The approach we recommend is to

**divide this problem into multiple smaller sub-problems and solve them using the 80-20 approach**. The aim is to reach a feasible solution and then attempt to increase its optimality. A few examples of sub-problems are:- forecasting
- scheduling
- sequencing
- transportation distribution

For instance, the first objective of making a forecast for the next 3 months can be accomplished using a time-series forecasting technique. It’s a fairly straight-forward approach. You can think about aggregation and disaggregation approaches as well.

Below, we have mentioned the steps you can follow to solve a sourcing/sequencing problem:

**Aim to solve the problem for the first month**and use the same approach for the second and third months.- Sourcing can be formulated as a scheduling problem. Basically, it can be said to be both a scheduling and a sequencing problem. You can solve it one by one –
**first look at the scheduling part and then the sequencing part**. - First a few thoughts on the scheduling (sourcing) problem:
- Scheduling can be a relatively easy exercise if we
*add aggregated product demand in rows and plant capacity in columns*. By doing this, we get a 81 x 6 matrix for 81 SKUs and 6 production lines. It is quite easy to solve this as a product mix problem using**Excel solver**or some other linear programming solver (or any heuristics approach). Minimize for the production cost and add capacity constraints for each production line as approximate capacity at monthly level. - Don’t worry if you can’t produce for full demand. The plant obviously doesn’t have the capacity to produce for the demand of all the SKUs. So
**start with only 30-40% of SKUs**and then keep adding more as you go. **Solve for items that have the lowest processing time**so that you can aim to produce for maximum demand possible (or try out a few variations here).

- Scheduling can be a relatively easy exercise if we
- Once you have the schedule for one month, then you can try sequencing it on the production lines.
- Use
**variations of “greedy” algorithm**(consider Local Search, Constraint programming or other heuristics technique). For example, you can sort the setup time matrix in ascending order (lowest setup time in the top-left corner and highest setup time in the bottom right corner). Also, look-out for patterns in changeover matrix. - Then
**start sequencing products**exactly as per this sorted setup time matrix. - You can minimize setup time and maximize production time by this method or a similar greedy algorithm.

- Use

Once you have a solution that works for one month, you can then **try to validate for constraints**.

If required, some “hand adjustments” can also be made. We don’t necessarily need a fully automated process to make this work (at least not in the first attempt).

We can then move onto building a similar solution for the remaining two months.

Don’t lose hope, keep trying!