Optimization of Material Procurement Plan - A Database Oriented Decision Support System

Recently, the business in steel has undergone a sea change. Customer requirements for steel products have become increasingly demanding in terms of better quality and specification. Globalization has thrown open the market to intense competition. The rise in raw material cost has put pressure on steel industry to optimize the procurement strategy time to time. It has become imperative to re-look at the production strategies and production costs to work out methods to address the market situations in a dynamic manner. Minimization of the production cost in a Blast Furnace (BF) in an integrated steel plant is a complex problem as it associates the quality, quantity, cost & freight of raw materials along with the production targets and present operating regimes. Coal forms a major source of cost in the entire gamut of Iron & Steel production. Coal quality has a direct bearing on the BF productivity and the final cost of hot metal. Steel Plants procure coal based on the quality requirements, coal availability and linkages with coal sources. This paper is based on application software that deals with the procurement of coal based on optimization techniques integrated with heuristic and statistical models. The software has been developed using C programming language, Oracle Developer tools as front end and oracle database as backend. This is an excellent tool for finalizing coal procurement plan, with a view to minimize hot metal cost and achieve desired coke quality at minimum cost. The software can be also be utilized for assessing the effect of Rupee / Dollar parity, effect of quality of any individual coal etc. on coal procurement plan and hot metal cost.