Dongbu Steel, a core company of Dongbu Group, produces 4 million tons of cold-rolled and hot-rolled steel sheets annually through factories in various regions. The cold-rolled steel division has world-leading competitiveness due to the fully automated Asan Bay Plant. Dongbu Steel's electric furnace steel mill is efficient with reduced CO2 emissions and energy consumption. The company aims to become a leading integrated steelmaking company by consistently producing cold-rolled steel sheets.
Project Background & Goals
Dongbu Steel's customers primarily purchase steel products from their inventory list of finished products, which has led to risks in production and logistics management. These risks include an increase in defective inventories due to uncertain forecasts and increased operating costs due to frequent planning and logistics changes. To address this, Dongbu Steel has implemented a customer-centric approach called the "Production Seat Reservation Methodology." This approach confirms "production seats" for customer orders, similar to a ticket reservation system, and promises delivery within a fixed time frame to improve decision-making and reduce operational costs.
Return on Investments
Dongbu Steel has implemented Zionex's SCM solution to improve its production and logistics management. By integrating demand forecasting, delivery date reply, integrated master plan and detailed scheduling, the company has established a production seating system that considers raw materials and production capacity and synchronizes production, sales and purchase plans. The system has been upgraded by constructing a raw material preparation system, changing the monthly planning system to a weekly management system and shortening the lead time. The company has also established a system that prioritizes inventory processing and built an appropriate inventory management system. Additionally, by implementing an ATP (Available to Promise) system, Dongbu Steel can promptly respond to customer delivery schedule requests, and plan production without delay, resulting in a significant reduction in material, inventory and resale levels. The company achieved a 52% reduction in inventory levels, established customer response within 5 minutes, and reduced average shipping lead times by 48%.