Food & Beverage
This industry is generally not represented by a very complicated manufacturing process, it is typically 2-4 main stages of which one is generally packing. There are a wide variety of SKUs in different sizes, brands and flavors and it is highly promotional with offers tied to sporting events, holidays and religious festivals. There is typically seasonal demand with the requirement for prebuilding as supply cannot meet demand during the high season. Product expiry and lot sizing are other key constraints with demand generally driven by forecast and if the forecast is missed the demand is lost. Inventory management is key with desired inventory levels required to be met across the supply chain network. The demand end point is typically spread across end consumers, wholesalers, stores, restaurants, bars and clubs and in the case of the beverage industry, returns (glass and plastic bottles) are very important.
Consumer Electronics
The manufacturing process for this industry is more complicated with deeper bills of material and usually involves contract manufacturing with long lead time parts. The contract manufacturing is typically in South-East Asia with final assembly done closer to the customer. There are a wide variety of end items which are made from various combinations of base parts. As a result, the industry is characterized by a mixture of make to stock and configure to order, where the base parts are made by the contract manufacturer based on forecast and the final assembly of the end item occurs when the order is placed. This was one of the earliest industries to adopt online ordering and it continues to be very common. Demand is placed across different channels such as end consumers, wholesalers and stores (3rd party as well as the original equipment manufacturer). From a planning perspective visibility and collaboration (forecast and commitment to demand) are very important as well as aftermarket and replacement parts.
Soft Goods Retail
Products in this industry are typically categorized by season, style, color, size and other relevant attributes. As result there are a large number of end items that need to be managed and controlled. Production typically involves contract manufacturing with the cheapest in the Indian subcontinent and South-East Asia followed by Latin America and then Europe. Production is generally not as complicated as other industries with bills of material that are not so deep. Planning is at least one to two seasons in advance, i.e., 6 to 12 months. Inventory and flow management are key to ensure product is getting to the end customer, be it through stores, online, wholesalers or distributors. The aim is to pull back on products that are not selling as well as expected and ensure there is enough supply for products that are doing better than expected and are the current seasons’ hits. As a result, companies will look to get the initial product flows from the Indian subcontinent and South-East Asia which are at a lower cost, but have longer lead times, while later season flow will come from Latin America and / or Europe where product is more costly, however, can be sent to the consumer faster.
Semiconductor
This industry is typically split into at least two specific parts. The front end, which consist of the fabrication and sorting steps and the back end, which involves assembly and testing. In between the front end and back end is an inventory point known as the die bank, which holds front end wafers ready for assembly. In the case of memory chips there is another assembly and test process performed after the first assembly and test. The fabrication (Fab) process is one of the most complicated with hundreds and thousands of operations and the complete process taking anywhere from 14 to 20 weeks. This is an extremely resource intensive industry, with very complicated routings in the Fab involving re-entrant flows (the same resource is used across multiple non-consecutive operations in the same routing). Not surprisingly very few off the shelf planning solutions are able to provide accurate detailed plans and schedules for the Fab. Key requirements are safety stock planning to ensure the required inventory levels are maintained in the die bank and across the front end and back end as well as starts planning, i.e., how many wafers to start in the Fab or Assembly, binning, where chips of different performance levels are created from the process and down binning, where chips of a higher performance level can be used to satisfy a demand for a lower performance level. Given the resource intensive nature of the industry, at the master planning, S&OP and higher levels, planning will often utilize a linear programming solver to optimize material, capacity and distribution plans as much as possible.
Automotive & Industrial
This industry is known for its heavy manufacturing and is represented by some of the most complicated and deep bills of materials, over ten levels deep in a given facility, with thousands of parts. The industry is characterized by original equipment manufacturers (OEMs) and many tiers of suppliers. Given the complex nature of the supply chain, visibility and collaboration are very important, to understand demand and product availability as well as tracking for product recalls. The process is very hierarchical in nature with everything being made, coming together and then assembled into the final product. Not surprisingly, the coordination of material is very important as any assembly cannot start till all of its sub-assemblies are in place. It is both material and capacity intensive with long lead time parts and complex resource representations consisting of alternate, aggregate and simultaneous resources as well as operators. In many of the manufacturing stages a company will look at make vs. buy decisions depending on supply constraints. The final product can be sold to end customers, either in a store or online, but is more commonly purchased through a dealer network. Dealers will buy product from the OEM and sell it to the end customer.
Metals
Metals is another manufacturing intensive industry and can be considered as the source or feeder industry to many other industries. The product is mined in its ore form, melted, casted and then hot rolled where it is combined with other materials to form alloys. It is then cold rolled to the required width and thickness and the required coatings are applied before it is processed into a variety of shapes such as coils, tubes, sheets, bars, etc. for use by different industries in their production processes. Some portions of the manufacturing process, such as melting and casting are not discrete but continuous. Due to the material, capacity and distribution intensive nature of this industry, the master planning, S&OP and higher-level planning processes will often utilize a linear programming solver to optimize plans as much as possible. Given the nature of the process and the complexity of constraints specific software products have been developed for this industry such as allocation of available material to orders, mill scheduling and caster scheduling.