LP-SupplyChain : the global optimisation of a company's total supply chain  

LP-SupplyChain is a software component for both modelling and optimising an organisation, for strategic and tactical decision making. Applications include sourcing, transportation flows, location and sizing of production plants and logistics centres, definition of catchment areas, opening and closing of establishments, defining locations and sizing of establishments, as well as internal flows and process capacity.

It uses Mathematical Programming to find solutions with the aid of a solver, such as IBM Ilog CPLEX or FICO XPRESS-MP.

Main features

The main modelling characteristics of LP-SupplyChain include:

• multi-layer (e.g. suppliers, factories, warehouses, customers—the number of layers is unlimited)
• multi-product and multiple product families
• representation of industrial processes with several types of resource constraints per plant (e.g. raw materials, work time, etc.)
• description of parts list, production mix of required components
• multi-modal transport (sea, air, road, rail etc)
• multi-seasonal/periodic (over different seasons, days of week, holiday periods etc) 

Optimisation is based on minimising the total cost of all of:  raw materials costs, industrial costs, logistics costs and transportation costs etc.

Input data
Effective modelling of a supply chain network requires the following data:

• list of sites (real or potential): factories, warehouses, platforms, etc.
• site capacity
• list of products and product families
• list of customer sites (with demand per product)
• list of modes of transport
• basic unit cost of upstream transport (on possible linkages)
• unit cost of distribution (on possible linkages)

The model can be improved using the following data (with a view to optimising all or a part of the production process):

• list of resources and their unit costs (raw materials, work time, etc.)
• list of processes in each factory and their unit costs and capacity
• description of the production component mix for each process and for each product (a formula for component mix may use either resources or other products or both)

Examples of completed projects:

Air Liquide: optimisation of production launch and distribution of industrial gas
Italcementi Group: overall optimisation of the cement supply chain
Air Liquide: strategic planning optimisation of bulk gas in Europe
TOTAL: optimisation of fuel distribution in France
EDF: procurement optimisation for conventional power plants, with multimodal transport constraints

To learn more about LP-SupplyChain's possibilities, please contact us for a demonstration.