Process Solutions
Product Information Note
SAND: Simplifying Supply Chain Management
with Better Supply and Distribution
Supply chain problems can cripple an operation, but it does not take a crisis to seize
the value from optimizing supply and distribution. SAND enables businesses to get
product and raw materials where they are needed in the most efficient way possible.
A clearer chain
SAND lets users model all their production facilities and
The complexity of modern supply chains means the impact of
transportation between raw material suppliers, manufacturing or
changes to prices, production, supplies or demand are not
blending facilities, toll processing facilities, terminals and
always obvious. SAND improves margins by showing the way to
customers. Users can easily input purchase opportunities,
a better supply and distribution network. Revealing the impact of
product demands, distribution costs, capacities, manufacturing
changes on profitability in the short, medium and long term, it
costs, inventories and other constraints. A single database stores
helps you develop a more efficient business.
all supply chain data for users throughout the organization.
Use SAND to solve raw material allocation problems, see the
Based on this information and linear programming, supplemented
impact of changes in prices and demand, or evaluate the
by integer programming where needed, SAND determines the
consequences of a plant closure or new pipeline. SAND ensures
most profitable methods of manufacture and delivery to satisfy
effective management of both materials and information
customers’ demands.
throughout the value chain.
It is a solution for strategic, tactical and operational planning:
• Strategic: Evaluate structural changes to the industry. SAND
reveals the implications of new production facility or closures,
new routes, pipelines or modes of transportation, or long-term
changes in supply or demand.
Production
Distribution
Raw
Materials
Purchases
Inventory
Maintenance
• Tactical: Examine the structure of a distribution network.
SAND helps users decide which terminals to keep and which
to divest by evaluating the fixed costs saved and variable costs
of supplying nearby customers from secondary sources.
• Operational: SAND can allocate products or feed stocks from
multiple supply sources to countless demand locations. Users
can evaluate spot purchase and sale opportunities, value and
implement exchange agreements, and target incremental
production where it will achieve the greatest margins.
Optimize every step
SAND combines a simple, intuitive interface allowing users to
create a distribution network directly on a map as shown below
with powerful modeling to account for virtually any physical or
Growing complexity: A challenge, and opportunity
economic constraint in the operation or distribution system.
SAND: Simplifying Supply Chain Management with Better Supply and Distribution
2
be assigned to each processing unit, with production limits for
each to allow different operations to share the same capacity
restrictions.
Where product switchover times and costs are significant or
products must be sequenced in a certain order, integer
programming can be added to the basic LP approach to improve
model accuracy.
Inventory control
Define period-specific minimum and maximum levels for any
material at any location; specify opening and closing inventories;
and apply minimum and maximum limits on any group of
materials or locations. Assigning the proper economic value to
inventory and providing meaningful limits allows SAND to reveal
the optimal production against inventory changes at locations
A simple map interface makes it easy to add locations.
Limitless Locations
Model any number of locations with standard tables available to
throughout the distribution network.
Customer demands
Where production capacity is limited and allocation of
incremental sales must be prioritized, demand volumes can be
assign capacity limitations to terminals and assign location-
modeled as maximums for SAND to select the appropriate
specific or material-specific costs to a variety of activities, such
product slate for the most profitable markets. Where demand
as shipping, receiving and inventory.
volumes are predictable, they can bet represented as fixed
Supply Availability & Cost
Material costs can be modeled where they are purchased and
quantities. Alternatively, a hybrid method can fix contractual
transported by the model to the proper locations, or entered
opportunities.
directly at the blending or processing facility on a delivered cost
basis. Use external spot prices, contract purchase costs or
Exchange agreements
SAND can model complex agreements for the exchange of
internal transfer prices. Purchases can also be entered in steps
different materials, including multiple delivery and receipt
to approximate a supply curve, and integer programming used for
locations and different modes of transportation. Exchange
volume discounts.
balancing mechanisms by individual materials or material groups
This ensures targets are within boundary limits, and provides a
can be set up to balance exactly, or to within specified
work process for creating, validating, approving and activating
percentage or absolute tolerances.
instructions. It can also integrate with a plant’s planning,
Multi-period capabilities
Multi-period modeling enables users to optimize inventory levels
scheduling, and ERP systems.
Transport
Model both continuous modes of transport such as pipelines, and
obligations and use maximum values for incremental
when product demands or manufacturing capabilities are
significantly different between periods. Users can tailor the
batch modes, including ships, barges, railcars and trucks. Batch
number and duration of each period, while a cloning feature
transportation modes can be structured for single or multiple
replicating data from any existing time period simplifies data entry
compartments with different material loading configurations.
for multi-period models.
Model transportation costs based on the World scale system, on
distance, point-to-point transfers, or complicated multiple
User-defined constraints
Define continuous and integer variables and enter user-defined
destination trips. Fixed and time-dependent port-related fees can
equations into the matrix structure using existing variables and
also be included.
user-created variables. This allows accurate modelling of realistic
physical and economic constraints.
Operations & Blending
Any production or blending operation and associated costs can
Proven results
be easily modeled, including conversion of any material or group
SAND cuts the costs and increases the efficiency and reliability
of materials into other materials. Multiple modes of operation can
of the supply chain management system.
SAND: Simplifying Supply Chain Management with Better Supply and Distribution
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Data management
Use of MS Access’s standard relational database management
system provides a single source of up-to-date supply chain data
to users throughout the organization, preventing data being
scattered throughout the corporation. The relational database
features of MS Access also ensure data integrity, requiring, for
instance, all necessary fields be entered before allowing users to
save data records and preventing duplicate entries. When an
object is deleted, the cascade delete feature of Access deletes all
occurrences in all other data input and output tables as well.
Both importing and manually entering data is simple with time
saving features, and in-built flexibility in SAND allows temporary
changes to the model structure to be simply handled.
Powerful outputs
SAND massively simplifies supply chain planning, with optimized
Flexible reporting to record improvements
results for each part of the value chain:
• Raw material allocation plans
Output from Crystal Reports can be exported to a variety of other
• Production plans
media, including MS-EXCEL or Lotus spreadsheets, Word
• Product allocation plans
documents, other text formats, any other ODBC compliant
• Route and material loading plans
databases, and HTML formats.
• Exchange agreement plans.
Benefits
Economically optimized targets feed scheduling systems. SAND
converts optimized distribution plans into implementable
SAND brings a range of benefits to supply chain management for
a more efficient business:
schedules, taking account of transport availability and inventory
• Reduced operation and transportation costs
conditions. It makes batch size and sequence decisions for
continuous transport modes such as pipelines and also makes
• Enhanced demand-driven purchasing decisions taking into
account realistic system limitations
route selection and material loading decisions.
• Improved customer delivery performance
• Better inventory management control
Custom, automated reporting
Standard reports through Crystal Reports provide clear
• Faster delivery cycles
overviews of results such as penalties and the total amount of
• More effective utilization of constraining resources
materials transported by each mode. MS Access or any other
• Enhanced and more up-to-date information for decisions.
third party reports can be used to create custom reports.
For More Information
Learn more about how Honeywell’s SAND, visit
our website www.honeywellprocess.com or
contact your Honeywell account manager.
Honeywell Process Solutions
Honeywell
1250 West Sam Houston Parkway South
Houston, TX 77042
Honeywell House, Arlington Business Park
Bracknell, Berkshire, England RG12 1EB
Shanghai City Centre, 100 Junyi Road
Shanghai, China 20051
www.honeywellprocess.com
PN-13-38-ENG
July 2013
© 2013 Honeywell International Inc.