Fine art

The Plansee HPM Group improves its customer service with shorter, guaranteed delivery times.

With thousands of products for hundreds of applications in dozens of different industries, supply chain management is more than a fine art. And complexity is just one aspect of the Plansee Group's manufacturing operations in short and long runs, whether it be small components weighing just a few grams or sheets weighing dozens of kilos. And all this with materials that demand complex multi-phase processing. To do this, the company makes use of a global production network of highly specialized manufacturing plants. The other aspect relates to the growing volatility in the market. Customers plan their production at increasingly short notice and are demanding delivery times that are sometimes far below the company's internal production times.

Complete transparency
“All the plants are integrated in a common SAP system,” explains Harro Borowski. He is responsible for logistics and supply chain management within Plansee. Integration in the SAP network is an indispensable IT measure “which turns each of our production plants into a fulfillment center.” No matter whether it is Reutte in Austria, Franklin in the USA or Shanghai in China, each plant and shipping site takes over responsibility for the entire logistics operation, even down to handling import when necessary. And the result of comprehensive networking is complete transparency. This is because it is not only the production plants that are integrated in the SAP system, but also the sales offices. If an employee at the Chinese subsidiary wants to know where an open production order is at the moment, all they need to do is have a quick look in the system. This is a key element in being able to provide customers with reliable information on the status of their orders. But another important breakthrough was also achieved, namely a reduction in delivery times. It was sometimes the case that a week elapsed by the time a local customer order had been ordered and planned in the supplying production plant responsible for delivery. Now, Plansee is able to confirm orders in its global production and delivery network immediately or at the latest within 48 hours, depending on availability.

Understanding the customers
Of course, this impressive achievement did not happen overnight, and not without significant changes. To start with, it was necessary to set up a uniform transfer pricing system across the globe. Borowski: “This speeds up the creation of offers massively and allows us to provide extremely reliable information to the customers. In order to increase our speed and efficiency, we are having a careful look at our forecast, and to do this, we want to have a better understanding of how the production systems of our main customers work.”

Intelligent decoupling
In essence, the aim is to synchronize our own and our customer's supply chain in order to improve service levels and minimize raw material procurement risks. Borowski offers an example: “The total procurement time for purchasing and transporting molybdenum is several weeks. During manufacturing, the raw material passes through a production process with up to eight production stages. Depending on the planning strategy and the product (from standard articles to customer-specific solutions), this can take up to six months.” When the product reaches the customer, however, it is processed within a few weeks and shipped as modules or finished goods to our customer's customer. “Of course, the increasing market volatility causes problems for our relatively long supply chain. The Plansee supply chain starts just after the mine,” says Borowski. The aim is to use intelligent decoupling points in the value chain. Materials with a high number of uses are managed on a reorder points and safety stock basis to guarantee short-term availability.

You can read other interesting stories in our magazine livingmetals.