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Coil Batching to Improve Productivity and Energy Utilization in Steel Production

Author

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  • Lixin Tang

    (Liaoning Key Laboratory of Manufacturing System and Logistics, Institute of Industrial Engineering and Logistics Optimization, Northeastern University, Shenyang 110819, China)

  • Ying Meng

    (Liaoning Key Laboratory of Manufacturing System and Logistics, Institute of Industrial Engineering and Logistics Optimization, Northeastern University, Shenyang 110819, China)

  • Zhi-Long Chen

    (Robert H. Smith School of Business, University of Maryland, College Park, Maryland 20742)

  • Jiyin Liu

    (School of Business and Economics, Loughborough University, Leicestershire LE11 3TU, United Kingdom)

Abstract

This paper investigates a practical batching decision problem that arises in the batch annealing operations in the cold rolling stage of steel production faced by most large iron and steel companies in the world. The problem is to select steel coils from a set of waiting coils to form batches to be annealed in available batch annealing furnaces and choose a median coil for each furnace. The objective is to maximize the total reward of the selected coils less the total coil–coil and coil–furnace mismatching cost. For a special case of the problem that arises frequently in practical settings where the coils are all similar and there is only one type of furnace available, we develop a polynomial-time dynamic programming algorithm to obtain an optimal solution. For the general case of the problem, which is strongly NP-hard, an exact branch-and-price-and-cut solution algorithm is developed using a column and row generation framework. A variable reduction strategy is also proposed to accelerate the algorithm. The algorithm is capable of solving medium-size instances to optimality within a reasonable computation time. In addition, a tabu search heuristic is proposed for solving larger instances. Three simple search neighborhoods, as well as a sophisticated variable-depth neighborhood, are developed. This heuristic can generate near-optimal solutions for large instances within a short computation time. Using both randomly generated and real-world production data sets, we show that our algorithms are superior to the typical rule-based planning approach used by many steel plants. A decision support system that embeds our algorithms was developed and implemented at Baosteel to replace their rule-based planning method. The use of the system brings significant benefits to Baosteel, including an annual net profit increase of at least 1.76 million U.S. dollars and a large reduction of standard coal consumption and carbon dioxide emissions.

Suggested Citation

  • Lixin Tang & Ying Meng & Zhi-Long Chen & Jiyin Liu, 2016. "Coil Batching to Improve Productivity and Energy Utilization in Steel Production," Manufacturing & Service Operations Management, INFORMS, vol. 18(2), pages 262-279, May.
  • Handle: RePEc:inm:ormsom:v:18:y:2016:i:2:p:262-279
    DOI: 10.1287/msom.2015.0558
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    Cited by:

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    2. Jing Wu & Dan Zhang & Yang Yang & Gongshu Wang & Lijie Su, 2022. "Multi-Stage Multi-Product Production and Inventory Planning for Cold Rolling under Random Yield," Mathematics, MDPI, vol. 10(4), pages 1-21, February.
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    4. Bożena Gajdzik & Radosław Wolniak & Wieslaw Wes Grebski, 2022. "An Econometric Model of the Operation of the Steel Industry in POLAND in the Context of Process Heat and Energy Consumption," Energies, MDPI, vol. 15(21), pages 1-26, October.
    5. Cheng, Ba-Yi & Leung, Joseph Y-T. & Li, Kai, 2017. "Integrated scheduling on a batch machine to minimize production, inventory and distribution costs," European Journal of Operational Research, Elsevier, vol. 258(1), pages 104-112.
    6. Zeng, Yujiao & Xiao, Xin & Li, Jie & Sun, Li & Floudas, Christodoulos A. & Li, Hechang, 2018. "A novel multi-period mixed-integer linear optimization model for optimal distribution of byproduct gases, steam and power in an iron and steel plant," Energy, Elsevier, vol. 143(C), pages 881-899.
    7. Husseinzadeh Kashan, Ali & Ozturk, Onur, 2022. "Improved MILP formulation equipped with valid inequalities for scheduling a batch processing machine with non-identical job sizes," Omega, Elsevier, vol. 112(C).
    8. Cheng, Bayi & Leung, Joseph Y.-T. & Li, Kai & Yang, Shanlin, 2019. "Integrated optimization of material supplying, manufacturing, and product distribution: Models and fast algorithms," European Journal of Operational Research, Elsevier, vol. 277(1), pages 100-111.
    9. Xiaowu Chen & Guozhang Jiang & Yongmao Xiao & Gongfa Li & Feng Xiang, 2021. "A Hyper Heuristic Algorithm Based Genetic Programming for Steel Production Scheduling of Cyber-Physical System-ORIENTED," Mathematics, MDPI, vol. 9(18), pages 1-25, September.

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