CIRP Annals - Manufacturing Technology 63 (2014) 433436

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CIRP Annals - Manufacturing Technology

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Global Footprint Design based on genetic algorithms An Industry 4.0

perspective
Guenther Schuh (1), Till Potente, Rawina Varandani, Torben Schmitz *
Laboratory for Machine Tools and Production Engineering (WZL), RWTH Aachen University, Aachen, Germany

A R T I C L E I N F O A B S T R A C T

Keywords: A cost-optimized design of a global production network is a complex task. Several optimization tools exist
Production planning
that determine cost-minimized solutions for dened points of times in the future but often do not take
Distributed manufacturing
into account the development of the network over time. The approach of this article is to analyze a series
Optimization
of different cost-optimized scenarios for several points of time in the future with distinct parameter
settings and compare its network structures. The goal of such broad calculations of future scenarios
according to the idea of Industry 4.0 is to identify a path in the trade-off between the costs for migrating
a network structure into another one and the total landed costs of the regarded series of future network
scenarios. The approach will be validated using data from real industrial case studies.
2014 CIRP.

1. Introduction also takes into account different production volumes, product

types and production process variations.
Production networks worldwide evolve into complex forma- Fig. 1 illustrates the Global Footprint of a company for which
tions and turn out to be increasingly difcult to handle [1]. Several WZL provided optimized scenarios for the future development of
reasons drive this development. One reason can be seen in the rise the production network. The network consists of 9 productions
of developing countries leading to a higher number of markets sites. The products are divided into 37 product groups which have
companies need to supply with goods. Another reason can be seen to be produced with 17 different resource types in 317 possible
in decreasing product life cycles and more exibility that a process variations. All of this adds up to a space of approximately
production network has to deal with [2]. Therefore, in a global era 10256 possible solutions, a number that is about three times bigger
of manufacturing, the demand for efciently operating networks is than the number of atoms in the universe (1078). The explosion of
met by usage and alignment of information and communication combinatorial possibilities as presented in the example is one of
technologies (ICT) [3]. Ongoing research and development in the the main problems in an unpredictable planning environment of
area of ICT leads toward a fourth industrial revolution also referred manufacturing systems [7].
to as Industry 4.0. A new generation of computers made it
possible to handle extensive calculations. This development is
supported by Moores law which describes how the amount of
operations doubles every two years and how simultaneously these
operations become more affordable [4]. Simulation and virtualiza-
tion allows for a future production with accelerated development
processes, improved decisions and solutions as well as reduced
costs of planning processes [5].
In the context described above, the design of global production
networks is a eld of production planning where information
technology can assist to handle complex decision making
processes. Applying the Global Footprint Design (GFD) approach,
WZL of RWTH Aachen University is supporting those strategic
decision making processes [6]. A Global Footprint is dened as a
companies global distribution of production sites and resources. It

* Corresponding author.
E-mail address: t.schmitz@wzl.rwth-aachen.de (T. Schmitz). Fig. 1. Strategic design of production networks Global Footprint Design.

http://dx.doi.org/10.1016/j.cirp.2014.03.121
0007-8506/ 2014 CIRP.
434 G. Schuh et al. / CIRP Annals - Manufacturing Technology 63 (2014) 433436
The complexity of this task can only be tackled by meta-
heuristics such as genetic algorithms. These algorithms search for
the maximum tness level of a characteristic variable for scenarios
(e.g. costs) by genetically evolving a multiplicity of data through
computer operations. The software-tool OptiWo, developed at the
Laboratory for Machine Tools and Production Engineering (WZL) at
RWTH Aachen University makes use of such a genetic algorithm
[8].
The experience of more than 5 industrial cases with the OptiWo
software tool has proven that genetic algorithms are capable of
handling the complexity of designing a production network.
Furthermore, experience also shows that a number of different
scenarios can be found which are characterized by a very different
network structure in terms of production sites, resources and
product groups, but still lead to comparable costs. One example
from an industry case is the one of two production sites, one
located in Turkey, the other one in Poland. Using the exact same
input parameters for different runs with the software tool, one
time Turkey became a major production site, the other time
Poland.
This multitude of computed equally suitable possibilities allows
the integration of secondary measures. Such measures offer a
strategic steering mechanism and may include criteria such as
complexity, risk stability, and migration efforts.
The approach presented in this paper focuses on the migration
efforts as a eld of study. This area is rather new but further
research is considered vital as the migration process is an
important cost driver for production networks. A number of
adaptions of a production network can be considered in the
transition process from one point of time to another such as
logistics costs, expenses for the recruitment of staff or the
acquisition/disposal of resources. For this approach, migration
effort will be measured in terms of the number of futile resources
in the transition phase of a production network as illustrated in
Fig. 2. Futile resources are dened as those resources that existed
in an earlier scenario and that are obsolete in a latter one, e.g.
resource type 4 in the given example. The total migration effort of a
scenario is then calculated by adding up the futile resources for
each resource type at each location.
In the methodology described in this paper, preferable
connections between scenarios for different points of time are
dened and suitable migration paths are identied. The approach
will then be evaluated with data from an industry case.
Determination of migration efforts for Production networks
Transformation of
Migration effort based on futile
resources at a location resources
R1,1: Valuable For all
R2,1: : framing requirements of production and nance are still met.
R3,1:
R4,1: Futile
ME: Migration effort of a scenario
2014 2016
Ti: Point of time
Rj,k:number of resources of type j
at location k
Fig. 2. Calculation of migration efforts based on futile resources.
2. State of the art
The design of global production networks has its roots in supply
chain considerations [9]. Whereas global production networks are
often times congured through coincidental developments over
long times, this stands in contrast to the long-term-nature of
production engagements and their necessity for strategic align-
ment. For the consideration of several variables and restrictions,
the design process of production networks needs to consist of an
integrated, heuristic approach and the measurement of strategic
values [6]. To align strategies and goals, it is useful to include
independent partners such as suppliers in the process of designing
efcient production networks [10].
Recent approaches include the planning of multiple time
periods and a variety of variables. A few concepts also consider
dynamic inuences and planning insecurities as well as migration
expenses.
The Global Variant System developed by Wagner and Nyhuis
aims at operating a production network on a global scale while
simultaneously retaining and advancing core competences in their
home markets. Their approach includes product structure,
international cooperation and process chains into various compo-
sitions of future scenarios. These scenarios are then analyzed for an
ideal and robust composition of production steps in the network
[11].
A model presented by Lanza and Ude focusses on the
conguration of the dynamics of production networks. The
approach incorporates business capabilities of production net-
works. Different conguration alternatives are assessed by using
the quality capability as a measure for the performance of the ramp
up phase of a production network. The methodology serves as a
blueprint for including further time-depend, dynamic inuences to
a production network [12].
Koberstein et al. develop a methodology to optimize the
planning of global production networks considering risks of
exchange rates and volatile product demands. The approach
consists of a multi-stage stochastic programming model that
integrates multiple periods as well as scenario trees to consider
uncertain exchange rates and demands. The model optimizes the
expected net present value of a production network [13].
Seifert und Langenberg present a method to determine how
many adaptions a supply chain requires in order to deal with
unforeseeable events described as business dynamics resulting
from product portfolio and global business effects. The used
modeling framework is based on a classication distinguishing
different needs for adaption. The methodology is able to dene the
need of adaption for a variety of different industries [14].
Lanza and Moser develop an approach for optimized planning
in production networks under the inuence of insecure inuences.
Their multi-objective optimization is based on determining an
efcient and strategically sustainable position in the setup of
network structures. This allows for quick reactions on external
dynamics by changing the network within a preconceived solution
space [15].
Meyer and Jacob present a model for multiple periods and
multiple variables, incorporating an assessment of the current
production network and the urgency to change it. The method aims
to optimize the net cash ow of a production network while
Under consideration of initially dened parameters, production
capacities are optimally distributed in regard to time and location.
The approach incorporates a network migration plan with the aim
of optimally distributing the networks transition costs [16].
The described approaches show that multiple period and
multiple variable planning as well as planning under uncertainty
and dynamic inuences are focus areas of recent investigations.
Also research considering migration costs has started but very few
approach have the background of a software tool being able to
handle the amount of possibilities reality confronts companies
with. Using the capability of OptiWo, the methodology of this
paper aims to analyze a series of scenarios that have been already
cost-optimized in order to nd suitable migration paths for the
further development of production networks.
3. Methodology for the determination of optimized migration
paths of production networks
The input data for the methodology of this paper consists of
cost-optimized scenarios derived from a project that WZL at RWTH
 G. Schuh et al. / CIRP Annals - Manufacturing Technology 63 (2014) 433436
Fig. 3. Methodology for the determination of optimized migration paths of production networks.
Aachen conducted with industry partners. The scenarios that have
been created by the software-tool OptiWo all lead to similar total
landed costs (TLCs). TLCs are dened as the total running costs of a
production network. They include cost factors necessary to
manufacture the demanded products with the resources dened
by the software tool OptiWo such as resource investments,
depreciation costs and interests, expenses for staff, material,
energy and maintenance, etc. The characteristics that distinguish
the scenarios are the network structures.
Therefore, the approach at hand introduces migration efforts as
a secondary selection criteria for optimized network scenarios. To
achieve this, a four-step-methodology has been developed as it can
be seen in Fig. 3: generating scenarios based on a genetic
algorithm, developing algorithms, developing a migration effort
matrix, clustering of migration steps and dening best migration
paths for a global footprint. These steps are explained in more
detail in the following chapters.
3.1. Generating data
The rst step of the methodology seeks to gather the necessary
data for the upcoming steps. For the purpose of this methodology,
it is necessary to calculate a whole variety of minimized scenarios
with identical parameter settings. The TLCs usually differ by less
than 5% and can be considered as equally good solutions.
For the purpose of verifying the results of this paper, a series of
optimization runs with the software tool OptiWo has been done
using data from an industry case. As presented in Fig. 3 on the left
side, the series consists of 10 runs for 5 different points of time in
the future which leads to 50 runs in total.
3.2. Development of a migration effort matrix
A comparison between individual scenarios in the data set
reveals differences as well as similarities between the structures of
different production networks. This is why for every two scenarios,
the effort for migrating one scenario into another varies by how
much has to be adapted to turn the rst scenario structure into the
second one. These adaptions can be summed up as the efforts for
building up or eliminating resources at different production sites of
the network. It is necessary to differentiate between efforts that
result from the growth of the network and those for the elimination
of resources that have been built up just before. The latter efforts
represent futile resources that were therefore not necessary from
the beginning to cover the demanded production volume.
The focus must lie in avoiding futility and therefore, this
approach considers migration efforts in a sense of unnecessary
build-up of production capacity. In order to identify futile
435
migration efforts, it becomes necessary to compare the network
structures of all available scenarios for a given point of time to all
the scenarios of the following point of time.
Each individual resource whose number is reduced in a follow-
up scenario compared to its original scenario will be counted as
futile and therefore migration effort. The basic calculations have
been illustrated on the right side of Fig. 2. This comparative
analysis will result in a matrix of migration efforts where each
effort is represented by the number of unnecessary resources of the
previous scenario as it can be seen in the second step in Fig. 3.
3.3. Dening preferable migration steps
Due to the enormous variety of sequences that can be presented
through the migration effort matrix, it becomes necessary to
reduce the amount of possibilities for further analysis. Therefore, a
classication with three categories is introduced to dene
migration steps over time that are more preferable than others.
The limits for the migration effort allowed are dened based on a
distinct percentage of the average TLCs per year and the average
costs of a resource as illustrated in Fig. 3 in the third step. For the
rst and most preferred category, the limit is set to 5% of the
average TLCs per year which, divided by the average resource costs,
results in an allowed migration effort of 6. The limit for the second
category is set to 15% which leads to an allowed migration effort of
18. All migration efforts higher than those two categories are not
considered feasible and account for the third category. Migration
steps of the third category will not appear in the migration timeline
of the last step of the methodology.
3.4. Selecting a suitable path from the migration timeline
The data prepared in the three steps before needs to be
rehashed in a way that both TLCs and migration efforts are
considered. This is done by creating a migration timeline where the
TLCs of all scenarios are plotted over time as presented in Fig. 3 in
the forth and last step. In this timeline, the preferable migration
steps selected in the previous step are integrated as connections
between the TLCs of the scenarios. The migration steps of the rst
category are illustrated with thick lines, those of the second
category with thin lines. All the scenarios that are not part of a
preferable migration step will not receive a connection.
The suitable migration path in terms of migration effort can
then be identied as a path where all or most of the migration steps
belong to the rst category or at least to the second category. The
TLCs and the migration expenses of this path are than compared to
the migration path with the lowest TLCs to verify the selection and
analyze the resulting cost savings.
436 G. Schuh et al. / CIRP Annals - Manufacturing Technology 63 (2014) 433436
TotalLanded Cost(TLC)inmillionEURO
55
B:Bestscenario
50 including migration cost
45
A:MinimalTLC
40 scenario
35
2014 2016
201 6 2018
2018 2020 2022
#futile TLCincl.
TLC
recources Migration
A:MinimumTLC
539 83 570.5
path
B:Minimummigration
543 15 548.7
effort path
Difference B-A: 4 -68
TLC over10years inmillion
Fig. 4. Excerpt of a migration timeline created from eld data of a GFD-project
(production network with 17 resource types, 9 production sites and an assumed
sales volume increase by 10% every 2 years).
4. Application
The methodology for the determination of optimized migration
paths of production networks is particularly relevant for medium-
sized businesses with versatile international involvement where
one production sites manufactures several product groups and
delivers to several markets. Therefore, this concept was rst
applied to real eld data of a global GFD-project by WZL with a
medium-sized company. The regarded network, consisting of 9
production sites and 17 different types of resources, was already
described in Fig. 1.
For the purpose of this project, it was assumed that the global
sales volume increases by 10% every two years. The 10
optimization runs were done for 5 consecutive points of time in
the future (20162024) starting with todays network structure
(2014). All other factors such as energy costs, transport costs, etc.
remained untouched.
The excerpt of the migration timeline for this particular project
in Fig. 4 illustrates two different possible migration paths: the path
with minimal migration efforts (thick line) and the path with
minimum TLCs (dotted line) which results from combining all
scenarios with the lowest TLCs for each point of time. The
migration path with minimum migration efforts is considered
most suitable. This evaluation was thereafter veried by compar-
ing the total costs (TLCs and migration costs) of both paths.
The Minimum TLC path leads to Total TLCs of about 539 million
s and a total migration effort of 83 resources. The minimum
migration effort path on the other hand accounts for total landed
costs of about 543 million s but a migration effort of only 15
resources. While the analysis of the TLCs leads to the selection of
the rst path, taking into account the migration costs changes the
perspectives. The average investment costs for resources in this
GFD-project can be determined as 380,000 s as illustrated in the
third step of Fig. 3. When adding these costs multiplied by the
number of futile resources to the TLCs of the scenarios, the total
costs for the minimum TLC path increase to 570.5 million s
whereas the costs for the minimum migration efforts path only rise
to 548.7 million s. Therefore, choosing the path with minimum
migration efforts saves the company 68 futile resources and about
21.8 million s or 4% of the total costs over a period of 10 years. The
given example shows how the considerations of the methodology
at hand can improve the results of the production network design
process and lead to further cost optimizations.
5. Conclusion
The approach of this paper enables decision-makers to come up
with improved strategies for the development of their company. By
applying the methods four steps, it becomes possible to compare
2024
migration paths and to identify a migration effort minimized path
time
for a production network. The foundation of this methodology is
the ability to handle the extensive number of possible scenarios
and select those that are promising. For this paper, a genetic
algorithm and a dedicated server have been used to handle the
solution space and the amount of data.
Further work needs to be done to improve the methodology.
The approach is expected to become more accurate with every
further optimization run that is done because more preferable
-21.8 migration steps are presumably detected. Therefore, the analysis of
the migration efforts needs to be fully implemented in the OptiWo
software in order to handle more information and to plot the
migration timeline with the preferable migration steps automati-
cally.
Acknowledgment
The authors would like to thank the German Research
Foundation DFG for the kind support within the Cluster of
Excellence Integrative Production Technology for High-Wage
Countries.
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