IBM Helps Solve Steel Industry's Complex Scheduling Problems

SOMERS, NY -- (MARKET WIRE) -- Aug 03, 2006 -- IBM (NYSE: IBM) researchers and consultants have developed a solution that applies sophisticated optimization techniques to help steel companies maximize their production, design and product delivery. The IBM Production Design and Operations Scheduling Solution for Steel, created in collaboration with many of the world's leading steel manufacturers, is the first to provide a 360-degree view across an entire steel mill, allowing companies to adjust manufacturing and shipping levels based on incoming orders. It is also the only solution to provide optimal designs for slabs and plates.

Major steel manufacturers have used the Production Design and Operations Scheduling Solution to help improve production throughput, reduce inventories, lower operating costs and increase sales revenue. This solution fills a critical gap between a company's Enterprise Resource Planning (ERP) system and the plant's real-time production control system by enabling the optimization of the daily production process -- typically over a seven-day horizon.

The complexity of production planning and scheduling in materials industries, such as steel, is greater than in most other industries. Specific problem areas in steel production planning and scheduling include inventory management; slab, plate and cast design; and melting shop, hot strip mill and finishing line scheduling. Optimizing each problem area independently can result in savings for a steel manufacturer. However even greater gains can be achieved by simultaneously optimizing all of these inter-related areas.

"The combination of these scheduling issues with the volatility of market conditions makes production planning in the steel industry one of the most challenging problems facing manufacturers today. By combining our consultants' industry expertise with IBM Research's mathematical modelling capabilities, this solution can help tackle these previously unsolvable problems," said William Pulleyblank, vice president, IBM Center for Business Optimization.

The solution's software is based on advanced mathematical algorithms that help users to optimize the production or manufacture of specific items with minimal waste and in the most efficient manner. For example, steel mills are using the tool to figure out which items should be produced in what specific order based on dozens of factors -- helping to minimize waste and speed up the overall production of the steel.

The most recent enhancement of the Production Design and Operations Scheduling Solution is for the melting shop area. This was developed at the IBM Global Business Solution Center in Bangalore. The new version includes an enhanced Web user interface, support for multiple platforms (Linux, AIX, Windows), and enhanced capabilities that enable it to expand easily to other industries with complex manufacturing processes, including mining, chemicals and petroleum.

With labs in the United States, China, Japan and India (among other countries), IBM has researchers in most of the leading steel manufacturing countries. This proximity gives IBM direct access to steel companies dealing with different challenges in various geographies, allowing the researchers to tap into the most complex industry problems.

For example, IBM has worked with POSCO, a major Korean steel manufacturer, to improve production capabilities by fulfilling orders more efficiently. One of the new capabilities IBM introduced to POSCO was the ability to pack multiple orders on a slab. Although this capability is effective in improving slab utilization, it made the solution more difficult from a computational and programming perspective. Still, the team met the challenge by combining expert knowledge of steel production with advanced optimization techniques to effectively increase average slab weight and reduce stock slabs and unused-slab weight, while increasing delivery performance.

For more information about this solution and the IBM Center for Business Optimization, visit

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