o9 Solutions, Inc. > Case Studies > Revolutionizing Steel Production with IoT: A Case Study on Improving OTIF and Reducing Inventory

Revolutionizing Steel Production with IoT: A Case Study on Improving OTIF and Reducing Inventory

Technology Category

Functional Applications - Inventory Management Systems
Platform as a Service (PaaS) - Application Development Platforms

Applicable Industries

Life Sciences
Metals

Applicable Functions

Procurement
Sales & Marketing

Use Cases

Demand Planning & Forecasting
Inventory Management

About The Customer

The customer is one of the world's largest steel wire manufacturers, with a geographically diversified presence in over 20 countries. As a major player in the steel industry, the company is committed to delivering high-quality products to its customers. However, they were facing challenges in terms of customer service, measured by On Time In Full (OTIF), and had issues with their capacity and material planning processes. These processes were manual and lacked accuracy, leading to excess inventory, shortages, and plant underutilization. The company was in need of a solution that could improve their planning accuracy, reduce inventory, and enhance their overall operational efficiency.

The Challenge

The company, one of the world's largest steel wire manufacturers with operations in over 20 countries, was facing significant challenges in customer service, capacity and material planning. Their On Time In Full (OTIF) performance was considerably low compared to their competitors, indicating a lack of efficiency in their operations. The company's capacity and material planning processes were entirely manual and lacked accuracy, leading to an excess of inventory, shortages, and plant underutilization. Furthermore, their Raw Material Planning was inaccurate as detailed BOM compositions, lead times, and alternative sources were not considered in the supply model and were done in Excel. The company also lacked effective capacity planning, leading to inaccurate sales allocations. Lastly, their order promising was inaccurate due to a lack of tools for detailed order planning.

The Solution

The company partnered with o9 to address these challenges. o9's platform enabled the company to perform master planning with detailed BOM, material and capacity constraints, and lead times, significantly increasing the accuracy of their Raw Material planning. The platform also provided scenario-based capacity planning integrated with demand planning, enabling accurate decisions on quotas for sales personnel. Additionally, the company was able to leverage the tools available on o9’s platform to perform master planning and order promising, which increased planning accuracy. The o9 Enterprise Knowledge Graph was used for true End-to-End planning, including demand, capacity, master planning, and order promising. The ability to run scenarios and have real-time demand-supply synchronization proved to be a game-changer for the organization. The company replaced their homegrown solutions and Excel with o9's platform.

Operational Impact

The implementation of o9's platform brought about significant operational improvements for the company. The platform's ability to perform master planning with detailed BOM, material and capacity constraints, and lead times led to a significant increase in the accuracy of their Raw Material planning. This helped the company avoid excess inventory and expedite orders, thereby improving their OTIF performance. The scenario-based capacity planning integrated with demand planning enabled accurate decisions on quotas for sales personnel, addressing the issue of inaccurate sales allocations. Furthermore, the company was able to make accurate order promises due to the detailed order planning tools available on o9’s platform. The flexibility of the platform also allowed the addition of execution layers such as order entry and custom workflows for sales teams, further enhancing operational efficiency.

Quantitative Benefit