To attain all of the above goals, firms have to offer best quality product at a reasonably least price as and when required, avoiding a stock-out situation which has given impetus to the concept of Logistics Management
It has ability to ensure a consistency in the quality, tremendous cost saving potential and making goods at the place of requirements in time
A survey conducted by Fawcett and Clinton shows that more than 80.2 percent of the leading edge firms and
More than 75.8 percent of the other firms include logistics in their strategic planning process.
Independent Business Function Manufacturing Sales Distribution Procurement Inventory Control Out Come Aggressive preaching Skill Objective Maximization of Profit by Sales volume
Limited Integrated Business Manufacturing Management Physical Distribution and Sales Managemt Material Management Output Price – based competition Objective Cost Control
Internal Integrated Business Function (Logistics Management Manufacturing Management Marketing and Distribution Management Material Management OUTPUT Increased Productivity. Profitability and Market Shares Objective Maximization of profitable Sales Values and Cost Reduction
External Integrated Business Function (SCM) C U S T M E R S L O G I S T I C S V E N D E R S Output Customer Values and Harmonics Relations Relationships Objective Core Competency
Logistics is responsible for managing the acquisition, movement and storage of materials, parts and finished goods (together with related information flows) through an organization and its marketing channels to meet customer expectations and the company’s profit objective.
The process of planning, implementing and controlling the efficient, cost – effective flow and storage of raw materials, in-process inventory, finished goods and related information from point of origin to point of consumption for the purpose of conforming to customer requirements
Logistics Management is an integrating function which coordinates and optimizes all logistics as well as integrates logistics activities with other functions including marketing, sales, manufacturing, finance and IT
It Includes the design and administration of system to control the flow of materials, work-in-process and finished inventory to support business unit strategy
Visual Representation of Integrated Logistics Management
Logistics is the process of strategically managing the procurement, Movement and storage of materials, parts and finished inventory (and the related information) through the organization and its marketing channels in such a way that current ans future profitability are maximized through the cost – effective fulfillment of order.
Logistics Management refers to designing, developing, producing and operating an integrated system which is responds to customer expectations by making available the required quantity of required quality products as and when required to offer best customer service at the least costs
Defined as the process of coordinating non martial activities necessary to the fulfillment of the service in a cost and customer service effective manner
It is an internal integration of interrelated managerial function to ensure a smoth flow of raw materials from the point of inception to the first product point, semi-finished goods within production process and finished goods from the last point the point of consumption
Defined as the process of anticipating customer needs and wants acquiring the capital, material, people. Technologies and information necessary to meet those needs and wants, optimizing the goods-or services, producing network to fulfill customer requirements; and utilizing the network request in a timely way
Gaining Competitive Advantage through Logistics
Important Logistics Activities and Their Relations to Key Business Goals Logistics has been recognized not only as a group of important functions, but as functions that have important strategic impacts as well
Strategic logistics planning is essentially concerned with the deployment and management of logistics resources to met the desired cost effective service performance of the system
This may involve, number and location of warehouses, mode and carrier selection, Inventory positioning, inventory planning, sub contracting of services, sourcing, equipment and facilities planning, order management and Infromation systems planning etc
This is also includes such decisions as location and capacities of company owned plants and warehouses, acqusition or long term hiring of carriers like ships barges, trucks etc, acquisition of matrial handling system and facilities, balancing facilities to maximize throughput and flexibility and introduction of system to help, reductions in response time and in process inventory
Choice of supply, transport mode, strategic alliance with both suppliers and customers also form parts of these strategic logistics planning process.
The process of strategically managing the acquisition, movement and storage of materials, parts, finished goods inventory, and related information flows through the organization and its marketing channel in such a way that current and future profitability is maximized through the cost-effective fulfillment of orders.
Cost reduction: - This strategy is directed towards minimizing the variable costs associated with the movement and storage. The best strategy is to evaluate the alternative courses of action and select the optimum one keeping profit maximization as the prime goal in mind.
Capital reduction: - This strategy is directed towards minimizing the level of investment in the logistics system.
Service improvements: - This strategy recognizes that the revenue is a function of the logistics service provided and develops an effective service strategy that is different from the one provided by competitors.
Logistics has significant impact on these important corporate performance objectives
A sound strategic logistics plan for a manufacturing company must aim at:
Minimizing the landed cost of inputs through strategic sourcing, consolidation warehousing and carrier selection
Minimizing the procurement lead time and raw materials inventory through better information and procurement systems.
Increasing the productivity of the manufacturing unit through appropriate choice of technology, balancing of facilities and optimization of internal logistics support including material handling facilities
A sound strategic logistics plan for a manufacturing company must aim at:
Decreasing the finished goods inventory through reduced manufacturing response time.
Minimizing the assets including inventory deployed in the distribution channel
Minimizing the delivery lead-time through efficient customer response, quick response logistics and customer specific support services.
Econometric models assume availability of perfect information and equilibrium in the market economy. They ignore such complexities of real world as: dynamic processes, disequilibrium and the physical delays between action and results.
Models use the historical data to find the parameter values. Such estimation techniques reveal only the degree of past correlation between the variables. Such correlation cannot accurately represent the dynamic future.
Econometric models ignore soft variables and immeasurable quantities. At best, these variables are handled with proxy variables.
Causal relationships between model variables and feedback are not considered. The feedback relationships between environmental, social demographic factors are usually as important as economic influences.
Logistics decisions for complex systems, require temporal integration that covers planning horizons of several years to a day and spatial integration that covers the entire supply chain from suppliers to the ultimate customers
Fifth, the system involves temporal integration over a time range of one shift to several years.
Sixth, the system involves spatial integration that covers the entire supply chain from suppliers to the ultimate customers.
Seven, the performance of logistics (specially the internal logistics) system significantly influences the energy requirements and utilization of costly and coupled manufacturing stages, therefore, the cost of a ton of steel produced
Making the different types of raw materials available in the right quality and right quantity, and in the right time at the least possible cost to the Integrated Steel Plant and ensuring the back-to-back supply of the finished products through sea route for export is the logistics problem of the plant that we have taken for study.
Availability of ships of different category at Load Ports.
Scheduled maintenance of barges and other equipment in use, therefore, their unavailability at certain periods.
Restrictions on movement of 1000 ton and 700 ton barges to BFL. Only 2800 ton and 2000 ton barges are allowed for lightering and HRC loading at BFL. 700 ton barges are not operated during monsoon season for lightering.
Anchorage location depend on such variables as capacity of ship that can be handled, availability of anchorage, lighterage and HRC loading dues payable to port etc;
Tide dependent water level in the creek that constraints the smooth movement of barges in the creek.
To analyze the impact of dredging the river to different depths on the average annual lighterage and HRC loading cost per ton. [Once in few years].
To analyze the impact of locating the plant jetty at different distance from the sea on average annual lighterage HRC loading cost per ton[One time decision].
To choose the best strategy for lightering and HRC loading, from amongst available options. The options including use of only 2800 ton barges or both 2800 and 2000 ton barges for export and import. [Once in few years]
To evaluate the economics of the following options [Once in few years]:
Having a floating crane at BFL,
Having a Floating crane at BFL with a Storage Vessel,
Saving in cost per ton with dredging of the creek, and
To decide the optimum (minimum annual total cost) quantity of raw materials to bring to the plant in each month of the year taking into account the production requirement, inventory levels at the site, price of raw materials, handling cost, carrying cost and handling constraints in monsoon and fair weather.[Decision once a year]
To decide the optimum barge mix to hire for lightering and HRC loading operations with or without back-to-back supply of raw material and finished goods. These barges have to be hired for long term (one year for larger (2880 ton, and 2000 ton) barges and eight months for smaller barges of 700 ton and 1000 ton). [Decision once a year]
To decide the best ship size to hire from each of the load ports that minimizes the total relevant cost.[Decision once a month as hire charges of ships change]
To generate a schedule for movement of the material from a load port to the destination anchorage by ships of the most economic size, for known monthly supply of raw materials from the load port. [Monthly decision]
Develop a model to evaluate each set of ship hiring alternatives for the month and their laycan schedules to help select the best set of ships for the month taking care of the possible shortage of ships of most economic size from a load port.[Monthly decision ].
To optimally schedule the barges for lightering of ships at sea and loading of HRC to export ships. [ Daily activity ].
Important Hierarchical Decisions Problems of Inbound Raw Material Logistics Level Nature of Decision Time Horizon Frequency of Revision Problems Models Decision Maker I Strategic Several Years Annual Source selection for raw materials Economic evaluation Top Management Vessel size selection Simulation and economic evaluation Jetty Location Simulation and economic evaluation Dredging of creek Simulation and economic evaluation Barge mix selection Simulation and economic evaluation Middle Management
Important Hierarchical Decisions Problems of Inbound Raw Material Logistics II Tactical One year Monthly Procurement Planning Linear programming Middle Management Ship scheduling Scheduling Logistics Manager III Operational One month Daily Barge scheduling Simulation and Scheduling Barge Master
Simulation models have been used to evaluate the operational level performance of a strategic/tactical alternative
Study the problem at hand in detail and decompose into different sub-problems.
Identify the decision variables involved in each sub problems. Specially, examine the spatial and temporal dimensions of the sub problems.
Study each of these decision variables; find out the frequency at which decision regarding them have to be taken, and who is responsible of taking the decision at which place.
Group the decisions. Decisions with identical frequency, place and decision maker are grouped into one.
Take the longest-range (lowest frequency) decision problem first, study the decision variables involved. Develop and validate an appropriate model or a set of models to support decisions on that problem.
Repeat step (e) with the next lowest range decision problem for developing model(s) or decision support. Additional available information and the constraints imposed by the long-range decisions are explicitly considered in model (or DSS) development.
The models may be connected (integrated) by input/output amongst themselves and by input/output from the environment.
Conduct a detailed study of the present and proposed system to understand all the details about different subsystems, operations, movements, and constraints.
Decompose into appropriate sub-problems. Identify decision variables and its spatial and temporal dimensions peculiar to each of the sub problems.
Collect relevant data from the existing SIP and modify them suitably to suit to the Proposed Integrated Steel Plant.
Develop two a simulation models one for the ship lightering and the other for finished goods loading operations. The models simulate unloading of raw materials from the ships and loading of HR Coils into export ships, transport through barges of raw materials from ships to jetty and HR coils from HR jetty to ships, and loading and unloading of barges. The models specifically takes the random variations in ships lightering and HRC loading, barge movement, barge unloading and loading times and draft restrictions into consideration. Develop a third model to simulate the unloading of raw materials from incoming ships, their transport to plant jetty, unloading of materials from barges to cross country conveyors and back-to-back integrated supply of HRC for export.
Develop a LP model to determine the quantity of raw material to bring to the plant in each of the 12 months to minimize the annual cost of procurement, handling and storage. Such an approach is essential as the handling capacity is season dependent (less in monsoon) where as the plant requirements are independent of the season.
Develop a Spread sheet based economic model to find the best ship sizes to hire from different load ports.
Develop simulation based optimization models to evaluate the different operational strategies of using barges for both import of raw materials and export of HRC. The model considers the options of with and without back-to-back integration. The model for the best option obtained above is used to find the optimum barge mix to be hired for the year.
For known ship arrival schedules, develop a barge mix optimization model. For a given barge mix ship lightering and HRC loading simulation model is used to estimate the expected annual lighterage and HRC export volume and lightering and HRC loading cost per ton. From amongst the feasible barge mixes, the one that gives lowest cost per ton is selected. The annual lighterage and HRC export volume includes the total raw materials and finished goods handled by the barges.
Develop a model for evaluation of multiple ship schedules obtained by the shipping manager for hiring of ships from load ports for movement of raw material, to help select the best schedule for every month. This software tries to schedule the minimum cost ship from each port. It takes into consideration the number of ships that have to come from a load port and spreads their arrival at BFL/BPT/JNPT as evenly as possible during the period to avoid bunching and consequential detention charges. It also takes into account the barge mix available for lightering and HRC loading during the period and the tide restrictions. The result from this software is a schedule showing when a ship should report at the load port and when it would reach Bombay and when it is expected to leave Bombay after lightering with or without HRC for export.
Develop a scheduling model to generate the daily schedule for movement of barges for lightering of raw materials and loading of HRC ships from and into available at different anchorage for unloading/loading. The model explicitly takes into account the draft restrictions in the creek, night navigation restrictions, available loading gears in the ship, unloading facilities available at the ships and at the jetty etc. The model generates the schedule for each of the barges. The schedule for export loading of HR Coils is also generated.
Use the simulation model to evaluate the lighterage and HRC loading cost advantage in going for dredging the creek up to various depths.
Use the simulation model to find the effect of various jetty locations on the average lightering and HRC loading cost per ton.
Models used for Raw Material and Finished Goods Logistics System
Least Cost Ship Size from each Load Port Optimum ship sizes for different load ports Load Port Ship Size and Cost/ton Goa MBC’s of 2800 T at Rs.135.57/ ton Mangalore MBC’s of 2800 T at Rs.177.43/ton Vizag 30,000 to 35,000 T at Rs.269.35/ton Orissa 30,000 to 35,000 T at Rs.279.39/ton Bahrain 30,000 to 35,000 T at Rs.281.32/ton South Africa 30,000 to 35,000 T at Rs.349.60/ton Brazil 65,000 T at Rs.460.33/ton
The LP Model for Making the Annual Procurement Plan
The model gives the following the optimum results
Optimum monthly procurement/arrival of each raw material source-wise and quantity,
The optimum barge mix selection model - assumptions:
There are two barge unloaders and one barge loader/unloader available. The unloaders can only unload cargo, using grabs from barges bringing in raw materials. The loader/unloader cannot only unload imported raw materials from barges, it can also load HRC for export into barges. The grabs have to be changed for this purpose and this takes four hours.
Three barges can be berthed at the jetty for loading/ unloading at any given time.
Only the MBCs (Mini Bulk Carrier) that is 2800 ton and 2000 ton barges are allowed to be used for export of HRC.
700 ton and 1000 ton barges are not allowed to BFL for lightering.
All barges except the 700 ton barges are hired for whole year. 700 ton barges are hired for only eight months of fair weather season.
Enough HRC for export is available at the jetty whenever it is wanted.
The export requirement of HRC is 75,000 ton per month in both fair weather and in monsoon .
Without back-to-back Integration (Independent Barges for Import and Export)
Option I: All the 2800 ton barges available in the fleet will be used exclusively for export of HRC whenever export ships are available. At times when no ships for export are waiting the 2800 ton MBCs are used for lightering ships with raw materials.
Option II: Some of the 2800 ton barges will be exclusively used for export of HRC whenever export ships are available. During these times a loader will be exclusively used for loading HRC for export. At times when no ships for export are waiting the 2800 ton MBCs are used for lightering ships with raw
Option III: All the 2800 ton and 2000 ton barges available in the fleet will be used exclusively for export of HRC whenever export ships are available. At times when no ships for export are waiting the 2800 ton MBCs and 2000 ton ISVs are used for lightering ships with raw materials.
Option IV: Some of the 2800 ton and 2000 ton barges will be exclusively used for export of HRC whenever export ships are available. At times when no ships for export are waiting the 2800 ton MBCs and 2000 ton ISVs are used for lightering ships with raw materials. The rest of the barges will be used only for lightering of raw materials.
Option V: All the 2800 ton barges available in the fleet are used for both export and import. The barges will carry HRC for export when sailing out from the jetty, they will reach the export ship, have the HRC unloaded and proceed to the ships with import cargo waiting to be lightered. It will bring back to the jetty raw material lightered from the import ship. Thus the forward and return trips made will both be loaded.
Option VI: Some of the 2800 ton barges available in the fleet will be used for both export and import. These barges will carry HRC for export when sailing out from the jetty. They will reach the export ship, have the HRC unloaded and proceed to the ships with import cargo waiting to be lightered. They will bring back to the jetty raw material lightered from the import ship. Thus the forward and return trips of these two barges will be fully loaded. The rest of the barges will be engaged in lightering of raw materials.
Option VII: All the 2800 ton and 2000 ton barges available in the fleet will be used for both export and import at all times. The barges will carry HRC for export when sailing out from the jetty. They will reach the export ship, have the HRC unloaded and proceed to the ships with import cargo waiting to be lightered. They will bring back to the jetty raw material lightered from the import ship. Thus the forward and return trips made will both be loaded for these barges.
Option VIII: Some of the 2800 ton and 2000 ton barges available in the fleet will be used for both export and import at all times. The barges will carry HRC for export when sailing out from the jetty, they will reach the export ship, have the HRC unloaded and proceed to the ships with import cargo waiting to be lightered. It will bring back to the jetty raw material lightered from the import ship. Thus the forward and return trips made will both be loaded.
The total cost for lightering and HRC loading
Ship hire cost for unloading days for the raw material ships.
Ship hire cost for the HRC export ship for loading days.
Port charges payable to the Port for the volume of cargo loaded or unloaded.
The daily hire charges to be paid to all the barges.
The charges for fuel etc payable per trip to barges.
Warfage and Stevedoring charges payable for the day.
The Results of Experiments on Barge Mix Optimization Model for Lightering and HRC loading Operations with Various Options B1 –2800, B2 – 2000, B3 – 1000, and B4 – 700 ton Barges Option Model Barges engaged for export Barges with back-to-back integration Optimum Barge mix of B1,B2,B3,B4 Maximum Tons per Annum Average cost per ton (Rs/ton) Feasibility (Yes/No) B1 B2 B1 B2 B1 B2 B3 B4 Without back-to-back supply II 2 0 0 0 3 4 2 2 4496012 217.32 Yes IV 2 2 0 0 4 4 3 4 3684012 245.53 No With back-to-back supply V All 0 All 0 2 4 2 2 4692012 192.11 Yes VI 2 0 2 0 2 4 2 2 4692012 192.11 Yes *VII All All All All 2 2 5 5 213012 605.47 No VIII 2 2 2 2 2 6 3 4 5542412 161.18 Yes * Infeasible
Sensitivity Analysis Lighterage and HRC Loading Cost/ton when using Various Combination of 2800 and 2000 ton Barges (B1 –2800, B2 – 2000, B3 – 1000, and B4 – 700 ton Barges) Barges with back-to-back integrated Optimum Barge mix Tons per Annum Average cost Rs/ton B1 B2 B1 B2 B3 B4 2 2 2 5 4 2 5542412 161.18 2 3 2 6 3 4 5651212 161.52 3 2 3 6 2 4 5719212 163.32 3 3 3 6 6 4 5726012 167.60 3 4 3 5 2 4 5427212 177.91 2 4 3 5 4 4 5623212 166.99 2 5 2 6 3 3 5328812 174.81 4 4 5 5 5 2 5747612 173.35
Two of the 2800ton barges available in the fleet will be used only for export of HRC whenever export ships are available.
All the 2800 ton barges available in the fleet will be used for both export and import at all times.
Two of the 2800 ton barges available in the fleet will be used for both export and import at all times.
Two of the 2800-ton and two of the 2000-ton barges available in the fleet will be used only for export of HRC whenever export ships are available.
All the 2800 ton and 2000 ton barges available in the fleet will be used for both export and import at all times.
Two of the 2800-ton and two of the 2000 ton barges available in the fleet will be used for both export and import at all times
All the2800 ton barges available in the fleet will be used exclusively for export of HRC whenever export ships are available.
All the2800 ton and 2000 ton barges available in the fleet will be used exclusively for export of HRC whenever export ships are available.
Results from Model with two barges each of 2800 ton and 2000 ton in export and import circuit. B1-2800 ton Barge,B2-2000 ton Barge,B3-1000 ton Barge,B4-700 ton Barge. Cost/per ton means average raw material Lightering and HRC loading cost per ton) Barges Fair Weather Monsoon Weather Annual B1 B2 B3 B4 Ton/Mth Cost/ton Ton/Mth Cost/ton Ton/year Cost/ton 2 5 4 2 505901 167.03 373801 149.49 5542412 161.18 2 5 5 4 506101 168.08 373801 150.94 5544012 162.37 3 6 2 4 530101 165.29 372901 158.81 5732412 163.13 2 5 6 4 509451 168.55 372801 152.60 5566812 163.23 3 6 2 3 528801 165.53 372901 158.81 5722012 163.29 2 5 6 3 506801 169.02 372801 152.60 5545612 163.55 3 4 4 2 506001 170.45 373901 154.13 5543612 165.01
The results from experiments of barge-lightering model with various options (B1 –2800t, B2 – 2000t, B3 – 1000t, and B4 – 700t Barges , Values in ‘( )’ gives the Monsoon weather value) OPTION Opt. Barge mix B1,B2,B3,B4 Fair-weather ton (Monsoon tons) Tons per Annum Average cost per ton Rs/ton B1 B2 B3 B4 All 2800 t Export and Import 2 4 2 2 398251 (376501) 4692012 192.11 2 nos. 2800 t Export 3 4 2 2 396751 (330501) 4496012 217.32 TWO 2800 t Export and Import 2 4 2 2 398251 (376501) 4692012 192.11 All 2800 t and 2000 t Export and Import 2 2 5 5 112501 (210001) 1740012 Cost very high at Rs 605.47 Ton 2 nos. 2800 t and 2 nos. 2000 t Export 4 4 3 4 329201 (262601) 3684012 245.53 2 nos. 2800 t and 2 nos. 2000 t Export and Import 2 6 3 4 505901 (373801)) 5542412 161.18
Effect of Locating the Plant Jetty at Different Distances from the Sea B1-2800T Barge,B2-2000T Barge,B3-1000T Barge,B4-700T Barge Sl. No. Distance of Jetty from the Sea (in KM) Best Barge Mix Lighterage Cost in Rupees/Ton B1 B2 B3 B4 1 5 KM 5 4 0 0 102.23 2 10 KM 4 5 1 0 124.51 3 15 KM 4 5 1 0 126.87 4 20 KM 3 6 2 1 162.59 5 25 KM 3 4 4 2 185.64 6 30 KM 3 3 5 6 225.32
Effect of Locating the Plant Jetty at Different Distances from the Sea
If the savings due to reduced annual lighterage cost is more than the annual cost of transportation of materials from the new location to the plant, the new location of the jetty may be seriously considered. An alternative to the location may be imperative, particularly when the congestion in the river increases due to higher movement of bulk materials for the proposed integrated steel plant of the company and other industrial units that are coming up in the area.
Effect of Dredging the Creek on Lighterage Cost
The movement of the barges in the river is tide constrained.
The tide height in the creek varies from a high of 5 meters to a low of 0.6 meters above the Chart Datum at the highest of the high tides and at the lowest of low tides respectively.
The actual ground level in the creek varies from 0.8 to 9 Meters below the Chart Datum.
The draft requirement for the loaded barges varies from 3.8 meters to 2.0 meters.
The draft required for empty barges varies from 2.2 meters to 0.8 meters.
A safety clearance of 0.5 meters from the ground is also required in addition to the minimum draft essential for sailing.
One way of making barge movement less restrictive is to dredge the creek.
Dredging increases the depth of the channel below the chart datum and makes additional draft available for sailing of the barges at any given time
This is expected to bring down the lightering time of ships as the navigation will be less dependent on tides.
Effect of Dredging the Creek on Lighterage Cost (B1 –2800t, B2 – 2000t, B3 – 1000t, and B4 – 700t Barges) Depth of Dredging in M. Opt. Barge mix B1,B2,B3,B4 Fair-weather ton (Monsoon tons) Tons per Annum Average cost per ton Rs/ton 0 2,5,4,2 505901 (373801) 5542412 161.18 0.5 3,6,3,2 512810 (376901) 5610012 157.94 1.0 3,3,4,2 527201 (377901) 5718012 157.52 1.5 2,3,4,6 529651 (378901) 5764122 157.33 2.0 3,3,2,6 530451 (379301) 5781212 157.24
The maximum reduction in lighterage cost/ton for two meters of dredging is about rupees four per ton.
This could result in savings averaging around rupees twenty millions per annum.
This information will have to be used by the management to find the payback period of any investment in dredging and take an appropriate decision in the matter.
Another factor to be noted is that with about 0.5 meter of dredging more than three rupees of savings in lighterage cost is achieved.
Therefore deciding the most economical depth of dredging is also of great importance, for which the information in Table 6.7 can be used.
Since, cost of dredging is very high compared to the saving in lightering cost, the company alone can’t do the dredging at present.
It may be, however, considered later when the traffic volume in the creek increases due to the integrated steel plant and other units that are coming up along the banks of the Dharmatar river.
At that time by forming a confederation of creek user industries, one can seriously consider dredging option.
The Monthly Ship Scheduling Model This is the plan for hiring ships for a month Load port Laycan Report Report at Load port At Bombay Leave Bombay Bahrain 20.4.07 - 30.4.07 25.4.07 02.5.07 04.5.07 Vizag 24.4.07 - 04.5.07 29.4.07 07.5.07 10.5.07 Mangalore 02.5.07 - 12.5.07 07.5.07 11.5.07 14.5.07 Vizag 02.5.07 - 12.5.07 07.5.07 15.5.07 17.5.07 Paradeep 06.5.07 - 16.5 07 11.5.07 20.5.07 23.5.07 S. Africa 03.5.07 - 13.5.07 08.5.07 24.5.07 28.5.07 Vizag 16.5.07 - 26.5.07 21.5.07 29.5.07 01.6.07
Daily Barge Scheduling Model The schedule for a Barge by the name : Mastya Rani Date Time Activity Ship Name 11.5.07 10.57 Start loading barge Sagar Kanya 11.5.07 14.27 End of loading Sagar Kanya 11.5.07 16.57 Full barge reaches gull Sagar Kanya 11.5.07 19.44 Start through creek loaded Sagar Kanya 11.5.07 21.49 Reach the jetty loaded Sagar Kanya 11.5.07 21.49 Start unloading at brth1 Sagar Kanya 12.5.07 01.09 End unloading at brth1 Sagar Kanya 12.5.07 01.29 Start loading HRC at brth3 Krishna Sagar 12.5.07 03.29 End of loading at brth3 Krishna Sagar 12.5.07 07.29 Start through creek to gull Krishna Sagar 12.5.07 09.34 Reach gull Krishna Sagar 12.5.07 11.59 Reach export ship Krishna Sagar
Results from Model where only 2800 ton and 2000 ton Barges are allowed to BFL (B1 –2800, B2 – 2000, B3 – 1000, and B4 – 700 ton Barges ) Percentage Lightering at BFL Creek was not Dredged No Tide restriction 1 meter dredged creek 0.5 m dredged creek Cost per ton Opt. Barge Mix (B1,B2.B3,B4) Cost per ton Opt. Barge Mix (B1,B2.B3,B4) Cost per ton Opt. Barge Mix (B1,B2.B3,B4) Cost per ton Opt .Barge Mix (B1,B2.B3,B4) 100 186 2,6,0,0 171 2,5,0,0 173 2,5,0,0 176 2,5,0,0 75 169 2,5,2,0 156 1,5,4,0 157 1,6,4,0 158 1,6,3,0 50 156 2,5,2,0 143 0,6,4,1 144 1,5,4,0 145 1,6,3,0 25 163 2,5,3,0 150 0,5,5,0 152 1,6,4,0 154 1,6,3,1 0 170 1,5,3,2 159 0,5,6,0 160 0,5,5,1 162 0,5,6,0
Results from Model where only 2800 ton Barges are allowed to BFL (B1- 2800 , B2 – 2000, B3 – 1000, B4 – 700 ton Barges) Percentage lightering at BFL Creek was not dredged No Tide restriction 1 meter dredged creek 0.5 dredged creek Cost per ton Opt. Barge Mix (B1, B2, B3, B4) Cost per ton Opt. Barge Mix (B1, B2, B3, B4) Cost per ton Opt. Barge Mix (B1, B2, B3, B4) Cost per ton Opt. Barge Mix (B1, B2, B3, B4) 100 225 7,0,0,0 200 6,0,0,0 205 7,0,0,0 208 7,0,0,0 76 207 6,0,2,0 186 5,2,0,0 189 6,1,1,0 195 6,1,1,0 50 198 4,2,1,0 183 4,3,0,0 185 4,3,0,0 186 4,2,1,0 25 181 3,3,2,0 168 3,5,0,0 170 3,5,0,0 172 3,4,1,0 0 170 1,5,3,2 159 0,5,6,0 160 0,5,5,1 162 0,5,6,0
Results from Model with Floating Crane and 100 percent Lightering in fair weather at BFL (B1 –2800 , B2 – 2000, B3 – 1000, and B4 – 700 ton Barges) No. of barges at Ship Creek was not dredged No tide restriction 1 meter dredged creek 0.5 meter dredged creek Cost per ton Opt. Brage mix (B1,B2,B3,B4) Cost per ton Opt. Brage mix (B1,B2,B3,B4) Cost per ton Opt. Brage mix (B1,B2,B3,B4) Cost per ton Opt. Brage mix (B1,B2,B3,B4) Option I Only 2800 ton and 2000t ton Barges are allowed to BFL for Lightering and HRC loading 1 barge 198 2,5,0,0 179 3,5,0,0 180 3,5,0,0 182 2,5,0,0 2 barges 184 2,6,0,0 172 3,5,0,0 173 3,5,0,0 175 2,6,0,0 Option II Only 2800 ton Barges are allowed to BFL for Lightering and HRC loading 1 barge 240 7,0,0,0 221 7,0,0,0 223 7,0,0,0 226 7,0,0,0 2 barges 228 7,0,0,0 210 7,0,0,0 212 7,0,0,0 215 7,0,0,0
Results from Model with Floating Crane and Storage Vessel of 1,50,000 ton Capacity and 100 percent Lightering in fair weather at BFL (B1 – 2800 , B2 – 2000, B3 – 1000 and B4 – 700 ton barges, FC =Fixed charge) Fixed Charge in Rs Creek was not dredged No tide restriction 1 meter dredged creek 0.5 meter dredged creek Cost per ton Opt. Brage mix (B1,B2,B3,B4) Cost per ton Opt. Brage mix (B1,B2,B3,B4) Cost per ton Opt. Brage mix (B1,B2,B3,B4) Cost per ton Opt. Brage mix (B1,B2,B3,B4) Option I Only 2800 ton and 2000 ton Barges are allowed to BFL for Lightering and HRC loading FC at Rs 200 213 2,5,0,0 199 3,5,0,0 202 3,5,0,0 209 3,5,0,0 FC at Rs 100 190 2,5,0,0 175 3,5,0,0 177 3,5,0,0 182 2,6,0,0 Option I Only 2800 ton Barges are allowed to BFL for Lightering and HRC loading FC at Rs 200 260 7,0,0,0 240 7,0,0,0 245 7,0,0,0 249 7,0,0,0 FC at Rs 100 237 7,0,0,0 220 7,0,0,0 224 7,0,0,0 229 7,0,0,0
The models described in this paper offer a complete package for the solution of the inbound raw material and ‘back –to back’ finished goods logistics problem of the integrated steel plant.
The approach of breaking complex logistics problems into sub-problems and using separate models to solve each sub-problem proved to be an effective problem solving strategy in this case.
Involvement of the operating personnel and managers in development of models, in collection of relevant data, explicit enumeration of operating logic and in validation of models proved very useful for the acceptance and implementation of the system.