Capacity Planning

Mueller Industries produces nonferrous containment or directional products for substances that flow. With a total of 15 manufacturing sites and 24 plants around the world, Mueller is the largest international manufacturer of copper tubing. The company currently employees over 3000 people and generates annual revenues of $1.3 billion.

The Challenge
Mueller Casting Company, which casts the copper billets that will eventually end up as Mueller's copper tubing, began operations in 1999. The objective for building the casting operation was to provide Mueller with a means to refine impurities out of lower cost scrap metal which could then be used to manufacture the company's copper tubes. In order to make the plant profitable, the plan was to consume 70% of its input from scrap. Post audits of Mueller's capital expenditure requests revealed that the plant was buying too much cathode, or pure copper, to accomplish the company's goal. NovaSim, one of our most valued SIMUL8 Certified Solution Providers helped Mueller investigate.

The Solution
Mueller Industries decided to use SIMUL8 to test Mueller Casting Company's operations and verify the accuracy of the data leading to decisions to purchase higher quantities of cathode than had been originally forecasted. SIMUL8 allowed Mueller to take a look at the casting company's operations from a capacity planning and process improvement standpoint to verify and justify the current capital expenditures, as well as test theories to improve their scrap consumption.

First raw data was collected from the casting company. Next, the casting company managers and management from headquarters agreed on clearly defined objectives relating to floor space and capacity. Using a diagram, the team then collaborated on both how the model was to be built and how the data would be fed into the model. They agreed on the process flow before inputting data and routing parameters. The model was completed to the team's satisfaction in about 2 weeks, including reworks to incorporate data and processes that were missed on the first round.

The Result
Ron Shaw of Mueller Industries is enthusiastic about the benefits of using SIMUL8. "By building the simulation we were able to confirm that the plant in its current configuration does not have the capacity required to process the amount of scrap we had originally planned for. Current conditions are costing us in the neighborhood of $7 million. Having concrete evidence of the reasons why will allow us to correct the situation and plan alternative uses for the casting plant."

Mueller began using SIMUL8 early in the summer of 2000. Choosing SIMUL8 was the right option for this organization which had knowledge of simulation but not extensive experience. "For the first model that we built, we worked with someone who had great experience. After going through that, I was able to build a model within a couple of weeks on my own. Now, I'm able to put one together of equal complexity in under a week," Shaw explains.

The company is continuing to expand the role that simulation plays in its organization. Mueller plans to begin using it as a tool for optimizing its business processes and as a service it can offer to its plants around the country to help them with their planning. Says Shaw, "We have three people in our headquarters who are well trained on the software and whose services will be co-opted to help our divisions make better operating decisions."

Dave Ramsey,
Principal Transport Planner Hertfordshire Highways