Academics / Undergraduate Program / Client Project Challenge / ProjectSupply Chain Optimization: Routing and Inventory
July 16, 2024
Lufkin Industries has many pump shops. These are customer-facing locations that supply products to the oil and gas industry.
Lufkin worked with a student team from Northwestern’s Client Project Challenge class to analyze their transportation routing and inventory strategy. In this project, the team focused on the Permian Region, which has 12 Pump Shops.
This wasn’t a typical routing problem. Lufkin wanted to create fixed delivery schedules that were the same every week or two, wanted to test different delivery frequencies to different pump shops, and wanted constraints on the number of trucks and drivers they used. In addition, Lufkin wanted to understand the inventory implications for each route evaluated.
The team built a routing model and inventory model to answer these questions.
The following is a map of Lufkin locations. This project focused on the distribution center in Texas and the pump shops it serviced.
“We enjoyed working with Cem, Joey, Janin, and Catherine. They worked with our data, made reasonable assumptions when there was missing data, and came up with some interesting results. Specifically, they identified supply chain savings by creating a new delivery schedule that reduced transportation costs, reduced potential inventory, and didn’t change the number of trucks and drivers we needed. We are now determining what we can implement,” said Solai Chidambaram, Vice President of Supply Chain at Lufkin.
Lufkin is a portfolio company of KPS Capital. Aaroop Sankar, VP of Portfolio Operations of KPS Capital, said, “We were excited to see Lufkin work with Northwestern. Our portfolio companies always look for ways to continually improve and open new recruiting channels.”
Cem Askin, Joey David, Janin Liu, and Catherine London were the Northwestern student team. Professor Somayeh Moazeni was the faculty advisor.
Solai Chidambaram was the project sponsor from LUFKIN. Aaroop Sankar was a sponsor from KPS Capital.
About: LUFKIN
LUFKIN’s proud legacy extends back to the early 20th century when the LUFKIN Foundry manufactured railroad and sawmill equipment. The company expanded soon after by pioneering oilfield pumping units in the 1920s. Today, LUFKIN is a world leader in its field, providing precision-engineered oilfield equipment, products, and services to customers around the world.