BASF Solves Supply Chain Optimization Problems Using FICO Optimization

Global Chemical Company Wins FICO Decisions Award for Analyzing Investment Impacts Across Entire Supply Chain Using FICO Xpress Insight

BASF has optimized one of the world’s largest supply chain networks using FICO Xpress Optimization. BASF’s advanced business analytics team used the mathematical optimization software to map all of the company’s supply chains at once to weigh the economic value of an investment, a massive computational challenge. For its achievement, BASF was awarded a 2018 FICO Decisions Award for AI, Machine Learning & Optimization.

“The chemical value chain is highly complex. When making strategic investment decisions, you have to take into account multiple global production sites, interdependent plants, manifold products and various businesses,” said Franz Joachim Schwenke, head of the Advanced Business Analytics team at BASF. “Our team of data scientists is constantly searching for new opportunities, to make available data more transparent and create solutions which support strategic and tactical decisions. We created a solution that can accurately evaluate the impact of strategic and tactical decisions like investments into new production plants for an entire chemical supply chain.

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“To make it easier for BASF employees to use, we integrated the solution in a FICO Xpress Insight web application,” Schwenke said. “With this interface, it is possible to generate scenarios intuitively and easily share them with other users. Our colleagues especially appreciate that input data and the optimization results are shown via interactive dashboards and network graphs, making it easy to compare several scenarios at a glance.”

FICO^® Xpress Solver can consider an entire value chain at once with all its relevant constraints. Through the detailed modeling of the interdependencies between the different business units participating in the value chain, the total economic value of an investment can be evaluated faster and more accurately. The project combined strong mathematical optimization models with a business-friendly user interface.

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While the data preparation as well as scenario calculation took several months in the past, the new application allows BASF to generate a scenario within a couple of minutes. In addition, the usage of mathematical programming has led to a major improvement in quality of value estimation.

“BASF showed an innovative use of technology in a project with very large-scale and very complex problems,” said Sid Dash, research director at Chartis Research. “They solved challenging data representation and computational problems that just could not be addressed using spreadsheets. The judging panel was impressed by the scope and scale of their achievement.”

“BASF is solving computational problems at an absolutely massive scale and putting it directly in the hands of business users,” said Steve Hadaway, general manager for FICO in Europe, the Middle East and Africa. “Our Xpress solution is ideal for businesses like BASF that need flexibility, ease of use and tremendous computational power to find answers to big problems. C************** to the team for this well-deserved award.”

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