Better Together or Divided Forever—Integrated or Hierarchical Material and Workload Control

Offering bespoke products is the cornerstone of many competitive manufacturing strategies. The challenge for production control is allocating materials to individualized orders before they can be released to the shop floor. This requires joint evaluation of material inventory and workload control. However, these topics have been studied in isolation for (Formula presented.) years, under the presumption of a hierarchical control design. This traditionally had the practical advantage of a reduced need for real-time system information. With the advancements in Industry 4.0, control functions can now be integrated. We amalgamate knowledge from both disciplines, present hierarchical and integrated production control designs, and formulate material inventory policies tailored to pulled order release. Using simulation, we show that a decentralized and integrated production control design drastically reduces cost (at least 15%) and improves delivery performance in various settings.