Aurubis Supply Chain
Aurubis aims to become the most efficient and sustainable smelting network in the world. In addition to its ambitious environmental goals and legal requirements, the company must, above all, keep a close eye on energy and procurement prices. Today, the company manages the complex processes along the supply chain using an integrated planning solution that includes simulation capabilities.
The Company: Metals as the Foundation for Progress
From renewable energy and e-mobility to digitalization: smart and connected innovations cannot function without metals. For over 150 years, Aurubis has been producing copper and other metals that are essential to modernizing our lives. Our core expertise lies in processing and optimally utilizing complex concentrates and recycled raw materials to produce metals of the highest purity.
Each year, the company produces more than 1 million tons of exchange-grade copper cathodes with a purity of 99.99% at its European smelting facilities and processes these into a wide range of semi-finished products made of copper or copper alloys. Sustainability is a top priority and is firmly anchored in the company’s strategy. Already today, Aurubis relies on recycled materials for 50% of its metal production in order to optimally combine the goals of securing raw materials and protecting the environment. This proportion is set to increase even further in the future.
The facts at a glance:
✓ Transparent processes
✓ Significant time savings
✓ More accurate results through statistical forecasts
✓ Intuitive usability
✓ Informed decision-making
The Challenge: Data Integration for Efficient Planning
“Our goal is to become the most efficient and sustainable smelter network in the world,” explains Nick Materzok, Program Manager at Aurubis AG. In addition to ambitious environmental goals and legal requirements, it is essential to keep a close eye on energy and procurement prices. “We source our raw materials from over 30 mines. The entire procurement process is therefore a crucial lever for achieving our goals.” Twenty-four elements and 50 different material grades have a decisive influence on production and must be taken into account by the procurement team. The raw materials come from all over the world. Disruptions in the supply chain therefore quickly impact production. Not only do the quantities change, but also the available grades, which requires corresponding adjustments in the production process.
Processes along the supply chain therefore play a crucial role in successful business management. With the previous reporting options based on Excel, this was a nearly impossible task: “Manual, slow, error-prone, and outdated,” says Nick Materzok, summarizing the state of supply chain planning at the company. “A great deal of time was required for the manual entry, consolidation, and verification of data from the various ERP systems. In addition, there were frequent order changes, which in turn required adjustments to correct inventory levels. All of this took a tremendous amount of time, which we ultimately lacked for the actual analysis of the data and the development of various scenarios for final decision-making.”
For example, what happens if there is a shipping backlog at the Panama Canal and deliveries are delayed? The data needed for such scenarios used to have to be painstakingly compiled, and there was a lack of adequate simulation capabilities. Aurubis therefore decided to migrate its supply chain planning processes to a standardized platform. The goal was to increase planning transparency through a single point of truth. Additionally, supply chain planning and forecasting were to be integrated into a single platform to enable quick, informed decision-making through cross-functional ad-hoc analyses and simulations. The company was therefore looking for a solution that would automatically import all actual data to improve the department’s planning and control efficiency, reduce errors in information transfer, and enable faster responses to unplanned events.
The Solution: A Look at Various Scenarios
To select the right software, Aurubis held a series of meetings with various vendors and ultimately invited four providers to give a demo. The future users from the specialist departments were then asked to evaluate the presented solutions themselves. The Board planning platform ultimately won out, with celver serving as the implementation partner. “We had a good feeling about Board and celver right from the start, partly because they acted as partners on equal footing,” recalls Nick Materzok. This impression was also confirmed over the course of the project by Aurubis Vice President Stephan Gernerth-Mautner Markhof: “We have a very specialized data environment. But even when things got difficult, celver fought through it with us. Highly effective teams were formed.”
The joint implementation team began by setting up the integrated planning platform, which was designed to link the various planning processes together. The biggest challenge here was consolidating actual figures and transactions from the various legacy systems. To this end, all relevant data—including data from SAP and MES—was first transferred to a data warehouse in order to standardize the dimensions for subsequent analyses. Based on this data, various aspects along the supply chain—such as sales and operations planning or procurement simulation—can now be flexibly mapped in real time within an integrated solution.
“We’ve opted for an agile and incremental approach, moving away from requirements and specifications toward user stories,” Nick Materzok explains. “Together with a clear focus on the product vision, this helps us execute projects in a targeted manner. We can learn from our initial experiences and benefit from those insights in later phases. When it comes to data integration, for example, there are many synergies that can be leveraged if we take a coordinated approach.”
The first phase focused on procurement and production planning for ores and scrap used in copper extraction. The goal was to reduce error-prone manual data entry processes and to conduct scenario analyses in procurement planning. In the future, Aurubis plans to plan at a higher frequency with even greater detail—with the aim of improving predictability in procurement. In another project focused on purchasing simulation, the company aimed to accelerate processes in order to respond more quickly to the market. The new SCM platform was designed to help align not only the quantity but also the quality of purchased raw materials with the long-term production program. Specifically, this means that buyers load data from SAP into their dashboard to forecast material receipts. There, they can see which concentrate materials have been planned, along with their quantities and quality. In custom views, various scenarios can then be simulated: What happens if a ship does not arrive or is significantly delayed? After selecting various parameters, the system calculates the impact this would have, for example, on warehouse capacities. Do they remain within the safe range between the minimum and maximum limits, or is action required?
“However, the system doesn’t just account for potential quantity discrepancies. If a shipment is delayed and the buyer has to source the material from a different mine, the quality of the material changes. Among other things, this affects our subsequent production process. These effects can also be simulated, allowing the buyer to identify options for action in a timely manner before problems arise in the production process,” explains Nick Materzok.
In joint workshops with another consulting firm, the topic of linear optimization was also addressed in depth, particularly with regard to the optimal utilization of Aurubis’ blast furnaces. While the celver team played a key role in the design phase, the other service provider handled the implementation.
Today, the parameters for linear optimization are seamlessly transferred from APS to the optimization tool. There, calculations are performed to ensure the blast furnaces are utilized to their fullest capacity. The results are then integrated back into APS so that they are visible to all users. This collaboration makes it possible to maximize the efficiency of the blast furnaces while ensuring transparency and control over the entire process. “The front end clearly shows which part of the process the products and pre-production elements are currently in. This is particularly useful for inventory forecasting,” explains Nick Materzok.
Concentrate planning is extremely important for Aurubis’ core business—metal smelting. To illustrate this, here is a brief overview of copper extraction: To separate the copper from other mineral components, copper ores must first be crushed and processed. The resulting copper-rich intermediate products are referred to as copper concentrates. Today, the new planning system precisely tracks when each concentrate shipment arrives, along with its composition and quality. This is highly complex for the various elements and is analyzed across different scenarios.
All procurement planning takes place in Board, where the data is first processed before being automatically forwarded to the furnaces’ operational scheduling. This integrated approach enables Aurubis to manage its entire supply chain planning across the group within a single system. All stakeholders have access to the same, secure data in accordance with their respective permissions. Dependencies become clear, and collaboration is improved. This also enables the optimization of tactical planning processes.
Transparency in supply chain management processes improves workflow and provides clarity on how well the supply to production processes is secured. Purchasing managers receive key indicators that enable them to intervene in a timely manner. This increases the resilience of the supply chain. “In inventory planning, we now have daily transparency across all products, as we always see the latest transaction data. And with the planning data in the forecast, we can reliably look ahead to see when new raw materials and intermediate products will be available. This allows us to manage our inventory much more effectively,” explains Nick Materzok. As a result, Aurubis can reduce its inventory levels, which in turn has a positive impact on liquidity and consolidated earnings. “However, fast doesn’t always automatically mean good,” says Nick Materzok. “With Board and the help of celver, we’ve managed to accelerate planning while simultaneously improving the quality of decisions, since we can now rely on well-founded data. The ability to simulate different scenarios also helps us assess the impact of individual decision options in advance.”
Given the highly customized nature of the procurement process, Board’s great flexibility and quick adaptability have proven to be extremely helpful. Stephan Gernerth-Mautner Markhof sees another advantage in the system’s intuitive usability: “During the planning and coordination sessions, everyone took to using Board with surprising ease and speed. And that was without any real training effort.”
"My main goal is for everyone in the group to be able to access the system without a second thought whenever they need to make decisions about material flows—just like checking the weather forecast or setting an alarm on their phone." As a result, additional use cases—such as financial planning—are already on the agenda for the future.
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