Cutting optimization cut raw-material waste by 80%

Each cutting plan looks like a small decision, but it is repeated all day long and determines how much raw material ends up as scrap. With 100 coil types, varying in thickness, strength and width, and 80 required cut types, the number of feasible combinations is far too large to evaluate on the shop floor.

Decided case by case, cutting ignores what comes next: an offcut that could have served the following week's demand is discarded because no one can see future demand and inventory at the moment of the decision.

Orion developed the solution in two stages, jointly modeling current and future demand, the costs involved and inventory, both historical and projected, to choose the cutting patterns that minimize total loss rather than the loss of each individual cut.

With projected inventory inside the model, offcuts are no longer automatically scrapped and instead become input for forecast demand. Raw-material waste fell 80% compared with the previous practice.