Analyzing the impact of space utilization and production planning on plant space requirements - A case study and methodology

In 200 1, the authors took part in a study aimed at evaluating the costs and benefits of centralizing warehousing activities for a network of four plants at a first-tier automotive supplier. A key issue raised during the study centered on how much space was available at each of the plants, and bow much space could be recaptured through improved layout and space utilization efforts, and through improved production planning practices. This paper focuses on the steps carried out to 1) quantify the space at each plant, 2) estimate manufacturing, inventory storage, and shipping and receiving space utilization levels, and 3) estimate the impact of production planning on inventory space requirements. Significance: A methodology is presented which explicitly considers the impact of space utilization and production planning on plant space requirements. The results obtained were pivotal to the manufacturer's decision to forego a new centralized warehouse, and instead focus on better utilizing current space and eliminating excess inventories driven by the manufacturer's current planning and control practices.