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Preactor at the Centre of $70m Savings at CST-Arcelor Brazil
mai 2006

CST-ArcelorLocated in Espírito Santo, Brazil, Companhia Siderúrgica de Tubarão (CST) is a world leader in the semi-finished steel market and is part of the Arcelor Group, one of the largest steel makers in the world. CST-Arcelor Brazil is the 11th largest Brazilian exporter and is responsible for 12% of worldwide sales volume for steel slabs. In 2004 alone they produced more than 2.94 million metric tons of slab and 1.90 million metric tons of hot steel coil. Since operations began in 1983, almost 70 million metric tons have been produced 92% of which was exported.

Today the company employs more than 4,000 people and boasts one of the lowest production costs in world, due mainly to its operational excellence and strategic location. However they wanted to increase their market share further and so they embarked on an ambitious project to expand their slab capacity by 50% and hot coil from 5 million tons per year to 7.5 million.

Starting in 2004 the project included the building of new production units such as a third blast furnace, a new  system of injection of pulverised coal (PCI), a third converter unit, a new coking plant, a new thermo power plant (CTE) and a third continuous casting machine.  The total cost is expected to be more that 1 billion US$ and will be completed in Q2 2006.

CST-ArcelorThe Challenge
One of the main challenges was to complete the project without disturbing the existing production capacity.  It required more than just new equipment and infrastructure, it needed systems and procedures to synchronize production and optimise processes.  This is where Preactor became fundamental to the success of the investment.

To understand the problem, let’s go back to 1995, when CST-Arcelor Brazil had developed in-house a production scheduling system to handle its casting machine production process.  At that time, the system was not too difficult to handle.  However when the second casting machine was installed, it became much more complex to manage.

The design team had already realised the limitations so when the installation of a third casting machine appeared on the horizon they made an assessment on whether a rewrite of their existing package that could handle the complexity was feasible.

CST-ArcelorHaving decided that the in-house solution would require a huge effort to rewrite, they decided to search for an alternative.  This involved a multi-skilled team from Automation (IEC) and Metallurgy and Production Planning (IDM) divisions visiting several steel companies around the world to establish their needs. The process whereby liquid steel is made into slabs is a continuous one.  It is important that the casting machines are fed with a continuous supply of hot metal.  Converters covert the pig iron delivered from blast furnaces into steel.  This is delivered to the continuous casting machines using a giant 350 tons capacity ladle.

A 5 minute delay in refilling a casting machine can mean a one hour interruption in production.  A single ladle of steel represents $200,000 in revenues yet making the steel too early can represent huge additional energy costs in maintaining the required temperatures while it waits to be loaded.  Synchronisation of demand and capacity is key,  just as any other lean manufacturing initiative attempts to do.

Sergio Mendes, automation specialist from CST, commented on the project. "We visited many companies around the world to identify the functionality we needed but didn’t find what we wanted.  We almost went back to the internal development option when by chance we found a Preactor folder in a University just a few miles away”.

CST-ArcelorThe Solution
It was at this stage that Tecmaran, the Preactor Master Reseller for South America, became involved. Along with the CST team they were able to provide a solution that they believe is unique anywhere in the world. The Preactor solution is being used in the main production area of the CST-Arcelor Brazil, scheduling and synchronizing all the stages of production, starting from the converters, through secondary refining and finally the continuous casting machines. The pig iron transportation is also monitored in Preactor as any delay in delivery by the torpedo cars can impact the production process.   The schedule is generated in accordance with several parameters, rules and strategies of production, using the orders to be satisfied as the input of the requirements.   Some parameters are fixed while others can be modified.  For example it is possible to take into account the expected availability Pig Iron to modify the speed of steel production.

Sergio Mendes again.  “I believe we have implemented a unique state-of-the-art scheduling system here. And it was not an option.  The planning department needed a tool that could work 24x7 because the casting machines cannot stop. Any delay must be analysed and enable a fast response to meet our production goal. For example the Preactor Sequencer receives real-time events information and the bars in the Gantt Chart change automatically to red if there is any delay compared to the released schedule. Usually a new production sequence is generated every 20 minutes”.

Rafael Abreu, Director of the Tecmaran, who developed the sequencing rules, explains.  "We used a very different Preactor model and structure.  We created some special interfaces to make Preactor even easier to use in this application.  However I have no doubt that the customised sequencing rule is at the heart of the success of the system.  With just a few clicks users can generate schedules with different scenarios in seconds so they can test different production strategies before releasing a new schedule.”

The rule has 3 main objectives.

  1. Balance the orders to keep the casting machines working continuously – the user can assign priorities for the machines.
  2. Minimize the work in progress.
  3. Balance the converter machines with casting machines depending on the defined strategy.

“However the rule needed to handle several other constraints, transportation times and real-time events. It was really challenging but Preactor allows us to be imaginative and create solutions to meet unique needs such as this” added Rafael.

The Benefits
The Preactor system, based on Preactor 400 APS has been in continuous use since December 2004 and CST-Arcelor Brazil has already reported some impressive benefits. The specialist in planning and scheduling there, Rogério Teodoro, explained.  “Preactor has given us two kinds of benefit. We have been able to speed up production giving a saving of a few minutes on each production cycle. This amounts to 48 minutes per day which is equivalent to one an additional ladle load. The second benefit results from the production visibility that Preactor can offer, because we can ‘see’ the best time to stop the casting machines or even plan maintenance on specific resources.” If we convert this gain in time into money, it reveals the huge savings that are being made.

Rogério Teodoro again.  “Considering just the first benefit, we have estimated that the additional ladle per day delivered by Preactor, can result in an extra US$ 70 million per year on our annual revenue. We all are very happy with this.”

CST-ArcelorIn addition he pointed out that with the new system of synchronisation the company had obtained a significant improvement in their production management due to faster and better decision making on staff allocation and planned maintenance cycles.

“The ability to quickly create several production scenarios with different alternative planned maintenance periods has given us an extraordinary gain in terms of plant management. Additionally, we are more confident with the process and it has allowed us to reduce drastically the buffer time used in the past to minimise the impact of small delays in the production process”. His views are echoed by supervisor Jorge Maioli.   “Now we really spend our time trying to find the best strategy to reach our daily goals. The automatic sequencing rule can deliver optimised sequences based on different strategies and we can create many scenarios before we commit and release it”.   He continued.  “Despite the system being very easy to use and maintain, we count on the excellent support service from Tecmaran.  It gives us more confidence to improve the system and our procedures in the future”.

And what is that Future?  Today Preactor is a strategic tool for CST-Arcelor Brazil.  The outstanding results of the project has given confidence to the team to extend its use to cover the scheduling and control of the entire production process from the blast furnaces producing pig iron right the way through to the hot steel coil lines.