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Kimberly-Clark Latin America Builds an Optimization-Based System for Machine Scheduling

Author

Listed:
  • Nazrul Shaikh

    (Department of Industrial Engineering, College of Engineering, University of Miami, Coral Gables, Florida 33146)

  • Vittal Prabhu

    (Marcus Department of Industrial and Manufacturing Engineering, Pennsylvania State University, University Park, Pennsylvania 16802)

  • Danilo Abril

    (Kimberly-Clark, Latin American Operations, Bogotá, Colombia)

  • David Sánchez

    (Kimberly-Clark, Latin American Operations, Bogotá, Colombia)

  • Jorge Arias

    (Kimberly-Clark, Latin American Operations, C1001ABR Buenos Aires, Argentina)

  • Esteban Rodríguez

    (Kimberly-Clark, Latin American Operations, Heredia, Costa Rica)

  • Germán Riaño

    (Kimberly-Clark, Latin American Operations, Bogotá, Colombia)

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.

Suggested Citation

  • Nazrul Shaikh & Vittal Prabhu & Danilo Abril & David Sánchez & Jorge Arias & Esteban Rodríguez & Germán Riaño, 2011. "Kimberly-Clark Latin America Builds an Optimization-Based System for Machine Scheduling," Interfaces, INFORMS, vol. 41(5), pages 455-465, October.
    • Handle: RePEc:inm:orinte:v:41:y:2011:i:5:p:455-465
    DOI: 10.1287/inte.1110.0590
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    References listed on IDEAS

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