Human-Guided Optimization for Determining Where to Stamp Automobile Parts

Paper #:
  • 2017-01-0244

Published:
  • 2017-03-28
Abstract:
This paper describes a tool developed by Ford Motor Company to help business analysts revise sourcing plans when business conditions change. A common scenario is demand increasing beyond installed capacity – how should the business respond? Likewise, how should production change when demand is lower than expected? Sometimes the company can move production to different locations or outsource parts in order to reduce costs. This paper focuses on making such decisions for stamped sheet-metal parts. We describe an optimization tool used to periodically reassess where to stamp parts. The tool uses mathematical optimization to balance logistic and outsourcing costs. An important component is the user interface, which allows stamping experts to adjust the model in real time to reflect different constraints and competing objectives. This allows the algorithm to efficiently seek alternative solutions while the business expert guides for nuances that may be hard to represent mathematically. We demonstrate how this approach can lead to better business outcomes compared to unsupervised optimization.
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