Aggregate Supply Chain Allocation Planning

Process

Aggregate Supply Chain Allocation Planning or Medium Term Planning aims to determine the optimal plan for a specific facility viz. A Production Facility or a Supply Chain Network, over a finite medium period of time such as, for instance, 12 weeks or 12 months or 8 quarters. The planning could include planning for Procurement from Suppliers, Planning for Production (Product-Mix) across Multiple Plants,  Planning for Allocation of Products from Plants to Warehouse to Markets and Transportation choice of Products from Plant to Warehouse to Market.

The Aggregate Planning is done for different objectives functions of such as Cost Minimisation, Contribution Maximisation, Service Level Maximisation. The Planning process also takes into account different constraints that make the solution practical and actionable. Being Multiple Time Period, it is also possible to find the optimal inventory levels across multiple time periods such that the overall cost is minimised?

Medium Term Planning serves as a springboard for answering wider questions, for instance,

  • Which market(s) are most economically attractive for a specific company product and hence receive marketing efforts and Allocation on a priority basis?
  • What is the financial impact of a particular production, procurement and logistics plan?
  • What will be impact of expanding a product in a market on company-wide profits and costs?
  • For a Plant, what is the period-wise and average utilization level of each resource/equipment/process, which are the bottleneck resources and their behaviour over time and hence which to focus on for capacity expansion?

Solution

Our solution is  Mixed Integer Linear Programming solution; an optimization modelling based decision tool that helps the management of Large / Medium size firm to undertake Medium term Planning of Manufacturing and/or Logistics operations. It provides the user with the ability to compare the existing plan with the plan created using the tool to determine how it will increase profits or reduce costs. It also includes the capability to determine the period-wise and average utilization level of each resource/equipment/process, the bottleneck resources and their behaviour over time, which in turn identifies the focus for capacity expansion.

 Client Examples

ACC Ambuja Cements