Using optimisation to suggest alternative supply chains in the context of industrial symbiosis

Florian Stock, Simon Dunstall, Melanie Ayre, Andreas Ernst, Asef Nazari, Dhananjay Thiruvady, Sarah King

Research output: Chapter in Book/Report/Conference proceedingConference PaperResearchpeer-review

Abstract

The concept of firms exchanging materials, energy, water, and/or by-products in a collective approach to competitive advantage is called Industrial Symbiosis (IS). It was first described by Frosch and Gallopoulosin 1989, and in the same year, scientists uncovered an extensively intertwined network of companies from different industries in Kalundborg, Denmark that was a realisation of Frosch and Gallopoulos’ ideas. In IS, an unresolved research question relates to whether IS can be designed “ground up” into an industrial system (such as via planned eco-parks), or whether it can only occur “organically” through more serendipitous business interactions.

Given data on a defined set of businesses, quantified amounts of input and raw materials, and material transformation opportunities, our interest is on the use of computation and optimisation techniques in order uncover the potential for IS amongst firms, and to suggest for a single business which potential partners the business should target in order to build a network that could realise this potential. The transformation opportunities are modelled as processes in which a business, consortium, or external agent (such as a local authority) could invest, to enable materials to be transformed from lower to higher value. Examples might include (re-)manufacturing processes, a shared space for materials aggregation, or compressing and baling machinery that could increase waste density and so reduce storage and transportation costs for a material.

To formulate the problem, we consider the potential material flows between businesses and processes, using a linear distance model to describe transportation costs; market values to describe materials that are desirable inputs, and additional sourcing and sinking costs to obtain materials from outside of the network or dispose of surplus materials to landfill. The model is for a single time span, and as such we need to ensure that process investments do not lead to an amplification effect from the total investment cost not being amortized in the considered period.

Results are then presented for each participating business in terms of the origins, destinations and investments that describe the subgraph of material flows that maximises their financial return. For the proposed overall network to be commercially viable, each participant must show a positive return; as such we can demonstrate the difference between the set of local optima and the potential global optimal decisions, thereby uncovering the ideal opportunities for social or government investment.
Original languageEnglish
Title of host publicationMODSIM2015, 21st International Congress on Modelling and Simulation
EditorsRobert Anderssen, Tony Weber, Malcolm McPhee
Place of PublicationAustralia
PublisherModelling and Simulation Society of Australia and New Zealand
Pages1766-1772
Number of pages7
ISBN (Electronic)9780987214355
Publication statusPublished - 2015
Externally publishedYes
EventInternational Congress on Modelling and Simulation 2015: Partnering with industry and the community for innovation and impact through modelling - Gold Coast Convention and Exhibition Centre, Broadbeach, Australia
Duration: 29 Nov 20154 Dec 2015
Conference number: 21st
https://web.archive.org/web/20150627050926/http://www.mssanz.org.au:80/modsim2015/
https://web.archive.org/web/20150626200712/http://mssanz.org.au:80/modsim2015/index.html

Conference

ConferenceInternational Congress on Modelling and Simulation 2015
Abbreviated titleMODSIM2015
CountryAustralia
CityBroadbeach
Period29/11/154/12/15
OtherThe 21st International Congress on Modelling and Simulation (MODSIM2015) was held at the Gold Coast Convention and Exhibition Centre, Broadbeach, Queensland, Australia from Sunday 29 November to Friday 4 December 2015.

It was held jointly with the 23rd National Conference of the Australian Society for Operations Research and the DSTO led Defence Operations Research Symposium (DORS 2015).

The theme for this event was Partnering with industry and the community for innovation and impact through modelling.
Internet address

Keywords

  • Industrial ecology
  • supply chain optimisation
  • operations research

Cite this

Stock, F., Dunstall, S., Ayre, M., Ernst, A., Nazari, A., Thiruvady, D., & King, S. (2015). Using optimisation to suggest alternative supply chains in the context of industrial symbiosis. In R. Anderssen, T. Weber, & M. McPhee (Eds.), MODSIM2015, 21st International Congress on Modelling and Simulation (pp. 1766-1772). Australia: Modelling and Simulation Society of Australia and New Zealand.
Stock, Florian ; Dunstall, Simon ; Ayre, Melanie ; Ernst, Andreas ; Nazari, Asef ; Thiruvady, Dhananjay ; King, Sarah. / Using optimisation to suggest alternative supply chains in the context of industrial symbiosis. MODSIM2015, 21st International Congress on Modelling and Simulation. editor / Robert Anderssen ; Tony Weber ; Malcolm McPhee. Australia : Modelling and Simulation Society of Australia and New Zealand, 2015. pp. 1766-1772
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title = "Using optimisation to suggest alternative supply chains in the context of industrial symbiosis",
abstract = "The concept of firms exchanging materials, energy, water, and/or by-products in a collective approach to competitive advantage is called Industrial Symbiosis (IS). It was first described by Frosch and Gallopoulosin 1989, and in the same year, scientists uncovered an extensively intertwined network of companies from different industries in Kalundborg, Denmark that was a realisation of Frosch and Gallopoulos’ ideas. In IS, an unresolved research question relates to whether IS can be designed “ground up” into an industrial system (such as via planned eco-parks), or whether it can only occur “organically” through more serendipitous business interactions. Given data on a defined set of businesses, quantified amounts of input and raw materials, and material transformation opportunities, our interest is on the use of computation and optimisation techniques in order uncover the potential for IS amongst firms, and to suggest for a single business which potential partners the business should target in order to build a network that could realise this potential. The transformation opportunities are modelled as processes in which a business, consortium, or external agent (such as a local authority) could invest, to enable materials to be transformed from lower to higher value. Examples might include (re-)manufacturing processes, a shared space for materials aggregation, or compressing and baling machinery that could increase waste density and so reduce storage and transportation costs for a material. To formulate the problem, we consider the potential material flows between businesses and processes, using a linear distance model to describe transportation costs; market values to describe materials that are desirable inputs, and additional sourcing and sinking costs to obtain materials from outside of the network or dispose of surplus materials to landfill. The model is for a single time span, and as such we need to ensure that process investments do not lead to an amplification effect from the total investment cost not being amortized in the considered period. Results are then presented for each participating business in terms of the origins, destinations and investments that describe the subgraph of material flows that maximises their financial return. For the proposed overall network to be commercially viable, each participant must show a positive return; as such we can demonstrate the difference between the set of local optima and the potential global optimal decisions, thereby uncovering the ideal opportunities for social or government investment.",
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Stock, F, Dunstall, S, Ayre, M, Ernst, A, Nazari, A, Thiruvady, D & King, S 2015, Using optimisation to suggest alternative supply chains in the context of industrial symbiosis. in R Anderssen, T Weber & M McPhee (eds), MODSIM2015, 21st International Congress on Modelling and Simulation. Modelling and Simulation Society of Australia and New Zealand, Australia, pp. 1766-1772, International Congress on Modelling and Simulation 2015, Broadbeach, Australia, 29/11/15.

Using optimisation to suggest alternative supply chains in the context of industrial symbiosis. / Stock, Florian; Dunstall, Simon; Ayre, Melanie; Ernst, Andreas; Nazari, Asef; Thiruvady, Dhananjay; King, Sarah.

MODSIM2015, 21st International Congress on Modelling and Simulation. ed. / Robert Anderssen; Tony Weber; Malcolm McPhee. Australia : Modelling and Simulation Society of Australia and New Zealand, 2015. p. 1766-1772.

Research output: Chapter in Book/Report/Conference proceedingConference PaperResearchpeer-review

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T1 - Using optimisation to suggest alternative supply chains in the context of industrial symbiosis

AU - Stock, Florian

AU - Dunstall, Simon

AU - Ayre, Melanie

AU - Ernst, Andreas

AU - Nazari, Asef

AU - Thiruvady, Dhananjay

AU - King, Sarah

PY - 2015

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N2 - The concept of firms exchanging materials, energy, water, and/or by-products in a collective approach to competitive advantage is called Industrial Symbiosis (IS). It was first described by Frosch and Gallopoulosin 1989, and in the same year, scientists uncovered an extensively intertwined network of companies from different industries in Kalundborg, Denmark that was a realisation of Frosch and Gallopoulos’ ideas. In IS, an unresolved research question relates to whether IS can be designed “ground up” into an industrial system (such as via planned eco-parks), or whether it can only occur “organically” through more serendipitous business interactions. Given data on a defined set of businesses, quantified amounts of input and raw materials, and material transformation opportunities, our interest is on the use of computation and optimisation techniques in order uncover the potential for IS amongst firms, and to suggest for a single business which potential partners the business should target in order to build a network that could realise this potential. The transformation opportunities are modelled as processes in which a business, consortium, or external agent (such as a local authority) could invest, to enable materials to be transformed from lower to higher value. Examples might include (re-)manufacturing processes, a shared space for materials aggregation, or compressing and baling machinery that could increase waste density and so reduce storage and transportation costs for a material. To formulate the problem, we consider the potential material flows between businesses and processes, using a linear distance model to describe transportation costs; market values to describe materials that are desirable inputs, and additional sourcing and sinking costs to obtain materials from outside of the network or dispose of surplus materials to landfill. The model is for a single time span, and as such we need to ensure that process investments do not lead to an amplification effect from the total investment cost not being amortized in the considered period. Results are then presented for each participating business in terms of the origins, destinations and investments that describe the subgraph of material flows that maximises their financial return. For the proposed overall network to be commercially viable, each participant must show a positive return; as such we can demonstrate the difference between the set of local optima and the potential global optimal decisions, thereby uncovering the ideal opportunities for social or government investment.

AB - The concept of firms exchanging materials, energy, water, and/or by-products in a collective approach to competitive advantage is called Industrial Symbiosis (IS). It was first described by Frosch and Gallopoulosin 1989, and in the same year, scientists uncovered an extensively intertwined network of companies from different industries in Kalundborg, Denmark that was a realisation of Frosch and Gallopoulos’ ideas. In IS, an unresolved research question relates to whether IS can be designed “ground up” into an industrial system (such as via planned eco-parks), or whether it can only occur “organically” through more serendipitous business interactions. Given data on a defined set of businesses, quantified amounts of input and raw materials, and material transformation opportunities, our interest is on the use of computation and optimisation techniques in order uncover the potential for IS amongst firms, and to suggest for a single business which potential partners the business should target in order to build a network that could realise this potential. The transformation opportunities are modelled as processes in which a business, consortium, or external agent (such as a local authority) could invest, to enable materials to be transformed from lower to higher value. Examples might include (re-)manufacturing processes, a shared space for materials aggregation, or compressing and baling machinery that could increase waste density and so reduce storage and transportation costs for a material. To formulate the problem, we consider the potential material flows between businesses and processes, using a linear distance model to describe transportation costs; market values to describe materials that are desirable inputs, and additional sourcing and sinking costs to obtain materials from outside of the network or dispose of surplus materials to landfill. The model is for a single time span, and as such we need to ensure that process investments do not lead to an amplification effect from the total investment cost not being amortized in the considered period. Results are then presented for each participating business in terms of the origins, destinations and investments that describe the subgraph of material flows that maximises their financial return. For the proposed overall network to be commercially viable, each participant must show a positive return; as such we can demonstrate the difference between the set of local optima and the potential global optimal decisions, thereby uncovering the ideal opportunities for social or government investment.

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KW - supply chain optimisation

KW - operations research

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Stock F, Dunstall S, Ayre M, Ernst A, Nazari A, Thiruvady D et al. Using optimisation to suggest alternative supply chains in the context of industrial symbiosis. In Anderssen R, Weber T, McPhee M, editors, MODSIM2015, 21st International Congress on Modelling and Simulation. Australia: Modelling and Simulation Society of Australia and New Zealand. 2015. p. 1766-1772