Network Planning & Optimization. Caltex Designs for Growth

Transcription

1 Network Planning & Optimization Caltex Designs for Growth Astrid Tuin Solutions Manager LLamasoft, Inc. Henry Brunekreef Associate Director Logiworx Pty Ltd

2 Who We Are Caltex Australia's leading transport fuel supplier and convenience retailer Tim Boyer, Supply Chain Analyst Logiworx Supply Chain Optimisation and Logistics Specialists Henry Brunekreef, Associate Director LLamasoft Provides software & expertise to help organisations design & improve their supply chain Astrid Tuin, Solutions Manager

3 Presentation Objectives Outline specific situation and complications that led to Caltex Terminal Capacity Review project Discuss network optimisation approach and methodology Outline need for specialised optimisation tool Present Caltex Terminal Capacity Review case study

4 Situation Caltex had the need to identify the impact of projected future demand patterns for fuels on its distribution infrastructure comprising current terminals Currently, a yearly planning process forecasts: Demand Product mix changes Supply scenarios This process is done through spreadsheets, a method that is found to be laborious and contained; not a true optimisation technology Current process also lacks the ability to conduct in depth sensitivity analysis

5 Objectives & Deliverables Build a baseline model capturing: Current terminal locations and capacities Ten year demand and supply plan across the Caltex terminal network Identify gaps in capacity for serving key customers and product markets Understand the tipping point for capital investment requirements Identify and define storage tank requirements and loading rack configuration at terminals and refineries Model sourcing changes and identify impact on capacities of these increased importation changes Safety Stock optimisation

6 Network Strategy Trade-Offs KEY QUESTIONS What are the trade-offs to be made? How many facilities are required? What processes should be performed at which facilities? What should be the type, size and capacity of each DC? Which key processes, technology, organisation are required in order to operate the network? What level of capital is required to implement the optimal supply chain network and what return can be expected? When and where should capital be spent? Warehouse/ Inventory Costs TRADE-OFFS Customer Service Levels Network Strategy Transport Costs

7 OUTPUTS ACTIVITIES PHASES Project Approach Data Collection Scenario Planning Build Baseline Model Scenario Modelling Finalisation Develop work plan Compile data specification & templates Project kick-off meeting Identify initial modelling scenarios Confirm key strategic questions to be answered Development of cost drivers and economics Profile terminal locations and supply rules Inventory holding requirements & target stock levels Model set up and configuration Workshop to display baseline model outputs Run baseline model Workshop to display baseline model outputs & challenge / validate Sign-off baseline Collect & prepare additional design data Develop & execute scenario run plan Optimise & analyse alternative models Workshop to challenge scenario outputs Review & compare modelling outputs Develop and present key network findings Critique methodology and tool functionality Network optimisation project plan Sample data specification Scenario plans Sample modeling parameters & inputs Tool configuration Sample baseline outputs Modelling run plan Sample modelling outputs Analysis framework Network decision framework

8 Why use Optimisation Software Deal with increased complexity 11 Products 8 Refineries 16 Ports 17 Terminals 5 Capacity Constraints Caltex AUS network from Process repeatability Ability to conduct sensitivity analysis

9 What is Network Optimisation? An Example Supply Chain Area Historical Baseline Optimised Model Delta (%) Either flow 0 units or at least 10,000 Transportation M M % Warehousing M 26.01M +6.6 % Sourcing/Supply M M % Inventory M M -19.3% Production M M +6.3% Total % Do not use this lane if time to customer is more than 2 days WH cannot have throughput over 30M kg s/year

10 Example Baseline Outputs 100% 90% 80% 70% 60% 50% 40% 30% 20% Terminal 7 Terminal 6 Terminal 5 Terminal 4 Terminal 3 Terminal 2 Terminal 1 Terminal Demand & Capacity Difference by Year 10% 0%

11 Market & Regulatory Shifts 1. Increased uptake in biofuels 2. Changes in customer preferences 3. Changes in transportation costs 4. Australian refinery closures

12 Market & Regulatory Shifts Demand Inputs 1. Put in demand for all scenarios in a single Demand Table 3. Compare results across multiple scenarios very easily 2. Use Scenario Manager to select right demand for each scenario run

13 Market Shifts - Findings Terminal Demand & Capacity Difference by Year Total Tank Shortage

14 Safety Stock Optimisation Shifts

15 Conclusions Living model Ability to analyse scenarios quickly & accurately As part of the regular planning process As an ad hoc tool to adjust to unforeseen market changes To test new strategic proposals ROI positive Project pays for itself with quick wins

16 Astrid Tuin Solutions Manager - Australia LLamasoft, Inc. Phone: +61 (0) Astrid.Tuin@LLamasoft.com