Realizing block planning concepts in make-and-pack production using MILP modelling and SAP APO

In the industrial application environment considered, different variants of a basic product type are produced using the same resources and following the same basic process plan. To support production planning and scheduling for this type of production system, the concept of block planning is introduced, which has gained considerable attention, particularly in the consumer goods industry.

A block represents a pre-defined sequence of production orders of variable size. In order to demonstrate the practical applicability of the proposed block planning concept, we consider the production system of a major producer of hair dyes as a case study. We present two different implementations of the block planning concept.

One utilizes the Production Planning/Detailed Scheduling module of the SAP APO© software. The other approach is based on a mixed-integer linear programming formulation. In contrast to the academic literature, a continuous representation of time is chosen. Thus, the number of variables and constraints could be considerably reduced.

The approach suggested is computationally very efficient and provides the flexibility to model a variety of application specific features.