Systems analysis speeds up Chipita's, food-processing line

Chipita International, Inc., one of Greece's largest manufacturers of bakery products and snacks, makes croissants on seven specialized processing lines in Lamia, Greece. A rise in the demand for croissants over the past years called for an increase in output. We undertook a project to determine cost-effective ways of speeding up the croissant-processing lines. We found that the efficiency of a typical line (the ratio of the effective processing rate to the nominal processing rate) was 86 percent because of equipment failures. To reduce the impact of failures and increase the efficiency of the line, we proposed to modify the line by inserting an in-process buffer-refrigerator having a capacity of 40,000 croissants in the middle of the line and by speeding up the part of the line upstream of the buffer. We found that the efficiency of the modified line would rise to just under 98 percent at a cost of a minor increase in in-process inventory. We estimated that the modified design of the line would bring in extra earnings and savings of $19,150 per week because of the resulting increase in output, the elimination of the first shift of the week, and the reduction of scrapped material during long failures.