Practice Summary: General Electric Company Optimizes Wind Turbine Towers Sourcing and Logistics Operations

General Electric Company’s Renewable Energy business had been manually making annual sourcing and logistics plans to procure and deliver wind turbine towers to customer sites. This manual process was time-consuming and suboptimal and increased the cost in fulfilling customer demands. It was also cumbersome, especially because replanning is needed multiple times during the year for reasons beyond the control of the business. We develop an algorithm and a software tool for simultaneously generating near-optimal sourcing and logistics plans to procure wind turbine towers from suppliers across the world and deliver them to customer sites to minimize the total direct material and logistics costs incurred. The tool has been in use for making sourcing and logistics decisions for delivering wind turbine towers since 2021, resulting in savings of several million dollars just in the first year of its use.

History: This paper was refereed.