and methods. However, the lack of a holistic methodology to forecast the profitability of the application of lean elements and methods impedes the justification of necessary investments. This paper presents an approach developed at the Institute of Production Science of the Karlsruhe Institute of Technology to valuate the increased performance of a production system by lean elements and methods. By simulating and optimising the analysed production system, the ideal combination of lean methods can be identified. Key performance indicators of the real and ideal states of the production system can then be used to quantify the effects of the ideal combination of lean methods.