Profit Maximized Network Optimization at SAP System: A Real-life Implementation in Cement Industry

Eren Esgin, Eren Esgin, Volkan Ozay, Gorkem Ozkan

2021

Abstract

What if we told you that “you already have 27% of net profit trapped in your misleading business”? As common de facto state in production planning, subjective human judgments play a significant role on demand point:plant assignments at product replenishment and this is mostly driven by myopic transportation minimization paradigm, disregarding production and profitability determinants. In this paper, we propose an integer programming characterized Network Optimization solution to find global optimal assignments that maximize the profitability in terms of contribution margin or net profit by taking sales, transportation and production planning perspectives into account and concerning potential capacity constraints. According to the experimental results obtained at a real-life implementation in cement industry, Network Optimization solution increases contribution margin by an average value of 6.33% and net profit by 26.3%. Moreover, proposed solution architecture promises a seamless network optimization experience over a large canvas that wholistically integrates SAP system, optimization logic and Microsoft Power BI tiers. As a result, our clients can concentrate on more value adding operations such as variance analysis and what-if scenario evaluation rather than manual, time consuming and error-prone data preparation.

Paper Citation

in Harvard Style

Esgin E., Ozay V. and Ozkan G. (2021). Profit Maximized Network Optimization at SAP System: A Real-life Implementation in Cement Industry. In Proceedings of the 18th International Conference on Informatics in Control, Automation and Robotics - Volume 1: ICINCO, ISBN 978-989-758-522-7, pages 752-760. DOI: 10.5220/0010618507520760

in Bibtex Style

@conference{icinco21,
author={Eren Esgin and Volkan Ozay and Gorkem Ozkan},
title={Profit Maximized Network Optimization at SAP System: A Real-life Implementation in Cement Industry},
booktitle={Proceedings of the 18th International Conference on Informatics in Control, Automation and Robotics - Volume 1: ICINCO,},
year={2021},
pages={752-760},
publisher={SciTePress},
organization={INSTICC},
doi={10.5220/0010618507520760},
isbn={978-989-758-522-7},
}

in EndNote Style

TY - CONF

JO - Proceedings of the 18th International Conference on Informatics in Control, Automation and Robotics - Volume 1: ICINCO,
TI - Profit Maximized Network Optimization at SAP System: A Real-life Implementation in Cement Industry
SN - 978-989-758-522-7
AU - Esgin E.
AU - Ozay V.
AU - Ozkan G.
PY - 2021
SP - 752
EP - 760
DO - 10.5220/0010618507520760