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Refrain from jumping straight into the optimization models!
Supply chain professionals often struggle with delivering on so many seemingly conflicting objectives. A common practice is to look for an optimization model and use it right away. Models such as network optimization, inventory allocation, vehicle routing, truck load building, production scheduling, plant layout, procurement lot size determination are quite common. The results are, however, mostly sub-optimal. Why is it so?
Optimisation models carry certain inherent assumptions, which are taken as constraints. These could relate to company’s existing policies, processes, and operating practices.
Best practice is to analyze the conflict and look for its root cause. If we remove this root cause, the conflict evaporates, and we don’t need optimization! Several Toyota practices, such as SMED, single piece flow, TPM have evolved on similar lines.
Let’s not settle for a compromise solution and instead deliver on all the objectives simultaneously.