Broner Metals Solutions

1. Broner Metals Solutions Case Study Nisshin Steel

2. Nisshin Business Issues • Balancing material flow from one steel plant to multiple rolling and finishing plants • Gaps between planning and scheduling • Make sure material flow doen not create width or gauge gaps in finishing plants • Need to shorten manufacturing lead time.

3. Nisshin Steel HQ - Planning Division - Production Planner Monthly Planning (Horizon : 6 - 12 Weeks) Weekly/Daily Planning (Horizon : 2 - 4 Weeks) Off-line PS (Horizon 1 – 7 Days) Production Planner PS Plant B PS Plant C PS Plant D PS Plant E MOS Plant A Plants On-line PS (Horizon 1-7 Days) PS Plant B PS Plant C PS Plant D PS Plant E MOS Plant A Process Control Process Control Process Control Process Control Process Control

4. Nisshin Steel • Monthly planning • In Place and being used • Business objective is to balance/coordinate supply chain constraint with sales forecast. • Corporate Planning models detailed campaigns/Groups for Galv/coating lines • Goal to – optimise productivity and key constraints/value add processes • Corporate PP subordinates and balances material flow for other lines & logistics based on galv line and coating line schedule • Includes forecast by product family to constrain sales plan • Planned orders are loaded into monthly campaigns • Results of PP used to set sales quotas.

5. Nisshin Steel • Weekly/Daily planning • Goal - Monitor conformance of sales and production to Monthly plan • Make adjustments to keep on target • Initially weekly will move to daily in future • Includes more detailed rules • Product line/customer priorities • JIT/Max Util strategy by plant/product line • Determine launch date for orders • Sustain material Flow to campaigned resources

6. Nisshin Steel Off-Line Scheduling • In progress – prototyping now at 3 plants • Goal to have separate scheduler at each plant • Have in one view (Inc KPI’s) for each machine • Current 5 days locked work • Balance for current campaign & next campaigns • First 5 days of current campaign locked by users • PS suggests to fill balance of campaign or move orders into next suitable campaign because of material flow disturbances • Show violations & overall tonnage

7. Nisshin Steel Mr Yutaka Hoshikuma, General Manager – Main System Innovation Group, commented “ With the implementation of new supply chain solution, we have improved visibility for entire plants in terms of managing due data performance. With this new solution we have a solid foundation for shortening the planning cycle and improving due date performance. To shorten the production lead time there are numbers of physical constraints in actual production process, however with the new system, we have a clear view of these problems, which will bring us the capability to make better control over these constraints.”

8. Broner Metals Solutions Case Study Japanese Customer A

9. Background on Customer • Location: Fukuoka, Japan • Production Size: 5 million tons per annum • Main product shape and type: Flat products/ Mild Steel, Stainless Steel and Special Steels • Main products: Coil and Sheet • Scope of production: Integrated steel plant • Systems environment: Home grown business systems and MES systems • Other systems projects: Re-implementing new business and MES systems • Centralized Order Intake at Headquarters, with extensive monthly/quarterly planning to divide the order book between the six plants. Order horizon at each plant is not more than 6 weeks.

10. Japanese Customer A Improvement areas/required functions of new planning system Improvement areasRequired functions of new planning system • Weekly to Daily Planning Processes • Uniting multiple Planning Processes • Plan based on Due Date & Current Inventory at each process • Shorten SupplyingLead-time • Production Controlbased on Mill Due Date • More accurate Due DateCommitment / AvailableCapacity Visibility • Better Response to Production Variance • Load Balancing based on Mill Due Date and optimal Lot Sizing • Load Balancing considering monthly Plan(maintenance etc.) • Due Date Quote based on daily Plan / Schedule • Alerting against Due Date, Production Constraints • Offering Capacity Availability info to satisfy Sales Forces • Swift and accurate re-Planning • Simulation with multiple sets of parameters

11. To-Be Planning Processes Long-term Planning (biannually, monthly) Plan for 3 weeks Plan for N months PP Model 1 PP Model 2 • Tuning up PP Model Daily Planning Off-line Planning Plan A • Evaluate DDP, Cap. Util. • Revise CC/Hot Groups Plan for 1 week Plan B • Evaluate CC/Hot Plans (Mid-term) • Revise CC/Hot Groups (Mid-term) Daily Scheduling • 2 PP Models • PP Model 1 : for near-term (3 weeks) Planning Runs every day • PP Model 2 : for mid-term (N months) Planning Runs off-line for simulating multiple scenarios • Groups Revision in PP Planning will be reflected on long-term Plan • Tuning up PP Model

12. Background on Project • Configuration focus: • Constrained at Casters & Hot Mill • Detailed grouping functions to optimise constraints and forward plan downstream units. • Size of team: • 3rd party: 2 people • Core customer team: 2 people • Broad customer team: 15 people • Broner implementation team: 2 people • Characteristic of the project: • Effort of Project teams to create a common vision for the planning solution • To adapt existing corporate culture to the use of a specialized packaged solution • The ease with which the generic Broner Solution could be adapted to the specific needs of the plant.

13. Results Achieved • Results achieved: • The NSC Team learnt a lot about their own production environment and production strategies • Being able to visualise the full production plan. • Improved delivery performance to specific date (not weekly or monthly promise buckets • Declare capacity to Head Quarters more accurately, after providing for Maintenance and Product Mix requirements.

14. Broner Metals Solutions Case Study Bao Steel

15. Background on Customer • Location: Baoshan, Shanghai, China • Production Size: 20 million tons per annum • Main product shape and type: Flat products/ Mild Steel • Main products: Coil and Sheet • Scope of production: Integrated steel plant • Systems environment: In-House ERP system with Broner APS

16. Key Project Drivers • Make realistic promises to customers • Reduce order promising window from a month to a week • Plan and Order intake on real capacity • Increase capacity visibility in overall business • Customer Enquiry response time< 3 minutes • Reduce Hot rolled product delivery period • Reduce Cold rolled product delivery period • Automate planning cycle • Planning consistency

17. Background on project • Broner Standard Methodology • Main phases of implementation • “As is” business process modelling • “To Be” business process modelling • System functional design • Interface development • Step 1: Material Planner and Production Planner configuration and testing • Material Planner and Production Planner going live in production • Step 2: Order Negotiator (CTP) configuration and testing • Order Negotiator going live • Final project closure: All modules in production

18. Project History June 02 Dec 02 Jan 03 March 03 Sept 03 Feb 04 Design I/F develop MP/PP config MP/PP Live All in production ON-CTP config CTP Live MP/PP ON-CTP Project close Installation

19. Background on project • Size of team: • 3rd party: 2 people • Core customer team: 5 people • Broad customer team: 15-20 people • Broner implementation team: 4 people • Characteristic of the project: • Phased approach for Business process change • Phased approach for Implementation • To adapt existing corporate culture to the use of a specialized packaged solution

20. Benefits achieved • Realistic order promising based on real capacity picture • Delivery promise based on specific date (not weekly or monthly) • Customer Enquiry response time < 1 minute • Being able to visualise the full production plan. • Improved material allocation • Reduced inventory • Less Scrap material • Better product mix control • Consistent planning business process • Consistent Schedule execution based on optimised production plan • Improved business processes as a result of better decision support tool

21. Mr. Li Qingyu, Assistant General Manager and ESI Director of Baosteel said “The Broner solution has already helped us in our strategic drive to improve customer service and become more competitive with other major steel producers in the region. We are pleased with progress so far and look forward to further improvements in the future”.

22. Broner Metals Solutions Case Study Gerdau – Acos Finos Piratini

23. Case Study - Gerdau Background • Small, specialist steel, long products plant • Losing market share, not making profit • Part of larger profitable Gerdau Group

24. Case Study – Aços Finos Piratini Background • Speciality steel, Rod & Bar plant • Engineering, Stainless and Tool Steels • Round, Square, Flat Bars & Wire Rod • 300,000 tonnes per year • 80% of products for Automotive Industry • Plant • Electric Arc Furnace, Ladle Furnace • Vacuum Degassing • Billet Casting, Ingot Casting • 2 Hot Rolling Mills • Forging, Heat Treatment, Cold Finishing

25. Case Study – Aços Finos Piratini Business Issues Identified • Poor Delivery Performance • High Backlog • Losing market share • Under utilised capacity • Not making profit

26. Case Study – Aços Finos Piratini Broner business consulting for Business Process Redesign • Identify key business goals • Internal training and education programme • Restructure separate Planning and Scheduling Organisations • Integrate Order Intake Control with Production Planning • Manage Customer Orders • Implement Planning and Scheduling System

27. Case Study – Aços Finos Piratini • Solution Implemented • Production Planning • Material Planning • Production Scheduling • Order Negotiator-CTP

28. Case Study – Aços Finos Piratini Benefits • Significant reduction in backlog of late orders to lowest ever level of 7000 tonnes • Delivery performance climbed from 50% to over 85% in 6 months • Market share increased • Throughput increased • Costs reduced • Plant profitable following completion of implementation

29. Broner Metals Solutions Gerdau - Acominas

30. Gerdau - Acominas Implementation • 4 Mtpa Integrated steel making, billet rolling and heavy sections mills • Implemented Production Planner, Melt Shop Scheduler and On-line Coordinator modules. • Production Planner plans material flow from Blast furnace to port considering steel making restrictions, rolling campaigns and Ship departure dates • Scheduling system sequences steel plant, ingot casting and hot mill considering primary and secondary steel making constraints and complex sequencing requirements for billet mill • On-line coordinator provides real time monitoring and re-scheduling capability for all “hot end”processes Benefits • Elimination of shortages of Ferro alloys • Elimination of temperature related quality and productivity problems

31. Broner Metals Solutions Case Study Dofasco

32. Dofasco - Business / Project Overview Business overview • Yield : 4.0mil t / year (84% produced in Hamilton) • Product : Hot Rolling, Cold Rolling, Galv, GalvalumeTM, Tinplate etc. • Market : Automobile, Construction, Energy, Pipe & Tube,Electronics, Packing etc. • ERP : Legacy Project overview • 1. Broner Metals implementation • June 1993 : Started survey on packaged solution • Sep 1995 : System cut over • 2. Applied modules • Production Planner • Order Negotiator - CTP • Material Planner • Production Scheduler • Melt Shop Scheduler

33. Dofasco Supply Chain Boilers Coke Turbo Blowers Condensing Plants Steam Iron Ore Turbines COAL Pellets Stoves Breeze Coke Hamilton - Product Flow Screening Plant Scrap Steel Blast Furnaces PFO-EAF Desulph IRON Ladle-Met No. 2 MAKING Melt Shop K-OBM 8.5" Slab HOT ROLLING Caster STEEL Scarfing Machine Reheat Crop Slab Lifter Ladle-Met Furnaces Shear MAKING 8.5" Slab No.2-66" 7 Stand Degass No. 1 Furnace 66" 2-Hi Coilers Caster No. 2 Furnace Finishing Mill Reversing Slabber Rougher Galvanizing Lines FINISHING STREAMS Galvanized CPCM Shipped Outside Pickle Slitting Cold Rolling Lines Open Coil Tempering Mills Mills Anneals 2 Stand 42" No. 2-72" 5 Stand Outside Cold Mill Temper Mill No. 2 Tower Slitting Cold Rolled Annealing Line Shipped 2 Stand 56" Temper Mill No. 1-56" 5 Stand Cold Mill Electrolytic Tinning Continuous Line No. 2-66" Annealing Lines Temper Mill Coil Preparation Lines No. 1-66" Tin Plate Cold Mill Tin Plate No. 1-66" Shipped Tunnel Furnace Temper Mill Shears 62" Slitter 60" Slitter Electrolytic Shearing No. 5-56" Outside Sheet Mill Cleaning Temper Mill Hot Strip Batch Annealing Outside Lines Slitters Slitting Hot Rolled Shipped 4