Merck Animal Health's OR portfolio added $200M with no new capacity

Biomanufacturing grows vaccine and therapeutic ingredients in living organisms, which makes yields, lead times and costs vary batch to batch. Equipment is expensive and capacity is hard to flex, so the usual answer — build more — is not available.

Merck Animal Health spent four years with Eindhoven University of Technology developing a portfolio of optimization models and decision-support applications for its biomanufacturing operations, designed to work with that variability instead of around it.

The implementation generated $200 million of additional revenue without additional raw materials, energy resources or new equipment — pure operating gain from better decisions.

The models were adopted widely across the firm, and the project was a finalist for the 2022 INFORMS Franz Edelman Award.

Optimize the portfolio, not just each batch

Modeling variability lets the optimizer exploit it instead of fearing it.

Portfolio-level choice finds value no single-batch fix can.

$200M with no new capacity is a pure decision-quality gain.

A decade of academic pipeline (10 graduate students) fed the practice.

When every batch varies, portfolio-level optimization beats adding slack capacity: model the uncertainty and let it choose which product, line and campaign to run.

The optimization portfolio generated $200 million in additional revenue without new raw materials, energy or equipment and was adopted across the firm; Merck Animal Health and TU/e were named 2022 Franz Edelman Award finalists.