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Inventory becomes one of important aspects to identify whether a company has fulfilled the consumers’ demands or not. Shortage of stock, finished goods particularly could emerge the failure of accomplishing the target of consumers’ demand that could also lead to loss of sales. Therefore, it needs good inventory control. This paper is objected improve SME’s productivity by using the approach of discrete system simulation of aluminum industry that rapidly developed in Yogyakarta. Simulation is one of the appropriate tools for experiments that purposed to identify best response from system components. Based from Observation from line production, there are semi-finished products were not finished. Other than that the firm has no clue to solve the problem. Design of experiment and scenario are developed in a model that was built to obtain solution in enhancing the performance and productivity. As the result of initial performance that is not optimal, rescheduling on transporter schedule and the replenishment of machines and operators on the lathing process could be performed as improvements to enhance the productivity. This experiment can be used as the solution in improving the product’s output as 64.36%.

Like manufacturing companies that have flowshop production lines, SME facing the amount of flow time and makespan. Unfulfilled production targets, buildup on some machines that result in other machines being idle, increasing waiting times across multiple machines, and poor performance of workers are a series of problems facing SME. This article uses a discrete system simulation method to analyze and evaluate SME production lines to improve performance. Simulation is an appropriate tool used when experiments are needed in order to find the best response from system components. From the results of modeling and simulation done found the root of the problem is due to accumulation that occurs in one machine and the lack of utility of the operator in producing bags. So do the experimental design with 3 scenarios on the system that have been modeled and obtained some solutions that can be offered to solve the problem. Furthermore, after the alternative selection is obtained the best scenario based on the alternative selection test is the scenario3 by adding 2 new machines and 1 new operator on the production line obtained a significant output increase compared to other scenarios of approximately 30%. While the best scenario based on the minimum cost is the scenario2 by adding 2 new operators obtained output that is not much different than the scenario3. However, it has not been able to solve a series of problems facing SME. Therefore, the results of this study to solve a series of problems faced by SME is to add facilities in the production line of 2 new machines and 1 operator (scenario3).