Dynamic Models for Supply Chain Planning in Oilfield Services Industry: A Case for Hybrid Cross-Docks

41 Pages Posted: 8 Aug 2017

See all articles by Ashley Jones

Ashley Jones

Halliburton

Manoj Vanajakumari

Texas A&M University

Chelliah Sriskandarajah

Texas A&M University

Haoying Sun

Texas A&M University - Mays Business School

Date Written: August 4, 2017

Abstract

We consider a supply chain planning problem via efficient cross-docking for oilfield services industry. The problem is motivated from a major oilfield services company in North America. In a typical supply chain setup of this industry, the companies ship raw materials to an international location (typically a Free Trade Zone), which serves as the stock consolidation point for the region, break-bulk and then ship to field locations (oil excavation sites also called plants). In this research, the consolidation points are hybrid cross-docks (HCD), where raw materials can be stored free of cost for a specific period of time. The supply chain problem involves minimizing the total inbound and outbound transportation costs and the inventory management costs at the cross-docking facility and the plants. In this context, we analyze two problems under the following scenarios: (i) all raw-materials required at each plant (outbound delivery) are shipped periodically by the company from the HCD, and (ii) the outbound delivery is outsourced to a 3PL. For the first problem, we perform complexity analysis, use discrete optimization, and develop a heuristic algorithm. For the second problem, we perform stochastic analysis and robust optimization. The first scenario gives rise to new integrated inventory and logistics models. The second scenario provides new theoretical models and analysis for a variation of the dynamic lot-sizing problem. This paper demonstrates the use of a modeling approach that not only meets this need for this specific industry, but also has the potential to be applied to other industries with similar supply chain structure.

Keywords: Supply Chain, Cross-Docking, Logistics, Robust Optimization, Dynamic Lot Sizing

Suggested Citation

Jones, Ashley and Vanajakumari, Manoj and Sriskandarajah, Chelliah and Sun, Haoying, Dynamic Models for Supply Chain Planning in Oilfield Services Industry: A Case for Hybrid Cross-Docks (August 4, 2017). Mays Business School Research Paper No. 3013853. Available at SSRN: https://ssrn.com/abstract=3013853 or http://dx.doi.org/10.2139/ssrn.3013853

Ashley Jones

Halliburton ( email )

3000 N. Sam Houston Pkwy E.
Houston, TX 77032
United States

Manoj Vanajakumari (Contact Author)

Texas A&M University ( email )

Langford Building A
798 Ross St.
College Station, TX 77843-3137
United States

Chelliah Sriskandarajah

Texas A&M University ( email )

Langford Building A
798 Ross St.
77843-3137

Haoying Sun

Texas A&M University - Mays Business School ( email )

Wehner 401Q, MS 4353
College Station, TX 77843-4218
United States

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