Product-to-plant allocation optimisation between European hubs

Founded at the beginning of the 20th century, Ideal Standard is a multinational company specialized in the production of porcelain for bathrooms, toilets and plumbing. It owns the main brands in the segment within Europe, having more than 2 thousand units of different products.

The European market can potentially be supplied by all the company's factories, located in England, Italy, Bulgaria and the Czech Republic. With some restrictions on technology and know-how, the distribution of products between the factories can be optimized considering the cost of producing a certain part at each location plus the logistical cost up to the end customer. However, this task is complicated when considering the very different production profiles between the factories (more or less automated) as well as the high cost of manufacturing the molds, which are used to produce up to hundreds or thousands of pieces depending on the technology.

We created a fully customized model to represent each process (molding, kiln, painting, among others) of each factory, providing handling of a large number of SKUs. The mixture of entire decisions and the non-linear calculation of productivity required an entire mixed model with quadratic constraints. The purpose of the optimization was to minimize global costs over a one-year horizon.

With the use of the model in the annual budget exercise, a high reduction in the variable cost was observed as well as a better use of the capacity of each plant.