Plant co-ordination in pharmaceutics supply networks

Research paper by M. Grunow, H.-O. Günther, G. Yang

Indexed on: 01 Feb '03Published on: 01 Feb '03Published in: OR Spectrum


The production of active ingredients in the chemical-pharmaceutical industry involves numerous production stages with cumulative lead times of up to two years. Mainly because of rigorous purity requirements and the need of extensive cleaning of the equipment units, production is carried out in campaigns, i.e. multiple batches of the same product type are produced successively before changing to another product type. Each campaign requires a specific configuration of equipment units according to the recipes of the particular chemical process. In the chemical-pharmaceutical industry, production stages are often assigned to different locations, even different countries. Hence the co-ordination of plant operations within the resulting multi-national supply network is of major importance. A key issue is the co-ordination of campaign schedules at different production stages in the various plants. In practice, it is almost impossible to determine exact optimal solutions to the corresponding complex supply network problem with respect to overall logistics costs. In order to reduce the required computational effort, we introduce several aggregation schemes and a novel MILP model formulation which is based on a continuous representation of time. Moreover, we propose an iterative near-optimal solution procedure which can be successfully applied to even exceptionally large real life problem instances. The applicability of the approach suggested is shown using a case study from industry.