Using IT-based solutions to improve logistic operations of a scrap collection system

The study takes place at a steel production company in Mexico, where the market has a deficit for its collection capabilities. This project focuses on the redesign of the logistics system in charge of the collection of raw material, which is done by the company owned fleet. The initial diagnostic phases had the purpose of identifying the root causes of the problem at hand. They involved collecting and analyzing data regarding the providers, processing factories, costs and the process involved with the collection system. The key action taken was to establish a new venture of collaborative economy as a mean for scaling the collection capabilities. In addition, a new planning and operations scheme was implemented using a software application for better routing. It includes a prioritized provider selection based on performance, fleet management, and data gathering with integrated analytics. The results after a pilot period were a decrease in the logistics costs by 14.48%, a decrease in the average kilometers driven per ton by 27.4%, and an increase in collection capacity by 8%.