Companies often have problems when it comes to planning and allocating business resources, from human resources to machines, trucks, planes, locomotives, manufacturing lines, warehouses, etc. Why is this? Well, resource planning and allocation seem like an easy task, but the reality is that it is not. Allocating resources to the different activities in the best possible way can be a real headache.
In fact, can you identify if you have a problem in the planning and allocation of your resources? It is not easy to recognise such a problem. At this point you need to ask yourself:
- Can I improve planning?
- Do I want to increase profits, reduce costs or improve some other KPI?
- Do I miss deliveries or encounter coverage problems with sufficient staff?
- Does it take too long to plan?
- Do I do them manually with a spreadsheet?
If you can improve KPIs, take a long time to generate schedules or allocations or are still doing them manually, a software solution with optimisation capabilities can help, allowing you to make allocations at the click of a button and in the most efficient way possible.
Challenges in planning and resource allocation
When it comes to planning and allocating resources to the different tasks to be performed, we are faced with several challenges. On the one hand, we have a large number of variables and constraints that come into play and have to be taken into account at all times. On the other hand, planning must be aligned with the company’s KPIs and objectives. And finally, optimal planning must be chosen. This means that from the infinite number of existing possibilities, we must choose the allocation of resources that will bring the greatest efficiency to the process.
It should also be borne in mind that there are different planning horizons. For example, long-term strategic or tactical planning identifies the capacities that will be needed in the future, such as the amount or type of resources. Operational planning weeks or days in advance allows for the optimal allocation of resources to activities. And real-time planning allows re-planning of previous schedules depending on daily operations, e.g. in case of disruptions or breakdowns, or case of changes in resource availability.
Let’s look at an example. When planning a production system from manufacturing to transport, warehousing or distribution, supply chains have to ask themselves certain questions at a strategic level:
- How much of each product should I make at each production site?
- From which factory should I send which products to which warehouse?
- Where do I place the warehouses and cross-docks?
- What machines do I need to have in each factory?
- How many trucks do I need?
- How many employees do I need?
At the operational level:
- What timetable and tasks should each employee have?
- Which machine should produce which order and when?
- Which orders should each truck deliver to ensure deliveries and reduce kilometres driven?
- Which route is most efficient depending on delivery points and delivery times?
And be prepared to react quickly and efficiently to any unforeseen event or incident on the day of operations that may change the previous planning, re-planning optimally in real-time.
Applying optimisation to resource planning and allocation
To answer the above questions and to be able to create optimal planning and allocation of resources, companies can use software solutions based on mathematical optimisation.
First of all, it is necessary to formulate the problem, i.e. to know the problem to be solved. Then, the most efficient mathematical model must be defined depending on the characteristics of the allocation problem: variables, coefficients, restrictions and objectives. Once the model to be applied has been identified, the algorithm must be programmed and the performance of the solution calculated. Is the solution obtained efficient and can it be applied to the problem formulated? If so, the only thing left to do is to implement the solution and analyse how this new planning and allocation of resources improves the KPIs and results of the operation.
Benefits of optimal planning and allocation
Using a software solution based on mathematical optimisation techniques for resource allocation enables organisations:
- Avoid unforeseen difficulties: by knowing your resources in advance and planning how to use them, you can address shortfalls or problems before they arise.
- Prevent attrition: effective resource management allows you to avoid “over-allocation” or “dependency” on resources by gaining an overview of the team’s workload.
- Have greater transparency: it allows for greater visibility of operations, capacity, or workloads at all times.
- Measure effectiveness: with an overall understanding of what it takes to manage and execute an upcoming event, you can effectively plan and measure ROI.
At decide4AI we have been developing and implementing software solutions based on mathematical optimisation and Artificial Intelligence for more than 14 years to help our clients to carry out optimal planning and allocation of their material and human resources. Our numerous success stories in different business sectors position us as the leading company in Spain in this field.
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