A framework for optimizing the supply chain performance of a steel producer

Ali Diabat, Raid Al-Aomar, Mahmoud Alrefaei, Ameen Alawneh, Mohd Nishat Faisal

Research output: Chapter in Book/Report/Conference proceedingConference contribution

Abstract

Supply Chain Management (SCM) is focused on developing, optimizing, and operating efficient supply chains. Efficient supply chains are characterized by cost effective decisions, lean flow and structure, high degree of integration, and well-chosen Key Performance Indicators (KPIs). Although there exists a large body of literature on optimizing individual supply chain elements (transportation, distribution, inventory, location, etc.), the literature does not provide an effective methodology that can address the complexity of the supply chain of a large scale industry such as steel producers. This paper, therefore, builds on existing research methods of supply chain modeling and optimization to propose a framework for optimizing supply chain performance of a steel producer. The framework combines deterministic modeling using Linear Programming (LP) with stochastic simulation modeling and optimization. A holistic LP deterministic optimization model is first used to characterize and optimize the supply chain variables. The model minimizes the annual operating cost of the steel company's supply chain. Simulation-based optimization with Simulated Annealing is then used to determine the operational levels of the supply chain drivers that meet a desired level of customer satisfaction. The proposed approach is applied to the supply chain of a major steel producer in the Arabian Gulf.

Original languageEnglish (US)
Title of host publicationICEIS 2013 - Proceedings of the 15th International Conference on Enterprise Information Systems
Pages554-562
Number of pages9
StatePublished - 2013
Event15th International Conference on Enterprise Information Systems, ICEIS 2013 - Angers, France
Duration: Jul 4 2013Jul 7 2013

Publication series

NameICEIS 2013 - Proceedings of the 15th International Conference on Enterprise Information Systems
Volume1

Other

Other15th International Conference on Enterprise Information Systems, ICEIS 2013
CountryFrance
CityAngers
Period7/4/137/7/13

Keywords

  • Linear programming
  • Simulated annealing
  • Simulation
  • Steel industry
  • Supply chain management

ASJC Scopus subject areas

  • Information Systems
  • Information Systems and Management

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