Optimisation of process audit plan for minimising vehicle launch risk using MILP

Abstract

Suppliers play a critical role in the success of any organisation. A complex product such as an automobile often involves a large number of suppliers. The need for high supplier quality especially gets highlighted at the time when automobile manufacturers launch new vehicles. A new vehicle launch involves enormous coordination efforts among the original equipment manufacturer (OEM) and suppliers distributed across the globe. In such situations, supplier audits are used for minimising associated launch risk. However, allocating limited qualified engineers to supplier plants for an audit becomes a challenging task. This research proposes a mixed integer linear programming (MILP) model to allocate engineers to supplier plant locations and create an optimal audit schedule by incorporating the level of risk involved.

Tactical Audit Planning

“…To solve this problem, the authors provide multiple decomposition strategies consisting of separating team formation from assigning tasks. Rai et al (2013) approach the problem of maximizing risk coverage with auditor-task exclusivity and the requirement of completing all jobs above a certain level of risk. The authors use this model in a real case of auditing autoparts suppliers before the launch of a new vehicle.…”

“…Systematizing the literature enables the identification of several trends in audit scheduling research. Models considering risk-based payoff functions apply them to practical cases (Hemaida 1997;Rai et al 2013). Models minimizing makespan tend to be similar to job-shop scheduling models.…”