Chinese metal producers are currently facing a challenging time. With buzzwords like “Industry 4.0” and “Made in China 2025,” both the Chinese government and Chinese companies are pushing forward the digitalization of the metals market. This rapid development of science and technology, however, requires modern companies to adapt to intelligent manufacturing. Companies that refuse to change can easily miss opportunities for further development. During this breaking period, VAMA realized that it needed to work harder when it comes to process intelligence and standardization.
The VAMA plant is a cold rolling mill with post processing lines for pickling, batch annealing, continuous galvanizing, rewinding as well as automatic and hand packaging lines. The plant covers a large range of automotive steel products including the world-famous ultra-high-strength steel Usibor@. The annual production capacity is designed to be 1.5 million tons, including 800 000 tons of cold rolled coils, 200 000 tons of aluminum coils and 500 000 tons of hot-dip galvanized coils.
Valin ArcelorMittal Automotive Steel Co (VAMA) is a joint venture between Valin Steel and the ArcelorMittal Group, which produces steel for Chinese automobile manufacturers. The company has been striving for two objectives in the Chinese market: to intensify cooperation with ArcelorMittal’s main customers in China and to develop long-term cooperation with major Chinese domestic automotive manufacturers.
From the very beginning of the factory construction, VAMA realized that having state-of-the-art hardware is not enough. Instead, the intelligent, future-oriented supply chain solution and a stable, transparent quality management system are the pillars of sustainable development in this area. That’s why VAMA has decided to use PSImetals as its production management system for its new plant in Loudi, Hunan Province, in southern China. The project started in May 2013 and after a one-year implementation phase PSImetals went live in June 2014.
Challenging Certification Processes
Since automotive manufacturers require their suppliers to provide standard certification, steel companies must ensure a stable production process and provide the information necessary for certification. Software is certainly not a substitute for reliable production processes, but it can help steel companies maintain them. Production management software not only gathers all quality-relevant data in the production process, but also helps to improve efficiency and reduce errors in the production.
An important part of the certification is the complete and transparent traceability of the product quality data, which means justifying the grounds for quality decisions by recording quality data. With PSImetals, all quality data of the finished products can be displayed with the material genealogy. The powerful archiving function provides 10 years of traceability: Whether you want to track quality data and events during production or raw material data from hot rolled coils. Besides that, automotive companies are also demanding that steel companies provide proof of the reliability of all traceable data, especially those related to the safety. Here PSImetals is one of the most significant drivers contributing to the certification process.
Gu Li is one of the key people in the project and he is optimistic about the future of VAMA as an automotive steel manufacturer. For Mr. Gu, one of the most important features that a production management system must offer, is production data traceability of at least ten years. This is one of the prerequisites for meeting the strict certification requirements and thus becoming a reliable supplier for automotive companies. PSImetals has been running successfully at VAMA for more than four years, so that the entire production now relies on the software. From Mr. Gu's point of view, this is a great success and an important step for VAMA in the direction of intelligent manufacturing.
At the Loudi plant, Guan Xiaohua is the main user of the PSImetals Quality module and she enjoys the intelligence of the system every day. The surface quality and the physical properties of the automotive steel are strictly controlled, so that the comparison of target and actual values in the production process and the determination of the end use must be very precise. Since the implementation of PSImetals, Ms Guan only has to concentrate on exceptional situations. Routine production events are now captured, compared and released by the system.
Intelligent Supply Chain Integration
Planning the production and sales processes at the VAMA plant is not as easy as it seems: VAMA has to deliver precise requirements to the upstream suppliers and at the same time integrate itself into the supply chain of downstream processing.
From the perspective of the overall system architecture, all processes in automotive steel production must be integrated and transparent. The system design of VAMA therefore follows the concept of “thick” level 3 and “thin” level 4: all production-related operations are carried out in the PSImetals Level 3 system, from order processing via triggering of procurement requirements to the complete tracking of process quality. The ERP system (Level 4) releases the order to PSImetals, which manages the entire production in a tight cycle from planning to quality. This structure allows VAMA to create an integrated and transparent supply chain and reduce any instability that would be caused at production level by the exchange of data across multiple systems.
From a planning perspective, VAMA strived for a flexible and agile supply chain plan and an increase in Usibor@'s market share in the Chinese market through long-term agreements with downstream automotive manufacturers to develop a stable security storage strategy and production plan and through coordination with upstream hot rolling suppliers to provide JIT (Just-in-time) deliveries. The conception and implementation of the planning system PSImetals was exactly aligned to this final goal.
For Zhang Dongxing, production planning at VAMA is very diverse: the entire planning cycle takes two months - from procurement, production to coordination of the downstream supply chain. A planning solution must cover all this. PSImetals at VAMA takes over almost all functions from long-/medium-term planning to piece-based short-term planning including sales operation plan, due date quoting, production and order planning, material planning (coil consolidation), order scheduling and production line scheduling. From Mr. Zhang's point of view not only the VAMA employees but also the PSI employees have grown professionally with the project. With the project, PSImetals planning consultant Han Chengyan has become a planning expert at PSI China and PSI project manager Xing Peng has grown from a reserved engineer to a project manager who takes care of the interests of both parties and always finds the right balance.
VAMA's decision in favour of PSI was driven by the worldwide cooperation between PSI and ArcelorMittal as well as PSI's innovative strength in the area of Industry 4.0. Carlos Pimentel faced two major challenges in the course of the project: to correctly define the business processes between Level 4 (ERP) and Level 3 (production management system) and to win over the VAMA employees to use PSImetals from the start of production. PSImetals, however, proved to be a particularly user-friendly software that provides its users with relevant information. Mr. Pimentel is pleased that the production start went smoothly and immediately, that a high system availability is now ensured and that he receives constant support from PSI experts when changes are required.
A Nutcracker for Automotive Steel Producer
VAMA CMO Jurgen Cobbaut once said in an interview: “You may think that VAMA is relatively small, but we are very fast in developing new steel grades. Our products are of excellent quality, stable and constantly improving. That is to say, VAMA does not produce steel for vehicles, but offers Automotive Steel Plus.”
PSI has set itself the task of offering a plus for automotive companies as well. This means that we focus on the specific needs of the automotive industry, offer intelligent manufacturing features and make our customers competitive in these challenging times.
Automotive steel manufacturers have to deal with many questions on a daily basis:
