The document discusses key performance indicators (KPIs) used by Ternium Siderar, a steel factory, to monitor maintenance performance. It outlines challenges in the steel industry, where cost is a key driver. Ternium Siderar uses KPIs to measure maintenance effectiveness, efficiency, and safety. Effectiveness KPIs include maintenance costs and downtime. Efficiency KPIs include jobs completed and spare part turnover. Safety KPIs track injuries. The author concludes Ternium Siderar has strong effectiveness KPIs but could improve efficiency measurement by tracking hidden costs like opportunity costs during downtime.
The document discusses key performance indicators (KPIs) used by Ternium Siderar, a steel factory, to monitor maintenance performance. It outlines challenges in the steel industry, where cost is a key driver. Ternium Siderar uses KPIs to measure maintenance effectiveness, efficiency, and safety. Effectiveness KPIs include maintenance costs and downtime. Efficiency KPIs include jobs completed and spare part turnover. Safety KPIs track injuries. The author concludes Ternium Siderar has strong effectiveness KPIs but could improve efficiency measurement by tracking hidden costs like opportunity costs during downtime.
The document discusses key performance indicators (KPIs) used by Ternium Siderar, a steel factory, to monitor maintenance performance. It outlines challenges in the steel industry, where cost is a key driver. Ternium Siderar uses KPIs to measure maintenance effectiveness, efficiency, and safety. Effectiveness KPIs include maintenance costs and downtime. Efficiency KPIs include jobs completed and spare part turnover. Safety KPIs track injuries. The author concludes Ternium Siderar has strong effectiveness KPIs but could improve efficiency measurement by tracking hidden costs like opportunity costs during downtime.
The document discusses key performance indicators (KPIs) used by Ternium Siderar, a steel factory, to monitor maintenance performance. It outlines challenges in the steel industry, where cost is a key driver. Ternium Siderar uses KPIs to measure maintenance effectiveness, efficiency, and safety. Effectiveness KPIs include maintenance costs and downtime. Efficiency KPIs include jobs completed and spare part turnover. Safety KPIs track injuries. The author concludes Ternium Siderar has strong effectiveness KPIs but could improve efficiency measurement by tracking hidden costs like opportunity costs during downtime.
A. THE MAYOR CHALLENGES FOR MAINTENANCE IN STEEL INDUSTRY .......................................................... 1
B. KPIS USED IN TERNIUM SIDERAR STEEL FACTORY ................................................................................... 2 1. Effectiveness Measures .................................................................................................................. 2 2. Efficiency Measures ....................................................................................................................... 2 3. Safety Measures ............................................................................................................................. 2 4. Consideration................................................................................................................................. 2 C. CONCLUSIONS ........................................................................................................................................... 3 D. APPENDIX 1: TERNIUM SIDERAR MAINTENANCE KPIS............................................................................ 4 1. Direct Maintenance Cost ............................................................................................................... 4 2. Diary Plant Downtime ................................................................................................................... 4 3. Pareto Downtime (6 month)........................................................................................................... 5 4. Efficacy-N Job Completed/Month ................................................................................................. 5 5. Workshop Backlog ......................................................................................................................... 6 6. Turnover of spare parts.................................................................................................................. 6 7. Frequency Index (FI), Gravity Index (GI)...................................................................................... 7 8. FI Benchmark................................................................................................................................. 7 E. APPENDIX 2 .............................................................................................................................................. 8 1. Figure 4.4 Efficiency & Effectiveness ......................................................................................... 8 2. Figure 1.5: Total Cost of Maintenance .......................................................................................... 8 F. REFERENCES ............................................................................................................................................. 9
A. The Mayor Challenges for Maintenance in Steel Industry
Nowadays, the COST is the key driver for Maintenance in the Steel Industry. To begin with the recent history of the Steel Industry, before the 90th decade, the Steel was considered as a nation strategic asset for military matters. After 1990, the privatisation process took place along the world. For the actual century more than 90% of Steel factories are controlled by private companies. This phenomenon produced an atomized steel market. According to the Word Steel Association, the mayor producer has less than 10% of the market sharei. Because of the atomized market, the steel Industry is a very competitive business in which there arent big players that can control the price. In this context the most efficient companies will buy the less efficient. It is a natural market process. What is more, The global steel industry has not escaped the current economic downturn and this will be reflected in the figures you see for the last quarter of 2008ii. The industry has responded rapidly with production cuts, to ensure supply matches demand. 2009 will be a difficult year in terms of profitability. There will be restructuring in the industry and this will be hard on those involvediii.
Production Evolution for 2008 Word Crude Steel Statistics (106 Tons)
Source: Word Steel Association
As maintenance is one department into the company, not a company of
maintenanceiv, the mayor challenge for maintenance in the steel industry is to maintain functions of equipments for a required time with maximum safety and minimal environmental impact for the life cycle cost at the less cost as possible.
B. KPIs used in Ternium Siderar Steel Factory
In order to check that the challenges are being met by the maintenance strategy, Ternium Siderar has the following KPIs (See appendix 1):
1. Effectiveness Measures -
Direct Maintenance Cost - Cost vs Budget (long term control)
Diary Plant Downtime (short term control)
Six Month Pareto Downtime (long term control)
2. Efficiency Measures -
N Job Completed / Month or day (long / short term control)
Workshop Backlog (short term control)
Turnover of spare parts (long term control)
3. Safety Measures -
Frequency Index (FI), Gravity Index (GI) (long term control)
Frequency Index Benchmark (long term control)
4. Consideration In Ternium Siderar we have a diary planning meeting between maintenance and production in which we analyse the diary plant downtime. Apart from this, in the workshop, the maintenance
department reviews the N Job completed/day and the backlog. The
rest of KPIs are being monthly analysed between maintenance and production department. Each KPIs has standard, targets and it is automatically obtain from the systems. (SAP, QNX). Everybody into Ternium Siderar could access to maintenance KPIs (Free Public Access). In this assignment, It has been presented the most representative Ternium Siderar Maintenance KPIs. These are only the 25% of the total SITE.
C. Conclusions In my opinion Ternium Siderar has developed a very good KPIs in the Maintenance Site in order to keep indicators on target. If I compare the Ternium Siderar KPIs with the Efficiency & Effectiveness diagram (see Appendix 2.1), we have developed very well KPIs to measure Effectiveness and we have opportunity to improve in Efficiency. According with the Industrial Steel context, I consider that the next step for Ternium Siderar is to begin to measure the Hidden Cost in direct form, for example the Cost/Downtime. We have automatically registered
every
downtime.
In
addition
to
this,
we
have
the
opportunity cost per unit process and the cost for the scrap that every downtime produced. We have everything in our systems, but we only display the visible part of the iceberg (see Appendix 2.2). Ternium Siderar must show the part of the iceberg behind of the water line in order to maintain the leadership in the steel industry.
D. Appendix 1: Ternium Siderar Maintenance KPIs
1. Direct Maintenance Cost
MAINTENANCE DIRECT COST
Year
Month Real
BUDGET
Dif.
Real
BUDGET
Dif.
Services Materials
Labour Contracts Others
2. Diary Plant Downtime
Maintenance Downtime
Total Month
DOWNTIME (Hours Frequency)
Cool Mill
Downtime Last Month
Frequency Frequency Month IGO
Frequency Last Month
Total Month IGO Frequency Month SAP
Downtime Total Last Month
3. Pareto Downtime (6 month)
Hours
PARETO DOWNTIME (6 Months)
SAP Equipment Number
4. Efficacy-N Job Completed/Month
5. Workshop Backlog
Work Orders
Workshop Backlog
Months
6. Turnover of spare parts
7. Frequency Index (FI), Gravity Index (GI)
8. FI Benchmark
E. Appendix 2 1. Figure 4.4 Efficiency & Effectivenessv
2. Figure 1.5: Total Cost of Maintenancevi
F. References
Top Steel Producers 2008, Word Steel Association, link:
http://www.worldsteel.org/?action=storypages&id=330 ii
Crude Steel Statistics 2008, Word Steel Association link:
http://www.worldsteel.org/?action=stats&type=steel&period=latest&month=13&year=2 008 iii
Ian Cristmas (2009), Director Generals column, Word Steel Newsletters 32, Word
