"Consolidation, industrial Alignment and Performance verification for Movement to Market of a SCheduling solution featuring Heuristics-enhancED simulation & optimisation."

Final Report Summary - CAP2M-SCHED (Consolidation, industrial Alignment and Performance verification for Movement to Market of a SCheduling solution featuring Heuristics-enhancED simulation & optimisation.)

Executive Summary:
The work carried out within CAP2M-SCHED is a direct consequence of the RTD achievements of its pre-cursor project, CAP-SCHED (Research for SMEs, No.222487) in which groundbreaking, industry-guided RTD has been carried out to develop an intelligent scheduling (short-term planning) solution. Improved schedule optimisation has significant economic impacts for companies who must regularly & rapidly solve process scheduling problems.
Although software packages are available on the market to assist with scheduling, their usefulness is limited, because they depend on the human operator to simulate scheduling scenarios ‘by trial & error’ so as to find an adequate solution.
The innovative approach of CAP-SCHED allows the process (human) operator to interactively set various parameter values based on his/her intimate knowledge of the process, and to be assisted at the same time by automated, algorithmic constraint-solving capabilities which use domain-specific knowledge (heuristics) to optimise the remaining parameters within given operating constraints.
A major objective of the CAP2M-SCHED project was thus to promote confidence that the CAP-SCHED solution can be perceived by prospective commercial partners & industrial customers to confer highest added-value and return on procurement investment.
This goal was achieved through the following actions :
 test & consolidate prototype CAP-SCHED process scheduling solutions;
 verify the performance of prototypes on a number of typical industrial exemplar processes;
 evaluate & fine-tune the capabilities of CAP-SCHED to cope with diverse process conditions encountered in practice;
 refine market analysis, business modelling & associated marketing strategy.

Project Context and Objectives:
Introduction
The innovation focus in CAP-SCHED ( ) – the progenitor “Research for SMEs” project which directly lead to the demonstration project, CAP2M-SCHED, - has been to develop an intelligent scheduling ( ) solution for use in process-intensive industries.
The essential objectives of the CAP-SCHED solution are to improve efficiency gains - through faster development and distribution of schedules – and to boost effectiveness - by higher throughput, reduced operating costs, and lower inventories - in the supply chain network for industries where getting from the raw material to the finished product is heavily process-dependent.
The work carried out within CAP2M-SCHED is a direct consequence of the RTD achievements of CAP-SCHED. A major objective was thus to promote confidence that the CAP-SCHED solution can be perceived by prospective commercial partners and industrial customers as conferring highest added-value and return on procurement investment.
Concept and Objectives
The concept underlying the work of the “Research for SMEs” precursor project CAP-SCHED, called for progressively rendering results, at each stage of development, to be capable of generic application to process flow scheduling (PFS) problems which share the same or similar characteristics, across a broad basket of otherwise unrelated process industries in terms of the business areas they address.
PFS applications include: continuous or semi-continuous processes (such as crude oil refining, and numerous chemical transformation processes such as plastics and synthetic rubber production); and batch processes (such as paints, pharmaceutical products).
On commencement of the CAP-SCHED project in 2008, the fundamental idea was that a panoply of PFS problems, encompassing a wide range of levels of complexity, could be addressed using a generic heuristic decomposition scheme ( ).
Ultimately, close, insightful dialogue with industry has led to a refinement of the initial approach, leading to two related yet distinct CAP-SCHED prototype scheduling solutions. Importantly, this has also led to an amplification of industrial relevance and market opportunity.
Consistent with the objectives of the Demonstration Action as described in the Research for SMEs Workpgramme 2011, Activity 2.3 CAP2M-SCHED 's goal was to allow the partners to obtain the vital leverage necessary to propel RTD results achieved to date towards market-readiness in preparation for subsequent commercial exploitation, through a combination of:
 testing and consolidation of prototype CAP-SCHED process scheduling solutions;
 performance evaluation & verification of prototypes against key performance indicators (KPI) for typical exemplar processes in industries of strategic interest to partners, with a view to establishing best-practice guidelines for installation & integration of CAP-SCHED scheduling solutions;
 refinement of market analysis, including:
- determination of the scope for value-engineering of CAP-SCHED prototypes.
- convergence on business models appropriate to targeted industrial markets and key factors affecting procurement decisions;
- and associated marketing strategy.

Project Results:
CAP-2MSCHED is a software-encoded tool which significantly improves the ability of process operators to quickly and reliably achieve scheduling solutions (i.e. short-term plans) which are capable of running complex industrial production processes at, or as close as possible, to optimum performance.
This new solution brings significant improvements to today’s often manual by-trial-and-error scheduling methods and tools technologies, through the innovative combination of linear programming methods, and heuristic programming (“learning by discovery”) techniques. Inclusion of true heuristics capabilities is particularly innovative in this industrial applications’ domain.
Specifically, this allows the scheduling manager to have an “automated assistant” to which he/she can entrust finding the optimum settings for hard-to-judge complex, interacting process parameters, in order to best satisfy simultaneous, perhaps competing constraints, such as reducing the carbon footprint, v. the fastest & most economic conversion of input materials to final output products.

The project has resulted in two products:
Product A: for continuous and semi-continuous multistage production processes – combining heuristic decomposition methods and cooperation between optimisation & simulation.
Industrial applications include: crude oil refining; numerous chemical transformation processes such as plastics and synthetic rubber production.
Product B : for batch processes – that is, discrete-time, multi-product, multi-level, multi-resource processes, whose economic effectiveness may be dependent on resolving both lot-size and sequencing issues. To this end, Prototype B combines simulation, optimisation and metaheuristics capabilities.
Industrial batch-type processes within the scope of this CAP-SCHED prototype “B” are typically found in pharmaceutical and biotechnology production.
Product A for continuous and semi-continuous processes

The foregrounds of the CAP2M-SCHED project for continuous and semi-continuous processes consist, on the algorithm side, on an iterative heuristics that combines optimisation and simulation and on the software side on a .NET plugin to Princeps blending optimization software, optimix. Tests were carried out on a refinery blending optimization use case involving fuel oil products and a FCC Unit .
Algorithm
The goal of the CAP2M-SCHED project was to integrate the optimization of some process units parameters to the blending optimization. Since those parameters usually have a non-linear behaviour, an iterative heuristics was developed: the problem is linearized through the calculation of partial derivatives and simulation is used to obtain an initial solution for the optimization procedure and to update the problem linearization at each iteration .
Software
The CAP2M-SCHED iterative algorithm described in the above section was implemented in C# as a .NET plugin to Princeps blending optimization software optimix. It is thus embedded into a separate dll that can be included or not when starting the software.
Results
The CAP2M prototype was tested on a fuel blending schedule of 10 days, containing 9 blend events. Each parameter considered in the optimization has been discretized in pieces of 48 hours. When one unit parameter was included in the optimization, the total profit was increased by 3 to 4% and when two were included, it was increased by 6%. This represents an increase of 0.5 to 1 dollar per cubic meter which a good result1.
Product B for batch processes

The foregrounds of the CAP2M-SCHED project for discrete batch processes consist, on the algorithm side, on mixed integers programming (MIP) formulations and heuristics and on the software side on a .NET plugin that can be integrated to existing systems as well as a stand-alone application. Tests were carried out on two use cases: a steel production and a valve production.
Algorithm
The goal of the CAP2M-SCHED project was to solve discrete batch scheduling problems. Base on the work carried out during the previous CAP-SCHED project, two MIP formulations were designed to represent the problem, one with continuous time representation and the other with discrete time representation. Commercial solvers can then be used to solve the problem using a branch-and-bound algorithm, which is an exact solution approach2.
Since some industrial-size instances can be hard to solve with an exact approach, heuristics (based on the discrete-time formulation) were developed to find good solutions more efficiently.
Software
The MIP formulations and heuristics were implemented using Aimms which is a commercial modeller for this kind of models. This allows to choose the solver used for the branch and bound. During the project the following ones were used : cbc, cplex and gurobi.
A .NET plugin able to call the Aimms model was developed. This plugin can be integrated to any existing software provided it can call .NET assemblies.
Besides, a stand-alone application containing this plugin was developed so as to be able to test the algorithms. With this application, the interface with existing system is done through xml files: .NET plugins can be defined to customize the xml format used for reading instances and writing solutions, using the provided interface .
Results
This product was testing on two use cases: valve production and steel production.
Valve production use case
Steel production use case
Compared with a solution found by simulation, the average throughput is increased about 11%, while the production time has been reduced by 10%. The overall production time is about 20 hours; it means about three shifts of 8 hours. The CAP2M tool brings 10% of throughput improvement without making any changes to the plant, which is a good result in steel sector .

Potential Impact:
The development of supply chain and process management tools is no longer a core RTD activity of enterprises in process-intensive industries. This places a crucial emphasis on promoting collaboration between all those involved in the value-chain, from those for whom business profitability depends on suitably optimised production processes, to those who develop the methods and tools used in the planning, scheduling, and control of processes. Compounding the issue, a paradigm shift has emerged in the acceptance criteria of technologically sophisticated, end-user organisations.
Whereas criteria were before based on compliance of process management tools to desired functionality, issues of optimised operational performance now play a dominant role in acceptability.
This emphasises the need for effective networking – among the SMEs who supply tool components for supply chain and process management, as well as within sector-specific value-chains so as to comprehend, appreciate & assimilate high-level end-user requirements.
Furthermore, a major risk factor expressed by process industries in depending on SMEs as 3rd-party sources for process planning & management components, is that SMEs are often perceived as insufficiently realistic regarding the market applicability of the methods & tools they are developing.
The expectation of end-user companies is that SMEs should anticipate risks and provide pro-active assistance with risk management in integration of new management technology, with a view to helping clients to achieve an acceptable RoI on their procurement investments in supply chain and process management tools. This should include performance benchmarking before approaching industrial clients, and include advice on work process and technical change management.
Therefore, the invaluable opportunity inherent in the approach adopted by the core group of SMEs who have developed CAP-SCHED, is the ability to embed themselves in their industrial end-user exemplar process participants’ pursuit of improvements to process optimisation. For the CAP2M-SCHED project partners, this approach amplifies the impact of innovation as a key business process for their future growth and prosperity.

Impact assessment on end-user process industry project partners
Scheduling is the process of developing and maintaining optimal tactical and operational plans, down to the fine-grain level – usually daily – with the objective of maximising value (measured in terms of effect on profit margin) from the available envelope of options which affect the process. All of this must be done by taking into consideration a wide variety of constraints, including market conditions, manufacturing plant conditions, and supply, delivery & shipment logistics. In other words, scheduling provides a critical link between corporate planning, and plant operations.
Viewed in this context, scheduling and the ability to obtain cost-effective process throughput and production output, directly reflects on management’s agility in coping with the supply chain. It places an emphasis on cooperation between planning (over the long term), scheduling (over the short term), and process execution activities, and their links to operations, logistics, purchasing, and sales.
The industrial reality is that scheduling remains largely supported by disparate collections of spreadsheets and data, with decision-support tools whose capabilities are very limited. Management agility is therefore hard to achieve. And significantly, the ability to analyse multiple alternatives – particularly where unforeseen occur – is not part of the current work processes or best practice.

Although a number of solutions are available on the market to provide assistance with scheduling, (cf. §1.2.1 Figure 1 2), their usefulness in achieving an acceptable solution to schedule optimisation is severely hampered by virtue of the simplistic approaches they offer to simulation.
Essentially, although many solutions provide quite acceptable long-term process planning capabilities, they fail to provide adequate support to the human operator in effectively coping with process characteristics which are both continuously changing, and can change rapidly.
An analysis of factors leading to annual operating losses (or, missed opportunity costs through ineffective process optimisation) are listed in the following table. The figures are drawn from a petrochemical industry exemplar site.
Cause of Annual Losses (K€) Refinery
(single site)
1) Lost market opportunities 500
2) Difficulty to react to unforeseen events 400
3) Disruption due to incidents 400
4) Under utilisation of equipment capacity 300
5) Poor visibility on other parts of the organisation 300
6) High inventory levels 300
7) Demurrage costs ( ) 300
8) Quality Give-away 200
9) Material and energy losses 200
Total 2900
Table 3 1 Comparative annual losses and their causes, petrochemical industry exemplar

With the possible exception, of item 5) in the above list, CAP-SCHED is capable of affording improvements on all other items.
As a module within a larger simulation & optimisation solutions package, the estimated price component for CAP-SCHED for a large refinery is of the order of €7k per annum (lease price, and inclusive of maintenance charge). It can be readily calculated from above table that:
For a large refinery, payback on CAP-SCHED is achieved even if a mere 0.25% of the value of losses can be overcome.
Of particular relevance is the figure for item 2) “difficulty to react to unforeseen events” : note that in this case, if approx. 2% of the annual losses due to this factor alone can be recuperated, then once again, this will have provided sufficient payback for the annual cost of CAP-SCHED.
Expected use of knowledge from CAP2M-SCHED by the SME partners
For Princeps – strengthening its position as a supplier of simulation & optimisation solutions within the petrochemical industry, in addition to assisting the company to develop new business opportunities in biotechnology application sectors (with a specific interest in biofuel production).
For ManOPT – by further promoting the company’s position as a provider of expertise and solutions for manufacturing system optimisation through adding a truly innovative, industrially-verified approach to scheduling optimisation.
Moreover, work by Princeps in performance testing & validation of CAP2M-SCHED prototype “A” in semi-continuous flow processes in the petrochemical industry, is expected to provide leverage to ManOPT’s targeted expansion of its business interests into pharmaceutical industry processes.
For TTS – by providing an innovative and pragmatic extension which brings value-added benefits to deploying its “SSP” production systems simulation methodology in the context of the company’s consulting services. CAP2M-SCHED will also add a complement of scheduling simulation capabilities to the TTS software toolkit of modules which the company deploys in high-fidelity modelling of new production facilities.
Furthermore, work planned by ManOPT to undertake performance testing and validation of CAP2M-SCHED prototype “B” in batch process scheduling at the Schuf valve manufacturing plant – whose products integrate components made from steel - is expected to assist TTS by giving valuable leverage to the company in its quest to successfully address a new market opportunity for its services & simulation software. Namely, in structural steel fabrication, where economic operators in this area currently remain inadequately equipped as regards deployment of advanced IT in process planning & optimisation.
For Schuf - by being the first in their industries to benefit from the economic and operational benefits that are anticipated from the performance testing and tuning of the Cap-Sched solution on their processes. . The key motivation for SchuF is to reduce the lead time for its sales order delivery. It is also expected to increase the reliability of sales order promised delivery dates. This represents a significant competitive opportunity for SchuF, since a more rapid delivery of its very high quality products will increase its competitive position further - despite severe competition from other valve vendors outside the EU.

Ownership of Intellectual Property
CAP2M-SCHED is a direct result of R&D co-financed by the 7th Framework Programme’s “Research for SMEs” theme, grant agreement number FP7-SM-2007-1-222487. As such, ownership and IPR are governed by a Consortium Agreement, signed between the Cap-Sched partners on 1st October 2008 and subsequently CAP2M-SCHED Consortium Agreement, signed between the Cap2M-Sched partners in February 2012. The key IP decisions are:
(1) None of the 3rd-party Research Performing Organisations who received finance for conducting R&D work on behalf of the SME partners, and which has generated IP encapsulated in CAP2M-SCHED (“Foreground”), have retained any rights to exploitation of the Foreground. Therefore, 100% of the Foreground IPR has been transferred to the SME partners.
(2) Princeps is designated as the Exploitation Manager, and: “will protect the knowledge and results of the project and ensure they are taken to the market place for both their benefit and the benefit of the other SME partners. Princeps holds the main IP rights.”
(3) Each of the beneficiaries (i.e. Princeps, ManOPT, and TTS) is entitled to exploit the Foreground by using, and selling products within its business, and for this purpose the SME Exploitation Manager has granted, to each of the other beneficiaries, Access Rights to the Foreground for exploitation on a royalty free, non-exclusive basis, limited to use in respect of its business.
(4) ManOPT Systems Ltd, and Technology Transfer Systems s.r.l. “will have a percentage of royalties equal to 7.5% on the final system’s sales (for 5 years), and will receive commission as direct distributor of the software (for 5 years).”
(5) For the specific end-user, Schuf Valve Ltd. who will test and validate CAP2M-SCHED for batch process scheduling of fabricated metal and alloy products:
 free access to the Foreground for the duration of the project together with free consulting services. They will be granted discounts of not less than 20% of the market price for commercial CAP2M-SCHED products post-project. There is however no obligation to purchase any software or services from any of the partners, post-project.
(6) For 3rd-party end-user process-dependent companies (such as Total), they will be accorded favourable conditions which include:
 free use of CAP2M-SCHED together with consulting, for a chosen site, for a defined period, with volume discounts should they decide to deploy the solution at other sites.
(7) For 3rd-party companies who develop related solutions for industries, and who integrate CAP2M-SCHED as part of their own solution (such as Steel-Projects sarl, part of the FICEP Group):
 integration and distribution of CAP2M-SCHED under favourable conditions, using both a discounted sales price, and a volume discount to be negotiated according to agreed objectives.

Exploitation Strategies
Views on exploitation strategy: Princeps
Princeps has been an actor in the area of planning and scheduling solutions for the process industry, now for around 15 years. The company is active in research and technology developments in these areas, with a specific focus on the integration of planning and scheduling on the one hand, and on the other, the cooperation between optimisation and simulation as problem solving paradigms.
In line with our general business strategy, Princeps intends to exploit the algorithmic developments and prototypes resulting from this project, firstly with our existing client base in the oil and petrochemical industries. Next, our intention is then to gradually introduce the CAP2M-SCHED solution to clients in industries which have similar scheduling issues to those of our existing client base, but which are compounded by additional factors such as, for example, lot-sizing and sequencing issues. As an example, we currently view biodiesel production as having strong synergy with the scheduling problems which face our traditional petro-chemical client base.
Furthermore, we are likely to also consider establishing partnerships for exploitation as a complementary route to expanding our market share from sales of the solution into additional process industry scheduling solution markets.
Views on exploitation strategy: ManOPT
ManOPT currently provides optimisation solutions to clients in manufacturing, primarily discrete engineer-to-order products. In the first instance, we expect the output from the CAP2M-SCHED follow-on demonstration project to provide a prime commercial opportunity to integrate process simulation capabilities with our existing software solution, MAK€.
Secondly, the process industry client base of ManOPT tends to be characterised by batch-type processes and their attendant scheduling optimisation issues, thereby addressing a complementary set of process industry segments compared to Princeps.
Thirdly, our intention is to expand our business interests into the pharmaceutical industry processes, using our domestic reputation and contacts as springboards, and in view of the relative importance of the pharmaceutical industry in Ireland. A successful entry into this industry will enable further growth for our company through expanding our product offering domestically and ultimately, within the EU.
Views on exploitation strategy: TTS
TTS expects to increase its market share, firstly, by exploiting CAP2M-SCHED capabilities so as to offer an innovative solution for production scheduling in the steel fabrication sector, and then extending this into other manufacturing sectors typified by batch-type processes. The expectation is that this can be achieved by being able to offer company-specific customisation of the CAP2M-SCHED tool, as well as by the provision of consulting services.
A further motivation is that we stand to reinforce our knowledge of factors and issues which affect scheduling aspects of processes, as well as acquiring practical know-how in applying the innovative CAP2M-SCHED approach to best effect in batch-dependent process schedule optimisation for our clients.
Lastly, the combined effect of the above aspects is to further develop and broaden our capabilities, and thereby strengthen the company’s position and perception of high added value as a technology transfer company towards SMEs.

Dissemination Strategies
The use of case studies, publication of articles in trade journals, and pro-active participation in events specific to targeted sectors, are recognised by all partners as significant means of promoting their distinctive competence, know-how and solutions.
The market survey result [D3.1] and the business plan [D3.2] provides a positioning of the CAP2MSCHED scheduling solution with respect to known competing solutions, and to the partners strategic business interests and perspectives on how to leverage best advantage from the commercialisation of the software. Non-confidential extracts of these reports will continue to be available of the project website post project.
From the perspective of clients who will procure and deploy this innovation, CAP2M-SCHED can be characterised as an aid to enhance industrial productivity, by enabling process scheduling staff to more rapidly achieve better scheduling solutions. Economic performance is enhanced through:
• improved margins from more profitable (more exhaustive) transformation of raw source materials
• improved volume throughput-per-unit-time (more sellable end-product per unit time)
• improved (reduced) costs through more efficient use of resources in the transformation of raw materials to intermediate products, and from intermediate to final end-products.
The tactical route to proving these benefits demanded close cooperation with a number of key reference large process industrial users. During these field demonstrations, CAP2M-SCHED prototypes ran on working processes by experienced scheduling managers who were able to compare, contrast, and provide invaluable feedback to the SME developers. This approach allowed the partners to collect material which will be used to produce case studies and gather valuable supportive evidence. Non-confidential performance results are published in the project brochure

The work of the project is expected to ultimately affect the nature of scheduling in a broad basket of process-intensive industries such as biotechnology, pharmaceutics, chemicals, and energy, where the ability to meet optimisation objectives which have direct consequences on the environment, industry economics, and company bottom-line profitability, is of vital importance.
Promoting industry awareness of the capabilities and benefits afforded by the new Cap2M-Sched solution, places an emphasis on publicising and disseminating experiences, results, and industrial endorsements achieved through the work of the project.
Within the project, the partners participated in an event [D4.2] aimed at a heterogeneous spread of industrial participants, with intended initial objectives of:
•raising awareness of the general benefits to scheduling operations optimisation, and bottom-line financial impact of embracing the CAP-SCHED solution;

List of Websites:

www.cap2Msched.eu

Final Report Summary - CAP2M-SCHED (Consolidation, industrial Alignment and Performance verification for Movement to Market of a SCheduling solution featuring Heuristics-enhancED simulation & optimisation.)

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