2008 Grupo Nestlé México
Replenishment and Scheduling
 
 
  The Company
 


Nestlé with headquarters in Vevey, Switzerland was founded in 1866 by Henri Nestlé and is today the world's leading nutrition, health and wellness company. Sales for 2007 were CHF 107.6 bn, with a net profit of CHF 10.6 bn. It employs around 276 050 people and has factories or operations in almost every country in the world.

   
  Goals and Issues
 


The scope of Nestlé México's operations covers 7 manufacturing plants, 23 production processes, over 30 finished product categories and 32 raw materials. On a weekly basis the planning and materials areas need to decide how best to utilize the supply of raw materials (including fresh milk) and optimize the allocation of resources in order to produce what is required in the most cost-effective way.

   
  Implementation and Results
 


Technologix developed and implemented a materials and production scheduling spreadsheet optimization model using What's Best! from Lindo Systems Inc. as its optimization engine.

The scheduling model determines, based on targets, the net production requirements by product category, and then optimizes the allocation of raw materials based on product formulations and unit costs. If cost-effective, it will decide to move raw materials between facilities.

The resulting tool schedules the entire México operations for the next 18 weeks. It usually generates optimal solutions in less than a minute, even though its size is quite significant: Over 28,000 decision variables, 500,000 coefficients and 77,000 restrictions, and took approximately 3 months to be completed.

   
  Our Tools
 
The Nestlé México model was developed entirely in What's Best!, the award winning spreadsheet add-in software from LINDO Systems Inc. (www.lindo.com). What's Best! allows us to solve a variety of operational and logistical problems by linking spreadsheet software with the power of mathematical programming algorithms and techniques.