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Tactical Planning in a Beverage Industry
An AIMMS' optimization-based application was developed to automate the tactical planning process in a complex beverage manufacturing plant. The application provides for fast analysis of utilization profiles of various assets involved in the beverage production. This exercise is critical in supporting capital expenditure decisions and in decisions relating to processing additional raw-material over and above the amounts forecasted previously that may be available at a cheap price due to sudden market condition changes. The application demonstrated that asset utilization can be predicted and optimized to maximize ROI to the business.
Business description & background
Prior to the harvesting season, a beverage-maker is interested in making sure that the assets on hand are adequate to support the forecasted harvest and sales demand for the products. The decision support tool also needs to guide buy decisions when additional raw material becomes available at cheaper costs. The following business aspects are relevant to this project:
- Very concentrated activity of production as it is tied to harvesting cycle;
- Multiple products;
- Perishability constraints on the raw materials and intermediates;
- Production sequencing is a critical element of the production recipe. Asset utilization profiles are a function of the schedule of these sequences;
- High sensitivity to cost (both operating and capital).
Within the company, currently there exists no systematic way of generating and analyzing a plan for capital expenditure and profits optimization. Microsoft Excel and MS Project are used to do planning and scheduling. As a result, there is no line of sight to the financial impacts of decisions made on the ground.
The challenge
Optimal Solutions Inc., was charged with the task of demonstrating a tactical planning application that:
- Generated cost-optimal and implement-able plans;
- Honored sequencing constraints in various recipes;
- Provided a user-friendly interface
The solution
To rigorously assess the impact of scheduling on cost, mathematical-programming-based scheduling (as opposed to heuristics) is relevant for this application. Of the several platforms available, AIMMS was chosen for developing the application because of its class-leading GUI capability and its ability to interface with a variety of MILP solvers. Also, the sparse matrix execution & time management features in AIMMS were very critical to us in this application. Results were tested using representative raw material forecast data.
The benefits
The company was introduced to the concept of model-based decision-making for the first time. The business team and manufacturing team appreciates the value of such a decision support system. Cycle time in making these decisions with the application is on the order of minutes as opposed to hours by manual means.
How did AIMMS add value
Overall we were very happy with our decision to use AIMMS as the development platform of choice for this application. The tutorials and manuals available provided great insights into the powerful features of the package, which we were able to exploit to simplify the formulation of the problem. Some specific features of particular value to us were:
- Powerful GUI capabilities to represent schedules on a Gantt-chart;
- Sparse matrix execution capability;
- Ability to start at the low end of MILP solvers and scale to high-end solvers when needed to avoid upfront cost.
About Optimal Solutions Inc.
Optimal Solutions was established specifically to serve the need of the process industry for advanced decision support systems, including Sales & Operations Planning (S&OP), Advanced Planning & Scheduling (APS), & process optimization. With over 25 years of experience in process and operations research within the process industry, AOI develops cost-effective decision support applications incorporating state-of-the-art technology, such as AIMMS.
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Contact Website |
Ranjan Ghosal info [ @ ] osiopt.com |
