A major US Winery was faced with a tough supply chain optimization problem in their Tank Farm area. Tanks are a very essential equipment group for a Winery where a majority of the processing and storage happens. Tanks are also a very expensive asset pool with long lead time for constructing new units. The company was interested in leveraging the most out of their Tank Farm by optimizing the utilization of the available tanks. The Optimal Solutions Inc (OSI) team was hired to study and define the optimum tankage (also knows as cooperage) required and how to use these tanks more effectively. The OSI team was able to provide clear recommendations about the tankage requirements and the areas of improvement. A well-defined planning and scheduling decision support software solution for day-to-day optimization activities was also developed. This work helped the winery realize a capital cost avoidance benefit of over $1 Million along with significant quality benefits.
The tanks farm consists of tanks with varying capabilities and sizes. The business is faced with fulfilling a string of processing orders every week and efficient allocation and scheduling of the Tanks is critical to ensuring successful order fulfillment. This is essentially an inventory management and order-fulfillment problem.
The problem can be broken down into an assignment problem – where tanks have to be assigned to the jobs in order to yield the best quality product, and a scheduling problem – where the assigned jobs meet a due date requirement. This essentially means that the problem is one of assigning jobs to Tanks in a time-slot.
The objective function is a complex one and involves a composite of (and often conflicting) objectives. Typical objectives are
The scheduling problem is also faced with several processing constraints. Honoring these constraints is critical to the operation of the tank farm. This also makes the problem difficult to formulate and solve.
The personnel involved in the Tank farm planning and scheduling are savvy engineers but NOT specialists in Operations Research or Optimization. Hence, the planning and scheduling application has to be designed with a robust and user-friendly interface.
First, the OSI team conducted a thorough survey of the Tank farm area to look for improvements and the supply chain was identified as an area for improvement.
Then, a mathematical programming – based Scheduling system was built using AIMMS as a platform. This system has a MS Access Database in the back end with a Excel Front-end (the front-end is being modified into a Web-Based front-end in 2011). This system features an optimization solver in the core that solves the efficient Tank-Farm usage problem – honoring all business constraints and maximizing the composite objective function. The user has the flexibility to re-define the objective function and also to turn on/off any constraints via the user interface.
The application solves for hundreds of jobs in minutes.
The application has reduced the cycle time of planning from days to minutes. It has also resulted in capital avoidance of over $1 Million – as a result of efficient usage of the Tank farm.
On the quality front also, the application has given significant benefits. By efficient matching of tanks to jobs, it has resulted in an average of 10% head-space reduction – hence reducing the oxidation of wine significantly.
The Tanks scheduling/planning solution implemented by OSI won high marks for enabling easy creation of order fulfillment plans. Some specific features of particular value were:
A major US Winery was faced with a tough supply chain optimization problem in their Tank Farm area. Tanks are a very essential equipment group for a Winery where a majority of the processing and storage happens. Tanks are also a very expensive asset pool with long lead time for constructing new units. The company was interested in leveraging the most out of their Tank Farm by optimizing the utilization of the available tanks. The Optimal Solutions Inc (OSI) team was hired to study and define the optimum tankage (also knows as cooperage) required and how to use these tanks more effectively. The OSI team was able to provide clear recommendations about the tankage requirements and the areas of improvement. A well-defined planning and scheduling decision support software solution for day-to-day optimization activities was also developed. This work helped the winery realize a capital cost avoidance benefit of over $1 Million along with significant quality benefits.
The tanks farm consists of tanks with varying capabilities and sizes. The business is faced with fulfilling a string of processing orders every week and efficient allocation and scheduling of the Tanks is critical to ensuring successful order fulfillment. This is essentially an inventory management and order-fulfillment problem.
The problem can be broken down into an assignment problem – where tanks have to be assigned to the jobs in order to yield the best quality product, and a scheduling problem – where the assigned jobs meet a due date requirement. This essentially means that the problem is one of assigning jobs to Tanks in a time-slot.
The objective function is a complex one and involves a composite of (and often conflicting) objectives. Typical objectives are
The scheduling problem is also faced with several processing constraints. Honoring these constraints is critical to the operation of the tank farm. This also makes the problem difficult to formulate and solve.
The personnel involved in the Tank farm planning and scheduling are savvy engineers but NOT specialists in Operations Research or Optimization. Hence, the planning and scheduling application has to be designed with a robust and user-friendly interface.
First, the OSI team conducted a thorough survey of the Tank farm area to look for improvements and the supply chain was identified as an area for improvement.
Then, a mathematical programming – based Scheduling system was built using AIMMS as a platform. This system has a MS Access Database in the back end with a Excel Front-end (the front-end is being modified into a Web-Based front-end in 2011). This system features an optimization solver in the core that solves the efficient Tank-Farm usage problem – honoring all business constraints and maximizing the composite objective function. The user has the flexibility to re-define the objective function and also to turn on/off any constraints via the user interface.
The application solves for hundreds of jobs in minutes.
The application has reduced the cycle time of planning from days to minutes. It has also resulted in capital avoidance of over $1 Million – as a result of efficient usage of the Tank farm.
On the quality front also, the application has given significant benefits. By efficient matching of tanks to jobs, it has resulted in an average of 10% head-space reduction – hence reducing the oxidation of wine significantly.
The Tanks scheduling/planning solution implemented by OSI won high marks for enabling easy creation of order fulfillment plans. Some specific features of particular value were:
