Management Science of Yonsei MBA : A Scheduling and Capable-to-Promise Application for Swift & Company Management Science of Yonsei University MBA By Professor

Management Science of Yonsei MBA : A Scheduling and Capable-to-Promise Application for Swift & CompanManagement Science of Yonsei MBA : A Scheduling and Capable-to-Promise Application for Swift & Company y

Management Science of Yonsei University MBAManagement Science of Yonsei University MBA

By Professor Kim SeongmoonBy Professor Kim Seongmoon

22 조 조

이종윤이종윤 , , 석문호석문호 , , 김원규김원규 , , 김윤중김윤중 , , 김용태김용태 , , 박은진박은진


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0. Common Sense about Cow Meat ! 0. Common Sense about Cow Meat !


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1. About 1. About Swift & CompanySwift & Company

■ ■ 회사 개요회사 개요1. 1855 년 Gus Swift 에 의해 설립2. 2nd Largest processor of Beef & pork in the world

3. 매출규모 : $ 10 Billion/year

4. Out-standing Point of Swift & Company

- Contribution to the food industriesContribution to the food industries : (1)Conveyor belt 를 이용한 혁신적인 disassembling

process

(Henry Ford 에 의해 자동차 대량 생산에 적용 )

(2) Refrigerated rail car(1881)

: brought top-quality meat from Chicago to

East Coast

- Creating the Swift BrandCreating the Swift Brand : 지역에서 도축한 고기를 소비하는 고객들에게 일주일이 경과된 안전한 고기

제공을 위해 brand power 도입

- Turning waste into profitTurning waste into profit : 도축 설비의 대형화로 발생되는 부산물을 활용하여 제품화 시킴

- Continuing the tradition in innovationContinuing the tradition in innovation : 업계 최초 ISO9002 획득 ,

100% 원료 검사 등을 도입하는 선도자의 역할 수행5. 2007. 7. 남미 최대의 beef processor 인 JBS S.A.(sales $2.1 billion) 에 인수되어 JBS Swift

Group 로 세계 최대의 beef processor 가 됨 .

+


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1. About 1. About Swift & Company Swift & Company

- Capacity : 2,500 마리 / shift

(for a total of 18,000 to 25,000 per plant per week)

Swift’s FactorySwift’s Factory

A B C

D E

Fat Cattle

2 살 이상의 살찌운 소

Bull

Dairy cow

Buyer

Brand

Grade

Weight

■ ■ CAPACAPA


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2. Swift’s product line and Necessary of Lear-Program

slaughter

Fabrication processing

Package

80hin a chill room

- seven primal cuts : classified by quality grade, yield grade, weight, brand characteristics- minimizing trim waste/ maintaining the speed

primal into smaller, subprimal piecespack in plastic, vacuum package,

boxing

product line

1. quality grade ( 차돌박이 무늬 수준 )-show high levels of fat marbling based upon a cut made at the 13th rib by USDA inspectors- individual cattle are highly variable and may not grade out as expected2. yield grade ( 살찐 부분의 외부 두께 )- the thickness of the outer fat covering by USDA inspectors- individual cattle are highly variable and may not grade out as expected3. weight ( 무게의 변화 )- customers order by weight and not by the piece, it takes a greater number of pieces from light carcasses to fill an order than from heavy carcasses.- the cattle vary greatly in weight, with a typical carcass weighing between 600 and 800 pounds.4. brand characteristics ( 많은 제품 )-Swift & Company has many product brands. To be sold under a particular brand name, an animal must meet certain standards and possess certain characteristics.- Swift either sells it as trim or uses it to make ground beef.- The fabrication and disaggregation for offal are similar to those for boxed beef, although less complex.

Many Many variablevariable


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3. 3. A simplified disaggregation tree of Swift’s product A simplified disaggregation tree of Swift’s product


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4. Property of Cow Meat Market and Comparison between America and Korea

한국 미국 인구 ( 백만명 ) 49 301

인당 Cow 소비량 (kg/인 ) 6.8 43.4

인당 Pig소비량 (kg/인 ) 18.1 29.3)

연간 소비량 ( 백만톤 ) 0.33 13.1

사육 두수 (백만두 ) 2.5 96.7

육류 가공 업체 40 65

1. 제품이 썩기 쉽기 때문에 원료 및 제품의 생산과 재고 관리가 절대적으로 중요 : 기간에 따른 할인 발생 2. 원료 및 부위에 따라 다양한 제품을 얻을 수 있음 . - 제품의 부위별 수요 차이 => 균형을 맞출 수 있는 주문 관리 필요 - 나이 , 먹이 주는 방법 , 소의 종류 , 품질 등급 분류- 다양한 가공 과정 필요 3. 원료 확보에 기간이 소요되며 , 원료의 등급 판정 등에 많은 변수 존재 4. 원료 구매 이후 빠른 회전율 5. 원료 비중이 매우 높음 (85% 이상 ) 6. 원료를 최대한 활용해야 수익성을 확보할 수 있음 7. 외부 요인에 의한 영향 큼 – 광우병 등

■ ■ 소고기 시장의 특징소고기 시장의 특징

■ ■ 한국과 미국의 소고기 시장 비교한국과 미국의 소고기 시장 비교


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5. PROJECT PHOENIX5. PROJECT PHOENIX

구분 기존 System 신규 개발 System

Strategy Production-Push Business model Demand-Pull Business model

Major Requirement

Product Availability

Not possible to check the Product availability and inventory information

To provide the information in close to real time

Inventory To control inventories accurately

Merchandising To provide the ability to sell unsold production with maximum margin

Optimization To provide the ability to reoptimize the use of raw material to satisfy changing demand


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■ Model Configuration

Forecasting&

Demandmanagement

CSRs

CapacityPlanning

CTP

ATP

Scheduling ModelScheduling Model

Sales&

Operation Planning

Master Planning

5. PROJECT PHOENIX5. PROJECT PHOENIX


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6. Available-to-Promise (ATP) vs. 6. Available-to-Promise (ATP) vs. Capable-to-Promise (CTP)

■ Available to promise (ATP)The uncommitted portion of a company’s inventory and planned production, maintained in the master schedule

to support customer order promising. The ATP quantity is the uncommitted inventory balance in the first period

and is normally calculated for each period in which an MPS receipt is scheduled. In the first period, ATP

includes on-hand inventory less customer orders that are due and over-due.

■ Capable to promise (CTP)Under the MTO (make-to-order) environment, CTP use to determine if the orders is possible to handle or not

during the specific period.

Production

Capacity

or

Inventory

Committed order

timeDemand Time Fence Planning Time Fence

Firm Slushy Free

Production

Capacity

or

Inventory

Committed order ATP

time


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7. Scheduling Model7. Scheduling Model

1. Model Object

– Manager : Plan and Monitor each day’s production

– CSRs : Enter the orders and check product availability

2. Model Functionality

Scheduling Model

1. Current finished goods

inventories

2. Committed orders

3. Forecast with

Committed orders

1. Shift Level Schedule

2. Daily Level Schedule

3. Snap shots on

every 15 Min. interval

INPUT OUTPUT


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7. Scheduling Model7. Scheduling Model

Minimize ∑ Operation Cost for Cutting & Packing + ∑ Unsatisfied demand penalty

+ ∑ Capacity violation penalty for Production, Packing and Inventory limit

- ∑ Sales price x Sales amount

목목적적함함수수

Subject to

Carcass availability : 2times of Carcass availability

Packing Operation : ∑ Packing operation = ∑ Fresh packing + ∑ Frozen Packing

Inventory balance : Ending inventory = Staring inventory + New product – Sales

Demand balance : ∑ all demand = ∑ Not fulfilled from Inventory

+ fulfilled from production

Total sales : Total sales = Sales from Inventory + Production

Production limits : enforces any limits on piece/box production

Inventory capacity : Not possible to storage the inventory capacity

Cutting & Packing Operation > 0

Demand fulfillment, Unsatisfied demand >= 0

Limitation violations for Production, Packaging and Inventory >= 0

Box production for Fresh and Frozen >= 0

Ending Inventory >= 0

Sales from Production >= 0

변변수수


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8. Capable-to-Promise Model8. Capable-to-Promise Model

1. Model Object

Determine whether a plant to ship a requested order on the requested date and

time with the production and cattle constraints during 90day model horizon


CTP Model

1. Cattle availability

2. Customer Orders

3. Finished-goods

Inventory

1. Next Shift

Production Schedule

INPUT OUTPUT


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8. Capable-to-Promise Model8. Capable-to-Promise Model

3. Model Transaction

(1) Product queries to find out the available product/quantity on a specified date

(2) Product commitments to see if the plant can make on specified date.

(3) Deletion of existing order line items by fixing the unfulfilled demand variable

(4) General edits of existing order line items quantities, which can be done in either query or

commit mode

4. CTP Model

(1) Scheduling 과 거의 유사한 개념

(2) Major differences with Scheduling Model

(a) Coproduct production is not tracked in CTP models

(b) All sales are from production

(c) There are no inventory locations or associated inventory capacity


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9. Available-to-Promise Model9. Available-to-Promise Model

1. Model Object

- Provide the real time visibility of the inventory to proactively sell


- 총 45 Model 의 최적화 : 5 개 공장 x 3 개 Line x 3 Operation

ATP Model

Each LP model

1. Stating Inventory

2. Committed orders

3. Production Schedule

from CTP

1. Unsold production

from each shift

INPUT OUTPUT


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9. Available-to-Promise Model9. Available-to-Promise Model

Maximize ∑ Available fresh production + Available frozen production

목목적적함함수수

Subject to

Fresh-production balance

= Available fresh production – Freezing operation – Fresh sales – Ending inventory

Fresh-Inventory balance : Starting fresh inventory – Sales = Ending inventory

Frozen-production balance

= Available frozen production + Starting frozen inventory – Frozen sales – Ending

inventory

Available fresh production >= 0

Available frozen production >= 0

Ending fresh inventory >= 0

Ending frozen inventory >= 0

변변수수


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10. 10. Benefits and ResultsBenefits and Results

1. On time delivery rate 향상

1) On time delivery +/- 1 day : 65% → 87% (22% 개선 )

- 1day delivery

: 24% → 6% [18% 개선 ]

+ 1day delivery

: 11% → 7% [4% 개선 ]


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14% 개선

2. Percent-sold/week 개선 : 평균 14% 개선 ㆍ LP Model 기반 시스템이 고객 수요에 맞춰 생산 스케줄을 최적화

ㆍ Percent-sold position : 일주일 생산 중 기수주된 Order 의 생산스케줄이 차지하는 비중


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3. 판매량 증대 : 평균 20% 증가 [115,000 box]

20%

개선


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4. Business Model 변화 : Production-Push → Demand-Pull ㆍ고객의 수요에 의해 생산 스케줄 및 원재료 구매가 이루어지는 사업구조

Documents

Management Science of Yonsei MBA : A Scheduling and Capable-to-Promise Application for Swift & Company Management Science of Yonsei University MBA By Professor