Most of our customers want the same things: lower costs, consistent quality, reliable support, and more efficient processes.
And we’re more than happy to provide them with innovative ways to achieve it all. Read on to learn about some of our interesting case studies.
In the metals industry, a small change can make a big difference in terms of costs. Trouble is, you might have to consider thousands of constraints across hundreds of heats. So how does a company determine how a change in any one constraint might affect costs?
One company turned to MSA for answers.
MSA’s Metals and Advanced Manufacturing division recommended that the client use our Blending Optimization Software Suite™, BOSS™. BOSS determines the least-cost combination of raw materials needed to produce a given heat, line-up, or production schedule, taking into account all of a company’s various operating and quality constraints.
BOSS considers the current inventory, available market materials, material chemistry information, and the chemical and physical constraints to calculate the least expensive mixture of materials to meet a product specification.
This particular client was using BOSS to schedule a week’s worth of heats at a time, but they wanted a special sensitivity analysis report, summarizing the costs of each constraint considered while calculating the charges for hundreds of heats. We’re talking constraints in the thousands.
MSA prepared the special analysis report, and in reviewing, the client found an elemental maximum constraint on one standard grade that showed a cost of $14,000.
Our BOSS report indicated that if the company were able to increase the maximum amount of that particular element by one pound in a 200,000-pound heat, they would be able to save $14,000 each time they made that standard grade. Quality, operations, and sales personnel all approved of the change, and the client was able to recognize great, on-going savings.
Any company involved in the buying or selling of ferrous scrap knows that it lacks transparency and price visibility. Ask 10 different companies, and they’ll give you 10 different prices of what they feel is the current market for a given commodity.
The price discovery process is archaic and incredibly challenging, given the volatility that exists in the scrap markets today. For information, most companies turn to industry publications, yet these are often unreliable, given their survey-based approach to collecting pricing information.
These companies need accurate and timely price information, based on actual order transactions, not guesses.
A nationally recognized steel producer wanted to achieve some objectivity in the process, get more accurate starting prices and obtain the information needed to be competitive.
It found the answer it wanted with MSA.
MSA’s Metals and Advanced Manufacturing Division recommended that the company take advantage of our Raw Material Data Aggregation Service™, RMDAS™.
RMDAS offers this major steel producer several benefits
- Improves the company’s buying performance to lower the cost of goods sold in an extremely competitive environment
- Provides access to accurate price and volume data to help determine what prices to offer or accept for a particular commodity from a supplier
- Establishes a more accurate starting price for each grade of ferrous scrap that it buys, giving a reasonable place to start negotiations
- Shows weighted average price and volume data in other geographic and product groupings, regional availability and competitive market forces
- Represents over 65% of ferrous scrap purchased by steel mills in the U.S. in geographic regions
- Forms the basis of long-term pricing arrangements
- Provides quick and meaningful comparative online graphs to benchmark the company’s performance using the powerful online reporting system
- Offers a ‘score card’ to determine how the company’s prices compare with other regions and product groupings
- Provides access to participants to weekly price data for the RMDAS index commodities
- Offers Flash Reports that show regional price and volume trends
- Acts as a reasonable modeling tool for SOx compliance
- Shows prices and availability of alternative grades for mix changes that may reduce costs
- Allows the company to track each of its locations against regions, product groupings and individual commodities
Our client has found RMDAS to be a useful tool in its ongoing effort to improve its buying performance and reduce its raw material costs in an extremely competitive environment.
By providing transaction-based data, rather than survey-based data, our solution brings the objectivity this company desired. Over the years, our client has found that the aggregated data reported in RMDAS is accurate and statistically relevant.
Today, this steel producer has the data it needs to better analyze its buying strategies and activities. It has more insight on the competition. It has improved its purchase planning, and can recognize opportunities to buy better.
RMDAS helps the company identify potential trends, adjust its strategy on a monthly basis, and enjoy real cost savings by finding opportunities to introduce other commodities into the melt process, identifying opportunities to supplement or alter its charge mix to reduce costs.