Stalkanat is one of the largest manufacturers of steel ropes and reinforcing strands in Eastern Europe, a leader in the manufacturing of metal products in Ukraine. The company’s product range includes over 6,000 wire and over 1,500 rope types and sizes.
The driving force inspiring the process of building a modern production management system was the company's transition to foreign markets.
Before launching the project to implement a single complex system on the no/low-code IT-Enterprise platform, the company's information infrastructure was formed of a ‘patchwork’ of unrelated software products (Excel, 1C, self-developed production management systems, etc.). Such an approach did not allow comprehensive and effective management of the enterprise's business processes and hampered the company's development.
The company entered the project keeping in mind the following goals: increase the transparency of functions and business processes, build end-to-end management processes, and improve business KPIs.
Stalkanat production digitalization began with the Steel Wire Workshop and ended with two sites of the Steel Wire Rope Shop. A detailed description of the project is provided further.
The project to build a modern, comprehensive production management system based on the IT-Enterprise platform suggested a logical chain of sub-projects:
MDM (Master Data Management)
Building a unified MDM (Master Data Management) data model involved the development of a single database of all classifiers, department/unit directories and other reference materials.
One important task of MDM is to ensure the unity of classification, coding, and naming of homogeneous objects (material and technical resources, counterparties, services, etc.) This combination prevents many problems arising from data inconsistency or incomparability, simplifies reporting, and eliminates duplication.
Therefore, MDM serves to consolidate, unify and synchronize all master data and create a single digital ecosystem at the enterprise.
WireDesigner: easier & faster addition of reference information (estimated 80% improvement)
The sub-project to digitalize the processes of developing regulatory and reference information (RRI) along with product development (PD) resulted in the launch of a computer-aided design system (CAD). In this system, design engineers develop standards (norms, rates) and processes for new products.
In fact, WireDesigner is a unique tool that speeds up the addition of reference information by 80%. With this tool, it took the company just 6 months to finalize the regulatory and reference information and move on to digitalizing production management at the pilot site (Steel Wire Workshop).
Manufacturers of metal hardware and ropes tend to have a wide range of products, up to hundreds of thousands of types and sizes. Not surprisingly, it can take months or even years to add all the reference information without supporting tools.
Overall, WireDesigner is aimed at maintaining a unified reference information base required for product development and can accelerate further processes of entering this data for new products.
Estimating Available-to-Promise using modern scheduling methods: MPS, MRP, APS
Traditionally, without any special tools, Available-to-Promise is estimated based on understanding the duration of the production cycle for each product group. To this estimate, one should add an extra time reserve: +2 weeks or, for a discrete set, postpone production to the first/second half of the next month.
As an alternative, IT-Enterprise offers two conceptual approaches to estimating Available-to-Promise:
- First approach: with scheduling tools (MPS, MRP, APS) the process can look like this:
1 Sales accept the order, takes a break of 1 day and transfers the order to the production planning team → 2 Production planning adds the order to the general portfolio, plans them together and receives quite an accurate estimate of ATP→ 3 Sales provide information about ATP to the customer → 4 Customer agrees to the estimated ATP and the order is transferred to production.
Scheduling and optimization planning tools are interconnected and all help to estimate ATP: MPS (Master Production Schedule); MRP (Manufacturing Resource Planning); APS (Advanced Planning & Scheduling).
- Second approach: with capacity planning tools like CRP (Capacity Requirements Planning), ATP estimate will be rougher but faster.
Production management: MPS, MRP, APS, MES
According to the strategy of building a production management system, it was decided to standardize business processes using MPS, MRP, APS, and MES. As a result, there is now a clear and consistent process of order execution with scheduled operations:
- In WireDesigner, the design engineer develops regulatory and reference information for the required type and size, so the production of each order is scheduled according to the technological chain. In other words, each order gets its own production plan.
- Next, all orders are grouped among themselves according to APS planning rules and distributed among the shop equipment.
- Based on the production schedule, work orders are formed.
First, the planner builds an optimal production schedule. After that, work orders help to share the required information with the shop workers.
The shop workers receive on their mobile devices work orders for each stage of production. Later, the workers use MES (Manufacturing Execution System) to register output in electronic form and provide information to the planner. Enterprise units/departments interact with each other through this app thanks to tracking work orders and output.
- The production schedule items are closed (marked as done) after the respective work orders are completed.
- Finally, the planner recalculates the operational production schedule and can see how the actual progress of production has changed the due dates (forward or backward) compared to ATP at the time of accepting the order.
Using detailed schedules and electronic work orders for each sales order allows the company to track its execution. With more accurate data, it becomes possible to quickly plan, implement and control operational adjustments in production management, eliminating the human factor as much as possible and not wasting effort on manual control as the system displays the current progress online.
Moreover, there is a significant increase in process manageability along with a reduction in the number of hours spent on management and control. Staff members have enough time to direct their attention to other urgent issues, such as compliance with processes, standards, quality, and production optimization.
Organization of operational work-in-progress (WIP) accounting per order on the shop floor without stops for inventory count
The company introduced tracking of the sequence of processes:
1 Based on electronic work orders, each process batch (drum, reel, coil) is registered upon production → 2 Each process batch is marked with a label immediately at the time of production → 3 Process batch is now enriched with detailed information about the order and production, indicated on the label → 4 When the process batch is transferred to the next operation, its entry is also registered.
In this way, there is a connected sequence of processes: registering the time stamp of the order's production and information about the state of semi-finished products; for the first operation in the sequence, the material batch is also registered.
All material flows are registered during production (from the arrival of raw materials to the release of finished products). The inventory data for materials and semi-finished products in each production unit is changed online and is available 24/7 for all process participants.
"In the past, the whole enterprise was stopped for at least one shift for inventory. Now, we can work smoothly, without these monthly stops. Thanks to the IT-Enterprise system, the availability and status of batches are available in real time.
Stalkanat now has an additional 12 production shifts per year, which means extra tons of output. Even this achievement alone can cover the project implementation cost in 3–4 years at most. For me, this is the most important case study on digitalization," said the CFO of Stalkanat.
The shop floor works only with work orders formed on the basis of the production schedule. Work orders are made exclusively for the output plan, which contains only sales orders from customers.
"With IT-Enterprise, ‘liquid’ WIP is now visible. In the Steel Wire Workshop, we cut the amount of ‘illiquid’ WIP by 50–60%, with a direct financial gain of approximately 28,000 euros per year. Consequently, we could manageably increase the ‘liquid’ WIP by a much larger amount.
At the moment, the company management can make conscious decisions on WIP, seeing the exact WIP amount in real time. Before, it took up to 5 days and the work of five IT specialists to update the information.
According to my expert opinion, such actions generate profit by reducing downtime and increasing monthly production volume by 5%, which means quite a lot in money equivalent," adds the CFO.
The reduction of WIP also led to savings on bank loans and excluded the freezing of current assets up to 30,000 euros annually.
Quality management: incoming control, post-operational control, acceptance tests
The company set up a full quality control process (SmartQuality): starting from incoming control of raw materials to acceptance tests.
Hundreds of tests are done per day, hundreds of thousands per month: each coil of wire that is removed from the mill is tested after almost every operation. Thanks to this, defects can be detected and tracked at every production stage. Test results correlate with the quality of semi-finished or finished products and are an indicator of compliance with the client's requirements.
Currently, control is performed after each semi-finished product processing operation. The system automatically monitors the results of interoperation control and excludes the human factor. It also allows the company to accumulate statistics for better decision-making in production management.
SmartTender: electronic trading platform for logistics
The company optimized logistics operations by placing orders for transportation through the electronic trading platform SmartTender.
"In the first year of using this approach, the company saved about UAH 1,000,000 on logistics, which allowed us to get an increased margin. Year by year, the number is growing proportionately to the growth of volumes," said the CFO of Stalkanat.
Management of wire rod warehouses
The company has built processes for planning the receipt, placement, control and writeoff of raw materials in the warehouse management system (WMS). Each coil of wire rod is marked, which helps to identify its location at the warehouse and simplify warehouse logistics within the enterprise.
The writeoff process for wire rod has also been simplified: the storekeeper sees the movement in the system and warehouse inventory, which is controlled using a data collection terminal (TCD scanner) by scanning the coils in the warehouse.
The scaling of the production management system at Stalkanat began with the Steel Wire Shop, which produces reinforcing strands, fiber, welding and spring wires, and ended with the digitalization of the business processes of the Steel Wire Rope Shop, which produces ropes and wires with various types of electroplated coating.
Overall, three large factories have gone through the process of digital transformation. The first project was implemented quickly, with the maximum involvement of the IT-Enterprise team, while the next two projects were implemented independently by the company’s own Competence Center (CC).
The Competence Center was created by the customer at the very beginning of cooperation between Stalkanat and IT-Enterprise. The team learned in practice how to implement digital tools during the first large-scale project.
Further scaling of the digital transformation project to other production sites of the Steel Wire Rope Shop by the Competence Center helped the company achieve significant savings on the IT system implementation and maintenance.
The digitalization project relied on modern production management methods:
> APS planning for production optimization using the theory of constraints for optimal production loading and output planning;
> WireDesigner tool to speed up the addition of reference information;
> WMS, MES on mobile devices for real-time mobile accounting for raw materials, semi-finished and finished products in warehouses and production.
Here is a list of key benefits that were achieved as a result of implementing the project for production management digitalization at Stalkanat:
The described project to build a production management system is part of Stalkanat’s digital transformation. Further developments are underway, with a financial project currently being implemented to optimize sales, procurement, treasury, budgeting and accounting processes.
Stalkanat expects to optimize production planning with AI tools, which will help to achieve maximum output in periods of increased demand and respond to more customer inquiries.
Watch a video case study with a roadmap for Industry 4.0 implementation and getting the desired outcomes at "Stalkanat", Steel Wire Workshop.
Learn about more case studies:
> transition of the maintenance team to work with the SmartEAM mobile application: managing work orders for reactive maintenance
> production transformation (Industry 4.0) with the optimization of each production stage
> business process reengineering (Industry 4.0) in stages and with software solutions for business included in SmartFactory