A Novel Optimization Model for Equipment Capacity Planning with Total Number of Assets and Changeover Minimization

Capacity planning is one of the major factors in saving capital and avoiding unnecessary costs in any manufacturing system particularly large original equipment manufacturers (OEMs). However, many manufacturing systems still suffer from huge costs incurred due to a lack of applying a robust capacity planning optimization model. Most of the developed models in literature do not consider real-life situations in manufacturing systems and, hence, are not easy to implement. In this paper, a novel capacity planning optimization model considers various important features of a manufacturing system. The objective function of the model is to minimize the weighted sum of the total number of assets and changeovers. A unique feature of the developed model is the capability of providing the number of additional required assets of each type in case the existing assets are not capable of covering the entire demand. The other unique feature is providing the utilization percentage of each asset and, hence, identifying underutilized and overutilized assets. This will give great insight to planners about the possibility of saving even more assets by increasing the capability of some machines through adding tooling and/or reprograming them. The developed model, as a capacity planning tool, has been deployed in some of Ford Motor Company’s plants, and it has shown potential to save millions of dollars for the studied programs. The model can easily be used in different manufacturing systems, plants, and OEMs. A real case study is provided for illustration.