Integrating process operations and finances for the optimal design of chemical supply chains (original) (raw)
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Current Opinion in Chemical Engineering, 2012
There is a large body of work on modelling and optimisation of the supply chain in the chemical process industry. This review summarises the most recent concepts and structural components constituting the SC. It describes the enlarged scope presently attributed to supply chain management, which departs from classical approaches focused on operations to a more integrated conception that jointly considers necessary decisions from other business functional areas (e.g. corporate finances, new product development, environmental management), as well as captures the complex dynamics characterizing the supply chain management (SCM) problem. Moreover, new perspectives come into focus for enterprisewide decision-making through the use of ontologies that provide a general model representation for different decisionsupport levels at different time and space scales.
Computers & Chemical Engineering, 2009
Enterprise-wide decision problems are receiving increasing attention in the process systems engineering literature. In particular, the supply chain and product development pipeline management components of this general class of problems have been subjects of intensive research in both their deterministic and their stochastic forms. The supply chain management (SCM) problem has seen work largely focused on the process operations and logistics components while for the product development pipeline management (PDPM) problem much of the attention has been on MILP formulations addressing the consequences of product failure during its development. In their full realization, both are recognized as challenging stochastic multi-stage decision problems. In this paper we discuss three important aspects of these problems that require further research: the realistic representation of the financial components and appropriate criteria for this class of problems, strategic management of supplier and customer relationships through inventory management and option contracts, and innovative approaches to suitably value and integrate a broader range of decisions available to management. We highlight and extend relevant contributions and case examples drawn from the recent literature that are emerging on these topics and use this work to point out further challenges.
A Review of Optimal Designs in Relation to Supply Chains and Sustainable Chemical Processes
Modern Applied Science, 2012
With the emerging importance of balancing environmental, social, and economic objectives within a company setting, growing awareness of planning of supply chains and sustainable optimal design has been brought into perspective. An immense amount of research has been devoted to this sector, in hopes of capturing these objectives to ensure long term sustainability. Among some of the approaches that have been developed, product design, inventory management, product recovery, production planning with an emphasis on remanufacturing, reverse logistics, and supply chains that are closed-looped have been given additional attention in various pieces of literature. We will review and analyze some of the research that has surfaced in regards to sustainable chemical processes along with supply chain design. Focus will be given to three main areas, (i) waste management and energy sufficient sustainable supply chains, (ii) sustainable supply chains and their effect on the environment, (iii) sustainable water management principals. The challenges that these three sectors face have been summarized, and all future opportunities have been highlighted. Environmental sustainability is an issue that receives a lot of attention in the press, journals, and media. Most of the discussions surrounding this debate focus on the environmental impacts that organizational supply chains have on the environment. The goal of this paper is to further investigate the environmental impact concerns, and how these concerns are impacting the operational and strategic management of company supply chains. The research we have complied is intended to give an overview of the practices that companies have adopted and to clarify that further research is still in the midst of being conducted.
Empowering financial tradeoff with joint financial and supply chain planning models
Mathematical and Computer Modelling, 2007
The concept behind improved enterprise systems is the overall integration of its whole functionality through optimised financial links. This paper addresses the implementation of financial cross functional links through the integration of production scheduling and planning with financial management in a modelling framework aimed at chemical process industries. Altogether models must play a more active role, recommending besides schedules and plans, the optimal budgetary decisions for each new scenario. The platform built combines a deterministic cash flow management model with a MILP formulation of process operation. The advantages of this approach are highlighted through case studies.
International Journal of Production Economics, 2011
Models that aim to optimize the design of supply chain networks have become a mainstream in the supply chain literature. This paper aims to fill a gap in the literature by introducing a mathematical model that integrates financial considerations with supply chain design decisions under demand uncertainty. The proposed Mixed-Integer Linear Programming (MILP) problem enchases financial statement analysis through financial ratios and demand uncertainty through scenario analysis. The applicability of the model is illustrated by using a case study along with a sensitivity analysis on financial parameters expressing the business environment. The model could be used as an effective and convenient strategic decision tool by supply chain managers.
Optimal design and planning of sustainable chemical supply chains under uncertainty
AIChE Journal, 2009
This paper addresses the design of sustainable chemical supply chains (SCs) in the presence of uncertainty in the life cycle inventory associated with the network operation. The design task is mathematically formulated as a bi-criterion stochastic mixed-integer nonlinear program that simultaneously accounts for the maximization of the net present value (NPV) and the minimization of the environmental impact for a given probability level. The environmental performance is measured through the Eco-indicator 99, which incorporates the recent advances made in Life Cycle Assessment (LCA). The stochastic model is converted into its deterministic equivalent by reformulating the probabilistic constraint required to calculate the environmental impact in the space of uncertain parameters. The resulting deterministic bi-criterion MINLP is further reformulated as a parametric MINLP, which is solved by decomposing it into two sub-problems and iterating between them. The capabilities of the proposed model and solution procedure are illustrated through two case studies for which the set of Pareto optimal, or efficient solutions that trade-off environmental impact and profit, are calculated. These solutions provide valuable insights into the design problem and are intended to guide the decision maker towards the adoption of more sustainable design alternatives.
Optimal design of sustainable chemical processes and supply chains: A review
2012
The importance of balancing social, environmental and economic objectives in companies' development has cultivated a growing awareness on the sustainable optimal design and planning of supply chains. In the past years, significant research effort has been devoted to extend current approaches to capture these objectives in order to guarantee long term sustainability. Among the various approaches developed, inventory management, product design, production planning and control for remanufacturing, product recovery, reverse logistics and closed-loop supply chains have gained more attention in the literature. In this paper, we review some of the relevant research on sustainable chemical processes and supply chain design focusing on three main areas: (i) sustainable supply chains with respect to energy efficiency and waste management, (ii) environmentally sustainable supply chains and (iii) sustainable water management. The emerging challenges in this area are summarized, and future opportunities are highlighted.
Supply chain design and planning accounting for the Triple Bottom Line
12th International Symposium on Process Systems Engineering and 25th European Symposium on Computer Aided Process Engineering, 2015
In this work, a multi-objective mixed integer linear programming (moMILP) model is presented for the design and planning of sustainable closed loop supply chains. It includes strategic decisions such as facility location, definition of the transportation network, technology selection and allocation, as well as tactical decisions such as supply planning, that satisfy the demand. The first objective accounts for the economical pillar of sustainability considering profit maximization. The profit is measured through net present value (NPV) at the end of the planning horizon, accounting for costs with facilities, transportation, raw material acquisition, production and remanufacturing, inventory, product recovery and human resources. The second objective is the environmental impact minimization, evaluating the environmental pillar of sustainability. It is measured using the Life Cycle Assessment (LCA) methodology ReCiPe, applied to the main activities of the supply chain: production, transportation and facility installation. Both unimodal and intermodal transportation are considered. The third objective accounts for the social pillar of sustainability. This is measured through socioeconomic indicators applied by the European Union to its Sustainable Development Strategy. An approximation of the Pareto front is obtained through the augmented Ɛ-constraint method that allows to address the trade-offs inherent to these conflicting objectives. The applicability of the model is demonstrated through a representative supply chain case study showing how this tool may help companies to adjust to the new sustainability context.
Planning a Supply Chain with Risk and Environmental Objectives
Zenodo (CERN European Organization for Nuclear Research), 2016
The main objective of the current work is to introduce sustainability factors in optimizing the supply chain model for process industries. The supply chain models are normally based on purely economic considerations related to costs and profits. To account for sustainability, two additional factors have been introduced; environment and risk. A supply chain for an entire petroleum organization has been considered for implementing and testing the proposed optimization models. The environmental and risk factors were introduced as indicators reflecting the anticipated impact of the optimal production scenarios on sustainability. The aggregation method used in extending the single objective function to multi-objective function is proven to be quite effective in balancing the contribution of each objective term. The results indicate that introducing sustainability factor would slightly reduce the economic benefit while improving the environmental and risk reduction performances of the process industries.