arcelatormittal

Unisoma completes the development of Ábaco, a new Coal Supply Chain Planning Tool for CST, an Arcelor Brasil S.A. Company. The newest AIMMS based application developed by Unisoma for CST supports the generation of integrated supply chain planning for different coal processes and companies.


Business Description

Arcelor Brasil S.A. negotiates with worldwide vendors (mainly from Australia) the annual coal supply for its companies (Belgo, CST and Sol Coqueria Tubarão). Once defined the annual purchase, it is necessary to plan the supply of each coal during the year in order to guarantee its utilization in the different processes of the companies (Coke Plants at CST and SOL, Sintering Plants and Blast Furnaces at CST and Belgo). The coal is transported by ships and stored on piles. In the Coke Plants, mixtures of coals of different piles have to be made so that a certain final coke composition has to be achieved. Therefore, the supply planning has to foresee these blending on the annual horizon in order to guarantee the availability of coals needed to the production of a coke with specified properties (operationally, the tool supports the supply re-planning of the balances of coals not yet transported, from the current date to the end of the year). Furthermore, it aims to minimize the total cost of logistics.

The Challenge

A previous Ábaco version (called Embark Module) was in use at CST since 1999. This AIMMS based planning tool was developed for a unique process/company combination: the CST set of Coke Plants. Once this holding was formed, some managerial processes reengineering has been implemented. The Integrated Coal Supply Chain Planning for the various companies, for instance, was centralized at CST since this unit is responsible for the large amount of coal consumption among the different companies. To support automatic and optimized generation of integrated plans a new version of Ábaco System was developed.

The Solution

The Integrated Coal Supply Chain Planning (the Ábaco System) basically involves simultaneous solving of 3 related sub-problems: the shipping scheduling, the coal blending planning for the coke plants and the coal storage planning.

The Shipping Scheduling has to balance the supply of high and low quality coals over time in such way coke production according to technical requirements for different coke plants can be observed – what is in fact obtained through the Coal Blending Planning. Moreover, this shipping scheduling has to guarantee “feasible” safety stock levels as a precaution to unexpected coal supply shortages – the coals in stock will be blended in the case shortages occur. This sub-problem (called Coal Storage Planning) is also integrated to the Coal Blending Planning since it is possible – for the short term – to change the mixture of coals to adjust the coke quality making use of coals previously planned to be used in the future (planned stocks of coals).

There are ships with different capacities and number of holds. Each ship loading can be compounded by one or more coals, for one or more processes/companies combinations. Since each hold can not be loaded with distinct coals or with a same coal for different companies, the problem was modeled as Mixed Integer Problem. This model considers other types of constraints like storage capacities, material balance for the vigilant contracts, coal durability and coal supply for “known” consumption processes. Solutions are chosen according to global logistic cost criteria. It considers direct costs (purchasing, freight, storage, etc…), as well costs related to some problem constraints violations (needed to allow the generation of feasible solutions). These violations are controlled by penalties.

Ábaco is connected to CST´s Reduction Area Database, an Oracle RDB from where coals qualities are extracted. It is also linked to CBSOL, an internal coal transportation control system.

For the short-term another AIMMS-based tool was developed: the Coke Production Sequencing (called MIX Module). The main objective of the MIX Module is to coordinate interdependent coal loading sequence and to guarantee, over the short-term, the coke required specifications – the module considers the real compositions of the piles available on the yard. There is a functional relationship between Ábaco and MIX. Over the short-term, the blending average specification defined by the Ábaco has to be pursued in order to avoid quality infeasibilities in future.

How did AIMMS add value?

It would be practically impossible to conduct a complex model development like Ábaco Project through full or component based conventional programming in less than 6 months, even considering previous problem knowledge Unisoma had. Some core AIMMS functionalities like the ability to model in multi dimensions and the use of pivot tables were fundamentals to represent and exhibit model data and results through a friendly GUI. Thanks to OLE BD interface it was possible to quickly integrate Ábaco to corporate databases.

Customer Quote

“Ábaco is an integrated system that has been used for CST’s technical and purchase staff to schedule the coal shipments, controlling the level of stocks, optimizing and supporting the decision of the company, guaranteeing the continuous operation, maintaining the quality of the products with low variability”. 

Luiz Afonso de Andrade, Solid Fuels Purchase Executive, Iron Making Department of CST

About Arcelor Brasil S.A. and CST

In 2005 Arcelor Brasil S.A. (an Arcelor Mittal subsidiary) was founded by the union of three Brazilian companies with a strong presence in the steel market: Companhia Siderúrgica Belgo-Mineira, Companhia Siderúrgica de Tubarão (CST) and Vega do Sul. The holding has an annual installed production capacity of 11 million tons of flat and long steel/year. It is among the largest steel companies operating in Latin America.

CST is a world leader in the steel slab market, responsible for 20% of worldwide sales volume, and is one of the largest companies in Brazil. Strategically located in the city of Vitória, the capital of Espírito Santos State, in eastern Brazil, CST has established itself as a supplier of high-quality semi-finished steel products (slabs and hot-rolled coils) for the automotive industry. To guarantee CST´S production capacity expansion from the current 5 million tons to 7.5 million tons of steel plates/year a new coke plant (called Sol Coqueria Tubarão) has been constructed, with a capacity to produce 1.5 million tons of coke/year.

Contact: Eduardo M. Milanez

Email: eduardo@unisoma.com

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