Inventory management in a build-to-order environment

This paper presents an ongoing research project analyzing the procurement operations of a medical device manufacturer that produces a high variety of products. The products with low-volume demands are well suited for a build-to-order production methodology, but this has not been successfully implemented. As a result, production is inefficient, shipments to customers have arrived late and customer satisfaction has decreased. Factors contributing to this problem are raw material shortages, misuse of the Enterprise Resource Planning (ERP) system, and a lack-of-cooperation between all departments. Simulation will be used to show that inventory accuracy and efficient procurement processes are essential for build-to-order production.