*Source : Strategic Challenges of Operations Management

Why is optimization crucial for operations management processes?

« With today’s increasingly complex business challenges, optimizing your processes and systems to make your company more efficient, more agile and more productive is not just a competitive advantage but a matter of survival ». (Dassault Systèmes)

Operations planning is getting more and more complex and volatile with pandemic disruptions, overstocks / out-of-stocks risks and increasingly demanding customers, without speaking of environmental norms and the fierce competition for innovation race.

To tackle these challenges, businesses require to have a more resilient and robust operations planning system to achieve an overall performance and respond to the customer’s demand efficiently.

You have probably heard by now that prescriptive analytics and optimization technologies can bring significant benefits for your business. However, do you know precisely what are these benefits and what they actually mean?

Four major benefits of optimization at the core of any organization

1. Automation

The first considerable benefit of equipping your organization with optimization tools is to automate the complex, laborious, and time-consuming task of assigning and planning resources. For example, in the vehicle routing optimization case, using an application solver enables to reduce the time spent to build your transportation plan from a few hours to a few minutes. A relief when you receive orders at 7pm to be delivered by the next day at noon.

But automation is also implying less mistakes, more robustness, more reliability, and guarantees that you deployed the best possible solution. Let’s recall that optimization problems are facing « combinatorial explosion » with billions of possible solutions, hence not-automated processes necessarily imply some kind of arbitrary decisions, often based on habits despite the volatility of the situation.

In fact, the core of the benefit here is that decision support tools are actually semi-automating the processes, empowering the expert teams with advanced optimization technologies to enable them to take the best informed decisions. The real strength of this kind of tools is the ability to simulate various scenarios by tuning the parameters while getting the associated optimal solution in a few seconds.

2. Operational performance

The most obvious but still essential benefit of optimization solvers is to improve operational performance, namely the ability to achieve your objectives with an optimal use of the resources at your disposal. In other words, « doing more, while consuming less resources ». There are multiple factors that contribute to a better operational performance: sizing correctly the set of resources you will use ; assigning them intelligently over time to balance workload ; optimizing their course of actions to create synergies and avoid waste…

The greatest margins for improvement lie on macroscopic decisions with systemic optimization handling simultaneously the multi-dependencies of several decisions. An illustrating example is this use case of maintenance planning and routing, revealing that a planning tool that selects the priority customers with a consideration of the resulting maintenance team routing cost can provide +30% gains in profits.

3. Quality of service

Being equipped with powerful application solvers provides more confidence about your ability to honor your « customer promise » and even to offer new added value services.

Optimization tools participate in improving the quality of service by respecting all the constraints of a given problem. Ensuring the best customer’s satisfaction can also be an objective of the solver.

Plus, you can value new services while improving synergies. For example, thanks to application solvers, you could offer to your customers to choose for them when to intervene depending on their availabilities and on how it can fit optimally in your planning.

4. Sustainable development

Optimization technologies are your best ally not only to comply with environmental norms but also to incorporate sustainability in your corporate strategy. Of course this kind of decision support tools enables by essence to rationalize the consumption of resources: pooling of scarce resources, smooth and fair workload, reduction of waste, less CO2 emissions and empty truck returns and much more…

But they also provide measurable indicators to share with your customers and stakeholders, showing how sustainability lies at the core of your decision making processes (strategic insights about CO2 emissions, routing time, kilometers traveled, etc.).

Automation, operational performance, quality of service and sustainable growth are the major benefits that can be achieved thanks to optimization technologies. But there are many more indirect ones such as resilience, agility, reliability, confidence…

At Atoptima, our software library brings out the best of optimization intelligence to tackle your most complex optimization problems.