A production scheduling heuristic for an electronics manufacturer with sequence-dependent setup costs

In this paper, we develop a three-step heuristic to address a production scheduling problem at a high volume assemble-to-order electronics manufacturer. The heuristic provides a solution for scheduling multiple product families on parallel, identical production lines so as to minimize setup costs. The heuristic involves assignment, sequencing, and time scheduling steps, with an optimization approach developed for each step. For the most complex step, the sequencing step, we develop a greedy randomized adaptive search procedure (GRASP). We compare the setup costs resulting from the use of our scheduling heuristic against a heuristic previously developed and implemented at the electronics manufacturer that assumes approximately equal, sequence-independent, setup costs. By explicitly considering the sequence-dependent setup costs and applying GRASP, our empirical results show a reduction in setups costs for an entire factory of 14–21% with a range of single production line reductions from 0% to 49%.