Osaka Steel, Japanese major electric furnace steel maker started new operation system at Sakai plant to optimize ferrous scrap inventory with around 2 weeks of consumption. The system is to simulate consumption schedule and to control the scrap inventory each for around 15 grades indicating supplemental purchase when some grade scrap is less than 2 weeks consumption. The firm tries to avoid excess scrap inventory for lower operation cost.The firm tries to establish just in time operation system in Osaka Steel way, in which the firm tries to optimize the volume of purchase, production and sales. The new scrap control system is a part of the effort to improve the operation. The new system indicates the scrap purchase automatically only to control the inventory to level of 2 week consumption. The system shows the stock condition for each grade in 3 different color sign on the screen to indicate 3 different statuses including more than 2 weeks of consumption, 50-100% consumption and less than 50% consumption. The firm tries to improve the system for better optimization of inventory control. Sakai plant managed scrap purchase and inventory by depending on skilled workers’ experience. However, the operation was affected by other makers scrap purchase price resulting overstock or less than optimum volume for scrap consumption.
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