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Evan Rash and Karl Kempf

Decision Engineering Group


Intel Corporation
Product Line Design
and Scheduling
at Intel
I NFORMS ANNUAL MEETI NG 2011
Charlotte, North Carolina
CPMS Daniel H. Wagner Prize Competition
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CPMS 2011 Daniel H. Wagner Prize Compet it ion I nt el Corp 2011
Agenda
1. Business Background
2. The St rat egic Business Problem
3. Mat hemat ical Formulat ion
4. Our New Solut ion
5. Our Cust om I mplement at ion
6. Growing Business I mpact
Founded
July 18
th
, 1968
3
Leading Edge Process Technology
32nm 45nm
1x
0.1x
0.01x
0.001x
65nm 22nm*
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k
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r

T
r
a
n
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r

L
e
a
k
a
g
e
Higher Transistor Performance (Switching Speed) Higher Transistor Performance (Switching Speed)
* projected
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CPMS 2011 Daniel H. Wagner Prize Compet it ion I nt el Corp 2011
PC
CLI ENT
ULTRA
MOBI LI TY
DATA
CENTER
EMBEDDED
& COMMS
DI GI TAL
HOME
Leading Edge Product Technology
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CPMS 2011 Daniel H. Wagner Prize Compet it ion I nt el Corp 2011
Feat ur e, Mar k et , and Ti me
Dy nami cs
m
a
r
k
e
t
s
features
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CPMS 2011 Daniel H. Wagner Prize Compet it ion I nt el Corp 2011
Market1 $13 240,000
Market2 $15 300,000
Market3 $14 450,000
Market4 $12 880,000
Market5 $9 900,000
Marketing ASP Vol
Different Markets Need
a Different Mix of Features
m
a
r
k
e
t
s
features
Selling the product in the market brings in revenue
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CPMS 2011 Daniel H. Wagner Prize Compet it ion I nt el Corp 2011
Feature1 Feature2 Feature3 Feature4 Feature5 Feature6 Eng&Mfg
$300,000 $400,000 $400,000 $250,000 $300,000 $200,000 EngCost
$1.50 $0.35 $1.25 $0.50 $0.50 $0.25 MfgCost/u
Market1 $13 240,000
Market2 $15 300,000
Market3 $14 450,000
Market4 $12 880,000
Market5 $9 900,000
Marketing ASP Vol
Different Markets Need
a Different Mix of Features
m
a
r
k
e
t
s
features
Engineering and manufacturing incurs costs
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CPMS 2011 Daniel H. Wagner Prize Compet it ion I nt el Corp 2011
Feature1 Feature2 Feature3 Feature4 Feature5 Feature6 Eng&Mfg
$300,000 $400,000 $400,000 $250,000 $300,000 $200,000 EngCost
$1.50 $0.35 $1.25 $0.50 $0.50 $0.25 MfgCost/u
Market1 $13 240,000
1 0 0 1 0 1
Market2 $15 300,000
1 0 0 0 1 1
Market3 $14 450,000
1 1 2 0 0 0
Market4 $12 880,000
2 0 1 0 0 0
Market5 $9 900,000
1 3 0 0 0 0
Marketing ASP Vol
Different Markets Need
a Different Mix of Features
Markets have unique feature requirements
m
a
r
k
e
t
s
features
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CPMS 2011 Daniel H. Wagner Prize Compet it ion I nt el Corp 2011
Different Markets Have
Different Timings
Markets are not all synchronized in time
m
a
r
k
e
t
s
features
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CPMS 2011 Daniel H. Wagner Prize Compet it ion I nt el Corp 2011
Different Features Have
Different Availabilities
time
F
e
a
t
u
r
e
1
F
e
a
t
u
r
e
4
F
e
a
t
u
r
e
3
F
e
a
t
u
r
e
2
F
e
a
t
u
r
e
5
REV 1.0
BUILD
BUY
REV 2.0
Partial Reuse
m
a
r
k
e
t
s
features
Feature development must be
synchronized with market
windows
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CPMS 2011 Daniel H. Wagner Prize Compet it ion I nt el Corp 2011
Constraints
Feature sets in the products must meet (or exceed) the
needs of the target markets
Features must be engineered in time to be integrated
into the products
Products must be engineered and manufactured to hit
the market timings
The engineering budget is finite (leading to an emphasis
on reuse)
Maximize Profit (Max Revenue, Min Eng and Mfg Cost)
Objective
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CPMS 2011 Daniel H. Wagner Prize Compet it ion I nt el Corp 2011
Business questions include (at least):
Given an engineering budget, what set of products
maximize revenue or profit?
Given a revenue target, what set of products
minimize cost, with what engineering budget?
Given a number of Features to engineer, what is
the profit maximizing order of development?
Given a Feature build vs. buy decision (cost,
timing), which generates the most profit?
Difficult to solve with standard techniques due to many
different constraints, competing objectives, and interrelated
tradeoffs
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CPMS 2011 Daniel H. Wagner Prize Compet it ion I nt el Corp 2011
Math
Define Problem & Formulate as Mathematical
Programming
Show Complexity & Difficulties involved with
Traditional techniques
Solution Methodology & Implementation
CPMS 2011 Daniel H. Wagner Prize Compet it ion I nt el Corp 2011
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CPMS 2011 Daniel H. Wagner Prize Compet it ion I nt el Corp 2011
The Core Problem
Generate a Product Line Strategic
Map products into markets
Schedule product development
Generate Product Features
Tactical
Meet or exceed market requirements
Schedule feature development
Optimize for Profitability Strategic
Product line must optimize profitability
Must consider engineering budgets
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CPMS 2011 Daniel H. Wagner Prize Compet it ion I nt el Corp 2011
Generating the Product Line
Inputs
Set of markets
Number of products
Time horizon
Decisions
How many products to
build
When to introduce
products
Which markets to sell
products into?
{ } M ,..., 1
{ } T T ,..., ,..., 1
0
p
|
{ } T T z
p
,...,
0
e
pmt
o
Binary
Integer
Binary
At most one product per market
M P s
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CPMS 2011 Daniel H. Wagner Prize Compet it ion I nt el Corp 2011
Generating Product Features
Inputs
Set of features
Market Requirements
Decisions
Product Features

Feature Availability
{ } F ,..., 1
pf
x
{ } T T y
f
,...,
0
e
Units of Feature f in Product p
Integer
Integer
mf
D
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CPMS 2011 Daniel H. Wagner Prize Compet it ion I nt el Corp 2011
Optimize for Profitability
Inputs
Market Volumes and
Prices
Feature Engineering
Cost (with Reuse)
Product Engineering Cost
Feature Mfg. Cost
Expressions
Revenue
Engineering Cost
mt mt
p v ,
f
c
A
( ) t R
f
|
.
|

\
|

= = = =
P
p
M
m
T
t
F
f
pf f mt mt pmt
x c p v
0 0 0 0
o
( )

+

= = =
F
f
T
t
f
P
p
p
t R A
0 0 0
|
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CPMS 2011 Daniel H. Wagner Prize Compet it ion I nt el Corp 2011
Reuse Function
Engineering features
presents reuse
opportunities
Developing Feature 3 may
cause developing Feature
4 to be cheaper/faster
The Reuse Function
defines these reuse
synergies
Typically dynamic and
complex
time
F
e
a
t
u
r
e
1
F
e
a
t
u
r
e
4
F
e
a
t
u
r
e
3
F
e
a
t
u
r
e
2
F
e
a
t
u
r
e
5
REV 1.0
Feature 3
Feature 4
BUILD
BUY
REV 2.0
Partial Reuse
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CPMS 2011 Daniel H. Wagner Prize Compet it ion I nt el Corp 2011
Reuse Function Example
A hypothetical Reuse Function where developing one feature in a
group causes subsequent feature development to be 50% cheaper
Feature f Group G(f) R

(t) when t -1 = y


1 1 1
2 2 .5 if y
2
> y
S
, else 1
3 2 .5 if y
S
> y
2
, else 1
4 3 .5 if y
4
> y
S
, else 1
5 3 .5 if y
S
> y
4
, else 1

if

=
g0()

if
g

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CPMS 2011 Daniel H. Wagner Prize Compet it ion I nt el Corp 2011
Full Formulation
Objective: Maximize Profit
max o
pmt
I
mt
_P
mt
- C

x
p
F
=u
_
I
t=u
H
m=u
P
p=u
- R

(t)
T
t=u
F
=u
-A [
p
P
p=u

o
pmt
P
p=u
1 m, t One Product per Market

m
o
pmt
x
p
p, m, t Market Satisfaction Constraint
z
p
max|: [
p
> u|y

| Product Availability Constraint


o
pmt
= u p, m, t < z
p
Market Coverage Availability Constraint
HI[
p
o
pmt
I
t=u
H
m=u
Product Selling Requirement
R

(t)
F
=u
S
t
Resource Constraint
[
p
{u,1] Binary Constraint
o
pmt
{u,1] Binary Constraint
x
p
|u, , max
m
| Integral Units of Features Constraint
y

{I
u
, , I +] Scheduling Window Constraint
z
p
{I
u
, , I +] Scheduling Window Constraint

Subject to:
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CPMS 2011 Daniel H. Wagner Prize Compet it ion I nt el Corp 2011
Why Is This a Hard Problem?
Non-linearity
Reuse Function
Objective Function & Constraints
Integral & Binary Decisions
Scheduling
Mapping
Combinatorics & Problem Size
Difficult to solve by traditional techniques!
Linear/Mixed-Integer Programming
Constraint Programming
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CPMS 2011 Daniel H. Wagner Prize Compet it ion I nt el Corp 2011
Our Solution
Integrate diverse OR techniques
Resource-Constrained Job Scheduling
Optimal Set Covering
Portfolio Optimization
Dynamic Programming
Decompose Problem into Multiple Stages
Outer strategic Genetic Algorithm
Inner tactical Heuristics and MIPs
Financial Optimization through Genetic Algorithm
Fitness
24
CPMS 2011 Daniel H. Wagner Prize Compet it ion I nt el Corp 2011
Decomposition Product Line Design
Strategic
Tactica
l
Out er Genet i c Al gor i t hm
I nner Set Cov er i ng/ Heur i st i cs
1. Product Release Schedule
2. Product t o Market Mappings
3. Product Feat ures
Ext : Feat ure Subst it ut ions
4. Feat ure Schedules
5. Feat ure Reuse
6. Resource Const raint s
7. Financial Obj ect ives
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CPMS 2011 Daniel H. Wagner Prize Compet it ion I nt el Corp 2011
Decomposition Generate Product Features
Strategic
Tactica
l
Out er Genet i c Al gor i t hm
I nner MI Ps and Heur i st i cs
1. Product Release Schedule
2. Product t o Market Mappings
3. Product Feat ures
Ext : Feat ure Subst it ut ions
4. Feat ure Schedules
5. Feat ure Reuse
6. Resource Const raint s
7. Financial Obj ect ives
Per Product
Per Product
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CPMS 2011 Daniel H. Wagner Prize Compet it ion I nt el Corp 2011
Decomposition Financial Optimization
Out er Genet i c Al gor i t hm
I nner Set Cov er i ng/ Heur i st i cs
1. Product Release Schedule
2. Product t o Market Mappings
3. Product Feat ures
Ext : Feat ure Subst it ut ions
4. Feat ure Schedules
5. Feat ure Reuse
6. Resource Const raint s
7. Financial Obj ect ives
Select ion
Mut at ion & Crossover
Per Product
Per Product
Strategic
Tactica
l
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CPMS 2011 Daniel H. Wagner Prize Compet it ion I nt el Corp 2011
Outer Strategic Algorithm
1. Outer: Creating Product Schedules
Generate a random chronologically sorted product
schedule, with some products turned off.
Use crossover to zip different schedules together
and mutations to randomly permute schedule by
pushing products out and pulling products in
2. Outer: Creating Market to Product Mappings
For each market randomly cover or skip the market.
If covered, select a random product from the list
generated in 1
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CPMS 2011 Daniel H. Wagner Prize Compet it ion I nt el Corp 2011
Inner Tactical Algorithm
3. Inner: Determine Product Features (MIPs)
- Cover market requirements with minimum manufacturing cost
- Cover market requirements with minimum engineering cost
Randomly alternate and allow the evolutionary process to pick the
best
4. Inner: Deduce Feature Schedules
Back out the feature engineering schedule based on when the
features need to be available for the products availability (1)
5. Inner: Evaluate Reuse
Evaluate the reuse of the feature schedule from (4)
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CPMS 2011 Daniel H. Wagner Prize Compet it ion I nt el Corp 2011
Outer Strategic Algorithm
6. Evaluate Resource Constraint
Evaluate the engineering resources for the entire
roadmap
Model engineering resource constraints as soft
constraints
Use a Lagrangian penalty approach similar to the
concept of an overtime cost of exceeding the available
engineering resource supply
7. Evaluate NPV & Fitness
Evaluate the fitness of the product line by determining its
NPV and subtracting out any resource overage penalties
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CPMS 2011 Daniel H. Wagner Prize Compet it ion I nt el Corp 2011
Pinning Parts of the Solution
Planning involves many strategic aspects
Not always possible to solve with a clean slate
Solver must be able to pin portions of the
solution in place and solve using remaining
degrees of freedom
Examples
Locking products onto the roadmap
Locking feature availability schedules
Forcing entry into particular markets
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CPMS 2011 Daniel H. Wagner Prize Compet it ion I nt el Corp 2011
Implementation
Custom Implementation
(C# .NET)
Required Custom
Mutation/Crossover and
Solution Flow
Inner sub-problem
solved via modular
heuristics plugged into
larger GA
Most Heuristics: C#
Feature Substitution:
OPL CPLEX
Database
Reporting and Analysis
Scenarios
Solver
Inner Sub-Problems
Outer GA
C
#
C
#
C#
C#
CPLEX
SQ
L
90%
10%
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CPMS 2011 Daniel H. Wagner Prize Compet it ion I nt el Corp 2011
The Business Process
BEFORE
1) Many spreadsheets with local
databases
2) Local view by product,
sometimes by division
3) Few what-ifs
AFTER
1) One tool with global database (HW
and SW)
2) Holistic view across divisions and
products
3) Many what-ifs
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CPMS 2011 Daniel H. Wagner Prize Compet it ion I nt el Corp 2011
The Business Process
BEFORE
1) Many spreadsheets with local
databases
2) Local view by product,
sometimes by division
3) Few what-ifs
4) Difficult decision making between
finance, planning, and engineering
(design and mfg)
5) No global optimization and little
(if any) local optimization
6) Little reuse between divisions
and within divisions
AFTER
1) One tool with global database (HW
and SW)
2) Holistic view across divisions and
products
3) Many what-ifs
4) Collaborative decision making
between all of the product functions
5) Global profit optimization
6) Increasing reuse across divs and
products (few%/mo)
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CPMS 2011 Daniel H. Wagner Prize Compet it ion I nt el Corp 2011
User Data and Feedback
0
20
40
60
80
100
120
140
0
7
-
1
0
0
8
-
1
0
0
9
-
1
0
1
0
-
1
0
1
1
-
1
0
1
2
-
1
0
0
1
-
1
1
0
2
-
1
1
0
3
-
1
1
0
4
-
1
1
0
5
-
1
1
0
6
-
1
1
0
7
-
1
1
0
8
-
1
1
0
9
-
1
1
1
0
-
1
1
USERS BY
MONTH
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CPMS 2011 Daniel H. Wagner Prize Compet it ion I nt el Corp 2011
User Data and Feedback
JOBTITLE #USERS HRSUSED
STRATEGICPLANNERS 16 996
PROJECT/PROGRAMMANAGER 39 476
PRODUCTDESIGNENGINEER 23 394
FINANCIALANALYST 39 342
PRODUCTMARKETINGENGINEER 5 63
OPERATIONMANAGER 3 21
PRODUCTSOFTWAREENGINEER 8 4
TOTAL 133 2296
0
20
40
60
80
100
120
140
0
7
-
1
0
0
8
-
1
0
0
9
-
1
0
1
0
-
1
0
1
1
-
1
0
1
2
-
1
0
0
1
-
1
1
0
2
-
1
1
0
3
-
1
1
0
4
-
1
1
0
5
-
1
1
0
6
-
1
1
0
7
-
1
1
0
8
-
1
1
0
9
-
1
1
1
0
-
1
1
PRODUCT #OF
DIVISION USERS
Div1 58
Div2 25
Div3 12
Div4 11
Div5 9
Div6 4
Div7 3
Div8 3
Div9 2
DivAdmin 3
Misc 3
TOTAL 133
USERS BY
MONTH
36
CPMS 2011 Daniel H. Wagner Prize Compet it ion I nt el Corp 2011
User Data and Feedback
JOBTITLE #USERS HRSUSED
STRATEGICPLANNERS 16 996
PROJECT/PROGRAMMANAGER 39 476
PRODUCTDESIGNENGINEER 23 394
FINANCIALANALYST 39 342
PRODUCTMARKETINGENGINEER 5 63
OPERATIONMANAGER 3 21
PRODUCTSOFTWAREENGINEER 8 4
TOTAL 133 2296
0
20
40
60
80
100
120
140
0
7
-
1
0
0
8
-
1
0
0
9
-
1
0
1
0
-
1
0
1
1
-
1
0
1
2
-
1
0
0
1
-
1
1
0
2
-
1
1
0
3
-
1
1
0
4
-
1
1
0
5
-
1
1
0
6
-
1
1
0
7
-
1
1
0
8
-
1
1
0
9
-
1
1
1
0
-
1
1
PRODUCT #OF
DIVISION USERS
Div1 58
Div2 25
Div3 12
Div4 11
Div5 9
Div6 4
Div7 3
Div8 3
Div9 2
DivAdmin 3
Misc 3
TOTAL 133
USERS BY
MONTH
We ar e f i nal l y w or k i ng i n
a t r anspar ent sy st em
i nst ead of spr eadsheet s on
r andom shar ed dr i v es.
Usef ul as an acumen t ool
as w el l as l ear ni ng about
w her e sy ner gi es ex i st f or
our pr oduct s.
No i dea
how w e can
opt i mi ze
mar k et
cov er age
w i t hout a
t ool l i k e
t hi s.
37
CPMS 2011 Daniel H. Wagner Prize Compet it ion I nt el Corp 2011
Concl usi on
This is a complex problem considering
market , feat ure, and product t ime dynamics
Ext remely difficult t o solve wit h t radit ional
t echniques
Developed and implement ed a cust om
solut ion t o t he problem
The syst em current ly has users across
divisions and j ob roles
We believe t he syst em ( over t ime) will
become crucial t o I nt els cont inuing success
39
CPMS 2011 Daniel H. Wagner Prize Compet it ion I nt el Corp 2011
Extensions
Feature Substitution
Feature A or Feature B can be interchanged
Time to Market Penalties
Late products suffer in the marketplace
Minimum vs. Target Market Requirements
Feature A is a must-have, Feature B is a value-add
Build vs. Buy decisions
Develop in house or license?
NPV Optimization

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