Case Study: Modelling a
multinational lubricants operation
A multi national oil company had acquired
a lubricants company, which resulted in a duplication of blending
operations and distribution networks in Northern Europe. They asked us
to model the operations to test various scenarios and identify the ideal
network.
A number of products could only be blended at specific plants and some
distribution centres could not handle bulk products. The cost of the raw
material varied between blending plants, as did the blending costs and
the site cost overheads. The transport costs were modelled with
different costs for tanker movements and pallet movements. There was
also direct delivery to customers as well as delivery to distributors.
Also, some blending could be contracted out.
The system was modelled in CAPS Supply Chain Designer. Various options
were modelled, including limiting the number of DCs, limiting the number
of blending sites and closing specific sites. As the software easily
allowed sites to be limited to producing particular products within
overall site production capacity, the model was quickly changed and
rerun when local operational staff identified unacceptable product
combinations.
The production visibility provided by the CAPS software proved useful in
obtaining the approval of operational management. The model indicated a
new production and distribution network, which gave significant savings.
