Digital transformation helps INTERPIPE boost fulfillment of job-order production plan to 95+%
INTERPIPE is among the top three manufacturers of solid-rolled railway wheels and the top ten exporters of seamless pipes worldwide. Before 2014, the company’s main export direction was the CIS market, in particular the Customs Union. This market’s distinctive feature is large order volumes for standard product types.
Since 2015, INTERPIPE began to face new challenges:
- the need to grow sales across Europe and the US;
- fierce competition with the global leaders in pipe and wheel manufacturing;
- switching from mass production to small-batch manufacturing.
The new paradigm was in urgent need of a new approach. Eventually, it was Industry 4.0 technologies that became a fundamental component in this transition.
The first project implemented by INTERPIPE was Smart Factory. Generally, this term refers to progressive manufacturers that show agile reaction to market fluctuations and combine physical solutions with virtual ones.
Step-by-step, Smart Factory was able to deal with a number of challenges:
The new markets had their own specifics: more orders and items, smaller batches. Smart Factory increased the speed of processing customer inquiries and expanded the product range by 300%. Just in the short term, INTERPIPE’s sales showed a staggering growth of 62% in Europe and 22% in the US.
Expanding the product range and customer base meant a different approach to each order’s traceability. The tracking system managed to cover the entire product lifecycle: from raw material to finished goods. So far, the traceability rate at pilot facilities has reached 100%.
End-to-end operational APS planning
The planning boost allowed the existing production facilities to achieve just-in-time (JIT) job-order completion. Along with benefits for logistics and reputation, there was an economic one: the power consumption in steel manufacturing had almost halved (-45%).
With the IT system, INTERPIPE created a digital twin of its production, which, in turn, served for process optimization, better planning, process modeling and scaling-up to implement them in manufacturing. Moreover, all processes can now be monitored online.
ІІоТ (Industrial Internet of Things)
Denys Morozov, First Deputy to CEO at INTERPIPE Group, calls IIoT a revolution in accountability. The technology makes it possible to reorganize logistics and cover product tracking. INTERPIPE uses mobile devices and QR codes to label all products. After that, products can be tracked by their codes with maximum availability of such details as the date of casting, steel grade, customer requirements, or order number.
These five steps increased the fulfillment rate of the job-order production plan from 64% to 95+%.
What is more, the rate of compliance with delivery terms grew from 50% to 79+% (considering some objective factors on the customer side).
Migration to new markets did not only imply a different approach to manufacturing. Requirements for logistics also became higher: in the past, products were mostly delivered by railway, and the new European customers were quite used to transportation by road.
Automobile transportation is convenient and customer-oriented. A vehicle arrives directly at the facility, where the customer can immediately start unloading the batch. However, there was some difficulty with multi-item orders, which had to be not only shipped but also arranged in the vehicle as required.
This bottleneck was mitigated thanks to the WMS (Warehouse Management System). It provided a possibility to create a separate “pocket” for each customer and vehicle, where the pipes can be arranged (virtually and physically) in the order required by the customer to minimize vehicle stopover time.
The average loading time is now 2–3 hours.
A lot of manufacturing companies face problems when it comes to maintenance. They tend to buy unnecessary spare parts that end up in stock for years, while at the same time they “patch” the actual repair needs with urgent purchases. As a result, they suffer financial and reputational losses.
How did INTERPIPE tackle this issue? The company based its strategy on Predictive Maintenancе. In a nutshell, its underlying principle is diagnosing and preventing failures. If there is an assembly or machine expected to fail in, say, 100 days, the system will issue an alert and notify the user. The remaining time will be enough to hold a tender, purchase the required parts and replace the problem ones before the accident actually happens – therefore, no downtime or breakdowns to worry about.
Here, INTERPIPE also uses QR codes (showing all the equipment condition data and repair history) and sensors. The innovative plant “Dniprostal” has over 28,000 sensors taking parameter values every second.
The overall effect of Predictive Maintenance is a 24% reduction of equipment downtime and 10% smaller maintenance costs. Meanwhile, equipment availability has grown by 15%.
INTERPIPE case study (video)