AMR Research: Quintiq Proves Its Metal at Luvata

Luvata Copper Strip BV produces stainless steel and copper products for industrial and domestic use. The Netherlands-based company globally maintains a market share of around 10%. But faced with smaller order sizes (down 8%), demands for 100% delivery performance (achieving less than 90%), and inevitably increased order complexity, the company needed to increase production by over 5% per year, without any major investment in equipment in order to meet demand.

The Bottom Line: Without implementing visibility and planning automation tools, the company was destined to lose market share fast and find itself in an irrecoverable situation.

The results are impressive. Material efficiency is up 2% and delivery performance has increased by 5%. Better still, the company is now taking orders for slitting mixes that could not be committed previously. Luvata needed clearer knowledge of the load situation because it was losing out in one part of the market--i.e., 0.85 thick pre-rolled strip. It reviewed four major planning and scheduling packages for the project, finally settling on Quintiq because of its stronger functionality, proving that in this case size didn't matter.

The project started in September 2000, following a nine-month selection process. One week later, the slitting optimisation solution was introduced, which immediately enabled scheduling of 0.85 pre-rolled strip. In the first quarter of 2004, the company is now about 25% over its production budget. This fast implementation capability is a key to Quintiq's success. At a recent user event in Amsterdam, many customers cited the flexibility of the tools. In fact, this very flexibility is also one of its weaknesses. Project scope creep is easily adopted, so prospective customers need to put a ring fence around each project. At the same time, this flexibility aided Luvata's implementation. Quintiq's environment was much more dynamic than Luvata expected. Rapid changes were required, and Luvata found it vital to keep its own internal knowledge of the system in line with Quintiq's. Without doing so, self-support would have been impossible.

The Takeaway: Quintiq is now starting to pre-package applications for something closer to an out-of-the-box model. This should speed adoption even more.

Luvata is now looking to transfer its capacity planning from its Enterprise Resource Planning (ERP) system to Quintiq's, and also plans to introduce a Manufacturing Execution System (MES) to further automate the updating of the Quintiq system. The only real concern about Quintiq's future is its ability to service all new projects. With 70 to 80 consultants, it is stretched. But Quintiq is aware of this and is building on its relationships with companies such as CGE&Y, Unisys, and Accenture.

Source: 2004, AMR Research, Nigel Montgomery

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