MGMT90141 Business Analysis and Decision Making

Optimal Resource Allocation for Bluescope Australia

A Mathematical Programming Literature review of one of the largest steel manufacturing companies in Australia.

Group No. 14

Seminar: Monday 1pm

Word count: 1947

Name Student IDAnmol Lakhotia 987094

Sayonee Gondhali 1005486Mengge Yang 798776

Wanting Zhang 902380Nikita Nair 974117

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INDEX

1. INTRODUCTION 3 2. CONSTRAINTS 3-53. METHODOLOGY 5-64. JOURNAL DESCRIPTION 6-115. STRENGTHS 11-136. WEAKNESS 13-147. DISSCUSION AND CONCLUSION 148. REFERENCES 15-16

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INTRODUCTION

BlueScope is one of the largest steel manufacturing companies in the world with

activities in Australia, New Zealand, Pacific Islands, North America, and Asia. The

organization utilizes 16,000 work force and has its biggest plant situated at Port

Kembla close to Wollongong in the Illawarra, New South Wales.

The steel industry all around the world has been facing challenges because of the

growing competition from China. The global oversupply has led to the use of low

priced imported steel in Australian projects and in turn these imports have forced

Australian prices to reduce to an unacceptable low. Bluescope has to reduce their

cost to respond to China’s steel prices and in order to overcome this situation it has

to implement a practical solution. In order to minimize the production cost an optimal

resource allocation method can be used. Several mathematical programming such

as linear programming, integer programming can be used so as to solve this

problem. To minimize the cost of production the steel company will face several

constraints which have been listed below:

CONSTRAINTS -:

Inferior Quality of raw materials: raw material quality assumes vital part in

cost control. Lower quality raw materials results into higher utilization of its

own as well as of other raw materials and additionally higher utilization of fuel

and energy.

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Wastage of raw materials: Raw materials add to significant cost of

production. Henceforth particular utilization of the raw material ought not be

more than what is required by the technology utilized. While storing any

wastage of raw materials should be completed avoided.

Lack of New technology: Technology is another region where most extreme

consideration is required if the cost of production is to be kept low. Each one

of those advances which reduces utilization of raw materials, fuel, energy and

utilities and enhance the nature of items should be chosen.

Machinery Breakdown- Occasionally because of no proper maintenance

there might be issues and breakdown, which can affect the overall production

process.

Maintenance – In the event that the convenient and legitimate upkeep of

plant and hardware is dismissed then it adds up to breakdowns and

impromptu unsettling influences of the procedures.

Low capacity utilization: it is significant that every unit of the steel plant

should utilized to its greatest limit. When any unit is underutilized then it will

result into higher settled fixed cost (over heads, devaluation, depreciation etc.)

High energy usage - Other than fuel, there are different types of energy that

are utilized in a steel plant. Out of these, electrical vitality has a considerable

commitment to the cost of production.

High fuel consumption – Every single metallurgical process in a steel plant

happens at high temperatures and subsequently they are fuel serious.

Additionally, cost of fuel is dependably on the expansion.

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Lack of training and supervision of labour – Adequate training and

supervision of labour is important so that optimal utilization of resources are

achieved.

No proper recycling of waste – The vast majority of the procedures in a

steel plant creates a lot of strong (dust, slop, scale, scrap and slag and so on.)

or fluid squanders. These squanders if reused lessen the utilization of raw

materials, fuel and water.

Solid Waste Management - In steel manufacturing process there is a lot of

solid waste that is generated, and which can be reused and to produce

several valuable products, which is often overlooked by many manufacturing

companies.

METHODOLOGY:

Optimal Resource Allocation in the manufacturing industries ( in this case - : steel

industry ) has pulled in an impressive consideration from analysts. The different

ways of solving the problem was considered by understanding the approach of used

by the researchers .For the above purpose , international journals which have been

published in the past 10 years has been collected online through Research gate,

Scopus, Sciendirect, and Emrald Library by typing keyword like “Optimal resource

allocation in steel industry”, “Optimal energy utilization”, “Maximum capacity

utilization”. And mathematical modelling. We have also researched about Australian P a g e 5 | 17

steel industry and Bluescope in company 360 and IBIS World. The other references

from which we have taken has been mentioned in the bottom of this assignment.

Journal Description:

The following table provides detailed description of variety of models proposed in the

10 international articles.

Journal Name Description

A Goal Programming Optimization

Model for The Allocation

This paper develops a goal planning

optimization model. In order to

determine the optimal configuration

of production and meet the

company's goals. That is to

maximize the volume of production,

reduce the cost of raw materials,

reduce maintenance costs, maximize

sales revenue, and maximize

production capacity. This model

developed in this paper can optimally

configure liquid steel so that the

production distribution does not

exceed the maximum capacity and

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the machine's working time.

A finite capacity production

scheduling procedure for a Belgian

steel company

In the journal, a multi-objective

limited capacity algorithm is

proposed for production scheduling.

Constrains were considered in the

model. Various often conflicting

weighted objectives were optmized.

The model were seprated into two

stages. The first one is a machine

assignment stage, in this stage the

routing of an individual order through

the network was determained. And

detailed operation timetable for a

specifice order will be created in

second scheduling stage.

An optimization model for production

allocation in a large steel

Manufacturing industry

The journal provides a optimized

solution base on a steel company in

Indonasia. And the aim of the journal

is to find a best way to allocate the

resource to different department and

avoid surplus and deficiency to

maximize the production. The

constrains including allocation of

each subdivision and the limitation of

defect rate. And it achieve 93% of

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the production goal during the

simulation, which could be a

considerable way for future work

Assessing Risk for Strategy

Formulation in Steel Industry

This article describes a risk

assessment approach that creates

value by preventing or exploiting risk.

The paper lists the risks and crises

faced by some steel companies, and

uses this information to carry out

certain strategic planning.

Conducting a risk assessment can

help companies use limited

resources to gain more benefits.

Modelling and Optimizing Energy

Utilization of Steel Production

In this paper, a progression of

requirements of our enhancement

display from this model. In light of the

genuine procedure circumstance, we

pick the steel generation, vitality

proficiency and independent gas

surplus as the principle enhanced

objectives in this paper. A short time

later, a fuzzy linear programming

technique is led to acquire the multi

target streamlining results. At long

last, a few measures are proposed to

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enhance this low proficiency and

high entire cost process structure.

Optimizing production scheduling of

steel plate hot rolling for economic

load dispatch under time of use

electricity pricing

In this paper, for hot rolling, an

average cluster compose and vitality

escalated process in steel industry, a

generation booking advancement

display for ELD is proposed under

TOU valuing, in which the goal is to

limit power costs while considering

punishments caused by bounces

between contiguous chunks.

Steel Recyclability In this paper, The reusing system

considers the natural weight of

utilizing steel scrap and the

advantage of scrap reusing from

end-of-life items. It considers the

reusing of scrap into new steel as

shut material circle reusing, and in

this way, reusing steel scrap stays

away from the creation of essential

steel.

Fuzzy Raw materials allocation this paper exhibits another crude

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problem materials allotment (RMA) show in

which the requests of items and the

costs of surplus items should fuzzy

factors, the included confinements

primarily incorporate the stock of

every raw material and the creation

limit of organization.

Application of advanced technologies

for CO2 capture from industrial

sources

This paper results from a community

oriented action did inside the Joint

Program on Carbon Capture and

Storage of the European Energy

Research Alliance (EERA CCS-JP)

and goes for examining the

probability of new CO2

advancements in the application on

the major modern producers.

Integrated scheduling of rolling

sector in steel production with

consideration of energy consumption

under time-of-use electricity prices

Zhao, S., Grossmann, E. and Tang,

L. use linear programming models

with the goal of finding a way for the

steel industry to consider changes in

electricity prices to reduce production

costs, based on the way the grid is

currently using time-of-use pricing for

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industrial customers. The article

discusses an integrated scheduling

problem of a multi-stage production,

considering activity decision making

and demand management.

STRENGTHS -:

A finite capacity production scheduling procedure for a Belgian steel

company-

This journal ( Mario Vanhoucke, Dieter Debels, 2008) takes into account two

phase optimization model it also takes various constraints in the steel industry

into consideration. It considers hierarchical production planning approaches to

deal with the complex nature of production planning. Also steel industry is an

energy, materials and capital intensive industry, which makes effective

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scheduling and planning very important and this journal gives an overview for

the same.

Assessing Risk for Strategy Formulation in Steel Industry- This journal

conducts a risk assessment can help companies use limited resources to

gain more benefits.

An Optimization Model for Production Allocation in A Large Steel

Manufacturing Company- In this journal (Cucuk Nur Rosyidi, Anandhyta

Yunan Perdana and Yusuf Priyandari, 2014 ) they have used to solve the

problem of production planning (i.e the amount of products and corresponding

resources to be used) they have used an input output model. They have also

used a computerized scheduling system to generate schedules which are

optimal.

Integrated scheduling of rolling sector in steel production with consideration of

energy consumption under time-of-use electricity prices-

This journal proposes to streamline the coordination of generation and power

utilization, and to limit the regular creation cost with the thought of energy

utilization.

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Steel’s recyclability- This journal (Clare Broadbent, 2016) exhibits techniques

which propels zero waste; a decreasing in the measure of materials used and

stimulates the reuse and reusing of materials.

WEAKNESS:

A finite capacity production scheduling procedure for a Belgian steel company

-The model used in this journal is restricted on a middle term arranging

skyline level. Also, each organization needs a tweaked calculation to meet

their prerequisite

Assessing Risk for Strategy Formulation in Steel Industry- The researches in

this journal was done on small and medium enterprise. But blue scope is a

large enterprise. Which means the feasibility of this method should be

discussed further. And, professional risk assessment is critical to the

business, so the investment in this area will also be included in the cost.

Modelling and Optimizing Energy Utilization of Steel Production- The model

was implemented at a steel plant affiliated with Mining and Mining

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Development and Transformation Organization. And need inter-enterprise

scheduling and distribution. Which is hard to be applied in a single company.

Integrated scheduling of rolling sector in steel production with consideration of

energy consumption under time-of-use electricity prices- Production process

in the steel industry is very complex, the resources should be considered

explicitly so as to achieve optimal utilization and production efficiency, in this

journals other energy sources such as coal and water have not been

considered explicitly, electricity consumption is the only source specified.

DISCUSSIONS AND CONCLUSIONS:

The major resources that are Raw materials, Manpower, Machinery, Energy, fuel

have to be used to the maximum capacity so as to achieve the overall efficiency and

to minimize the overall cost of production which would in turn reduce the prices of

products and also retain the quality and will help you Bluescope to face the

challenge of global oversupply. Also one of the most important aspect to control the

global oversupply is to apply import tariffs on steel which are imported from Asian

companies. The government support to apply such import tariffs are essential.

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REFERENCES:(Mario Vanhoucke, Dieter Debels) A finite capacity production scheduling procedure for a Belgian steel company.

https://hal.archives-ouvertes.fr/hal-00512989

An Optimization Model for Production Allocation in A Large Steel Manufacturing Company

(Cucuk Nur Rosyidi, Anandhyta Yunan Perdana and Yusuf Priyandari Industrial Engineering Department Sebelas Maret University Jalan Ir. Sutami 36 A Surakarta, 57126, Indonesia)

https://www.researchgate.net/publication/260484470_An_Optimization_Model_for_Production_Allocation_in_A_Large_Steel_Manufacturing_Company

Application of advanced technologies for CO2 capture from industrial sources

(Matteo C. Romanoa,*, Rahul Anantharamanb , Antti Arastoc , Dursun Can Ozcand ,

Hyungwoong Ahnd , Jan Wilco Dijkstrae , Michiel Carboe ,Dulce Boavidaf)

https://core.ac.uk/download/pdf/82399401.pdf

ENERGY EFFICIENCY IN A STEEL PLANT USING OPTIMIZATION-SIMULATION

(Ivan Ferretti(a), Simone Zanoni(b), Lucio Zavanella(c))

http://www.msc-les.org/proceedings/emss/2008/EMSS2008_180.pdf

Assessing Risk for Strategy Formulation in Steel Industry through Real Option Analysis

(Farrah Merlinda Muharam a,b, *)

https://ac.els-cdn.com/S1877042811016089/1-s2.0-S1877042811016089-main.pdf?_tid=2fabe4e0-ee02-4ed4-ab5c-f3642abaf511&acdnat=1534671815_b66cb62ff92733dedebff86b44417d25

Modeling and Optimizing Energy Utilization of Steel Production Process: A Hybrid Petri Net Approach

(Peng Wang,1 Zeyi Jiang,1,2 Zhitao Liu,1 and Shanghong Fu1)

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http://journals.sagepub.com/doi/full/10.1155/2013/191963

Optimizing Production Scheduling of Steel Plate Hot Rolling for Economic Load Dispatch under Time-of-Use Electricity Pricing

(Mao Tan,1 Hua-li Yang,1 Bin Duan,1 Yong-xin Su,1 and Feng He2)

file:///C:/Users/lenovo/Downloads/1048081.pdf

Steel’s recyclability: demonstrating the benefits of recycling steel to achieve a circular economy

(Clare Broadbent)

https://link.springer.com/article/10.1007/s11367-016-1081-1

A Goal Programming Optimization Model for The Allocation of Liquid Steel Production

( S N Hapsari and C N Rosyidi 2018 IOP Conf. Ser.: Mater. Sci. Eng. 319 012021)

http://iopscience.iop.org/article/10.1088/1757-899X/319/1/012021

Fuzzy Raw Materials Allocation Problem

(Gao-Ji Sun)

https://www.sciencedirect.com/science/article/pii/S1875389212014800

Application of advanced technologies for CO2 capture from industrial sources

(Matteo C.Romano , a RahulAnantharaman b , AnttiArasto c , Dursun Can Ozcan, d HyungwoongAhn d , Jan WilcoDijkstra, e MichielCarbo e , DulceBoavida f )

https://www.sciencedirect.com/science/article/pii/S1876610213008989

Integrated scheduling of rolling sector in steel production with consideration of energy consumption under time-of-use electricity prices

(Shengnan Zhaoa,b , Ignacio E. Grossmannc , Lixin Tang d,e,∗)

http://egon.cheme.cmu.edu/Papers/Zhao_DSM_Steel.pdf

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