INDUSTRY: Supply Chain
Vestel gains greater visibility and flexibility across its supply chain, fosters increased integration and collaboration throughout its operations, and boosts its overall productivity and profitability with ICRON.
Vestel – an ICRON customer for almost 20 years – is one of Europe’s manufacturing giants, specializing in producing consumer electronics, mobile technologies, displays and LED lighting, and household and professional appliances.
In 2011, Vestel decided that it needed an integrated sales and operations planning (S&OP) solution, as the manufacturer’s supply chain had become too complex – involving too many products, components, constraints, and constantly changing demand signals – to handle. For this S&OP solution, they turned to ICRON.
Here are some of the key challenges Vestel was facing due to the complexities of its supply chain:
Vestel’s planning team spent over one year trying to develop their own heuristics-based system to solve these challenges, but they were not successful. To overcome the complexity of their business challenges, Vestel’s planners required an automated, optimization-based solution.
They needed an algorithmic planning system that would enable the company to gain greater visibility and flexibility across its supply chain, foster increased integration and collaboration throughout its operations, and boost its overall productivity and profitability.
To help Vestel attain a highly flexible, integrated, and automated S&OP process, ICRON’s S&OP solution – using Gurobi’s mathematical programming solver as its optimization engine was implemented in 2011 with some customer-specific modeling. ICRON’s solution, which was developed, tested, and integrated with Vestel’s existing ERP system, was implemented over the course of six months and became immediately fully operational.
The new ICRON system revolutionized and optimized Vestel’s S&OP process and empowered its planners by equiping them with enhanced supply chain visibility and the capability to:
Vestel’s implementation of ICRON’s S&OP solution system and the Gurobi Optimizer delivered:
For the Vestel S&OP solution implementation, ICRON decided to utilize the Gurobi solver. There were a few key factors behind this decision. To solve Vestel’s S&OP puzzle, which consisted of 150,000 decision variables (30,000 of which were integer variables) and 200,000 constraints, ICRON needed a best-of-breed mathematical optimization solver that would be able to quickly generate optimal plans.
The Gurobi solver is used in two modes in the Vestel S&OP solution:
Gurobi possessed several distinctive features that were essential for the Vestel solution, including:
Interactive, instantaneous optimization power: Gurobi’s solver is able to respond immediately to input from Vestel’s planners, incorporate the latest data, and instantly create and revise optimal plans.
Infeasibility analysis and relaxation: Gurobi is able to quickly conduct an analysis to determine the root cause of the infeasibility of a planning problem and run scenario analysis to explore various possible solutions. Gurobi enables infeasibility relaxation, where certain constraints can be manually relaxed by the user so that a feasible solution can be determined.
Multi-objective optimization algorithms: Gurobi’s multi-objective optimization algorithms have the capability to balance multiple objectives and optimize Vestel’s performance in these separate areas.
Warm start capability: Users can – instead of generating an entirely new optimization solution every time they use the system with their new changes to the data or constraints – get the solver to pick up where it left off and restart the optimization process utilizing the existing solution. This makes the system faster and more interactive – thereby enhancing the user experience.
Fueled by the Gurobi optimization engine, ICRON’s S&OP solution has proved to be a powerful tool for Vestel, enabling the company to overcome its S&OP challenges, visualize and optimize its supply chain operations, and achieve increased agility, efficiency, and profitability.
ICRON is a leading provider of Optimized Decision Making and SupplyChain Optimization software solutions. Founded in 1992, ICRON helps customers visualize, synchronize, and optimize their end-to-end supply chain operations and enables them to make optimized decisions that improve their productivity and profitability. For more information, visit www.icrontech.com
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