• Food and Beverage Industry's: Challenge: Reduce Costs and Avoid Stock Outs at Retailers

    by Scott Young | Jul 19, 2016 | Technology & Capabilities

    Growth in the Food and Beverage Industry has been limited or negative over the past three years while margins, which were traditionally high, have fallen. At the same time production complexity has increased as a result of increased product variety, decoupling points between make to stock (MTS) and make to order (MTO) moving upstream, more food safety regulations and traceability requirements.

    Product variety has outpaced growth to the extent that since 2010 items have increased by 32% but average sales per item dropped by 22%*. This is due to factors such as pressure to grow revenue, regional tastes and packaging requirements.

    Increased production complexity and need to rapidly react to changes in demand has placed production scheduling at the core of reliable supply chain management.

    Production scheduling in the Food & Beverage Industry is complex as the result of seasonal supplies, sequencing rules and sequence dependent setups, invalid product combinations, batch size requirements, intermediate storage restrictions and required synchronization with packaging lines, product shelf life and inventory policies. Finding the right balance between the various manufacturing trade-offs is of utmost importance in reducing costs while avoiding stock outs at retailers.

    Optessa MLS has a large number of features that are crucial for process industry scheduling in achieving cost reduction and order fulfillment. Main features include:

    • Patented modern solver arriving quickly at the best balance between the client’s competing production/business rules.
      Example: changeovers – WIP and FG inventory levels – order fulfillment
    • Dynamic rescheduling accommodating changes in schedule while minimizing deviations from original schedule maintaining material stability
    • Hierarchical modeling supporting stage wise scheduling
    • Dynamic batch / lot sizing
    • Attribute specific routings related to product specific decoupling points
      Capacity and storage restrictions
    • Sequencing based on attributes and attribute specific cleanup /setup times
    • Attribute based capacity limits and invalid combinations
    • Inventory policies and limits

    *Supply Chain Metrics That Matter: A Focus on Food and Beverage Companies-2016, Supply Chain Insights, June 15, 2016