Packaging process optimization of liquid chemicals by using discrete event simulation at Sachem
Packaging plays a crucial role in modern supply chains, ensuring that products arrive safely at their destination. Much of the packaging we use today are made from materials that are not easily recyclable, leading to waste and pollution. As we strive towards more sustainable practices, it is important to consider the role of packaging and how we can make it more environmentally friendly without compromising customer satisfaction and costs.
This is exactly what Martin de Fouw researched in his master thesis at Sachem named: “Packaging process optimization of liquid chemicals by using discrete event simulation”.
Where it started
Sachem is a chemical science company that operates globally, producing fine chemicals that serve as raw materials for a variety of industries. The products are made at Sachem’s facility in Zaltbommel, and around 60 different products are produced. Sachem’s products are viewed as commodities, which means that it is difficult for companies in the chemical industry to differentiate themselves from competitors. Sachem aims to stand out by offering lower prices and better service, with excellent service relying on Sachem’s flexibility regarding delivery time, order size, and packaging materials. Delivery time and order size are significant factors for Sachem’s customers, and the packaging method is highly important due to customers’ specific requirements. The use of different packaging methods results in high costs and carbon emissions, which is not beneficial for Sachem. Sachem aims to contribute to a more sustainable world while at the same time reducing costs and carbon emissions.
At the start of this research, the packaging process and sales data for the year 2021 were analyzed. Sachem uses 25 different packaging materials, which can be grouped into three distinct groups: Intermediate Bulk Containers (IBC’s), Drums, and jerrycans. The first analysis found that many orders placed by customers involved unnecessary packaging material, resulting in high costs and CO2 emissions.
A discrete event simulation model was built to investigate improvement for the used packaging material. Three different improvement solutions were tested. The first solution suggested replacing the current intermediate bulk containers with recycled ones. It was found that for all replacement scenarios, the CO2 emissions regarding the use of packaging material dropped drastically together with the costs.
The second solution aimed to optimize demand by altering the demand distribution. In the data analysis, cost and CO2 emissions per order were calculated and plotted against sales volume for each product and customer. This made it possible to have a clear insight into which product and customers are responsible for the most cost and CO2 emissions per volume. In this improvement solution, the order behavior of positive outliers is used to change the order behavior of negative outliers. This resulted in significant cost and CO2 savings.
The last improvement solution proposes increasing the capacity of bulk tanks to reduce repacking activities. This would help avoid selling the product in unfavorable packaging and save time and resources. Testing showed that increasing capacity can reduce repacking activities, but further analysis of sales data is needed to determine its overall benefit for Sachem.
Furthermore, it is recommended to Sachem to promote to their clients the most sustainable packaging material every time an order is received. The simulation model can present the cost and CO2 savings to the customer, which can stimulate the customer to choose a sustainable option.