Conaprole, the biggest dairy production company in Uruguay, produces more than 150 SKUs in their ice cream plant, using five production lines, and up to five different packaging configurations for each line.
The company plans ice cream production on a 12-month rolling basis as part of the Sales & Operations Planning process, and the demand plan varies a lot due to seasonality. The factory management needs to prepare the production lines for the peak season during the low season, taking into account product shelf life and the warehouse’s freezing cameras’ capacity and costs. The factory was often unable to meet the high season demand that generated stock-outs. In addition, management found it very difficult to reschedule quickly their detailed plans due to the challenges they faced including bottlenecks, production process constraints, and staff turnover.
The management’s challenge was to be able to reformulate their plans in order to balance supply and demand and make sure they would avoid stock-outs in key products. They also sought ways to optimize the use of their production capacities.
Ite Consult found simulation modeling to be the best tool to provide Conaprole with the solution to these problems. They built a model in AnyLogic that was integrated with SAP Material Management and Production Planning and the other company’s S&OP planning platform.
By using the model, the Conaprole management was able to:
- Discover the processes in each production line by SKU.
- Optimize production plans to meet better the demand while maximizing product shelf life and minimizing warehouse costs.
- Improve production line utilization to secure additional production capacity in case of an increased demand.