How optimization technology can enhance your S&OP and IBP process

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Webinar 2:
Powering IBP with Modelling &
Optimization
Get inspired how optimization enhances your
S&OP / IBP experience

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About Marcel Mourits
> MsC in Mechanical Engineering
> PhD in Supply Chain Network Design
& Operations Research
> 10 years with Logistics Service
Providers and Retails
> 6 years in SC & Manufacturing
Business Consulting
> 3 years with AIMMS
Passion for improving decision making

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AIMMS…
… offers a new approach to solve critical business problems in typically
four months with our breakthrough technology.

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Optimization finds you the “Best Set of Actions”
AIMMS helps you find the ‘Best Set of Actions’ to improve the situation
The Power of Optimization!
> generate multiple sets of actions for various scenarios
> evaluate performance, sensitivity, robustness
> always the best fit answer to your requirements and objectives
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IBP / S&OP Optimization; Examples
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Our clients in Supply Chain
Optimization & IBP
1990 1995 2000 2005 2010 2015

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S&OP and IBP
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next
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Why powering IBP with Modelling & Optimization?

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Why powering IBP with Modelling & Optimization?
Taking S&OP to the next level
with Optimization

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• World leader in meat processing
• From field to retail shelf
• 5 industry standard process steps
• 54 processing plants in Brazil
• World leader in meat processing
• From field to retail shelf
• 5 industry standard process steps
• 54 processing plants in Brazil
Case in point:

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Celso Batista
JBS
Lead Global Planner
presenting
@
Dallas
SC & Logistics
Conference 2014
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12. DISSASEMBLY SUPPLY CHAIN
q 80 PRIMALS, 160 SUB-PRIMALS, 2.000 SKUs
§ Yield
§ Shelf Life
§ Maturation
§ Raw material requirements
§ Production requirements
q 50+ PRODUCTION PLANTS
§ Certifications
§ Capacities
§ Cattle availability
§ Costs
q 12+ DISTRIBUTION CENTERS
q 170 MAIN DOMESTIC DESTINATIONS
q 100 EXPORT COUNTRIES
JBS SUPPLY MODEL
QUESTION
MARKS
PROPOSED
SOLUTION
CAPTURED
GAINS
PROJECT
SYNERGIES
Picture from: UltimateBeef(http://ultimatebeef.co.za)

13. JBS SUPPLY MODEL
QUESTION
MARKS
PROPOSED
SOLUTION
CAPTURED
GAINS
PROJECT
SYNERGIES
GENERAL BUSINESS DAY-TO-DAY QUESTIONS
•Are we missing demand opportunities?
•Are we increasing inventory?
PULLED X PUSHED
PRODUCTION
•Are we maximizing the utilization of our production bottle-necks?
•Are we measuring those correctly?
BOTTLE-NECKS
•Are we allocating contracts respecting all the transportation implications?
•Are we minimizing freight? Are we minimizing taxes?
SHIPPING COSTS
•Is this the best mix of production to maximize the revenue?
PRODUCTION TRADE-
OFFS
•Given a group of premises, what kind of financial result should we expect?
•Should I keep volume as initial planned? Should I increase it? Should I decrease it?
FINANCIAL
PROJECTIONS
•Are we going to fill our firmed demands for next week? How my OTIF will end up being?
•Which products do I need to consider as priorities for next week? And for tomorrow?
SERVICE LEVEL

14. MATHEMATICAL APPROACH
OPERATIONAL RESEARCH
ü Maximize revenue
ü Consider business limitations / restrictions
OUTPUTS
ü Cattle procurement plan
ü Bone in meat decisions (Sell? Transfer? Debone?)
ü Production Plan
ü Sales Plan
ü Financial results projection
JBS SUPPLY MODEL
QUESTION
MARKS
PROPOSED
SOLUTION
CAPTURED
GAINS
PROJECT
SYNERGIES

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IBP – Optimization;
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Evolution of Marketing & Sales Planning
© Oliver Wight International 1
OPTIMISATION
PREDICTIVE MODELLING
MODELLING
PARAMETERS
PLANS
STATISTICAL
MODELLING
ANALYTICS
ASSUMPTIONS
PLANS
INTEGRATED ANALYTICS
How to get there?

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Demand Plan Optimization
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Demand Driven Production Scheduling
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Optimal Scenario Generation
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What sort(s) of IBP do you have?
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Commodities
Demand driven
Global alignment
Low maturity
Converging SC
Stable portfolio
Stable demand
Speculative pricing
Specialty products
Supply driven
Local for local
High maturity
Diverging SC
Rapid NPI
Volatile demand
Stable pricing

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General S&OP - IBP Optimization Platform
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Commodities
Demand driven
Global alignment
Low maturity
Converging SC
Stable portfolio
Stable demand
Speculative pricing
Specialty products
Supply driven
Local for local
High maturity
Diverging SC
Rapid NPI
Volatile demand
Stable pricing

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Working with Issue Resolvers
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Like to experience for yourself?
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“ I’m amazed; I know of no
other vendor that builds MY
application on the fly in a two
day workshop! “

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Next Webinars in this series
For more information refer to: marcel.Mourits@aimms.com
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