Optimizing Production Planning for Leading European Pork Producer

A large, vertically integrated European pork producer provides a comprehensive range of pork products and services, from pig breeding to packaged and processed pork-based products. With a global footprint, they export their products globally and have always embraced innovation and technology to enhance efficiency and sustainability.

The company is currently implementing DecisionBrain’s advanced production planning system, which is expected to deliver significant improvements in demand satisfaction, capacity utilization, and margin optimization. The tailored solution is designed to enable better inventory management, reduce waste, and align production more closely with real-time market demand.

Challenges in Production Planning for The Pork Producer

Despite their success, this company recognized inefficiencies in their production planning processes. They were using Excel for planning and had separate systems for managing fresh and frozen products. This fragmented approach led to several operational challenges:

• Demand Satisfaction: They aimed to increase the demand satisfaction for certain high-demand cuts, despite having limited production and inventory storage capacity.
• Margin Improvement: They wanted to reduce the amount of inventory that had to be frozen (due to risk of expiration) or downgraded (e.g., organically produced meat sold as conventional), thereby increasing their margins.
• Inventory Management: Over-stocking of inventory was another issue, leading to increased costs and inefficiencies.

This company desired a single, integrated production planning optimization system that could address these challenges and support their business objectives.

Advanced Production Planning Solution for Enhanced Efficiency in Pork Processing

DecisionBrain implemented an advanced production planning system tailored to this client’s unique requirements. By leveraging DB Gene decision support platform, the solution could be rapidly developed and tested through Agile methodologies.

The system optimizes production over a 1-3 week time horizon, determining how much of each product or cut to produce per shift, and updates the plan as demand fluctuates.

Key Features of the System:

• Comprehensive Planning Scope: The system handles planning for various product types, from whole/half/quarter animal carcasses to individual meat cuts and offals, across different labels/grades (e.g., Label Rouge, AOC, AB in accordance with French and EU regulations ) and fresh vs. frozen products. It also includes prepared foods like sausages and other pork-derived processed products.
• Push-Pull Process: The system operates as a push-pull process where incoming pigs (push) are matched with demand requirements (pull). The demand data is granular, considering factors like specific SKUs, packaging, labeling, and freshness.
• Optimization Modeling: The planning process is modeled as an optimization problem with constraints such as:
  • Bill of Materials Constraints: Which product/cut can be transformed into another.
  • Capacity Limitations: Ensuring warehouse, production line and workforce constraints are considered with penalties for deviation.
  • Freshness Rules: Products must be produced within a specified time frame to avoid excess freezing or disposal as distressed inventory (sold for little to no margin).
  • Substitution Rules: Higher grade products can be substituted for lower grade demand (e.g., antibiotic-free meat for standard grade), though this reduces margins.
• Seamless Integration: The system integrates with the company’s existing processes and IT systems, taking real-time data, optimizing it, and feeding the results back for use in scheduling and further processing.
• Reoptimize Based on User-Defined Targets: Adjust production according to strict targets provided by the user. This re-optimization aims to align operations more closely with actual conditions.

Business KPIs:

Some of the KPIs that the system optimizes and reports on include:

• Demand Fulfillment KPIs: Tracks overall demand satisfaction and site-specific fulfillment rates.
• Inventory Management KPIs: Monitors stock level adherence and warehouse utilization, including overuse costs.
• Operational Efficiency KPIs: Assesses freezing, downgrade operations, and production line utilization.

Improved Demand Fulfillment and Capacity Utilization Through Optimized Production Planning

Although the project is still ongoing, the implementation of the production planning system is expected to lead to substantial improvements in operational efficiency and demand fulfillment. Unlike off-the-shelf planning systems, the DecisionBrain solution is being tailored to the company’s specific operational constraints and planning goals. Once fully deployed, it is anticipated to improve key business KPIs such as:

• Demand Satisfaction: Maximizing customer demand fulfillment.
• Capacity Utilization: Increased production line and workforce efficiency.
• Inventory Levels: Maintaining target stock levels at both the SKU and warehouse level.
• Maximize Margins: Reducing the number of downgrades and freezing operations.

By re-optimizing the 3-week master plan each week and performing daily adjustments based on actual results from the previous day, the company is expecting to achieve greater alignment between production and actual conditions. This approach aims to minimize waste, improve responsiveness, and increase overall productivity.

Conclusion

By partnering with DecisionBrain, the client is moving from a fragmented and manual planning process to an integrated, optimization-powered system. While final results are still forthcoming, the solution is already demonstrating its potential to enhance operational efficiency and responsiveness. The new system exemplifies how tailored solutions can drive significant value and support long-term business growth.