Material flow control in make-to-stock production systems: an assessment of order generation, order release and production authorization by simulation

Material flow control (MFC) is a key element of production planning and control. The literature typically categorizes different MFC methods according to how MFC is realized. This distinction overlooks that MFC decisions can be subdivided into three independent tasks that are executed as orders progress through the system: (i) order generation, (ii) order release, and (iii) production authorization. MFC methods are typically designed for only one of these three tasks, which leaves a large part of the order flow uncontrolled. This study therefore not only provides a new categorization of MFC methods, but also argues for the simultaneous application (or the combining) of three different MFC methods for order generation, order release, and production authorization. To support this argument, the performance effects of an integrated MFC approach are evaluated. Findings show that each individual MFC method impacts different performance metrics, which can be explained by the presence of a hierarchy of workloads, where each workload level constrains the succeeding hierarchical level. Each MFC method has a main impact on a different workload. This has important implications for the design of MFC methods and extends recent literature on hierarchical production planning and control systems.