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Value of modular production concepts in future chemical industry production networks

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  • Becker, Tristan
  • Lier, Stefan
  • Werners, Brigitte

Abstract

Shorter product life cycles in the chemical industry have led to uncertain demand in terms of volume, location and type. Modular production concepts can be used to serve such volatile customer demand more efficiently. Modular plants increase the tactical flexibility of the supply chain substantially compared to centralized production with large-scale plants. Furthermore, production facilities can be flexibly opened, deactivated and reactivated. Modular plants can be relocated in the medium term, and their production capabilities can be reconfigured via process module changes. This work proposes new mixed-integer programming formulations for the tactical planning of production networks in the chemical industry; these formulations prescribe the volume, location, and process of modular plants in the production network over a multi-period planning horizon. The economic value of modular flexibility is investigated in a case study from the chemical industry under the consideration of diverse demand structures. The results have several managerial implications for the technical implementation and development of modular production technology in the chemical industry.

Suggested Citation

  • Becker, Tristan & Lier, Stefan & Werners, Brigitte, 2019. "Value of modular production concepts in future chemical industry production networks," European Journal of Operational Research, Elsevier, vol. 276(3), pages 957-970.
    • Handle: RePEc:eee:ejores:v:276:y:2019:i:3:p:957-970
    DOI: 10.1016/j.ejor.2019.01.066
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    2. Allman, Andrew & Zhang, Qi, 2020. "Dynamic location of modular manufacturing facilities with relocation of individual modules," European Journal of Operational Research, Elsevier, vol. 286(2), pages 494-507.
    3. Shahmoradi-Moghadam, Hani & Schönberger, Jörn, 2021. "Joint optimization of production and routing master planning in mobile supply chains," Operations Research Perspectives, Elsevier, vol. 8(C).
    4. Silva, Allyson & Aloise, Daniel & Coelho, Leandro C. & Rocha, Caroline, 2021. "Heuristics for the dynamic facility location problem with modular capacities," European Journal of Operational Research, Elsevier, vol. 290(2), pages 435-452.
    5. Eduardo Alarcon-Gerbier & Zarina Chokparova & Nassim Ghondaghsaz & Wanqi Zhao & Hani Shahmoradi-Moghadam & Uwe Aßmann & Orçun Oruç, 2022. "Software-Defined Mobile Supply Chains: Rebalancing Resilience and Efficiency in Production Systems," Sustainability, MDPI, vol. 14(5), pages 1-21, February.
    6. Tristan Becker & Bastian Bruns & Stefan Lier & Brigitte Werners, 2021. "Decentralized modular production to increase supply chain efficiency in chemical markets," Journal of Business Economics, Springer, vol. 91(6), pages 867-895, August.
    7. Sinha, Priyank & Kumar, Sameer & Prakash, Surya, 2020. "Measuring and mitigating the effects of cost disturbance propagation in multi-echelon apparel supply chains," European Journal of Operational Research, Elsevier, vol. 282(1), pages 148-160.
    8. Huang, Renxing & Kang, Lixia & Liu, Yongzhong, 2022. "Renewable synthetic methanol system design based on modular production lines," Renewable and Sustainable Energy Reviews, Elsevier, vol. 161(C).
    9. Ariane Kayser & Florian Sahling, 2023. "Relocatable modular capacities in risk aware strategic supply network planning under demand uncertainty," Schmalenbach Journal of Business Research, Springer, vol. 75(1), pages 1-35, March.

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