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Energy and Production Planning for Process Industry Supply Chains
Linköping University, Department of Management and Engineering, Production Economics. Linköping University, The Institute of Technology.
2012 (English)Licentiate thesis, comprehensive summary (Other academic)
Abstract [en]

This thesis addresses industrial energy issues from a production economic perspective. During the past decade, the energy issue has become more important, partly due to rising energy prices in general, but also from a political pressure on environmental awareness concerning the problems with climate change. As a large user of energy the industry sector is most likely responsible for a lot of these problems. Things need to change and are most likely to do so considering current and assumed future governmental regulations. Thus, the energy intensive process industries studied and focused on in this thesis exemplify the importance of introducing a strategic perspective on energy, an appropriate approach for planning, as well as the possibilities of including energy issues in a production and supply chain planning model.

The thesis aims to provide models, methods and decision support tools for energy related production and supply chain planning issues of relevance for process industries as well as for other energy intensive industries. The overall objectives are to analyze the strategic importance of energy management, production and supply chain planning, and the opportunities provided when energy is included in a production and supply chain planning model. Three different studies are carried out, analyzed, and presented as in this thesis.

The first study is a case study at a specialty chemicals company and resulted in the first paper. Since the energy issue is not only a cost issue driven by supply and demand, but also a political issue due to its environmental aspects, it is likely to believe that political influence and especially continuity will have escalating effect on the energy intensive process industry sector. Thus, the strategic dimension of energy is highly relevant in this thesis. The importance of organizational integration, having a main responsible person, locating core business, and political continuity are addressed as prerequisites for including energy into the corporate strategy. Regarding long term profitability, the importance of correctly utilizing the energy system by appropriate energy planning and with respect to energy efficiency and effectiveness in both flexibility and investment issues are addressed. Further on, the quest of finding alternative revenue while striving for a proper exergy usage is addressed.

The second study is a multiple case study with four different case companies involved; pulp, specialty chemicals, specialty oils, as well as a pulp and paper company. The need for improved production and supply chain planning is also addressed where for instance the lack of planning support for process industries is still an area of improvement. The production and supply chain planning in process industries is found to be rather poor compared to regular manufacturing companies. The planning methods found are often tailor made and adapted to the individual characteristics that are typical for many process industries. It has further on been difficult to distinguish similarities and differences among process industries regarding these planning issues and thus hard to generalize.

The third study focuses on mathematical modelling and programming developing a combined supply chain and energy optimization model for a pulp company. Taking the first papers together there are reasons to believe that a planning and optimization model that take energy aspects in consideration, as a previously missing link, will contribute to improve the operations in process industries. A clear impact of involving energy issues into the supply chain planning is shown. The results show that a different production schedule is optimal when the energy issues are applied, and depend on, for instance, variations in energy prices such as the one for electricity. This is shown by using a model for a supply chain where the energy flow, and especially the utilization of by-products, also is involved.

Place, publisher, year, edition, pages
Linköping: Linköping University Electronic Press, 2012. , 45 p.
Series
Linköping Studies in Science and Technology. Thesis, ISSN 0280-7971 ; 1555
Series
LiU-TEK-Lic, 2012:40
Keyword [en]
Process industry, energy-intensive production systems, production planning, energy planning, Supply chain planning and optimization, energy management
National Category
Engineering and Technology
Identifiers
URN: urn:nbn:se:liu:diva-84990Local ID: LiU-TEK-LIC 2012:40ISBN: 978-91-7519-762-3 (print)OAI: oai:DiVA.org:liu-84990DiVA: diva2:563470
Presentation
2012-11-16, ACAS (Hus A), Campus Valla, Linköping University, Linköping, 10:15 (English)
Opponent
Supervisors
Available from: 2012-11-22 Created: 2012-10-30 Last updated: 2012-11-22Bibliographically approved
List of papers
1. Strategic Perspectives on Energy Management: A Case Study in the Process Industry
Open this publication in new window or tab >>Strategic Perspectives on Energy Management: A Case Study in the Process Industry
2013 (English)In: Applied Energy, ISSN 0306-2619, E-ISSN 1872-9118, Vol. 104, 487-496 p.Article in journal (Refereed) Published
Abstract [en]

It has been anticipated that energy management will gain increased interest amongst companies in a near future. Yet, even in energy-intensive companies, like process industries, energy management is seldom treated strategically. The purpose of this study is thus to investigate the necessary prerequisites for putting energy management on the strategic agenda in energy-intensive process industries. This is done by the means of a literature review and a case study, and the analysis is based on how energy management is treated from three perspectives; a strategic perspective, an energy system utilisation perspective, and an alternative revenue perspective. The case study shows, similar to other process industry companies, that the strategic importance of energy management, to a large extent, is neglected. The research also indicates necessary prerequisites, for each perspective, for highlighting the strategic importance of energy management for a typical company in the process industry sector.

Place, publisher, year, edition, pages
Elsevier, 2013
Keyword
Energy management, energy-intensive production systems, energy efficiency, energy planning, specialty chemicals, case study
National Category
Production Engineering, Human Work Science and Ergonomics Business Administration
Identifiers
urn:nbn:se:liu:diva-84987 (URN)10.1016/j.apenergy.2012.11.027 (DOI)000316152700049 ()
Note

An earlier version of this paper was presented at EurOMA 2010, 6-9 June, Porto, Portugal.

Available from: 2012-10-30 Created: 2012-10-30 Last updated: 2017-12-07
2. Production planning in process industries
Open this publication in new window or tab >>Production planning in process industries
2012 (English)Report (Other academic)
Abstract [en]

Purpose of this paper

The purpose is to map the production planning process in process industries and analyze how it is related to their specific planning conditions and relevant current literature. Further on the research aims at detecting similarities and differences in production planning at tactical level.

Design/methodology/approach

The research methodology has a holistic multi-case design with focus on planning processes involving several entities within the companies. Information sources are documentation and interviews.

Findings

Process industries with different structures and conditions plan production differently. For instance a difference has been found between how material dominated companies plan compared to capacity dominated ones.

Research limitations/implications

Focus in this research has been on production planning at tactical level and therefore the strategic and operational level has mainly been left out of the study.

What is original/value of paper

The research gives insights in production planning processes for process industries and presents ideas on why the different production planning processes are designed as they are according some specific conditions.

Publisher
19 p.
Series
LIU-IEI-WP, 2012:2
Keyword
Process Industries, Production Planning, Tactical Planning, Supply Chain Planning, Multiple Case Study
National Category
Engineering and Technology Business Administration Transport Systems and Logistics
Identifiers
urn:nbn:se:liu:diva-84980 (URN)
Note

An earlier version of this paper was presented at NOFOMA 2011, 9-10 June, Harstad, Norway.

Available from: 2012-10-29 Created: 2012-10-29 Last updated: 2014-03-25Bibliographically approved
3. Including energy in supply chain planning at a pulp company
Open this publication in new window or tab >>Including energy in supply chain planning at a pulp company
2013 (English)In: Applied Energy, ISSN 0306-2619, E-ISSN 1872-9118, Vol. 112, 1056-1065 p.Article in journal (Refereed) Published
Abstract [en]

In this paper we consider integrated planning of the supply chain at a multi-site pulp company. In addition to the traditional focus on pulp products, also energy aspects are considered, both in the form of raw material and as revenue generating products. The idea is that energy intense raw materials not only gives fibre to the pulp process but also generates an energy surplus that can be used in different ways to create additional value or revenues. The planning horizon is one year and monthly time periods are considered. Decisions included in the planning are; purchase and transportation of raw materials from harvest areas to pulp mills, production allocation by dividing the production among the pulp mills, energy mix by choosing the energy input at the pulp mills, and distribution of products from mills to customer. An MILP model for the entire supply chain is proposed. A number of different scenarios including real data from the case company are analyzed and evaluated. The aim of the study is thus to investigate the effects on profitability while taking energy issues into consideration.

Place, publisher, year, edition, pages
Elsevier, 2013
Keyword
supply chain optimization, energy planning, energy-intensive production systems, MILP model, process industry
National Category
Engineering and Technology Business Administration Production Engineering, Human Work Science and Ergonomics Energy Systems
Identifiers
urn:nbn:se:liu:diva-84988 (URN)10.1016/j.apenergy.2012.12.032 (DOI)000329377800113 ()
Note

An earlier version of this paper was presented at ICAE 2012, 5- 8 July, Suzhou, China.

Available from: 2012-10-30 Created: 2012-10-30 Last updated: 2017-12-07

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