The Effects of the Main Changes of the Control System
in TŘINECKÉ ŽELEZÁRNY, a.s.
The Effects of the Main Changes of the Control System
in TŘINECKÉ ŽELEZÁRNY, a.s.
Ing. Jiří Cienciala, CSc.
Chairman of BoD and CEO
Ing. Jiří Cienciala, CSc.
Chairman of BoD and CEO
2
�Agenda
� Introduction of TŘINECKÉ ŽELEZÁRNY, a. s.
�Objective of TŘINECKÉ ŽELEZÁRNY, a. s.
�Methods Applied
�Results Achieved
�Conclusion
3
�History
1st electrification of rolling mill
1938
World War II - confiscated
1946
Nationalized
1983
BOF
1991
Joint stock company
Biggest BF in Czechoslovakia
1923
Centralization of steelworks at Třinec
1877
Railway Košice - Bohumín built
1871
Privatisation fully complete
1996
1906
Mining and Metallurgical Company1839
TŽ established by the Court of Habsburg‘s
4
�Technological flows
drawing andsurface finish
tube millOstrava-Vítkovice
productionof chains
Ar
LF
RH
IR-UT
peeling and grinding
heattreatment
coke plant
BF
sinter plant ingot teeming
BOF
EAF
bloomCCM
billet CCM
bloomingmill
reversingmill
medium section
light section
wire rod mill
billet millKladno
ladlemetallurgy
strip millBohumín
finalization
5
�TŽ Subsidiaries and Affiliate Companies
Řetězárnachains
Refrasilrefractories
Vesuvius ČRrefractories
ENERGETIKATŘINECenergy
production
SLÉVÁRNYTŘINECfoundries
STROJÍRNYTŘINECmachinery
FERROMORAVIAsteel drawing
TŽSCHVKladno
rolling of SBQ
VVTtube mill
6
�Products
sections
wire rod
rails
wide steel
semis
rebars
SBQ bars
7
�Motto: Quality Through the Ages
Strategic Objectives till 2011 • Objectives for YearsProjects within Key Areas:
Partnership ManagementStaffTechnology
Advanced industrial company based on steelmaking traditionOur Vision:
staff‘s abilities•company and region linkedtradition - since 1839•trade mark
Our Groundwork:
Client orientation • Innovation • Business spirit • FlexibilityContinuous improvement • Teamwork • Alliance thinking
Consistency, observance • Sharing knowledge and experienceCommunication • Common responsibility • Development of trust
Attitudes &Principles:
Our MissionTogether for the generations to come
8
�Objective of TŘINECKÉ ŽELEZÁRNY, a. s.
� To apply and develop the systemic approach
to integrated management in the long term that is
aimed at:� strengthening the competitive advantage
� increasing the value of the company
� attracting and recruiting young, powerful, and talented people
� To achieve the highest quality of internal environment by realising the synergy of internal sources as:� corporate culture
� development of intelectual capital
� team work
� strategic management together with implementing of process and project management
9
�TŽ Highlights
54175519559957776263peopleEmployees
18.8516.6824.285.575.22%ROCE
407
8.42
2068
30827
2205
2248
2005
434
11.72
2575
29275
2301
2427
2004
465
10.55
2684
31675
2364
2517
2006
404377tonsSteel per employee
2.461.79%ROS
518309mil. CZKProfit
2103421272mil. CZKRevenues
21902258ktSales of products
23332364ktSteel production
20032002UnitIndicator
Methods AppliedMethods Applied
Strategic Goals and Fulfilment
in Key Areas of Partnership, Technology, Staff, Management
Strategic Goals and Fulfilment
in Key Areas of Partnership, Technology, Staff, Management
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�Strategic Goals and Fulfilment
� Customer-oriented company (partnership, just in-time, innovation), optimal externalisation of non-productive processes, more efficient management of subsidiaries
� External sources – production chains –acquisitions, new production capacities in TŽ => leading to product portfolio diversification => resulting in strengthening the company‘s resistance to fluctuations in different market segments
� External sources (using various grants) utilization for TŽ‘s development to the largest possible extent
P artner ship
12
�Strategic Goals and Fulfilment
� Permanent process improvement – exploitation of internal sources: productivity growth (new investments, innovation, downsizing), quality, ecology-friendly production
� Significant investments 2000-20052000 2nd stage of wire rod mill modernization2003 Modernization of continuous light section mill2004 Exchange of the converter vessels, new ladle
furnace2005 Major overhaul of the blast furnace #4,
exchange of the converter vessels
Technolog y
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�Strategic Goals and Fulfilment
Technolog y
Reconstruction of the CCM #1 – 2 strands fi 525 mm
STC Annealing furnace #3
Dedusting of Sinter Plant #1
RH Vacuum Degassing Station #2
Significant Investments 2006
Significant Planned Investments 2007
Bars finishing line
Desulfurization of the hot metal
Secondary de-dusting of the BOF Plant
Garret coiling machines
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�Strategic Goals and Fulfilment
�Well-educated, well-trained, well-motivated, purposeful, steadfast and resolved person = the driving force of progress, developing intellectual capital
� Recruitment of young perspective experts –program of cooperation with all types of schools
� Compact program of staff training
� Improving working and living conditions, systematic decreasing accident rate level – joining the IISI‘s Accident-Free Steel program
S taff
15
�Strategic Goals and Fulfilment
� Setting TŽ‘s strategy and specifying tools for its implementation (strategic framework, project management)
� Crisis management in TŽ in 1999 (savings of CZK 1.2 billion, company‘s consolidation – appropriate preparation for the periods to come)
� Strategic Management (Business Plan, Financial Plan, BSC, Project Management, Key Production Programs etc.)
Manage m
ent
Results AchievedResults Achieved
In Key Areas
of Partnership, Technology, Staff, Management
In Key Areas
of Partnership, Technology, Staff, Management
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�Customer-oriented Company
TŽ
CustomersESAB – electrodesMUBEA –springs
ŽDB – wireMoravské forges
Technology suppliersSiemens
AutelSMS MeerConcast
Corporate developmentCooperation on quality
Cooperation on investment activities
Example:Cooperation with research
institutions, universities, companiesVesuvius, Refrasil
P artner ship
18
�Measuring of Customer Satisfaction
� The total index of employees satisfaction is calculated as a simple arithmetic average of particular indexes Is, Iv and Id
� Ic = 4.15 points and exceeded planned value 4.06 point
� 2006 evaluation is still in progress
86.00
83.00
4.15
4.14
4.30
4.02
2005
83.0081.6083.00Satisfaction with product (%)
78.4080.8083.80The level of customer satisfation (%)
3.924.044.19Total Index
3.834.274.62Index – Satisfaction with deliveries
4.154.084.15Index – Satisfaction with product
3.773.793.79Index – Satisfaction with service
200420032002P artner ship
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�Trends of the Steel Grades Produced
Technolog y
20
�Change of the Product Portfolio (%)
Technolog y
21
�Air Pollution (t/year)
Technolog y
22
�Number of Accidents
S taff
23
�Results of Satisfaction Measuring
0.7070.2730.120-0.328-0.214Perspective
for employees
0.5120.3860.4930.3620.421Total satisfaction level
0.420
0.753
0.818
-0.326
2004
0.591
0.714
0.822
-0.120
2002
0.014
0.408
0.373
-0.266
2000
0.064
0.418
0.288
-0.170
1999
0.653Confidence
in the manager
0.761Knowlegde of companies objectives
0.815Company perspective
0.065Total salary
Indicator 2006S taff
The total satisfaction level is measured with the Index of extensity which can reach the value from +1 up to –1.
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�Development of Parameters – BSC Method
M
T
S
P
Production cost
Stock level
Material utilization according to mills
Production capacity utilization
Accident rate
Ratio of skilled employees
Labor turnover
Start-up curve of new investments
Claims according to mills
V
R
T
RF
R
M
T
S
P
Pretax profit
Pretax profit of subsidiaries
Production of rolled material
Total cost of hot pig iron
Total cost of hot steel
Labor productivity
Ratio of skilled employees
Labor turnover
Market share CR, EU, CEFTA
Contentment of the customers
T
O
P
M
T
S
P
Production cost
Stock level - charge
Material utilization
Charge richness
Accident rate
Ratio of skilled employees
Labor turnover
Start-up curve of new investments
Claims
V
OManage m
ent
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�Projects in Key Area Management
Manage m
ent
Completed projects, e.g.:
� Implementing of VDA 6.1 and ISO 14001 in TŽ
� Migration SAP-R/2-R/3
� Implementing of TPM in TŽ
Projects in progress, e.g.:
� Implementing of APS in TŽ
� Implementing of Process Management – 2nd stage
� Security of IS according ISO 27001
What are we expecting in the nearest future?What are we expecting in the nearest future?
Outlook and ConclusionOutlook and Conclusion
27
�Direction and Development Goals of TŽ
� Strengthening the cooperation and partnership with suppliers and customers
� Optimalization of orders, awareness of customers
� Regional activities – road transport, development of the region
� Cooperation with essential surrounding – investment incentives, financial sources from ECSF funds
� Cross factory & country research
P artner ship
28
�Direction and Development Goals of TŽ
� Zero defects => Top quality (ability to reach it repeatedly) => obvious prerequisite
� 100 % availability of technology� Innovation (anticipating and meeting customers‘ requirements),
investments (modernization of Blooming and Reversing Mill, annealing furnaces for bars and wires, STAKU lines #2, #3 etc.)
� Ecology-friendly production (dedusting of the BOF plant etc.)
� High productivity – low costs, individual and team top performance,
� Hiring young experts, training, experience and knowledge sharing, innovative activities
� Accident free steel
Technolog y
S taff
29
�Direction and Development Goals of TŽ
� Optimizing of the activities within the TŽ/MS Group, process management, sharing, standardization…
� Product chains – acquisitions, new investment
� Implementing of management systems compatible with our customers (IT, KAIZEN, TPS, … )
� Utilization of APS systemManage m
ent
30
�Conclusion
� Boom in steel industry continues but …� The technological requirements on steel products will increase
� The strong one can control their production capacities dependingon demand
� The threat from East will grow
� The metallurgical basic industry will move to raw materials sources, gradually
� Our way - dynamics, courage, creativity, development of manpower, responsibility for the region
� Sustaining our vision – advanced industrial company based on steelmaking tradition