Overview of the Extrusion Department at Nolato Meditor AB

Abstract

This master thesis was done in collaboration between the division of Production and Materials Engineering at Lund University, Faculty of Engineering, and Nolato MediTor AB. The company, located in Torekov, offers a variety of solutions for the medical device and pharmaceutical industries. The project was performed in the extrusion department that manufactures a wide variety of medical tubes and hoses for the medical industry.

After conducting an overview of the company's department, it was discovered that the main issue in the department is low equipment utilization due to the wide product portfolio, containing both high and low volume products, that requires a significant amount of setting up and starting up of the equipment, making the production challenging in a cost-efficient manner. Hence, since the company is currently employing a make-toorder production strategy, certain low-volume products were chosen in consultation with the company's employees, and an analysis was undertaken to evaluate how changing the production strategy to make-to-stock would affect them. Make-to-stock was divided into two categories, with products stored in Torekov or at a third-party facility.

A thorough review of the literature focuses on various operations management strategies, how other authors dealt with similar challenges, production costs, and an in-depth explanation of Ståhl’s equation. A cost model was developed using Microsoft Office Excel software, and the calculations were based on the adaptation of Ståhl’s equation. The cost model was used as a decision-making tool between the two production strategies, and the obtained result were represented both tabularly and graphically. The analysis was performed on three family groups, or seven products in total.

Furthermore, the same cost model was utilized for another analysis in which the company wanted to see if it would be more profitable to produce in two shifts or three shifts, i.e. whether to run the production throughout the night or stop after two shifts and restart the next morning.

Popular Abstract

This master thesis was conducted in collaboration between the division of Production and Materials Engineering at Lund University, Faculty of Engineering, and Nolato MediTor AB. The company, located in Torekov, offers a variety of solutions for the medical device and pharmaceutical industries. The project was performed in the extrusion department that manufactures a wide variety of medical tubes and hoses for the medical industry. The department currently produces 80 different products on four production lines, but another production line will be added due to an increase in business.

Due to excessive variability and instability in production, the company expressed their challenge in the department. After conducting an overview of the company's department, it was discovered that the main issue in the department is low equipment utilization due to the wide product portfolio that requires a significant amount of setting up and starting up of the equipment, making production challenging in a cost-efficient manner. As a result, the question of whether equipment efficiency and utilization would increase if the items were manufactured using a different production strategy arose. As it was found during the literature review, operations management is key to each business as its duty is to design, plan, organize, coordinate, and manage resources that are required to either manufacture the products or offer services. Improper management of operations can lead to failure, whereas the proper can lead to success. In other words, it's possible that changing the production strategy in their extrusion department could improve production efficiency and equipment utilization. Further investigation revealed that some of the operations management methods that could be connected to the existing extrusion department are lean manufacturing, just-in-time, make-to-order as well as make-to-stock strategy.

Hence, since the company is currently employing a make-to-order production strategy, seven low-volume products were chosen in consultation with the company's employees, and an analysis was undertaken to evaluate how changing the production strategy to make-to-stock would affect them. Make-to-stock was divided into two categories, with products stored in Torekov or at a third-party facility. A cost model calculating the production cost was developed as a decision-making tool between the two production strategies. The obtained results were represented both tabularly and graphically. It was discovered that manufacturing products for
stock was preferable in all cases for the company. Meaning that not only would manufacturing costs be lower, but the company would also save a significant amount of time that would otherwise be spent setting up and starting up the equipment several times per year. By doing so, the company would become more efficient, but the utilization would further decrease. The time saved could be used to complete additional value-adding processes.

Furthermore, the same cost model was utilized for another analysis in which the company wanted to see if it would be more profitable to produce in two shifts or three shifts, i.e. whether to run the production throughout the night or stop after two shifts and restart the next morning. It was discovered that running the production throughout the night would be negligibly cheaper for the company, however other factors apart from the production cost need to be considered
when making the final decision, including production demand and employee’s well-being.

• author: Ivkovic, Simun
• supervisor: Christina Windmark
• organization: Production and Materials Engineering
• course: MMTM05 20231
• year: 2023
• type: H2 - Master's Degree (Two Years)
• subject: Technology and Engineering
• keywords: manufacturing, efficiency, lean manufacturing, production strategy, cost model
• report number: CODEN:LUTMDN/(TMMV-5349)/1-97/2023
• language: English
• id: 9122440
• date added to LUP: 2023-06-13 13:21:18
• date last changed: 2023-06-13 13:21:18