Tile Manufacturer Strives for Industry 4.0
New software is supporting supply chain planning and scheduling at Florim Ceramiche.
Florim Ceramiche SpA has been recognized as a leader in the ceramic industry for more than 50 years. The company’s business style can be summarized by three core principles: research, innovation and social responsibility.
Headquartered in Italy and expanding in the U.S., Florim’s core business is the production of porcelain tile that offers surfaces for applications in architecture, interior design, and building construction. Florim employs 1,300 people in two manufacturing plants, and achieves consolidated annual turnover of €330 million (approximately $364 million) while producing 25 million sq m of ceramic material per year.
It is a widely shared opinion among researchers and professionals that industry is approaching the threshold of a momentous turning point that could take the shape of a new industrial revolution (Industry 4.0). This revolution will be driven by the total integration of digital technology into industrial processes, changing products as well as processes.
Such a revolution will be founded on the continuous exchange of information between intelligent machines and humans. It will be based on a proactive and constant monitoring of manufacturing activities, concentrating on waste reduction and work organization improvements on the shop floor. Smart software solutions focused on production processes will play a strategic role in managing complexity, supporting company operations to face the continuously increasing market requirement of customized products while simultaneously improving manufacturing flexibility.
Florim is determined to play a starring role in the global ceramic industry by means of continuous investments in research and technology in the broadest areas of its business, with special attention to innovation and manufacturing excellence. In such a context, Florim sought to implement new software to support supply chain planning and scheduling that could be integrated with its existing SAP R/3 enterprise resource planning (ERP) system. Florim’s goal with the new software was to support and strengthen an agile supply chain to help the company face a global ceramic market driven by high service-level targets, where demand is affected by conflicting requirements: increased product mix, reduced quantities per order, and requests for shorter delivery times. Florim’s specific objectives can be summarized as follows:
- On-time delivery improvement and reduction in delivery lead time (from customer order to shipment)
- Reduction of finished product stock
- Increased flexibility of the planning process and improved capacity to react to market unsteadiness
- Increased resource productivity in terms of a reduction in the number of changeovers and total downtime required for setup
Planning and Scheduling
In 2010, Florim chose to implement Compass, a supply chain advanced planning and scheduling software tool developed by Plannet, an Italy-based software solution provider. The Florim planning and scheduling model configured in Compass was graphically designed directly into the application using the smart and user-friendly Process Modeling tool (see Figure 1).
The primary objective of the Master Production Schedule (MPS) is to determine finished product planned orders that are required to meet forecasts, customer orders and the target stock profile. For each finished product, the plan takes into account:
- SAP sales forecast data over a 15-month horizon
- “Regular” customer orders
- Extra customer orders (not included in forecast figures)
- Dependent demand (requirements originated by upper-level finished products)
- Top-quality inventory
- Released production orders (the MPS process plans top-quality tile quantities, as lower quality tile are the result of the manufacturing process itself)
MPS-planned orders are generated by a sophisticated algorithm. An advanced Compass lot sizing function takes into account the economic order quantity (EOQ) of common dry-pressed, semi-finished items, which is the real process constraint when it comes to planning quantity. If necessary, the lot sizing function is able to increase the quantity of MPS orders according to the minimum lot size that is defined at bill of materials (BoM) lower levels (dry-pressed). Surplus quantities are used to cover in advance forecast figures in future buckets of the plan. MPS orders are the primary input to the Compass MRP run to determine dry-pressed dependent requirements and the resulting planned orders, taking into account scrap quantity (from BoMs), process yield (from routings), and the rate of second- and third-class product output (from item master data).
To evaluate Florim’s long-term plan sustainability, finite capacity simulations can be run on the production order portfolio (made up of released, firmed and planned orders), and “what-if” scenario analyses can be promptly compared. Relevant key performance indicators (KPIs) can be configured to rapidly analyze the result of scheduling runs (see Figure 3). If necessary, managerial levers (e.g., shift/capacity adjustments, make or buy decisions, mill allocation, etc.) can be easily modified to improve the schedule.
The RAM-based algorithm of the Finite Capacity module calculates the short-term optimized production schedule for each production resource in a few seconds, under the following constraints:
- Product routings that determine production lines and productivity
- Capacity of production lines
- Availability of critical resources (e.g., molds, boxes/platforms, raw materials)
- Item attributes (e.g., size, brand, color) to optimize production sequences and therefore reduce the number of changeovers and overall setup time (Compass dynamic sequencing functions enable the definition of different sequencing/optimization criteria at the single resource level)
Specific functions allow the planner to easily modify the schedule proposed by the algorithm and freeze production in the short term (two to three weeks). The schedule result is then released to SAP R/3 to update production order end dates. Using a specific module called WBP (Production Workbench), the planner also firms/releases planned orders to SAP R/3.
During 2010-2014, Florim was able to achieve the following results:
- 35% reduction in finished product inventory
- 50% increase in inventory turnover ratio
- 88.8% on-time delivery on a monthly basis and 81.4% customer orders available in stock
- Improvement of mid-long-term visibility on materials (raw and packaging) and capacity requirements
- Short-term optimization of production resources
Overall, the results gained by Florim include improved real-time, interconnected planning and scheduling flexibility, as well as the ability to rapidly react and adjust to market-driven requests.