TRUMPF Uses a Mixed Integer Model as Decision Support for Strategic Production Network Design

Moritz Julius Ziegler (), Kilian Seifried (), Philipp Kuske () and Moritz Fleischmann ()
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Moritz Julius Ziegler: University of Stuttgart, Institute of Business Administration, 70174 Stuttgart, Germany, TRUMPF GmbH & Co. KG, 71254 Ditzingen, Germany
Kilian Seifried: University of Mannheim Business School, Business School, 68131 Mannheim, Germany
Philipp Kuske: TRUMPF GmbH & Co. KG, 71254 Ditzingen, Germany
Moritz Fleischmann: University of Mannheim Business School, Business School, 68131 Mannheim

Interfaces, 2019, vol. 49, issue 3, 213-226

Abstract: TRUMPF, a German owner-managed supplier of high-technology machinery, has experienced rapid growth over the past 15 years and expanded into a globally competitive firm with a complex production network. The company wanted to examine the effects of product reallocations within its production network on overall network costs, because it anticipated that its historically evolved structure was in need of revision. To support the company in doing so, we built a mixed integer linear programming model depicting large parts of the firm’s production network. The model allows for a combination of scenario analysis and optimization. We first used optimization to calculate a theoretical reference scenario. Subsequently, we used the model’s results to evaluate various alternative feasible scenarios. Overall, this modeling informed a strategic decision concerning the future network design. Furthermore, it guided planners through the decision-making process in a systematic manner, deepening their understanding of crucial cost factors.

Keywords: production network design; high-technology industry; modeling-based decision support; production strategy (search for similar items in EconPapers)
Date: 2019
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:inm:orinte:v:49:y:2019:i:3:p:213-226

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