ALUMINUM COMPANY OF AMERICA AutoMod shows ALCOA the Benefits of Material Handling Challenge: ALCOA had to overcome issues of size and inexperience when updating their large 1940s-era heavy industrial plant with an automated material handling system. Strategy: Use Applied Materials simulation consultants and AutoMod simulation software to understand the system and cut costs. Results: ALCOA saved millions of dollars by avoiding what the simulation model proved to be unnecessary equipment purchases.
Challenge
The Aluminum Company of America (ALCOA), manufacturer of aluminum sheet products used for beer and soda cans, wanted to modernize its Tennessee Operations. The facility consists of two 1940s-era plants totaling 10 million square feet with equipment weighing more than 30,000 pounds, a challenge for an engineering team with no previous automated material handling experience. ALCOA engineers hired simulation consultants from Applied Materials to help them through the process. Strategy
ALCOA planned to use automated guided vehicles to move batches of hot coils from the production area to annealing furnaces, and from the furnaces to a cooling area and storage to wait for the cold production processes. Because of the expense of the AGVs, it was critical for the engineers to know precisely how many were needed. Applied Materials consultants constructed a model in AutoMod to determine the optimum number. Engineers were also concerned about low production rates in an area where newer automated furnaces ran alongside manual furnaces. They considered adding more furnaces, but analysis by AutoMod showed that they could get significant production improvements by shutting down the old equipment and better scheduling the new furnaces; the analysis solved the existing problem and anticipated the facility's future needs without the expense of adding equipment. As the modernization project came to a close, ALCOA engineers looked for other areas to apply the benefits of simulation. In addition to material handling, ALCOA continues to use AutoMod to analyze and improve various processes in the facility, allowing production to increase in capacity to meet growing customer demands. Results
With the help of Applied Materials consultants and AutoMod simulation software, ALCOA saved millions of dollars on the modernization of the Tennessee Operations facility. The biggest benefit turned out to be cost avoidance: Heavy-equipment purchasing decisions that used to be made by engineers' intuition could now be verified and quantified with simulation, no small feat when a single furnace can cost several million dollars. This article was condensed from Simulation Shows the Benefits of Material Handling, published September 1996 in Managing Automation.   
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