Metals Industry White Paper

DRAFT: Metals Industry Model

High Performance Process Excellence

Metals Industry Model Description

HPPE Metals Workshop, Frankfurt, February 2008

HPPE Metals Workshop, Frankfurt, February 19-21, 2008Accenture Proprietary and Confidential

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TABLE OF CONTENTS

ARTICLE I. INTRODUCTION......................................................................................4ARTICLE II. METALS ON A PAGE.............................................................................51. PLAN AND MANAGE THE ENTERPRISE..............................................................6

2.1. Develop Strategic Plans....................................................................................62.2. Provide Information Technology Strategy and Governance.........................62.3. Plan and Manage Financial Performance........................................................62.4. Provide Governance and Manage Risks.........................................................62.5. Manage Stakeholder Relations.........................................................................62.6. Manage Portfolio................................................................................................6

2. VALUE CHAIN.........................................................................................................62.1. Perform Sales and Operations Planning.........................................................6

2.1.1. Develop Demand Plan..............................................................................................62.1.2. Plan Supply and Inventory.......................................................................................82.1.3. Balance Demand and Supply....................................................................................92.1.4. Develop Integrated Production Plan and Schedule...............................................102.1.5. Maintain Planning Processes.................................................................................11

2.2. Provide Production Capability.......................................................................122.2.1. Identify, Evaluate and Select Projects....................................................................122.2.2. Build or Expand Capability....................................................................................132.2.3. Commission Production Capability and Perform Close-out..................................14

2.3. Source and Prepare Raw Materials................................................................152.3.1. Develop Raw Materials Plan..................................................................................152.3.2. Conduct Raw Material Sourcing............................................................................152.3.3. Prepare Raw Materials..........................................................................................16

2.4. Manage Production.........................................................................................172.4.1. Primary Operations..................................................................................17

2.4.1.1. Manage Operations............................................................................................172.4.1.2. Manage Product and Process Quality...............................................................18

2.4.2. Rolling, Forming and Finishing..............................................................192.4.2.1. Manage Operations............................................................................................192.4.2.2. Manage Product and Process Quality...............................................................20

2.4.3. Processing and Fabrication....................................................................212.4.3.1. Manage Operations............................................................................................212.4.3.2. Manage Product and Process Quality...............................................................22

2.5. Provide Operating Services............................................................................232.5.1. Provide Plant Services...........................................................................................232.5.2. Manage Utilities.....................................................................................................24

2.6. Maintain Production Capability......................................................................252.6.1. Perform Reliability Analysis...................................................................................252.6.2. Develop Maintenance Plans...................................................................................262.6.3. Plan and Manage Shutdowns.................................................................................282.6.4. Schedule and Execute Maintenance Work.............................................................292.6.5. Monitor Maintenance.............................................................................................30

2.7. Market and Sell Products................................................................................322.7.1. Develop Market Insight..........................................................................................322.7.2. Develop Marketing and Customer Strategy...........................................................322.7.3. Conduct Order Management..................................................................................34


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2.7.4. Manage Customer Relationships............................................................................362.8. Plan and Manage Supply Chain Network and Inventory..............................38

2.8.1. Develop Supply Chain Network Strategy...............................................................382.8.2. Plan and Manage Warehouses and Finished Inventory.........................................392.8.3. Plan and Manage Logistics....................................................................................40

2.9. Source and Supply Goods and Services.......................................................412.9.1. Perform Strategic Sourcing....................................................................................412.9.2. Execute Transactional Sourcing.............................................................................432.9.3. Manage Supplier Relationships..............................................................................442.9.4. Manage MRO Stores & Inventory..........................................................................45

3. SHARED SERVICES.............................................................................................453.1. Conduct Research and Development.............................................................453.2. Process Financial Transactions......................................................................453.3. Deliver Information Technology Services......................................................463.4. Develop Human Resources.............................................................................463.5. Manage Content and Data................................................................................463.6. Manage Environment, Health and Safety.......................................................46

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ARTICLE I. INTRODUCTION

This work is a result of the HPPE Metals Workshop that was held in Frankfurt, Germany during February 19-21, 2008. The objective for this workshop was to get industry teams ready to review, restructure, or fine-tune their specific Industry Assets in line with Accenture’s firm-wide “Powering-Up Industry” initiative.

This initiative will leverage Accenture’s Metals practice by providing projects with past experiences and giving methods to map new opportunities. The process model will help the identification of synergies among other Accenture Industry Practices. The workshop focus was on trying to identify archetypes for the Metals industry, refine the logical operating model, define leading practices and KPI’s while ensuring commonality across the various HPPE industry models that constitute the Chemicals and Natural Resources [CNR] group within Accenture.

The core objective of this document is to define and detail the changes that took place in the Metals industry process model.


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ARTICLE II.METALS ON A PAGE

The first level of the Metals industry process model is the Metals on a Page:

According to the taxonomy adopted in this work, the One Page Industry Model consists of Platforms, Capabilities Areas, Capabilities, Processes and Sub-processes.

Specifically for the Metals on a Page we have:

Three Platforms: Plan and Manage the Enterprise Value Chain Shared Services

These platforms were maintained consistent for all industries within CNR. The Capability Areas in the Value Chain Platform were further delineated to reflect the Forest Products industry processes. The capability areas, capabilities, process and sub-processes were renamed to reflect the nature of the actual processes that are carried out within them as described in the following pages.

1. PLAN AND MANAGE THE ENTERPRISE 2.1. Develop Strategic Plans


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2.2. Provide Information Technology Strategy and Governance2.3. Plan and Manage Financial Performance2.4. Provide Governance and Manage Risks2.5. Manage Stakeholder Relations 2.6. Manage Portfolio

The nomenclature for the capability areas that constitute this Platform were made common across the CNR industries.

2. VALUE CHAIN

2.1. Perform Sales and Operations Planning

This capability area was initially named as Planning and renamed as Develop Operational Plans. The capabilities that comprise this capability area were reordered to reflect the logical sequence of the planning process. Perform Sales and Operations Planning deals directly with planning activities and the linkage of Sales, Manufacturing, and Planning organizations. This is a very broad overview of planning encompassing base plant loading to statistical forecasting analysis.

2.1.1. Develop Demand Plan

This involves building an accurate prediction of the sales volume and revenue. This develops and maintains the sales, material requirements and industry production capacity forecasts. The forecasting process involves collecting relevant data, adjusting the data for known external forces and internal constraints. Sales forecasts include projections of requests for new production, customer shipments, finished inventory and the price at which sales will be made. Material requirements forecasts consider customer demand, product mix and production capacity, as well as raw material availability and anticipated prices for the materials. Develop Demand Plan focuses on collecting and synthesizing the various sources of demand (baseline statistical analysis, customer incentive plans, actual booked orders, product mix, and market intelligence) to generate a single unified demand plan. This is generally done on a monthly basis and is used an input to the overall S&OP process.

2.1.1.1. Generate Statistical Forecast


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This involves gathering historical data and generating a baseline statistical demand forecast. Statistical techniques are used to extrapolate historical demand to generate a forecast. The correct statistical techniques need to be selected for each item (or group of similar products) based on its characteristics and demand pattern. Simulations can be run testing various techniques against historical demand to identify the appropriate technique for each item or product group.

2.1.1.1.1. Review Prior Month Forecast versus Actual to Understand Bias and Error

2.1.1.1.2. Test Key Mix and Seasonality Assumptions2.1.1.1.3. Collect Sales History and Leading Economic Indicators2.1.1.1.4. Generate 12-18 Month Rolling Statistical Forecast2.1.1.1.5. Publish "baseline" Statistical Forecast and Underlying Data

2.1.1.2. Identify Demand Events

This Process involves evaluating the demand based on existing contract and capturing customer growth and future programs

2.1.1.2.1. Review Customer Growth/Incentive Programs2.1.1.2.2. Review Status of Large Jobs2.1.1.2.3. Review Status of Large Contracts

2.1.1.3. Identify Product Changes

Understand Markets & Buyer Values focuses on conducting qualitative and quantitative assessments of market trends, competitors and consumer purchasing behavior to identify opportunities for new or improved product, and service offerings.

2.1.1.3.1. Update Changes to Value Proposition2.1.1.3.2. Review Product/Service Introduction and Discontinuation

2.1.1.4. Adjust Forecast

This involves understanding and identifying different demand events in collaboration with distributors, agents and other sales channels. Then a final adjusted forecast is developed.

2.1.1.4.1. Integrate Market Intelligence2.1.1.4.2. Produce Adjusted Forecast from Baseline Statistical Forecast

2.1.1.5. Generate Demand Plan


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Demand plan is generated based on forecast of future sales , promotion plans, store conditions, seasonality, product life cycles, causal factors/leading indicators and other anticipated future events/market intelligence. This forecast is then passed to supply planning in order to drive the creation of plans to fulfill the demand.

2.1.1.5.1. Review and Refine Adjusted Forecast2.1.1.5.2. Incorporate Changes in Inventory Policy to Produce Initial

Demand Plan2.1.1.5.3. Update Demand Panning Scorecard (KPI's)2.1.1.5.4. Identify Significant Changes to Baseline Forecast vs. Last

Month’s Baseline Forecast2.1.1.5.5. Identify Major Variations between Baseline and Macro

market Intelligence Forecasts and any Significant Forecast Trends

2.1.1.5.6. Highlight Key Exceptions/Issues2.1.1.5.7. Distribute Demand Planning Meeting Agenda, Adjusted

Forecasts and Initial Demand Plan2.1.1.5.8. Hold Demand Planning Meeting2.1.1.5.9. Release Consensus Demand Plan

2.1.2. Plan Supply and Inventory

This involves understanding supply flexibility and constraints for both internal & external entities (Capacity, inventory limits and lead time) and creation of a feasible supply plan aligned with sales & operating plan. It focuses on ensuring that available capacity/inventory is allocated to the right customers, distributors, and channels in accordance with the company's objectives and policies. This includes setting inventory targets, the valuation methodology, means of managing shortages and planning distribution. Plan Supply & Inventory focuses on evaluating the material supply and overall capacity available in the network. The process begins with an unconstrained Rough Cut Capacity Plan and Supply Plan. Then capacity and material supply constraints are imposed to look at alternatives to develop a realistic supply and capacity plan. Example constraints include labor, material requirements, technology, manufacturing, maintenance, and logistics. Another major area contained here is the inventory planning for the main inventory storage points (e.g. slab, hot roll, cold roll, and FG). The primary out put of this capability area is the Initial Supply and Capacity Plan.

2.1.2.1. Generate and Publish Rough Cut Capacity Plan


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This involves developing of an unconstrained supply/ capacity plan by identifying and simulating different production scenarios

2.1.2.1.1. Generate Unconstrained Capacity Plan from Demand Plan and Historical Run Rates

2.1.2.1.2. Resolve Alerts2.1.2.1.3. Apply Disaggregation Rules

2.1.2.2. Evaluate Production Scenarios

This involves analyzing the present business and logistics profile and gathering of data to simulate different supply chain scenarios

2.1.2.2.1. Define Supply Scenarios2.1.2.2.2. Evaluate Impact & Determine Action2.1.2.2.3. Publish Outputs from Scenarios2.1.2.2.4. Adjust RCCP Parameters

2.1.2.3. Plan Supply

This involves understanding supply flexibility in terms of identifying the different sourcing options to fulfill customer demand

2.1.2.3.1. Aggregate Demand and Net Out Committed Orders2.1.2.3.2. Evaluate Sourcing Options2.1.2.3.3. Create Initial Supply Plan

2.1.2.4. Apply Constraints

This involves understanding constraints for both internal & external entities (Capacity, inventory limits, lead time) and then adjusting the supply plan for these external forces and internal constraints.

2.1.2.4.1. Identify Labour Constraints2.1.2.4.2. Identify Material Requirement Constraints2.1.2.4.3. Identify Customer/ Technological Constraints 2.1.2.4.4. Identify Manufacturing Plant Constraints2.1.2.4.5. Identify Internal/ Outbound Logistics Constraints2.1.2.4.6. Understand Maintenance Constraints (Long Term

Maintenance Plan)

2.1.2.5. Refine Supply and Capacity Plan

This involves a review of the supply plan and process to identify and resolve any alerts/ exceptions that may be present. This involves establishment of a collaborative effort with channel partners to efficiently meet all supply obligations

2.1.2.5.1. Release Adjusted Supply Plan2.1.2.5.2. Update Infrastructure Requirements


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2.1.2.6. Plan Inventory

Through this process appropriate stocking levels and inventory locations are determined. The age and turnover relative to sales is monitored and managed in the process. This deals with mechanisms for tracking and reporting inventory at various stages (finished, WIP, etc) and performing valuation of the inventory.

2.1.2.6.1. Monitor Stock Levels2.1.2.6.2. Run Safety Stock Scenarios 2.1.2.6.3. Generate Replenishment for MTS and Finish to Order to

Match New Safety Stock Scenarios2.1.2.6.4. Resolve Alerts & Recommend Actions2.1.2.6.5. Plan Deployment Distribution 2.1.2.6.6. Publish Initial Supply and Capacity Plan

2.1.3. Balance Demand and Supply

Balance Supply & Demand is the capability area where the Demand plan and the Supply plan come together to generate the constrained Master Plan. This Master Plan is generally done at the product family level and then allocated to the plants to develop the plant loading. Optimization scenarios should be run of different options in order to develop this plan. As part of this process, pro forma financials should be run to help evaluate alternatives. The output of this capability is the Master Schedule / Demand Plan that will feed the actual S&OP process.

2.1.3.1. Integrate Demand and Supply

The planning processes associated with anticipating customer demand and managing product availability in a manner that minimizes supply chain cost while meeting service objectives.

2.1.3.1.1. Compare Demand & Supply2.1.3.1.2. Calculate Net Forecast (forecast-orders)2.1.3.1.3. Optimize Supply & Demand Profile2.1.3.1.4. Evaluate & Select Best Demand/ Supply Plan(s) - Create

Master Plan2.1.3.1.5. Ratify and Publish "Best"/ Master Plan (constrained forecast)2.1.3.1.6. Generate Critical Raw Material Supply Plan

2.1.3.2. Manage Allocation


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Manage Allocations focuses on ensuring that available capacity/inventory is allocated to the right customers, distributors, and channels in accordance with the company's objectives and policies. When demand exceeds supply for a given product, the process of developing and implementing an allocation plan becomes critical to achieving strategic goals and meeting profitability objectives.

2.1.3.2.1. Distribute Allocation Plan (sales quotas, finished/semi-finished/raw materials and facility capacity quotas)

2.1.3.2.2. Perform Allocation2.1.3.2.3. Publish Allocations

2.1.3.3. Set Revenue, Cost and Associated Operational Targets

In this process financial statements of each operating scenario are calculated and published. Also the supply chain KPI’s are identified.

2.1.3.3.1. Calculate Financial Statement for each Operating Scenario2.1.3.3.2. Analyze Supply Chain KPI's (logistics, commercial)2.1.3.3.3. Publish Adjusted Demand Plan and Financial Statement

2.1.4. Develop Integrated Production Plan and Schedule

Develop Integrated Production Plan and Schedule takes the Master Schedule as input into the S&OP process meetings to finalize this plan, allocate specific production orders, and then detail schedule/sequence the orders to the plants. The processes in this capability look at the specific plant level constraints to generate realistic production plans and then utilize detailed rules to perform the lowest level order/item sequencing.

2.1.4.1. Update Rolling Month/Weekly Production Plan

The typical time horizons for the Maintain Master Plan & Schedule sub-process range from 3 – 6 months, and are updated on a rolling basis so that the time horizon is always maintained

2.1.4.1.1. Perform Sales/Operation Process2.1.4.1.2. Allocate/ Reallocate Quotas2.1.4.1.3. ATP Process Needs to Supply Planned Orders (date, quantity

and SKU)2.1.4.1.4. Overlay Production Plan with Maintenance Plan

2.1.4.2. Optimize Production Plan


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This process reviews the possible production constraints and identifies the opportunities to adjust the production orders based on the constraints. It identifies the shortages or excess of products by balancing the production plan

2.1.4.2.1. Review Production Constraints2.1.4.2.2. Review Opportunity to Adjust Production Orders (quantity

and date)2.1.4.2.3. Balance Production Plan Components2.1.4.2.4. Address Shortage/ Excess of Product

2.1.4.3. Release Integrated Production Plan

This process generates the integrated production plan. It finalizes the requirements plan and the production routings and processes

2.1.4.3.1. Produce Production Plan2.1.4.3.2. Release Orders2.1.4.3.3. Confirm Requirements Plan2.1.4.3.4. Adjust Campaign Cycles to Reflect Actual Mix2.1.4.3.5. Coordinate/Optimize Multi-step Production Processes

(minimize order processing time and cost)'2.1.4.3.6. Analyze Production Process Routings

2.1.4.4. Prepare Detailed Schedule

This process focuses on the preparation of the final master schedule and monitoring the effectiveness of the schedule

2.1.4.4.1. Manage Rule for Equipment Operation2.1.4.4.2. Allocate Materials to Orders2.1.4.4.3. Schedule, Route & Sequence Production Orders2.1.4.4.4. Create & Manage Secondary Schedule2.1.4.4.5. Communicate Schedule & Sequence2.1.4.4.6. Measure Schedule Effectiveness

2.1.5. Maintain Planning Processes

Maintain Planning Processes covers the maintenance of data and models that are needed as inputs and parameters into the planning processes. These include but are not limited to statistical forecast models, production models, customer constraints, market intelligence, production standards, production costs, service levels, safety stock levels, and equipment capacity standards.

2.1.5.1. Maintain Demand Parameters


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All the parameters used in determining the statistical models, the forecasting techniques and the assumptions made are maintained and updated timely.

2.1.5.1.1. Define Planning Parameters2.1.5.1.2. Maintain Statistical Forecast Models 2.1.5.1.3. Adjust Weightings of Input Models and Data2.1.5.1.4. Identify Major Customers' "State of Business" (sales,

inventory, suppliers)2.1.5.1.5. Collect Data on Changes in Business Policies (ABC customer

and product segmentation) and Market Conditions2.1.5.1.6. Collect Macroeconomic Data/Market Intelligence2.1.5.1.7. Update Competitor "State of Business" (pricing and capacity)2.1.5.1.8. Determine Ideal Production Campaign Cycles

2.1.5.2. Supply and Capacity

Production standards and production costs are updated and maintained.

2.1.5.2.1. Update Production Standards2.1.5.2.2. Update Production Costs

2.1.5.3. Set Safety Stock Levels

Information regarding the inventory planning like the service levels, lead times, performance, forecasting accuracy records and the parameters are maintained and kept updated.

2.1.5.3.1. Determine Service Level Inputs2.1.5.3.2. Input Lead Times2.1.5.3.3. Input Production Performance2.1.5.3.4. Input Forecast Accuracy2.1.5.3.5. Generate and Publish Inventory Plan2.1.5.3.6. Manage Parameters

2.1.5.4. Maintain Planning Models

Maintain Planning Processes covers the maintenance of data and models that are needed as inputs and parameters into the planning processes.

2.1.5.4.1. Maintain Production Models2.1.5.4.2. Maintain Equipment Capacity, Run Standards2.1.5.4.3. Fine-tune Optimization Algorithms2.1.5.4.4. Adjust Weighting Factors for Operating Scenario Analysis

(WIP, production cost, facility utilization, service levels)

2.2. Provide Production Capability


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2.2.1. Identify, Evaluate and Select Projects

This is carried in-order to assess the economic, technical and operational viability. The pre-feasibility study results have a confidence level of 25% whereas the feasibility study results are close to 10% confidence level. The steps involved in pre-feasibility and feasibility studies differ in the extent of detailed tests and analysis and the confidence levels as mentioned above.

2.2.1.1. Create Conceptual Project

This process deals with the planning of project which is required to de-bottleneck the constrained. Here investment initiatives are assessed and scope of project is defined.

2.2.1.1.1. Re-assess Investment Initiative2.2.1.1.2. Define Scope2.2.1.1.3. Define High Level Process2.2.1.1.4. Identify Logistics Alternatives2.2.1.1.5. Identify EHS and Legal Requirements2.2.1.1.6. Perform Risk Analysis2.2.1.1.7. Update Business Case

2.2.1.2. Approve Conceptual Project and Proceed

This process deals with the reassessment and feasibility analysis of conceptual project. If the project goals meet the investment return and all legal requirement, the conceptual project is approved for further action.

2.2.1.2.1. Review and Approve Conceptual Project2.2.1.2.2. Authorize to Proceed

2.2.1.3. Create Basic Project

This process deals with the re-assessment of conceptual project which is required to de-bottleneck the constrained. Investment initiatives are again re-assessed and scope of project is re-defined and updated.

2.2.1.3.1. Re-assess Conceptual Project2.2.1.3.2. Refine Scope2.2.1.3.3. Define High Level Process2.2.1.3.4. Identify Logistics Alternatives2.2.1.3.5. Identify EHS and Legal Requirements2.2.1.3.6. Update Risk Analysis2.2.1.3.7. Define Sourcing Alternatives Plan2.2.1.3.8. Update Business Case

2.2.1.4. Approve Basic Project and Proceed


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This process involves the review of basic project. If the project is feasible from investment point of view, it is approved and forwarded for project engineering.

2.2.1.4.1. Review and Approve Basic Project2.2.1.4.2. Authorize to Proceed to Engineering

2.2.1.5. Prepare Program

This process deals with the identification and development of all the resource requirement planning and creation of WBS.

2.2.1.5.1. Identify and Plan Resources (Organization)2.2.1.5.2. Define WBS2.2.1.5.3. Plan the Detailed Design (overall plan)2.2.1.5.4. Define Stds, Tools & Procedures(Methodology)

2.2.1.6. Perform Project Engineering and Design

This process involves the development of details of the project, selection of technology and detailing of design and engineering.

2.2.1.6.1. Detail Basic Project2.2.1.6.2. Research & Define Technologies2.2.1.6.3. Simulation Process2.2.1.6.4. Develop Detailed Engineering

2.2.1.7. Prepare Detailed Plans

After confirming the technology and basic project engineering, the scope of project is confirmed. Various process stages are defined and approved and finally the master plan for project activity execution is created.

2.2.1.7.1. Confirm Scope2.2.1.7.2. Detail Process Stages2.2.1.7.3. Create Master Plan

2.2.1.8. Approve Program

This process deals with the review of master plan with baseline scope, cost and time lines, which is defined in feasibility study. After reassessing the master plan, the project is approved for further action.

2.2.1.8.1. Compare Baseline2.2.1.8.2. Update Business Plan2.2.1.8.3. Approve Program2.2.1.8.4. Authorize Work

2.2.2. Build or Expand Capability


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This is the where the detailed plans and designs created in the earlier capability are executed and work is carried out to develop the mine/ implement the project. The process manage program was added to reflect the activities of PMO.

2.2.2.1. Procure Goods And Services

This process involves the development of all resource requirements. For special equipment detailed engineering specification & required drawing are developed and material procurement process starts.

2.2.2.1.1. Define Sourcing Requirements2.2.2.1.2. Support Procurement Process2.2.2.1.3. Manage Contracts

2.2.2.2. Setup Construction/ Development Work

This process deals with the review and setting up the work plan, assigning task to designated team and final review of plan to execute the project activity.

2.2.2.2.1. Review Plan and Set up Work Activities2.2.2.2.2. Assign Tasks2.2.2.2.3. Conduct Early Access Examination2.2.2.2.4. Perform Final Setup Tasks

2.2.2.3. Mobilize Construction/ Development

This process deals with the arrangement of equipment, material and labor at the project work site. This involves the focused project stores with formalized inventory control. Time and attendance for contract work force recorded.

2.2.2.3.1. Access Premises2.2.2.3.2. Collect Personal Equipment2.2.2.3.3. Move Material/Equipment and People to Work Location2.2.2.3.4. Record Time and Attendance

2.2.2.4. Execute and Approve Work

This process involves the execution of master plan. The work quality is monitored by project team. After inspecting the specification and parameters of performed work, confirmation about the completion of work is issued.

2.2.2.4.1. Perform Work2.2.2.4.2. Inspect Work Quality2.2.2.4.3. Approve Work Performed

2.2.2.5. Manage Program


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This process involves the managing and coordination of project work. This includes the availability of all required resources at required time.

2.2.2.5.1. Establish PMO2.2.2.5.2. Execute PMO

2.2.3. Commission Production Capability and Perform Close-out

This is where the different facilities/ equipments and machines are test-run to ensure operating parameters have been complied with and the necessary alterations are carried out before handing over the facilities to operations and maintenance. The completed facilities and handed over for operation and maintenance and post-implementation audits are conducted to ascertain whether the business case has been satisfied.

2.2.3.1. Conduct Cold Commissioning

This process involves the initial phase of commissioning of project. Here the critical works are thoroughly checked and verified against the available drawing. In some cases equipments are tested by running them under unloaded condition. Based on the inspection the detailed cold commissioning report is prepared.

2.2.3.1.1. Define Commissioning Approach2.2.3.1.2. Prepare Cold Commissioning Plan2.2.3.1.3. Execute Cold Commissioning2.2.3.1.4. Prepare Cold Commissioning Report

2.2.3.2. Conduct Hot Commissioning

Based on the detailed cold commissioning report, all equipments are tested, if any deficiencies found are corrected. Then hot commissioning plan is prepared and complete project facility is hot commissioned off-line under loaded condition. Based on trial run detailed report is prepared and observed deficiencies are corrected.

2.2.3.2.1. Pretest All Equipment to be Commissioned2.2.3.2.2. Correct Deficiencies2.2.3.2.3. Revise Commissioning Approach2.2.3.2.4. Prepare Hot Commissioning Plan2.2.3.2.5. Execute Hot Commissioning2.2.3.2.6. Prepare Hot Commissioning Report

2.2.3.3. Conduct Training


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This process deals with the training part of operation crew. The project team prepare training material, comprehensive plan and involve the operation staff in the hot commissioning process of project facility.

2.2.3.3.1. Develop Training Materials2.2.3.3.2. Prepare a Comprehensive Training Plan2.2.3.3.3. Provide Operation & Maintenance Training for Staff2.2.3.3.4. Evaluate Training Effectiveness

2.2.3.4. Hand Over Completed Capability

This process deals with the complete hand over of project facility after commissioning and training to the operation staff. This includes end users performing a final quality inspection. On completion of all quality actions, end user signs the acceptance of facility and takes the ownership of operating manuals.

2.2.3.4.1. Handover to Operations & Maintenance2.2.3.4.2. Perform Quality Inspection2.2.3.4.3. Sign Acceptance

2.2.3.5. Close Project / Work Package

This process deals with the storing of unused material back in the stores and also the release of labor for deployment else where. Project team records final “as built changes and finalized the costing and internal change-outs. Close out is performed for each work package.

2.2.3.5.1. Return Unused Materials2.2.3.5.2. Release Labor & Materials2.2.3.5.3. Record Final “As built” Changes2.2.3.5.4. Finalize Costing & Internal Charge-outs

2.2.3.6. Conduct Post-Implementation Audit

This process involves the post implementation audit of project. This establishes whether the project terms reference were met as well as captures the specific knowledge gained during the project , which can be reused for subsequent work.

2.2.3.6.1. Perform Post Implementation Audit2.2.3.6.2. Capture Specific Knowledge Gained2.2.3.6.3. Review the Business Case

2.3. Source and Prepare Raw Materials


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2.3.1. Develop Raw Materials Plan

In this process material requirement plan is developed based on the production plan. It considers the inventory levels, historical data of material consumption to generate the raw materials plan.

2.3.1.1. Analyze Production Plan

This process analyses the overall production output relative to input. It analyzes the demand for raw materials by item to understand the impact on the output. It also analyses the possible constraints on through put.

2.3.1.1.1. Establish Overall Throughput2.3.1.1.2. Understand Demand by Sub-items to Test for Impact on

Consumption Rates2.3.1.1.3. Analyze Constraints on Throughput

2.3.1.2. Estimate Consumption

It lists out the raw materials required for production along with its specifications. Based on the list it analyzes the consumption figures of each raw material by final output.

2.3.1.2.1. List Key Raw Materials and Specification2.3.1.2.2. Analyze Planned Throughput by Final Product2.3.1.2.3. Estimate Required Quantities by Each Raw Material by

Supplier (this may vary depending upon source -- different materials may different process yields)

2.3.1.3. Review Inventory Level

After coming up with the estimated consumption figures, the current inventory levels are compared with the historical data and based on this analysis, future inventory levels are projected.

2.3.1.3.1. Gather Current Inventory Levels of Main Raw Materials2.3.1.3.2. Project Future Inventory Levels based on Current and

Projected Consumption

2.3.1.4. Plan and Communicate Demand by Item

Based on the requirements and consumption estimates, final inventory levels, projected demand estimate and any new material requirements are planned. The quality parameters of the raw materials are also finalized. Mitigation plans are defined for stock outs and any kind of quality deviations. Then the demand and consumption plans are communicated.

2.3.1.4.1. Analyze Inventory Levels and Projected Demand Estimate Amount of New Requirement by Type of Raw Material

2.3.1.4.2. Set General Quality Parameters


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2.3.1.4.3. Define Mitigation Plans for Stock Outs and Quality Deviations

2.3.1.4.4. Elaborate and Document all Necessities2.3.1.4.5. Communicate Demand/Consumption Plan

2.3.2. Conduct Raw Material Sourcing

Based on the raw material requirement plan, sourcing options are analyzed and finalized. Then purchase department is informed with the procurement plan.

2.3.2.1. Analyze Demand Plan

This process analyses the overall demand of raw materials for throughput. It lists out the raw materials required for production along with its specifications. It plans the quantities required and identifies the constraints in raw material handling.

2.3.2.1.1. Check Raw Materials Overall Demand2.3.2.1.2. Analyze Specifications of Items2.3.2.1.3. Confirm Quantities2.3.2.1.4. Identify Constraints on Unloading, Storage and Consumption

Parameters

2.3.2.2. Check Consumption History and Inventory Procedures

Based on the list or raw materials required, it analyzes the historical consumption data of raw material and projects the future consumption figures for each raw material by item. After coming up with the estimated consumption figures, the inventory procedures, constraints and sourcing are reviewed.

2.3.2.2.1. Evaluate Consumption History by Item2.3.2.2.2. Check Inventory Procedures, Constraints, Resourcing Points

2.3.2.3. Analyze Sourcing Options

In this process the sourcing options for the raw materials are identified. The current ongoing contracts are reviewed, sourcing modes and potential suppliers are defined. Logistics, quality constraints are checked. Burden optimization of raw materials is conducted.

2.3.2.3.1. Verify Current Contracts by Item2.3.2.3.2. Define Sourcing Modes (shipping, rails, trucks) and Potential

Suppliers2.3.2.3.3. Analyze Pile and Inventory Levels, Estimated Consumption

and Procurement Needs2.3.2.3.4. Establish Procurement Timeline and Responsibilities2.3.2.3.5. Check Logistics, Quality and Other Related Constraints2.3.2.3.6. Trigger Interaction with Suppliers (RFI, RFP, Contract

Renewal, etc.)


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2.3.2.3.7. Conduct High Level Optimization of Raw Material Burden by Considering Projected Costs of Delivered Raw Materials and the Associated Cost of Conversion -- as Required Iterate Back to Develop Raw Materials Plan

2.3.2.4. Conduct Procurement

In this process the procurement targets are finalized. The suppliers and contracts are selected through negotiation. These contracts are finalized once these proposals are analyzed by the final users.

2.3.2.4.1. Define Procurement Targets by Item (quantities, target price, quality, timeline)

2.3.2.4.2. Select Suppliers and/or Contracts2.3.2.4.3. Conduct Negotiation2.3.2.4.4. Involve Final Users to Analyze Proposals2.3.2.4.5. Select Primary Suppliers and Contingencies

2.3.2.5. Monitor Delivery

The deliveries are monitored to maintain time deliveries and quantities.

2.3.2.5.1. Follow Time Deliveries and Quantities2.3.2.5.2. Analyze Quality and Overall Processing Feedback2.3.2.5.3. Document Lessons Learned

2.3.3. Prepare Raw Materials

Based on the sales order and product requirements, production department schedules its production is such a way so as to maximize its production with optimum use of the raw materials and resources.

2.3.3.1. Understand Production Scheduling and Campaigns

The in process checking of inventory and the work in process is analyzed on continuous basis. The quality plan for the products is made to meet product quality requirements.

2.3.3.1.1. Verify Total Demanded Output2.3.3.1.2. Check Inventory Availability2.3.3.1.3. Analyze Quality Specifications

2.3.3.2. Define/Analyze Furnace Parameters

In this process based on the product requirements, the output parameters are set. Plans are established for grades to be blended to achieve final product output and all the process parameters and settings are defined.

2.3.3.2.1. Set Output Parameters2.3.3.2.2. Establish Plan of Grades to be Blended


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2.3.3.2.3. Define Feed Control in Accordance with Rated Capacity

2.3.3.3. Prepare Sinter/Briquette/Additives

This process explains the detailed procedure for preparing Sinter/Briquette/Additives for production.

2.3.3.3.1. Marshal Material and Position it for Consumption2.3.3.3.2. Sample for Quality Analysis

2.3.3.4. Prepare Reductants

In this process the reductants required for production are identified and their preparation is explained in detail.

2.3.3.4.1. Analyze Finish Products Specifications2.3.3.4.2. Match Specifications and Quantities

2.3.3.5. Monitor Materials Performance

In this process the raw materials performance in terms quantities used, procurement process, and quality is monitored.

2.3.3.5.1. Keep Track of Campaign Performance and Raw Materials Used

2.3.3.5.2. Maintain Individual Figures by Type of Material/ Batch/Supplier

2.3.3.5.3. Provide and Discuss Process Performance Analysis with Procurement, Materials Management and Operations

2.3.3.6. Perform Process and Material Research and Improvement

In this process the material analysis data is provided to the labs for research and to develop any improvement plan for processes.

2.3.3.6.1. Provide Data to Labs and External Research/Quality Entities2.3.3.6.2. Establish Pilots with New Materials, Additives and

Reductants2.3.3.6.3. Provide Feedback to Suppliers2.3.3.6.4. Develop Improvement Plans for Main Processes/Raw

Materials

2.4. Manage Production

2.4.1. Primary Operations


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2.4.1.1. Manage Operations

Primary Operations includes smelting, refining, secondary melting and treatment through production of first solid form of metal ready to be rolled, extruded or processed further. It would include casting – ingot and continuous whether it be to slab, bloom, billet or strip.

Smelting operations usually produce a generic product which is further refined and customized through alloying and other treatments. As such, it tends to be a process operation akin to chemical refining. The customization process often occurs in batches at which point individualized tracking is required.

Primary operations tend to function most efficiently when operated to minimize variability despite the inherent variations that occur due to incoming raw materials and the variety of chemical / physical characteristics of final product to be produced

2.4.1.1.1. Burden Optimization (Short Term)

Short term burden optimization is critical to cost efficiency. There is a short term need to work with the amounts and properties of the raw materials actually available – decisions must be made “on the run” as the anticipated requirements for product have changed or there are deviations in the properties in of the raw materials. Adjustments of operating parameters may need to be made to accommodate fluctuations in the materials available. Those adjustments seek to minimize overall costs while producing the targeted level and characteristics of output to satisfy customer demand.

2.4.1.1.1.1. Confirm Required Characteristics of Produced Product2.4.1.1.1.2. Evaluate the Degree of Availability of Materials2.4.1.1.1.3. Identify Feasible Burden Options2.4.1.1.1.4. Optimize Quality/Cost Tradeoff

2.4.1.1.2. Run and Record Production

This process is directing personnel to operate equipment to produce a specified amount of material having a set of pre designated properties. The direction of personnel should ideally include the procedures by which they are to undertake their task and measurements of their success in following the direction includes also their degree of compliance in following the procedures.

2.4.1.1.2.1. Dispatch Production Activities2.4.1.1.2.2. Execute Activities2.4.1.1.2.3. Monitor Production Activities2.4.1.1.2.4. Record & Report Production Results


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2.4.1.1.3. Process Excellence

These are the processes which frequently distinguish high performance operations from others. It establishes the metrics by which the operation will be measured and therefore the priority of efforts. Data Collection and Analysis is the process of collecting data regarding the Performance Measures that have been defined. It is more specific for analyzing against the defined metrics. It can also be used for problem solving and directing improvements. Effective Continuous Improvement Programs distinguish high performance operations. Supervision and workers are engaged in using data to drive improvement in consistency, costs and throughputs.

2.4.1.1.3.1. Define Performance Measurements2.4.1.1.3.2. Data Collection and Analysis2.4.1.1.3.3. Continuous Improvement Program Application

2.4.1.1.4. Supervision

Supervision is the application of leadership. It is an intangible, but it is an essential ingredient in high performance. First line supervision is particularly critical to assure compliance to procedures -- especially those associated with safety. The quality of supervision is the “hidden force” that motivates personnel to follow procedures and maintain a positive work ethic. Supervision includes scheduling personnel according to the needs of the operation within the constraints of company regulations or collective bargaining agreements.

2.4.1.1.4.1. Labor Scheduling and Management2.4.1.1.4.2. Overhead Management2.4.1.1.4.3. Apply Leadership

2.4.1.2. Manage Product and Process Quality

Manage Product and Process Quality focuses on assuring that the inputs to the process are within the quality parameters and these parameters are set to be meaningful to the cost, quality, and safety of the operations. The goal of this process area is use the right limits and specs to create the right product the first time while minimizing scrap, rework, and the overall cost of poor quality work.

2.4.1.2.1. Manage Quality of Inbound Materials and Supplies


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Quality management of inbound materials has a structured approach to assessing the properties of incoming raw materials and their degree of compliance to pre-established specifications.

2.4.1.2.1.1. Identify Materials which have to be Controlled2.4.1.2.1.2. Set Acceptance Limits2.4.1.2.1.3. Notify Procurement of Material Requirements2.4.1.2.1.4. Testing and Sampling2.4.1.2.1.5. Notification

2.4.1.2.2. Monitor Process

The process of transforming raw material to product must be controlled. The parameters essential achieving the required results need to be identified. Once the parameters that need to be controlled have been identified then control limits established. Those control limits establish the lower and upper boundaries for the measurement of the parameter to be considered “under control.”

2.4.1.2.2.1. Process Parameter Identification2.4.1.2.2.2. Control Parameters2.4.1.2.2.3. Measure Parameters2.4.1.2.2.4. Evaluate Process Data

2.4.1.2.3. Establish Mill Limits and Campaign Parameters

Production facilities for metals have limitations on the products that can be produced. Those limits may be in the form of the chemistries that can be provided due to absence of essential equipment (e.g. vacuum degasser to produce IF steels). Those limits have to be documented in the form of the specification that can be produced.

2.4.1.2.3.1. Identify Reasons for Limits and Sequences of Production to be Grouped

2.4.1.2.3.2. Evaluate Trade-offs between Cost of Operation, Quality, Inventory and Customer Service

2.4.1.2.3.3. Set Parameters and Communicate to S&OP Process

2.4.1.2.4. Inspect Product

Although incoming raw materials and transformation process have been assessed to be within specifications there is a requirement to test whether the output is within the chemical and physical properties that were specified when the instruction to produce was provided. There may be fluctuation in a non monitored process parameter or other issue which causes a deviation.

2.4.1.2.4.1. Define Product Acceptance Parameters2.4.1.2.4.2. Capture Product Characteristic Data


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2.4.1.2.4.3. Evaluate Product Characteristic Data

2.4.1.2.5. Perform Out of Parameter Disposition

In even the best operations some out of parameter material gets produced. Best practice is to maximize the value of that material through informed disposition. That disposition might include treating the product in some way to eliminate the defect, reapplying it to another less stringent requirement or sending it to be re melted.

2.4.1.2.5.1. Determine Parameters and Degree Product is Out of Specified Tolerance

2.4.1.2.5.2. Conduct Material Disposition

2.4.1.2.6. Dispose Quality Claims

This process deals with the quality claims disposing methodology.

2.4.1.2.6.1. Option Identification 2.4.1.2.6.2. Material Direction (scrap, reprocess, reassign)

2.4.1.2.7. Manage Certifications

Frequently material must be tested and certified as to its properties. In primary operations the certification is usually in regard to the chemical properties of the material produced. The process of managing certifications covers the request for the certification, the accreditation of the lab and/or testing process, the conducting of the tests, the recording of the of the tests and the reporting of the results.

2.4.1.2.7.1. Test Material2.4.1.2.7.2. Issue Certification

2.4.2. Rolling, Forming and Finishing


Semi-Finished Transformation converts the solid form from Primary Operations into products which are used by manufacturers. The input solid forms can be produced by facilities within the enterprise (including transfers from remote facilities) or purchased from other companies. Semi-Finished transformation typically requires the handling and processing of discrete units, e.g. transforming a distinct slab into a coil. Each step in transformation further defines the physical properties. Although there are many exceptions, the general relationship for this transformation is that there is a relationship of one piece out for one piece in.



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Supervision is the application of leadership. It is an intangible, but it is an essential ingredient in high performance. First line supervision is particularly critical to assure compliance to procedures - especially those associated with safety. The quality of supervision is the “hidden force” that motivates personnel to follow procedures and maintain a positive work ethic. Supervision includes scheduling personnel according to the needs of the operation within the constraints of company regulations or collective bargaining agreements.

2.4.2.1.3.1. Labour Scheduling and Management2.4.2.1.3.2. Overhead Management2.4.2.1.3.3. Apply Leadership

2.4.2.1.4. Outside Processing Management


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Outside processing is utilization of a third party to transform product. Outside processing may be used to extend the production capability of a metals producer either in the form of range of products provided or amount of available capacity. The decision process to use outside processing is much different depending upon the reason. Extending product range is often more of a strategic decision whereas using outside processing to extend available capacity can be more of a short term tactical decision.

2.4.2.1.4.1. Establish Master Agreement2.4.2.1.4.2. Receive and Evaluate Requests for Service2.4.2.1.4.3. Release Work Order to Process and Authorize

Shipment to Processor2.4.2.1.4.4. OSP Scheduling2.4.2.1.4.5. OSP Production2.4.2.1.4.6. OSP Release Shipment


Manage Product and Process Quality focuses on assuring that the inputs to the process are within the quality parameters and these parameters are set to be meaningful to the cost, quality, and safety of the operations. The goal of this process area is use the right limits and specifications to create the right product the first time while minimizing scrap, rework, and the overall cost of poor quality work. The Quality Management capability establishes procedures to ensure the condition and quality of incoming material, work-in-process, and finished products including all requirements of product inspection, release of material for shipment, and auditing of compliance to standard practices. Quality activities include establishing control parameters for equipment and monitoring variance to those control parameters and analysis of trends and root causes of product and process quality issues. This also includes maintenance and archiving of quality data, documentation, quality processes and control sheets, and the distribution and delivery of quality documentation to customers.





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2.4.2.2.2.1. Process Parameter Identification2.4.2.2.2.2. Control Parameters2.4.2.2.2.3. Measure Parameters2.4.2.2.2.4. Evaluate Process Data




2.4.2.2.3.2. Evaluate Trade-offs Between Cost of Operation, Quality, Inventory and Customer Service

2.4.2.2.3.3. Set Parameters and Communicate to S&OP process



2.4.2.2.4.1. Define Product Acceptance Parameters2.4.2.2.4.2. Capture Product Characteristic Data2.4.2.2.4.3. Evaluate Product Characteristic Data




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2.4.2.2.5.1. Determine Parameters and Degree Product is out of Specified Tolerance




2.4.2.2.6.1. Option Identification2.4.2.2.6.2. Material Direction (scrap, reprocess, reassign)




2.4.3. Processing and Fabrication


Processing and fabrication converts the products from semi-finished transformation into sizes, shapes, quantities and surfaces directly usable in manufacturing.





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Supervision is the application of leadership. It is an intangible, but it is an essential ingredient in high performance. First line supervision is particularly critical to assure compliance to procedures - especially those associated with safety. The quality of supervision is the “hidden force” that motivates personnel to follow procedures and maintain a positive work ethic. Supervision includes scheduling personnel according to the needs of the operation within the constraints of company regulations or collective bargaining agreements.

2.4.3.1.3.1. Labour Scheduling and Management2.4.3.1.3.2. Overhead Management2.4.3.1.3.3. Apply Leadership

2.4.3.1.4. Outside Processing Management

This process considers the following aspects of outside processing: Establishing agreements with processors and processing

standards with those processors Process of deciding when to use outside processing (added

capability or capacity) Advising processors of materials that will be sent and at what

time, processing and shipping instructions Capturing information regarding the actual movement of

materials to processors and the processing and shipment of the materials

2.4.3.1.4.1. Establish Master Agreement2.4.3.1.4.2. Receive and Evaluate Requests for Service


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2.4.3.1.4.3. Release Work Order to Process and Authorize Shipment to Processor

2.4.3.1.4.4. OSP Scheduling2.4.3.1.4.5. OSP Production2.4.3.1.4.6. OSP Release Shipment


Manage Product and Process Quality focuses on assuring that the inputs to the process are within the quality parameters and these parameters are set to be meaningful to the cost, quality, and safety of the operations. The goal of this process area is use the right limits and specifications to create the right product the first time while minimizing scrap, rework, and the overall cost of poor quality work. The Quality Management capability establishes procedures to ensure the condition and quality of incoming material, work-in-process, and finished products including all requirements of product inspection, release of material for shipment, and auditing of compliance to standard practices. Quality activities include establishing control parameters for equipment and monitoring variance to those control parameters and analysis of trends and root causes of product and process quality issues. This also includes maintenance and archiving of quality data, documentation, quality processes and control sheets, and the distribution and delivery of quality documentation to customers.






2.4.3.2.2.1. Process Parameter Identification2.4.3.2.2.2. Control Parameters2.4.3.2.2.3. Measure Parameters


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2.4.3.2.2.4. Evaluate Process Data




2.4.3.2.3.2. Evaluate Trade-offs Between Cost of Operation, Quality, Inventory and Customer Service

2.4.3.2.3.3. Set Parameters and Communicate to S&OP Process



2.4.3.2.4.1. Define Product Acceptance Parameters2.4.3.2.4.2. Capture Product Characteristic Data2.4.3.2.4.3. Evaluate Product Characteristic Data



2.4.3.2.5.1. Determine Parameters and Degree Product is Out of Specified Tolerance




2.4.3.2.6.1. Option Identification2.4.3.2.6.2. Material Direction (scrap, reprocess, reassign)


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2.5. Provide Operating Services

2.5.1. Provide Plant Services

This process deals with the services required for plant operation. It deals with the development of services strategy and execution of services

2.5.1.1. Develop Services Strategy

This process deals with the identification of the services required for plant operation. The required demand and service levels expected are estimated. Budget allocation for services and its feasibility for outsourcing are also evaluated.

2.5.1.1.1. Identify and Establish Central Services – (candidates for these types of services include security, common roads and track ways, janitorial, trash disposal, maintenance of landscaping, maintenance of offices)

2.5.1.1.2. Estimate Required Demand and Service Levels for each Type of Service to be Provided on Central Basis

2.5.1.1.3. Evaluate Services for Outsourcing - Check Relative Advantages and Disadvantages to having Outside Company Provide Service

2.5.1.1.4. Decide which Services will be Outsourced2.5.1.1.5. Establish Budget or Basis for Determining Budget for

Services

2.5.1.2. Deliver Services

The services are monitored and its performance is evaluated in terms of cost relative to budget and service levels expectations.

2.5.1.2.1. Based on Demand and Service Level Expectations Staff Appropriately

2.5.1.2.2. Engage Procurement Function/Processes to Acquire Services to be Outsourced

2.5.1.2.3. Monitor Compliance with Agreed upon Service Levels - whether Internally Provided or Outsourced


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2.5.1.2.4. Monitor and Analyse Cost of Service Relative to Budget

2.5.2. Manage Utilities

This involves assessing and defining requirements for the utilities to be provided (candidates for utilities include electricity, combustible gas distribution, compressed air, water treatment), developing a plan, effectively managing the demand vs. supply and operating the various utilities. Effective management of the utilities affect not only the throughput, but also the planning and quality of the products.

2.5.2.1. Develop Utilities Strategy

This involves assessing and defining requirements for utilities to be provided (electricity, water and so on) and thereafter defining plans and guidelines to meet the utilities requirements

2.5.2.1.1. Assess and Define Requirements for Utilities to be Provided (candidates for utilities include electricity, combustible gas distribution, compressed air, water treatment)

2.5.2.1.2. Identify Supply Options (this includes considering options for constructing facilities or capabilities)

2.5.2.1.3. Balance Plan2.5.2.1.4. Develop Guideline

2.5.2.2. Assure Regulatory Compliance

This involves identifying the statutory and regulatory requirements that may impact the operation of utilities and defining appropriate monitoring procedures to ensure compliance

2.5.2.2.1. Determine Which if any Regulations may Impact the Operation of Treatment or Generation Facilities

2.5.2.2.2. Assure Appropriate Data Collection and Monitoring Procedures as Developed in Conjunction with EH&S Processes are Implemented

2.5.2.3. Monitor Supply & Demand

This involves the capturing of the generation and consumption data.

2.5.2.3.1. Capture Generation Data2.5.2.3.2. Capture Consumption Data


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2.5.2.4. Operate Utilities

This involves the physical process of operating different utility facilities to ensure that defined service levels are met at all times

2.5.2.4.1. Run Utility Stations and Plants2.5.2.4.2. Generate or Source Utility (Electricity, Water, Compressed

Air, Hydraulics, Others)2.5.2.4.3. Ensure Availability and Backups2.5.2.4.4. Run Backups2.5.2.4.5. Provide Utility Services

2.5.2.5. Manage Receipt and Distribution

This involves effectively managing the demand vs. supply requirements and generation of early alerts in case of significant mismatches.

2.5.2.5.1. Evaluate Real Time Supply Demand Balance2.5.2.5.2. Generate Warnings2.5.2.5.3. Optimize Receipt and Distribution2.5.2.5.4. Communicate Decision

2.6. Maintain Production Capability

This capability area deals with receiving, developing maintenance plans, and performing maintenance work on various assets. It also encompasses planning and managing plant shut-downs.

2.6.1. Perform Reliability Analysis

This comprises the processes to identify & resolve and manage improvement opportunities to ensure that the plant is capable of producing the right products at the right time to meet our commitment to customers.

2.6.1.1. Perform Reliability Analysis

This comprises the processes to identify & resolve and manage improvement opportunities to ensure that the plant is capable of producing the right products at the right time to meet our commitment to customers.

2.6.1.1.1. Perform Systemic Evaluation on Critical Equipment 2.6.1.1.2. Utilize Reliability Engineering Know-how and Related

Tools 2.6.1.1.3. Conduct RCM Activities 2.6.1.1.4. Specify, Select, Monitor and Put Away Equipments

based on LCC


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2.6.1.2. Execute Root Cause and Failure Analysis

This process looks at the identification of problems and completing RCA on a selected problem based on priority. Thorough problem identification is a critical step in continuous improvement. If it is done well it builds success into the process and increases the possibility of a positive outcome for all involved. There are many alternate processes for conducting RCA and usually, the best process to use is the one which best meets the needs of the situation and the skills of the people involved.

2.6.1.2.1. Determine Triggers Based on Repetitive, Major or Unexpected Failures

2.6.1.2.2. Develop Failure Analysis 2.6.1.2.3. Communicate Analysis and Suggest Corrective Actions 2.6.1.2.4. Develop Budget for Execution of 52-week Map2.6.1.2.5. Control Proposed Actions’ Effectiveness2.6.1.2.6. Conduct Failure Analysis in Similar Areas2.6.1.2.7. Quantify Aggregated Benefits of Reliability Analysis2.6.1.2.8. Perform Critical Equipments Treatment on Failures

2.6.2. Develop Maintenance Plans

This capability involves identifying parts and tools necessary for jobs and reserving or even staging them as appropriate. A planner would simply determine and gather the necessary parts and tools before the job is assigned. The planner might even write instructions on how to do the job. With this preparatory work done, the craft person actually doing the job would not have to waste time first getting everything ready. The intent is to identify the steps to create an effective maintenance plan.

2.6.2.1. Define and Manage Maintenance Strategic Planning

This process contributes towards the development of a Strategic Maintenance Plan that defines the targeted performance levels and the required operating life of equipments. These plans shall be developed with consideration of the business performance requirements, equipment capability, maintenance requirements, and costs.

2.6.2.1.1. Develop and Keep Updated Area's Strategic Maintenance Plan

2.6.2.1.2. Define the High Level Operating Model and Organization

2.6.2.1.3. Define Equipment Capabilities Required to Support Maintenance Strategy and Capacity Plan

2.6.2.1.4. Estimate Materials Resources and Contracts for Long-term Events

2.6.2.1.5. Develop and Keep Updated Continuous Improvement Plan


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2.6.2.2. Define and Manage Medium Term Planning

This process begins with defining the annual scope of activities, identification and development of an estimate for parts, tools, services necessary and the budget requirements.

2.6.2.2.1. Develop Annual Plan and Define Activities Scope2.6.2.2.2. Define Calendar, Duration and Tolerance of Activities2.6.2.2.3. Estimate Materials and Services2.6.2.2.4. Develop Budget for Execution of Annual Plan2.6.2.2.5. Review Annual Plan Baseline - Three-monthly2.6.2.2.6. Identify Needs of Special Procedures, Execution Risks

and Contingency Development

2.6.2.3. Define and Revise Maintenance Plans

This process involves creating an integrated maintenance plan which details the proactive maintenance systems and processes that will ensure equipment and systems will operate at optimum reliability and cost. These systems include a battery of maintenance strategies, including preventive, predictive and reliability strategies that help insure the business continually strives to become a leader in world-class maintenance.

2.6.2.3.1. Define Maintenance Manpower Needs2.6.2.3.2. Assign Inspection, Start up and Ramp up Teams2.6.2.3.3. Adjust Training Grade to Manpower Profile2.6.2.3.4. Feasible Manpower2.6.2.3.5. Available Maintenance Teams for Training

2.6.2.4. Define Performance Process and Indicators

This process ensures that a Performance Management Program is defined and implemented that provides a consistent and objective method of evaluating maintenance processes and personnel.

2.6.2.4.1. Define Performance Management Process2.6.2.4.2. Establish KPIs and Service Levels Goals between

Maintenance Areas2.6.2.4.3. Define and Revise Goals

2.6.3. Plan and Manage Shutdowns

This capability comprises the business processes to cover the planning & management of maintenance work that is undertaken during a planned downtime of greater than eight hours duration. It covers the process from the formulation to the work to be carried out through to the post shutdown


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evaluation. A plant may go for a shut down for maintenance or upgrading which has a significant impact on production. Hence, it has to be planned accordingly and the shut down operation must be carried out by giving notification to all affected.

2.6.3.1. Develop and Update Shut Down Planning

This process starts with managing the preliminary information-gathering phase of a shutdown. It is during this phase that shutdown roles are responsibilities are assigned and objectives are set, stakeholders are notified that a shutdown is being planned, a master job list is compiled and cost estimated are prepared. The process is culminates with a management review of a Pre-Shutdown Report. If the Pre-Shutdown Report is accepted the shutdown will proceed. Otherwise modifications to the shutdown plan will be made based on management feedback on the rejected Pre-Shutdown Report.

2.6.3.1.1. Identify Work Orders for Shut Down2.6.3.1.2. Perform Detailed Planning on Work Orders2.6.3.1.3. Schedule Shut Down Work Orders and Other Tasks2.6.3.1.4. Provide Technical Information to Executors

2.6.3.2. Manage Shut Down and Evaluate Performance

This is the phase within a Shutdown in which maintenance work is performed. The application of leadership and control measures ensures that the work is completed to the correct quality and within the allocated time. The end of this phase is when all the work originally planned for the shutdown is completed.

2.6.3.2.1. Define Shutdown Tracking Mechanism2.6.3.2.2. Manage Shut Down, Evaluate Performance and Take

Corrective Actions2.6.3.2.3. Balance Available Resources and Services Demand2.6.3.2.4. Communicate Shut Down Progress

2.6.3.3. Perform Post Shut Down Quality Evaluation

The post shutdown quality evaluation allows the business to measure the overall performance against the shutdown plan. This business process concludes with the generation of a Shutdown Evaluation Report, which critiques the planning & execution of the shutdown and documents successes, areas of improvement, and key learnings.

2.6.3.3.1. Evaluate Performance against Shut Down Schedule2.6.3.3.2. Evaluate Plan against Actual Effort, Time and Cost2.6.3.3.3. Record Areas for Improvement2.6.3.3.4. Monitor Equipment Performance after Start Up


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2.6.4. Schedule and Execute Maintenance Work

This capability focuses on executing the released work order. It includes activities such as ensuring safety procedures are followed, the right skills and parts are used, and work is done to the required standards and on time.

2.6.4.1. Identify Maintenance Requirements

This process is the starting point for executing maintenance activities. The objective is to have a strategy that is consistent with the Sales & Operations Plan and Capital Planning and an on-going set of requests for maintenance prioritized to mesh with the strategy.

2.6.4.1.1. Identify Maintenance Needs2.6.4.1.2. Prioritize Demand Based on Agreed Criteria2.6.4.1.3. Analyze Budget Availability2.6.4.1.4. Approve Maintenance Work2.6.4.1.5. Create Maintenance Work Orders

2.6.4.2. Perform Detailed Planning

Having identified and authorized the work that needs to be done, the next stage is to plan the Maintenance Orders to make sure that the work can be done safely and effectively This process is concerned with the detailed planning of maintenance tasks within a Maintenance Order considering the specific requirements of the agreed maintenance order types.

2.6.4.2.1. Define and Revise Activity's Standard Time2.6.4.2.2. Define and Revise Necessary Materials2.6.4.2.3. Define and Revise Necessity of Special Tools and

Auxiliary Equipment2.6.4.2.4. Monitor Equipment Warranties2.6.4.2.5. Request Resources, Materials and Services2.6.4.2.6. Approve and Release Planned Maintenance Order2.6.4.2.7. Provide Technical Information to Executors

2.6.4.3. Prepare Maintenance Work Scheduling

Having prioritized and agreed the work that should be done in the next scheduled period, the next step is to schedule the jobs to make sure that the appropriate resources are available on the day to match the work requirements. This process covers the scheduling & resourcing of maintenance work and involves allocation of work to Work Centers according to priorities and time frames. The schedule should be “resource balanced” to ensure that the work is achievable.


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2.6.4.3.1. Check Resources Availability2.6.4.3.2. Balance Available Resources and Services Demand

(backlog)2.6.4.3.3. Develop and Communicate Daily Work Schedule2.6.4.3.4. Align Equipment Release with Operational Area

2.6.4.4. Execute and Control Maintenance Work Orders

This process covers the execution of maintenance work to ensure that it is carried out safely, efficiently and effectively to specification. The execution and recording of maintenance work is one of the most critical elements of the total maintenance effort, being the point where all of the preparatory planning and scheduling work comes together. Performing the maintenance work is the stage where, having received the package of work instructions and technical information associated with the maintenance orders, the work crews (or contractors) actually carry out the task.

2.6.4.4.1. Gather Necessary Resources (materials, tools, equipment, documentation, etc.)

2.6.4.4.2. Get Permission from Operational Area2.6.4.4.3. Execute Maintenance Work2.6.4.4.4. Document Maintenance Work2.6.4.4.5. Monitor Quality of Work

2.6.5. Monitor Maintenance

This capability involves evaluation of the maintenance processes and equipment performance. This includes KPI data as well as trends, planning, scheduling and crew analysis. This describes the data collection and reporting of maintenance key performance indicators (KPI’s) for equipment, maintenance, and cost performance. This information will be analysed for trends and losses, whether they be process or equipment based. The future performance level of equipment is dependant on the correct and timely execution of current maintenance work and implementation of best practices resulting from analysis of historical data was added to highlight the processes and sub-processes for monitoring the maintenance tasks in a plant like preventive maintenance, corrective maintenance and auditing.

2.6.5.1. Analyse Equipment Performance

This process involves analyzing equipment performance against defined targets, identifying improvement opportunities and corrective actions which would contribute to reliability improvements and the prevention of future equipment failures.

2.6.5.1.1. Regularly Evaluate Performance Against Defined Targets

2.6.5.1.2. Identify Improvement Opportunities2.6.5.1.3. Define the Corrective Actions to Accomplish Goals


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2.6.5.1.4. Perform Defined Corrective Actions2.6.5.1.5. Monitor and Communicate Corrective Actions'

Effectiveness

2.6.5.2. Analyse Maintenance Costs

This describes the reporting of maintenance key performance indicators (KPI’s) for equipment, maintenance, and cost performance. This information is analyzed for trends and losses, whether they be process or equipment based. The analysis leads to defining and planning of corrective actions. The execution of the suggested corrective actions is monitored to ensure that objectives are met.

2.6.5.2.1. Produce Costing Reports (costs and investments)2.6.5.2.2. Analyze Results and Spending Trends2.6.5.2.3. Define, Plan and Execute Corrective Action2.6.5.2.4. Monitor Progress of Corrective Actions

2.6.5.3. Analyse Maintenance Process Performance

This involves the evaluation of the existing maintenance processes against defined targets, identifying improvement opportunities and corrective actions which would contribute to improvements in the effectiveness and efficiency of the maintenance processes.

2.6.5.3.1. Regularly Evaluate Process Performance Against Defined Targets

2.6.5.3.2. Identify Improvement Opportunities2.6.5.3.3. Define the Corrective Actions to Accomplish Goals2.6.5.3.4. Perform Defined Corrective Actions2.6.5.3.5. Monitor and Communicate Corrective Actions'

Effectiveness

2.7. Market and Sell Products

This capability covers market research and intelligence, developing marketing strategy, executing the order management functions, and developing customer relationship models and approaches

2.7.1. Develop Market Insight

This capability addresses the ability to determine potential market opportunity. It encompasses activities such as the collection and analysis of data on consumption, end-use market segments, competitor activity and future trends. It results in the development of deep understanding of the current business and market environment, distribution, competition and product trends. This serves as an input for the development of Marketing and Customer Strategy.


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2.7.1.1. Perform Market Research and Analysis

It involves collecting, organizing, and analyzing competitive market data which will provide the organization with an educated understanding of the market place. This involves gathering information about the customer's business issues and level of interest (e.g., business objectives, decision making processes, buying patterns, strategic alliances, competitors). In particular, a solid understanding of the customer requirements as they relate to price, quality, lead time, and product attributes. This should provide an understanding of key differences in the market based on customer preferences.

2.7.1.1.1. Analyse Macro Economic Trends2.7.1.1.2. Research and Analyze End-use Markets, Products and

Customers2.7.1.1.3. Identify and Monitor Channel Structure

2.7.1.2. Conduct Competitive Intelligence Research

This involves collecting, organizing, and analyzing competitive market data which will provide the organization with an educated understanding of their competitors in the market place.

2.7.1.2.1. Gather and Evaluate Competitor Information

2.7.2. Develop Marketing and Customer Strategy

This capability addresses the development of a marketing strategy and marketing objectives. It is the process of designing and executing commercial strategies and tactics consistent with the overall strategy of the business and current market and competitive conditions. This provides essential input to Account Management, Sales Channel Management, Marketing Management & Execution, Service Management & Execution functions.

2.7.2.1. Define Product Strategy

This process works to review product lines or groups and their profitability, market penetration, validating current budget and staffing levels, understanding overhead absorption impacts, and making decisions to introduce, expand, maintain, or discontinue a given product line

2.7.2.1.1. Define Product Offerings2.7.2.1.2. Define Service Offerings2.7.2.1.3. Manage Product Portfolio

2.7.2.2. Manage New Product Development

This deals with the effective management of product life cycles from a sales perspective, product pricing and maintenance of price lists


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2.7.2.2.1. Identify Market Opportunities2.7.2.2.2. Screen and Select Opportunities2.7.2.2.3. Build Business Case2.7.2.2.4. Conduct Scenario Analysis and Test Key Assumptions2.7.2.2.5. Conduct Product Trial

2.7.2.3. Define Customer Strategy

This involves development of a customer strategy in terms of value proposition to ensure customer satisfaction as measured by repeat business and customer loyalty, as well as, to attract new prospects.

2.7.2.3.1. Define Customer Segmentation2.7.2.3.2. Understand Cost to Serve2.7.2.3.3. Set Service Levels2.7.2.3.4. Define/ Update Business Rules

2.7.2.4. Define Pricing Strategy

The process develops pricing strategies and plans. It determines how to price consistent with direction set in the Channel Strategy process. Effective execution of this process will consider differences across end-use market segments, geographies, distribution channels, products and competition. In addition, this process encompasses monitoring realized price compared with targets.

2.7.2.4.1. Define Contract/Spot Mix Target2.7.2.4.2. Define Industry Pricing Strategy2.7.2.4.3. Define Product Pricing Strategy2.7.2.4.4. Define Customer Segment Pricing Strategy2.7.2.4.5. Define Global Pricing Strategy2.7.2.4.6. Set Pricing Guidelines and Rules2.7.2.4.7. Publish List Prices for Metal, Extras and Processing2.7.2.4.8. Define Contract Terms and Negotiation Strategy

2.7.2.5. Define Channel Strategy

The process involves maximizing the profitability of each customer segment by balancing service levels, cost to serve and customer need with the economics of different routes to market. A key activity of this process is to decide whether a particular item, customer, or end use market better served directly or by supply through a distributor or other channel partner

2.7.2.5.1. Identify Cost to Serve by Channel2.7.2.5.2. Identify Channel Selection Criteria2.7.2.5.3. Identify and Select Channel Partners2.7.2.5.4. Model Channel Shift Impact2.7.2.5.5. Define Standard Business Rules by Channel


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2.7.2.5.6. Monitor Channel Performance and Refine Strategy

2.7.2.6. Define & Execute Communication Strategy

This addresses the planning of marketing campaigns. Marketing campaigns are conducted in order to deliver an organization's message about its products or services to particular target markets. It is intended to generate an increase in demand for that particular product or service.

2.7.2.6.1. Develop Brand Messages2.7.2.6.2. Develop Marketing Messages and Communication Plan2.7.2.6.3. Develop and Disseminate Marketing Materials (e.g.,

pamphlets)2.7.2.6.4. Manage Trade Association Relationships

2.7.3. Conduct Order Management

Order Management encompasses the activities related to completing the sales transaction with the customer. It starts with the order capturing process and ends with delivery of the product including receipt and management of customer payments and claims.

2.7.3.1. Maintain Customer Information

Maintaining the customer information helps in the analysis of customer payment position (credit history, amount and age of past due etc.)

2.7.3.1.1. Maintain Customer Master2.7.3.1.2. Maintain Customer Hierarchy2.7.3.1.3. Maintain Credit Master2.7.3.1.4. Maintain Contract Information2.7.3.1.5. Identify Special Requirements

2.7.3.2. Perform Price Administration

It covers receipt of payments from customers and application of payments to open invoice. It also includes the activities of collection including calling customers requesting payment, and if non-payment continues to potentially launch suit or turn over to collection agency. This also includes the analysis of price leakage or loss by creating price waterfalls.

2.7.3.2.1. Apply Price to Orders2.7.3.2.2. Conduct Pricing Exceptions Approval Process2.7.3.2.3. Monitor Compliance to Guidelines2.7.3.2.4. Analyze Margin Loss/Leakage2.7.3.2.5. Manage and Update Prices2.7.3.2.6. Manage Retroactive Pricing2.7.3.2.7. Process Rebates2.7.3.2.8. Define Product Groups, Hierarchy and Attributes


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2.7.3.2.9. Develop and Maintain Standards and Specifications2.7.3.2.10. Manage External and Internal Steel Grades ?????2.7.3.2.11. Define Process Routings and BOM Rules and

Constraints2.7.3.2.12. Identify and Supply Customer Required Documentation2.7.3.2.13. Manage Product Specification Changes

2.7.3.3. Manage Inquires and Quotes

This is the process of managing any inquiries or quotes regarding a product. Validating the metallurgical requirements is a vital ingredient of product pricing.

2.7.3.3.1. Validate Product Metallurgy Requirements2.7.3.3.2. Check Available-To-Promise2.7.3.3.3. Provide Price Quote2.7.3.3.4. Document Inquiries and Quotes

2.7.3.4. Create and Monitor Sales Orders

This encompasses the activities related to completing the sales transaction with the customer in the form of creation of a sales order, and subsequently ensuring product availability and monitoring and tracking of the order.

2.7.3.4.1. Create Sales Order2.7.3.4.2. Check Credit2.7.3.4.3. Confirm Product Availability2.7.3.4.4. Confirm Sales Order2.7.3.4.5. Release Sales Order2.7.3.4.6. Track Sales Order

2.7.3.5. Create Customer Invoice

This is guided by customer specific information as to the form (paper or EDI or both) of invoices, essential information to be included on the invoice, and location to which invoices should be directed.

2.7.3.5.1. Prepare Invoice2.7.3.5.2. Issue and Dispatch Invoice Copies [Paper/Electronic]

2.7.3.6. Manage Customer Claims

This process covers the activities of processing claims, returns and disputes for both material and services provided to the customer. The process directs the investigation of quality claims by Technical Service. The process can be triggered through a variety of events including deductions taken from payment of invoices, physical return of materials shipped to a customer, and a formal claim. In many organizations an “in-the-field” customer technical service representative is involved in


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evaluating claims and rejects with the dual purpose of learning so to improve the “in-house” manufacturing process and keeping the expectations of customers in regard to quality consistent with the agreement made between customer and the company.

2.7.3.6.1. Receive and Enter Claims 2.7.3.6.2. Investigate and Document Claims2.7.3.6.3. Enter Disposition2.7.3.6.4. Process Claim Adjustment2.7.3.6.5. Close Claims

2.7.4. Manage Customer Relationships

Managing Customer Relationships is the process of developing and maintaining relationships that ensure customer satisfaction as measured by repeat business and customer loyalty while ensuring company profitability. This is a very broad area that could have its own project launched around channel management, customer segmentation, and overall sales force effectiveness. We will need to determine how much of this is in scope and our goals in this area during the 2 week scope definition period.

2.7.4.1. Manage Sales Force

This covers activities such as allocating resources to geographic and end use market segments, tracking sales effectiveness, and designing and executing sales force compensation.

2.7.4.1.1. Set Sales Plan Targets and Monitor Performance2.7.4.1.2. Design Incentive Approach2.7.4.1.3. Establish Customer Account Plans2.7.4.1.4. Develop Forecasts2.7.4.1.5. Document Call Reports2.7.4.1.6. Communicate Pricing Guidelines and Monitor

Compliance

2.7.4.2. Manage Sales Prospects

This process deals with identifying and tracking prospects for new business. Prospects include new customers and new opportunities within existing customers.

2.7.4.2.1. Identify and Qualify Leads2.7.4.2.2. Track New Business Success Rate

2.7.4.3. Manage Sales Channels

This process deals with the planning, design and effective management of distributor, agents and other third-party sales channels.


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2.7.4.3.1. Establish Contracts with Selected Distributors and Agents

2.7.4.3.2. Prepare Distributor and Agent Business Plan2.7.4.3.3. Assess and Review Distributor and Agent Performance

2.7.4.4. Monitor Service Performance

This deals with the effective management of a customer account measured in terms of increased customer satisfaction and repeat business.

2.7.4.4.1. Monitor Order Patterns2.7.4.4.2. Monitor Service Level Performance2.7.4.4.3. Capture and Evaluate Customer Satisfaction Metrics

2.7.4.5. Perform Contract Administration

This deals with the effective management of a customer contract from developing the customer offer, finalizing the contract terms and conditions to setting contract price and monitoring it.

2.7.4.5.1. Develop Customer Offer 2.7.4.5.2. Manage Technical Specifications2.7.4.5.3. Set Contract Price2.7.4.5.4. Finalize Terms and Conditions2.7.4.5.5. Finalize Customer Contract2.7.4.5.6. Monitor Customer Contract Performance

2.8. Plan and Manage Supply Chain Network and Inventory

This capability area deals with the supply network, management of the warehouses and the transportation of various materials. This capability works to create an integrated and well managed supply chain network specially the distribution network. This is critical because of the significant costs associated with material movement and to ensure target customer service is provided at all times.

2.8.1. Develop Supply Chain Network Strategy

The activity of primary interest within this capability is the capturing and analysis of the movement patterns of material – i.e. how much metal, either WIP or finished, moves between various points by which mode of transportation.

2.8.1.1. Capture and Adjust Flow-Paths

This process identifies the different possible logistics network. It also evaluates and assesses material flow in this network and the cost estimates. It also considers ad hoc changes brought to the network and implements the changes.


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2.8.1.1.1. Profile Physical Logistics Network2.8.1.1.2. Evaluate Material Flow Throughout Network2.8.1.1.3. Determine Costs By Flow-Path2.8.1.1.4. Validate Service Levels By Product/Customer Segment2.8.1.1.5. Assess Ad Hoc Network Changes2.8.1.1.6. Test and Implement Changes

2.8.1.2. Design and Build Network Optimized Model

This includes designing of a baseline supply chain network model and identification and prioritization of different supply chain scenarios.

2.8.1.2.1. Build Data Model2.8.1.2.2. Develop Baseline Model and Validate2.8.1.2.3. Develop and Prioritize Scenarios 2.8.1.2.4. Configure Baseline LP/MIP Model Structure

2.8.1.3. Optimize Network Model

This process simulates different supply chain scenarios using the designed supply chain model and uses the results to optimize the model

2.8.1.3.1. Optimize Baseline Model (Unconstrained) and Validate2.8.1.3.2. Optimize Model For Each Prioritized Scenario 2.8.1.3.3. Perform Off-Line Analysis to Validate Output (using

flow tools)

2.8.1.4. Determine Future Supply Chain Network Vision

This involves developing and documenting of the proposed supply chain model and includes creation of plans for implementation and smooth transition from the old model to the new one.

2.8.1.4.1. Determine Scenario Decision Criteria and Weighting2.8.1.4.2. Select Preferred Network Scenario2.8.1.4.3. Create & Validate Implementation Plan2.8.1.4.4. Create & Validate Change Management Plan

2.8.1.5. Evaluate Outsourcing Opportunities

This process identifies the products where there is a possibility of outsourcing it to third parties. It deals with the overall outsourcing strategies, determining the methodology to finalize the third party and implementing the plan.

2.8.1.5.1. Evaluate Existing Fulfillment Activities Against Core Capabilities Matrix


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2.8.1.5.2. Develop Business Case For Outsourcing Non-Core or Limited Capability Activities

2.8.1.5.3. Short-List 3PL Candidates Based on Business Requirements, Capabilities & Fit

2.8.1.5.4. Conduct RFP From Potential Candidates2.8.1.5.5. Determine Scenario Decision Criteria and Weighting2.8.1.5.6. Select Preferred 3PL Provider2.8.1.5.7. Create & Validate Implementation Plan2.8.1.5.8. Create & Validate Change Management Plan

2.8.2. Plan and Manage Warehouses and Finished Inventory

This capability is particularly focused on the warehousing of finished goods both inside the plant and at external locations. Concerns include the setting of inventory policies regarding levels and aging and monitoring compliance to such.It also includes load building (identification of specific items to be included as part of shipment), the day to day management of the warehouses, inventory practices. A comprehensive inventory analysis and future policy assessment is a feasible output.

2.8.2.1. Manage Warehousing and Distribution Operations

This involves providing the right product in the right place at the right time to meet anticipated demand from a specific location. Based on the Distribution Plan and the Sales Forecast, a Distribution Program is developed which defines where and how much inventory will be stored at the multiple warehouses or distribution centers.

2.8.2.1.1. Optimize Facility Layout2.8.2.1.2. Optimize Material Flow-Path2.8.2.1.3. Improve Processes and Methods2.8.2.1.4. Improve Labour Productivity2.8.2.1.5. Execute Material Receipt and Putaway2.8.2.1.6. Perform Inventory/Order Selection2.8.2.1.7. Prepare Order for Shipment2.8.2.1.8. Perform Inventory Verification

2.8.2.2. Manage Inventory

Through the process appropriate stocking levels and inventory locations are determined. The age and turnover relative to sales is monitored and managed in the process. This deals with mechanisms for tracking and reporting inventory at various stages (finished, WIP, etc) and performing valuation of the inventory. It involves defining and managing a set a business rules for shortage situations.

2.8.2.2.1. Assess Current Inventory Position2.8.2.2.2. Implement Inventory Controls2.8.2.2.3. Conduct Excess and Obsolete Procedures


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2.8.2.2.4. Manage Shortages and Imbalances2.8.2.2.5. Track and Report Inventory

2.8.3. Plan and Manage Logistics

The essence of this capability area is the scheduling /ordering of transportation services and follow-up that as to how those services were rendered. Given the portion of material moved by customer truck or designated carrier the process requires visibility to customer order requirements in addition to cost and reliability measures.Transportation Optimization can by itself be a project that can last multiple months.

2.8.3.1. Plan Transportation

Plan Transportation covers the planning of transportation for shipping raw materials from suppliers to the plants, moving in-process material from a plant to another plant, warehouse, or distribution center, and shipping products to fill customer orders.

2.8.3.1.1. Develop Transportation Strategy2.8.3.1.2. Execute Transportation Cost Reduction Programs2.8.3.1.3. Improve Equipment Utilization2.8.3.1.4. Improve Route Productivity2.8.3.1.5. Conduct Tariff/Rate Review2.8.3.1.6. Manage 3PL Performance to Contract

2.8.3.2. Execute Transportation

Execute Transportation includes preparing and executing the transportation plan for shipping raw materials from suppliers to the plants, moving in-process material from a plant to another plant, warehouse, or distribution center, and shipping products to fill customer orders.

2.8.3.2.1. Prepare Transportation Plan2.8.3.2.2. Create Delivery/Shipment2.8.3.2.3. Tender Shipment and Confirm Receipt2.8.3.2.4. Schedule Loading2.8.3.2.5. Execute and Control Transportation Schedule

2.8.3.3. Survey Shipment

This process deals with the shipment procedure right from product checking to dispatch. This includes the documentation process, identifying damaged material and dispatching.

2.8.3.3.1. Confirm Product Quality


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2.8.3.3.2. Confirm Product Quantity2.8.3.3.3. Survey Sign-Off2.8.3.3.4. Finalize Shipping Documents2.8.3.3.5. Dispatch Materials

2.8.3.4. Optimize & Monitor Transportation

This process involves optimizing and monitoring the various shipments made to customer to minimize the costs involved.

2.8.3.4.1. Manage Carriers2.8.3.4.2. Track Shipment2.8.3.4.3. Manage Exceptions

2.9. Source and Supply Goods and Services

This capability area deals with sourcing and supply of materials and services and was earlier called Procurement. This capability area is inter-linked with all the other capability areas in the forest product industry, as well as, the other CNR industries.

2.9.1. Perform Strategic Sourcing

This capability involves optimization of the various elements of total cost of ownership to maximize the value to the company. It focuses on those activities within the overall procurement process that are unique to cost effective sourcing and supply of material inputs to the manufacturing process. Some key components of the procurement area include the management of currency fluctuations for global material sourcing and the negotiation and definition of long-term purchasing contracts. This capability deals with identifying the strategy for selecting suppliers and negotiating agreements with the selected suppliers.

2.8.3.1. Perform Spend Segmentation and Identify Opportunities

This process starts with gather and analyzing high level spends data to identify & prioritize opportunities.

2.9.1.1.1. Spend Categorization/ Segmentation 2.9.1.1.2. Identify Opportunities

2.9.1.2. Develop Category Profile

This involves development of a high level category segmentation approach; calculate Total Cost of Ownership (TCO)

2.9.1.2.1. Develop Internal Profile 2.9.1.2.2. Develop External Profile

2.9.1.3. Develop Sourcing Strategy


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This involves development of sourcing strategy and finalizing the approach.

2.9.1.3.1. Determine Category Strategy 2.9.1.3.2. Establish Category Baseline

2.9.1.4. Identify Selection Factors and Screen Suppliers

This process starts with gather and analyzing high level spends data to Identify & prioritize opportunities. This involves development of a high level category segmentation approach; calculate Total Cost of Ownership (TCO) and finally development sourcing strategy and approach.

2.9.1.4.1. Determine Approach 2.9.1.4.2. Pre-Qualify Suppliers

2.9.1.5. Conduct RFx/ Auctions

This process involves building a supplier selection decision Framework, developing the RFx/ auction approach and finally conducting the RFx process.

2.9.1.5.1. Determine RFx Model 2.9.1.5.2. Complete RFx Process

2.9.1.6. Develop and Negotiate Agreements and Contracts

This involves development of a negotiation approach, planning and conducting the negotiations and finalization of the agreement.

2.9.1.6.1. Negotiate Agreements and Contracts2.9.1.6.2. Shape Agreements and Contracts

2.9.1.7. Implement Agreements and Contracts

For new contracts this process includes determination of organization & process impacts and development and execution of a contract implementation plan.

2.9.1.7.1. Implement Agreements and Contracts

2.9.2. Execute Transactional Sourcing

The capability primarily deals with the transactional activities in purchasing starting from Purchase Requisitions to settlement of vendor invoices. It includes management of authorizations and approvals, sourcing decisions on a transactional basis, determination of specifications including delivery and scheduling, and the generation


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and transmission of purchasing documents such as purchase orders, RFQs, and releases.

2.9.2.1. Process Purchase Requisition

This focuses on ensuring that requisitions from consuming entities within the organization are appropriately authorized to order.

2.9.2.1.1. Create or Change Purchase Requisition2.9.2.1.2. Approve Purchase Requisition

2.9.2.2. Assign Sources of Supply

This focuses on ensuring products (materials and services) are obtained from the right suppliers, purchased within the agreed terms (including price and delivery time).

2.9.2.2.1. Determine Approach 2.9.2.2.2. Process RFQ

2.9.2.3. Process Purchase Order

The key output of the process is the issuance of a purchase order.

2.9.2.3.1. Create or Change Purchase Order2.9.2.3.2. Approve Purchase Order2.9.2.3.3. Dispatch Purchase Order

2.9.2.4. Manage Incoming Materials and Services

The process focuses on accepting physical possession of items shipped to a company and confirming the specifications of the material received.

2.9.2.4.1. Receive Materials or Services2.9.2.4.2. Check Specifications or CoA2.9.2.4.3. Manage Vendor Returns

2.9.2.5. Post GR or Service Entry

The process focuses on acknowledging the receipt of services including outside processing or tolling operations and settle claims if any.

2.9.2.5.1. Post Goods Receipt or Service Entry2.9.2.5.2. Manage Claims

2.9.2.6. Process Vendor Invoices and Service Acceptance


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The process focuses on paying vendors for material and services received. It is highly transactional and has the responsibility of capturing the information necessary to account for costs, verifying the accuracy and legitimacy of vendor invoices and creating the documents (checks or request for bank transfers) necessary to transfer funds from the organization to the supplier.

2.9.2.6.1. Process Incoming Vendor Invoices and Service Acceptance

2.9.2.6.2. Manage Vendor Exceptions

2.9.3. Manage Supplier Relationships

This capability involves the negotiation and establishment of contracts and agreements, definition and evaluation of suppliers against key performance measures, supplier audits, the management of supplier information, and re-evaluation of agreements. This provides a framework for developing a partnership approach in order to establish and maintain trusting, quality relationships with suppliers involving joint process and product improvements with regular target measurements.

2.9.3.1. Define Supplier Strategy

This focuses on sourcing and qualifying suppliers of materials

2.9.3.1.1. Perform Supplier Segmentation2.9.3.1.2. Establish Supply Base Management Strategy2.9.3.1.3. Manage Supplier Sourcing Capability

2.9.3.2. Manage Supplier Performance

This focuses on confirming that suppliers are capable of delivering products or services in a timely manner by performing periodic supplier evaluations against key performance measures, conducting supplier audits, and so on

2.9.3.2.1. Develop Supplier Performance Measurement Strategy2.9.3.2.2. Monitor and Report Supplier Performance2.9.3.2.3. Assess Supplier Performance2.9.3.2.4. Manage Supplier Exit Strategy2.9.3.2.5. Recognize Supplier Performance

2.9.3.3. Manage Supplier Integration and Collaboration

This focuses on sourcing and qualifying suppliers of materials In addition, this focuses on establishing the suppliers collaboration in our business.

2.9.3.3.1. Manage Supplier Integration/ Induction/ On-boarding


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2.9.3.3.2. Establish/ Sustain Supplier Collaboration2.9.3.3.3. Maintain Supplier Certification2.9.3.3.4. Maintain Catalogues2.9.3.3.5. Manage P-Card Based Purchases2.9.3.3.6. Manage Product Life Cycle Sourcing

2.9.3.4. Perform Supply Contract Administration and Management

This involves the negotiation and establishment of new contracts and agreements, management of existing contracts based on agreed criteria and re-evaluation of agreements for contract renewals.

2.9.3.4.1. Define Supply Contract Management Strategy2.9.3.4.2. Plan Supply Contract Administration2.9.3.4.3. Manage Supply Contract Compliance2.9.3.4.4. Manage Supply Business Continuity

2.9.4. Manage MRO Stores & Inventory

This capability deals with the strategy, receipt, handling and storage of maintenance, repair & operating supplies.

2.9.4.1. Define Storage and Inventory Strategy

This process focuses on defining the material storage strategy and planning the inventory to run the MRO Store.

2.9.4.1.1. Define Storage Strategy 2.9.4.1.2. Conduct Inventory Planning

2.9.4.2. Operate MRO Stores

This process deals with the store operation, where the materials are received from suppliers and store in storage facility. During requirement the materials are issued to internal customer. This includes the physical verification of inventory and coordinating the material supply.

2.9.4.2.1. Plan Storage2.9.4.2.2. Issue Materials2.9.4.2.3. Perform Physical Inventory Verification2.9.4.2.4. Co-ordinate Supplier Managed Inventory

3. SHARED SERVICES

3.1. Conduct Research and DevelopmentThis capability covers managing the technical aspects of the business. The potential in-scope activities involve obtaining inputs from customers with


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regards to new products and customer technical service with regard to solving product application and usage issues.

3.2. Process Financial TransactionsThe capability area covers the transactional side of Financial / Accounting functions. For example, Order to Cash includes:

Authorizing and managing credit Managing sales orders Manage contracts Maintain customer master data Invoice customer Cash application Manage and process collections Manage and process disputes & deductions

3.3. Deliver Information Technology Services3.4. Develop Human Resources3.5. Manage Content and Data

The key in scope activity within this capability is the managing the repository of product offerings. In specific, keeping mill limits updated for both internal and external purposes. It would include maintaining web site interfaces and providing mechanisms for sales personnel to be able to respond quickly and accurately to most inquiries recognizing that some inquired items may have to be investigated.

3.6. Manage Environment, Health and Safety


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Metals Industry White Paper

Documents

Transcript of Metals Industry White Paper