The propane crisis of 2013-2014 presented significant concerns for Midwestern states. The State of Iowa took a scientific approach to addressing these challenges by developing a Propane Supply Chain Optimization Strategy.
The focus of the effort is to understand the root causes of issues that resulted in the propane shortage. Then, leveraging this knowledge, potential risks and opportunities are objectively analyzed to better manage Iowa's propane supply chain. The core goals of the effort were:
- To be better informed when demand for propane reaches critical levels and Iowa faces potential shortages; and
- To proactively define viable contingencies to better manage extreme fluctuations and disruptions in propane supply in the future.
Iowa's approach was to analyze the problem objectively using a Supply Chain Network Optimization methodology. It is a proven discipline, leveraged by large Fortune 500 companies and government agencies, to optimize complex global supply chains, improve profitability and increase operational efficiency.
The effort is an extension of Iowa's Statewide Freight Transportation Network Optimization Strategy. Partnered with Quetica Consulting, the Iowa Department of Transportation (Iowa DOT) used demand-based supply chain design and optimization techniques to effectively identify and prioritize investment opportunities for an optimized freight transportation network to lower costs for Iowa businesses.
The propane study employs these same techniques to evaluate short- and long-term optimization scenarios to better handle fluctuations in propane supply and demand, and the corresponding economic impact to Iowa businesses and consumers.
To learn more, please download the project overview.
Photo Credit: Propane Education and Research Council