arvind consulting group

Business Transformation & Operational Excellence Consultants

Brochure - Steel Industry

March 10, 2024 arvind consulting group (www.arvindconsulting.com) 1

Who we are….
Maximise business value

Design and deliver excellence in

operations

“Transformation, evolution, and adaptation to the ever changing business ecosystem is the only solution for
survival and growth”

We understand the We partner our clients We deliver significant We transfer We leverage the latest
industry and have from concept to sustainable benefits competencies to the improvement and
done it before… implementation team digital tools

March 10, 2024 arvind consulting group (www.arvindconsulting.com) 2

Sectoral Expertise
Tata Steel, Ispat ITC PSPD,
Metals, Steel & Electrotherm,
Sundaram Fasteners
Paper Abhishek Industries,
Mining Yash Papers,
Hoganas, Bhagyalaxmi

Neocorp
Mahindra and Mahindra
Automotive Packaging Plastine India Limited
AMW
Polyplex

Aarti Textiles
Medium & Light Balmer Lawrie
Textiles 3 DCM Shriram Rayons
Engineering Johnson Lifts
KK Spinners

India Cements,
Dalmia Cements Jagajit Industries
Cement Beverages
Star Cement, Magicrete Coca Cola Limited
Hyderabad Industries

Tata Chemicals
Cavincare (Dairy)
Chemicals / Glass Insecticide India Ltd Dairy & Food
Ruchi Soya
United Glass Ltd

10 March 2024 arvind consulting group (www.arvindconsulting.com)

‘acg’ depth and capabilities across industries
Heavy
Industry Textiles Auto & Agro-
Steel & Steel Engg. & Metals &
& Auto Chemical/ Paper Cement Pharma
Products Machinery Mining
Apparel Comp Chemicals
Solution Mfg
Productivity
Improvement P P P P P P P P P
Capacity Assessment &
Planning P P P P P P P P P
Cost Reduction
P P P P P P P P P
Robust Maintenance
Management System P P P P P P P P
Energy Management
P P P P P P
Supply Chain
Management P P P P P P P P
Quality Improvement
P P P P P P P P
Sales and Operations
Planning P P P P P P P P
Customer Relationship
Management P P P P P P
New Product
Development P P P
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 Intangible benefit and sustainability measures
 Increase every employees
involvement and
contribution to growth
Systems and processes for Robust maintenance
 Effective utilization of sustained results practices
leadership and directors’
time
 Reduce dependency on
individuals
Improved plant reliability - Scientific and structured
 Responsibility and
More predictable plant approach towards problem
accountability of work
across levels
behaviour solving
 Sets up a continuous
improvement engine
 Minimize firefighting and
Defined responsibility and Improved morale and
surprises
enhanced accountability teamwork
 Consistency in output

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arvind consulting group (www.arvindconsulting.com)
 We have very realistic and scientific methods to arrive at expected
numbers for performance parameters
Key Performance Unit of Best in Assumptions/
Area Good Average
Indicator Measure Class Remarks

Best in Scrap
handling
Processing equipment
efficiencies
% >85 70-85 <70

class
Specific power 30 ton furnace and
Kwh/ton <510 510-550 >550
consumption 13.5 MW power
30 ton furnace and

e
Induction Tap to Tap time mins <75 75-85 >85
13.5 MW power
Furnace

it v
30 ton furnace
No. of
Lining Life >35 30-35 <30 Acidic ramming
heats
Daily mass
As Is
management

a
practices We derive Performance Caster Availability % >95 90-95 <90 monthly average

realistic Reheating
Specific fuel
consumption (eq.

t rKg/ton <50 50-60 >60 pulverized coal, (cv

s
possible/ furnace
pulverized coal) is 5500)

stretch targets
u
Overall Plant
% 80-85 70-80 <70

l
efficiencies

l
Availability (run time) % >92 85-92 <8

I
monthly average
Rolling Material Yield % >98 96-98 <96%
Equipment Current mill (rebar
Specific power
mill) Kwh/ton <85 85-95 >95
health & operating consumption
upkeep practices Hot roll percentage % >94 90-94 <09

about 60% hot

Burning loss % <.8 0.8-1.5 >1.5
billet

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Our engagements have helped organizations achieve
significant top line and bottom line benefits

• Increase in throughput 10-25%

• Improvement in OTIF to 80 – 90%

Value • Enhanced delivery capability improvement 30% to 50%

Enhancement • Better realization from customer – Higher sales efficiency & effectiveness
• Efficiency of Managers/frontline operators 15% to 20%
• Improvement in New product Development process 20 to 50%

• Reduced material costs - 5% to 20% reduction in cost of goods sold

• Reduced Wastes - Reduction in defects by 50% to 60%
Cost Reduction • Reduced cost of logistics and distribution 5-8%
• Reduced resource costs and overheads
• Optimized Manpower

• Optimal Working Capital - 20% - 50% reduction in inventory

• Material Flow Synchronisation – Improved Supplier reliability, Efficient processes for inbound &
Cash Liberation outbound supply

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Tangible benefits
There exists potential of annualized benefits to the tune of 50-60 Crores

Improvement
Opportunity UOM Actual Value Should be Gap Annualized benefit
Potential

Power consumption at SMS KWh/ton 482,62,500

e
Production Tons/day
1097,00,000

i v
Rolling Mill Utilization Tons/day 4026,08,000

a t
Spares and consumables Rs./ton

tr
Yield Losses Scrap to Metal %

lus
Yield Losses Metal to TMT %

Il
Power consumption at rolling mill KWh/ton
TOTAL 5905,70,000
Assumptions
• 330 days a year
• Electricity cost @ INR 6.5 per unit
• Weighted cost of scrap INR 20 per Kg
• Contribution : INR 4 per Kg
• WACC: 10%

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Illustrative implemented actions
Manpower
Improving Delivery Improving Flow Production plan
Optimization

Understanding the AS IS Sales and Institute a performance management

Buffer Management Device a production plan
Operations Planning Process structure (PMS)

Identifying the improvement areas in Set up working rules and guideline w r

Establishing Pull Replenishment based planning
planning t manpower deployment
Optimize floating pools to take care of
Implementing Supermarket product mix fluctuations and express Minimizing Material Movement Manpower deployment plan
orders

Rejects and Rework Maintenance Enablers Reduction in wastages

Analysis of current state Implementation of AET structure Deciding metrics Waste Identification

Devise and implement systems to Assess the maintenance manpower

Improving OEE Waste Measurement Mechanism
minimize defect generation adequacy
Management Information System at
Devise and implement systems to Make people aware of maintenance Implementation of wastage reduction
Wing Incharge and Production Heads'
maximize defect detection metrics MTTR, MTBF actions
Level
Streamline sparepart management
Focused improvement methodology
system (ABC, VED analysis)

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 Citations
Situation Approach Results
1. Low utilization of machines 1. Focused Improvement Projects (FIPs) 1. Witnessed potential throughput of 51.8K
launched to speed loss MT/month for a period of 20 days
2. Frequent changes in production plan
2. Focused Improvement Projects (FIPs) 2. Successfully completed 20 projects
3. Non availability of raw material
launched to improve downtime loss related to throughput improvement and
Steel/ Metals

4. High inventory at Finished Goods (FG) stage 10 additional projects resolving business
3. Focused Improvement Projects (FIPs)
problems
launched to key operational issues of the plant
3. All lines (CRM, CGL, ECL, SPM, BAF)
4. MIS system introduced that reports actual
demonstrated best production since
production along with Normalized production
commissioned during this engagement

1. Low prime yield due to defects 1. Gap analysis of performance to highlight key 1. Improvement of prime yield by 2%
focus areas
2. High scrap generation 2. Reduction in inventory levels by 30%
2. Improvement projects to be taken up based on
3. High inventories leading to high cost of interest 3. Streamlining of process of demand,
KPIs and gap analysis
materials and production planning
Steel/ Metals

3. Data collection and analysis ascertain cause 2 cross-functional teams and 10

and effect using tools like Ishikawa Diagram frontline operator level teams were
deployed focusing on routine
4. Implementation of improvements
management
5. Training of daily management tools
4. Measurement and monitoring system in
6. Deploy Cross Functional Daily Management place for sustaining improvements
Teams
7. Visual controls & early warning signals

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 Citations
Situation Approach Results
1. The client is a secondary steel manufacturer in central 1. Analysis of Inventory and identification of key 1. Reduction in overall inventory levels by
India causes for high inventory levels as well as 30%
ageing inventory
2. The client was faced with margin pressures due to rising 2. Streamlining of process of demand
costs and shifting demand 2. Mapping of planning processes and planning, materials planning and
Steel/ Metals

identification of gaps and improvement production planning

3. A cost reduction diagnostic helped unearth an opportunity
opportunities
to reduce working capital by optimizing inventory 3. 2 cross-functional teams and 10
3. Formation of cross-functional teams and frontline operator level teams were
handholding for data analysis, developing deployed
insights and implementing improvement
4. Measurement and monitoring system in
actions
place for sustaining improvements
4. Projects reviewing & monitoring structure

1. A leading secondary steel manufacturer in western India 1. Detailed diagnostic study with focus on 1. Demonstrated targeted throughput
that aims to be a front runner in flat products throughput improvement with a view to assess improvement of 32% for a period of 20
feasibility of producing targeted production per days
2. The Client wanted assistance at its newly commissioned
month
plant in assessing feasibility and identifying and 2. All lines (CRM, CGL, ECL, SPM, BAF)
Steel/ Metals

implementing processes and systems so as to increase 2. Establishing KPIs, baselines and targets demonstrated best throughput during
throughput and improve capacity utilization in Cold the engagement
3. Detailed roadmap to achieve agreed
Rolling, Galvanizing, Annealing, finishing and Color
improvement through focused improvement 3. Robust processes for routine
coating lines
as well as redefined processes and systems management were set in place
4. Implementation of action plan and
demonstrating agreed improvement

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 Citations
Situation Approach Results
1. A significant improvement required in the EBITA 1. FIP for reduction in Specific Consumptions 1. Changeover time is reduced by 50%
performance through operations optimization and cost
2. FIP for improvement in Yields 2. Productivity is improved by 25%
reduction
3. FIP for improvement in Availability 3. Feed loss instances in sponge iron plant
2. Systems and processes for sustenance of performance and
Metals rolling

has reduced by 43%

a continuous improvement culture 4. FIP for improvement in Productivity
4. Productivity at steel melting shops has
5. FIP for Set up Robust Maintenance
increased by 13%
Management Systems
6. Set up of cross functional team structure for
daily management

1. High Conversion Cost 1. We prepared improvement programs for 1. Reduced wastage of bottles and seals by
improving specific steam cost, bottling costs 30%.
2. Low throughput
and bottling process.
2. Steam Cost is reduced by 5-7%
3. High Logistics Cost
2. The project planned to address all the losses in
3. 5% improvement across 9 bottling lines
4. Permit Management – resulting in higher duties and the OEE loss tree an also the logistics cost
in 3 months
Additional cost of logistics to utilize permit quantities optimization
Beverages

4. Reduced logistics cost in Rupees per ton

per Km. by 10%
5. Improvement in Load ability per truck
by 2 – 5%
6. Overall benefits of 2 crs

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 Citations
Situation Approach Results
1. Unable to achieve energy savings targets laid by 1. Creation of complete energy map 1. Reduction in Aux. Power consumption
Government of India of co-gen power plant from 13% to 12%
2. Identified the excess consumption by
2. Cost of energy increase by 18% in last one year comparing with best practices and zero based 2. Reduction in steam consumption of
consumption figures straw fiber line by 1%
3. Unable to achieve targets in energy cost reduction
3. Segregated into eliminate, reduce, replace, 3. Reduction in steam consumption of
minimize and essential categories wood fiber line by 6%
Paper

4. Action planning was done for each category 4. Reduction in power consumption of
and implemented paper machine by 6%
5. Creation of complete energy map

1. Need for Reduction in conversion cost. 1. Rolling out Throughput improvement Model 1. EBITA improved to 14% from 2-3 %
that integrates concepts from Lean, Six Sigma
2. Need for Reduction in downtime to improve throughput 2. Yield has increased from 43% to 45.5%
and other breakthrough methodologies
3. Designing system to sustain improvements in operations. 3. Cost of raw material has decreased by
2. Focused improvement projects were taken in
4.7%
Paper

4. Bring in best practices to build a culture of continuous key areas for cost reduction
improvement 4. Copier production has increased by
66.67%
5. Paper machine downtime is decreased
from 12% to 3%

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 Citations
Situation Approach Results
1. Frequent changes in production plan 1. Mapped end to end process and captured the 1. 90% OTIF achieved through
expectations of the stakeholders improvements in delivery processes for
2. Capacity constraints at Production stage & high inventory
all lines
of Steel and Paints 2. Captured Voice of Customers through detailed
customer interviews 2. 3% improvement in Productivity (on
3. Frequent stock outs & changeover
account of process redesign)
3. Decoupled production for repeat orders of Key
4. Non availability of a system to track delivery performance
customers by stocking inventory at 3. 53% reduction in Set-Up time
Manufacturing facilities
4. 20% reduction in RM Inventory
4. Assigned dedicated capacity for Key Customers
Packaging: Drums and Barrels

and Rush orders

5. Established capacity and Infrastructure to
ensure feasibility of sales plan
6. Defined Standard Production and Transit Lead
time for each type of Barrel
7. Designed Inventory norms for RM, PM and FG,
at all stock points, to absorb demand variations
to minimize stock-outs
8. Identified bottlenecks and debottlenecked the
operations thereby enhancing productivity

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 Engagement tracks and roadmap
M1 M2 M3 M4 M5 M6 M7 M8 M9 M10 M11 M12
Asset Maintenance The 9 Step process
Practices

Capability Enhancement Launch workshop

iv e
On the job training and hand holding in implementation

Stores and Inventory

Management Inventory management

ra t
st
Inventory Categorization Equipment History
norms

Area Effectiveness

lu
Teams AET Formation KPIS and AET Boards KPI Tracking and Analysis

Il
Establishing
Responsibility and Collating activity Role grouping and Draft JD for
Finalize JDs Define KRA and KPI Linkage to PMS
data Stratification Positions
Accountability
Project Team
Project Identification Formation + Project Measurement and Action planning and
Sustenance closure
Project Team and goal setting analysis implementation
Project Identification Measurement and Action planning and charter
Focused Improvement Formation + Project Sustenance closure
and goal setting charter analysis implementation
Projects
Wave 1

SCOM SCOM SCOM SCOM SCOM SCOM SCOM SCOM SCOM SCOM SCOM SCOM

A detailed weekly plan shall be prepared in the first month of the engagement
SCOM: Steering committee meeting
arvind consulting group
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 Arvind Garg
Email: arvind @acgletters.com

Reach us at.. Mobile: +91 99102 26249

Rishi Ranjan
Email: [email protected]
Mobile: +91 98997 78237

Thank you!

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