Impact of Dynamic Capacity Policies on WIP Level in Mix Leveling Lean Environment

Balancing demand's product variety in production planning is one aspect of variety management challenge. This phenomenon is described in lean systems as mix leveling. This paper approach product mix leveling problem from a dynamic perspective. A system dynamics model is developed to explore the dynamics associated with the WIP level performance at different mix leveling policies in a lean environment. The system captures different lean tools and policies. Results showed that the best WIP performance is sensitive to both the degree of lean tools implementation as well as the capacity scalability level of the system. The presented analysis showed that dynamic capacity is essential for successful mix leveling policies; however, investments in such scalability can be minimized with shorter production cycles as well as efficient JIT implementation. In addition, the positive impact of SMED on WIP accumulation in lean environment was well demonstrated.