Materials logistics without boundaries
Increasingly, logistics is moving away from being a support function and is becoming a competitive factor that is receiving ever more attention from Plansee High Performance Materials and its customers.
Logistics sees itself as a shaper of process and information networks, both within and across companies. It is supported by well-qualified teams and is intended to meet operational and strategic challenges arising within both the corporation itself and the market. As far as Plansee is concerned, these challenges are due to the fact that it is becoming increasingly difficult to plan the demand for products made from the refractory metals molybdenum and tungsten. Sales volumes in important markets such as the automotive industry and consumer electronics are extremely volatile, and suppliers like Plansee have to cope with this volatility. Plansee’s value-added chain, from ore concentrate through to ready-to-install components, is distributed across different production plants in different parts of the globe. Furthermore, project business is growing in importance. “Increasingly, our customers think in terms of entire cenarios when they plan to introduce ew functionality into their products. For this approach to be successful, they must be able to find qualified suppliers who have the ability to introduce these new functions quickly and efficiently,” explains Harro Borowski, head of supply chain management at Plansee.
These are developments that Plansee is responding to and which demand ongoing adaptation and optimization of the logistics process chains. And that’s not all: “For us, the challenge is to use intelligent supply chain management to give our customers a competitive edge and differentiate ourselves from the competition,” Borowski continues. So what impact do these challenges have on organizational aspects and supply chain management at Plansee? As of 2007, SAP has been deployed systematically throughout Plansee. This established the foundation for designing and rolling out uniform process standards worldwide. As well as the integration of customer forecasts that are relevant to production, Plansee now offers its customers a wide range of ways of working together to simplify order processing:
The introduction of direct deliveries across the group allowed Plansee to ship products directly from the production plant to the end customer. This had a significant impact in reducing delivery times and logistics costs. One major benefit is that the organizational
structures and processes in the various corporate units are increasingly converging, with the result that it has been possible to significantly increase the flexibility and speed with which we react to changes in market needs and specific demand.
In order to offer customers the ultimate in supply reliability, Plansee operates consignment stores for individual customer groups. The agreed quantity of quality-checked material is constantly reserved for the customers.
EDI connection to customers
Plansee has set up the necessary electronic interfaces to individual customers to allow data to be exchanged without delay. At the same time, the roles played by the customers and Plansee in the field of logistics management have been adapted to match the new logistics requirements. This allows Plansee to adjust its production flexibly to suit customer demand at any time. Efficiency in the supply chain rises and transaction costs fall.
In its shipping operations, Plansee offers its customers the option of DDP deliveries (Delivered Duty Paid) worldwide. This involves Plansee, as the shipper, paying applicable customs duty in countries in which the company has subsidiaries. This entire process is accompanied by active tracking and tracing of all consignments, rapid electronic provision of shipping and delivery documents and early identification and handling of other requirements relating to export and import, such as tariffs and import turnover tax. This requires a detailed, application-specific description of the materials and products used, which is provided to the carrier for customs clearance purposes.
As soon as a purchase order is created, the system performs a background check to establish whether the customer is from a country to which an embargo applies or is on a sanctions list. The material classification is used to determine whether, for example, the customer needs to provide an end-user certificate for the product. This provides legal certainty for both the customer and Plansee.
Plansee uses modern methods for defining and controlling decoupling points in production in order to reduce delivery times and balance out fluctuations in demand in the market. Decoupling points take the form of intelligently controlled intermediate storage. On the one hand, such storage facilities can be filled, irrespective of fluctuations in market demand, thus permitting continuous production. On the other hand, however, they allow customers to be supplied with additional quantities at short notice. Throughput times are controlled and, wherever possible, reduced, in order to increase flexibility in production. This process is supported by active control of the production lines and capacities to meet daily requirements. At Plansee, this production strategy is now deployed for virtually all semifinished molybdenum and tungsten products such as sheets, strips, rods and wires. The semifinished product is kept in stock in a limited number of dimensions and can quickly be processed to meet customer requirements before being shipped. One important driver behind the implementation of this production strategy is the display and lighting industry.
Most sales staff at Plansee have real-time access to information on their customer, production and distribution transactions, irrespective of their location. Customer care staff can respond to inquiries about customer orders and distribution operations irrespective of the production and delivery location and of the relevant time zone.
To make sure it can continue to meet the ever-increasing requirements of both internal and external customers, the Plansee supply chain management team systematically develops its global and local business processes. The aim is to reduce delivery times, to increase the flexibility of both production and the supply chain network, to implement staff development activities that help employees meet these challenges, to increase the transparency and quality of information, and to strengthen the global operational collaboration that makes Plansee a globally active, virtual organization.