Operations Research Transforms Baosteel’s Operations

Abstract

Shanghai Baoshan Iron and Steel Complex (Baosteel) is China’s largest and the world’s third-largest steel company. In 2005, our research team was tasked with developing advanced operations research-based planning tools to improve the operational efficiency of Baosteel’s Shanghai plant. In the following six years, we developed novel optimization algorithms and tailored metaheuristics, and implemented four decision support systems (DSSs) to replace the manual planning methods at the Shanghai plant. The DSSs have brought scientific operations management to Baosteel and transformed the plant’s production and final-product delivery operations. Baosteel estimates that from 2007 to 2012, they provided a cumulative economic benefit of 77 million. Based on their current usage at this plant, they also estimate that these DSSs will continue to provide an annual economic benefit of 20 million, which represents a 17 percent improvement of Baosteel’s information technology and operations management capability. They have also reduced Baosteel’s carbon dioxide emissions by 585,770 tons annually.