Utilizing Advanced Maintenance Practices and Information Technology to Achieve Maximum Equipment Reliability
Dofasco is Canada’s 2nd largest steel manufacturer producing 4.5 million tons of flat rolled steel per year. They have revenues of over $3 billion and employ 7,000 people in their Hamilton, ON plant. Dofasco is North America’s most profitable steel producer and were recently ranked as the #1 steel maker in the world by Dow Jones.
Motivation to Improve
In the 1980’s the steel business was good. However, in the late 80’s and early 90’s things began to change. Globalization was beginning to influence the market, imports started arriving at lower prices and higher quality, hangover from the 1970’s inflation saw costs rising and prices dropping, there was a shift from a sellers to a buyers market, and shareholder returns were beginning to erode.
Dofasco took a step back and evaluated their maintenance performance and found that they were operating in an environment where 70% of their work was reactive and only 30% was proactive. They also found that the rate of product quality improvement was flat and their average equipment availability was only 78%. At that point they realized that Equipment Reliability was key to improving product quality, production output, costs and shareholder return. They initiated a project to research, develop, and implement the most advanced maintenance practices and information technologies to achieve maximum equipment reliability.
As a result of the opportunity to employ this innovative technology Dofasco completely changed how their maintenance departments operate and achieved millions of dollars in savings. They now do 75% proactive work or better. Their equipment availability increased more than 10% and their product quality yield rose from 76% to 91%. They were also able to reduce their maintenance workforce, through voluntary attrition, from 3,678 people down to 1,734 people. Their parts inventory was reduced from $110 million to $70 million with a goal to get to $50 million by 2001.
Reliability, CMMS, Maintenance, EAM