【正文】 Key messages and summary of improvement potential 182。 McKinsey analysis MLS* Maintenance cost available? Downtime Repairs Labor Parts Service Planned Breakdown ? Almost uniquely used for downtime tracking ? Cost data entry is inplete due to the lack of discipline of users (though they trained) ? No interface with other plant MIS systems, except with purchasing function ? Many features of the system are not or almost not used –Maintenance work planning –Equipment maintenance cost and repair history –Safety stock model。 McKinsey analysis BS/020313/SHMISC(2020) 31 ANALYSIS OF ELECTRIC BREAKDOWNS IN HSM 1998 * days worked in 1998 Source: Interview。 c on ta m i na t i on ofl ub r i c a ti n g o i lNo? Cov er pl at e bo tt l i ng Y es? P i n i o n s ta n d us ag e No? O i l h ea t, l e v e l , pres s ure P os s i b l e? A i r p r es s ure No? A i r c ha m be r p ad u s ag e No? ? ? ? ? ? ? O th ersTotal tasks Tasks operators can do without training Tasks operators can do with training Core maintenance checkup Always/high Sometimes/medium Almost never/low 7080% of these tasks are patible with operator’s normal job Total plant manhours for checkup Thousand hours Annually in whole plant, manhour can be saved by operators which results in cost savings A significant portion of checkup activities in maintenance can be taken over by operators without disturbing their normal job. Example: RTM Edger – HSM Source: Interview。 McKinsey analysis Cost/ton BS/020313/SHMISC(2020) 24 BREAKDOWN OF LINE 3 MAINTENANCE HOURS* BY NATURE Thousand Manhours, 1998 Several issues can be raised based on the breakdown of maintenance manhours . * Including subcontracted and outsourced labor hours ** Mostly pure checkup (., heat, oscillation, noise, voltage, etc.). But sometimes followed by simple onsite repairs *** Rest, standby, etc. Source: Interview。Diagnosis results ? Line 3 production team diagnosis ? Maintenance team diagnosis ? PSM team diagnosis 182。 consumables Tools Electricity Labor Cost items Yield loss Roll consumption Electricity Improvement ideas ? Quality improvement to reduce scarfing ? Reduce roll consumption through optimized roll machinery and usage management ? Reduce unplanned downtime to improve electricity consumption Rolls Each process section should be evaluated closely to identify potential cost savings opportunities. Yield loss Total cost Noncontrollable costs Controllable costs Savings target (40% of controllable) Post top controllable cost Source: McKinsey analysis BS/020313/SHMISC(2020) 12 Initial discussions have led to improvement ideas that may have significant impact on the cost. Detailed studies are necessary in the idea generation and screening waves. IDENTIFIED COST IMPROVEMENT OPPORTUNITIES Process ? LF/VD ? CCM ? Reheating ? Finishing Improvement ideas ? Increase refractory lifetime and alloy yield by adding cokes or carbon powder to prevent excess oxidation of liquid steel ? Reduce material consumption through new specified coating thickness for tundish ? Reduce energy consumption by improving working ratio of torches and burners ? Reduce BC oil consumption through hot charging ? Reduce BC oil and other energy consumption by improving heat efficiency of heat exchangers ? Reduce work rate through better training and process control ? Reduce labor cost through improving working efficiency Expected impact High Medium High High Medium Feasibility EXAMPLE Source: Interview。Therefore a twophase approach is proposed for operations and purchasing ? Tangible change through, bottomup idea generation and screening, and implementation in production and maintenance units (line 3) and breakthrough teams in purchasing ? Institutionalization phase to ensure continuity: KPIs, MIS, anization, incentives, procedures, etc. BS/020313/SHMISC(2020) 2 CONTENTS 182。 it is not a plete record of the discussion. Presentation of Diagnosis Results to the Steering Committee Operational Improvement Program BS/020313/SHMISC(2020) 1 KEY MESSAGES 182。BS/020313/SHMISC(2020) CONFIDENTIAL This report is solely for the use of client personnel. No part of it may be circulated, quoted, or reproduced for distribution outside the client anization without prior written approval from McKinsey amp。The pany has been hit hard by the 1998 crisis in particular line 3 182。Key messages and summary of improvement potential 182。 McKinsey analysis BS/020313/SHMISC(2020) 13 BENCHMARKING WORK IN PROCESS AND FINISHED PRODUCTS INVENTORY LINE 3 Work in process Percent Company A Average player Benchmark Interest cost savings* on less required capital by closing 50% of the gap Impact Finished products Percent Company A Average player Benchmark Interest cost savings* on less required capital by closing 50% of the gap `97 `98 34% 80% 14% +100% ? Better forecasting system ? Realtime scheduling adjustment ? Interchangeable bloom and beamblank specifications Improvement ideas Closing the gap between the pany and worldclass practice by reducing the WIP and finished goods inventory level can significantly reduce the capital cost. * Assuming 15% capital cost Source: McKinsey analysis BS/020313/SHMISC(2020) 14 BENCHMARKING OVERALL EQUIPMENT EFFICIENCY – STEELMAKING, 1998 Percent * Calendar time holidays market driven stops Source: McKinsey analysis Company A World class Savings potential Fixed cost savings at a 3%