Reduction of Ferro Manganese Consumption in Steel production

Decision making process in a public sector unit:

The “IF IT WERE SO SIMPLE” Syndrome.

During the year1985, there was a call from a Steel Plant to my office. The call was from the

Training Manager of the company. He wanted that they are intending to organize a training

program on Value Engineering for their engineers. I was requested to visit them for finalizing

the program details. I visited the plant and met the training manager. The company wanted to

conduct a three days program. After discussing the course contents and schedule, I insisted

that the program will not be conducted unless it is designed as a three tier program. The first

tier of half day Appreciation program will be for the top management, to be attended by the

Managing Director and other members of the top management. The second tier Orientation

program of two days will be conducted for the senior management group covering the

DGMs, Sr. Managers and Managers, and in the third tier, the detailed application oriented

training program will be for the shop level engineers up to the levels of Senior Engineers, of a

duration of five weeks. The training manager was of course surprised to hear such a stand by

a consultant. He said that it is just not possible to get the top and senior manager teams for a

program of this nature and it was meant for only the shop floor engineers.

I regretted and said that unless the program is conducted as suggested,I will not conduct the

program. I, upon returning to his office, did confirm the above discussions through a formal

letter, with a copy to the Managing Director of the company.

Interestingly enough, there was a telephonic call to me stating that the Managing Director

desired to meet me.

I made another visit and met the MD. The MD said that he wanted to see the person who is

insisting that the top and the senior managers should attend a training program on a subject

which is meant for the shop level engineers.

I explained as to why this condition was being laid out. In the past, whenever I had conducted

the program, the participants invariably came out with very potential suggestion for changes

in processes and products, which were felt to be very much implementable and practical, but

again, invariably they were never being implemented. This was due to the fact that while the

shop level engineers have the time and energy to go through the details and work on the

alternative designs, they did not have the required delegation of powers to take decisions to

implement the suggestions. In companies, normally the senior managers have the powers and

authority to vet out the alternative designs and processes based upon their techno economic

considerations, and the green signal or permission to try out is invariably in the hands of the

top management. This was precisely the reason that I was insisting upon the three tier

program, where the top management would give a moral undertaking that if any suggestions

are put forth, they would indeed look at them seriously, and it will be the responsibility of the

senior management to evaluate the suggestions and submit them for action and decisions for

trial to the top management.

The MD was convinced and offered to attend the program as suggested.

The program was conducted as planned.

As the detailed program was designed as an application oriented program, the participants

were to undertake projects within the company to get a hands on experience of application of

the learnings from the training program.

I offered to the MD that I would like to include a project which was a burning issue for the

management, and was being discussed at senior levels. Although the MD had his own doubts

about the competence of the trainer to handle purely technical subjects, he agreed and

suggested that one of the projects to be undertaken by the teams should be the burning issues

of high consumption of Ferro Manganese in the Steel Melting operation.

The company was operating at a consumption level of 22 Kgs. of Ferro Manganese per MT

of steel and the company was producing about 1.2 Million Tons of this grade of steel per

year. A committee was set up to look in to the matter and a target of 20 Kgs. per MT of steel

was set for achievement.

On questioning, it came out that TISCO was operating a similar process and they were able to

manage at a consumption level of 18 Kgs. of Ferro Manganese per MT of steel.

The main issue raised by me was as to why they have taken TISCO as the standard. Even

TISCO could be wrong.

The need is to start from the basics. Exactly how much of the Ferro Manganese is required to

get the expected metallurgical properties. The team took some samples and from the

stochiometric principles, arrived at a figure of 1.5 KG equivalent of the Ferromanganese

going in to the steel. Then the basic question was as to where is the rest of the 22 Kgs. going.

Teams study of the whole process brought to light that the way the material is prepared and

added in the process is the main culprit. The finer parts of the material were observed to be

flying out with the high draft to the chimney and the medium sized material was getting

oxidized much before reaching the steel.

Also, the stage at which the ferromanganese was being added also needed a review as to

whether it can be added at a different stage of the process instead of in the furnace. The team

had come with an option that perhaps the ferromanganese can be added while the steel is

being poured in to the ladles. This was expected to be avoiding the flying off and oxidizing

conditions.

And this is where the “IF IT WERE SO SIMPLE” syndrome seemed to come in to action. A

series of discussions with the concerned Manager, Sr. Manager, DGM and the GM of the

shop were held. However, unfortunately enough, every one was raising the same question

again and again. The question was “IF IT WERE SO SIMPLE, wouldn’t the Russians or the

Germans or the TISCO or other steel plants in the country try it and do it.”

No one was ready to try it out on the same plea. Further probing brought to light the inherent

fear of the people that “IF SOME THING GOES WRONG, MANY HEADS WILL ROLE”.

The experiment or the trial called for testing the hypothesis on a batch of 9 laddles of steel,

each of 250 MT. That ment that unless the experiment was carried out on 2,250 MT of steel,

it can not be ratified, even if the experiment is felt to be possible. This is exactly what in

many cases and in most of the industries happens. No one wants to bell the cat. This is not a

case of belling the cat but having or developing the technical confidence and acumen.

No one in fact was ready even to take up the case at higher levels stating that it is not worth

any trials and would any way fail.

At this stage, I decided to bring in the top management in to picture who had promised the

necessary interface when ever required after the first tier program.

While trying to get an appointment with the MD, I had the routine obstruction at the MD’s

office by his personal assistants, who would not even fix up an appointment with the MD for

this purpose. The plea was that MD is far too busy for subjects like this and it is the shop

floor managers who take decisions. If they had said that it would not work, it means it will

not work.

All I could do was to take a slip of paper, jot down four sentences about the status of the

project and got it sent to the residence of the MD.

The very next morning a meeting was fixed with the MD in chair and all the concerned

managers of the section in seats along with me.

Every member in the gathering objected to the subject saying it was not worth wasting on a

critical subject like that with a rank outsider who doesn’t even know how steel is made. The

MD took a review of the whole proceeding and asked the team members just five questions.

Q1: What is the confidence level of the team about the success of the trial? And

Q2: What is the loss if the experiment fails? It will be a one time loss.

Q3: What will be the gains if the trial succeeds? It will be perpetual for the rest of the future.

Q4: What is the probability that the experiment may fail?

And finally,

Q5: What will be the consumption level as per the team members’ gut feeling?

The answers were very simple.

A1: 90%

A2: Rs. 12,00,000 one time loss because all of the 2,250 MT of steel would be required to be

reprocessed.

A3: It was expected that the consumption level may come down to about 16 to 17 Kgs. per

MT, there by offering a scope and potential of saving about 5 to 6 Kgs. of ferromanganese

per MT of steel. This was projected to be about Rs. 4 crores per year (At Rs. 6.5 per Kg. for

1.2 Million MT steel per year)

A4: 10%, because no one else in their knowledge has ever tried it before.

A5: 16 to 17 Kgs. of ferromanganese per tone of steel.

This was the real decision making point for the MD and he juggled with the figures that with

a chance of failure being as low as 10%, with a 90% confidence level, the company could

save about Rs. 4 crores per year perennially, and if at all the experiment fails, the company

would only loose about rs. 12 lacs one time.

He gave his nod and permission to go ahead.

The team went ahead with the production with the new process and Lo and Behold, they

achieved a final figure of just 9.8 Kgs. per MT of steel. Subsequent upon this, just to

reconfirm the trials, the company produced another set of 10,000 MT of steel with similar

results.

There was enough reason for every one to be happy about.

HOWEVER,

After a period of about two years I decided to visit the plant and see whether any further

improvements were effected. UNFORTUNATELY, the company was found to be working

on the old norms and consumption levels of 22 KGs. per MT of steel. This was a shocking

revealation. Upon enquiry it came out that since the MD was promoted as Director Technical

at SAIL and I any way was not expected to visit a second time, no one bothered to regularize

the process. All that was needed was to install an additional crane for this process, for which

a budgetary sanction was accorded. BUT, just one Sr. Manager, who was in charge of this

work didn’t take action.

WHOM DO WE BLAME?

Having been very badly hurt with such attitude of executives, I decided to go over to Delhi

and meet the ex-MD. I met him and narrated the whole episode and expressed his

unhappiness and sadness over the issue.

An action was initiated and at present, at the time of writing this article, the company was

reported to be achieving consumption levels of about 12 Kgs. of ferromanganese per MT of

steel.