Supply chain redesign and new process introduction in multipurpose plants

Abstract

Supply chain redesign involves decisions on facility location, relocation, investment, disinvestment, technology upgrade, production-allocation, distribution, supply contracts, capital generation, etc. In a previous publication (Naraharisetti et al., 2008), a mixed integer linear programming (MILP) model was developed for plants that use dedicated production processes. However, many batch plants such as those producing pharmaceuticals, paints, agricultural products, fine polymers, electronics, etc. are multi-purpose and can switch their products over time. Continuous plants such as refineries may also operate in different production modes. In this work, the process (a process refers to a stoichiometry through which raw materials are processed to give the products) used in a given production plant is allowed to vary from period to period and also within a period, for example, a production plant may produce both paint A and paint B in the same period and paint C in the next. An MILP model is developed for supply chain redesign in such plants. Using the MILP model and an illustrative example, we demonstrate new process introductions.