UMinho and Bosch team awarded for model that optimises security stocks

It is a decision support system that calculates and suggests the optimal safety stocks of a company, minimizing costs and ensuring the level of customer service. This innovation created by a team from the School of Engineering of the University of Minho, in partnership with Bosch Portugal, has just won the Excellence Award Logistics Academy 2022, from the Associação Portuguesa de Logística (APLOG). The annual award distinguishes academic projects of technological innovation and collaborative platforms that point to new paradigms in the area.

The winning project is called DIABO (Data Intelligence & Analytics for Business Operations) and was published in the scientific journal Computers & Industrial Engineering. The new mathematical model stands out for integrating two safety stock management strategies to face the uncertainty of supply chains: maintenance of reserve stock (safety stock); and anticipation of the delivery of supplier orders (safety time).

“DIABO uses logistics data and, in a hybrid approach of optimization and simulation, suggests, in a dynamic way, the strategy to adopt in terms of safety stock and safety time for each of the products”, says João M. Fernandes, co-author of the work and full professor of the Department of Informatics of the School of Engineering of UMinho. The decision support system jointly optimises the safety stock and safety time, maximising service levels and minimising the costs associated with stock maintenance. This strategy proves to be fundamental to cope with the highly disruptive environments that today’s supply chains face.

The project was demonstrated in the Bosch factory in Braga, but “it can be extrapolated to the most diverse areas of activity and with impact”, highlights the researcher from the Algoritmi Center of UMinho. In practice, it interests to the industry to have increasingly lower stocks and, in parallel, avoid the strong penalties of not delivering to the customer on time. The project was developed by João M. Fernandes, Maria Sameiro Carvalho, João Gonçalves, Tiago Martins, Luís Marques, Pedro Silva, José Telhada, Lino Costa, Miguel Oliveira, Marcelo Reis, José Miguel Silva, Luís Araújo and Daniela Correia.

Second distinction

It is the second time that UMinho/Bosch wins the APLOG award. In 2016, it stood out for presenting iFloW, “the first online platform to track the location of raw materials in real time”. The concept was even a finalist for the European Logistics Association’s European Logistics Excellence Award. Specifically, Bosch in Braga has a few hundred suppliers, has around 2.5 billion tons of freight and iFlow allowed “increasing productivity by 10% among logistics planners in track & trace activities”.