The Volkswagen Pre-Production Center Applies Operations Research to Optimize Capacity Scheduling

The Volkswagen Pre-Production Center (VPC) is responsible for the entire prototype assembly of the Volkswagen brand. In their assembly sites, however, they often cannot employ their manufacturing staff to the full utilization level, and therefore, the manufacturing volume is low. Maximizing the manufacturing volume for a given available capacity is a frequently pursued objective in industrial manufacturing. The planning task of capacity scheduling contributes to this objective by deciding on resource allocation and the selection and scheduling of orders. We were asked to evaluate possible operations research/management science (OR/MS) solutions for their capacity scheduling problem. To this end, we developed a prototype for capacity scheduling based on binary integer programming. After the prototype had revealed high improvement potential, we developed a spreadsheet-based decision support system (DSS) for daily capacity scheduling. The schedules generated by the DSS were substantially better than the solutions generated by the current manual procedure, in terms of both accomplished manufacturing volume and planning effort. After successful test implementation and rollout, the VPC estimated the annual cost savings to lie in the six-digit Euro range. Meanwhile, we continue spreading OR/MS methods to neighboring departments of the VPC.