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Optimisation for sustainable supply chains

Summary of the project

The main goal of this research is the optimisation of supply chains considering environmental impact and energy costs. Special attention is given to the field of reverse logistics, where raw materials partly come from recycled sources. The quantity and quality of recyclable materials can vary greatly, which makes planning of the remanufacturing processes difficult. Because of this, robust medium-term transportation plans are required that are coordinated with production plans on the same time-horizon. On the other hand, scheduling of the production lines should also be coordinated with the schedules of in- and outbound transportation in the short-term. The cost of energy and the environmental impact will be considered during the solution of both planning and scheduling problems either in the objective function or as a constraint.

Electricity is significant among energy sources, as electricity pricing can change during the day in most countries. We would like to examine different pricing strategies from the suppliers’ point of view that can shift industrial consumers towards a network level optimum.

Another possibility for the reduction of the environmental impact and energy consumption is resource sharing between small- and medium-sized companies. To facilitate this, we aim to develop a cloud-based IT framework that provides companies an opportunity to share their free production and transportation resources with each other, and also aids them in reserving such resources.

The research focuses on four areas:

1) Coordinated medium-term transportation and production planning, aiming to minimize transportation costs and environmental impact. Our goal is to develop new methods that take the constraints of transportation and production into account, as well as those of reverse and forward logistics. The plans must be both optimal and robust.

2) Supplier-side optimisation of electricity prices for industrial consumers. We want to devise new pricing policies that guide industrial consumers towards and optimal energy usage from the suppliers’ point of view.

3) We want to develop new methods for modelling and solving scheduling problems in the short-term horizon, where the production order of commodities has to be coordinated with transportation priorities. Energy costs will be considered both as constraints and in the objective function. We will devise not only predictive, but reactive scheduling strategies as well.

4) It may be beneficial for smaller production units in the supply chain to share part of their production/transportation resources with each other. As the practical realization of this concept raises a number of questions, we would like to develop a new IT support system that helps factories to share their free capacities with others, and also makes these available for reservation.

Relevance of the results expected from research project

New planning models and algorithms are to be developed as the result of this research, and a Collaborative Supply Chain will also be designed for platforms that mainly exist in scientific fields and have not been applied in the industry yet.