This document discusses the Sales and Operations Planning (S&OP) project at ÇimSA, a leading white cement producer. It provides an overview of the project, including ÇimSA's supply chain challenges, IBM's solution approach, and achievements. The solution involved building an optimization model integrated with ÇimSA's SAP system to generate optimized production, inventory, transportation, and sales plans. Challenges in deploying optimization projects included ensuring data quality, defining project scope, building trust in the solutions, and dealing with changing business conditions over time.

1. Eray Cakici
October 12, 2020
IBM
Sales and Operations Planning (S&OP) at ÇİMSA
Data Science & AI Elite Team
3rd conference of the EURO Working Group on the Practice of OR
Challenges in the deployment of OR projects

2. Agenda
1
CimSA S&OP Project
Overview
Solution Approach
Achievements
2
Challenges in the deployment
of OR projects – CimSA case
Challenges
Solutions
2
Data Science & AI Elite Team/ October, 2020/ © 2020 IBM Corporation

3. 3
Data Science & AI Elite Team/ July, 2020/ © 2020 IBM Corporation
ÇimSA
§ World leader in white cement
§ 15+ grinding mills, 10+ kilns, 30+
silos in 15 Locations
§ $400M+ revenue/year
§ Core strengths in high quality special
cement products and strong network
structure
CimSA Supply Chain… 10.000 ft look
Sabanci Cement Group - Turkey
Data Science & AI Elite Team/ October, 2020/ © 2020 IBM Corporation

4. 4
Supply Chain Optimization
The majority of a supply chain’s
lifecycle costs are locked-in at the
start
Decisions Value
Source: AMR Research, BCI
Solutions
Such “up-front” decisions include:
• Distribution Network
• Inventory Locations
• Supplier Network
• Inventory Levels
• Logistics Suppliers
Strategic
Tactical
Operational
Strategic
Supply
Chain
Planning
Advanced
Planning and
Scheduling
MRP/ERP
Execution
80%
20%
Data Science & AI Elite Team/ October, 2020/ © 2020 IBM Corporation

5. 5
ÇİMSA & IBM Optimization Use Cases
Fuel Mix
Optimization
Strategic Problems
(Years-Months)
Tactical Problems
(Months - Weeks)
Operational
Problems
(Days - Real-time)
Inventory
Planning
S&OP
Integrated
Supply Chain
Scheduling
Data Science & AI Elite Team/ October, 2020/ © 2020 IBM Corporation

6. 6
Sales and Operations Planning at ÇİMSA
Data Science & AI Elite Team/ October, 2020/ © 2020 IBM Corporation
CimSA S&OP team meets with executives every week to decide on:
• Sell / Not to Sell Decisions
• Order-Facility Assignments
• Customer Service Levels
• Inventory Levels
• Production Modes (High/Medium/Low speed)
• Line Conversions (white vs gray in certain kilns)
• Maintenance & Balancing Stops
• Plan for Next 24 Months

7. 7
Solution Approach
Data Engineering:
Ensure complete and clean input
data and seamless integration with
SAP
Staging Database
Select best sales and
operations plan:
Maximize Profit & Fulfillment
Decision Optimization
Dashboard
Network plan details
Customer & Warehouse
allocations
Production & Warehousing &
Transportation plans
Capacity utilizations
The ultimate goal for ÇimSA is to be proficient in the use of the
technology as part of the S&OP process and conduct it internally.
Data Science & AI Elite Team/ October, 2020/ © 2020 IBM Corporation
Sales
Capacities
Costs
Compatabilities
Specific business rules
Data

8. 8
Model Design Details
Input Data
Sales
Variable Costs
Fixed Costs
Transportation Types
Production Modes
Customer Priorities
Maintainences
Setups
Decision Optimization
A fine-tuned Mixed Integer
Mathematical Model
Constraints
(Business Rules)
Goals
BOMs
Recipes
Workcenters
Warehouses
Ports
Currency rates
Taxes
Data Science & AI Elite Team/ October, 2020/ © 2020 IBM Corporation
Maximize Profit
Maximize Fulfillment
Capacities
Compatabilities
Setup&Stopping Rules
Allocation Rules
Safety Stock
Min Fulfillment

9. 9
Managing Supply Chain Risk
Data Science & AI Elite Team/ October, 2020/ © 2020 IBM Corporation

10. We’ve to do more with less

11. and we’ve to run many “what-if” scenarios

12. Business challenges
§ Integrated production and
distribution decisions
§ Multiple-objectives
§ Complex business rules
§ Capacity bottlenecks
§ Dynamic market conditions
§ Manual processes
Business benefits
§ Supply chain cost reduction
expected by 5-10%
§ Better customer service
§ Visibility of planning results
§ An automated and optimized
decision support system with
what-if scenario analysis
capabilities
Data Science & AI Elite Team/ October, 2020/ © 2020 IBM Corporation

13. Developed solution
Technical perspective:
§ A staging database is fully
integrated with Cimsa’s SAP
system
§ Custom web-based user
interfaces
§ Cplex is embedded into the
custom developed application
Model perspective:
§ A mixed integer mathematical
programming model
§ Parameter tunings
§ Warm-start and new multiple-
objective features
Data Science & AI Elite Team/ October, 2020/ © 2020 IBM Corporation

14. 14
Challenges in the deployment of
OR projects – CimSA case
3rd conference of the EURO Working Group on the Practice of OR
Challenges in the deployment of OR projects

15. Collection
Validation
Preparation
Generation ?
3rd conference of the EURO Working Group on the Practice of OR
Challenges in the deployment of OR projects 15
DATA

16. 3rd conference of the EURO Working Group on the Practice of OR
Challenges in the deployment of OR projects 16
SCOPE
Optimize ALL
or at least MORE

17. How do I know your solution is optimal?
17
TRUST
3rd conference of the EURO Working Group on the Practice of OR
Challenges in the deployment of OR projects

18. 18
DURATION
3rd conference of the EURO Working Group on the Practice of OR
Challenges in the deployment of OR projects
§ Political Movements i.e. Arab Spring 2010-2012
§ Floods i.e. 2011 Thailand
§ Pandemics i.e. 2020 Covid
§ Team Changes i.e. Ginni Rometty retirement

19. SOLUTIONS
§ AI/ML à Data Cleanness & Completeness & “Generation”
§ Decomposition à Scope
§ Visualization & Reporting & What-If Analysis à Trust
§ Stay Calm à Duration
3rd conference of the EURO Working Group on the Practice of OR
Challenges in the deployment of OR projects

20. Wrap Up
§ We’ve got the right “team”
§ The right “approach”
§ The right “optimization tool”
§ There continue to be great opportunities…
We had challenges AND
3rd conference of the EURO Working Group on the Practice of OR
Challenges in the deployment of OR projects