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Some History

Some History. MÖBIUS has been founded in 1997 as a spin-off of the university of Ghent It has previous experience with research projects partially funded by the Flemish Government The early conception of ECLIPS … scale up Research Efforts European Project Involving European Partners

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Some History

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  1. Some History • MÖBIUS has been founded in 1997 as a spin-off of the university of Ghent • It has previous experience with research projects partially funded by the Flemish Government • The early conception of ECLIPS … scale up Research Efforts • European Project • Involving European Partners • Supporting European Expansion MÖBIUS

  2. Some History • EU Sixth Framework Program 2002-2006 • Research funding (50% for private enterprises, 100% for academics) • Broad number of areas (Nanotechnology, IT, Life Sciences, …) • Official “Calls for Requests” zoom in on thematic priorities • Proposals to be addressed by European Consortia • STREPS – Specific Targeted Research Project (1 – 4 Mi Eur) • IP – Integrated Projects (10 – 30 Mi Eur)

  3. Some History Jan ‘04 Assess opportunities for Möbius, with external guidance Idea of multi-echelon cyclic planning Build consortium: Riga Technical University (Lt), Eurodecision (Fr), Soft Cell (Cz), Huntsman (Ge) Build proposal (multi-echelon, planning, phase-in/out, mature, automated switching) Build external advisory board: Agfa, Hanssen First submission (total budget 3,7 M€ / 2,3 M€ funding) Dec ’04 Rejected: Not above all thresholds Jan ‘05 Review of evaluation with commission services • Adjust proposal • revision of parts of the document: expected impact, more bullets/tables/charts • extend consortium: Pliva Lachema (Cz, pharma) • extend external advisory board: Tate&Lyle, Associated Weavers, Thales, Alcatel, Sidmar Resubmission (other call) Admitted to second phase (above thresholds, funding considered) Dec ’05 Admission to Contract Negotiations It’s more difficult than it looks …

  4. Some History Jan ‘06 Receipt “informal” invitation to negotiation with “Specific Negotiation Items” Contract Negotiations with Scientific Project Officer Discuss 16% budget cut with partners (total budget 3,4 M€ / 2 M€ funding) “Contract Preparation Forms” & adjust “Description of Work” (annex to contract) Replace Soft Cell as a partner Create consortium agreement End Apr ’06 ECLIPS kick-off meeting in Ghent It’s more difficult than it looks …

  5. Supply Chain Management Production Steps & Intermediates Finished Goods Suppliers Customers Raw Mat. Segmentation Network Design Value Stream Mapping Stock/ Non-Stock Supply Mgt Sizing/Simulation Collaboration Collaboration Supplier Mgt Physical Distrib. Ops Efficiency Inventory Mgt Mfg Planning & Optimization Demand Planning Human Factor : Change S&OP Product Life Cycle Mgt Inv Mgt Tool APS/Scheduling Forecasting DRP WMS MES ERP APS/Plan Supply Inventory Manufacturing Distribution Demand Tactical SC Screening Process Analysis & Design Operational Tooling Advice

  6. Supply Chain Challenges Globalize Supply and Demand Increase in Average and Spread of Lead Times Increase in Safety Stocks Increase in Working Capital Requirements Lower Return On Assets Increase Return on Assets Increased Competitivity / Pressure Financial Markets MI 1: Reduce inventory investment while globalizing supply chains

  7. Supply Chain Challenges Customers require ever more customized and up-to-date products Increase in number of SKU’s Higher risk of obsolescence Increase in Working Capital Requirements Lower Return On Assets Increase Return on Assets Increased Competitivity / Pressure Financial Markets MI 2: Deliver ever more customized and up-to-date products while reducing inventory investments

  8. How Companies Struggle (IOMA Inventory Management Report 2004) Let’s try to « squeeze » costs Anecdote In a recent project we discovered the following In a bid to reduce transportation and warehousing costs, the transport department decided to skip the European Distribution Centre for replenishing DCs in Southern Europe. The corresponding net increase in inventory investment was 30 Mi Euro

  9. Research Proposal Sales Procurement Production Distribution Sales Procurement Strategic Network Planning Demand planning Master planning Demand planning Purchasing & MRP Production plan Distribution plan Purchasing & MRP ATP & Demand Fulfillment ATP & Demand Fulfillment Scheduling Transport plan Collaboration Collaboration We try to innovate in 2 domains : Planning & Forecasting The Planning Domain Problem statement • Planning Algorithms have become very advanced / complex • They allow for optimizing parts of the supply chain … Stadtler, H., Kilger, C., Supply Chain Management and Advanced Planning: Concepts, Models, Software and Case Studies, 2002

  10. Research Proposal Consumer Sales Retailer’s Orders to Manufacturers 5 10 15 20 5 10 15 20 Manufacturer’s Orders to Supplier Wholesaler’s orders to Manufacturer 5 10 15 20 5 10 15 20 The Planning Domain But, how advanced they may be, they do not tackle some basic supply chain problems like the well known “bullwhip effect”

  11. Research Proposal The Planning Domain Our Proposal: Use Multi-Echelon Cyclic Planning for planning Mature Products • Example of a Multi-Echelon Supply Chain

  12. Research Proposal The Planning Domain Our Proposal: Use Multi-Echelon Cyclic Planning for planning Mature Products • In a cyclic plan, the time between two production orders is constant, this can be illustrated in using a wheel • The following figure shows cyclic plans on each of the processes

  13. Research Proposal The Planning Domain Our Proposal: Use Multi-Echelon Cyclic Planning for planning Mature Products • It allows to synchronize steps and reduce buffer stocks • The optimization takes into account inventory and setup costs of all stages and optimizes the overall supply chain cost

  14. Research Proposal The Forecasting Domain Problem statement • Part 1: “Traditional” techniques like time series are not well suited for forecasting new products • Part 2: Manual forecasting for a large number of items tends to lead to poor performance As a result, forecasts for new products are often • Static, we don’t learn from actual sales • Optimistic, sales people tend to have an upside bias

  15. Research Proposal The Forecasting Domain We propose to learn from historical product introductions • Example Input: Historical Product Introductions

  16. Research Proposal The Forecasting Domain We propose to learn from historical product introductions • Example Output: Clusters of “Typical” Product Introductions

  17. Research Proposal The Forecasting Domain We propose to learn from historical product introductions • The ECLIPS forecasting method for new products

  18. Research Proposal T2.3 Life Cycle Integration Using Artificial Intelligence & Simulation Maturity End-of-Life Introduction T2.1 Forecasting & Multi- Echelon Demand Visibility T2.2 Forecasting & Multi-Echelon Demand Visibility T2.1 Multi-Echelon Cyclic Planning Using Artificial Intelligence Using Artificial Intelligence Using Mixed IntegerLinear Programming Task Structure of Work Package 2 «Concept Development» • The two main complexities we try to tackle … • Multi-Echelon, Holistic optimization of the Supply Chain • The different phases of a product lifecycle and their integration

  19. Project Structure 12 Quarters / 5 Work Packages / 3,5 Mi Euro / 387 mm • Today = End Q3 • End Phase 1 – Concept Development • Start Software Development • Tomorrow • Start Simulation Testing

  20. 6 PARTNERS - 1 PROJECT Hunstman Advanced Materials (Eu) Real-Life Supply Chain Chemicals Pliva-Lachema Diagnostika (Cz) Real-Life Supply Chain Pharmaceuticals Supply Chain Expertise Coordinator Riga Technical University (Lv) Academic Expertise Eurodecision (Fr) Optimization Expertise Software Integration

  21. Serving Tomorrow’s Business Conflicting Objectives Globalize Supply Chain Diversify Product Offering … Shorter Product Lifecycles Increase Profitability… Reduce Working Capital Breakthrough Required Today’s Business Challenges consist of … … ECLIPS breakthrough target … 30% Inventory Reduction with Improved Customer Service Top level executives from top level companies advise the project team in the Advisory board

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