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Why are we talking about optimising dairy production today?


"At the manufacturing stage, between 1 and 5% of raw milk input is considered waste mainly due to system failures and quality control rejects. Further disconnect and inefficiencies flowing information between tactical and operational planning create more wastage by either having excess demand or producing the wrong product mix."

With the new S/4HANA 2020 release, SAP provides a game changer planning engine called production planning optimisation (PPO) for matching supply & demand at the lowest cost.

The following illustration gives you an overview how PPO supports decisions in production planning:

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This PPO solver supports a time (sub-daily possible) bucket-based planning approach and considers constraints such as production capacity, lead time, farm milk supply profiles and maximum delay allowed in fulfilling market demands. Using this planner can work out an optimised supply plan (in the form of planned orders and stock transfer plans) to ensure the availability of materials for a defined part of your manufacturing or supply chain network.


 

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Summary


To optimize dairy production, companies can use innovative tools like the Production Planning Optimization (PPO) engine, which SAP introduced with the S/4HANA 2020 release. During the manufacturing stage of the dairy supply chain, waste is generated due to system failures and quality control issues, as well as inefficient information flow between tactical and operational planning.

The PPO engine helps address these issues by streamlining the supply chain to match supply and demand at the lowest cost. This results in less waste and increased efficiency, which can lead to improved profitability and customer satisfaction.
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