German baker wins FICO Decisions Award for Artificial Intelligence, Machine Learning and Optimisation for reducing transportation and production costs using FICO Xpress Optimization

Highlights:

• Harry-Brot is recognised for its cutting-edge use of optimisation technology in production and distribution operations with a 2017 FICO Decisions Award for AI, Machine Learning & Optimisation.
• Harry-Brot is one of the biggest German producers of bread and has increased sales by close to 30 percent in the past five years.
• Harry-Brot used FICO^® Xpress Optimization to reduce costs 3.57 percent for production and 1.81 percent for transportation, resulting in an overall cost savings of 3.4 percent, exceeding their investment by more than a hundred times in the first year.

FICO (NYSE:FICO) today announced Harry-Brot, Germany’s largest producer of baked goods, has won a FICO Decisions Award for its use of advanced optimisation technology to reduce costs.

Harry-Brot produces roughly 1,000 varieties of baked goods that are distributed to 9,300 German stores. The baker runs 73 different production lines across nine sites; each production line is restricted to a specific set of products, speed of production, and capacity.

“We wanted to find the optimal assignment of products to different production lines; we were eager to see, if we changed the status quo, how much cost savings we could uncover and still meet our customer’s demands,” said Matthias Säger, Project Manager Logistics Systems, Harry-Brot. “With FICO’s powerful optimisation, we were amazed at what we found and how quickly we were able to go from insight to action. We could analyse a large set of variables, modify constraints and explore trade-offs in order to identify the optimal strategy for baking production and distribution. The scenario output gave us tremendous insight into more profitable decisions and the impact of different combinations of factors.”

Using FICO^® Xpress Optimization and working with Asolvo, a German firm specialising in optimisation services, the baker was able to dramatically improve the efficiency of its highly complex baking production and distribution operations.

With FICO Xpress Insight, Harry-Brot was able to apply high-performance solvers and algorithms, flexible modeling, comparative scenario analysis and visualisation to identify ideal assignments for production lines. This helped minimise costs and meet customer demand; in fact, Harry-Brot saw cost reductions of 3.57 percent and 1.81 percent for production and transportation costs, respectively. Overall costs were reduced by 3.4 percent, which meant that cost savings achieved in the first year significantly surpassed the company’s investment.

“Harry-Brot is a great example of the real power of optimisation; solving complex business problems by running comparative scenarios that show where you are today, and identifying the potential opportunities that exist in the future,” said Bill Waid, vice president for FICO Decision Management Suite.

“I’m very impressed with Harry-Brot’s application of optimisation to solve a highly complex sourcing problem,” said Douglas Gray, director of Enterprise Data & Analytics at Southwest Airlines, which won a 2016 FICO Decisions Award; Gray was a judge for this year’s awards. “Though baking is a very different business from airlines, their experience using FICO Xpress Optimization echoes our own, and like Southwest they have taken full advantage of the power and flexibility of a tool that can crunch astronomical amounts of data and weigh millions of alternate solutions to find the very best.”

FICO^® Xpress Optimization is the world’s most advanced optimisation software, enabling businesses to quickly and easily apply optimisation techniques to solve business problems, faster. FICO Xpress is part of the FICO Decision Management Suite, a platform for building and managing analytics-powered decision management applications.