The Optimization of the Woodlam Furniture Factory with Specific Reference to It’s Electricity Consumption

Abstract

Woodlam is the leading plywood furniture manufacturer in South Africa, experiencing steady growth in the last few years. Due to the increasing cost of electricity in South Africa it has become important for companies within the manufacturing industry to find methods to optimize their electricity consumption. This enables these manufacturers to reduce operating costs. Globalization and market pressures also make it necessary to find a means to reduce the cost of production in order to increase profit and remain competitive both locally and internationally. Addressing this problem correctly results in a more profitable business model while allowing production capacity to meet the customer demand. This report includes a literature review to understand key concepts, electricity data collection and analysis, solution research and design of the approach to solving the problem as well as the evaluation and validation of the proposed improvements. This report outlines the importance of finding an effective solution to rising electricity manufacturing costs and depicts the methodology and steps necessary to obtain the desired optimal solution. An indepth study was conducted to provide insight into the manufacturing process. Electricity tariffs and solution approaches were also examined from which an operations research mixed integer linear programming model (MILP) was selected. This model was then formulated to achieve the desired financial benefits that can be achieved through the intelligent scheduling of operations. The monetary and environmental results of the (MILP) model depict that by scheduling the production of the machinery has the ability to assist the production manager to reduce the electricity cost by avoiding peak electricity tariff time periods. The validation process to determine the success of the project is also outlined.