Applications of the internet of things and optimization to inventory and distribution management

Resumen

Livestock production in the European Union represents 40% of the overall agriculture output. The European feed sector is of utmost importance to the livestock industry. Farm animals in the EU-28 consume an estimated 478 million tons of feed a year, of which 163 million tons are produced by compound feed manufacturers (FEFAC, 2018). The European feed industry is a growing industry, with an estimated turnover at e50 billions, that directly employs approximately 110, 000 people, most of them in rural areas where employment offers are usually scarce. Even though most of the compound feed plants are small and medium enterprises (SMEs), they have an average production volume of 40, 000 tons of compound feed per plant (FEFAC, 2019). The quality of this compound feed is really important to farmers, because it directly correlates with milk or meat quality. A better knowledge of the farm’s nutritional needs gives the feed manufacturer the best position to plan raw material procurement, as well as give them a reliable supply chain, with short lead times that will replenish their silos before they run out of feed. Final delivery is often done by trucks. Hence, an efficient distribution relies on how routes have been planned. The same truck will cover a wider product variety for the same trip, depending on the number of compartments. Moreover, this transport fleet can be totally or partially owned by the feed manufacturer. Outsourcing is commonly used to increase service capacity during peak periods. At the feed mill, raw materials are processed into grain or pellets. According to the demand, which varies throughout the week, a certain number of products should be produced and kept in stock. The more orders per day a feed manufacturer has, the more complex it is to achieve optimal production and distribution. For a make-to-order processes, it is of utmost importance to have a demand forecast, precisely to adopt certain make-to-stock process, thus smoothing the production peaks. As a result, being able to serve large orders and unexpected demands will depend on these decisions. This thesis elaborates on the research done towards the implementation of a computer-aided solution to address the problem of delivering animal feed to farms.