Optimization Based Approach for Managing Enterprise-Wide Business Planning in a Petrochemical Industry

Transcription

1 Optimization Based Approach for Managing Enterprise-Wide Business Planning in a Petrochemical Industry Bhieng Tjoa and Arturo Cervantes Optience Corp. and Kagoto Nakagawa Mitsubishi Chemical Corp. Presented at 2004 AIChE Spring Meeting April 27, 2004

2 Outline Planning problem in petrochemical industry Business planning decisions/ issues Planning application requirements Example Summary

3 Supply Chain Planning Problem Environment for: - data access - decision supports: - strategic planning - production planning - logistics - business performance analysis How to make the most profitable decisions Suppliers Inventory Resources Inventory (Warehouses) Customers How to reduce cost How to improve productivity How to improve business

4 Horizontal Decision Complexity Horizontal interactions in supply chain decisions» Flexibility of operation options» Function of time Feedstock Production capacity Inventory Logistics Sales Material & Information Flow Plants Warehouses Suppliers Customers $$$ & Information Flow

5 Vertical Decision Complexity Vertical interactions in supply chain decisions» Consistency Planning, Scheduling & Real Operation Information Access Point Strategic Planning Information Details Production Planning Benefits Opportunity Optience SCMart Suite for Business Management Production Scheduling Business Monitoring OPERATION

6 Integrated Petrochemical Business Upstream Intermediate Downstream Refinery PE PP ETY Naphtha Ethylene Plant PPY VCM PVC Others BTX Plant BZ TOL XY SM TPA PS PET BPA PC Power Plant Others

7 Upstream/ Intermediate Business Supply chain planning decision at each business unit External product purchases Raw Materials #, $ Products #, $ #, $ Internal Internal #, $ Business Unit #, $ External External : opportunity for optimization (decisions)

8 Downstream Business Raw Material Purchasing Raw Material Stock Production Step 1 Process Grades Production Step 2 Product warehouses Logistics Sales Silos Process grades Silos Sales grades On-Site Customer 1 Customer 2 External Other customers Off-Site Internal Internal demands : opportunity for optimization (decisions) Sales Additives

9 Planning for Integrated Petrochemical Business Upstream Intermediate Downstream Refinery PE PP Naphtha Ethylene Plant ETY PPY VCM PVC Others BTX Plant BZ TOL XY SM TPA PS PET BPA PC Power Plant Others

10 Challenges in the integrated Planning Problem Problem characteristics Upstream/intermediate processes Operation» Continuous» Few products - co-productions» Simpler product distributions Challenges» Non-linear Blending/mixing, Yield performance» Combinatorial Operational constraints Downstream processes Operation» Continuous/ batch» Many products Product recipes/ Product allocations Challenges» Complex resource allocation, product inventory and distribution management

11 Business Planning Decisions (1/3) Raw material purchasing» What material, How much, From which supplier & When Need to consider» Prices, logistics, inventory level, business policy Raw material storage Production» Storage management today & future operation plan Need to consider» Allocation for new arrival and feeding to production lines/plants» Manage inventory level for all storages» What to make, How much, Which plant & When Need to consider» Availability & capacity of plants, production efficiency» Product inventory & demands

12 Business Planning Decisions (2/3) Product storage/ warehouses Logistics Sales» What product, how much to keep, where Need to consider» Demands, productions, logistics» Logistic cost management today & future operation plan Need to consider» Demands, Inventory at each warehouse, production» What product, how much, prices, where & when Need to consider» Production & inventory» Logistics cost, business policy

13 Business Planning Decisions (3/3) All of the above decisions are related & have impacts on overall profit Need to consider the trade-off of key decisions simultaneously

14 Issues in Planning Problem Understanding the impacts of uncertainty» Price changes» Demand changes» Capacity changes» Business policies Inventory Product allocation Require sensitivity analysis» Create case & sub-cases Impact of changes on profitability

15 How do we make a decision for Enterprise Wide Business Planning Need an optimization based application What kind

16 Planning Application Requirements (1/2) Problem representation/ Modeling capability Problem scope Modeling of upstream to downstream businesses» In the same environment as one model Modeling approach Concise problem representation» Unit operation based approach» Automatic mathematical model generation data driven Multi-level modeling» Support multi-level model aggregation different applications Modeling capability Mathematical programming approach» Model for linear, nonlinear & combinatorial problem (LP, NLP, MILP & MINLP)» Robust optimization solution engines

17 Planning Application Requirements (2/2) Data/ model management Data I/O Efficient data transfer/ viewing» Open database architecture Data viewing/ analysis Efficient environment for data viewing & analysis» Rapid UI development environment Supporting workflow Model/data communication & sharing Multi-level application» Planning & Scheduling Cross-department» Purchasing, Planning, Sales, etc..

18 Example of Applications Ethylene Business Planning & Scheduling

19 Ethylene Business Optimization Opportunity A Business Scenario Feedstock Info Ethylene Plant Inventories Business Policy: Yield Light ETY PPY Demands 104 Heavy ETA Production target Ethylene Propylene NAP Cost Optimal NAP ratio (L/H) BBP GSL Day ETY & PPY Demands Market Dependent Process Dependent Market Dependent Optimize Decisions for now and future Resource Knowledge Business Policy

20 Ethylene Plant Process Flow Diagram Primary Quench Fractionator Tower Deethanizer Demethanizer Ethylene Fractionator Products Hydrogen Furnaces Methane Ethylene Feedstock Naphtha Light Hydrocarbon Charge Gas Compressor Chilling Ethane Propylene Propane B -B Fuel Oil Depropanizer Gasoline Propylene Fractionator Debutanizer

21 Optimization - Ethylene Business Planning Monthly Interaction between sections Feedstock Market Ethylene Plant Inventories What to buy ETY Demands Planning: - Aggregate model - Business policy analysis PPY GSL Main Focus: Find optimal feedstock purchases for production planning, for meeting production demands

22 Optimization - Ethylene Production Scheduling Interaction between sections Daily Vessel scheduling Blending Ethylene Plant Inventories ETY PPY ETA Demands BBP How to allocate feedstock GSL Main Focus: Scheduling: - Accurate (rigorous) daily production model - Mixed Integer Nonlinear optimizer Find optimal feedstock allocation for daily production scheduling, for meeting production demands

23 Model Representation Planning

24 Model Representation Scheduling

25 Planning Application Planning result summary

26 Planning Application Feedstock purchasing & planning workflow

27 Scheduling Application Scheduling result summary

28 Multi-Products Business Planning & Scheduling Example Polymer business

29 Example: Multi-Products and Multi-Sites Planning Raw materials Production lines Plant product inventories Distribution centers Demands Plant 1 Warehouses Customers S1_1 R1_1 S1_2! B1_1 T3_1 M3_1 R1_2 T1_1! Plant 2 T3_2 M3_2 S2_1 R2_1 S2_2! B2_1 T3_3 M3_n R2_2 T2_1

30 Example Modeling in SCMart Modeler

31 Business Performance Monitoring & Analysis Example Multi-products business

32 Business Performance Monitoring Data sharing & performance analysis» Custom view for each department Optience Core Sale Dept. Purchasing Dept. Business Dept. Production Dept. Planning Dept. Databases for Business Management Logistics Dept. any other dept.

33 Sample View - Products Group by product class, product list

34 Sample View - Customers Group by regions

35 Sample View - Sales Total by region

36 Sample View - Inventory Total, by warehouse, product class, product

37 Sample View Shipping Cost By regions

38 Sample View Sales Analysis Top 20% most profitable products ($)

39 Enterprise Wide Business Planning Example OA & PO business

40 Integrated Planning OA & PO Business Model representation PE PP PO (Poly-olefins) OA (Olefins-Aromatics)

41 Integrated Planning OA & PO Business Result PE capacity (sub-cases)

42 Integrated Planning OA & PO Business Result Profit

43 Integrated Planning OA & PO Business Result on Naphtha selections

44 Integrated Planning OA & PO Business Result OA demands

45 Summary Enterprise wide planning need one system For business decision support applications Optience SCMart Suite Strategic Planning Higher level system for Business Management Information Details Production Planning Production Scheduling Benefits Opportunity Business Performance Analysis ERP for Business Transaction OPERATION