An Agent-based Model of a Corrugated Box Factory: the Tradeoff between Finished-goods- Stock and On-time-in-full Delivery

Strong competition and the high demands of consumergoods companies for just-in-time delivery together with high standards of product and service quality are turning the top end of the corrugated-board box market into a very tough place to be. Customers order a large variety of different boxes, each with its own colour scheme and product specific printing, and expect them to be delivered at very short notice. These demands combined with the complexity of a multi-stage production process and the unpredictability of customer behaviour and machine failures lead to larger and larger inventories of finished goods stock at corrugated box factories, all to be able to guarantee “on time and in full” deliveries to the clients. In this paper we show how an agent-based model of a corrugated box plant was used to evaluate different strategies to reduce this level of stock without compromising on-time-in-full delivery, and lead to a much improved factory understanding. The software model is in use as a strategic and operational tool by a world-leading corrugated box manufacturer.