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Omya Hustadmarmor Optimizes Its Supply Chain for Delivering Calcium Carbonate Slurry to European Paper Manufacturers

Author

Listed:
  • Stéphane Dauzère-Pérès

    (Centre Microélectronique de Provence, Ecole des Mines de Saint-Etienne, Avenue des Anémones, Quartier Saint-Pierre, F-13541 Gardanne, France; and Molde University College, PO Box 2110, N-6402 Molde, Norway)

  • Atle Nordli

    (Department of Strategy and Logistics, Norwegian School of Management BI, Nydalsveien 37, N-0442 Oslo, Norway; and Optimal Logistics, PO Box 4806 Nydalen, N-0467 Oslo, Norway)

  • Asmund Olstad

    (Molde University College, PO Box 2110, N-6402 Molde, Norway; and Optimal Logistics, PO Box 4806 Nydalen, N-0467 Oslo, Norway)

  • Kjetil Haugen

    (Molde University College, PO Box 2110, N-6402 Molde, Norway)

  • Ulrich Koester

    (Omya International AG, PO Box 32, CH-4665 Oftringen, Switzerland)

  • Myrstad Per Olav

    (Rolls-Royce Commercial Marine, Årsundvegen 24, N-6270 Brattvåg, Norway)

  • Geir Teistklub

    (Hustadmarmor AS, N-6440 Elnesvågen, Norway)

  • Alf Reistad

    (Hustadmarmor AS, N-6440 Elnesvågen, Norway)

Abstract

The Norwegian company Omya Hustadmarmor supplies calcium carbonate slurry to European paper manufacturers from a single processing plant, using chemical tank ships of various sizes to transport its products. Transportation costs are lower for large ships than for small ships, but their use increases planning complexity and creates problems in production. In 2001, the company faced overwhelming operational challenges and sought operations-research-based planning support. The CEO, Sturla Steinsvik, contacted Møre Research Molde, which conducted a project that led to the development of a decision-support system (DSS) for maritime inventory routing. The core of the DSS is an optimization model that is solved through a metaheuristic-based algorithm. The system helps planners to make stronger, faster decisions and has increased predictability and flexibility throughout the supply chain. It has saved production and transportation costs close to US$7 million a year. We project additional direct savings of nearly US$4 million a year as the company adds even larger ships to the fleet as a result of the project. In addition, the company has avoided investments of US$35 million by increasing capacity utilization. Finally, the project has had a positive environmental effect by reducing overall oil consumption by more than 10 percent.

Suggested Citation

  • Stéphane Dauzère-Pérès & Atle Nordli & Asmund Olstad & Kjetil Haugen & Ulrich Koester & Myrstad Per Olav & Geir Teistklub & Alf Reistad, 2007. "Omya Hustadmarmor Optimizes Its Supply Chain for Delivering Calcium Carbonate Slurry to European Paper Manufacturers," Interfaces, INFORMS, vol. 37(1), pages 39-51, February.
    • Handle: RePEc:inm:orinte:v:37:y:2007:i:1:p:39-51
    DOI: 10.1287/inte.1060.0276
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    References listed on IDEAS

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    Cited by:

    1. Hark-Chin Hwang & Wilco van den Heuvel & Albert P. M. Wagelmans, 2023. "Multilevel Lot-Sizing with Inventory Bounds," INFORMS Journal on Computing, INFORMS, vol. 35(6), pages 1470-1490, November.
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    3. Di Wu & Xuejun Ji & Fang Xiao & Shijie Sheng, 2022. "A Location Inventory Routing Optimisation Model and Algorithm for a Remote Island Shipping Network considering Emergency Inventory," Sustainability, MDPI, vol. 14(10), pages 1-22, May.
    4. Papageorgiou, Dimitri J. & Nemhauser, George L. & Sokol, Joel & Cheon, Myun-Seok & Keha, Ahmet B., 2014. "MIRPLib – A library of maritime inventory routing problem instances: Survey, core model, and benchmark results," European Journal of Operational Research, Elsevier, vol. 235(2), pages 350-366.
    5. Christiansen, Marielle & Fagerholt, Kjetil & Flatberg, Truls & Haugen, Øyvind & Kloster, Oddvar & Lund, Erik H., 2011. "Maritime inventory routing with multiple products: A case study from the cement industry," European Journal of Operational Research, Elsevier, vol. 208(1), pages 86-94, January.
    6. Dimitri J. Papageorgiou & Ahmet B. Keha & George L. Nemhauser & Joel Sokol, 2014. "Two-Stage Decomposition Algorithms for Single Product Maritime Inventory Routing," INFORMS Journal on Computing, INFORMS, vol. 26(4), pages 825-847, November.
    7. Kristin Uggen & Marte Fodstad & Vibeke Nørstebø, 2013. "Using and extending fix-and-relax to solve maritime inventory routing problems," TOP: An Official Journal of the Spanish Society of Statistics and Operations Research, Springer;Sociedad de Estadística e Investigación Operativa, vol. 21(2), pages 355-377, July.
    8. Agostinho Agra & Marielle Christiansen & Kristine S. Ivarsøy & Ida Elise Solhaug & Asgeir Tomasgard, 2017. "Combined ship routing and inventory management in the salmon farming industry," Annals of Operations Research, Springer, vol. 253(2), pages 799-823, June.
    9. Christiansen, Marielle & Fagerholt, Kjetil & Nygreen, Bjørn & Ronen, David, 2013. "Ship routing and scheduling in the new millennium," European Journal of Operational Research, Elsevier, vol. 228(3), pages 467-483.
    10. Michael F. Gorman & John-Paul Clarke & Amir Hossein Gharehgozli & Michael Hewitt & René de Koster & Debjit Roy, 2014. "State of the Practice: A Review of the Application of OR/MS in Freight Transportation," Interfaces, INFORMS, vol. 44(6), pages 535-554, December.
    11. Kristian Andersen & Henrik Andersson & Marielle Christiansen & Roar Grønhaug & Aslanbek Sjamsutdinov, 2017. "Designing a maritime supply chain for distribution of wood pellets: a case study from southern Norway," Flexible Services and Manufacturing Journal, Springer, vol. 29(3), pages 572-600, December.
    12. Bredström, David & Haugen, Kjetil & Olstad, Asmund & Novotný, Jan, 2015. "A mixed integer linear programming model applied in barge planning for Omya," Operations Research Perspectives, Elsevier, vol. 2(C), pages 150-155.
    13. Roel G. van Anholt & Leandro C. Coelho & Gilbert Laporte & Iris F. A. Vis, 2016. "An Inventory-Routing Problem with Pickups and Deliveries Arising in the Replenishment of Automated Teller Machines," Transportation Science, INFORMS, vol. 50(3), pages 1077-1091, August.
    14. de Assis, Leonardo Salsano & Camponogara, Eduardo, 2016. "A MILP model for planning the trips of dynamic positioned tankers with variable travel time," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 93(C), pages 372-388.
    15. Manousakis, Eleftherios & Repoussis, Panagiotis & Zachariadis, Emmanouil & Tarantilis, Christos, 2021. "Improved branch-and-cut for the Inventory Routing Problem based on a two-commodity flow formulation," European Journal of Operational Research, Elsevier, vol. 290(3), pages 870-885.
    16. Bertazzi, Luca & Coelho, Leandro C. & De Maio, Annarita & Laganà, Demetrio, 2019. "A matheuristic algorithm for the multi-depot inventory routing problem," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 122(C), pages 524-544.
    17. Hemmati, Ahmad & Hvattum, Lars Magnus & Christiansen, Marielle & Laporte, Gilbert, 2016. "An iterative two-phase hybrid matheuristic for a multi-product short sea inventory-routing problem," European Journal of Operational Research, Elsevier, vol. 252(3), pages 775-788.
    18. Bertazzi, Luca & Bosco, Adamo & Laganà, Demetrio, 2015. "Managing stochastic demand in an Inventory Routing Problem with transportation procurement," Omega, Elsevier, vol. 56(C), pages 112-121.
    19. Patrik Flisberg & Mikael Rönnqvist & Stefan Nilsson, 2009. "Billerud Optimizes Its Bleaching Process Using Online Optimization," Interfaces, INFORMS, vol. 39(2), pages 119-132, April.
    20. Marta Pérez-Pérez & Canan Kocabasoglu-Hillmer & Ana María Serrano-Bedia & María Concepción López-Fernández, 2019. "Manufacturing and Supply Chain Flexibility: Building an Integrative Conceptual Model Through Systematic Literature Review and Bibliometric Analysis," Global Journal of Flexible Systems Management, Springer;Global Institute of Flexible Systems Management, vol. 20(1), pages 1-23, December.
    21. Leandro C. Coelho & Jean-François Cordeau & Gilbert Laporte, 2014. "Thirty Years of Inventory Routing," Transportation Science, INFORMS, vol. 48(1), pages 1-19, February.
    22. Akartunalı, Kerem & Dauzère-Pérès, Stéphane, 2022. "Dynamic lot sizing with stochastic demand timing," European Journal of Operational Research, Elsevier, vol. 302(1), pages 221-229.

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