The encyclopedia · Engineering & Operations · Operational decision · 2010–2011
Kimberly-Clark Latin America optimizes machine scheduling across five countries
Integrated lot-sizing and scheduling cut Kimberly-Clark's finished product inventories up to 45% in five countries.
Kimberly-Clark Latin America
the move
Kimberly-Clark Latin America manufactures dozens of stock-keeping units in varying quantities using a few machines, with sequence-dependent setup times and stochastic demand between planning periods.
Because the same SKU can run on multiple machines of different efficiency, and demand shifts each period, manual lot sizing and scheduling were inefficient. The team formulated an integrated inventory, production-planning and detailed-scheduling model that solves the industry-size NP-hard problem in minutes.
The solution and its approach were tested extensively and deployed in five countries, replacing manual plans.
why it works
- Integrating inventory, production and scheduling captured effects each silo ignored.
- The solution method solved an industry-size NP-hard problem in minutes, making it usable.
- Sequence-dependent setups were handled explicitly rather than averaged away.
- Stochastic demand was addressed by re-optimizing each planning period.
what transfers
When the constraint is shared machines and setups depend on sequence, lot-sizing and scheduling must be solved together or each is locally wrong.
what came after
The model reduced finished product inventories by up to 45%, raised yield and uptime by 2%, and improved service levels by 2.4%. It was a 2010 Daniel H. Wagner Prize finalist and a 2011 Interfaces paper.
references
- Kimberly-Clark Latin America builds an optimization-based system for machine scheduling
- Kimberly-Clark Latin America Builds an Optimization-Based System for Machine Scheduling
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