Solving the raw materials reception problem using revenue management principles : an application to a Portuguese pulp mill

The significant contribution of raw materials inbound logistics to the reduction of the procurement cost have motivated several recent studies, particularly in the forestry sector. New routing and truck scheduling techniques have been proposed to plan in advance the arrival of the trucks to the mill’s gates. Yet, little attention has been given to the trucks rece ption, unloading and internal movements until exiting the facilities. Consequently, congestion and queuing of the trucks at the mill gate often occur, increasing the duration and costs of the transportation services. This paper introduces the Raw Materials Reception Problem (RMRP) and presents an innovative solution approach anchored on Revenue Management principles often used in for example airline and hotel booking systems. The solution builds on segmenting carriers/trucks and their dynamic assignment to the time slots available at the unloading docks, awarding on -time arrivals. Direct unload at the production lines is further preferred. It avoids, whenever is possible, the passage in the intermediate stockyard, therefore leading to a reduction of the mate rial handling cost. Results of the application of this solution approach to the wood supply of a Portuguese pulp mill are presented. The case study encompasses 120 pulpwood daily deliveries on 6 possible unloading docks inside the mill. The proposed approa ch led to a reduction of 55% on the daily raw material reception cost when compared to the FIFO approach used today. The maximum waiting time for each truck was also reduced, particularly for the trucks on higher priority segments. This approach was implem ented in the Wood Delivery System prototype and then used for conducting a trade -off analysis that provided valuable information to support decision -making in respect to the design of the reception process.