【正文】 tation ? Actions required BS/020313/SHMISC(2020) 3 Costs Quality Time/service TOP IMPACT DIMENSIONS The TOP approach seeks operational improvement opportunities along three dimensions: cost, time/service and quality. ? Lower operating costs ? Lower material and energy consumption ? Lower inventories ? Internal –Less downtime –Shorter changeover times –Elimination of slowdown –Debottlenecking ? External –Fewer late deliveries –Shorter lead times ? Internal –Less yield loss, rework, rejects –Less deviation from specs –Elimination of downgrading ? External –Elimination of customer plaints, deviation from specs Source: McKinsey analysis BS/020313/SHMISC(2020) 4 Controllable cost savings Time/ throughput improvement Quality improvement Total production savings pared to 1998 Potential savings on capital cost from inventory reduction Total savings potential TOTAL OPERATING COST SAVINGS POTENTIAL FOR LINE 3 * The cost of Line 3 excludes semi’s from lines 1 and 4 Source: McKinsey analysis Overall production cost savings potential for the plant: including savings on capital from inventory reduction Substantial cost savings can be captured through controllable cost reduction, time/service and quality improvement. BS/020313/SHMISC(2020) 5 DEFINITION OF COST TYPES CONTROLLABLE COST In TOP, all costs are categorized as “A”, “B”, or “C” costs. A 40% improvement target is set for “A” and “B” costs. Cost type “A” “B” “C” Definition Those cost items that have no strict theoretical or legal limits to constrain improvement opportunities The controllable portion of those cost items where strict theoretical or legal limits do exist. The cost in excess of the limits is subject to the 40% target The noncontrollable portion of those cost items where strict theoretical or legal limits do exist Examples ? Labor ? Operating supplies ? Subcontracting ? “Excess” energy and material costs (due to less than 100% yield and efficiency) ? “Core” energy and “core” material (required at 100% energy and efficiency) Improvement target Percent 40 40 0 Source: McKinsey analysis BS/020313/SHMISC(2020) 6 PROCESS FOR DETERMINING “B” COSTS For each expense item, a theoretical limit is calculated. The theoretical limit bees a noncontrollable “C” cost. The difference between actual consumption and the theoretical limit is the improvement potential, or “B” cost. The “B” cost targets can be calculated in several ways, depending on the availability of information. Can the theoretical limit be calculated based on physical or chemical laws? Is a worldclass standard available? Calculate the theoretical abilities of the equipment be employed “B” cost calculation “B” improvement target Percent Difference between current consumption and theoretical limit 40 Difference between current consumption and worldclass standard 100 Difference between current consumption and theoretical abilities of equipment 100 20% of current consumption (80/20 rule) 40 Yes No Yes No Yes No Source: McKinsey analysis BS/020313/SHMISC(2020) 7 EAF LF/VD CCM Reheating Rolling Total savings potential CONTROLLABLE COST SAVINGS BREAKDOWN BY PROCESS STEPS EAF and Rolling sections account for nearly 50% of the total controllable cost savings potential and should be given top priority in the subsequent TOP implementation waves. Finishing Source: McKinsey analysis BS/020313/SHMISC(2020) 8 CONTROLLABLE COST SAVINGS BREAKDOWN BY COST DRIVERS 60% of the total controllable cost savings potential will e from two key cost drivers. Labor cost and energy consumption. Significant efforts are needed to capture these cost improvement opportunities. Labor Energy Subcontractor Yield Refractory Total savings potential Equipment/tool Electrode Materials savings based on 1998 prices Source: McKinsey analysis BS/020313/SHMISC(2020) 9 IDENTIFICATION OF COST IMPROVEMENT POTENTIAL IN EAF LINE 3 Sub contractor Materials Labor Lime Refractory Other energy Electrode Yield Electricity Total cost Noncontrollable costs Controllable costs Savings target (40% of controllable) Post top controllable cost Cost items Electricity Yield Improvement ideas ? Reduce the every loss to outside EAF ? Reduce the amount of slag generated An average of 40% reduction of controllable cost can be achieved through rigorous idea generation, screening and implementation. Source: McKinsey analysis Electrode ? Stabilize the arc to reduce the tip consumption using good slag forming BS/020313/SHMISC(2020) 10 BENCHMARKS AND IDEAS FOR SAVINGS IN STEELMAKING Action required ? Prevent breakage of electrodes ? Optimize the current inflow and oxygen Impact Annual savings through decreased electrode consumption by 13–25% Reduction of EAF electrode consumption (Kg/ton) 1998 Technical limit as perceived by management Industry best practice 13% 12% 25% EXAMPLE LINE 3 Action required ? Optimize total energy consumption ? Better insulation to prevent energy loss Impact Annual savings by closing 50% of the gap Reduction of total equivalent energy (KWh/ton) External benchmarking can help close the gap between the pany and the worldclass practices. 1998 Worldclass 7% Coke Oxygen Electricity Source: McKinsey analysis BS/020313/SHMISC(2020) 11 IDENTIFICATION OF COST IMPROVEMENT POTENTIAL IN ROLLING LINE 3 Hydraulic oil Bearing Outsourci