Kimberly-Clark Latin America builds an optimization-based system for machine scheduling

Nazrul Shaikh, Vittaldas V. Prabhu, Danilo Abril, David Sánchez, Jorge Arias, Esteban Rodríguez, Germán Riaño

Research output: Contribution to journalArticle

3 Scopus citations

Abstract

During a single planning period, Kimberly-Clark Latin America manufactures dozens of stock-keeping units (SKUs) in varying quantities using a few machines. The same SKU can be manufactured on multiple machines, some of which are more efficient than others. In addition, the setup time for an SKU is sequence dependent, and its demand is stochastic between planning periods. The stochastic demand necessitates changing production plans each planning period; given the large number of SKUs and small number of machines, this leads to inefficiencies. This paper describes the formulation and corresponding solution approach of an integrated inventory, production-planning, and detailed scheduling model to address the inefficiencies in lot sizing, production scheduling, and inventory management. The paper's key contribution is the solution approach, which solves the resultant industry-size NP-hard problem in minutes. The solution quality and its implementation have been tested extensively, and the model has been successfully deployed in five countries. A reduction in finished product inventories of up to 45 percent, an increase in yield and uptime of 2 percent, and improvements in service levels of 2.4 percent are directly attributable to the model and the solution approach highlighted in the paper.

Original languageEnglish (US)
Pages (from-to)455-465
Number of pages11
JournalInterfaces
Volume41
Issue number5
DOIs
StatePublished - Sep 1 2011

All Science Journal Classification (ASJC) codes

  • Strategy and Management
  • Management Science and Operations Research
  • Management of Technology and Innovation

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    Shaikh, N., Prabhu, V. V., Abril, D., Sánchez, D., Arias, J., Rodríguez, E., & Riaño, G. (2011). Kimberly-Clark Latin America builds an optimization-based system for machine scheduling. Interfaces, 41(5), 455-465. https://doi.org/10.1287/inte.1110.0590