A Simulation Study on Assemble-to-Order Production for a Taiwan Machine Tools Manufacturer

Machine Tools Assembly has being one of the most important industries in Taiwan for past few decades. Assembling a single modern CNC machine tool may take a few weeks or even months depending on factors such as the complexity of the machine structure, the supply of key components such as spindle, bed, coolant systems, and tool magazine, management of human resources, and the availability for required equipment or tools. The most costly resource for machine tools assembly is the space for assembly. At least an area of 15–20 m2 is necessary for a single machine and essentially the space will be occupied as long as the machine is completed. Besides this spatial problem, Taiwan’s machine tools manufacturers today also face serious unstable supply of the key components offered by outside suppliers. This study focuses on two important decisions faced by every Taiwan machine tools manufacturer: selecting the customers’ orders for assembly launch and determining the priority of the on-going assembly projects for allocating the limited resources like equipment and tools, and human forces. A discrete-event simulation model for a complicated machine tools assembly system considering the spatial problem and the quality issue of key components is developed to evaluate several rule combinations for making these two decisions. Simulation experiments are then properly designed and conducted under various system conditions for detailed investigation.