Business Challenges
To facilitate the expansion of their factory in Wetteren, Belgium, Mr. Mallo recognised the need for significant investments. Although there was a firm commitment to invest, the exact magnitude and focus of these investments remained to be decided. The primary objective was to pinpoint critical bottlenecks within the existing operations and to use this information to justify and guide the scale and direction of the investments.
Keys to Success
Marshmallow production at Mr. Mallo is seasonal with diverse recipes, making optimising capacity regarding resources and personnel vitally crucial for consistently surpassing customer expectations. As a private-label manufacturer in this sector, reducing costs is also a key priority. Given the high fees associated with inventories, Mr. Mallo aimed to minimise stock levels. At the outset of our collaboration, Mr. Mallo’s goal was to simulate the entire production process. Tecnomatix Plant Simulation emerged as the ideal tool for this purpose. As the partnership progressed, the potential of this solution to serve as a comprehensive planning tool became evident. By simulating various marshmallow recipes and seasonal demands, they could predict weekly production schedules effectively. This strategy enabled Mr. Mallo to predict inventory needs for up to three months accurately. The simulation provided insights into the required stock levels relative to production capacity, enabling more intelligent production predictions. This empowered the production manager with complete control over stock management. In scenarios with excess capacity, the stock was built up in anticipation of periods with lower production capacity. This approach optimised stock levels and ensured a more efficient and responsive production process.
Results
The strategies implemented at Mr. Mallo led to several notable improvements. First, there was a marked increase in the efficiency of their investments, resulting in a more effective utilisation of resources. This optimisation meant their capital was spent in areas that yielded the most significant returns. Secondly, the reliance on large safety margins for inventory was substantially reduced. This shift allowed for more precise inventory management, contributing to a reduction in costs. Effective stock management is crucial in industries like marshmallow production, where overstocking can lead to significant financial burdens. Lastly, the adoption of simulation-based planning facilitated the optimisation of their weekly production schedules. This change enabled Mr. Mallo to gain firmer control over their inventory levels. They could now make more informed and accurate decisions about stock based on their production capacity.