(380c) Operational Planning Of A Multisite Production And Distribution Network

The operational planning of a multisite production and distribution network, which entails making strategic decisions for efficient production facility utilitization and customer-order fulfillment over a time horizon of several months, is of great importance but has received considerably less attention than when compared to operational planning for a single production site. The inherent complexities of simultaneously simulating production tasks at each facility as well as the interplay between several production and distribution centers make operational planning of a multisite production and distribution network prohibitive. Shah [1], Kallrath [2], and Kreipel [3] all provide excellent reviews of the various issues related to operational planning. Kallrath [4,5] and Timpe [4] have presented a model which addresses several of the issues related to the operational planning of a multisite production and distribution network. Significant challenges exist though towards addressing large-scale, industrial applications.

The supply chain under investigation contains multiple production facilities which supply both made-to-order and made-to-stock goods to multiple customer distribution centers where customers go and receive their orders. Each production facility is a multiproduct and multipurpose batch plant. The novel multisite planning formulation is a discrete-time mixed integer linear programming (MILP) model which still captures the continuous-time nature of the supply chain. The planning model addresses the plant's production capacity by means of a unit aggregation approach. The given operational planning model ascertains the daily production profile (e.g., how much of each product should be produced at a facility on a daily basis) for each production facility and determines a realizable size and satisfaction date for customer orders at the various customer distribution centers. All demands are attempted to be satisfied by the customer-specified date, but unsatisfied demands are allowed to be carried over from one day to the next as well as partial order fulfillment. The daily production profile for each production facility attempts to efficiently utilize each production facility while concurrently taking into account customer demands. When addressing the two primary objectives, the proposed model minimizes the aggregate transportation cost, maximizes the degree of customer order fulfillment, and maximizes the gross profit for the time horizon of interest. The planning model has been applied to an industrial case study of a supply chain consisting of three multipurpose and multiproduct batch plants and three distribution centers. The production capacity of each plant is represented by the thirteen batch reactors present within each facility. Sixty-three different products are considered over a three month time horizon, and computational results will be presented which demonstrate that the novel multisite operational planning model was able to address the aforementioned objectives.

[1] Shah, N. Process Industry Supply Chains: Advances and Challenges. Computers Chem. Eng. 2005, 29, 1225. [2] Kallrath, J. Planning and Scheduling in the Process Industry. OR Spectrum, 2002, 24, 219. [3] Kreipl, S.; Pinedo, M. Planning and Scheduling in Supply Chains: An Overview of Issues in Practice. Production and Operations Management. 2004, 13, 77. [4] Kallrath, J.; Timpe, C.H. Optimal Planning in Large Multi-Site Production Networks. European Journal of Operational Research. 2000, 126, 422-435. [5] Kallrath, J. Combined Strategic and Operational Planning - An MILP Success Story in Chemical Industry. OR Spectrum. 2002, 24, 315-341.