The application of the theory of constraints at Middelburg ferrochrome to determine the expansion capacity of the inbound raw material logistics system

Gardner, Jeffrey Morgan (2004-12)

Thesis (MBA)--Stellenbosch University, 2004.

Thesis

ENGLISH ABSTRACT: With the demand for ferrochrome increasing, Middelburg Ferrochrome is considering various capacity expansion opportunities. One of the proposed expansions would entail the construction of a pelletising and sintering facility on the site. During the feasibility study, a study was necessitated to verify if the inbound raw material logistics system at Middelburg Ferrochrome would be able to accommodate the additional raw material required for the pelletising and sintering facility. The objective of this study was to validate if the existing raw materials system is indeed capable of accommodating the additional demand placed on it by the addition of a pelletising and sintering plant at Middelburg Ferrochrome. This will be analysed with the use of the Theory of Constraints. In the study project, an overview of the principles of the Theory of Constraints is presented. An integral part of the Theory of Constraints is the Five Focussing Step process. This process was applied to the existing inbound raw materials logistics system at MFC, in an effort to maximise the raw material processing capability of the system. The methodology that was used to verify whether the inbound raw materials logistics system was capable of handling the additional raw materials involved the construction of a simulation model that was representative of the operation of the existing system. Measurements that were required to assess the performance of the system relative to its goal were defined. The performance of the existing raw materials system was assessed by subjecting the results of the simulation to the defined measures. The simulation model was then adapted to include the pelletising and sintering facility and the increased raw material requirements were introduced to the adapted model. The performance of the future system was then assessed in the same way as the existing system. The benefits that were derived from the application of the Five Focussing Steps were introduced to the adapted simulation model and the simulation results were then reassessed according to the defined measures. Key findings of the study were that through the application of the Five Focussing Steps the processing capability of the inbound raw materials logistics system could be increased. Only with the inclusion of benefits derived from the application of the Five Focussing Steps would the inbound raw materials logistics system at Middelburg Ferrochrome be capable of meeting the additional demand placed on it by the introduction of a pelletising and sintering facility at the site.

AFRIKAANSE OPSOMMING: ‘n Toename in die vraag na ferrochroom het tot gevolg dat Middelburg Ferrocrome (MFC) verskeie kapasiteit-uitbreidingsgeleenthede oorweeg. Een van die voorgestelde uitbreidings behels die konstruksie van ‘n pelletisering- en sinteraanleg. Hierdie voorstel se lewensvatbaarheidstudie het onder meer behels dat die bestaande logistieke stelsel wat Middelburg Ferrocrome se inkomende grondstowwe hanteer, ontleed moes word. Die doel van die analise was om te bepaal of die bestaande logistieke stelsel in staat sou wees om die addisionele grondstowwe, benodig vir die pelletisering- en sinteraanleg, te hanteer. Die doelwit van hierdie studie is om vas te stel of die vermoë van die huidige grondstofstelsel in staat is om die addisionele las van die voorgestelde Middelburg Ferrocrome pelletisering- en sinteraanleg te kan hanteer. Dit word met die behulp van die "Theory of Constraints" ondersoek. ’n Oorsig van die beginsels van die “Theory of Constraints” word in hierdie studie weergegee. ’n Integrale deel van die “Theory of Constraints” is die Vyf Fokus Stappe proses. Met hierdie studie is die Vyf Fokus Stappe proses toegepas op die inkomende grondstof logistieke stelsel van MFC ten einde die grondstof proseseringskapasiteit van die stelsel te maksimeer. Die metodologie wat gevolg is om te bepaal of die inkomende grondstof logistieke stelsel die vermoë het om die addisionele grondstoflas te hanteer, het die konstruksie van ’n simulasie model wat die bedryfskondisies van die bestaande stelsel naboots, behels. Die huidige logistieke stelsel se inset waardes is geïdentifiseer en in die simulasie model ingevoer ten einde die model se akkuraatheid te verifieer. Die simulasie model is hierna aangepas om die voorgestelde pelletisering- en sinteraanleg in te sluit. Die werkverrigting van die voorgestelde stelsel is hierna op dieselfde wyse as die bestaande stelsel geëvalueer. Die voordele wat uit die toepassing van die Vyf Fokus Stappe afgelei is, is by die aangepaste simulasie model bygevoeg waarna die simulasie resultate herevalueer is. Die hoof bevindings wat tydens die studie gemaak is, is dat die inkomende grondstof logistieke stelsel se kapasiteit wel deur die toepassing van die Vyf Fokus Stappe verhoog kan word. Daar is verder gevind dat die bestaande inkomende grondstof logistieke stelsel wel die addisionele las van ‘n pelletisering- en sinteraanleg kan hanteer, maar slegs indien die voordele wat uit die toepassing van die Vyf Fokus Stappe verkry word, ingesluit word.

Please refer to this item in SUNScholar by using the following persistent URL: http://hdl.handle.net/10019.1/85170
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