Planning and scheduling for mill industry

In today’s transformed business world, the push-based manufacturing philosophy and the siloed planning processes of the past are proving insufficient to manage ongoing demand volatility. Supply chain leaders have moved to a push/pull based planning paradigm that synchronizes the supply chain with real-world market demand — while also respecting asset utilization, production cost and other operational constraints.

In order to create a truly agile, synchronized supply chain, most businesses face significant obstacles. Traditional planning processes have largely been siloed, lacking integrated decision making across multiple functional areas, as well as any involvement from supplier and channel partners. Instinctual reactions to market volatility, such as stockpiling inventory in a “push-based” manufacturing stance, have drained precious resources.

Proper tools, technology and methods can bring is assessable benefits to steel industries supply chain such as increased margin and revenues through better understanding of market opportunity and supply chain capability, increased throughput and better efficiency in the supply-chain due to improved product mix, increased revenue and margin by focusing sales effort on a financially optimized sales plan, allows Sales to evaluate the commercial impact of accepting new business prior to committing delivery, increases delivery performance by eliminating overbooking and integrating the competing objectives of sales and production.

Why not ERP (SAP) based Production Planning and Scheduling tool

In mill industries the production process cannot be fully controlled and the plans cannot always determine the outcome of processes. In addition, the large number of characteristics for the manufactured products and customer behavior necessitate changes on short notice. The complex machine scheduling and typical logistics of quantity versus unit based handling forces companies to adapt a reactive planning approach. Essentially, reactive planning means that the result of the previous step must be evaluated to determine the next production step. Quite often, some of the units processed do not have the required specifications (off grade). A decision must then be made in real time on how to process these units further. Consider the example of a customer who orders 200 tons of a specific type of steel in the form of coils. The sales order leads to the casting, rolling, and further processing of several slabs. Each individual slab belonging to the order, and each coil, must be mapped from the moment it is first produced. Single coils might pass through very different production paths, especially if any reworking is necessary. Single pieces might also need to be removed from the package for the original sales order because they deviate too far from the required specification.

SAP being a transactional system, these issues are uncommon in processes mapped within it, which means that specialized systems must be used. These specialized systems can bring agility to the planning and scheduling process and then can complement ERP (SAP) to its true potential.

Aligning the core processes:

For a steel supply chain, there are four core processes that must be closely synchronized in order

to enable organizational agility. If planning processes in any one of these areas are operating in isolation, the global supply chain will not be able to achieve its highest potential. Disconnects prevent the manufacturing organization from responding as a single entity to fluctuating demand levels — and result in sub-optimal decisions.

01.Sales & Operations Planning and Order Promising:

The S&OP applications specialized for steel industry should provide strategic and tactical business planning tools that emphasis the capacity of the plant on the most rewarding products and markets together with real-time ATP and CTP tools that provide rapid delivery commitments to the customer considering supply-chain capacity and profitability. For a metal industry specific scenario, these S&OP engines provide facility for generating forecast based on historic product / market mix, optimizing the product mix based on total contribution margin or capacity, creating the master production schedule considering all supply-chain costs and constraints raw/semi-finished material / equipment productivity/yield, transportation, inventory restrictions and targets, enable users to apply process level restriction to ensure productivity at the bottleneck resource, AATP tools that normalize incoming order mix based on optimized sales plan and at real time, Order Management functionality to balance the demand with supply, checking process constraints to avoid holdup due to poor productivity product mix.

02.Advanced Planning and Scheduling:

The APS solution focused on steel industries provide order fulfilment tools that maximize delivery performance and throughput while minimizing inventories/lead times and costs. The benefits of using APS includes but not limited to aid improving productivity and utilization through better management of bottlenecks and piece size optimization, reducing inventory through more truthful allocation and cascade allocation of excess inventory, exploit material flexibility to reduce material shortage, improve customer service as manufacturing supply chain becomes more agile to change. The APS for a steel specific scenario offer features like attribute centered automatic allocation, de-allocation and re-allocation of raw material, WIP and finished product to sales order based on inventory build-up, cycles and process restrictions. APS should optimizes and balances material flow through the supply chain considering alternate routes, equipment capacity, production cycles and process restrictions. In addition APS for steel industry must be capable to forecast equipment utilization, inventories and delivery performance.

03.Detailed Scheduling:

These are specialized tools for different areas with in steel manufacturing supply chain but sharing the same vision to accomplish the master Production schedule. These detailed scheduling applications are based on industry proven specialized algorithm to provision automated and interactive scheduling tools that balance the operational rules and constraints of supply chain resources against the commercial priorities in the production plan. Some of the benefits these tools can bring to the table are creating an agile environment that lead to better customer service due to rapid rescheduling capabilities, improving productivity due to ability to consider more complex business rules and ability to pick up opportunities that can otherwise be missed during manual scheduling process, lowering the cost of production, improving product quality, reducing the WIP inventory, reducing scrap & rework due to more optimal sequencing and reduced manual scheduling effort. These tools can further be used as an agent of change to challenge the existing practices of the organization specific to planning and scheduling. The detailed scheduling tool for steel industry offer features like automated and interactive scheduling which covers all areas of an integrated steel plant from Blast Furnace till finishing line, the tools are capable of creating heat & tundish sequences apart from providing support for hot charging of slabs into conventional hot rolling mills. The tool are also designed to support real-time slab allocation facility for assigning off-spec material to alternative orders and real-time scheduling facility for short term co-ordination of steel making by close integration with the collaborative manufacturing solutions.

04.Collaborative Manufacturing:

Collaborative Manufacturing or MES provide the collection of production data for analysis and integration into planning & scheduling, and other systems, to improve operating efficiency, reduce costs and increase on-time delivery, together with facilities for real-time control of the production process. The MES solution includes support for four important category of manufacturing operations management namely Production, Quality, Maintenance and Inventory. The real time data from MES can greatly improve the visibility through manufacturing supply chain, reduced cost, improved productivity, quality and reliability by analyzing process data to identify products/ processes that incur high cost. MES helps manually inspect and execute schedules, capture and store history of process & product data in real time.

Looking toward the future, there is only one real certainty is that uncertainty will continue to prevail. Synchronized and integrated planning process enables the business to anticipate and respond to proactively to any business uncertainties. Utilization of critical assets can be enhanced by extended demand visibility, capacity projection and better load balancing through advanced order planning.

[ The views expressed in this blog is author's own views and it does not necessarily reflect the views of his employer, JSW Steel ]