Nlmk: how we improve production efficiency. Information technology at nlmk nlmk production system

Following the old tradition, I present informational materials that are published by client companies. I got hold of the NLMK Company magazine with a number of interesting articles. I would like to bring to your attention the first of them - an interview with the head of NLMK's production system development department.

NLMK Group is recognized as the most efficient steel company in the world. The key to global success was the implementation of a set of programs to improve operational efficiency within the NLMK Production System. Ekaterina Yeletina, Head of the Development Department of the NLMK Production System, tells about what has been done and what remains to be done.

1. When and how did the implementation of the Production System at the Lipetsk site begin?

Work in this direction was started back in 2009. The introduction of new approaches was carried out from the production sphere - from there, where the main added value is created and where the largest reserves are hidden. We started with improving quality, stabilizing technology, and increasing equipment reliability. Then, as the system developed, the area of \u200b\u200bdistribution expanded, the consciousness of the personnel of enterprises was transformed, new approaches became for people “our method of work”. At present, NLMK's production system covers the key enterprises of the Group: NLMK, VIZ-Stal, Stoilensky GOK, Altai-Koks, NSMMZ, NLMK-Kaluga. NLMK Pennsylvania is actively involved in new approaches.

2. What tasks do you face this year?

In the current year, the main tasks of the NLMK Production System are horizontal and vertical dissemination of knowledge (training of personnel of various levels of competence) and their consolidation, as well as the autonomous functioning of the Production System tools.

Training in new principles and tools continues, both with the involvement of external consultants and trained “internal trainers” of the enterprise. Overall on this momentincluding training by internal trainers, more than 10 thousand employees of NLMK Group were trained.

As for the consolidation of new approaches, we strive to ensure that the system is self-regulating, does not require “manual control”. This will ensure its sustainability in the future. Last year, for this purpose, departments for increasing production efficiency were created in the divisions, subordinate to directors for directions. The departments selected the most proactive employees from the shops and industries, who became the conductors of new approaches, driving force changes.

This year, a full diagnostics of the functioning of the Production System is carried out by conducting audits in sinter-blast furnace, steel-making and rolling industries. During the audits, the main problem areas and further development of the system were identified.

3. How effective are the Manufacturing System tools?

Summing up the interim results of using the tools of the NLMK Production System, more than 130 A3 projects are currently being implemented, aimed at achieving target levels for equipment downtime, non-conforming products, material consumption, and energy resources. More than 60% of ongoing projects have reached their target levels as of July 2014. The leading indicators in terms of project efficiency are achieved by steelmaking and repair production - over 75%. The cost reduction effect from the implementation of a set of programs to improve operational efficiency based on the implementation of NLMK's production system at all sites of the Group amounted to USD 235 million in 2013 against the level of 2012, in the second quarter of this year - USD 63 million against the level of 2013 ...

New approaches became “our way of working” for people

4. Which of the instruments are being developed most actively?

The direction of mapping repairs and technological operations is actively developing. In July, based on the mapping results, a number of measures were developed to optimize the duration of technological operations and scheduled repairs without deteriorating quality by 10–20%. This frees up additional time for the production of metal products.

The direction of activating production personnel is developing. So, in the production of cold rolled products at the site polymer coatings Thanks to the increased attention of the division's management, informing the staff about existing problems and methodological support of the departments for increasing the efficiency of rolling production, in July the personnel of blue-collar professions developed 10 initiatives - proposals aimed at improving product quality, ensuring stable operation of equipment, and reducing the consumption of raw materials and materials.

It is important to note the expansion of the NLMK Production System not only to the main production facilities, but also to the functional areas of the enterprise, such as logistics, energy efficiency, H&S For example, the Directorate for Operational Efficiency and Logistics Services are jointly implementing a project to optimize the length of time that rolling stock is on NLMK's premises. The goal of the project is to reduce the volume of work in progress. According to preliminary estimates, reserves for reducing the duration of transportation finished products inside NLMK are up to 30%.

5. What ideas and principles of lean manufacturing is NLMK primarily targeting?

First, I would like to clarify that NLMK's Production System does not copy any of the existing production systems, be it LEAN, 6 Sigma or something else. We select the principles and tools of the world's leading enterprises that are most suitable for solving specific problems in a given situation, and adapt to the conditions of the Group of Companies. As for the principles of the Production System, similar to the LEAN philosophy, this is, of course, transparency and objectivity of the information used, continuous improvement, consistent identification and elimination of all types of losses and, most importantly, the involvement of personnel of all levels and areas of activity in joint problem solving.

6. Is it difficult to promote the Japanese system at a Russian enterprise? Still, you can stumble upon a misunderstanding.

We are not introducing the Japanese system, but its principles, adapted to work at our enterprise. Regularly receiving feedback from the shops, we, of course, know that there is some misunderstanding. After all, in any team there will always be optimists who believe in the success of changes, and pessimists who are ready to blame a certain "Russian mentality" for failures. But with the experience of successful projects, people's attitudes gradually change, they have faith in the effectiveness of our methods and the desire for improvement.

We are not implementing the Japanese system, but its principles.

7. One of the main principles of the Japanese system is continuous planned improvement in small steps. What, in your opinion, is better than global and drastic changes? Can you give an example in which NLMK service department would be most noticeable in terms of efficiency?

It is impossible to say unequivocally which is better: revolutionary changes with a quick effect or evolutionary ones with a stable effect in the long term. It all depends on the specific goals. However, in my opinion, drastic changes can cause misunderstanding and rejection in people. The production system is slowly but surely changing the psychology of people and makes the process of continuous improvement a "formula for life."

8. Some experts believe that the form of submitting initiatives resembles the good old system of innovation at industrial enterprises in Soviet times. Is it so?

Yes, this procedure really resembles the Soviet innovation system. However, our option for submitting initiatives is simpler in terms of registration and faster in terms of promotion. Each employee, having an idea for improvement, can fill out a one-page form in the shift-meeting room and submit it to the technical council of the division. If the council approves the initiative, then the remuneration is up to 2 thousand rubles. can be obtained immediately - only for submitting an offer. If the event subsequently gives a positive effect, the employee will receive additional remuneration of about 10 thousand rubles.

In any team, there are always optimists who believe in the success of changes.

9. It is believed that it will take 5-6 years for the system to be extended to all production. Will this justify itself in the current environment, when market conditions change every quarter?

A radical restructuring can be quick if we give priority to such tools of the Production System as A3, mapping, and the introduction of new materials. For a lasting effect, each new change must become a "way of thinking" and a "way of working." 5-6 years and even more is a normal period for the formation of "new habits" and the embedding of a new philosophy in production.

10. A certain effect has been achieved, but it must not only be preserved, but also developed further. What else needs to be done to make the system work?

For 2015, it is planned to further transfer the principles and tools of the Production System to all the main processes of the Group's enterprises, to define within each main line of business a functional to improve efficiency, to adapt tools to increase efficiency to the specifics of areas. Further coordination of the Production System with the budgeting process will continue.

As for the long-term perspective, our main goal, of course, is to make the company truly efficient: to make the customers, shareholders and employees of the company happy.

Interview: Natalia Sviridenko, Yana Larina

3 facts about NLMK's production system

  • the implementation of the Production System is one of the factors that helped NLMK Group become the most efficient steel company in the world;
  • in the second quarter of 2014, the effect of cost reduction from optimization programs at all sites of the Group amounted to USD 63 million compared to 2013;
  • more than 10 thousand NLMK Group employees were trained on the principles of the Production System, taking into account training by internal trainers.

Reprinted with the permission of the publication: "NLMK Company", corporate magazine of the NLMK Group of Companies, No. 5-6 (48) November-December 2014.

Who might be interested in this

Businesses are traditionally the most active users of IT retail, telecom and financial sectors. However, companies in the metallurgical sector, being one of the main exporters in our country and therefore competing with the world's leading players in their industry, must maintain their business management systems at the highest level. About how IT is used for this in the NLMK group of companies, the largest steel producer in Russia,PC Week Sergey Svinarev told the vice president of NLMK for information technology Vadim Uryas.

PC Week: What is NLMK? What are its unique characteristics compared to other companies involved in the extraction of raw materials and the production of metallurgical products from them?

Vadim Uryas: NLMK is an international company. Along with the main production site - Novolipetsk Metallurgical Plant - it includes more than 20 factories in Russia, the USA and the European Union. Moreover, many are the largest in their region, or the most modern or unique in their field. And this is without taking into account dozens of scrap collection sites of "Vtorchermet" and service centers NLMK India. NLMK Group is the largest steel company in Russia: according to preliminary estimates, smelting this year will amount to about 16 million tons of steel, of which about 13 million - at factories in our country. We are also in the lead in terms of production cost per ton of metal, significantly ahead of foreign companies in this indicator.

NLMK is a vertically integrated company, whose enterprises mine and produce all the necessary components for the production of rolled metal, with the exception of coking coal. These enterprises include the Stoilensky Mining and Processing Plant, which extracts and processes ore, Altai-Koks, which produces coke products, Stagdok and Dolomit, which produce fluxes. Steel is smelted from this raw material at the Novolipetsk Combine, which is either rolled into coils there, or sent to our European and American (USA) enterprises to produce finished products next to the client. This chain allows us to ensure almost full utilization of our steelmaking capacities. And here's what else distinguishes NLMK from other players russian industry ferrous metallurgy: all mentioned foreign enterprises are integrated into the general production chain and are fully managed by the company's management. The group's foreign enterprises produce a number of unique species rolled products that are in great demand on the world market, for example, for the manufacture of foundations for offshore wind turbines. In addition, the NLMK group of companies includes enterprises producing valves for the construction industry, and VIZ-Stal, which produces transformer steel - the most high-tech product in metallurgy, and together with NLMK occupies about 11% of the world market for this type of steel.

PC Week: What are the main challenges facing the IT departments of companies in your industry? And does NLMK's IT department have any special specific tasks? Is he involved in software development and system integration, or is this activity outsourced?

V.U .: Of course, every metallurgical company has a certain specificity, but on the whole they all solve the same problems. IT development at NLMK is largely determined by the strategy initiated in 2008 to transfer all companies of the group into a single information space and centralize them. information systems... Even the leading Western companies in our industry have not reached a similar level of centralization today. The goal is to create a unified management system for all enterprises of the NLMK group of companies based on the SAP ERP solution. To do this, in some industries, it was necessary to abandon legacy business applications and transfer them to a single SAP ERP deployed in a common data center. As a result, it was possible to halve the number of IP used in the group. Today all our Russian enterprises and a number of foreign ones are connected to the ERP system. By 2019-2020 it is planned to ensure the operation of all enterprises of the group on one ERP-system and support of uniform methodological principles in relation to accounting and organization of business processes

The MES-level industrial process control system is another matter. Historically legacy products and systems are widely used here, but the ideas of digital business transformation that have appeared recently stimulate the creation of innovative solutions using big data technologies, streaming processing, etc. At the same time, the centralization of such systems is similar to how it is done in ERP , inappropriate due to the high risk of stopping critical production cycles. Therefore, MES systems at our enterprises, even of the same profile, develop independently and differ from each other. Nevertheless, a certain unification of them would be useful, and now we are considering the possibility of such unification. In particular, we are studying the Smart MES concept, which assumes not only a reactive control method, but also a proactive one, which allows predicting events, predicting changes in product quality, etc. This concept assumes a completely different approach to working with data collected by various systems. operating at different levels (APCS, MES, ERP).

PC Week: What key IT projects of NLMK in recent years could you highlight?

V.U .: Any project, before it starts, is preceded by a stage of discussion with business units, which must clearly articulate what tasks it is designed to solve and what it will bring to the business. This is done in order not to produce systems that are not able to provide significant results for the company and risk remaining unclaimed.

As part of the transfer of all enterprises of the holding to a single SAP ERP system, which I mentioned, two years ago we migrated it to the high-performance in-memory platform SAP HANA, which allowed us not only to significantly speed up a number of processes, but also to implement the generation of individual complex reports (say, a report on the shipment of rolls), which we simply could not receive in the SAP system based on the traditional disk-based Oracle DBMS. We could not even calculate the nomenclature of the repair department, containing hundreds of thousands of items. By changing the platform, we got a whole range of opportunities that, within the framework of the previous platform, would require a radical technical re-equipment and the purchase of new hardware. Now a project has been initiated for the transition to a new generation ERP system SAP S / 4HANA; its completion is planned for the first half of 2017. This transition does not require re-implementation, but is carried out as part of a standard SAP technical upgrade.

One more important project - implementation of a methodologically new approach to budgeting based on SAP ERP with the possibility of modeling different scenarios and quick recalculation of options. The budgeting system has become more efficient and flexible. At the request of sales divisions, this year, we have built new system management of interaction with customers "Client info", in which there are significant differences from classic CRM systems. All clients have the opportunity to send us the necessary specifications and orders, as well as to promptly receive all the necessary information and documents. The server side of the solution is based on Microsoft CRM, and the client side is our own development based on SharePoint. With the introduction of "Client info", the acceptance and processing of orders has noticeably accelerated. A similar system for managing interaction with suppliers is implemented based on SAP SRM (Supplier Relationship Management).

For the top management of the enterprises, the information and analytical system put into operation this year is intended, which makes it possible to monitor the indicators of production processes at the workshop level (MES, transport, technological standards). It provides in real time all the necessary balances of raw materials, materials, capacities and gives a complete picture of production at the moment. So far, such a system has been introduced only at the Lipetsk site, but over time we want to extend it to all enterprises of the holding.

A statistical modeling system has also been created that allows you to control the quality indicators of finished products and predict them based on the characteristics of the feedstock (coal, coke, ore, pellets, etc.) and many other factors that indirectly affect the parameters of the product. The system makes it possible to select batches of raw materials from those available in the warehouse to ensure the required level of quality of the final product. It is also allowed to solve the inverse problem: the selection of raw materials and operating modes that ensure the release of a product with predetermined desired properties and price characteristics. The basic statistical algorithms were developed by Belgian experts.

PC Week: What is NLMK's IT budget and what is it mainly spent on? How has it changed in recent years? Does your company use IT outsourcing?

V.U .:We do not disclose absolute figures, but there have been no budget cuts in recent years. Our IT budget has three parts. The largest is allocated for development programs (new projects) and on average 40% of the total IT budget. From year to year, this article increases, as the number of projects grows: in 2015 there were 25 of them, in the current - 50, and in 2017 about seventy are planned. The second part is allocated for maintenance programs: regular costs for infrastructure support, purchase of licenses, etc. Its share in the IT budget is relatively stable (about 40%), and in absolute terms it grows at approximately the rate of inflation. And the third part is the operating costs, mainly the salaries of the employees. Its share is about 20%.

If we talk about IT outsourcing in the classical sense, then we use it during the operation of the SAP ERP system deployed on the infrastructure of the Vienna data center Atlas, which is maintained and operated by a cloud provider and is paid by us monthly as a service with a given SLA level. Licenses for SAP ERP were purchased by us under a separate contract and paid in full. We buy all other IT services (not related to SAP software) as a customer from a contractor on a project basis with clearly defined scope and deadlines.

PC Week: What areas are the responsibility of your IT department? Does it solve the problems of managing individual enterprises of the group and, in particular, questions of shop management and process control systems?

V.U .: NLMK Group enterprises do not have their own IT specialists. Although physically they may be in the field, organizationally they are subordinate to a single IT department and cannot independently initiate any projects. The IT department solves a wide range of tasks for the operation of existing systems (except for production equipment and process control systems), their support and maintenance, development and implementation of new solutions Of course, his resources are not enough for everything, so we attract external companies of various profiles. When the total the staff of the group is more than 55 thousand in the staff of our IT department is about 700 people. Of these, about three hundred are responsible for communication systems, the rest are engaged in IT.

Last year, we got serious about optimizing our IT architecture, and this work is done only by our own specialists. And when implementing many projects initiated by business units, we use the resources of external consultants and system integrators. As the number of projects doubles annually, and the number of IT department remains unchanged, external resources are attracted more and more every year.

PC Week: Does NLMK have its own data center? Does the company use the services of cloud providers?

V.U .: I would not talk about a data center, but at the Lipetsk site of NLMK there is a modern powerful computing center that makes full use of virtualization technologies. It operates all ISs, with the exception of SAP business applications and systems, which, for objective reasons, are impractical to centralize and which are located locally at the holding's enterprises. Our computer center has about four hundred servers, which, thanks to virtualization, form a private cloud.

PC Week: What are the company's plans regarding the application of IoT technologies (IoT)? How relevant is this topic for metallurgical enterprises?

V.U .: In principle, this topic is very interesting to us. We understand that this direction promises great advantages and therefore we follow it and analyze its capabilities. The limiting factor is the unavailability of most of the production equipment used for such technologies, but, for example, in our new pelletizing plant equipped with modern technology, we plan to test similar solutions. In particular, we are trying to build models for predicting the timing of maintenance and repair of equipment based on information collected in real time from a variety of sensors.

Today, the group is forming the NLMK Strategy 2022, and in accordance with it, IoT technologies will take their rightful place in the section dedicated to creating a digital enterprise. Unfortunately, in metallurgy, even at the international level, today there are very few examples of the use of IoT, which we could be equal to as a reference.

PC Week: Does NLMK set itself the task of import substitution in IT? How can such tasks be stimulated - by potential cost reductions or by government economic policy?

V.U .: We do not set ourselves the direct task of import substitution. Considering the possible benefits of this, expressed in reducing costs, you need to carefully analyze all the advantages and disadvantages, as well as all the risks. In particular, along with technical characteristics and the price of products, the level of service provided by the vendor and technical support... Unfortunately, not all domestic hardware and software manufacturers are capable of providing a competitive level in this regard. Hopefully it will grow over time. Taking into account the possible risks, we are not ready for the widespread use of Open Source solutions.

PC Week: Thank you for the conversation.

NLMK Group, an international steel company with assets in Russia, the United States and the European Union, has been audited at the Lipetsk site for compliance with the criteria for the Total Toyota Production System (T-TPS), one of the world's most efficient production process control systems.

The purpose of the audit was to assess the efficiency of the NLMK Production System (PS NLMK) and receive recommendations for its further development.

NLMK PS has been implemented at NLMK Group enterprises since 2013. The system includes a wide range of practical tools and techniques to improve the efficiency of production and business processes. Their use made it possible in 2014-2015 to achieve a positive effect on EBITDA in the amount of $ 477 million, even taking into account the impact of the negative pricing environment.

The audit of NLMK PS for compliance with the T-TPS criteria was carried out by leading experts from Toyota Engineering Corporation and the TPS Certification Center (Japan). The auditors checked the work of the blast furnace, steelmaking and rolling production units, assessed the use of NLMK PS tools, analyzed the processes of supply, maintenance and repair of equipment, personnel training, labor protection and industrial safety.

The auditors noted that the level of development of the NLMK Production System exceeds the average level of the world metallurgical companies... In terms of production, NLMK's assessment is in line with the best practices of European and American metallurgical enterprises.

“The experts highly appreciated the use of the A3 tool by NLMK specialists to solve problems, the level of compliance with labor protection and industrial safety requirements. Separately, experts from Toyota Engineering Corporation noted the effectiveness of work to achieve the company's goals through the implementation of optimization programs. The auditors pointed out the ways of developing the system to achieve the level of leaders - Japanese companies, for example, increasing the involvement of employees of enterprises in the process of continuous improvement. We intend to include the recommendations in the development program of NLMK's Production System for 2016-2017, ”commented Julia Venza, NLMK's Director of Operational Efficiency.

Briefly about NLMK's production system

The production system of NLMK (PS NLMK) is a methodology developed by the Group's specialists, which includes a wide range of both global and unique industrial practicesaimed at improving the efficiency of the main production, technological and business processes. It is an ongoing, self-sustaining process of finding and implementing improvements. Full-scale and systematic implementation of PS at NLMK began in 2013.

NLMK PS tools are used to implement operational efficiency improvement programs. Thanks to the implementation of the Production System, NLMK Group has become one of the most efficient steel companies in the world.


About NLMK Group

NLMK Group is a vertically integrated steel company, the largest in Russia and one of the world's most efficient steel producers. NLMK Group's metal products are used in various industries, from construction and mechanical engineering to power equipment and offshore wind farms.

NLMK's production assets are located in Russia, Europe and the United States. The company's steel production capacity exceeds 17 million tons per year, of which about 16 million tons are located in Russia.

NLMK demonstrates the most competitive production costs among global manufacturers, and the company's profitability is one of the highest in the industry. The company's revenue in 2015 amounted to $ 8 billion, EBITDA - $ 1.95 billion, net profit - $ 967 million. The Net Debt / EBITDA ratio is 0.56.

NLMK's ordinary shares are traded on the Moscow Stock Exchange (ticker “NLMK”), global depository shares - on the London Stock Exchange (ticker “NLMK: LI”). The company has an investment credit rating of BBB-.

Additional information about NLMK Group is available on the website www.nlmk.ru

Information about Novolipetsk Metallurgical Combine

Novolipetsk Iron and Steel Works is the main production site of NLMK Group, Russia's largest producer of steel and metal products with high added value, and one of the most efficient metallurgical companies in the world. The plant is the core of NLMK Group's unified international production chain with assets in Russia, the EU and the USA.

Steel production at the Lipetsk site accounts for about 18% of all steel production in Russia and about 80% of all steel products of NLMK Group. NLMK's high-quality metal products are used in various strategically important sectors of the economy, from construction and mechanical engineering to the production of power equipment and large-diameter pipes. At the end of 2015, steel production at NLMK Group's main production site reached 12.9 million tonnes - the highest level in more than 80 years of the mill's operation. Steel output at 100% utilization of steelmaking capacities increased by 2.4% compared to the previous year. Record figures were achieved at all redistributions of the Novolipetsk Combine.

Three enterprises of NLMK Group, the largest in Russia and one of the most efficient steel producers in the world, are recognized as leaders in labor productivity in their regions. The organizers of the first All-Russian award "Labor Productivity: Industry Leaders - 2015" came to this conclusion.

NLMK Group companies demonstrated the best results in their regions:

  • NLMK Kaluga (Kaluga region): labor productivity - 12.64 million rubles per employee per year;
  • Novolipetsk Metallurgical Plant (Lipetsk region): labor productivity - 9.15 million rubles per employee per year;
  • Altai-Koks (Altai Territory): labor productivity - 7.83 million rubles per employee per year.

The achieved performance indicators are the result of the implementation of the NLMK Production System, which includes a set of working tools, a system for setting and cascading goals, a personnel motivation system, a unique database, which became the basis for programs to improve operational efficiency.

In 2014, the effect of the implementation of programs to improve the operational efficiency of the Novolipetsk Iron and Steel Works alone amounted to about 7 billion rubles. For the Group as a whole, the effect of increased efficiency exceeded RUB 11.5 billion.

Information about the NLMK Production System

Work on the creation of the NLMK Production System began in 2009. Initially, we analyzed the production systems that were successfully functioning at that time in the world: "Lean Manufacturing" Toyota, "Six Sigma" Motorola and others.

Based on the selected systems and in-house developments, the NLMK Production System was created, which includes a set of working tools, a system for setting and cascading goals, a personnel motivation system and a unique database, which became the basis for programs to improve NLMK Group's operational efficiency.

NLMK's production system is universal, its use allows maximum use of productivity reserves, improving manufacturing processes, to minimize losses along the entire technological chain, from the extraction of ore in an open pit to the delivery of the final product to the consumer, thereby, receiving additional profit.

NLMK's production system has expanded not only to the main production facilities, but also to the functional areas of the enterprise, such as logistics, energy efficiency, labor protection, industrial safety, etc.

In 2014, over 400 employees were trained in the principles lean manufacturing, including with the involvement of specialists from Toyota Engineering Corporation.

Currently, NLMK's production system covers the key enterprises of the Group: NLMK, VIZ-Stal, Stoilensky GOK, Altai-Koks, NSMMZ, NLMK-Kaluga. The Group's foreign sites, in particular NLMK Pennsylvania (USA), are actively involved in the application of new approaches. In 2015, it is planned to further disseminate the principles and tools of the Production System to all major processes of NLMK Group enterprises around the world.

About NLMK Group

NLMK Group is a vertically integrated steel company, the largest in Russia and one of the world's most efficient steel producers. NLMK Group's metal products are used in a variety of industries, from construction and mechanical engineering to power equipment and offshore wind turbines.

NLMK's production assets are located in Russia, Europe and the United States. The company's liquid steel production capacity exceeds 17 million tons per year, of which about 16 million tons are located in Russia.

NLMK demonstrates the most competitive production costs among global manufacturers, and the company's profitability is one of the highest in the industry. The company's revenue in the 1st half of 2015 amounted to $ 4.4 billion, EBITDA - $ 1.1 billion, net profit - $ 491 million.

NLMK's ordinary shares are traded on the Moscow Stock Exchange (ticker “NLMK”), global depository shares - on the London Stock Exchange (ticker “NLMK: LI”).

Additional information about NLMK Group on the website www.nlmk.com/ru

Information about Novolipetsk Metallurgical Combine Novolipetsk Iron and Steel Works is the main production site of NLMK Group, Russia's largest producer of steel and metal products with high added value, and one of the most efficient metallurgical companies in the world. The plant is the core of NLMK Group's unified international production chain with assets in Russia, the EU and the USA. Steel production at the Lipetsk site accounts for about 18% of all steel production in Russia and about 80% of all steel products of NLMK Group. NLMK's high-quality metal products are used in various strategically important sectors of the economy, from construction and mechanical engineering to the production of power equipment and large-diameter pipes.

At the end of 2014, the volume of steel production at the main production site of NLMK Group reached 12.56 million tonnes - the highest figure for all 80 years of the mill's operation. Steel output at 100% utilization of steelmaking capacities increased by 1.3% compared to the previous year. Record figures were achieved at all redistributions of the Novolipetsk Combine.

Information about NLMK Kaluga

NLMK Kaluga - a metallurgical enterprise of a new generation, which is part of the Long Products Division of the NLMK Group (NLMK Long Products). The start-up of NLMK Kaluga, which took place in July 2013, was recognized as the main event of the year in Russian metallurgy at the opening of the international exhibition Metal-Expo'2013 in Moscow.

Investments in the construction of the plant amounted to 38 billion rubles, of which 7.5 were directed to the introduction of advanced environmental technologies.

The production capacity of NLMK Kaluga for the production of steel and long products is 1.5 million tonnes of steel and 0.9 million tonnes of rolled products per year, and the company has unique equipment in Russia, allowing it to produce the widest range of premium grades of long products for construction purposes.

NLMK Kaluga outperforms the average performance of similar Russian enterprises in terms of efficiency. For example, electricity consumption per ton of finished products is 10% lower, natural gas consumption is 18% lower, and the efficiency of using raw materials is 4% higher.

The launch of NLMK Kaluga made it possible to create 1,250 new jobs at the plant and 600 jobs at service enterprises, as well as provide jobs for related businesses in the Kaluga Region.

Since the start of the plant, NLMK Kaluga has mastered 15 types of long products. Today the assortment of the plant includes reinforcing bars No. 10, 12, 14, 16, 18, 20, 22 and 25 and structural shapes: corners 25x4, 75x6, 63x5, 63x6, 100x7, 90x6 and 90x7. Until the end of this year, it is planned to offer consumers also steel corners 50x5 and 100x9.

Information about Altai-Koks

Altai-Koks is one of the largest coke-chemical enterprises in Russia. The company also manufactures a wide range of chemical products. The design production capacity of the enterprise is 4.4 million tons of coke in dry weight per year. Since 2006 Altai-Koks has been part of the NLMK group of companies.

Article in source: up-pro.ru/library/production_management/systems/eletina-nlmk.html

What helped NLMK overcome the inertia of human thinking and how the foundation for the development of the Production System is being strengthened, we talk with Yekaterina Yeletina, Head of Operational Efficiency at NLMK.

- Over the past few years, NLMK's production system has grown significantly stronger. Your production efficiency improvement system (SPEP), which was launched at NLMK in 2008, also yielded good results in a number of indicators. What exactly did you want to achieve with it? Before 2008, what prevented the plant from achieving its goals?

- According to the name, we wanted to achieve an increase in production efficiency, but without capital costs - by identifying internal reserves.

As for the barriers to achieving performance goals, we have been hindered in the past mainly by the inertia of human thinking.

- Today SPEP is the core of NLMK's PS. And which parties were primarily affected by the implementation of the system? Why did the transformation begin with them?

- The introduction of new approaches began from the production area - from where the main added value is created, and where the largest reserves are hidden. We started with improving quality, stabilizing technology, and increasing equipment reliability.

- Please tell us about the mechanism for launching the SPEP. Were specially created teams engaged in the implementation, or was some other mechanism chosen?

– Initial stages implementation was the development of methodology and training of personnel. For these purposes, we have created the Production Efficiency Improvement Office (UPEP). The development of new approaches was carried out on pilot projects at the stage of experimental-industrial operation under the guidance of the UPEP.

After the final debugging of the procedures, they were transferred to industrial operation and the operation was monitored by means of audits. The main mistake at our first steps, in my opinion, was the introduction of the system "from below" from the level of workers, foremen, and not "from above" - \u200b\u200bfrom the president and general directors.

Photo 1-2. Examples of the implementation of 6C approaches at NLMK

- When was the Operational Efficiency (OE) direction opened? What are the responsibilities of an MA manager?

- The direction was created in 2009. The main responsibilities of the head of this area are the development of documented procedures of the NLMK production system, their adaptation to the conditions of the group's enterprises, training of personnel in the procedures and principles of the production system during its implementation.

- NLMK executives have repeatedly stressed that the tools for the implementation of the SPEP are selected depending on the strategic goals and objectives. What would you say about correspondence in this chain? What tasks have you solved by using certain tools? What are the results of the work?

- NLMK's production system is not based on any one ideology (Lean, 6 Sigma, etc.), but selects and adapts the most appropriate best practices depending on the goal pursued. For example, to stabilize technology and quality, we use control charts (quality control charts), to increase the "useful" time of equipment operation - timing and analysis of the reasons for equipment downtime, to find ways to reduce the cost - A3. However, there are no strict rules on the scope of application of a particular tool. In each specific situation the optimal set of tools is sought.

As for the results, they can be illustrated by the example of the implementation of the A3 methodology. We began to implement this tool in February 2013 with the development of documented procedures, training of pilot testing personnel (rolling production of NLMK was chosen as a pilot project). Then there was a pilot operation, the extension of the approach to other areas of activity.

By September 2013, the economic effect from the implementation of A3 projects amounted to more than 1 billion rubles.

Photo 3-4. Work on A3 projects at NLMK production facilities

- The SPEP program includes three main areas, among them - improving the system of key performance indicators (KPIs), as well as extending the KPIs to the aggregate level. Could you give an example of cascading goals?

- You can illustrate the cascading goals with the following example.

One of the KPIs of the enterprise is the cost of production; KPI of a production director (for example, steelmaking) - inappropriate products and defects in the shops of his competence; KPI for the shop manager - non-conforming products and rejects by product type; Aggregate level KPIs (operator) - technology stability.

As for improving KPIs, this is the cornerstone of the entire NLMK Production System.

- Without permanent work it is impossible to involve personnel in improving the development of the PS. How do you manage it? How engaged are NLMK personnel today?

- With the aim of involving, we have developed a system of both material and non-material motivation of personnel. Engagement is carried out through informing, visualizing goals and objectives.

In 2013, line personnel submitted more than 450 initiatives to improve the efficiency of processes, mid-level specialists implemented more than 130 A3 projects, engineering and technical specialists implemented more than 180 projects within the framework of comprehensive programs.

- SPEP is intended not only for production - the system also applies to functional areas. What approach is used when extending SPEP to other areas?

- The distribution process of the Production System is not complete. It continues. The main approach used is the following. Responsible for operational efficiency is determined in the direction. If necessary, a group is formed to introduce new approaches.

Photo 5. Operational control stability of technology using control charts (IS "SPEP") at the workplace

- There is a third direction in the SPEP program - the distribution of the training system and the transition to the autonomous use of the used tools. What has been done to solve problems in this area?

- A multilevel training system has been built. Top managers of enterprises are trained by involved organizations (for example, Toyota Engineering Corp.). The middle management and future internal trainers are trained by the involved organizations and the EPEP. An important stage in the transfer of practical skills here is the internship of trainees at the UPEP. Foremen and workers are trained by internal trainers.

As for the transition to an autonomous use of the Production System tools, it is carried out after the implementation of all the implementation stages I have mentioned above. An important step here is securing personal responsibility for the use of proven practices.

Photo 6. Training from Toyota Engineering Corp on "Total Management System" (TMS)

- What areas of efficiency improvement will be implemented in 2014?

- The 2014 program is aimed at expanding the implementation area of \u200b\u200bthe NLMK Production System, as well as developing and implementing new tools.

- Why would you advise the heads of other enterprises to come to the LIN Summit in Gelendzhik? What do you think they will get useful for themselves?

- The Summit provides an opportunity to use the accumulated experience to reduce the time to implement systems to improve operational efficiency. The question of the expediency of this event is not even discussed.

Ekaterina Yeletina

 

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