Metal slitting and trimming operations are among the most critical and most complex processes in steel and aluminium manufacturing. Every day, planners must decide which coils to use, how to slit them, and how to balance production efficiency with inventory health. These decisions directly affect material waste, inventory ageing, working capital, and overall profitability.

However, in many plants, these choices are still made using manual tools, experience, or incomplete data, creating hidden inefficiencies that accumulate over time.

This article explores the most significant operational and financial challenges metal manufacturers face, including inventory ageing, FIFO implementation, trim loss, and the compounding cost of small inefficiencies. It also explains how optimisation solutions like X-Trim enable manufacturers to reduce waste, improve inventory utilisation, and recover millions in hidden losses.

Let’s take a look at the problems first.

Problem nº1 – Inventory Ageing: When Raw Material Becomes Scrap

Metal coils are not static assets. Over time, they degrade due to oxidation, corrosion, and changes in surface or mechanical properties. This is especially critical for galvanised steel, aluminium, and coated materials, where surface quality directly affects customer acceptance.

The challenge is knowing which coil to use at the right time. In many plants, planners rely on spreadsheets, experience, or limited ERP visibility. As a result, newer coils are often used first because they are easier to allocate or better match immediate production needs. Meanwhile, older coils remain in storage until they become unusable.

The financial consequences are significant.

For example, consider a coil valued at $1,200 per ton. If 20 tons become obsolete, the direct loss is $24,000. However, the true cost includes handling, storage, machine time, replanning, and operational disruption. The real impact can easily reach $40,000 to $60,000 for just 20 tons. Across a full year of operations, these losses can accumulate into hundreds of thousands of dollars.

Problem nº 2 – FIFO in Theory vs. Reality

First-In, First-Out (FIFO) is widely recognised as a best practice for inventory management. In slitting operations, however, FIFO is extremely difficult to implement consistently. Planners must simultaneously consider multiple constraints, including coil width, thickness, material grade, customer requirements, machine availability, and delivery deadlines.

Without optimisation tools, planners are forced to make compromises. They may choose coils that simplify production rather than those that minimise ageing risk. Over time, this leads to growing volumes of obsolete inventory, locking up working capital and increasing scrap risk.

Enforcing FIFO effectively requires evaluating thousands of possible combinations of coils and orders, which cannot be done manually with consistent accuracy.

Problem nº 3 – Trim Loss: The Largest Hidden Cost in Slitting Operations

Every slitting process generates trim loss, but the scale of this waste is often underestimated. Typical trim loss ranges between 1% and 5% of total production. For a plant processing 100,000 tons per year at an average value of $1,000 per ton, a 3% trim loss represents 3,000 tons of wasted material, which is equivalent to $3,000,000 annually.

This level of waste is often accepted as inevitable, but much of it results from suboptimal cutting patterns. Manually determining the best slit configuration across hundreds of orders and thousands of coils is mathematically complex. Even highly experienced planners cannot consistently identify the optimal patterns needed to minimise waste.

Reducing trim loss by just 1% in this scenario would generate $1,000,000 in annual savings, without increasing production capacity or sales volume.

Problem nº 4 – The Compounding Cost of Small Inefficiencies

Material loss is only part of the problem. Inefficient planning also increases machine setups, reduces throughput, and creates production bottlenecks. Each setup change requires downtime, labour, and machine adjustments, reducing overall productivity.

Even small planning inefficiencies compound quickly. As we analysed before, losing 20 tons of material may seem manageable, but at a real cost of up to $60,000 per incident, repeated losses can have a measurable impact on annual profitability.

The main issue is decision complexity. Modern slitting operations involve thousands of variables, and manual planning methods cannot fully optimise material usage, production efficiency, and inventory consumption simultaneously.

Why Traditional Systems Cannot Solve the Problem

ERP systems provide essential tracking for inventory and production, but they are not designed to optimise cutting patterns or coil selection. They show what is available, but not what should be used, because they do not have the advanced optimisation algorithms required to analyse all possible combinations and identify the most efficient production plan. Without this capability, manufacturers rely on approximations, leaving significant savings unrealised.

This gap between ERP systems and manufacturing optimisation is well known in the industry. Read more about this HERE.

How Optimisation with X-Trim Transforms Slitting Operations

Optimisation solutions like Greycon’s X-Trim directly address the operational and slitting challenges by automating coil selection, trim optimisation and production scheduling.

1. X-Trim selects the most appropriate coils based on the order requirements, stock and inventory availability. This ensures that old coils are selected at the right time, preventing the risk of obsolescence. This way, manufacturers can improve efficiency and reduce waste.
2. Maintaining FIFO manually often conflicts with trim optimisation and production constraints. X-Trim solves this by evaluating thousands of possible combinations and automatically allocating stock most efficiently. This allows inventory to flow correctly.
3. X-Trim uses advanced optimisation algorithms to generate the most efficient trim and slitting patterns, which reduces trim loss and material waste. Even 1% improvement can deliver substantial financial gains.
4. Knife changes and inefficient planning can reduce slitter productivity. X-Trim optimises production planning to minimise knife changes and increase machine work.
5. Instead of relying on spreadsheets and manual work, X-Trim uses advanced algorithms to evaluate all possible production scenarios and select the most profitable outcome. The result is not only operational improvements, but also a measurable financial impact.

From Operational Improvement to Strategic Advantage

In an industry where margins are tight and material represents most of the production cost, the difference between manual planning and optimised decision-making is measured in millions of dollars. The difference between optimised and non-optimised operations can range from $1 million to $10 million per year in financial impact.

The key is not producing more metal but using existing material more intelligently. By reducing trim loss, preventing inventory ageing, and maximising coil utilisation, optimisation solutions like X-Trim empower manufacturers to actively control the variables that most directly impact cost, efficiency, and profitability.

In today’s manufacturing environment, optimisation is no longer just a technical upgrade; it’s a fundamental requirement for sustainable profitability.