Production Planning with Patterns
Posted by Sridhar Tayur on Thu, Feb 03, 2011 @ 10:35 AM
For decades, a major challenge in managing manufacturing plants in Chemical, Consumer Packaged Goods, Pharmaceuticals and other 'process like' industries (although they maybe producing discrete parts like ball bearings) has been the economical sizing of production runs, variously known as lot sizing, rhythm wheel, campaigns, cyclic schedules and so on. The difficulty is computational due to sequence dependence in changeover times and costs, capacity constraints and routing and recipe restrictions, and other secondary or tertiary constraints.
We achieved a major break-through recently, in a co-innovation project with ConAgra Foods, when we added a new constraint -- a very practical restriction that allows for easy implementation of solutions in the real world -- that insists that the production timing pattern of any item, on any resource, needs to belong to a small set of allowable patterns. This allowed us to create near optimal solutions to large size problems relatively quickly; ConAgra has implemented this already in several plants, and they are seeing 30% reduction in cycle inventory and reduced total changeover costs while meeting demand in a more responsive manner.
An academic paper on this is forthcoming in Operations Research. In the meantime, if you want to test our new algorithm out, please contact us and let us show you how your factories can run better. An enterprise strength module, that works with our EIO suite and connects to ERP/APS systems (including SAP's SNP and PP/DS), called PPPO (Production Planning with Patterns Optimizer) is available for purchase as well.