Integrated Value Chain Optimization of Steel Operation

The Challenge

Emerge in a very competitive market

Over the past few years, the global steel industry has been in a deep crisis largely driven by a combination of factors such as declining demand, overcapacity, tumbling steel price, all-time high volatility of the raw material market, etc.

Many companies have already made tremendous efforts to reduce costs but it is not sufficient in today’s market. How can further savings in operations be achieved while delivering a high level of product quality? What is the best way to capture cost interactions between operational units and the external market? How can market changes be analyzed and quickly addressed? There are still many challenging questions that need to be answered to remain competitive in today’s steel market.

The Solution

Holistic value chain integration for profit maximization

N-SIDE SCOOP solution supports steel makers’ decisions for optimal procurement, sales and operations strategies and planning to maximize their overall plant profit.

SCOOP covers the entire value chain of steel production, from raw material selection based on quality, price and market availability to end product portfolio. Based on a sophisticated mathematical programming model that unifies both technical and economic constraints, the solution considers simultaneously not only raw material properties, process chemical / thermal balance, gas distribution and product quality, but also raw material prices, operating costs and sales revenue.

Scenario comparison and sensitivity analysis to answer “what-if” questions

SCOOP can create multiple scenarios based on various consumptions, for example, raw material shortage, product price variation, maintenance schedule changes, etc. For each scenario, an optimal recommendation will be generated. One can compare these recommendations, identify their differences and understand potential financial impacts in order to take the best decision. In addition, a sensitivity analysis tool in SCOOP can be used to evaluate the impact of one or more parameters on other optimization results. Based on this analysis, an impact curve can be easily drawn to help users understand the trend change and identify “behind-the-scenes” reasons causing such a change.

Customized scope to mimic your plant operation

SCOOP is developed in a modular structure in which each module represents one operational unit along the steel process chain. These modules can be flexibly assembled into one application to perfectly mimic your plant operations. Users will have the option either to run global optimization for entire plant or local optimization for the selected scope.

Business intelligence to show optimal KPIs

SCOOP’s top-down optimization calculates the optimal production level and target production cost of each operational unit in order to achieve the maximum profit. The target production cost is further distributed into raw material cost, operating cost, energy and utility cost, etc., which are also related to the optimal operating points of unit operations. These optimal decisions are reported by a Business Intelligence dashboard and ready to be compared with actual KPIs.

From strategy down to operations,
make your production optimal and profitable

Procurement strategy:

Determine the selection and optimal purchase quantity of raw materials by considering underlying interactions between price, product quality, productivity and logistic supply.

Process optimization:

Find the most profitable operating point such as material flow, production level or intermediate product quality for your steel work based on comprehensive mass and energy models.

Capacity planning:

Maximize equipment utilization by allocating the best production route for every product group.

Investment assessment:

Identify process bottlenecks under a given maintenance schedule and easily assess key ROI on new equipment and technology for productivity improvement.

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Product portfolio optimization:

Calculate marginal cost of each product group and define the ideal product mix that maximizes your plant profit.

The Results

End-to-end operation optimization

For carbon or stainless steel plants, SCOOP optimizes procurement, sales and production to maximize the overall profit and give your company the ability to quickly adapt to any market changes.

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Reduce steel cost by 2-5 USD/ton

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Move to integrated business planning with holistic view of steel value chain

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Plan raw material procurement for cost-effective blending and low inventory

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Improve collaboration between plant operation, finance and procurement

implementation sites worldwide

millions tons of steel optimally produced with SCOOP every year

seconds to solve a complex planning problem with 50,000 decision variables and constraints

— They trust us —

quote-testimonials

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ArcelorMittal Dunkirk
We did already have some tools allowing us to calculate the raw material mix required. However, our tools only allowed us to optimize one department at a time. (…) We quickly realized that SCOOP was much more advanced because it was modeling as well thermodynamics, yields, product quality models, etc.

— They trust us —

quote-testimonials

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SCOOP is a miracle tool.  There are multiple advantages from the integrated model of SCOOP and they can be illustrated by many examples.  SCOOP is used daily within CSN. (…) 6 months after implementation, the results are already far beyond expectations!

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