Can improving the lot sizing procedure at Caterpillar Gosselies help the factory reach its cost reduction targets ?

Details

Supervisors

Chevalier, Philippe

Faculty

Louvain School of Management

Degree label

Master [120] en Ingénieur de gestion

Abstract

For the last several years, the global economic conjecture and its negative impact on the mining sector has put economic pressure on Caterpillar Inc. In order to cope with the new market conditions and return the group to stable profit, the top management of Caterpillar Inc. decided on a broad cost reduction strategy. This cost reduction strategy translates into yearly cost reduction targets for the Caterpillar Gosselies factory. The team responsible for ensuring that the Gosselies factory reaches its cost reduction targets highlighted the improvement of the lot sizing procedures of the Gosselies factory as a potentially important source of savings opportunities. As part of that team during my internship I am tasked with the project of analyzing the actual lot sizing systems and trying to assess the associated savings opportunities. The objectives for this project thesis are multiple: - Assess the lot sizing systems in place at Caterpillar through three business cases around specific suppliers. - Optimization of the sourcing strategy for the three suppliers in question (including but not limited to lot sizing) - Proposals of improvement for the lot sizing systems as well as the Gosselies factory in general. Additionally, a review of state of the art of the lot sizing process will be included.