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Lecture 27: Supply Chain Scheduling 1

Lecture 27: Supply Chain Scheduling 1. Outline. The Beer Chain Carlsberg Denmark Supply Chain Management Supply Chain Introduction Strategic, Tactical, Operational Planning vs. Scheduling Hierarchical Decomposition. Supply Chain Scheduling. Carlsberg. Sells many different brands of beer

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Lecture 27: Supply Chain Scheduling 1

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  1. Lecture 27: Supply Chain Scheduling 1 © J. Christopher Beck 2005

  2. Outline • The Beer Chain • Carlsberg Denmark Supply Chain Management • Supply Chain Introduction • Strategic, Tactical, Operational • Planning vs. Scheduling • Hierarchical Decomposition © J. Christopher Beck 2005

  3. Supply Chain Scheduling © J. Christopher Beck 2005

  4. Carlsberg • Sells many different brandsof beer • Sells many different “formats” • bottles, cans, kegs • 6-pack, 12, 24 © J. Christopher Beck 2005

  5. Distribution Centre Carlsberg Supply Chain Brewery 1 4 production lines Brewery 2 2 production lines Warehouses Stage 1 Stage 2 Stage 3 © J. Christopher Beck 2005

  6. Stage 1 Scheduling • 3 production steps on each line • brewing (and fermentation) • filtering • filling – bottling/packaging • All are resource constrained but filling is usually the bottleneck • Filling operation has different costs and processing times © J. Christopher Beck 2005

  7. Stage 1 Scheduling • All orders have fixed “lot size” • Products are divided into A,B,C categories • A – high runners – a lot of demand • C – specialty beers: more expensive, less demand • Sequence dependent changeovers! © J. Christopher Beck 2005

  8. Stage 1 Transportation • Either to DC or direct to a warehouse • Different lot size constraints (truck capacity) © J. Christopher Beck 2005

  9. Distribution Centre Carlsberg Supply Chain Brewery 1 4 production lines Brewery 2 2 production lines Warehouses Stage 1 Stage 2 Stage 3 © J. Christopher Beck 2005

  10. Stage 2 & 3 Optimization • Placement of pallets at DC and warehouses • Transportation to warehouses • Transportation to customers • vehicle routing © J. Christopher Beck 2005

  11. Scheduling Process • Medium term: 12 weeks • given demand and forecasts for products • 3 MIP models solved sequentially • Costs: production, storage (at brewery, DC, warehouse), transportation, tardiness, non-delivery penalty, and violation of safety stock • Each MIP is composed of 5-10 subproblems based on products © J. Christopher Beck 2005

  12. Safety Stock • One goal is customer service • Usually achieved by maintaining inventory at DC and warehouses • Minimum inventory levels = safety stock • A lot of safely stock  good customer service, but also high inventory costs! © J. Christopher Beck 2005

  13. Short Term Scheduling • Based on medium term schedule, short term scheduling plans the actual production for one week • More detailed model of resource (i.e., sequence dependent setup costs) • Use genetic algorithm or constraint programming • Transportation scheduling © J. Christopher Beck 2005

  14. Overall Process • Medium term plan is re-done every day using up-to-date information • takes 10 to 12 hours • Then short term scheduling is re-done © J. Christopher Beck 2005

  15. Comments • This is not a distributed scheduling solution! • Decompositions are crucial • medium term/short term • product-based • transportation scheduling decoupled from production scheduling © J. Christopher Beck 2005

  16. Supply Chain Optimization • Assume we are interested in minimizing the cost of the entire supply chain • Individual participants will cooperate to minimize overall cost • How many things are wrong with this assumption? © J. Christopher Beck 2005

  17. Levels & Horizons © J. Christopher Beck 2005

  18. Planning vs. Scheduling © J. Christopher Beck 2005

  19. Hierarchical Decomposition • Planning solves higher level problems based on aggregate data • The planning decisions are then used as constraints (e.g., due dates) for the scheduling • May be multiple independent scheduling problems • Planning decouples scheduling problems! © J. Christopher Beck 2005

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