Agent-based hierarchical production planning and scheduling in make-to-order manufacturing system

Nowadays, manufacturing organisations face increasing pressures from the frequent change in product type, continuous demand fluctuation and unexpected change in customer requirements. In order to survive in the turbulent environment, manufacturing organisations must become flexible and responsive to these dynamic changes in the business environment. This paper presents a hierarchical agent bidding mechanism that is particularly designed for Make-to-Order manufacturing system and attempts to enhance the operational flexibility of manufacturing system in dealing with dynamic changes in the business environment. The novelty of this mechanism is that it enables manufacturing resources to be self-organised cost-efficiently within structural constraints of manufacturing system for fulfilling customer orders. However, when orders cannot be fulfilled within the structural constraints of manufacturing systems, the mechanism can enable manufacturing resources to be regrouped flexibly across system boundaries but with minimum disturbances to existing system structure. Based on an example application to a manufacturing company, this paper demonstrates that the operational flexibility provided by this mechanism is able to help manufacturing system to respond demand fluctuation through balancing the capacity across the entire system. Meanwhile, this mechanism potentially enables manufacturing systems to deal with unexpected changes in product type. As long as the manufacturing system has the technicality required by a new product, this mechanism enables resources across the manufacturing system to be cost-efficiently and flexibly self-organised to fulfil the