This is the first in a series of postings which challenge the common conception that linear programming solvers are in general not a good fit when dealing with industrial size factory planning processes that typically consider thousands of manufacturing orders and complex multi-step routings. These findings are the result of our five year engagement with such problems in real life business environments. Here, we take a systematic approach in order to analyze the need for using formal optimization, the challenges that arise in this process and the ways to overcome them.


A high level of inefficiency is related to the production planning processes in the metals industry. Low asset utilizationpoor delivery performance and high inventory carryover are the three key areas of inefficiency. Corresponding Key Performance Indicators in these three areas are typically used in order to measure and improve production planning performance.

The key root causes for the inefficiencies in metals supply chains can be grouped in three broad categories depending on their origin. A summary is presented in the following graph.

In the introductory article of this series, we described the broad scope of factory planning problems. We also presented the key needed abilities and complementary characteristics of heuristic algorithms that are typically used by Advanced Planning Systems (APSs) in order to provide automated solutions to such problems. These abilities and characteristics are summarized in the following graph.


A classic challenge in the management of assembly lines is how to balance the assignment of work so that there are no bottlenecks in the flow. 


The metals industry faces a number of unique challenges that put significant pressure on its supply chain planning operations. This is particularly relevant as the industry emerges from the recent economic downturn.

The main characteristics of the metals industry are summarized in the left column of the  following diagram; some of them have been relevant for a long time (marked in green) whereas some only became important more recently (marked in cyan). The right column contains the main challenges that the industry faces as a direct consequence of its characteristics.