Using a strategic decision making tool to design and ... - Unctad

Multi-year Expert Meeting on Transport,Trade Logistics and Trade Facilitation:

Transport and logistics innovation towards the review of the Almaty Programme of Action in 2014 22-24 October 2013

USING A STRATEGIC DECISION MAKING TOOL TO DESIGN AND OPTIMIZE SUPPLY CHAIN NETWORKS (A BEST PRACTICE IN GLASS RECYCLING) by

Mr. Aurélien Levieux Engineer (Institute for logistics) of Le Havre University, ISEL

This expert paper is reproduced by the UNCTAD secretariat in the form and language in which it has been received. The views expressed are those of the author and do not necessarily reflect the view of the United Nations.

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USING A STRATEGIC DECISION MAKING TOOL TO DESIGN AND OPTIMIZE SUPPLY CHAIN NETWORKS (A BEST PRACTICE IN GLASS RECYCLING) CNUCED Presentation October, 23rd 2013

[email protected] 04/11/2013

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ISEL, a school unique in France ISEL, school of logistics is the only public engineering institute in France in the field of logistics Some figures: – – – – – – –

School founded in 1994 465 graduated engineers 212 students (2013/2014) 40% women Around 50 new graduates each year 95% graduates under contract in less than 6 months ISEL 800 program: double the number of students by the coming years

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ISEL, a school unique in France ISEL has numerous foreign partner institutions, both European (Socrates/Erasmus programme) and worldwide ISEL has also 2 main partnership agreements with the universities of Hull (UK) and Magdeburg (Ger) A specific entity, Comptoir of Logistics (value-creation entity)

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Comptoir of logistics Comptoir of Logistics: – Project engineering – 14 colleagues – 3 main competences: • Modeling/simulation • Supply Chain trade skills diagnosis (Audit) • Major projects and cooperation

Construction of decision making tools We design both strategic (network optimization) and operational (process/flow optimization) models

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Modeling and simulation Modeling is a symbolic representation of some aspects of an object or a real phenomenon Simulation enables to develop a model and to test different configurations (time, spatial configuration, …) under different constraints

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Modeling and simulation – Logistics issues Sourcing Manufacturing Inventory Infrastructure Outsourcing

Strategic

Inventory modelling / deployment Cost models and budgets Warehouse layout Vehicle routing

Tactical

Opérational

Route Manifests Stock replenishment Shift Patterns Warehouse Resources Picking Lists

Daily

Weekly

Monthly

6 Months

1 year

2 years

5 years

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Modeling and simulation – CAST Aurora CAST Aurora: a strategic support tool for Supply Chain planning Interests: – – – – – – – –

Results:

To gain insight To quantify relationships To optimize To generate and evaluate options To test sensitivities To remove emotion and politics To adopt a rigorous process To provide a point of expertise...

– – – – –

Network Optimization Warehouse positioning Transport Mode selection Supply & Demand allocation Carbon optimization

Consider all elements of the Supply Chain in a single, integrated model

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Modeling and simulation – Methodology Modifications

Requirements definition

1 Analysis of the situation 2

Data gathering

Data analysis 3

Data

Adequation

Results analysis

5 4

Scénarios Configuration

Modelling 6

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Implementation 7

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Software 1: Project definition, objectives

6: Study period, units, rules and constraints

2: Flow diagrams, mappings…

7: Model design

3: Technical data, key variables, constraints 4: Perimeter, functionalities, elements...

8: Model implementation Simulation run

5: Data analysis (folding, deleting, combining…)

9: Assumption tests (analysis and recommendations)

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Partners

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AUTOMOTIVE GLASS RECYCLING

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Context and objective Context European regulation: from 2015, 95% of the total weight of an End of Live Vehicles (ELV) should be re-used / recycled. Concerning this issue, France is not a model in Europe: only 81% of an ELV is be re-used / recycled. Automotive glass is not recycled and is representing 3-4% of the total weight… Objective Establish a profitable network for glass collecting and recycling of the French manufacturer Renault

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Partners Industrials

Engineering schools

Association Public partners

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ISEL objective

Create a decision making tool to size and define the cost of the collecting, storage and distribution network of reusable glass in France (including carbon footprint)

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Actors of the supply chain Glass deposits • Car crushers • Car dealership • Windscreen repairer (Carglass, France Pare brise…)

Collection platforms • Sita platforms • Renault platforms...

Glass reprocessing sites Transportation companies

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Model presentation – Main figures

3 615 collection points

2 172 locations

52 571 tons of glass (24 kg/VHU) 142 collection platforms “6 customers” (glass demand) 4 different transportation vehicles

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Résults

Maltha

Base case

PATE

Solover 2

SRPVI Solover 1

Brianne

Scénario

Number of tons

Collection

Base Case

51 769 t 98 %

2 068 452 € 40 €/t

Platforms

Transfer

33 614 € 1 276 480 € 0,7 €/tConfidential 24,7data €/t

Total

CO2

3 378 546 € 65,3 €/t

2 137 t 41,3 kg/t

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Examples of scenarios Increase of the number of platforms Scenario

Number of tons

Collection

Platforms

Transfer

Augmentation du nombre de plateformes

51 797 t 98,5 %

1 643 544€ 31,7 €/t

37 947 € 1 321 414 € Confidential data 0,7 €/t 25,5 €/t

Total

CO2

3 002 904 € 58 €/t -11%

1 929 t 37,25 kg/t -10%

Total

CO2

2 891 566 € 55,8 €/t -15%

1 769 t 25,8 kg/t -47%

Existing platforms relocation Scenario

Number of tons

Collection

Platforms

Transfer

Relocalisation des plateformes

51 797 t 98 %

1 519 530€ 29,3 €/t

37 940 € 1 334 096 € data 0,7 €/t Confidential 25,8 €/t

Use of new transportation companies (higher capacity vehicles) Scenario

Number of tons

Collection

Nouveaux transporteurs pour le transfert (25 à 27 tonnes)

51 769 t 98 %

1 922 293 € 37,1 €/t

Platforms

Transfer

56 061 € 690 785 € data 1,1 €/t Confidential 13,3 €/t

Total

CO2

2 669 139 € 51,5 €/t -14%

1 740t 33,6 kg/t -19%

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Average cost VS. % of collection 70

65

Existing platforms

Confidential data

55

50

Target cost

Average cost (€)

60

45

Relocated platforms

40

35 100%

90%

80%

70%

60%

50%

40%

Number of collected tons (percentage)

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Conclusions of the study Conclusions • The number and the location of each actor of the supply chain have a strong impact on the total cost • It is necessary to consider several key variables to reach the objectives of the project • It is important to gather products (minimize number of platforms) to decrease significantly logistics costs

The use of CAST can be adjustable depending on your needs Importance of the size of the network and the granularity of the model 04/11/2013

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Thank you for your attention Institut Supérieur d’Études Logistiques Quai Frissard – B.P. 1137 76063 LE HAVRE CEDEX Tel.: +332 32 74 49 00 Fax: +332 32 74 49 11 Email: [email protected]

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