2. 1
Introduction
Background
Aleris, Inc. is a producer of rolled and extruded aluminum products. The
company formed in 2004, when Commonwealth Industries, Inc. and IMCO
Recycling, Inc merged. They are a Fortune 500 company and are traded on the
New York Stock exchange. One of the largest private companies in the United
States, they are a multinational corporation with 40 facilities all over the world.
Their headquarters is in Beachwood, Ohio, which is suburb of Cleveland.
The specific Aleris facility that will be examined is located in Clayton, New
Jersey, at 838 North Delsea Drive (08312). This plant was founded in 1970 and
primarily manufactured foil and food containers. The machinery at this plant is
unique, in that they are able to use light-gauge coating to create products with
colors, prints, and performance characteristics. As a result, they have evolved into
a re-rolling and finishing site. They are ISO 9001:2008 compliant, which is a very
specific set of quality rules that make sure customers get quality products and
great customer service. The plant operates 24 hours a day, 7 days a week.
Products
Aleris has a variety of product types that it delivers:
Direct-Chill and Continuous-Cast Coil – used in heat dissipation
Plate – can be manipulated to serve a variety of purposes and industries
Extrusions – geometrically structured beams
Foil – for food service and pharmaceutical industry
3. 2
Tread – diamond patterned panels
Building Products – used in construction products
Clayton’s products differ slightly due to their specific set of machinery:
Semi-rigid Formed Container Stock – aluminum foil containers for food
service
HVAC Standard and Automotive Fin Stock – heating and cooling pipes
Pharmaceutical Closure Stock – used to ensure quality and longevity in
containers
Spiral Duct Stock – piping and duct material for construction
Distribution
Coating line operates at 100% capacity – application of colors/coats to
products
Customers
Aleris has a variety of loyal customers, but their three main customers are:
HFA (Handi Foil) – Manufacturer of disposable aluminum and plastic
food packaging. They are the largest producer of semi-rigid aluminum foil
containers with an annual demand of 63 million pounds. Aleris provides
about 20% of HFA’s requirements. They are also the only foil
manufacturer marketing a 100% recycled product. They are based out of
Wheeling, Illinois.
Chart Heat Exchangers – Long-term light gauge account. Customer is a
public company (symbol – GTLS). They manufacture brazed aluminum
4. 3
heat exchangers for major LNB projects and large chemical and industrial
plants. They have no competition in the United States and has the largest
brazing furnace. Aleris is its largest supplier.
West Pharmaceutical Services- a leader in developing delivery systems for
the administration of pharmaceutical products. West has been a customer
to the Clayton plant for nearly 40 years. Their Clearwater facility processes
over 80% of the aluminum seal demand in the western hemisphere. Their
corporate office is in Lionvill, Pennsylvania but they have facilities all over
the world.
Staff
Lauren Zientek – Finance Coordinator
Jeff Raines – Safety Leader
Dave Williams – Reroll Crane Operator
Kelly Barb – Quality Engineer
Al Clopsic – Director of Technical Services and Sales
Dave Kannapel – Operations Manager
5. 4
Safety
The Clayton facility values safety above all other priorities. This is achieved
through strict safety policies and equipment. All employees and visitors must go
through a safety orientation outlining various rules and practices. Employees and
visitors wear various kinds of protective gear at all times while in the facility:
Orange reflective vests – it is vital that individuals are as visible as possible
since there are cranes, forklifts, and other dangerous equipment
everywhere.
Steel Toed boots with rubber soles – in order to offer protection from
accidents involving heavy items. Floor is constantly covered in oil and
cleaning agent so rubber soles are needed to ensure proper traction. Safe
walking areas are outlined in yellow to show workers the safest route
around the factory floor.
Protective eyewear – eye protection is mandatory for every individual at all
times. There can often be chemicals or shards produced by machinery that
is dangerous for your eyes.
Ear plugs – the factory floor is extremely loud and ear plugs are necessary
to prevent hearing loss. Machinery emits loud alarms many times to alert
those on the floor to their location so they can avoid its path.
Helmets – the site is a hardhat area and there are three colors. White for
employees who have worked their longer then 90 days. Green for
probationary workers who have worked at the facility less then 90 days.
Yellow for visitors to the facility.
6. 5
As a result of these policies, the facility was awarded special safety recognitions in
2011, 2012, and 2013 with over 1100 days with no accidents. They are currently
about 130 days with no recordable accidents.
Phase 1: Define
7. 6
Project Charter
Business Case
Aleris International, Inc. is a company that processes large rolls of aluminum
into different thicknesses, widths, and colors for their customers. The products are
large, rerolled sheets of aluminum, and they are looking to improve their current
storage process in a way that helps to:
Reduce time spent moving rolls
Reduce the costs associated with moving/storing rolls
Improve product quality by minimizing defects associated with excessive
movement
If these improvements are made, it could reduce their product cycle, increase
production, and reduce costs for the company.
Problem Statement
Aleris has a large amount of customers and is constantly outputting a large
amount of rerolled aluminum. In an effort to store all the outputted products in
its facility, they have moved a sizable amount of reroll to a previously unused
section of the factory. Used for a process that is no longer necessary at the facility,
the area where overflow products are stored is a far distance away from where it
is being tracked and shipped. This requires the employees to travel farther
distances to document and move the reroll, which translates to added time in the
facility’s processes. Also, increased time spent moving the reroll farther distances
escalates the possibility of acquired defects.
8. 7
Project Scope
This project will limit itself to the immediate decrease in time needed by this
singular facility to move and interact with the finished rerolled aluminum. The
original site of storage will be most closely examined in order to determine how
its space can be used more efficiently. Current processes concerned with
interacting with the finished aluminum will be examined as well. Anything that
directly affects the staff overseeing the movement of the reroll will be also be
analyzed and discussed.
Goal Statement
The goal of this project is to reduce the time Aleris uses moving reroll on the
factory floor. This may be achieved through a variety of means such as increasing
how many rolls can be stored in the original location as well as improving the
efficiency of the process employees use to interact with the reroll.
Role of Team Members
Blair Atkins – Team Leader
Joey Gallo – Non-Capital Solutions/Data Processing
Matt Petosa – Capital Solutions/Technology Assessment
Curtis Costantino – Quality Issues
Milestones and Deliverables
Milestones:
1. Week 1 – November 19th
, 11:00am-1:00pm.
a. Take safety orientation
b. Tour plant
9. 8
c. Speak with staff
d. Define problem
e. Assign roles
2. Week 2 – November 24th
, 11:00am-1:00pm.
a. Describe process flow
b. Discuss issues with storage and quality
c. Examine various excel spreadsheets
d. Describe revised process flows
3. Week 3 – December 3rd
, 11:00am-1:00pm.
a. Take second plant tour
b. Identify capital solutions
c. Speak with additional staff
d. Examine plant diagram from engineering
4. Week 4 – December 10th
, 11:30am-1:30pm.
a. Examine predictable long-term benefits
b. Discuss presentation roles and paper structure
c. Wrap up presentation and term paper information
5. Week 4 - December 11th
, 3:30pm: Presentation to Dr. Roh’s Operations
Management class and Aleris staff.
Deliverables will include an improved storage process plan, presentation, and
case study outlining the project’s purpose, progression, and possible effectiveness.
These will be presented to Aleris staff as well as Dr. Roh.
Resources Required
Staff – with the ability to outline and affect various processes
Office space – to collaborate with staff and team members
10. 9
Data - including layout of facility, process outline, flow of materials, and
material types/levels
Equipment – used to move and interact with the reroll
12. 11
Basics
Alloys
Coils weigh about 20,000 lbs. and cost about $1.40 a pound.
Aleris has four-digit designations for the four types of aluminum alloys it
processes:
o 1100
o 3003 – most common type of alloy
o 3004
o 3105
The widest coil is 50.375” and 68* in coil height.
The alloys are divided between those that are for pharmaceutical use and
those that are not. They require different processes to produce.
Vendors
Aleris utilizes two main suppliers for its aluminum reroll needs:
1. Alcoa – the third largest supplier of aluminum products in the world. They
are a multinational corporation operationally based in Pittsburgh,
Pennsylvania. Orders from this supplier require a minimum 3-month
supply purchase.
2. Aleris plant in Lewisport, Kentucky – another plant in the Aleris family
that supplies the Clayton plant with reroll. Ships at 10% SOTIF (shipped on
time in full) so extra must be ordered in order to make sure enough is
available for production at all times.
14. 13
Process Flow
The current process flow involves a number of steps from which reroll enters the
facility and is used in production for a customer’s order, see Figure 2 (below):
1. The reroll is ordered by the Purchasing/Planning department. The lead
time for an order is generally 3-6 weeks.
2. A flatbed truck arrives about 8 times a day with 2-3 rolls of aluminum of
varying alloys and widths. These rolls weigh about 20,000lbs. The truck
entrance (Figure 3) is located at the bottom of the diagram in Figure 1
(below).
3. A large crane above the loading entrance uses a large hook to raise the
roll up off of the truck and onto the shipping area, which is directly
adjacent. The crane is represented by the large square mass at the
approximate center of Figure 1.
4. The crane operator places each of the coils in a row from left to right,
which is at the center of the diagram.
5. The BOL information on the roll is entered into the computer and a
unique identifier called the Reroll ID Number is generated.
6. The Reroll ID Number, Alloy, and Width are spray painted onto the side of
the reroll (Figure 4) to identify the reroll for crane and forklift operators.
7. After 48 hours the material is unwrapped (Figure 5). This time is necessary
to avoid staining on the rolls as their surface temperature must equalize
with the temperature in the facility.
8. When a certain alloy is required for use in a customer order, the Reroll
Crane Operator receives a “Pull List” from the scheduler. This determines
what coils need to be pulled for Breakdown.
15. 14
9. The material on the list has the location of the coil in the pull, which is
designated RR, FLR, or UF. Excess inventory is generally placed in the UF,
or up front area, which is an all-purpose area currently being used for
overflow. It is much farther from the machines then Reroll or
Receiving/Shipping floor.
10. The coils are transferred to open space near the machines or furnaces
(Figure 6).
11. The recently moved coils are then taken by the Stacker Crane Operator
and loaded onto racks or into the machine for processing (rear racks in
Figure 6).
21. 20
Issues
Movement of Product
The process of moving the rerolled aluminum coils through their storage and
production phases is expending a considerable amount of time and expense.
Since there is such a large amount of inventory, the UF (Up Front) area is
necessary to absorb the overflow. This means that retrieving certain alloy orders
will take longer then others. The coils are randomly displaced all over the three
storage areas based on the convenience of their location at the time the Crane
Operator was placing it. This means aluminum alloys with different demand will
be spread all over the facility, often requiring many movements of unrelated rolls
to get to the location of the required roll. Aluminum is sensitive to physical
contact and more movement means a greater opportunity for mishandling of the
reroll in ways that damage it.
Quality Control
Due to the ways the aluminum is stored and moved, damage can occur to the
reroll:
Water Stain (Figure 7) – permanent staining on the surface of the
aluminum that impairs it cosmetically but not physically. It generally
occurs when the dew level of the facility is too low and the discrepancy
between the temperature of the aluminum and the facility causes water-
22. 21
marks on the aluminum that cannot be removed. Unwrapping a reroll coil
too early can cause these marks.
Mill Marks – physical defects caused when grit and debris collects on the
outside of the roll. With each sequential rolling pass on the machine, the
possibility for holes, dents, and tears accumulates. This debris builds up on
the rolls due to it being stored directly on the floor after being unwrapped.
Cinching (Figure 8) – occurs when the welding holding a roll together
weakens. It is caused by vibrating the roll while moving it. This causes
loose wraps, which do not perform as well in the machines.
Dents and Dings – when rolls are moved, the possibility of accidentally
damaging the roll surface multiplies. Occurs when the rolls come into
contact with other objects. Dings and dents damage the aluminum
cosmetically and physically. These can lead to continued problems during
processing.
When physical deformities occur, the aluminum will often need to be scrapped.
The scraps are compressed into cubes, which are then sold for reprocessing. If the
aluminum has already reached the customer and they discover it, they will send
it back to Aleris for a refund.
Inventory
In the attached file, Aleris Inventory.xls, Microsoft Excel was used to figure out
how off Aleris’ inventory really was. We extracted the columns pertaining to the
specific alloy ID, the type of alloy, and the weekly demand for that alloy in
pounds. Since coils come in weights from around 14 thousand pounds and 20
23. 22
thousand pounds, we took the weekly demand in pounds and divided it by those
numbers to see about how much of each coil are demanded a week. When you
divide by 14 thousand then add up the sum of each coil demanded the demand is
217 coils and when you divide the total demanded by 20 thousand the demand is
152 coils. Therefore the weekly demand of total coils is between 152 and 217 coils
a week. Then we took these numbers and divided by 7 to say that there is between
about 22 and 31 coils demanded per day. Next we took the Target Inventory
levels and found the difference between that and the current inventory levels to
see how far off the inventory.
For example, D0006 is 327,910 pounds off of where the target inventory is which
is between about 16 and 23 coils. This case is specifically bad because for this
specific alloy they have too many and there is only a demand for 75 thousand a
week which means it will take about 5 weeks to get them back to their desired
inventory for that alloy. We also figured out how much each coil was off which
can be seen in our excel sheet. Next, we added all of these together to see the
total that entire inventory was away from the respective target inventory for that
alloy and found that they are off by between 169 and 238 coils off. Each coil costs
around 30 thousand dollars and when you multiply that with the amount of coils
off you can see that they were between $5 million and $7 million off from their
target inventory.
26. 25
Improvements
Non-Capital Improvements
These changes to the process flow require very little to no capital. They are
process improvements that save the company time and money in the future if
applied:
Organize coils in rows based on most demanded alloy – coils are currently
placed where ever is most convenient to the Crane Operator. If they are
organized right-to-left by most common alloy, there will be fewer
movements necessary by crane and forklift operators, as orders are
fulfilled.
Apply FIFO (First In First Out) inventory management – to ensure that
older rolls are used first in new orders, a first-in-first-out inventory
management strategy would lower the accumulated risk that age and
movement pose to a coil.
Place coils in pyramid pattern (Figure 11) – Coils are currently placed in
individual rows, lightly touching one another, in the order they are pulled
off of the truck. Pyramids effectively double the amount of space a given
area can hold, and when combined with an organization system that
embraces actual and forecasted demand, can be quite effective in
maximizing a storage area.
Non-Capital Revised Process Flow
After the above improvements are applied, the process flow is as follows (Figure
9):
27. 26
1. The reroll is ordered by the Purchasing/Planning department. The lead
time for an order is generally 3-6 weeks.
2. A flatbed truck arrives about 8 times a day with 2-3 rolls of aluminum of
varying alloys and widths. These rolls weigh about 20,000lbs. The truck
entrance (Figure 3) is located at the bottom of the diagram in Figure 1.
3. A large crane above the loading entrance uses a large hook to raise the
roll up off of the truck and onto the shipping area, which is directly
adjacent. The crane is represented by the large square mass at the
approximate center of Figure 1. The reroll is placed in rows according to
alloys. The rows are turned into pyramids when necessary (Figure 11).
4. The BOL information on the roll is entered into the computer and a
unique identifier called the Reroll ID Number is generated.
5. The Reroll ID Number, Alloy, and Width are spray painted onto the side of
the reroll (Figure 4) to identify the reroll for crane and forklift operators.
6. When a certain alloy is required for use in a customer order, the Reroll
Crane Operator receives a “Run List” from the scheduler. This determines
what coils need to be pulled for Breakdown.
a. It is determined which matching coil in the area is oldest.
7. The material on the list has the location of the coil in the pull, which is
designated RR, FLR, or UF. Excess inventory is generally placed in the UF,
or up front area, which is an all-purpose area currently being used for
overflow.
8. The coils are transferred to a designated area near the compactor, where
they will be unwrapped.
9. The recently moved coils are then taken by the Stacker Crane Operator
and loaded onto racks or into the machine for processing (rear racks in
Figure 6).
29. 28
Capital Improvements
These changes to the process flow require significant capital. Although many of
these suggestions can cost many thousands of dollars, they can potentially speed
up the process significantly:
Laser grid system for warehouse floor (Figure 13) – using a grid system
will ensure that when rolls are taken off the truck by the Crane Operator,
they can be quickly put into an area with other similar alloys. It also
ensures that the rolls are spaced properly on the floor. Since the floor
cannot be reliably painted due to oils and constant scrubbing, a laser
system is both highly visible and low-cost. Cost for the system is estimated
at between $500-1000.
KLP RollStop System (Figure 12) – this is a simple rack system which is
situated on tracks that travel along the ground. Chocks can be inserted on
the tracks to accommodate different reroll thicknesses and widths. This
system maximizes its given space, keeps pyramids from collapsing, and
elevates the coil from the floor, minimizing the possibility of defects. They
can stack three rolls high and do not absorb oil. The system costs a starting
price of about $25,000 but could cost upwards of $53,000.
Tablets for warehouse employees – tablets would be carried by machine
operators, forklift drivers, and managers. They would run an application
(or series of applications) which assists in coil movement, identification,
lists, etc. Their information would be updated in real-time based on the
data in the company’s in=house database. Time would be saved finding
requests rolls and the racks would be better organized. Depending on the
platform of tablets that are used, the cost could be anywhere from
30. 29
approximately $2,500-10,000. (A demo of the application interface can be
found in the attached PowerPoint Presentation)
Install Visual 8 – Aleris already plans to use this software in the near
future. It is a highly sophisticated forecasting and planning program that
helps aid predictability.
Capital Revised Process Flow
If the above equipment is applied to the revised process flow, the changes to the
original process flow become more significant (Figure 10):
1. The reroll is ordered by the Purchasing/Planning department based on the
projections from the Visual 8 Planning Software.
2. A flatbed truck arrives about 8 times a day with 2-3 rolls of aluminum of
varying alloys and widths. These rolls weigh about 20,000lbs. The truck
entrance (Figure 3) is located at the bottom of the diagram in Figure 1.
3. A large crane above the loading entrance uses a large hook to raise the
roll up off of the truck and onto the shipping area, which is directly
adjacent. The crane is represented by the large square mass at the
approximate center of Figure 1. The reroll is placed in rows on the KLP
Racks according to alloys. The racks are turned into pyramids when
necessary (Figure 9).
4. The BOL information on the roll is entered into the computer and a
unique identifier called the Reroll ID Number is generated.
5. The Reroll ID Number, Alloy, and Width are spray painted onto the side of
the reroll (Figure 4) to identify the reroll for crane and forklift operators.
31. 30
6. The location of the coil within its pyramid is entered into the tablet user
interface and then updated in the facility-wide database.
7. Visual 8 generates a “Run List” for the coils that need to be run next.
8. The tablet can be used to search for a specific alloy, width, and coil age.
This will determine which coil should be pulled first.
9. The coil is unwrapped in the designated area near the compactor.
10. The coil is then placed on the transfer rack.
11. Stacker Crane operator brings coil forward on transfer rack and picks it up
to put it in a place on the 3-story storage rack (Figure 6).
36. 35
Conclusion
Going Forward
While a large amount of information has been gathered and processed in order to
make the suggestions in this presentation, there is still a lot of work to do.
Studying time and financial based information could help better describe the
viability of making certain changes:
A time-study should be performed when any organizational changes have
been made in the shipping area to examine how much time is actually
being saved by having rolls organized by age, alloy, and width.
A study examining the frequency of physical deformities to rolls before
and after the implementation of the changes could be helpful and further
fine these process changes.
A financial study examining whether spending money on the capital
suggestions saves the company a significant enough amount of money in
the long run.
These are merely suggestions based on the data we would have liked to seen in
the future, and we believe are integral to crafting a perfect combination of capital
and non-capital solutions.
Training
In order for implementation to go smoothly, each layer of management will have
to be well versed in the intricacies of the changes and their benefits. When the
new information disseminates to the employees on the floor, it is vital that they
37. 36
are able to find solutions to their issues as soon as possible. A training program
will be necessary to explain:
how the process has changed
why it has changed
how they are personally affected by it
Further training for those who will be using tablets and utilizing the racking
system will also be necessary. This training process should take place
electronically, with paper versions on hand. The safety guidelines and course will
need to be altered to address the use of new devices and processes. When
addressing employee concerns, explaining how each change benefits each worker
will help to ensure that the new policies are carried out.
Implementation
They will need the full loyalty and flexibility of their staff in order to make sure
the process changes are integrated smoothly. When certain aspects of the changes
do not function as intended, then it will be up to the staff to communicate with
the management so appropriate alterations can be made. Increasing the
frequency of staff meetings may be necessary for an extended period in order to
improve communication between the floor staff and the management. This helps
to quickly identify and resolve issues as quickly as possibly.
Accountability
Paying close attention to metrics will be a key component of the implementation
phase, and it will be crucial that every employee is playing their part in the
change process. If certain metrics experience detrimental trends, having
38. 37
employee accountability will allow management to help pinpoint issues and
communicate them to the person most directly influencing the issue. If every
employee is championing their individual process, the implementation process
will be much smoother and produce a much better and long-lasting result.
39. 38
A Big Thanks to,
Lauren Zientek – Finance Coordinator
Jeff Raines – Safety Leader
Dave Williams – Reroll Crane Operator
Kelly Barb – Quality Engineer
Al Clopsic – Director of Technical Services and Sales
Dave Kannapel – Operations Manager
Dr. Roh – Operations Management Professor, Rowan University
