• Usiminas Plant image As a title image

Usiminas optimizes their production with PSImetals Planning

Usiminas and PSI Metals have been working together since 1997 and have successfully implemented various Supply Chain Management projects over these 25 years of partnership.

Both partner companies joined forces again and in 2022 implemented together an integrated PSImetals Sales and Operations Planning solution, comprising the operations of both Cubatão and Ipatinga sites, as well as a detailed PSImetals Flow and Order Planning for each production plant of these sites.

Usiminas (Usinas Siderurgicas de Minas Gerais S.A) is a steel producer, leader in the production and sales of flat steel in Brazil, with headquarters in Belo Horizonte/MG and 2 operative sites, in Ipatinga/MG and Cubatão/SP.

Usiminas produces slabs, heavy plates, as well as coils and sheets: hot rolled, cold rolled, electrogalvanized, and hot dip galvanized.

Usiminas Logo for PSI Metals article

Project Results

The project implemented a product based software solution for the tactical (PSImetals Sales and Operations Planning) and the Flow and Order Planning levels, ensuring higher adherence between what is being sold and what is being effectively produced, and consequently achieved very important business objectives, such as:

  • Reduced time required to produce a plan for Sales & Operations, so that decisions can be made on suitable time and the communication to the market (customers) and to Usiminas’ operational areas could be improved.
  • Allowed for the creation and simulation of multiple scenarios where different demand and operational conditions could be tested and validated, notably the simulations of different galvanizing campaigns and the simulation of different demand scenarios.
  • Ensured plan feasibility, by using accurate master data and an adequate supply chain planning model.
  • Improved sizing of stocks for physical work in process and flow of materials through the lines, respecting physical limitations, observing process constraints and business objectives.
  • Improved customer delivery performance and frequent updates on the delivery forecast.
  • Enabled more adequate decisions of ‘where to produce’ in cases where the demand could be satisfied from both sites, as well as adequately plan material transfers from Ipatinga to Cubatão.
  • Defined monthly requirements of replenishment of semi-finished materials (slabs), mainly for Cubatão operations.

PSImetals Sales and Operations Planning (S&OP)

Usinimas Plat iname for PSI metals Article
Source: Usiminas Plants

The PSImetals Sales and Operations Planning process commonly indicates, based on a combination of actual and forecast demands, what should be a company’s sales plan to increase its financial results based on the constraints of an existing installed operational capacity. Also on the operations level it helps on defining maintenance plans, campaigns for producing similar materials in certain lines, and the requirements of shifts operations (modus operandi). Moreover, it can be used in longer terms to identify where to invest for removing the production bottlenecks.

The situation prior to the project was that Usiminas was using Microsoft Excel in order to create both the S&OP and the PSImetals Flow and Order Planning. The Excel files contained multiple ‘macros’ developed using Visual Basic which were difficult to use, maintain and modify.

Carrying out the S&OP in Excel spreadsheets was very time consuming. The elaboration of one monthly plan was typically lasting for over a week, and by the time the plan was ready most conditions had already changed and the plan could already be obsolete.

In addition, the plan being produced would not consider both sites simultaneously for processing the combined demand, and therefore would not consider the alternativeness between these sites.

The PSImetals S&OP solution was implemented in a single instance for producing monthly plans for a horizon comprising the 5 upcoming months. With the PSImetals S&OP solution, Usiminas now has one system covering the 2 sites and producing an integrated plan in around 3 minutes, allowing for simulations of multiple scenarios, and ensuring collaborative management and control of the monthly Sales and Operations Planning process.

According to Rodrigo Brentegani, IT Project Manager from Usiminas:

Before we implemented the PSImetals Solution, we had tried other solutions but they did not satisfy our production needs as we needed over 24 hours to run the sales and operation plans. With the PSImetals Sales and Operations component, we take just a few minutes and we can try different scenarios. Even though we are still learning how to use the solution, so far, we are satisfied with its performance.

PSImetals Flow and Order Planning

Usiminas Project image for PSI Metals Article
Source: Usiminas Plants

The operational plan is typically elaborated to determine when materials and orders will be processed and through which resources, and therefore provide a more detailed visibility of when orders will be delivered, how resources are being utilized, and how the levels of stocks are evolving over time.

The PSImetals Planning solution implemented for Usiminas has the following characteristics:

  • A daily plan is produced individually for each site, for the entire order book, which typically would imply on a detailed plan for approximately 40 days;
  • The solution was also migrated from Microsoft Excel to a robust and configurable supply chain planning model;
  • The master data (productivity, yields, routes, equipment, calendar, efficiency, constraints, etc) is shared between the monthly S&OP and the daily plan, ensuring consistency of data and results
  • Also outputs from both the S&OP and Daily plans are shared between each other for consistency between the different planning levels
  • The plan is considering each piece of material individually, and although this implies on a very high level of detail, each plan takes less than 10 minutes to be produced, so various simulations and scenarios can be created on an ‘ad hoc’ basis. Here the decision of making separate instances for Ipatinga and Cubatão proved to be very important;

Conclusions and Next Steps

Usiminas and PSI Metals will continue to collaborate on improving the software tools that provide support to the Supply Chain Management business process.

A subsequent project has already started for the implementation of the PSImetals Framework, a set of tools that will enable a robust and still flexible integration between multiple planning and scheduling systems, as well as a safer and simpler architecture that will also improve the connection of the PSI modules to external systems.

From an IT perspective, this will ensure higher system availability and less costly maintenance. From a business perspective, the benefit will be a more integrated process with increased consistency between the different planning processes and layers (sales planning, operations planning, production scheduling). PSI Metals is proud of being a long-term Usiminas partner and we will continue working in close partnership for increased benefits.

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Bilder: Usinas Siderurgicas de Minas Gerais S.A