Turning Waste into Value: Integrated Supply Chain Planning for Food Byproducts

A leading ingredients manufacturer transforms food waste into valuable nutrition. One of its divisions repurposes cheesemaking byproducts that can’t be sold to consumers, such as expired or misshaped batches, converting it into high quality ingredients for animal and pet food. The resulting powder adds flavor, protein, and essential nutrients, helping animals grow healthier and making feed more appealing.

Unlike most manufacturers, this company faces an especially difficult planning problem because its raw materials are inherently unpredictable. The supply of byproduct cheese changes constantly in both quality and quantity, making it challenging to plan production with precision. The company works with dozens of potential suppliers and operates multiple processing plants across the region. Coordinating pickups, managing storage, and allocating production efficiently while controlling transportation costs requires constant adjustment.

To manage this complexity, the company partnered with SimpleRose to design a tailored decision support system for both strategic-tactical supply planning and operational decision support, both powered by mathematical optimization.

The Challenge: Planning with Uncertainty

Each week, suppliers generate varying quantities of byproduct cheese. When a full load is ready, the supplier calls to request pickup, and the company must quickly decide where to send it and how to use it efficiently.

Beyond the unpredictability of supply, a further planning challenge is that not all ingredients are equal. Each supplier’s product differs in moisture, fat, and protein content, meaning it can only be blended in limited proportions to maintain consistent quality in the finished product. And since storage space at the processing plants is finite, shipments must be timed and balanced carefully to avoid shortages or overflows.

Traditional planning tools struggled with this volatility. Manual spreadsheets and static rules of thumb could not keep up with the day-to-day realities of sourcing from dozens of suppliers while maintaining high utilization across several plants.

The Solution: Two Levels of Optimization

1. Tactical Supply Network Planning

SimpleRose developed a tactical optimization model that looks across a rolling 12-month horizon. This model decides:

• Which suppliers should be active during the year
• Which processing plant each supplier should deliver its ingredients to

The model balances multiple business goals: minimizing freight costs, maintaining the right inventory buffers, respecting blending and quality constraints, and preventing plant overcapacity. It uses the company’s production forecasts and supplier availability estimates to generate a cost-efficient and feasible sourcing plan.

The results give planners a transparent, data-driven way to decide which suppliers to contract for the year and which to hold in reserve. The tactical model also generates an initial supply plan that serves as the default starting point for the operational system.

2. Operational Decision Support (Intra-Day Execution)

When a supplier calls with an unexpected load ready for pickup, a dynamic decision engine steps in. This operational module ranks potential destination plants in order of suitability, using live data on:

• Current and forecasted inventory at each plant
• Remaining storage space and active production lines
• The mix of high- and low-quality material on hand

The system recommends where the load should go based on current conditions, while staying aligned with the broader tactical plan. For instance, if a particular plant is nearing capacity or short on high-quality inputs, the system may direct a load elsewhere, even if that means diverging from the long-term allocation.

This continuous balancing of short-term responsiveness and long-term efficiency helps the company manage unpredictability without losing control of costs or quality.

Impact and Results

The optimization system has already delivered measurable savings and smoother operations. By comparing historical shipping data against simulated results, the company found:

• 6–10% reduction in freight costs compared to previous manual methods
• More consistent plant utilization, with reduced risk of shortages or overcapacity
• Greater visibility and control over sourcing plans and supplier performance

As the company’s network has grown with suppliers, plants, and constraints, the system’s value has scaled with it. Working together, the tactical and operational models create a unified decision-making framework that links long-term planning with daily execution.The models now form the foundation of a repeatable, data-driven planning process that adapts to real-world variability while preserving flexibility.
By transforming a volatile, waste-driven input stream into an optimized supply network, this collaboration demonstrates how applied analytics can drive both economic and environmental impact. The company can now source more efficiently, reduce waste, and plan production with greater confidence – turning unpredictability into opportunity.

SimpleRose helps organizations solve complex planning and scheduling problems faster and in greater detail. Our work spans supply chain, logistics, workforce, and maintenance planning, as well as other large scale optimization challenges in areas such as energy and portfolio management. Whether you are accelerating an existing model, building a tailored decision support system, or exploring our next generation solver, we help you spend less time simplifying and more time solving.