Logistics is a vital artery of the coal industry, ensuring uninterrupted transportation of coal from mines to power plants. Even minor deviations in coal quality (NCV, ash content, moisture, sulfur content) from the technical requirements of power plants and inefficient management of rolling stock (wagons) can lead to significant financial losses and reduced profitability. Traditional logistics models often need to consider all these nuances, leading to suboptimal resource use and increased costs.

For example, the existing fleet of open wagons is distributed manually to loading stations based on the availability of empty rolling stock on specific days. The transportation cost factor is only partially considered when allocating railcars when negotiating contract terms. In cases where coal quality deviates from the operational plan, the changes in coal shipment directions by recipients are determined manually, and the factor of optimal logistics costs is only partially taken into account.

Solution

To solve this problem, MODUS X developed and implemented an innovative model for DTEK Energy to optimize the coal supply business process. This model considers the quality of coal and the distribution of rolling stock, representing a true breakthrough by integrating advanced technologies and analytical tools to maximize efficiency and ensure the stable operation of Ukraine’s energy system during the war.

The model includes

• An automated tool (advanced analytics algorithm) that selects the most profitable car owner for each route in real-time.
• Daily planning and updating of transportation plans based on the sales plan and the current coal quality forecast, considering the selection of the most cost-effective car owner.
• A user-friendly interface for creating shipment orders (raw coal, concentrate) based on the recommendations of the optimization model.

In addition, the model automates the process of distributing wagons, considering demand, availability, and transportation costs, thereby minimizing empty mileage.

“This model is not merely a software product; it results from a deep understanding of business needs and the application of advanced technologies. We are proud that our team was able to create a solution that allowed DTEK to achieve significant cost savings, enhancing the efficiency of logistics processes,” said Valentyn Vyntu, Chief Data Officer at MODUS X

To ensure the accuracy and efficiency of optimization, the tool utilizes a wide range of input data, including:

• Wagon information: detailed records of loaded, empty, and available wagons, their types (gondola cars, hoppers), current locations, and technical conditions.
• Coal quality: comprehensive data on the coal quality from each mine, including key parameters such as ash, moisture, sulfur content, and calorific value. Coal quality forecasts are also considered for more accurate planning.
• Mine throughput: data on coal production volumes at each mine, optimizing railcar loading and planning deliveries based on production capacity.
• Unloading restrictions: information on the capacity and schedules of unloading terminals at power plants, which helps avoid congestion and ensure timely coal delivery.
• Other logistical constraints: a full range of constraints, such as the capacity of TPP warehouses, routing standards, train speed limits, etc., are considered to avoid unforeseen situations and ensure logistics efficiency.

Optimization algorithm

The model uses a robust optimization algorithm, including graph-based and nonlinear optimization techniques. This algorithm processes input data and constraints to find the optimal coal and rolling stock distribution solution. It considers various factors, such as the distance between mines and power plants, transportation costs by different modes, railroad capacity, technical requirements of power plants for coal quality, and other constraints

The model is integrated with SAP and Ukranytsia’s internal accounting systems, allowing it to work with up-to-date data in real time, ensure high forecast accuracy, and respond quickly to logistics conditions.

Model tools

“Daily shipment schedule”

This tool allows you to create an operational shipment schedule, considering the optimized distribution of wagons and coal. It visualizes the entire coal shipment and transportation process, maximizing efficiency and minimizing the risk of delays and downtime.

Advanced interface

The solution’s interface is crucial for analyzing and managing logistics processes. It allows users to visualize data, receive recommendations on wagon and coal distribution, and track the efficiency of logistics operations in real-time.

Key project results and impacts:

• A modern interface has been developed and put into commercial operation, enabling work with the optimization model, visualization of data, and receipt of recommendations for the distribution of cars and coal.
• The efficiency of the optimization model was confirmed based on historical data from previous years.
• The railcar distribution processes have been automated, significantly enhancing efficiency.

“MODUS X’s coal supply business process optimization model has significantly improved the efficiency of our logistics network by reducing costs and optimizing the use of rolling stock. The model’s flexibility allows us to quickly adapt to market changes and ensure uninterrupted coal supply, which is an important link for the operation of TPPs,” said Olga Antropova, Head of Operational Efficiency Management at DTEK Energy.

The MODUS X data management team’s implementation of the model for optimizing the coal supply business process, based on the quality and distribution of rolling stock was a key solution that allowed us to optimize resource use and increase DTEK’s competitiveness. The tool considers variations in coal quality and ensures efficient use of rolling stock when planning logistics processes.

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