Production Planning Is One of the Hardest Parts of Steel Manufacturing
Planning production in a steel manufacturing company is not as simple as deciding how much to produce.
A planner has to consider customer orders, available raw material, heat requirements, machine capacity, production time, quality requirements, existing stock and delivery commitments.
The situation becomes more complicated when the company has several production stages.
For example:
Scrap may go into melting.
Melting produces a heat.
The heat produces billets.
Billets move to rolling.
Rolling produces finished bars or other steel products.
The finished material may then go through cutting, grinding, slitting or another process before it reaches the customer.
A small change at one stage can affect the entire production plan.
This is why steel manufacturers need production planning software that understands the actual steel manufacturing process.
Why Excel Based Production Planning Becomes Difficult
Many steel companies start production planning with Excel.
It works reasonably well when production volume is small and the number of orders is limited.
As the business grows, the planning file becomes more complicated.
One sheet may contain customer orders.
Another may contain raw material.
Another may contain production capacity.
The production team may maintain its own schedule.
Stores may maintain another stock report.
The planner then has to compare all of them before deciding what to produce.
This creates several problems.
Production plans can become outdated quickly.
Material availability may not be accurate.
Customer priorities may change.
A machine may become unavailable.
A production order may take longer than expected.
The planner then has to update several files manually.
A connected steel ERP can reduce this dependency on spreadsheets.
Production Planning Should Start with Customer Demand
A good production plan should begin with what the business needs to deliver.
Customer orders can provide information such as:
The planner can then compare these requirements with existing stock and planned production.
This helps answer an important question.
What needs to be produced, and when does it need to be ready?
- Customer
- Product
- Grade
- Size
- Quantity
- Required delivery date
- Priority
- Special specifications
Existing Stock Should Be Considered Before New Production
Not every customer order requires fresh production.
There may already be finished stock available.
The system should therefore show:
This prevents unnecessary production.
It can also help sales teams understand whether an order can be fulfilled from existing stock.
- Available finished goods
- Reserved stock
- Customer allocated stock
- Stock under inspection
- Blocked stock
- Stock available for production or sale
Raw Material Availability Can Affect the Production Plan
A production plan is useful only when the required material is available.
For steel manufacturers, this may include:
If a required grade cannot be produced because the necessary material is not available, the production schedule may have to change.
A steel production planning system can compare production requirements with current inventory and open purchase orders.
This gives planners a better view of potential material shortages.
- Scrap
- Billets
- Alloying materials
- Consumables
- Other raw materials
Melting Planning Needs Special Attention
Melting is a critical stage in many steel manufacturing operations.
The planner may need to decide:
A proper production planning system can help organize this information instead of maintaining separate planning sheets for each furnace or production area.
- Which grade to produce
- How many heats are required
- What raw materials are needed
- Which furnace will be used
- When the heat should be produced
- What customer requirement it supports
Heat Planning Can Be Connected with Customer Requirements
Heat planning becomes more useful when it is connected with actual demand.
For example, if several customer orders require the same grade, the planner can review whether the requirements can be combined into suitable production heats.
This can help reduce unnecessary production changes and improve planning efficiency.
The exact planning approach will depend on the manufacturing process, grade requirements and plant capacity.
Billet Planning Should Follow the Melting Plan
In an integrated steel operation, the melting plan affects billet production.
The planner needs to understand:
This information can then be used to prepare the rolling schedule.
- Expected heat output
- Billet size
- Billet quantity
- Billet weight
- Grade
- Production timing
- Available billet stock
- Rolling requirements
Rolling Planning Should Consider Customer Orders
Rolling mills often have to manage multiple products and sizes.
The production schedule may depend on:
A production scheduling system can help planners arrange production in a more practical sequence.
- Product
- Grade
- Size
- Length
- Customer order
- Available billet
- Machine setup
- Changeover
- Production capacity
- Required delivery date
Machine Capacity Matters
A production plan should consider the actual capacity of the plant.
For example, the business may have:
If the planned workload is higher than available capacity, the system should make the situation visible.
This allows management to decide whether to: change the production sequence, use another machine, add a shift, outsource processing, change the delivery plan or review customer priorities.
- Furnaces
- Casting machines
- Rolling mills
- Cutting machines
- Grinding machines
- Slitting machines
- Other processing equipment
Production Scheduling Should Be Flexible
Steel manufacturing does not always follow the original plan.
A furnace may require maintenance.
A machine may break down.
Raw material may arrive late.
A customer may change the delivery requirement.
A quality issue may stop production.
The production plan should therefore be easy to revise.
A good production planning system should allow planners to make changes while keeping the original information available for comparison.
Planned Production and Actual Production Should Be Compared
A production plan is only useful if the business can compare it with what actually happened.
Management should be able to see:
This helps identify whether production planning assumptions are realistic.
- Planned production
- Actual production
- Production variance
- Production delay
- Machine downtime
- Quantity variance
- Yield variance
- Scrap
Production Delays Should Be Visible
When production is delayed, the impact can move through the entire business.
A delayed heat can affect billet availability.
A billet shortage can affect rolling.
A rolling delay can affect finished goods.
Finished goods delays can affect customer dispatch.
A connected production system can help identify where the delay started.
This makes it easier for management to take corrective action.
Production Planning and Inventory Should Work Together
Production planners should not have to request a separate stock report every time they create a schedule.
The planning system should provide current information about:
This creates a much more reliable basis for planning.
- Raw material
- Work in progress
- Billets
- Finished goods
- Scrap
- Material under inspection
- Material allocated to customers
Production Planning and Procurement Should Work Together
Production requirements can also help procurement plan future purchases.
If the production schedule shows that a particular raw material will be required next week, procurement can check whether sufficient stock is available.
If not, a purchase requirement can be raised.
This reduces the chance of production being stopped because of a material shortage.
Production Planning Can Reduce Excess Inventory
Overproduction can create another problem.
Producing material without confirmed demand can increase finished goods inventory and tie up working capital.
Production planning should therefore consider:
This helps the business balance customer service with inventory investment.
- Customer orders
- Existing stock
- Forecast demand
- Production capacity
- Minimum stock requirements
- Management priorities
Customer Priority Should Be Visible
Not every order has the same delivery requirement.
A production planner may have to prioritize orders based on:
A production planning system can make these priorities visible to the production team.
- Delivery date
- Customer priority
- Contract commitment
- Material availability
- Production sequence
- Order size
Production Planning for Multiple Locations
Large steel companies may operate more than one plant or production location.
Planning becomes more complicated when material and production capacity are distributed across locations.
Management may need to decide which plant should handle an order based on:
A connected ERP can provide a common view of these requirements.
- Available capacity
- Product capability
- Raw material
- Location
- Delivery requirements
- Existing stock
Production Planning Should Include Quality Requirements
Quality requirements can affect the production sequence.
Certain customer orders may require specific:
The production plan should therefore be linked with the relevant quality requirements.
This reduces the risk of producing material that does not meet the customer's specification.
- Grades
- Chemical composition
- Dimensions
- Mechanical properties
- Testing
- Certification
Production Planning and Job Work
Some steel manufacturers send material outside the plant for processing.
For example:
The production plan should consider the time required for these external processes.
Otherwise, the finished material may not be ready by the required delivery date even though the internal production is complete.
- Cutting
- Grinding
- Slitting
- Heat treatment
- Other specialised processing
Production Cost Should Also Be Considered
Production planning has a financial impact.
Different production sequences can result in different costs.
For example, unnecessary machine changes may increase production time.
Additional handling can increase labour and energy costs.
Excess scrap can reduce material efficiency.
A good steel ERP should allow management to compare planned and actual production costs.
Production Planning Dashboard
A management dashboard can provide a quick view of production.
Important information can include:
This helps management focus on the areas requiring attention.
- Today's production plan
- Actual production
- Pending production
- Open production orders
- Heat schedule
- Billet availability
- Machine capacity
- Production delays
- Material shortages
- Customer orders due
- Production variance
What Steel Manufacturers Should Look for In Production Planning Software
Before selecting steel production planning software, manufacturers should check whether the system can handle their actual production process.
Important areas include:
The software should support the way the plant operates rather than forcing the business into a generic manufacturing process.
- Customer order planning
- Raw material availability
- Heat planning
- Melting planning
- Billet planning
- Rolling planning
- Machine capacity
- Production scheduling
- Production orders
- Material requirements
- Quality requirements
- Job work
- Planned versus actual production
- Production costing
- Production reporting
- Multi-location planning
From Customer Order to Production Schedule
Consider a simple example.
A customer places an order for a specific grade and size.
The system checks current finished stock.
Available stock is not sufficient.
The planner reviews the production requirement.
Required raw material is checked.
The melting plan is prepared.
The heat is produced.
Billets are created.
Billets are scheduled for rolling.
Finished products are produced.
Quality checks the material.
Finished goods are received into inventory.
The material is then allocated and dispatched to the customer.
When these activities are connected, the planner has much better visibility over the complete order.
Why Connected Production Planning Matters
Production planning affects almost every part of a steel business.
It affects raw material requirements.
It affects inventory.
It affects machine utilization.
It affects production cost.
It affects customer delivery.
It affects working capital.
That is why production planning should not remain an isolated Excel exercise.
The more connected the planning process is with inventory, sales, purchasing and production, the easier it becomes to make realistic decisions.
Better Production Planning Starts With Better Information
A steel production plan is only as good as the information behind it.
If customer orders, stock, raw material, machine capacity and production schedules are maintained separately, planners spend too much time collecting information before they can make a decision.
A connected steel ERP provides a common view of these requirements.
NAVSteel brings steel specific production requirements together with inventory, purchasing, sales, quality, costing and finance.
For steel manufacturers still managing production schedules through multiple Excel files, a dedicated steel production planning system can provide better visibility and make production planning easier to manage.
Explore NAVSteel to see how steel production planning, inventory, production and business management can work together in one ERP platform.
Frequently Asked Questions
What is Steel Production Planning Software?
Steel Production Planning Software helps manufacturers plan and schedule production based on customer orders, raw material availability, machine capacity, production requirements and delivery commitments.
Can steel production planning software manage heat planning?
Yes. A steel specific ERP can connect heat planning with grade requirements, raw material availability, production schedules and customer demand.
Can production planning be connected with inventory?
Yes. Connecting production planning with inventory helps planners understand whether raw materials, billets and finished goods are available before scheduling production.
Can steel ERP software manage rolling schedules?
Yes. Rolling requirements can be planned based on product, grade, size, billet availability, customer orders and production capacity.
Can the system compare planned and actual production?
Yes. Planned quantities can be compared with actual production to identify production variance, delays and other issues.
Can NAVSteel connect production planning with finance?
Yes. NAVSteel is built on Microsoft Dynamics 365 Business Central, allowing production information to connect with inventory, purchasing, sales and financial management.
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