INTEGRATED PLANNING & SCHEDULING FOR GREATER AGILITY & RESOURCE OPTIMIZATION

Kuah Ann ThyeBRMS Practice Leader, IBM Websphere ILOG

Agenda

Illustrate ILOG Optimisation Portfolio1

Share ILOG PPO2

Share Case Studies3

ILOG: Leadership in Optimization

� Over 160 of the Global 500 build custom applications using ILOG Optimization engines and tools

– 65% in Manufacturing, Transportation & Investment Management

– 80 Manufacturers and 40 Transportation companies in the Global 2000

� Over 1,000 commercial customers under maintenance� Major ISVs reach thousands of others

– 8 of top 10 Supply Chain application vendors– SAP, Oracle, i2, Manugistics, Manhattan Associates, Infor, Quintiq, Kronos, Logic

Tools, DynaSys, Ariba, SmartOps, Cadence Design, Siebel, Tavant, Siemens, Areva, Sabre, PROS, Emptoris, CombineNet, ITG, Eclipsys, SPSS, etc...

� Most of our Modeling Tool competitors are CPLEX Resellers, reaching hundreds more

– GAMS, Paragon, Maximal

� Over 1,000 Universities using our optimization products in their research projects

– ILOG CPLEX is to Operations Research what SPSS and SAS are to statistics

Industry Views …No. 1 Optimization since 80s

Pioneered by ILOG/CPLEX

Optimization Technologies Evolution

DispatchRules

1960 1970 1980 1990

SA, GA, Tabu

CPMPERT

Constraint-based Scheduling

2005-20091947

Primal SimplexLP

ParallelLP/MIP

ConcurrentScheduling

Interior Point

ConstraintPropagation

Large MIPsMIP

ShiftingBottleneck

First CP Systems

CooperatingSolvers (MP/CP)

Global constraints

Barrier LPBarrier Crossover

Dual Simplex

Single ModelingLanguage

(MP,CP)

UnifiedObject

ModelParallel

CP

"ILOG is the leading provider of optimization software components." Larry Lapide, Research Director, AMR Research

"ILOG - The Optimizer Inside." Byron Miller, Analyst, Giga Group

“We selected ILOG because we judged their products to be the bestagainst competitive offerings, and because they are the market leader in most, if not all of their product categories.”

Richard Ratliff, Vice President, Sabre

Optimization Market Leadership

“The leading optimization component vendor is ILOG. ”

“ILOG is the world’s leading provider of software components”6/99, 6/00

CPLEX Across the World

1194 Cities – Excluding ISV deployments

Single Platform Collaborative Planning : Custom Who’s doing

what?Who’s doing

what?

Material Planning

Sales & Operations Planning

Transport Planning / Scheduling

Supply Programme

Production Planning

ILOG LogicTools Suite

Determine optimal number, location, territories, and size of warehouses, plants, and lines.Determine where products should be made.

Inventory Analyst: Strategic

Product Flow Optimizer

Transport PowerOps

Plant PowerOpsPlanning and detailed finite

scheduling for process manufacturing plants

Advanced routing optimization engine for on-going use.

Determine best flow considering inventory, transportation, and mode

Determine push/pull locations, buffer locations, postponement, and policy analysis

LogicNet Plus XE

Transportation AnalystStrategic routing for fleet

sizing, multi-stops, backhauls, and more.

Inventory Analyst: TacticalMaintain the correct inventory

levels on an on-going basis

Multi-SiteProductionSourcing

ProductionPlanning and

Scheduling

Supply Chain

Applications Transportation Planning

Inventory Optimization

StrategicNetwork Design

ILOG Plant PowerOps

� FMCG– Fresh dairy– Tobacco– Chocolate– Biscuits– Baby food– Beer, Soft Drinks

� Pharmaceutical– Biotech– Pharmaceutical

� Chemicals– Consumer chemicals– Industrial chemicals– Cosmetics

� Models key manufacturing constraints

� Designed as a decision support system

� Strength on optimization and performance analysis

� Integration in IT landscape

Integrated Planning and Scheduling solution

• High demand variability

• Complex manufacturing process

• Focus on performance management and cost control

• Product mix changes, new productintroduction, phase out

• Complex product quality issues

ILOG Plant PowerOps Overview

ManufacturingData

ManufacturingData

Supply Chain

Management

Supply Chain

Management

EnterpriseResourcePlanning

EnterpriseResourcePlanning

AdvancedProcessControl

AdvancedProcessControl

ManufacturingExecutionSystem

ManufacturingExecutionSystem

Production ordersDue datesDependenciesResourcesCalendarsModesSetup modelsRecipesShipment costs

PlanningScenarios

Interactive Graphical

Planning BoardInteractiveGantt Chart

• Production schedules

• Pegging arcs• Machine lineups• Resource loads• Safety stock• Tank levels

• Daily or weekly plans

• Calendar view• Plan validation• Exceptions• Alerts• Reports

• KPI Analysis• What-if analysis• Scenario comparison• Drag & drop (insert)• Partial Freeze & Solve• Undo/redo

DELLDELL

Integrated Planning & Scheduling

Integrated Planning & Scheduling

ILOG PlantPowerOpsILOG PlantPowerOps

ProductionPlanningProductionPlanning

DetailedSchedulingDetailedScheduling

BusinessRules

BusinessRules

GoalsConstraintsParametersFilters

Optimize:

• Order fulfillment

• Cycle time• Production

cost• Inventory• Utilization

ProductionPlanner

IntegrationPlanning

Model

Interactive planning

Inside the plant : Network Structure

Define the resources, resource groups and connectionsusing PPO’s plant layout

Multi-Plant: Planning Use Case

Distribution Planning View displays demand satisfaction by time and sourcing choices by location

Distribution Planning View displays demand satisfaction by time and sourcing choices by location

Multi-Plant: Planning Use Case

Planning Sheet View displays a schedule of resource utilization in the facility.

Planning Sheet View displays a schedule of resource utilization in the facility.

Planning Workload view shows the % utilization of the resources in the facility.

Planning Workload view shows the % utilization of the resources in the facility.

Master Data Maintained in ERP/SCM System

Planning & Scheduling Model

ERP / SCM

WebsphereSAP DataAdapter

ERP/SCM ModelInstantiation

ILOG Planning & Scheduling System

Mapping

Load/Refresh/Commit

ILOG Solution

Master Data

Transactional Data

Editing Planned Production with Automatic Configuration

Multi-step Recipes:

Automatic configuration of the possible modes function of previous choices

Multiple Optimization Profiles: Utilization, Inventory, Capacity

.

The different “optimization profiles” can be defined. E

Planners can choose an existing optimization profile or creating a new one.

Each optimization profile defines the goals of the schedule by setting the relative importance of different objectives

© ILOG, All rights reserved 205-May-10

Violation Panel• Show violations of

tank capacity and batch mixing

Violation Panel• Show violations of

tank capacity and batch mixing

Add a new production order

Add a new production order

Tank Level Display• Monitor tank levels

and uncover problems, such as insufficient intermediate products

Tank Level Display• Monitor tank levels

and uncover problems, such as insufficient intermediate products

5/5/2010 Internal ILOG Document21

Enforce maximum 36 hours between two cleanings

Enforce maximum 36 hours between two cleanings

Changeover with Cleaning In Place triggered by allergen transition

• These setups textured

Changeover with Cleaning In Place triggered by allergen transition

• These setups textured

Ordinary changeover with no major cleaning (installing fruit container, rinsing)

• These setups have no pattern

Ordinary changeover with no major cleaning (installing fruit container, rinsing)

• These setups have no pattern

Fixed Production Orders have a “brick” patternFixed Production Orders have a “brick” pattern

© ILOG, All rights reserved 235-May-10

Impact• Part of the additional

demand is left unsatisfied because of missing capacity

Impact• Part of the additional

demand is left unsatisfied because of missing capacity

KPI Comparison Panel • Provides an easy way to

compare scenario solutions• A plug-in mechanism allows

to define custom KPIs.

KPI Comparison Panel • Provides an easy way to

compare scenario solutions• A plug-in mechanism allows

to define custom KPIs.

PPO Integrates Production Planning and Scheduling

Gantt Chart shows the

schedule for each resource

Workload Table shows the

utilization of resource

Managing Plant Floor Constraints

With improved plan reliability

Max duration on storage tankCleaning policies

Multi-purpose storage tank

Continuous process

Re-planning: Reducing System Nervousness

Enforce Fulfillment in Next Production Run� Enforce that next run of planning engine fulfill at least the same

percentage of a demand as in the current planning solution

� If the delivery window is larger than the time bucket then the planned delivery may be occur later

Reducing Re-planning nervousness

� Fix planned productions in current planning solution

� Fix planned deliveries in current planning solution

Scenario Creation and Comparison

� Create and manage scenarios

� Copy scenarios

� Test different planning strategies

� Define and apply business policies

� Define and compare custom KPIs

� Compare Gantt charts and solutions side by side

What-if analysis with precise KPIs

© ILOG, All rights reserved 305-May-10

Available-To-Promise

� Without changing the planning solution we can promise 187 pallets Dec 7th

Capable-To-Promise� Could we produce more bio-strawberry on December 7th with a

different trade-off?

Prioritize the customers using non-delivery costsand re-optimize

Prioritize the customers using non-delivery costsand re-optimize

1000 achievable ?1000 achievable ?

Capable-To-Promise

We can promise 751We can promise 751

We can promise 75% of the 1000 requiredWe can promise 75% of the 1000 required

We let 249 unsatisfiedWe let 249 unsatisfied

You can use a What-If scenario, not to clutter the repository withthis simulation of demand

You can use a What-If scenario, not to clutter the repository withthis simulation of demand

Asset UtilizationAsset utilization by resource

Asset utilization by resource family

Asset Utilization

� Detailed workload table including total changeover time, total productive time etc. by resource or by resource family

PPO provides Fully Configurable Reporting Capabilities

Pre-defined measures

Pre-defined reports

Inventory alerts in PPO

Inventory excess with respect to max days of supply

Inventory deficit with respect to min days of supply

Stock Coverage ViewInventory levels for intermediates and finished good s expressed in quantity and days of supply

Stock Summary ViewSummary of inventory levels for intermediates and finished goods expressed in quantity and days of su pply

Planning with UncertaintyService Level Type = “Fill Rate Dynamic”: safety stock not based

on average lead time but on next production time bucket

Unique feature: not only graphical but also taken into account in optimization !!!

Case Study : Leading Milk Producer

� Customer in FMCG– Manufacture Yogurt and Diary Products

� Manufacturing process – Tank-based processes

– continuous equipments

– storage tanks– filling and packaging

� Compared the manual plan vs optimized plan

Case Study - Challenges

� High Product Mix

� Shared resources (production and cleaning equipments)

� Volatile demand

� High service level requirements

� Shelf life, maturation time for both intermediates and finished products

� Multi-step recipes in continuous equipment, production tanks and storage tanks

� Cleaning in place

� Traceability Regulations

Fresh dairy products

Milk Pasteurizers

Filling Lines

Extending PP/DS with Plant PowerOps

Powder milk

Sugar

Yogurt preparation

Packing lines

Cream Low-fat milk

Fermentation

CoolersStorage of final products

Factory Layout

PASTO

FERMENTER 4

TANK 4

LINE

4

FERMENTER 5

TANK 5

LINE

5

FERMENTER 9

TANK 9

LINE

9

FERMENTER 10

TANK 10

LINE

10

FERMENTER 11

TANK 11

LINE

11

FERMENTER 3

TANK 3LIN

E 3

FERMENTER 8

TANK 8

LINE

8FERMENTER 7

TANK 7

LINE

7

BioPrune

BioSoyRed

Fruits

BioSoy

Natural

Vital.PeachChunk

Vital.Strawberry

Chunk

BioSkimPrune

WMBio

Skim

Vital.Limon

Vital.Natural

Vital.PinappleChunk

Vital.Peach

Vital.Strawberry

BioKiwi

Cereals

BioMuesli

BioStrawberry

BioPrune

Vital.MelonChunk

BioStrawberry

BioKiwi

Cereals

BioMuesli

WMVital.

Chunk

WMVital.

Chunk

WMVital.

Chunk

WMBioSoy

WMBioFat

WMBioFat

BioSkimKiwi

WMVital.

Sweet.

down

down

BAT I BAT II BAT IVBAT III

CowMilk

SoyMilk

ferment

fruit

Pasteurized Milk

Intermediates : different White Masses obtained from fermentation of milk in batches and stored in cold storage tanks

Intermediates : different White Masses obtained from fermentation of milk in batches and stored in cold storage tanks

Connectivity to be managed between tanks and linesConnectivity to be managed between tanks and lines

Final products : fruit adding and packagingNot all products can be made on all lines

Final products : fruit adding and packagingNot all products can be made on all lines

Fermenter 7, Tank 7, Line 7 downFermenter 7, Tank 7, Line 7 down

2 kinds of raw materials : cow milk and soy milk, a setup time is incurred to clean the pasto after soy milk

2 kinds of raw materials : cow milk and soy milk, a setup time is incurred to clean the pasto after soy milk

On conditioning lines:•Setup times when product switching (labeling, fruit container plugging etc.)•Cleaning In Place triggered on:

• transition from product with allergens• elapsed time since previous CIP

On conditioning lines:•Setup times when product switching (labeling, fruit container plugging etc.)•Cleaning In Place triggered on:

• transition from product with allergens• elapsed time since previous CIP

Results – Manufacturing Operations

� Production Smoothing– Stable production frequency

– Frequency is determined by the min and max days of supply

Manual plan VS optimized plan

Results – Manufacturing Operations

� Operational efficiency– operational time / net production time– between 2% and 5% increase

� Improved throughput� Reduced cycle time (reduced non-productive operations)

� Cleaning costs and changeovers– Between 10% and 40% reduction

5/5/2010

Case Study : Pharmaceutical IndustryChemical Substances Micro-organic cultures Vegetable or animal tissues

Fermentation & purificationSynthesis

Pharmacologically active ingredient

Extraction

PREPARATION OF THE PHARMACEUTICAL PRODUCT

Proportioning

Mixing

Direct use

Packaging

Capsules, Granules

Tablets, Pills, …

P ACK AGING

PREP ARATION OF

THE ACTIVE

INGREDIENT

Biotech Manufacturing Process

Micro-organic cultures Cell culture and harvest Purification Bulk, fill, freeze, dry

Example

Cell growth & harvest

Upstream purification

Purification vaccine A

Purification vaccine C

Purification

vaccine B

Purification vaccine D

Cleaning in place

Conclusion: Benefits of PPO

� Reduce waste, work-in-process inventory and cycle time

� Increase throughput via improved resource utilization

� Generate realistic schedules by taking into accounts true manufacturing constraints

� Improve the synchronization between intermediate products and finished goods

� Align manufacturing execution with demand sensing

� Reduce planning and scheduling cycle time

� Improve production smoothing by generating plans with stable production frequency and low production variability

� Quickly align manufacturing strategies to changing market conditions

INTEGRATED PLANNING & SCHEDULING FOR GREATER AGILITY & RESOURCE OPTIMIZATION

Kuah Ann Thyekuahat@sg.ibm.com