Multi-plant coordination: towards improved manufacturing performance

Abstract

Firms in several discrete parts manufacturing industries operate in a multi-plant environment, where products are processed successively at several different plants. Prior studies have ignored the interaction between different plants in a multi-plant scenario. This model captures this interaction and is preferable to the uncoordinated or the sequential approach which ignores this interaction. Using strategies based on Lagrangian relaxation and Lagrangian decomposition, the authors show that coordination leads to improved cost performance and enhanced profits for firms. In the quest for improved performance, multi-plant coordination represents an important strategy for firms.