The U.S. Steel Story
U.S. Steel, a unit of USX Corporation, is the nation's largest steel producer of high quality plate, sheet, tin, and tubular products. USS strives for continuous improvement in all processes, costs, and most important customer service. In an effort to improve customer satisfaction, U.S. Steel re-engineered their order fulfillment process in which i2's Factory Planner and UEC IT's Template for Metals were integrated to optimize planning and scheduling.
1995 symbolized a change in how business was conducted at U.S. Steel. It was during this time that U.S. Steel shifted from a transactional order process to one more focused on contract orders. The new process placed greater emphasis on more efficient supply chains and development of finite capacity plans to better direct the new vendor managed inventory requirements brought on by the increasing contract orders. Not only did U.S. Steel re-engineer these processes but replaced the old infrastructure with a more modern one designed to easily integrate U.S. Steel's "back-office systems" to future e-commerce initiatives.
Business Dilemma:
In the old environment, U.S. Steel knew they would need to build inventory levels to meet just in time promised delivery dates. However, they also realized by mechanizing the supply chain planning process, inventories would be reduced and manual work would significantly decrease making the new processes less costly and easier to manage.
"Without a mechanized supply chain, we would have to buffer our variability with inventory to keep customers happy. The new system would afford U.S. Steel an efficiency advantage while our customers would receive the superior customer service they expect from us," said Bill Kelly, U.S. Steel General Manager of Business Process Reengineering.
U.S. Steel's key challenge was to implement a system that would reduce inventory costs, reduce cycle times, and allow U.S. Steel to effectively manage inventory to ensure the success of growing contract business.
Strategies to Success:
U.S. Steel chose to partner with i2 Technologies. i2 had a good supply chain planning tools as well as a vision for the future.
As the project progressed, U.S. Steel realized a systems integrator with expertise in systems integration and a keen understanding of the metals industry was essential to the implementation. With a long history of systems development and integration, U.S. Steel knew UEC IT would be their champion.
"Essential to our decision was the fact that UEC IT, with their fundamental knowledge of metals and implementation expertise would ensure an efficient and cost effective implementation. More so than even a big six consulting firm," said Bill Kelly.
The Tools for Success:
U.S. Steel and UEC IT recognized the additional functionality and enhancements added to i2's Factory Planner were invaluable to the implementation. UEC IT took this skill set, knowledge, and experience developed at U.S. Steel and merged it together to form Metal Templates for i2's Master Planner and Factory Planner products. The templates would enable metal producers worldwide to optimize their return on investment from i2's solutions.
Implementation Issues:
U.S. Steel recognized the value of i2's products, however, they also knew that UEC IT's development and integration expertise was key to the project's success.
"UEC IT's templates increased user acceptance in our plants. Without the templates and UEC IT's knowledge of the metals industry, the project would have taken a lot longer and would have been much more expensive," said Bill Kelly.
UEC IT's Factory Planner and Master Planner Templates for Metals represent one piece in the project's success. Another key element was UEC IT's efficiency in integrating i2's tools with U.S. Steel's legacy systems and their new order fulfillment system. This integration enabled U.S. Steel to automate the process of handing data to and from the Factory Planner. Without this functionality, full optimization would not have been possible.
Success:
USS is now realizing the return on investment they anticipated from the project. "Our inventories have decreased enough at one plant to pay for the entire project," says Kelly. "USS has seen continuous improvements in inventory reduction in both in-process and finished goods."
USS is also using the supply chain solutions as a foundation for their e-commerce initiatives. "We've connected the total solution to U.S. Steel's Extranet environment to give our customers complete visibility of our supply chain on the Internet," says Kelly.
These benefits will flow through to U.S. Steel's customers.
"Inventory reductions and improved vendor managed inventory has increased customer acceptance and appreciation at U.S. Steel. The solution presented by UEC IT and i2 will give USS unparalleled ability to continuously improve customer satisfaction while reducing costs, Kelly says.
Results
1995 symbolized a change in how business was conducted at U.S. Steel. It was during this time that U.S. Steel shifted from a transactional order process to one more focused on contract orders. The new process placed greater emphasis on more efficient supply chains and development of finite capacity plans to better direct the new vendor managed inventory requirements brought on by the increasing contract orders. Not only did U.S. Steel re-engineer these processes but replaced the old infrastructure with a more modern one designed to easily integrate U.S. Steel's "back-office systems" to future e-commerce initiatives.
Business Dilemma:
In the old environment, U.S. Steel knew they would need to build inventory levels to meet just in time promised delivery dates. However, they also realized by mechanizing the supply chain planning process, inventories would be reduced and manual work would significantly decrease making the new processes less costly and easier to manage.
"Without a mechanized supply chain, we would have to buffer our variability with inventory to keep customers happy. The new system would afford U.S. Steel an efficiency advantage while our customers would receive the superior customer service they expect from us," said Bill Kelly, U.S. Steel General Manager of Business Process Reengineering.
U.S. Steel's key challenge was to implement a system that would reduce inventory costs, reduce cycle times, and allow U.S. Steel to effectively manage inventory to ensure the success of growing contract business.
Strategies to Success:
U.S. Steel chose to partner with i2 Technologies. i2 had a good supply chain planning tools as well as a vision for the future.
As the project progressed, U.S. Steel realized a systems integrator with expertise in systems integration and a keen understanding of the metals industry was essential to the implementation. With a long history of systems development and integration, U.S. Steel knew UEC IT would be their champion.
"Essential to our decision was the fact that UEC IT, with their fundamental knowledge of metals and implementation expertise would ensure an efficient and cost effective implementation. More so than even a big six consulting firm," said Bill Kelly.
The Tools for Success:
U.S. Steel and UEC IT recognized the additional functionality and enhancements added to i2's Factory Planner were invaluable to the implementation. UEC IT took this skill set, knowledge, and experience developed at U.S. Steel and merged it together to form Metal Templates for i2's Master Planner and Factory Planner products. The templates would enable metal producers worldwide to optimize their return on investment from i2's solutions.
Implementation Issues:
U.S. Steel recognized the value of i2's products, however, they also knew that UEC IT's development and integration expertise was key to the project's success.
"UEC IT's templates increased user acceptance in our plants. Without the templates and UEC IT's knowledge of the metals industry, the project would have taken a lot longer and would have been much more expensive," said Bill Kelly.
UEC IT's Factory Planner and Master Planner Templates for Metals represent one piece in the project's success. Another key element was UEC IT's efficiency in integrating i2's tools with U.S. Steel's legacy systems and their new order fulfillment system. This integration enabled U.S. Steel to automate the process of handing data to and from the Factory Planner. Without this functionality, full optimization would not have been possible.
Success:
USS is now realizing the return on investment they anticipated from the project. "Our inventories have decreased enough at one plant to pay for the entire project," says Kelly. "USS has seen continuous improvements in inventory reduction in both in-process and finished goods."
USS is also using the supply chain solutions as a foundation for their e-commerce initiatives. "We've connected the total solution to U.S. Steel's Extranet environment to give our customers complete visibility of our supply chain on the Internet," says Kelly.
These benefits will flow through to U.S. Steel's customers.
"Inventory reductions and improved vendor managed inventory has increased customer acceptance and appreciation at U.S. Steel. The solution presented by UEC IT and i2 will give USS unparalleled ability to continuously improve customer satisfaction while reducing costs, Kelly says.
Results
- Decreased Inventories at Fairless Works by over 40%.
- Took 2 to 8 weeks out of the supply chain for specific parts.
- USS is now working with customers to include customer inventory in the total supply chain.
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