RESEARCH AND APPLICATION ON TECHNOLOGY TO CONSTRUCT A
GREEN PRODUCTION LOGISTICS SYSTEM IN IRON AND STEEL
ENTERPRISE
BY
GAO WEI*, WANG LI, QI MINGMING
SYNOPSIS:
Taking production logistics system between workshops in iron and steel enterprise as the
research object, analyze and optimize the whole logistics process, improve the efficiency and
environmental friendliness of the logistics system.
Using macro and micro analysis theory and technology platform, analyze and optimize the
facilities and equipments of logistics system, improve the operating efficiency of the
equipments, make the production logistics system in iron and steel enterprise work more
reasonably. Use systematic layout planning method to arrange the storage establishment,
monitor and adjust the storage state of materials in real time with warehouse management
system. Establish the logistics management information system, to monitor and operate the
logistics process with a general view, and to manage the emergent accidents.
With analysis and optimization technology system of production logistics system, the iron
and steel enterprise will improve the coordination and efficiency of whole logistics system,
reduce the workload, reduce the energy consumption and reduce the exhaust emission, make
the iron and steel enterprise more clean and environmental friendly.
Finally, demonstrate the application state and effect of the analysis and optimization
technology system with two examples of Chinese iron and steel enterprise.
Keywords: Analysis and Optimization Technology System of Production Logistics System,
Green Production Logistics System, Macro and Micro Analysis of Logistics,
Systematic Layout Planning, Logistics Management Information System
*
Assistant Researcher of General Layout and Transport System Research Department,
CISDI Group Co., Ltd, Chongqing, China.
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1. Introduction
The iron & Steel industry is changing its conventional development pattern of high energy
consumption and heavy pollution. With the deepening of the community’s knowledge about
relation between industry and environment, the steel producers are paying increasing
attention to energy efficiency, environmental protection and green manufacturing. China
steelmakers have been worked actively on energy conservation and emission reduction in
recent years. For example, Baosteel has been promoting the green manufacturing, green
product and green metal industry chain; Taiyuan Steel has been exploring the way of
harmonious development with city. Tangshan Steel has been actively developing itself into a
world class clean-production steelmaker; Regarding technical innovation for energyconservation & emission-reduction, the steel producers are largely focusing on pollutant
control (e.g. DCQ de-dusting), energy recycling (e.g. blast furnace TRT) and by-products
utilization (e.g. metallurgical slag treatment). It would be a new trend of environmentalprotection for steelmakers to study the role of production logistics system optimization in
energy-conservation & emission-reduction.
As a bond of various materials flow within the steelworks, the production logistics
system is crucial to safe and efficient operation of the plant. Brubidge[1] proposed the socalled Production Flow Analysis technology in hopes of finding the solution to plant
efficiency improving. Over recent years, the research people have made wide studies on
production logistics for steel-producers. Professor Li Shujian and Mr. Chang Zhiming[2] has
studied the typical process flow in steel plants and set up multi-stage production material
transportation balance model with an attempt to achieve material transportation balance and
consistency for steel plants. Mr. Shao Juping and Mr. Sun Fenghua[3] have proposed the
production planning method and process for material transportation activity optimization. All
these efforts have promoted the study on production logistics for steel producers, contributing
to higher production rationality and economy.
The present paper studies the analysis and optimization method for production logistics
system of steel plants from technical and management viewpoint, taking into consideration
the production material transportation, loading/unloading and storage. The problems and
bottlenecks are identified by analysis of production logistics system. With optimization
activities (e.g. layout adjustment, equipment configuration improvement, creation of
information system for logistics management), the logistics system will run with higher
efficiency in better harmony, contributing to lower energy consumption and less pollutant
emission.
2. Problem Description
2.1 Definition of Production Logistics for Steelmakers
For steel plants, the production logistics refers to the real flow process of raw materials,
fuels, in-process products, semi-finished product, final products and by-products between the
process units, which typically include the logistics outside the plant during the production
(from arrival of raw materials & fuels at the plant till the delivery of final products).
Typically, the production materials will be treated and stored as required by the appropriate
process, and transported/handled by some transporting equipment and loading equipment,
which make up the full process of production logistics for a steel plant. The biggest
difference of production logistics from supply logistics, sales logistics and return logistics lies
in its close link with the production process. The steel plant cannot keep optimal production
without logical production logistics. Inappropriate production logistics will result in lower
production efficiency, or even shutdown.
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For production logistics of steel plants, each production procedure is a node of the steel
plant inner network. The relation between nodes, in essence, is a kind of relation between
demand and supply. The features of production logistics for steel plants mainly include the
following items:
(1) Logistics is a part of production process;
(2) Production logistics is playing a very strong role of “cost-center” for production;
(3) Production logistics of steel plants are highly specialized;
(4) Production logistics of steel plants is intrinsically possible for precise planning;
(5) The production, transportation and storage are stage-wised;
(6) The logistics involves a great material variety, many procedures and big difference.
As a part of the steel producers’ sustainable development strategy, green production
logistics shall provide effective allocation of logistics facility, equipment and human resource,
so as to achieve a good balance among efficiency, environment, health and safety. Green
production logistics system will not only reduce the resource occupancy and pollutant
emission, but also improve the environmental friendliness by process units pacing
coordination and resource utilization.
2.2 Problems Existing in Steel Plant Production Logistics
Compared with other industries, the production logistics for metal industry is more
complicated. As found in the survey of some China steel producers, their production logistics
all have some problems, which are summarized as follows:
(1) Lack of global (plant-wide) view during production logistics planning, and poor
allocation of logistics facilities. The key logistics facility have to be allocated with production
process taken into consideration, otherwise the material transportation route shall be diverted
or take roundabout, resulting in low transportation efficiency.
(2) Improper transportation system design. The improper design of road and railway
transportation system (or some part of the route) will result into congestion, and hence lower
transportation efficiency.
(3) Extensive storage management. The storage is largely controlled in conventional
way, without real-time inventory monitoring or logical inventory allocation, so the warehouse
utilization is poor.
(4) Lack of general management mechanism or platform for the production logistics
system. The production logistics involves many independent departments, and the lack of
effective communication platform or coordination mechanism results in poor performance of
production system.
The failure of any link in the production logistics system will cause poorer system
efficiency, and hence more energy consumption and more pollutant emission by logistics
facility and equipment. Therefore, the pursuit of efficient production logistics system is
essentially the pursuit of green production logistics.
For analysis and optimization purpose, the production logistics of steel plants shall be
regarded as an integrated system, with well-defined functions for each component. The
analysis and optimization activities shall aim at overall system performance improvement. In
solving the specific problem, efforts shall be made to analyze the system component relation
and interaction to identify the key problem, so as to work out the appropriate solution.
3. Steel Plant Production Logistics Analysis & Optimization System and
Key Technology
3.1 Analysis & Optimization System
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The best solution to problems existing in steel plant production logistics system is to
build a logistics analysis & optimization system. The intrinsic characteristics of steel plant
production logistics shall be studied in order to find out the appropriate analysis and
optimization expertise. As the production logistics is an integrated system, the analysis &
optimization expertise shall be envisaged with a global view instead of addressing only a
local problem.
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Fig. 1 The Architecture of the Production Logistics Analysis & Optimization System
The following principles shall be followed in building production logistics system for
steel plants:
(1) The production logistics of steel plant shall be studied as a whole, taking into
consideration the relation among components;
(2) Aiming at overall optimization, the system shall start from tackling specific
problems in transportation, handling and storage;
(3) Study of applying leading logistics technology of other industries into metal industry.
By studying and analyzing the production logistics system for steel producers, and
taking into consideration their features and key existing problems, the production logistics
analysis & optimization system for steel producers is proposed (system architecture is shown
in Fig. 1).
As demonstrated in the architectural drawing, the system has following features:
(1) Combined use of macro and micro-analysis philosophy (from macro to micro);
(2) Maximized quantitative analysis of production logistics for steel producers;
(3) Adaptation of good reference from study on transportation, logistics and other
industries.
3.2 Key Technology for Production Logistics Analysis & Optimization
3.2.1 Railway Network Analysis
Railway transportation is the primary means of transportation for most steel producers as
the incoming materials and outgoing products are mainly transported by railway, and the hot
metal, billets/slabs and BF slag are circulated within the steel plant by railway. For steel
plants, railway transportation is closely associated with the production process. The railway
system will connect several process units directly and the materials will be sent from one
procedure to downstream procedure by railway, so the performance of railway system plays a
decisive role in steel plant operation.
Railway transportation for steel plants is characterized by high transportation volume,
large capacity, low transportation cost, low energy consumption, high reliability, little
dependence upon weather, small flexibility due to fixed route as well as requirement for
special signal system and scheduling system.
The railway network analysis is intended to:
(1) Develop the optimal transportation route of main materials;
(2) Find the transportation volume balance for the whole railway system;
(3) Minimize the railway transportation bottleneck by optimizing the route, station and
throat point location.
The process flow of railway network analysis is shown in Fig. 2.
The following data can be obtained from railway network analysis:
(1) Primary material transportation route;
(2) Material transportation volume and turnover volume;
(3) Throughput of each section;
(4) Throughput of arrival & departure track;
(5) Throughput of throat points;
(6) Calculation of railway station track number;
(7) Calculation of marshalling station track number.
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Fig. 2 Railway Network Analysis Flowchart
3.2.2 Road Network Analysis
As a key component of production logistics system for steel plants, road transportation is
characterized by wide reaching, relatively high speed, good adaptability to freight size and
high flexibility.
Analysis & optimization of the road network is an important part of production logistics
analysis & optimization. The performance of road network has significant influence upon the
overall performance of logistics system. Road network is directly connected to each process
unit, so a local problem in road network may affect the normal operation of several process
units. The road transportation flow of steel plants is typically a mixed traffic of multiple
freight vehicles and passenger vehicles which may easily interfere with each other. Road
crossings, grade crossings and motor truck scale in a road network shall be logically located
and controlled to prevent congestion.
Road network analysis is intended to:
(1) Develop the optimal transportation route for primary materials;
(2) Find the transportation volume balance for the whole road system;
(3) Optimize the design and control of key spots (road crossings and grade crossings) to
avoid congestion and long waiting;
(4) Optimize the motor truck scale location.
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The process flow of road network analysis is shown in Fig. 3.
Fig. 3 Raod Network Analysis Flowchart
The road network can be analyzed by following technical data:
(1) Transportation route, transportation volume and turnover volume of primary
materials;
(2) Transportation volume, traffic volume, degree of saturation and service level of each
section;
(3) Distribution of road network transportation volume and traffic volume;
(4) Vehicle delay time and queuing length at road crossings and grade crossings;
(5) Utilization of truck motor scale;
(6) Vehicle delay time and queuing length, etc.
3.2.3 Optimization of Storage Facilities Layout
Storage is a key part of production logistics system for steel plants. With some inventory
capacity, the steel producer can achieve a balance between demand and output, and can
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reduce the operational cost by adjusting the production size and sequence. It can also avoid
huge product quality fluctuation due to variation in materials & fuels and product variety, and
can reduce the production logistics cost by larger and more economical transportation Layout.
To conclude, storage allows the steel producers to reduce transportation – operational cost,
coordinate the supply and the demand, and have more flexibility in operation and marketing.
Layout of storage facilities is critical for production logistics system optimization, which
will affect the pattern, structure and shape of the whole logistics system. Meanwhile, the
design of other facilities in the logistics system will also restrain the possibility of storage
facility Layout.
Storage facility layout can be optimized by mixed–integer linear programming (MILP),
simulation and heuristics. Systematic Layout Planning (SLP) developed by Mr. Tichard
Muther[4] and his colleagues is used in present paper to optimize the storage facility layout.
Fig. 4 Typical SLP Process Flowchart
The process flow of storage facility layout optimization by SLP is shown in Fig. 4, and
the main activities in each optimization process are as follows:
(1) To collect all current or predicted logistics data.
(2) To make logistics flow chart, and describe the material flow process between the
process units.
(3) To make relevant drawings to describe the closeness of non-logistics relation among
the steelmaker departments and among the different areas as the supplement to the logistics
flow chart.
(4) To design the approximate optimal layout of storage facilities without space
limitation taken into consideration. Two or more layout options shall be developed during the
design, each with the qualification of being the final solution. This is the more creative
procedure in the whole process, and also the most important one.
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(5) To adjust the layout options. The layout options shall be adjusted according to the
storage facility’s requirement for space and the available space. The structure of the
approximate optimum option shall remain steady on large during the adjustment.
(6) To consider the available space. In some cases, the layout has to be adapted to the
existing buildings and structures, so the available space will be limited significantly. It is
necessary to find a balance between the required space and the available space before
proceeding to next procedure.
(7) To develop the space-related drawings.
(8) To consider the comments and actual limitations. The layout options shall be further
adjusted, taking into consideration the available landform, required landform by storage
facility, logistics transportation connection and foreseen space, and a minimum of two
options shall be presented.
(9) To assess the layout options. The layout options are assessed with the preset data to
find the optimum one.
3.2.4 Selection of Transportation Equipment
Logical selection of transportation equipment for steel plants is critical for production
logistics design as it will affect the efficiency and economy of the whole logistics system.
Corresponding to the features of production logistics for steel plants, the transportation
equipment is characterized by large quantity, large variety high specialty, which is
challenging for transportation equipment configuration.
Selection of transportation equipment is typically selection of options. The options have
different attributes with different dimensions and weights, which fall within the category of
multi-attributes decision-making.
The typical decision-making process is shown in Fig. 5.
Fig. 5 Typical Decision-Making Process Flowchart
The decision-making for transportation equipment is intended to select the appropriate
equipment for transporting a specific material within the steel plant. Our study is about the
selection of road and railway transportation equipment.
The equipment type shall be selected according to the physical and chemical properties
of the transported materials, and then different model of this type of equipment shall be
chosen as options. The options shall have attributes such as transportation capacity, safety,
purchase cost, operational cost and environmental friendliness, which shall be assessed
quantitatively and qualitatively. The attribute values shall be represented by interval numbers.
The decision-maker shall remain neutral in transportation equipment option selection.
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From above problem description, model shall be built for the decision-making process
using relative membership grade (RMG) for interval number multi-attribute decision-making
based on ideal points. In this way, decision can be made on the transportation equipment, as
shown in Fig. 6.
Fig. 6 Transportation Equipment Choice Decision Process Flowchart
3.2.5 Logistics Management Information System
The increase of production logistics efficiency for modern steel producers shall rely on
the modern information technology, and the trend is to build a comprehensive logistics
management information system.
The comprehensive logistics management system is a production logistics management
information system using ERP, MES and PCS integrated framework as hierarchical mode.
Based on ERP (enterprise business management oriented), MES (production plan
management oriented) and PCS (process monitoring oriented), and backed up by computer
network and database system, the system allows quick information transfer, sharing and
integration among the different hierarchies. The system will acquire production, quality,
energy and financial data from production logistics operation, and provide overall
management for current position, quantity, weight, status and value of the required materials.
Consequently, the material flow, information flow and fund flow are integrated during the
production logistics. The system can reflect the performance of production logistics by means
of real-time information collection and processing, so as to provide important support for
decision-making.
In this system, ERP is a part of upper-level management system which provides
production management planning and decision analysis. MES provides connection for
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information transfer between ERP and PCS, to allow dynamic optimal scheduling &
sequencing for operation activities, on-line monitoring of production logistics information,
emergency handling, equipment status monitoring & trouble diagnosis and transport
dispatching. It acts as a bond in the system. PCS provides equipment check and control,
which allows the basic automation and process automation of equipment. The collaboration
of ERP/MES/PCS makes it possible for production logistics management to be intensive and
IT-based, consequently the current position, quantity, mode and value of the production
materials are managed as a whole, contributing to integration of material flow, information
flow and fund flow. The management team and decision-makers have access to real-time
production logistics data during the production and hence make effective decision.
4. Application
4.1 Road and Railway Network Analysis & Optimization for Steel Producer N
Steel producer N is a large steel complex with annual capacity of 8mt/a, consisting of
bulk material storage & handling, sintering plant, coking plant, Iron-making plant,
steelmaking plant and rolling mills. Its incoming raw materials & fuels and outgoing finished
products are largely transported by water and railway, and the interior production materials
are largely transported by railway, belt conveyor and road.
The existing production logistics problems in steel producer N are as follows: many
roundabouts in railway transportation, congestion in road transportation and many transshipments of raw materials & fuels and products within the plant. Besides, the steel complex
capacity will be expanded to 10mt/a in the upcoming technical revamping, so the existing
road and railway systems shall be checked to see if they can cater the expanded capacity.
Therefore, the road and railway system of steel complex N is analyzed and appropriate
improvement measures are proposed.
It takes terminals, road transportation system, and railway transportation system as the
research objects to analyze and optimize. The process of analysis and optimization is divided
into 5 steps:
(1) Analysis of the current logistics situation;
(2) Analysis of the logistics situation after production process technology improvement;
(3) Deign the optimization scheme of logistics;
(4) Verification of the optimization results;
(5) The conclusion of analysis and optimization.
Based on analysis, the key to production logistics system optimization lies in:
(1) Improper design of railway system route and stations, resulting in many railway
transportation roundabouts and much interference with road transportation;
(2) Improper road network, resulting in lack of trunk road network and uneven
distribution of road transportation volume;
(3) Improper location and use of storage facilities, resulting in extra material
transportation reversal and crossing;
(4) Improper design of some roads, resulting in heavy congestion in crossings.
Following optimization proposals are made:
(1) To improve the railway route and station design to reduce the incoming materials
and fuel transportation distance;
(2) To optimize the road network to define the road rating and specific purpose;
(3) To adjust the warehouse function to optimize the material flow direction;
(4) To optimize the troubled roads and crossings design;
Key data for comparison after the optimization:
(1) Railway turnover volume for materials reduces 14%;
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(2) Transport volume of each section in the road network is more even;
(3) Turnover volume of final products reduces 10%;
(4) Max delay time at road crossings reduces from 42.3s to 20.4s, and max queuing
length reduces from 139m to 43m.
4.2 Production Logistics System Analysis & Optimization for Steel Producer L
Steel producer L is a 7.2mt/a large integrated steel works consisting of bulk material
storage & handling, sintering plant, coking plant, Iron-making plant, steelmaking plant,
rolling mills and auxiliaries. Its incoming raw materials and fuels are largely transported by
railway, and its outgoing final products are largely transported by railway and roads. The
internal transportation is mainly by railway, roads and belt conveyors.
The steel producer L has a history of over fifty years, and obviously its logistics system
planned in earlier years lags far behind the steel plant development. The logistics system
within the plant is currently troubled with many material flow crossing and roundabout as
well as seriously insufficient storage facilities. The logistics system shall be analyzed and
optimized to reduce the operational cost of interior logistics.
By careful studying of transportation, storage and handling for steel producer L, the
logistics management information system is set up, as detailed in Fig. 7.
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Fig. 9 Analysis & Optimization Flowchart of Steel Producer L
After analysis and optimization, the achievement is as follow:
(1) To optimize the storage layout wit SLP method;
(2) After optimization, the layout of truck scales becomes more reasonable;
(3) The turnover volume of raw materials into plant reduces 32%;
(4) The turnover volume of road transportation reduces 15%;
(5) To plan the reconstruction schemes of materials handling facilities and railway system.
5. Conclusions
The study of green production logistics system is essential for steel producers to develop
energy-conservation & emission-reduction technology. Green production logistics can not
only reduce the resource occupancy and pollutant emission by the production logistics system
itself, but also help the steel producers to realize environmental friendliness by intensive
utilization of resources for the whole plant. The paper is of the opinion that the production
logistics system of the steel plants shall be analyzed as a sole object, and to build
comprehensive technical system is the best approach to its analysis and optimization. The
analysis shall be made on both macro- and micro-level in order to achieve quantitative and
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intensive analysis. Optimization technology shall aim at solving the actual problems, and take
the optimal performance of overall system as the top priority. Logistics management
information system is an effective tool to improve the production logistics conditions for steel
producers. The present paper sets up production logistics analysis & optimization system for
steel producers, and elaborates on key technology for transportation, storage, handling and
management information system. With two steel producers as examples, the actual result of
analysis & optimization system is demonstrated. It is proved by technology study and actual
application that the improvement of production logistics will reduce the energy consumption
and emission of logistics system itself, and will ensure smooth operation of process units and
reduce the overall energy consumption and emission of the whole steel works, contributing to
environmental friendliness of the steel producers.
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References
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Technology Beijing, 1999(6): 42-44.
[3] Shao Juping, Sun Fenghua. Optimizing Technology of Logistics-Oriented Production
Plan in Iron and Steel Enterprise [J]. Metallurgical Industry Automation, 2004(5): 15-17.
[4] Richard Muther. Systematic Layout Planning [M]. Boston: Cahners Books1973.
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