Including energy in supply chain planning at a pulp company

In this paper we consider integrated planning of the supply chain at a multi-site pulp company. In addition to the traditional focus on pulp products, also energy aspects are considered, both in the form of raw material and as revenue generating products. The idea is that energy intense raw materials not only gives fiber to the pulp process but also generates an energy surplus that can be used in different ways to create additional value or revenues. The planning horizon is 1 year and monthly time periods are considered. Decisions included in the planning are; purchase and transportation of raw materials from harvest areas to pulp mills, production allocation by dividing the production among the pulp mills, energy mix by choosing the energy input at the pulp mills, and distribution of products from mills to customer. An MILP model for the entire supply chain is proposed. A number of different scenarios including real data from the case company are analyzed and evaluated. The aim of the study is thus to investigate the effects on profitability while taking energy issues into consideration.