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Omya Hustadmarmor Optimizes Its Supply Chain for Delivering Calcium Carbonate Slurry to European Paper Manufacturers

Centre Microélectronique de Provence, Ecole des Mines de Saint-Etienne, Avenue des Anémones, Quartier Saint-Pierre, F-13541 Gardanne, France; and Molde University College, PO Box 2110, N-6402 Molde, Norway
Department of Strategy and Logistics, Norwegian School of Management BI, Nydalsveien 37, N-0442 Oslo, Norway; and Optimal Logistics, PO Box 4806 Nydalen, N-0467 Oslo, Norway
Molde University College, PO Box 2110, N-6402 Molde, Norway; and Optimal Logistics, PO Box 4806 Nydalen, N-0467 Oslo, Norway
Molde University College, PO Box 2110, N-6402 Molde, Norway
Omya International AG, PO Box 32, CH-4665 Oftringen, Switzerland
Rolls-Royce Commercial Marine, Årsundvegen 24, N-6270 Brattvåg, Norway
Hustadmarmor AS, N-6440 Elnesvågen, Norway
Hustadmarmor AS, N-6440 Elnesvågen, Norway
dauzere-peres{at}emse.fr
atle.nordli{at}optimal-logistics.no
asmund.olstad{at}himolde.no
kjetil.haugen{at}himolde.no
ulrich.koester{at}omya.com
per.olav.myrstad{at}rolls-royce.com
geir.teistklub{at}omya.com
alf.reistad{at}omya.com

The Norwegian company Omya Hustadmarmor supplies calcium carbonate slurry to European paper manufacturers from a single processing plant, using chemical tank ships of various sizes to transport its products. Transportation costs are lower for large ships than for small ships, but their use increases planning complexity and creates problems in production. In 2001, the company faced overwhelming operational challenges and sought operations-research-based planning support. The CEO, Sturla Steinsvik, contacted Møre Research Molde, which conducted a project that led to the development of a decision-support system (DSS) for maritime inventory routing. The core of the DSS is an optimization model that is solved through a metaheuristic-based algorithm. The system helps planners to make stronger, faster decisions and has increased predictability and flexibility throughout the supply chain. It has saved production and transportation costs close to US$7 million a year. We project additional direct savings of nearly US$4 million a year as the company adds even larger ships to the fleet as a result of the project. In addition, the company has avoided investments of US$35 million by increasing capacity utilization. Finally, the project has had a positive environmental effect by reducing overall oil consumption by more than 10 percent.

Key Words: transportation; freight; materials handling; decision analysis; multiple criteria