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Eliane gets a Grip on its Supply Chain
June 2003

Founded in 1960, Eliane Revestimentos Cerâmicos is one of the largest producers of ceramic coatings, selling more than 1600 products to around 85 countries around the world. Eliane employs some 2,400 people across 12 plants in various parts of Brazil and in 2002 their revenue was about US$ 140 million. They were the first company of its type to adopt advanced scheduling tools in Brazil and started initially with a pilot project to evaluate the benefits. The pilot project had objectives similar to the great majority of the companies when they acquire Preactor:-

  • improve the customers' service
  • guarantee delivery dates
  • reduce production costs
  • reduce lead-times
  • increase productivity and minimize losses
  • reduce stocks and improve the system of purchasing
     

If the pilot produced the results it wanted it could then consider applying the technology to all of its 12 plants and to synchronize production across all locations some separated by as much as 3000 km.

Eliane Revestimentos Ceramicos LtdaEach plant produces specific products, although some of them can be produced in two or more plants. Some products need to be processed in more than one plant.

Before Preactor, scheduling was totally decentralized and done in spreadsheets. Control and purchases of raw materials at each plant was done totally independently.  Thus, each plant scheduled its production lines focusing on their own needs. Typically this meant the minimization of setups times by running large batches.  However customers typically would order product from more than one plant and a common delivery date was almost impossible to achieve leading to poor customer service.

The immediate improvements produced had a huge impact not only in meeting the objectives they set out to achieve but also it opened Eliane’s eyes to the possibility of using Preactor to provide a corporate solution involving a fundamental culture change in the business’s sales and production strategies to focus on supply chain improvements that would benefit both the company and its customers.

Tecmaran, Preactor’s Master Reseller for South America, and the newly created Logistics Department at Eliane started to draw up the requirements for this corporate supply chain solution.

Marco Baptista, director of Tecmaran, comments.  “The objective now was to get to build on the results we had achieved in the pilot project and apply the benefits across all the plants.  In order to achieve this we realized that it would be necessary to centralize production scheduling across the whole supply chain including all of the 46 lines of production.  This would enable us to consider smaller production lots, decrease setup times through grouping batches with the same product attributes and take into account transport between factories in generating a delivery date.  We also needed to use the tool to reduce stocks at each location”.

The solution arrived at was a for a single Preactor 400 APS Master Scheduling system integrated with Eliane’s ERP system combined with 14 Preactor Viewers, one at each location.  The objective was to have a single point of contact for each customer who would deal with orders that required several products at each plant.  Eliane’s ERP system was modified to deal with multi-line sales orders with routing across many plants.  

When the system indicated that a sales order cannot be fulfilled by stock (real and projected), then a new Production Order is generated and sent to Preactor.  The Preactor user then builds several production solutions based on the current status of all plants until one that best meets the strategic objectives of the company is found. The rules used to find the best solution were developed by Tecmaran and focused on minimizing setups while guaranteeing delivery dates inside of a given time horizon.    Thus a schedule was produced that synchronized activities across all plants which resulted, even with smaller production batches, a reduction in delivery lead times, lower stocks, as well as better capacity utilization across the entire company.

Once the best schedule had been generated the details for each plant were sent via text files across Eliane´s network. Each plant then used its local Preactor Viewer to analyze the demand and pass back to the master scheduling system any suggested changes.  Once agreed the details were then fed to Eliane’s ERP system to synchronize purchasing with the schedule at each plant.  The Preactor Viewers were also used to provide an input of actual completion times which were again passed back to master system in order to provide order status information.

Eliane Revestimentos Ceramicos LtdaLuiz Antonio Fabro is the Coordinator of Planning of Production and Logistics at Eliane.  “We needed a solution that could be very fast and allowed us to react to sudden changes in demand or production problems.   Re-scheduling takes just a few minutes so we can give a much better service to our customers than we did before”.    Preactor also provides Elaine’s ERP system with up to date information so that the commercial department and other parts of the company can monitor the progress of production orders and get an early warning of delivery date problems. 

Luiz Fabro again.    "We extended the access to the information for everybody, so that everybody could get involved in maintaining service levels for our customers”.

Today, production scheduling at Eliane is considered a strategic function. Helped by Preactor, the company has improved its industrial and commercial operating practices to encompass a wider vision of its business, balancing better its capacity with the demands placed upon it.

Together with the benefits that Preactor’s solutions typically provide – gains in productivity, stock reduction and improvement in supply, Eliane counts on Preactor to support the sales effort. Nowadays, the company spends only 45 minutes to give a capable to promise answer for an order of 150 thousand m² of material, a high priority order.  

Fabro compared this with the old system.  “Before Preactor it took 3 days to give an approximate answer and the cost of communication between plants was very high.  Great benefits have accrued for the entire sales department in being able to give accurate delivery promises across Brazil as well as overseas.  The Agenda at production meetings in each plant is no longer about scheduling issues but concentrates instead on improving production local production processes and quality”.

Fabro again. “When we decided to centralize the scheduling of production we did not realized how the company would react but now we are sure it was a very good decision. Since 2000 we have been reducing drastically our inventory and improving our customer service. In December 2000 our final products inventory was 3.27m sq.m and now is just 1.8m, giving us an annual saving of US$16m.   Customer service levels have also undergone a drastic improvement. We receive about 100,000 sales orders every month and over the last 9 months we have achieved an on-time delivery performance of 95.5% for domestic orders and 90% for overseas business.  These spectacular results were based on decisions made on the basis of the output from Preactor as well as other logistics enhancements that became possible with the visibility provided by Preactor.

And the next step?  Elaine will extend Preactor’s use to help with additional logistic areas so it has a more complete view of the entire supply chain, from the arrival of the orders to delivery of the products.  In this way Eliane will make further improve service levels to make it a differentiator against competition and expand their business through a larger market share.