The Power of Chemicals Supply Chain Planning Optimization

A conversation with Ann Bixby, Supply Chain Advisor and Team Leader in AspenTech Global Professional Services

July 12, 2023

AspenTech and our implementation services ecosystem is helping customers on their supply chain digital transformation journeys. This month, I had the pleasure of catching up with Ann Bixby, Supply Chain Advisor and Team Leader in AspenTech’s Global Professional Services organization

Ann is a highly sought-after expert in supply chain planning, scheduling and optimization. She was recently featured with her father Robert Bixby, in an INFORMS feature article.

Roch Gauthier (RG): Hello and welcome Ann. Please share with us a bit about yourself and your experience in delivering AspenTech Supply Chain Management (SCM) planning and scheduling optimization solutions.

Ann Bixby (AB): Thanks for the invitation, Roch. I’ve been delivering optimization solutions since I graduated from Northwestern University with an M.S. and Ph.D. in industrial engineering. I have been delivering AspenTech SCM planning and scheduling optimization solutions for close to 25 years across many industries including bulk chemicals, specialty chemicals, building materials and protein-focused foods.

RG: Our conversation today is focused on chemicals supply chain planning and optimization. AspenTech customers leverage planning optimization as a source of competitive advantage, giving them an edge in supply chain decision making. Chemicals companies have numerous complexities spanning sourcing, manufacturing and distribution that must absolutely be considered holistically during planning and optimization. Could you share some deeper insights with our readers based on your customer project experience?

AB: One global chemicals client I work with has a supply chain consisting of approximately ten manufacturing sites and numerous third-party warehouses spanning North America, Europe and Asia. Their supply chain was designed with flexibility and optionality in mind to improve overall resiliency and profitability. I was involved in a project where we implemented the Aspen Supply Chain Planner, Aspen Plant Scheduler™ and Aspen Schedule Explorer™ solutions to help them boost the performance of their end-to-end chemicals supply chain.

A key complexity that needed to be tackled was the vast number of interdependent decisions related to options, pathways and constraints that their supply planner needed to consider every month, in support of the company’s Integrated Business Planning (IBP) process. This is due to the company’s multi-products, multi-stages of production and multi-sites manufacturing processes. This means that they may produce an intermediate material in one location or region and then ship it to other locations or regions for further processing to make different finished products for their customers. 

Their supply planner is also responsible for creating and updating key supply chain reports and communicating this to corporate and manufacturing colleagues. One example of a key report is the overall planned production volumes for the upcoming months, for all their production sites. An example of a critical exception report is to give visibility to all products planned to be shipped out of a location that is not the “preferred” one. 

Today, their supply planner no longer needs to manually work through and juggle all these possible options. They are now leveraging Aspen Supply Chain Planner’s powerful optimization capabilities to effectively consider all the options, pathways and constraints holistically. The system automatically determines the best possible plan to maximize profits across the planning horizon. In addition, all key planned production and exceptions reports are automatically generated and updated thanks to AspenTech SCM.

RG: Given that it is possible for this client to produce an intermediate material in one region and then ship it to another region, I’m guessing that keeping track of stock transfer shipping costs was also important to their supply planner?

AB: Yes, that is correct. However, what was even more critical to their supply planner and stock transfer planners was to never violate transportation restrictions as part of the planning and optimization process. This consideration is also now in place thanks to AspenTech SCM.

In the related Aspen Plant Scheduler and Aspen Schedule Explorer solutions that we deployed at each of their manufacturing sites, schedulers can view net planned shipments as a forecast and have the option of including it as demand so that they can anticipate upcoming production requirements. Interplant purchase orders and purchase requisitions in their SAP ERP are also imported into the AspenTech scheduling solutions and can be viewed and tracked on the interactive Planning Board. 

This client also has an AspenTech SCM end-to-end supply chain visibility solution, that we often refer to as a headquarter model, which enables them to view and understand the consequences of supply chain decisions across all their global interrelated sites and associated stock transfer movements. This is quite valuable when assessing how to tactically deal with supply chain disruptions.

RG: Let’s shift our focus to the back end of the client’s supply chain. Were there any complexities related to procurement and sourcing planning and optimization that were critical for them?

AB: Yes, there were. Their supply planner and sourcing stakeholders were not only interested in the overall volume of product that needs to be purchased, but also the composition and the associated price of the relative composition and concentration in the raw materials. This is a significant cost driver for this client and can make a significant impact in their total purchasing costs. I configured AspenTech Supply Chain Planner to allow them to have visibility into these raw material compositional aspects.

RG: What types of business insights has this chemicals producer experienced since they started to use the planning optimization solution?

AB: Their global end-to-end supply chain model is solved holistically in AspenTech SCM since we are leveraging Mixed-Integer Programming (MIP) optimization methods. Very often, the model comes back with an answer that their IBP stakeholders did not expect. This means that the model is helping them find better ways of doing things than they have in the past. The model has helped them challenge traditional “rules of thumb” and established practices. That’s extremely valuable!

RG: What are the top things that you would recommend to a prospective chemicals client before embarking on a supply chain planning and optimization project?

AB: Data availability and quality are crucial—especially cost-related data. Clients come to understand that the data in their ERP system is not set up for chemicals supply chain planning optimization purposes, but rather financial accounting purposes.

For the project that we’ve been discussing, the client’s transportation costs and constraints were not adequately represented for optimization purposes in their SAP ERP system. Fortunately, the AspenTech SCM solution helped to quickly identify errors in the data that had to be fixed, leading to better and more profitable end-to-end supply chain decisions.

RG: Ann, thank you for helping our audience learn more about chemicals supply chain planning and optimization and how it can become a source of competitive advantage for their companies.


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