SimWell Uses Arena Simulation to Help Customer Minimize Cost of Operating its Natural Gas Supply Chain
SimWell has worked for a gas provider in Western Canada. SimWell has built a dynamic simulation model of their supply chain for compressed natural gas in North Dakota. The objective of the project was to accurately size the fleet of vehicles in order to minimize cost, while keeping a service level of 100%.
Complexity of the project
The gas sources and and clients are always moving, since the gas is produced and consumed by the activities of the oil wells. Also, the natural gas gets stored at the customer in the trailers of the distributor. Finally, the weather, equipment maintenance and road conditions impact how the required level of service may be achieved.
The complexity of this distribution network exceeds the capacity of mathematical tools. Therefore, a discrete-event simulation model was built using the Arena Simulation software by Rockwell. Since the providers and customers are ever-moving, it is impossible to predict the exact locations where they will be in the future. Thus, SimWell has created a grid of geographical coordinates (longitude, latitude) on a road map of the region covered. A software for calculating routes was used to evaluate the travel times between the sites and a Markov chain was used to represent the impact of weather on the duration of the trips. Finally, SimWell has created an algorithm to dispatch tractors and trailers.
The model developed by SimWell has allowed its customer to correctly size the fleet of tractors and trailers, as well as test some different operational modes and choose the most efficient one. Therefore, the customer has minimized the risk of not achieving the required level of service, while keeping the costs as low as possible.
Here’s a video showing the challenge taken up by Ferus in North Dakota: