Potash Outbound Logistics Planning for BHP Billiton

Development of dynamic simulation for strategic planning of potash mine outbound logistics. Client – BHP Billiton – the world’s largest mineral resources company.
Period: October 2014 – April 2015
Industry sector: Mining
Client / Partner: BHP Billiton / Goldratt Research Labs

Project objective
  • Generate a strategy for the development of the logistics network of potash mines for 2017-2045
  • Choose the basic logistic network configuration
  • Determine the storage capacity requirement as well as loading and unloading equipment requirement in seaports and land hubs
  • Calculate and prove planned production costs of products delivered to the clients

Our scope of work

  • Conducting working meetings, collecting the main data for the project
  • The simulation model concept development
  • Development of information requirement
  • Managing of the data collection and its preparation for the modeling
  • Development of the simulation model on the AnyLogic platform
  • Development of inventory management and transport dispatching policies
  • Verification and validation of the model
  • Scenario analysis – comparison of more than 300 options of logistic network development
  • Preparation of the report about simulation results

Simulation model inputs

  • Strategic plan of potash production in mine in Central Canada in 2017-2045
  • Loading and unloading operations performance, transport capacity, transportation speed
  • Possible location options for 20 hubs and 31 seaports
  • Demand forecast
  • Consumers location forecast

Simulation model structure elements

  • Input data file of scenario in MS Excel format
  • Simulation model with interactive presentation, batch launch mode for fast scenario comparison, mode of sensitivity analysis
  • Data aggregation module that allows to generate MS Excel files with the simulation results

Simulation model outputs

  • Service level of clients supply
  • Production costs of product unit delivered to the client
  • Requirement for storage capacity, loading and unloading equipment in seaports and land hubs
  • Demand for railway cars, car fleet utilization capacity

Project result

  • The strategy of potash mine outbound logistic for 2017-2045 is developed
  • Suggested algorithms of inventory management and car fleet management are justified
  • Planned financial indicators of logistic network, including graph of planned production costs of products delivered to the clients by years, are calculated

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