Production Optimization Case Study

Description

Determine where, when and how much to produce in order to meet your customers’ real or anticipated demands while considering the capacities, constraints, costs, inventory and service level impacts that those production decisions have across your extended supply chain.

Sample questions this use case addresses

How can we assign production to work centers to meet near-term demand?

How does a cost-minimizing strategy compare to how we typically load our manufacturing resources?

How does a production wheel or campaign impact my objectives and costs?

How do my sourcing and distribution costs influence my production allocation decisions?

How is the throughput on a production work center influenced by changes to the timing of production runs?

Typical use case inputs

Constraints at internal work centers

Resource constraints from labor to material handling equipment availability

Throughput limitations on the inbound and outbound flows

Availability of third-party manufacturing capabilities

Conversion costs for each flow path through the production network

Costs of production expansions

Sequential optimization for non-financial targets

Typical use case outputs

Multi-period production schedule

Allocation of production lots

Resource planning for lot scheduling

Optimal resource loading for each production scenario

Pre-build schedule and warehouse utilization plan

Production optimization value

Traditional capacity and scheduling activities are constrained by the four walls. Plant and line managers are influenced by metrics and attainment goals that generally do not have the total enterprise impact in scope. They are seeking uptime and production throughput efficiencies. Managing production in that manner can have unintended consequences on the organization. Production efficiency gains can be more than offset by increases in unnecessary procurement, transportation, inventory and obsolescence costs.

The production optimization approach considers the upstream and downstream impacts that production decisions have on the organization. The plan also includes a level of analytical detail sufficient for communicating those objectives to execution focused players within your production facilities.

Customization

Customization Level Required: Medium

Details of Customization

DDM

Medium level of customization required to handle detailed BOMs and production processes as well as potential production capabilities.

Model Building

Medium level of customization to incorporate building of tables for BOMs, work centers, processes.