At its Alblasserdam plant FNsteel had a need to gain a deeper understanding of its plant logistics, in order to keep customer service at high levels under different scenarios. FNsteel would like to know if their manufacturing plant;
- could meet a 60% increase in production volume in terms of machine capacity and factory logistics,
- which machines would become bottlenecks depending on the product mix of the increase
- and which bottleneck would need to be worked on with priority.
Our client anticipated storage capacity for finished products and intermediates to be a constraint and suspected production step 3 to become a bottleneck but was not sure when.
With over 1000 SKU’s1 and complex routings over 3 main production processes, each consisting of several differentiated production stations, intuition would not be enough to get a quality answer. FNsteel contacted Voorne Partners to help solve the puzzle and provide a method to evaluate the effects of different scenarios.
Finding the answer
We approached the issue at hand from two angles – extended value stream mapping and mathematical modelling to;
- understand the material and information flow,
- understand the corresponding planning and control processes,
- provide a comprehensive and quantitative answer.
- Having understood the interaction between shop floor dynamics and planning and control processes we built
- a; capacity model to calculate capacity utilisation under different mix/volume/shift-model scenarios,
- inventory (queuing2) model to calculate the effect of increased volumes on inventory, storage requirements, and resulting lead times.
Obviously getting to the answer was only possible with input from FNsteel employees, through a process of workshops and most time consuming and difficult, data collection and validation. Data normally available in any company is not immediately suited for modelling, simply because it’s been set-up for planning, quality control, transaction processing etc, but not for modelling.
The answer
Having understood plant dynamic’s full spectrum we could;
- confirm that warehouse space for finished products was a bottleneck, but now also by how many m2 per scenario,
- refute the notion that production step 3 was a bottleneck; actually it was step 4, but as there was little room for storage in front of this step, work in progress stocks built-up in front of the preceding step 3,
- determine that storage capacity for work in progress need not be an issue as long as the plant is not loaded above (mix dependent) bottleneck capacity,
- show how flow and capacity could be optimised following different planning techniques and targeted changes to machine availability and staffing levels.
Based on this new insight and with the new tools FNsteel can now prepare for any scenario.
As Brian Clifton, Technical Director FNsteel bv said:
“Through their analysis work Voorne Partners helped us gain valuable insight and an improved understanding of our manufacturing flow. This will be a great help in evaluating the different scenarios we are considering for the future.”
FNsteel is a steel company that produces and processes wire rod3 and PC strand4. The company has a long tradition of steelmaking and is one of the leading companies in the European industry of quality wire products. One of FNsteel’s state of art facilities is located at Alblasserdam, a site for processing of steel wire, including pickling, annealing and drawing of the wire rod. FNsteel products are used for automotive, construction, general engineering and other branches as well.
1 Stock Keeping Unit
2 Based on capacity utilization and lead time variation per production step/asset
3 A rolled (non) alloy steel product which is wound into coils and transported in this form.
4 Pre-stressed concrete stand