【正文】 Diagnosis results ? Line 3 production team diagnosis ? Maintenance team diagnosis ? PSM team diagnosis 182。 McKinsey analysis 40% target Mechanic Electric Total maintenancedriven scrap Maintenancedriven cobblecaused scrap Post TOP maintenance driven scrap BS/020313/SHMISC(2020) 36 CONTENTS 182。 ABC classification for parts ? Low availability of cost data creates low cost awareness Plant HSM RTM Reversing flange edging Exists amp。 McKinsey analysis BS/020313/SHMISC(2020) 34 LOW AWARENESS OF EQUIPMENT RELATED MAINTENANCE COSTS AND LIMITED USAGE OF MLS SYSTEM FOR MAINTENANCE Maintenance technicians should be better aware of the maintenance costs and repair history of the equipment. Lack of discipline in entering cost and repair data makes that the available MLS (Maintenance Logic System) is containing only very partial information, leading to infrequent consulting. * Maintenance logic system in HP 9000 Source: Interview。 McKinsey analysis Total hours of breakdown Numbers of breakdown MTBF (working days) ELECTRICALHSM . STAND Reversing flange Edger stand Combination mill UR stand Utility Others Total electrical Total mechanical Total Improvement example in following page On average, the Heavy Section Mill has an unplanned breakdown every 9 hours. The main electric breakdown occurs on the stand. (Breakdown Mill) BS/020313/SHMISC(2020) 32 REDUCTION OF UNPLANNED ELECTRIC DOWNTIME IN HSM Percent Source: Interview。 McKinsey analysis ? Telko should be preferred above LG based on TCO analysis ? In HSM, about 300 LG contactors can be replaced by Telko’s at next repair, resulting in 17 million Won savings Lifecycle 2x1 year Lifecycle 2 years Maintenance cost* Purchasing cost LG (SMC180 P) Used today Telko (LCF185MF) Rejected today Example: Magic contactor in HSM Replacement of parts based on TCO also provides opportunities to reduce the maintenance cost. ESTIMATE EXAMPLE BS/020313/SHMISC(2020) 29 BENCHMARKING OF LINE 3 PLANNED AND UNPLANNED MAINTENANCE Percent of plant operating time*, 1998 * Total calendar time – holidays – market driven stops Source: McKinsey analysis EAF HSM Periodic/preventive maintenance downtime Unplanned/breakdown maintenance downtime Check the balance between periodic and unplanned maintenance (clear risk of “overmaintenance”) Lack of systematic execution of periodic/preventive maintenance significantly increases breakdown downtime Company A World class Company A World class Company A World class Company A World class TIME/SERVICE Benchmarking analysis for line 3 suggests a risk of “overmaintenance” in the EAF and a lack of preventive maintenance in the HSM, which results improvement target in terms of time/service. Cost Time/service Target reduction in maintenance driven downtime reduces line 3 fixed and variable production costs BS/020313/SHMISC(2020) 30 VICIOUS CYCLE OF HSM 3 BREAKDOWNS LEADING TO REDUCING PREVENTIVE MAINTENANCE 1998 Increased number of mechanical and electrical breakdowns of HSM Pressure maintenance to reduce/stop preventive maintenance Production schedule bees more and more tense Only 46% of “budgeted” preventive maintenance was really executed “Budgeted” Real Planned maintenance Hours Number of breakdowns Corresponds to 1 breakdown every 9 hours (of plant opening time) Mechanical Electrical Total HSM in line 3 is trapped in a vicious cycle of an increasing number of breakdowns and systematically reduced preventive maintenance. Source: Interview。 McKinsey analysis 100% 0 33660BS/020313/SHMISC(2020) 27 SHIFTWORK/DAY OPTIMIZATION * A is 7 AM15PM, B is 15PM23PM, C is 23PM07AM Source: Interview。 be ari ng (n oi s e c h ec k ) No? Le ak ag e amp。 McKinsey analysis LINE 3 Total Unplanned maintenance Planned maintenance Checkup** Reserved parts repair Store room arrangement Training Designing Others*** Stop of operation No stop of operation ? Cost optimization of strategies? ? Can operators do part of checkups? ? Is frequency of checks optimized? ? Cost reduction through outsourcing of noncore, cost ineffective, activities ? TCO/life cycle cost analysis done? Issues 7BS/020313/SHMISC(2020) 25 ANNUAL MAINTENANCE COST REDUCTION THROUGH ONE TIME INVESTMENT WITH SHORT PAYBACK TIME 1998 total maintenance cost related to stand cramping cylinder and frame rail in RTM Edger Annual cost reduction Post TOP, recurring maintenance cost Onetime investment First year maintenance cost Second year maintenance cost Third year maintenance cost Etc... Improvement ideas ? Modification of 5 stand clamping cylinders ? Modification of 1 frame rail Several ideas have already been expressed to reduce the maintenance cost through a one time modification with a short payback time. Example: RTM Edger – HSM Source: Interview。 McKinsey analysis Parts Total Utilities* Plant 1 (line 4) Plant 1 (lines 1,2,3) Line 1 Line 2 Line 3 Outsourcing Contracted labor Company labor Line 3 has the highest total maintenance cost COST Line 3 is the best opportunity to take an initiative to achieve the potential saving in terms of its higher total maintenance cost… 100% BS/020313/SHMISC(2020) 23 Steel making Rolling Line 1 Line 2 Line 3 Line 4 MAINTENANCE COST* BY PRODUCTION LINES … and also its high maintenance cost per ton. * Including allocated utilities maintenance cost Source: Interview。Next steps ? Proposed approach for next phases of the project – TOP waves and breakthrough – Institutionalization: KPI syst