Inventory Optimization Avoids Interruption in Supplies

During the final year of his Master’s degree in Production Management, Dorian Scheers completed an internship. The objective? Optimizing the company’s stock levels using SAS. Through working on the ground and support provided by SAS professionals, he learned the ropes of the software, successfully completed his assignment and delivered an award-winning thesis in the process.

“This internship has been an exceptional experience”, admits Dorian Scheers, who has since graduated with his Master’s degree from the Higher Education Institution of the Province of Liège (HEPL), and has already been hired as a consultant. For a full year, he had immersed himself alternate weeks at a company producing high-precision aeronautical parts (further called The Company). As part of his thesis, he optimized parts inventories so that no production department or customer would ever experience any interruption in supplies, while keeping the number of parts stuck in the delivery chain to a minimum. To be able to simulate what was really happening as closely as possible, he dived headlong into learning SAS solutions.

It all started with Dorian’s professor at HEPL who uses SAS in his simulation and scheduling courses. Dorian wanted to use the same software for his thesis, making it his first ever SAS implementation.

Calculating optimal stock levels

The Company wanted to change the production flow from push to pull. To achieve this change, it was crucial to set up joint parts inventories across different departments. “Thanks to the SAS solutions, I was able to run simulations using real data on quality, maintenance, the rate of performance of the machines and the number of available resources. This information helps optimize stock levels. Or, put simply, to have the fewest possible parts stuck in the delivery chain – because that’s where the company is losing money – while ensuring that the next department or the next customer is going to be supplied”, Dorian explains. “For example: if department A breaks down, department B will not be impacted by that event and will continue to operate. And all this happens optimally thanks to the fact that inventory across the two departments, calculated using SAS, takes into account the time that department A might need before restarting.”

He continues: “On a larger scale, and this is what pleases the sales teams the most, customers will never be affected by a strike or a two-week closure. The customer will always get delivery because stock is optimized. It is also possible to predict, for example, when it is necessary to work on Saturdays for a few weeks or when to prepare for a summer shutdown so that The Company will still be able to fulfil orders. Armed with this information, the company can hire sufficient personnel. The SAS model is a treasure trove of information for company managers.”

Combining SAS solutions to get the job done

The SAS solutions consist of various building blocks. For someone who has never seen a simulation model, that can seem very complicated. During his internship, one of Dorian’s tasks was to simplify presentation so that managers could better understand the results. “After all advanced simulation and modelling work is completed, the data are entered into SAS® Visual Analytics to clearly show managers the evolution of stocks based on around 20 different scenarios I provided.”

Getting professional SAS support

When embarking on his thesis, Dorian was not equipped to do model building work like this. But throughout his internship he received support from his teacher at HEPL and was trained by SAS. “As I started my thesis work, I had an initial day of training on SAS Simulation Studio. Then, during my internship, SAS was always there to help. If I came across a problem, I would send an e-mail and I would get an answer the same day. They were really open. Once my data extractions were done, SAS helped me rework the data using Enterprise Miner and link them in SAS Visual Analytics. To understand this aspect, I visited the SAS offices and I was fortunate to have a SAS trainer with me all day. It was extremely productive: everything was covered in just eight hours.”

Leading to the construction of a new production line

When Dorian presented the results of his work to The Company, among the various people present was the group’s industrial director. “I was bombarded with questions to check that I hadn’t forgotten anything. In the end, my results, calculated for three stocks with ten performance indicators, were used in the construction of the new production line! I was thrilled to have been able to take up the challenge.”

An acknowledged, nominated and rewarded thesis

Dorian Scheers’ optimization project is one of the biggest ever carried out in Belgium using SAS. The high quality of his thesis was acknowledged by SAS, who put him forward for the annual SAS Analytics Experience conference in Washington, US. He also submitted his work to the Belgian “Supply chain award-project of the year” competition, in the category of best Master’s thesis. And subsequently, he won the Silver Medal of the Prix Sésames, an award by Agoria Wallonia recognizing the best synergy between technology companies and students in higher education