ERTC Newspaper 2022

ERTC 2022

Repsol uses Control Tower solution to manage its integrated business value chain

ASPENTECH

Repsol S.A. is a global energy and petro- chemical company based in Madrid, Spain. It is engaged in worldwide upstream and downstream activities to bring efficient, sustainable, and affordable energy to mil- lions of people. Repsol’s chemicals busi- ness produces about 4750 kilotons/year of high-value products, including eth- ylene, propylene, butadiene, benzene, Polyethylene (PE), Polypropylene (PP), Low Density PE, Ethylene Vinyl Acetate (EVA), proplyene oxide (PO)/Styrene Monomer (SM), and propyl glycols. The company operates three integrated petrochemical complexes, which are man- aged as a single hub to strategically supply the southern European and Mediterranean markets. These complexes have feedstock flexibility with indigenous and imported feedstocks and can crack up to 35% light feedstock (LPGs). With its sophisticated, integrated business, Repsol was seeking a production and value chain optimisation solution to maximise margins and solve a number of other business challenges. Envisioning an End-to-End Supply Chain Control Tower To manage its downstream chemicals busi- ness, Repsol envisioned a solution that would provide full economic and customer service trade-offs for planning across the entire chemicals value chain. Although it had used Aspen PIMS™ for many years, the company required a best-in-class, end-to- end solution that would consolidate dispa- rate data, such as production rates, plant constraints, customer demand, prices and costs, inventories, production schedules, and more. Repsol named this projected vision ‘Control Tower’ after the air traffic control tower at an airport, directing oper- ations across the airspace to maximise safety and efficiency. The project included production and value chain optimisation in order to max- imise business margins in economic terms while considering customer service KPIs. Repsol wanted to empower its teams to improve decision-making and minimise response times across the end-to-end

“With the Aspen Supply Chain system, we provide full economic and customer service-driven trade-offs to planners and schedulers for the entire Repsol chemical business” Alfonso Galan, Planning and Optimization Senior Consultant, Repsol

Overall supply chain

Renery

Olens/aromatics

Bulk chemicals

Derivative chemicals

Polymers

Margin-driven optimisation challenges:

Optimise feedstock selection and operating conditions Accurately model varying yields and other non-linear process relations Provide visibility from inbound logistics through process operations to outbound product Provide feedback from daily data reconciliation to planning process Optimise feedstock selection to account for large variation with few simple products

Demand-driven optimisation challenges: Ac c urately model complex production wheel operation across growing product state Profitably balance interactions among orders, production, inventory and distr i bution Optimise production slate and asset utilisation to protably match market demands Optimise large number of dierent products made from simple feedstock

Trading

Figure 1 Margin and demand driven business lines within Repsol’s chemicals business

Manager, global supply planning with Aspen Supply Chain Planner, plant-level production scheduling with Aspen Plant Scheduler™, and enhanced collaboration, communication and ‘supply chain social networking’ with Aspen Schedule Explorer. Margin-driven optimisa- tion of Repsol’s refining and chemicals assets is completed with Aspen PIMS. All these capa- bilities, deployed in a Microsoft Azure private cloud, are integrated with SAP through Aspen Supply Chain Connect™ (ASCC) and Microsoft PowerBI, sharing supply chain data using powerful dashboards. The scope of Repsol’s Control Tower is expansive, covering bulk chemicals, deriv- atives, and polymers business units, and includes business processes such as sales and operations planning (integrated business planning), production economics, production planning, production scheduling, product/ grade wheel sequencing, demand manage- ment, supply/demand balancing, supply net- work planning, inventory optimisation, and distribution optimisation. Control Tower Results and Benefits Overall, the business benefits to Repsol from the Control Tower project were significant, including a 2-4% improvement in the compa- ny’s customer service level across the entire supply chain. Customer service level meas- ures the quantity of orders filled on time by a company; an increase generally means greater customer retention and satisfaction. Another huge benefit for Repsol was increased profit, enabled by three different initiatives implemented as part of the over- all project. First, the amount of prime product was increased by reducing transition time on the polymers units by approximately 3-4% due to scheduling optimisation. Second, bet- ter decision-making at the crackers resulted from increased visibility into the polymers business demands and constraints. The Control Tower solution proved to be so impactful that Supply & Demand Chain Executive magazine named it one of its Top Supply Chain Projects for 2022. These awards recognise the most transformative and successful case studies from the past year.

Challenge: Repsol needed to make the best business decisions, given the VUCA (volatile, uncer- tain, complex and ambiguous) macroeconomic environment. Solution : To understand its entire chemicals business as one system, Repsol used Aspen PIMS-AO™ (Advanced Optimization) with the following aspenONE® Supply Chain Management (SCM) solutions: • Aspen Supply Chain Planner™ (SCP) • Aspen Plant Scheduler-Extended Automation™ (PS-EA) • Aspen Collaborative Demand Manager™ (CDM) • Aspen Schedule Explorer™ (ASE) Value Created: With a comprehensive, total view of its chemicals business, Repsol was able to: • Improve its profit margin with improved business decisions for crackers, polymers scheduling, and distribution • Deliver return on investment over 10x with a payback period of less than six months • Increase its customer service factor by 2-4%

value chain. To enable this, it designed a system to create optimal plans and then implement those plans with production and logistics schedules, all integrated within its current IT landscape in SAP/APO. The Control Tower solution was conceived by balancing two halves of the chemicals business: the margin-driven or commod- ity side and the demand-driven or specialty side. Maximising value from the integrated business requires planning processes and

technology that supports both the margin- and demand-driven sides of the business and balance the objectives of each. Project Overview The Repsol Control Tower solution combines aspenONE Supply Chain Management with Aspen PIMS-AO, its current margin optimi- sation system. Demand-driven optimisation is performed using global demand fore- casting with Aspen Collaborative Demand

Firm orders & unconstrained forecast

Grade-customer demand & netback

PIMS-AO Monthly planning (3-4 months)

Collaborative demand manager Monthly forcasting (12-18 months)

Supply chain planner Monthly planning (12 months)

9 Constrained forecast

Monomer availability

Production plan Inventory plan

ASCC Database

Production plan Inventory plan

Firm scheduler (Frozen zone)

Inventory thresholds

Firm orders & net constrained forecast (working forecast refreshed in period)

Plant scheduler (8-12 weeks)

Scheduler explorer

Planned orders

Reference data Transaction data

Sales and distr i bution (SD) Materials management (MM)

Production planning (PP)

Global available promise (G-ATP)

Contact: aspentecheura@aspentech.com

Figure 2 Repsol Control Tower combines AspenOne Supply Chain Management with Aspen PIMS-AO margin optimisation system