CORUS Construction & Industrial Simulation Case Study

A Model Investment

In looking to help justify a major investment, Corus Construction and Industrial has found that the ProModel simulation software, from Production Modelling, has proved to be a vital new decision tool.

For all manufacturers, making the right investment decision has never been an easy task. But, with the prevailing business climate, selecting the best options in terms of new plant and equipment has become increasingly daunting. No longer can a company afford to assume that new technology will definitely deliver improvements, and any mistakes can quickly prove far costlier than the actual investment.

Therefore, it has become critical that prior to any investment decision being taken, both the financial returns and quantifiable performance improvements are determined as accurately as possible, and the case for investment accepted at every level. One way to help achieve this is to experiment and evaluate new equipment on a computer model before making the investment for real. This type of simulation not only provides the ability to measure the effects of new equipment on key performance criteria, and so help quantify financial and performance improvements, and can also be used to effectively compare alternative investment options. As such, this approach can take much of the risk out of any investment.

Yet, most companies still fail to take advantage of the benefits that simulation offers in terms of investment justification. The wrong assumption being that its application requires highly sophisticated modelling and so would prove far too expensive an approach, especially in terms the consultancy and IT skills needed. However, as Corus's Teesside Beam Mill has discovered through its use of the ProModel simulation software, even with just a few days training and the development of relatively simple models, it has been possible to very cost effectively analyse a major new equipment proposal. As a result, the operation has been able to determine that the investment will deliver the performance required, while also finding a solution that will cost less to implement.

New Evaluation Tool

The Teesside Beam Mill is part of Corus Construction & Industrial, one of the main business units within the Corus steel group, and is a major supplier of structural steel to the world's construction industry. Past investments enable the mill to compliment the rolling of standard sections with the production of innovative asymmetric beams, extra heavy jumbo sections and specialist sections designed for use in areas prone to seismic activity. Its products can be found in some of the most celebrated structures around the world; from providing the vertical columns in the UK's latest tower office building, at One Churchill Place, Canary Wharf, to being used in the rebuilding project at New York's Ground Zero.

Like all businesses competing within the extremely fierce global steel market, the Teesside Beam Mill is continually looking for ways to gain competitive advantage. While high quality, specialist products and co-ordinated customer support are one way, it is equally critical that the highly sophisticated operation continually improves its own productivity and delivery reliability. It was to help with investigating internal process and practice improvements that the site initially decided to invest in the ProModel Software, from Coventry based Production Modelling.

However, as Chris Hamlett, Manufacturing Manager - Development at the Teeside Beam Mill reports, "Having brought in the software and undertaken basic training, it was realised that the tool could also be easily used in a far more immediate role, to help evaluate a critical capital expenditure decision."

He explains, "The funding for major investment in the re-organisation of the operation's final product marshalling and dispatch activities, to further improve efficiency, were undergoing final approval. But, with theses activities being so critical to mill efficiency and with no chance of going back once the changes were introduced, there were significant risks involved. What we needed was a relatively easy way to more effectively analyse all the issues involved, and so ensure that the new process and equipment would not only meet all the demands, but actually deliver the improvements required. This, we recognised, was what ProModel could provide."

Mike Straiton, technical director at Production Modelling adds, "There is a long list of horror stories highlighting the significant risks involved in major production investments, and all point to the same failing - the lack of comprehensive justification analysis. With this in mind, we are coming across a rapidly increasing number of companies who like Corus are not just using ProModel simulation to improve existing facilities, but to help plan, check and justify - in detail - major new investments."

New Process Analysis

At present the mill employs two stacker cranes and a transfer bogie system to move finished products into the despatch bay. The product is then transferred to road trailers using three 15 tonne payload overhead cranes. The main issues with the current process are :-

• The 15 tonne crane payload is inadequate for modern transport needs.
• Despatch Bay inefficiencies as a result of crane interference.
• Current crane operation is time consuming and extremely manpower intensive.
• The current cranes are 1950's vintage.

When Hamlett came across ProModel, his team had already determined a potentially far more efficient marshalling and dispatch process. This involved the development of a pallet-based stacking system, modified trailer fleet, enhanced Despatch Bay coordination and crucially, a single modern large capacity crane based upon proven pallet / container technology. But, there were two fundamental questions that needed to be answered, namely :-

• Would the single crane cope with current production rates ?
• Would the downstream process cycle-time be maintained with the new palletised system ?

Therefore, the initial step undertaken by Hamlett, who was one of three trained in the use of the system, was to create a dynamic simulation model of the planned process re-configuration. "Despite our limited training on this advanced system, its ease of use meant that we were able to relatively quickly produce a simple, but more than adequate model for our purpose, and without the need for extensive outside help and consultancy," notes Hamlett. Although, as he adds, "The ongoing relationship with Production Modelling was vital as they provided feedback and important suggestions that enabled us to ensure that the model was accurate and fit for our purpose."

This simulation, driven with existing production data, proved a major step forward for the investment justification, by confirming that the new configuration and process sequence would work, and deliver the expected improvements. Moreover, the team were also able to use the model to establish that developing a new and potentially expensive transfer bogie system was not necessary, and that the required transfer process could be achieved by modifying and extending the existing bogie system. "Through this first model we not only established complete confidence in the basic premise of the planned investment, but we were also able to take a significant cost out of the project," claims Hamlett.

Then, after further development of the model, the team was able to undertake a far broader analysis of the new process, and in particular address the second key issue, which was the new crane. With the inherent reduction in flexibility of a single crane, the model was used to simulate a wide range of scenarios that assessed the key production parameters of movement cycle times, and product arrival rates. Again, the simulation clearly clarified the new equipment's ability to effectively cope with all current and projected throughput.

In addition, the development team now also have detailed output from the simulations that will be provided to the suppliers of the new crane installation. This is seen as another 'fail-safe' way of ensuring that the equipment installed will be exactly to the right specification.

Hamlett concludes, "ProModel made a major contribution to the development of the fully detailed re-organisation plan and its financial justification; for which we have subsequent gained the go-ahead. While the models developed may not have been the most sophisticated, they helped us build a far better and realistic understanding of the planned process, and provided clear and detailed answers to our key concerns. As a result, the project risks have been cut significantly, the cost of the re-organisation has been reduced, and all this has been achieved at a minimal cost."