SAP-Based Solution for Planning of the End-to-End Production and Supply Chain of a Mining and Metallurgical Holding
SAP-Based Solution for Planning of
the End-to-End Production and
Supply Chain of a Mining and
Metallurgical Holding
Contents
1. METINVEST Group
2
2. Supply planning powered by SAP
3. Planning mechanisms provided by SAP: limitations and course
of development
4. End-to-end "coal-coke-cast iron" planning model powered by
SAP
5. Course of development for the Company's integrated
planning system
METINVEST Group, a vertically integrated group of steel and mining companies
MINING
METALLURGY
SALES
SERVICELOGISTICS
* These data refer to 2016.
3
PRODUCTION ASSETS OFMETINVEST
Ukrainian assets of Metinvest (below)
Azovstal
Ilyich Iron and Steel Works of Mariupol
DKHZ
ZKHZ
SevGOK
CGOK
InGOK
HTZ
EMZ
KRDU
Zaporozhstal
UGOK
Ukrainian assets
Ferriera Valsider (Italy)
Metinvest Trametal (Italy)
Spartan (United Kingdom)
Promet Steel (Bulgaria)
United Coat (USA)
Global assets of Metinvest (above)
Assets
Joint Ventures
Independent Enterprises
Logistic routes
Legend
COKING COAL IRON ORE CONCENTRATE CAST IRON
SEMI-FINISHED PRODUCTS FLAT PRODUCTS LONG PRODUCTS PIPESmilliontons
milliontons
milliontons
milliontons
milliontons
milliontons
milliontons
thousandtons
STEEL
Operational Planning Business Model at METINVESTL
OG
IST
ICS
PR
OC
UR
EM
EN
TS
AL
ES
Sales forecast
Contracted volumes
Orders from the
distribution network
Incoming
information
Materials
Commercial
priorities and
limitations
Logistic costs
Logistic
limitations
PR
OD
UC
TIO
N
Available worktimefund of the primary equipment
Specifications and technological flow charts
Production versions
BU
DG
ET
ING
STRATEGIC
PLANNING
Long-term Planning (LTP)
Sales & Operations
Planning (S&OP)
Short-term Operational
Planning (OFP)
Calendaring (MS)
Management Company
Enterprises
Strategic Goals
and Objectives
Processes provided by SAP
Directions for further development
Planning
results
Operational plan:
Sales plan
4
Transportation plan
Procurement plan
Production plan
Architecture of the Solution for Implementing Planning Processes in SAP
SAP APO/SNP
SAP ERP
Supply chain planning
Materials
Specifications and
technological flow charts
Sales plan
Production plan
Transportation plan
Demand for primary raw
materials
Workplaces
Forecasted sales for product groups
Price forecast based on the terms of
sale
SAP MDG SAP APO/DP SAP BW
Materials
Forecasted commodity
prices
Schedule of repairs
Logistic component
SAP APO/DP
Logistic limitations
Planned Order Form
Planned orders
Purchase requests
Quoting table
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SAP ERP
Supply Chain Planning Model at МETINVEST
Scope of the
supply chain planning model at
METINVEST:
• 12 manufacturing enterprises
• > 700 locations of demand
• > 3,000 transportation relations
Fragment of the logistical model of the intragroup
cooperation at METINVEST
Structure of the supply chain
planning model at METINVEST:
• Logistic model
• Production planning models
Fragment of the logistic model of commodity delivery from
metallurgical enterprises to the locations of demand
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Logistic model in SAP APO SNP
Logistic model:
Graph vertices:
• locations of demand
• suppliers
• load transfer point
• manufacturers
Graph edges:
• transportation
relations
SAP APO SNP
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Suppliers of raw materials
coalwaste metallimestonebentonitemiscellaneous
Mining and Processing
Coke and Chemicals
Metallurgical Transferstations
Loadingports
SSC
Locations of demand
Production enterprises
Graph vertex Graph edge
Production planning models powered by SAP ERP
Production model:
o workplaces
• production machines
o Materials Master Record
• manufactured
products
o master data
• specifications
• technological flow charts
• production versions
SAP ERP
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The capacity of the production vertices on the graph is determined by production planning models
sintering ore limesinter
pellets cokepig
Ferriticlime
waste metal
Rawmaterials
Semi-finished products
pigMaster
Plan
iron oreConcent-
rate
sinter cast iron
steeltransfer
bar
transfer bar grade
transfer bar
bars
railsbraces
Sinter production
Productionof cast iron
Productionof steel
Productionof cast bars Flat products
Production of railbraces
Cutting ofwire rod
raw materials
raw materials
raw materials
Oxygen-converter workshop Rolling workshop of EMZBlast-furnace workshopSinter workshop
pig
grade
grade
grade
grade
bars
railsbraces
Rolling workshops MF EMZ
EMZRaw
materialsSemi-
finished products
Master Plan
cast
ir
on
stee
l
sin
ter
Squ
are
tran
sfer
bar
strip
wire rod
wire rod
strip
AM No. 1
AM No. 2
AM No. 3
AM No. 4
DP No. 1
DP № 3
DP № 5
KK No. 1
KK No. 2
KK No. 3
MNLZ No. 1
MNLZ No. 2
Stan 360
Stan 550
Stan 150
Stan 390
POS
UPRS
Implementation of SOP on the Basis of SAP
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Planningof production
Planningof supply chainat METINVEST:
Planningof logistic flows
of commodity output
Planning andoptimization
of logistic flowsof commodity output
Logistics cost planning
Planning and optimizationof logistic flows of primary
raw materials and materials
Planning and optimization of
utilization of capacities of KHP
Planning and optimizationof requirements of KHP for METINVEST in relation to
coal raw materials
Planning and optimizationof requirements for
primary raw materials and materials
Sales forecasting
Planning and optimization of GOK capacity utilization
Planning andoptimization of utilization
of capacities of metallurgical complexes
Evo
luti
on
of
the
SOP
pro
ject
Planning Mechanisms in SAP APO SNP
– coke and chemical plants
– agglomeration and blast-furnace
processing at metallurgical
enterprises
?
Production planning
mechanism in SAP SNP
Determination (selection) of the most expedient
(optimal) version of the manufacturer from the
many versions loaded into the system
Applicability
– concentrating and burning
capacities of GOKs
– steelmaking capacities of
metallurgical enterprises
– rolling capacities of metallurgical
enterprises
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User Limitations
SAP APO/SNP
Pre-configured logistics model
powered by SAP
Materials
Specifications and
technological flow charts
Sales plan
Production plan
Transportation plan
Demand for primary raw
materials
Workplaces
Forecasted commodity
prices
Schedule of repairs
Planned orders
SAP ERP
Purchase requests
User Limitations
Logistic component
SAP APO/DP
Logistic limitations
Forecasted sales for
product groups
SAP APO/DP
Price forecast based on the
terms of sale
SAP MDG
Materials
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SAP ERP
SAP BW
Architecture of the Solution for the End-to-End Planning of the "Coal-Coke-Cast Iron" Technological Chain
Model of interrelations between qualitative indicators
Qualitative
indicators of
mix material /
coke
Coke
consumption
Productivity of DP
The end-to-end planning model consists of three modules:
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coal mine
Coke nut
Gross coke
Coke fine
Blast-furnace
Coke
Coke gas
Semi-finished products
gas
Coal concentrate
Rawmaterials
Master Plan
Mix material production
Productionof coke
Coke sorting
Pig iron
Master Plan
limesintering ore
iron oreconcentrate Sinter
Liquid cast iron
cokepellets
Sinter production
Liquid cast iron production
Cast iron pouring
Agglomeration and blast-furnace processing
DC
KHL
Semi-finished products
Rawmaterials
Liquid cast iron
(processed)
Results of Testing the Prototype of the Solution for the End-to-End Planning of the "Coal-Coke-Cast Iron" Technological Chain
Solution scope Results of testing
• 4 coke and chemical plants
• 3 metallurgical enterprises
• > 60 suppliers of coal and coke
Cost of coal mix material +0.2%
Specific coke consumption –2.6%
Production volume of cast iron +1.5%
Structure of the economic effect, $
Suppliers of coal and coal concentrate
Coke suppliers (third party)
KHP No. 4
KHP No. 2
KHP No. 3
KHP No. 1
Metallurgical Complex No. 1
Metallurgical Complex No. 2
Metallurgical Complex No. 3
Coke consumption
Economic effect
Coal mix material
Productionvolume of cast
iron
Computational performance
Interrelations model
(27,882 x 80,507)
SAP APO SNP
Calculations > 72 hours
restr
ictio
ns
variables
Data uploading – 1.5 minutes
Calculations – 15 seconds
Basic SOP solution(without the Interrelations
model)
Integrated Solution(Database + Interrelations model) SAP APO SNP
Two-stage calculation process
Key
parameters
Permissible
tolerances
Calculation ~ 2 hoursModel loading 15 minutes
Direct
calculation
process
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SLIDE 12
Directions for the Further Development of the Integrated Supply Chain Planning System at METINVEST
LO
GIS
TIC
SP
RO
CU
RE
ME
NT
SA
LE
S
Sales forecast
Contracted volumes
Orders from the
distribution network
Materials
Commercial
priorities and
limitations
Logistic costs
Logistic limitations
PR
OD
UC
TIO
N
Available worktime fund of the primary equipment
Specifications and technological flow charts
Production versions
BU
DG
ET
ING
Long-term Planning
(LTP)
Sales & Operations Planning
(S&OP)
Short-term Operational Planning (OFP)
Calendaring (MS)
Management Company
Enterprises
Planning results
Operational plan:
Sales plan
Transportation plan
Procurement plan
Production plan
SAP IBP
APO PP/DS & APS
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Thank you.
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