A conceptual framework for managing congestion in manufacturing

This paper discusses the management of congestion in manufacturing. Tougher competitive situations have led to increasing attention being paid to customer satisfaction, of which timely and customized services are the key concepts. The decisions on how firms should trade off these expectations against high utilization of capital equipment and limited inventories are important to manage congestion effectively. A conceptual framework is presented in this paper for solving the problems of congestion in manufacturing. This framework takes into account the (i) role of cost accounting, (ii) presence of network externalities, (iii) evaluation of customer queueing costs, (iv) impact of entry regulation on congestion levels, and (v) pricing, competitive issues, and strategic implications in solving the problems of congestion. In addition, the role of new production concepts and technologies in the management of congestion is discussed in this paper.