An example of how reducing scrap optimization software works with coils
Material costs can control as much as 80% of the total end production cost for a manufacturer of steel products. This naturally includes those involved in the steel coil processing industry. If you, as a manufacturer of steel or metal products, can reduce even a small amount of the material used in your process, then costs can drop dramatically.
Using reducing scrap optimization software you will minimize scrap, and maximizing the amount of billable production out of your inventory of material.
We can define scrap as essentially the left over portion from the coil dimension to the dimensions required for products delivered to your customer. The challenge you face in minimizing the scrap is that you have both thickness requirements, length requirements and cut to length requirements that must be organized so that the right sized coil is being used for the right sized end products.
This in turn minimizes your scrap and ultimately saves you money. While you may have a whiz kid or two on staff that can keep all of this in check on a spreadsheet, the better and more precise method (not to mention more dependable) is using coil optimization software.
Coil optimization software also allows for running “what if” scenarios. Sometimes you might have a customer that is a higher priority customer but their run does not fit into your current schedule, yet you would like to move things around even though it is going to result in a hit to your short term productivity and potentially profit. Coil optimization software is designed to handle these types of situation.
Coil optimization software performs the following tasks; It takes as inputs the parts required, the constraints for each part, the total costs, the delivery times, the inventory available, the scrap output and resale value. In addition it can take the production capability of the equipment, optimizes the coil purchases, the production schedule for reducing the scrap and maximizing production rates.
Coil optimization software will take all of the requirements for slitting and cut to length blanks, matching them correctly to the optimal coil size to insure minimal scrap. This will also have a knock on benefits for minimizing coil inventory count. With each coil representing a significant cash outlay, every manufacturer’s goal is to minimize funds in inventory and maximize overall cash flow.
What are the benefits for somebody getting involved with coil optimization software for a steel coil slitting operation?
Consider a 50% reduction in scrap, a 40% reduction in coil sizes, and a 10% overall reduction material cost as a reasonable baseline for converting from manually configuring runs, to using coil optimization software.
The important thing to realize is that if you just have one type of customer, or very few different coil rolls for final product requirements, then the optimization software has much less value for you.
If on the other hand, you have a huge variety of products that you run with an enormous variety of potential coils you could be using, then the coil optimization software will pay for itself quickly and become much more of a necessity than even a luxury.
Here are the questions to ask yourself prior to investing in coil optimization software for your steel coil processing line.
1. Do you want to run the software as a locally based application, or do you want to run it as a cloud-based service on a mainframe system, or on standard IBM or Macintosh desktops? Ideally you want to run it locally on a standard but high powered desktop computer.
2. Is the software capable of taking inputs from the equipment; such as slitter blade dimensions, secondary shearing capability, line speeds, etc.?
Ideally you want software that can take all of these inputs or else you will not get the optimal answer to the coil optimization problem for your line.
3. Can the software be relatively easily customized for specific operations and for any changes to the line?
This is a double-edged sword. If the software is strictly a custom written piece of code for your specific line and you need to bring in high-priced programmers or have service contracts in order to do anything with your software, then you're going to have problems.
What you really want is software that comes basically set up with some minor tweaking for you to add capability to your line processes, or change parameters without requiring a purchase order to the company supplying you custom programming.
4. The last and most important question to ask is, will the software consider material pricing and rotating of parts for production into account when making calculations?
It is possible that the software is strictly working on a material efficiency basis rather than how much each product is worth. Ideally you want software that works on a profit basis rather than a material basis, though they should be very closely tied.
The end result of a steel coil slitting and processing operation is to make a profit for the owners of the operation, not to maximize the use of material. Though those two may be very closely related, the priority is the profit and not the material.
With this understanding of the many benefits of coil optimization software it becomes a critical function for management of a steel coil slitting processing operation to make sure that they have the best optimization software running for their line at all times. Taking care of this decision will make running the steel coil slitting line and cut to length lines much easier for the entire year.To return from this Reducing Scrap Software page to the Strip Metal Coil Processing Home page, click here.
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