Dispatch planning of finished steel: A case study in modeling and data analysis

Abstract

A steel plant has to dispatch products to forty four stockyards from a range of over hundred stock keeping units. The railways, who transport the steel, would like the steel plant to move the steel in a rake load since it is operationally beneficial. On the other hand, the steel plant prefers to move the steel with a shipment size as small as a wagon load. This paper attempts an analysis for the desirable shipment size between the rake load and the wagon load. This is done by first evaluating the requirements of the average finished goods inventory as a function of the percentage of dispatch by rake load, using a simulation model. A national perspective is then used for this decision since the railways are a crucial national resource. Having concluded that the rake load is the desirable shipment size, a decision support system is developed for the dispatch decision which must consider the product wise demand requirements, steel availability based on stocks available for loading and production expected in the short term, rake load (shipment size) requirements for various destinations, the rake formation constraints at the loading points etc. The paper also proposes longer term strategies to help increase the rake load dispatches.