“It is essential to thoroughly test our plans using simulation, enabling us to gain a holistic view of the dynamic behaviour of the entire supply chain,” Gilberto D’Ignazi, head of logistics, ENEL.
Worldwide, 39% of electricity is produced from coal, and in the 27 EU countries, 33%. In the future there will be a strong growth in electricity generated from coal, driven primarily by China and India, two countries with large populations, almost 2.5 billion people, where energy demand is growing at a remarkable pace. Equally remarkable, however, is the technological innovation taking place at ENEL, which has allowed the energy provider to become 10% more energy efficient compared to a few years ago. In particular, investments in the technology of “clean coal”, which is made in Italy, now allows ENEL to propose new generation power plants which meet the high standards of environmental excellence. For example, the Torrevaldaliga Nord power plant, which opened in July 2008 at Civitavecchia, is one of the most advanced in the world. The systems in place to transport and handle the coal are completely sealed, meaning the fuel never comes into contact with air, and emissions have been reduced by up to 88% compared to the previous oil system it was using. Background of the Project ENEL believed that the logistics of supplying fuel to its coal-fired power plants in the Mediterranean did not have the qualifications to support the competitive challenges of the coming years.
The most obvious constraint of the logistics model was the inability of current ports with shallow waters to accommodate vessels with high capacity. Due to each power plant reaching its maximum thermal efficiency when fuelled by a specific grade of fuel, each plant is only able to use a limited number of suppliers. All of this creates many economic inefficiencies arising from both the cost of purchasing the fuel and the transportation logistics. ENEL therefore decided to evaluate the possibility of completely redesigning the supply chain model, creating a large hub in Porto Torres, a port with deep water suitable to operate high-tonnage ships, and make its own fleet, optimizing the sale, transport and shipment to ports across the Mediterranean. Porto Torres The site of Porto Torres was the first of its size in Sardinia. During the past decade the port has seen a huge development in terms of industrial, commercial and passenger trade. Today there are programs for the renovation and expansion of the port.
Elements of the Supply Chain A variety of vessels and ships are part of ENEL’s supply chain. Each one has a different set of requirements and needs which has to be taken into consideration. These include: Capesize vessels with a dead weight tonnage of 170,000; Panamax type ships with a dead weight tonnage of 72.000; Panamax type ships with a dead weight tonnage of 65.000 which are also self-unloading; Handymax type vessels with a dead weight tonnage from 12,000; Tugs for entry and exit from the port; Loading docks which include cranes, hoppers and conveyors The Complexity of System Logistics Within a supply chain such as this one, there are multiple levels of demand, as well as variations in the type of fleet needed when delivering the fuel from the ports in Indonesia, South Africa, Colombia, United States and Russia. Each fuel supplier has its own set of rules regarding the arrival of ships to its ports, therefore the random variations in arrival times needs to be included in the plan.
The type of fleet needed for the loading of coal, bound for the various power stations is another factor which needs to be considered, as well as the viscosity of the coal, which when incorrect can result in failures or jams to unload berths. The frequency of failures (MTTF) also needs to be modelled, as does the time it takes to conduct any repairs (MTTR). The shift patterns of the ground operators is also another consideration, as are the rules and regulations set out by each port. Objective of the Project Since the realization that a single hub is a “single-point-of-failure” that could endanger the supply of fuel to the entire production system of ENEL in the Mediterranean, Studio Zeta was selected to fully analyse the system being proposed. Studio Zeta’s task included the need to validate the capacity of the new port when loading and unloading the ship’s cargo. The model also needed to verify staff requirements and the cost of resources on-shore, which included quay and handling equipment. Other tasks included quantifying potential demurrage charges, evaluating the performance of the logistics system and the “fleet mix”, which includes the incoming (Panamax, Capesize) and outgoing ships (Panamax, Handymax and the Panamax self-unloading)
Stress tests were also to be conducted to quantify the sensitivity to variations in weather conditions and the duration and frequency of mechanical failures. The model was also used to quantify Disaster Recovery planning. The Solution Following the objective for the project being set out, Studio Zeta used Lanner’s Simulation Platform WITNESS to conduct various experiments, which included the following scenarios: A fault-free environment with no influences from the weather; The introduction of variability and failures within the supply chain and various weather conditions to test the robustness of the plans; Shift patterns of ground operators; Varying the arrival of ships to the ports entrance; Varying the frequency of failures within the supply chain Stress tests were also used to discover how the increase of volumes and the increase of faults would affect the supply chain, as well as the time it would take to return to normal operations after a disaster took place.
In all of these cases the logistic system studied by ENEL has proved to be robust, capable of handling the amount of projected capacity and be able to withstand unexpected events, even when they are severe. By using WITNESS Simulation, Studio Zeta was also able to identify organisational solutions regarding the resourcing of the ground operators, significantly improving the working capacity of the port. The study has also enabled ENEL to reconsider the requirements of minimum safety stock, thereby reducing the cost of working capital.