Peter A. Kalish

GE Plastics Optimizes the Two-Echelon Global Fulfillment Network at Its High Performance Polymers Division

To achieve the highest customer satisfaction at the lowest costs, GE Plastics adopted a global approach to its manufacturing operations. Previously it met demand in one geographic region with production from that region only. It developed a decision-support system (DSS) to optimize the two-echelon global manufacturing supply chain for its high performance polymers division. The DSS uses a math-programming model to maximize contribution margin while taking into consideration product demands and prices, plant capacities, production costs, distribution costs, and raw material costs. The results of the model are the optimal production quantities by plant and the total contribution margin. The DSS is implemented in Excel and uses LINGO to solve the optimization model. After successfully implementing this system at the high performance polymers division, GE Plastics is rolling it out to other divisions.