Volatility and Synchronization in Steel Manufacturing—A Simulation Study of a Modern Steel Mill

The uniqueness of a product arises upon the processes and value adding activities involved in the internal material flow of the company. Although there are many simulation studies on discrete manufacturing, a comprehensive study on continuous manufacturing, such as steel manufacturing, is hardly available in literature. Steel manufacturing is a complex system. This research aims to understand the parameters controlling the dynamic complexity of a production system in steel making. We have built a simulation model based on an existing high-tech steel manufacturing factory in order to uncover what factors account for the volatility and how the whole chain can be synchronized. Dynamic complexity can be triggered by many factors depending on the system that it is being analyzed. The main disrupting factor on steel production is the synchronization of the different processes, including discrete and continuous steps. Through a multi-case analysis, we found out that three main parameters control the synchronization of the described processes; input rate, weight, warehouse capacity. Furthermore, a pattern of the volatility of the system was uncovered, i.e., the higher the volume treated, the lower the volatility of the warehouse capacity utilization.