© Copyright Commercial Metals Company 2007
CMC Confidential
Using GATP for Allocations in Mill ProductsCommercial Metals Company
Presented by:
Nick Gagliano and Taylor Lindsey
© Copyright Commercial Metals Company 2007
Company Background
Founded in 1915, Commercial Metals Company (CMC) manufactures, recycles, and markets steel, metal products, and related materials
CMC is a GREEN company; we recycle metals
Fortune 500
$6.5B annual revenue
11,000 employees
CMC is overall divided into Americas and International
High degree of vertical integration
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5 Steel mills5 Steel mills
5 Structural fab operations5 Structural fab operations4 Fence post shops4 Fence post shops10 Scrap/rail processors10 Scrap/rail processors4 Related businesses4 Related businesses
37 Rebar fab operations37 Rebar fab operations32 CRP distributors32 CRP distributors
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© Copyright Commercial Metals Company 2007
© Copyright Commercial Metals Company 2007
Business Challenges
Broad variation of processes and systems solutions- Existing locations - Acquisitions- Lines of Business
Consolidation of reporting data- Inventory- Shipments- Financials
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© Copyright Commercial Metals Company 2007
SAP Profile
Running SAP since 2008
4,000 users
What are the modules installed – ECC, SCM, BI
Where implemented – Lines of business
How many resources on project
How much customization?
Implementation
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Flow Chart
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Business Challenges
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• Rebar Capacity• Production• Inventory
• Merchant Capacity• Production• Inventory
Internal CustomerDemand
External Customer Demand
VMI Customer Demand
Other Customer Demand
CMC | Using GATP for Allocations in Mill Products | 20-Jul-11
© Copyright Commercial Metals Company 2007
gATP Specific Need
9
Distribution Center-
We need to Allocate Tons at
this location
Internal Customer
Other Customer
External Customer
VMI Customer
CMC | Using GATP for Allocations in Mill Products | 20-Jul-11
© Copyright Commercial Metals Company 2007
Affiliate Process Change
10
OLD PROCESS BEHAVIOR BUSINESS RESULT
“Every man for himself” approach
Internal Customers competed with each other for material
Displaced inventoryHigher transportation costs
Mills and FAB did notcollaborate on demand plan
Each division operatedindependently
Lack of trust between Mills and Internal Customers
No ability to allocate in legacy system
“No Holds Barred” sales order entry
As demand increased we became oversold
CMC | Using GATP for Allocations in Mill Products | 20-Jul-11
© Copyright Commercial Metals Company 2007
Affiliate Process Change
11
NEW PROCESS BEHAVIOR BUSINESS RESULT
Regional organizational alignment
Work together as a team to maximize value in vertical integration model
Better communication and planning
Mill Forecasting Team works with FAB Supply Chain
Weekly Allocation meeting to discuss supply and demand
Higher level of inventory optimization
GATP Allocation used for protection of Internal Customers’ stock items
Allocation entered during demand planning process
Sales Orders and STO’s will not confirm unless Allocation exists
CMC | Using GATP for Allocations in Mill Products | 20-Jul-11
© Copyright Commercial Metals Company 2007
VMI Process Change
12
OLD PROCESS BEHAVIOR BUSINESS RESULT
Allocation managed by Inside Sales
Undisciplined sales order entry
Stockouts for VMI Customers
Allocation performed one-by-one for each VMI item
Inside sales tires of the cumbersome process
Inefficiencies lead to neglect of process
Lack of system tools to capture data for analytics
No data capture or real time visibility to allocation
Limited or case-by-case analytics
CMC | Using GATP for Allocations in Mill Products | 20-Jul-11
© Copyright Commercial Metals Company 2007
VMI Process Change
13
NEW PROCESS BEHAVIOR BUSINESS RESULT
Allocation managed by Planning team
Allocations are entered in APO
Secured process
Higher order fulfillment %
GATP/VMI planningbooks used manage allocations at a product family level
VMI allocations entered for each production cycle
Consistency in the process
Customer satisfaction
Reporting to view remaining allocation and near-real time visibility in planning books
Data captured; development underway for forecast analysis
Visibility and betterdecision making
CMC | Using GATP for Allocations in Mill Products | 20-Jul-11
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VMI Planning Book
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© Copyright Commercial Metals Company 2007
ATP REPORT
Unrestricted StockDeliveriesRem. int AllocSales OrdersSTO Demand
ATP Stk
15
Affiliates and VMI Orders book against the Rem.int Allocbucket
All other orders book against the ATP Stkbucket
CMC | Using GATP for Allocations in Mill Products | 20-Jul-11
© Copyright Commercial Metals Company 2007
FAB PACE SPREADSHEET
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Req TonsActual Remain AllocFCST Tons/DayActual Tons/Day
Decision Points
Data pulled from
CMC | Using GATP for Allocations in Mill Products | 20-Jul-11
© Copyright Commercial Metals Company 2007
Key Takeaways
Integration partner
Implementation: “Big bang” vs. Tactical approach
Executive sponsorship
GATP methodology
Phased approach to data analysis
Where are you trying to create value?
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Questions
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