June 1995

Throughput-Based Manufacturing

Big Operational Switcheroo Looks At Bucks, Not Tons

ointing to the oversized paperback book, the 35-year employee

said: ''You know, this guy really makes a lot of sense." Everyone

in the group agreed. "But I thought we would have been doing

this all along."

The book's author is EliyahuM. Goldratt, one of the most respect­

ed business thinkers of our time. His book, 'The Goal: A Process of

Ongoing Improvement," introduces an intriguing new manufactur­

ing philosophy that is causing some of the world's manufacturing

giants to rethink every phase of their operations.

So, what does all this h�ve to do with Sparrows Point? Isn't this, as

Yogi Berra said, deja vu all over again? Haven't we done this before?

"re-thought, re-engineered, re-invented." What is different? Those

questions were flying at orientation meetings last year and, to some

Slabs ahead of the hQt strip mill are intended to speed the shipment of products to custome,. under the new Throughput-Based Manufacturing (TBM) system.

Paul Messaris (left). production Planning. and Dino Magnaterra, outside processing, work on a computer simulation during a four-day 77lroughput-Base Manufactun'ng training session.

degree. still are today as Sparrows Point embarks on a path it calls 'Throughput-Based Manufacturing."

Sparrows Point has not simply embraced a new ideology, but has assumed a leadership role among a handful of other companies. Our employees are developing new meth­ods of looking at and managing the marketing and manufacturing process methods that many believe will become the backbone of suc­cessful companies operating in the next century.

The Philosophyl The principal behind

Throughput-Based Manufacturing (rBM) sounds deceptively simple: It is a way to manage a company's manufacturing process by focusing on the dollars moving through the plant rather than production. At Sparrows Point that means matching steel production with market demand.

Applying TBM to Sparrows Point or any manufacturing company for that matter is not so straightfor­ward. says David Keifer. As produc­tion planning director, Keifer plays a key role in bringing TBM on board. "Manufacturers have been brought up to think of production units as their measure," he explains, "or how much material they can get though their process in the shortest period of time."

Under the traditional system, says Keifer, if an item takes longer to move through the manufacturing process, but earns more dollars, it may not be attractive if the measure­merit system is focused on tons pro­duced. "With TBM and the focus on dollars you say 'I really don t care if it results in fewer tons, as long as it results in more dollars,'" Measurement systems that many companies have are archaic and cause behaviors that are counterpro­ductive, he adds.

Taking Right Path "I ve seen a lot of programs intro­

duced over the years," says Billy Romano, a 43-year-employee, "but this one seems like it is really hap­pening." A supervisor in the tin mill's production scheduling department, Romano is seeing results after an intense four-day program on Throughput-Based Manufacturing.

While the road to the total imple­mentation of TBM at Sparrows Point is still being paved, one thing is cer­tain: just like the decision to embrace TBM, each step along the way will be evaluated carefully as it is implement­ed.

Welcoming radical new ideas on steel manufacturing didn't come easy. It started in 1993 with a team that took on vital issues of long-term survivability for Sparrows Point. "That team developed a vision of where we had to be in the future: recalls Keifer. The vision pinpointed areas in need of dramatic improve­ment including on-time shipments,

cycle time and our return on net assets (RONA). "'We were beyond small, incremental improvement in these areas: concedes Keifer, "and in need of some quantum leap improvements. "

The team talked to similar compa· nies which had achieved success. leading them to Goldratt. Goldratt. working with General Motors at the time. came to Sparrows Point to make a presentation to 35 union and management personnel. 'That group was responsible for deciding whether or not we worked with Eli Goldratt: says Keifer. ''We said: 'Look. is this guy for real or is he just blowing smoke?'" At the end of the presentation the group made the decision to pursue working with Goldratt.

Goldratt interviewed some top customers lastJune. What he really wanted to know is: "What is it going to take our customers to grow their business. If we can help them do that. then we in tum will grow with them."

Putting It Together It all began to come together

toward the end of last summer when 60 employees developed a "detailed solution" to issues brought up by customers. Teams look at order entry. scheduling, transportation. guaranteed supply programs. mea· surements. operations. and other areas.

Chuck Swearingen. ironworker. is on the contractor and measure· ments teams. and helped create a team to represent the union. 'We had some reservations until we start· ed learning about it." notes Swearingen. commenting on the for­mation of the union team. "We want­ed to articulate those concerns into the whole process and make sure they were incorporated."

Swearingen is also part of a 14-member union and management "core" group which meets weekly to monitor progress. The core group consists of the leaders from each of the teams. 'This is an ongoing process." he explains. "You can t stay static and must be able to change to be ahead of the competition."

Scarce Resource Is Key The key to implementation of

TBM was identifying the area that keeps Sparrows Point from achiev­ing maximum throughput In the

TBM philosophy that area is called the Capacity Constrained Resource (CCR). which the teams quickly identified as the caster.

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This was not intended to detract from the many accomplishments of caster employees. They fully utilize their state-of-the art equipment to constantly set production records. But with TBM insights it became clear that pushing steel through a manufacturing process as fast as pos­sible will not always bring in through· put dollars. Since it can only produce so much. it is imperative that virtual­ly everything coming through the caster be a product that is in the eur· rent demand: or "pulling" the steel through the production process rather than "pushing" it

To make the best use of the cast­er. also known as the "pinch point," early training was devoted to operat­ing and scheduling personnel, says to John Rockstroh, supervisor per­sonnel development. "'We identified people whose functions were critical

to implementation and put them through the initial training," says Rockstroh, who, with Carl Johnson, vice president of operations, and David Keifer, are overseeing the training and implementation. To date, over 100 employees have been through the four-day sessions. Another 220 are scheduled over the next two months.

Accounting clerk Bill Harriday has a greater appreciation ofTBM since completing the training. Like others, Harriday'says, "I thought we'd been doing this all along." When the total TBM concept was de­mystified over the course of the train· ing, Harriday could see the positive impact. "'We re all rowing in the same direction now. TBM brings us together to focus on a common goal to produce a quality product in the shortest amount of time." He adds. "In the old days we could be internal­ly efficient but not necessarily look· ing at the right things."

Rockstroh says the TBM message is spreading rapidly. "We recently finished orientation briefings to about 950 employees: he says. Everyone who went through the briefing was offered a copy of

The tin mill's Marion Lawson (left), shipping, and Billy Romano, production scheduling, look at coils ready to be shipped. Throughput-Based Manu/acturing places emphasis on "pulling" rather than "pushing" steel through the mill. With TBM techniques. Sparrows Point will be able to deliver products in a matter 0/ days instead o/ weeks.

i

� < • • 01( .� '11 '

t

Bill Harriday, accounting, part o/tlre first group 0/ employees to study T/lroughput-Based Manu/acturing, says "I thoug/zt we'd been doing this all along.'

Goldratt's book. In addition, the Partnership group has devoted a segment on TBM in communica­tions sessions at Dundalk Community College.

The change in philosophy is not easy, admits Chuck Swearingen.

"We have some bad habits or. as Goldratt says, 'sacred cows' to break." Getting the point ofTBM

across is not difficult. though, "Our primary goal is to supply the market­place with the right product at the right time and we have to structure the plant so we can accomplish that." Changing from a tons-per-hour to throughput-<lollar mind set will take time, he admits.

Customer Wins The benefits of Throughput­

Based Manufacturing to the cus­tomer are numerous. By looking closely at throughput dollars and optimizing the caster's production scheduling, Sparrows Point is clos­

ing in on the goal of 100% on-time shipping, Significant improvements have already been made,

Increased reliability will mean our customers will not have to carry "insurance" inventories to cover for late shipments. In addition, cus­tomers will enjoy a reduction in the

Chuck Swearingen is part o/ the 14-member TBM Coordinating Implementation Committee. Implementation will be progressing throughout 1995.

amount of time between order and

delivery as mills produce steel to

meet throughput dollars, not to add to inventory.

Billy Romano sees changes at the

tin mill already. "With the right things going through the caster, and through the hot strip mill, we don't have to scramble any more. Once we get a band on the floor we can get it

right out." Romano cites a customer

who needed 800 tons. "Because we had a buffer in the pickler, we had the material and were able to ship 24 truckloads in two days,"

The future ofTBM makes

Romano reluctant to retire next year, "It's kind of exciting with all these new things corning on." he says, "but I m sure they'll be able to handle it without me."

,C -" ,;.'-, Throughput-Based

Manufacturing:

. _ Throughput-Based M�nufacturing Is a philosophy for managing 'iI -manufacturing business which has optimizing throughput (dollar�), not production (ton�)I'as its' goal. ., Simply, if we produce steel which does not result in a shipment and payment, it does not count in the throughput world.

CapacIty Constrained Resource:

The "pinch point" or most scarce resource in the manufac­turing process, Here, it's the caster.

Throughput Dollars:

Dollars generated for every hour of production on the caster-<lur Capacity Constrained Resource.

10th Anniversary Coming In December

CALLED 'PiCH ,

Is Still King

and some have suggested the addition of another. thin­slab version - it is a resource that has done everything asked of it. Or. should we say. that steelmaking employees have done everything asked of them.

Brought on stream in 1985 as the savior of the Sparrows Point plant. the continuous slab caster has lately been referred to as the negative­sounding "Capacity Constrained Resource" (CCR) or "pinch point" in the new lingo of Throughput­Based

In tile cast floor control room arefeffMilltr (from lefV, caster foreman; George Moulden, general foreman. and Steve Harris. lead foreman.

Set to cele­brate a youthful 10th anniversary

Manufacturing ([BM). With the new TBM system. the

caster has been identified as the "scarce resource." It just happens to be the source of our slab steel.

But all production facilities will be part of TBM and its goal- to opti­mize throughput (dollars). not nee-

esskily production (tons). And, to better serve customers.

Putting dollars through the sys­tem. however, will be done mainly through close schedule coordination between sales. marketing, schedul­ing and production.

Scarce as the caster might be -

in December. the caster is gaining a reputation as one of the outstanding steel produc­tion facilities in this country. thanks to a group of dedicated employees.

Graduating from its design capaci­ty of 2.9 to 3.6 million tons annually is the most notable achievement. In December. the caster set a North

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Ira Tomlin takes a test sample from the oscillating mould on the cast /loor.

American monthly record for a two vessel. two strand shop of 327,924 tons. The facility also produced a record 3, 558, 241 tons in 1994.

Not surprisingly, many caster employees who are fine-tuning this equipment and making it hum have been there from the start. One of them is John Bright, caster coordina­tor, a 40-year employee who spent his first 30 operating cranes "in all of the open hearths and everywhere in steelmaking. "

Too confined in the cab of a crane, Bright says. ''I'm not sorry I came over here. I'm in the pulpit. I'm out on the cast floor. I'm checking out tundish cars. Our crew has a lot of responsibil­ity, we're running a strand."

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He mentions improvements. The automatic slide gate nozzle openings on the tun dishes. A better argon gas shrouding system around the pour­ing tubes to keep steel from oxidiz­ing. An automatic tundish tube changer - soon to be a robot -which takes less time and saves a line slow-down and scrapped slab seqions. The automatic powder feeders that feed the oscillating mould.

Two operator pulpits on the cast floor were also added, one for each strand, which makes concentration a little easier. The computer monitors and controls were previously out in the open. ''There are duel controls," Bright says. "we can do everything

Clarence Bowman uses a pre-heater to warm up a tundish

before it goes into senJiee.

A new robotic metallu1/lical treatment station. used here by strand technician Jim Jenkins. dramatically cuts the time it takes to test steel samples.

either outside on the floor or from inside the pulpit.

"We use the computer for every­thing we do here. We can see what's happening at the BO F or we can check ladles at the ladle treatment station."

Like many caster employees. Bright had never operated a comput­er before start-up 10 years ago. "I taught myself as I went along." he says. "Even though we trained in Austria and Bums Harbor, we still had to train ourselves. The job was a challenge to me. and you never get finished with learning here. But for guys who hadn't been around com­puters before. I think we did a damn

At tire caster from the stari in 1985, iohn Bright, coordinator, tells of many improvements. one of wlrich is the pulpit he is using. The 40-year employee says pulpits Irave been added for each of the two strands.

good job." AI Henderson. also a 40-year

employee. has been part of some radical changes as well. He came here in 1952. at age 15. but his aunt stepped in. saying: "You can't go to work. you've got to finish school."

He did get a job in 1955 as a laborer and was working at the mould yard before the caster started up. In the short 10 years Henderson has been at the caster's tundish repair shop. he's seen handwork replaced by a robotic refractory spray machine. which now relines the tundishes.

"Before, it took three people eight hours to line one tundish," he says, "and now the robot sprays six tun dishes in an eight-hour period." The life of the linings also have lengthened.

With this and other improve­ments, the costs in the tundish area have decreased from $3.82 per ton at start-up to $1.47 today.

A list of improvements at the cast­er became too lengthy to print here. There have been dozens. Since the caster is so highly automated, many improvements have involved com­puter programming and process con­trols.

More improvements are planned.

Bill Van Daniker, 4O-year employee and caster veteran, wanns up a tundish tube before hook-up.

Isaiah Barber, from his vantage point in the run-out control pulpit, gets to see end-product improvements first hand.

He will soon see the slabs grow in width from 86 to 90 inches, a change now in progress that will lead to increased productivity and width­scheduling flexibility.

Barber, also a 100year caster vet­eran, has seen plenty of changes. 'The biggest change probably was the switch from 8- to 100inch-thick slabs: he notes. '1ben, there also was the switch from rail transporta­tion to the slab haulers."

As to his operation, he explains that the new slab cut-off torches seem to work better. And, the com­puter programs have been updated. "We had to enter statistics ourselves at one time, now the information is already there."

The operation is "amazing: says Bar per, a former ladle liner. "I never thought I'd see what I've seen here, compared to the old ways and the steps that were e1iminated.

"We have better steel now. I real­ly don't think we would have sur­vived without the caster. It bailed out Sparrows Point"

Another caster employee who celebrated 40 years on the job this year is AI Henderson (foreground). He andiimmy Bamll,

foreman, examine a tundish awaiting re­lining in the preparation area.

Run-{)ut processor Isaiah Barber recalLs big changes in his area such as tlu

increased slab thickness from 8 to n inches and the swilchfrom rail transportation to slab Iraulers.

Some Plates? New Depot Ready,. Willing, Able

Truckers visiting the plate depot like the neal loads and laster turnaround time says Chuck Miller. loader.

Loaders Chuck Miller {foregroundl and Bob Currier u'ork with lilt crane operator to help grdde a plate into position at the new plate depot,jonneriy tlte rod mill's billet conditioning facility.

No, it's not the latest tooth paste - the new,

improved version. It's the same product­

our plates, which are pretty good to begin

with. Newness comes in the way they are picked up by

customers at the new plate depot.

Extremely pleased with the depot are truckers,

the first of whom left happily in a very short turn­

around time on January 16 - Day One for the depot.

A growing cadre of customers must also be happy,

because they're the ones sending truckers in increas­

ing numbers.

'This was really a good idea," says Bob Currier,

one of the handful of our employees at the depot. He

should know. He had been in plate shipping as a

checker, one of the three jobs he does now at the •

depot. 'This is a better service for the customer,"

Currier says. ''We guarantee shipment within 72 hours.

"It's a lot better over here. There is less noise and

traffic. The drivers like the service."

To plate truckers, accustomed to navigating

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Bob Currier positio>lS wood blocking before another plate is adtkd to the stack on an outbound truck at the new plate depot.

John Burgamy (left), checker, and Jim Joh>lSon.foreman, survey some of the depot� product. The plate is all A36, sized at 96 z 24().inches. and of varying thicknesses.

John Wallace is the plate depot's customer service account representative, and Barbara Holmes serves as his back up. They have "800" telephone lines and fazes. The depot has been a Ii/e-saver tor some customer.;, Wallace says.

Mechanics Phil Cantow (from left) and Ziggy Hyman were part of the four-man team that worlled with Mike Shemer, project leader, plate mill, to convert rod mill billet conditioning into the plate depot, seen in the distance, right of center.

around the bustling north end of the plate mill buildings. dodging the nor­mal hub-bub of mill life. the new depot is an oasis of tranquility.

It's located off the beaten track in the former rod mill area. which is trucker-friendly. Jim Johnson. depot foreman. says the 66.6QO.square-foot building once housed billet condi­tioning equipment for the former rod mill. Built in 1967. the facility was extended in 1982 to shelter a new $3-million grinding machine and inspec­tion equipment.

"We had to gut the interior. level the floor. make wooden pallets as bases for stacks of plates. and widen the truck entry door: Johnson says. The overhead crane was in place. and so were the railroad tracks over which the incoming plates travel.

The transformation began in mid-1994 with project leader Mike Shemer. plate mill technology, and a team of four mechanics - Bruce Kabernagel. Ziggy Hyman. Phil Cantow and Dennis "Ralph" Bellamy - who dismantled the equipment and stored it.

So far. it's been a great success. "Our experience during the first four months of 1995. when we achieved

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100% reliability. convinces us that we headed in the right direction," says Dick Cochran. plate marketing man­ager.

He cites five depot advantages -mainly for customers, but there's also something in it for the division:

1. Reliability. Before we take the order we tell the customer, "Yes, it's here." and reserve it.

2. Availability. We review the inventory and re-stock often.

3. Quality. Plates are inside, out of the weather, where they are less likely to rust. providing a better sur­face.

4. Efficiency. It's fast. We can

ship in three days or less, and load­ing takes about 30 minutes.

5. Premium Prlce_ Here's where the division comes in. Better ser­vice: better price.

The depot is not handling the entire shipping job. Actually, it's a small amount to start. The long-term goal Jor the depot is to ship 4-6,000 tons per month. Only A36 grade plates, in standard sizes, are stocked. The bulk of the orders will still go out directly from the plate mill by truck or rail.

In its infancy, however. the depot is off to a running good start. "I think everyone associated with it has

been pleased with the way it has been going," says John Wallace, cus­tomer service account representa­tive, who handles the depot with his back-up, Barbara Holmes. Bill Adey, plate mill expeditor, coordinates depot truck appointments with the customer and the transportation department.

"The three-day turnaround is a real life-saver for some customers. because business conditions change so fast: Wallace says. But can you ship in a few hours? "Yes. We had a customer call late one afternoon and he wanted the plates the next morn­ing. We did it"

There's flexibility, too. "We nor­mally sell a full truckload. but we could ship a single plate if it was nec­essary to satisfy an emergency."

The depot Wallace suggests. ·seems to be the prototype for 'throughput-based manufacturing,'" in which delivery time to customers is dramatically reduced.

Hearing of the service, some first­time customers have experimented with the depot and there is repeat

The new pllJte depot was once the billet conditioning building for the former rod mill. Its remote location makes access easier on truck., •.

business. Wallace says. Even more than once a day! Bob Currier says: "We see some truckers twice a day. They make one run. then come right back on the same day to get another load."

The depot concept is more effi­

cient. says Chuck Miller. formerly a plate mill crane operator. "Here. everything is sequenced. Every plate size has its own bay. We can control the way we load and store plates on the pallets. so that reflects on the way we load them on trucks. We can do it faster because the plates are ready to go."

Our own employees seem to like their varied jobs as well as their new location. There are two loaders. a crane operator. checker and fore­man.

They routinely switch jobs during their tum. doing the loading. check­ing or operating the crane. "We do everything. even the painting," Bob Currier jokes. They have been sprucing up the walkways. lunch and welfare areas. and the recycled facili­ty looks well-kept, like somebody cares about it once again.

•

Coating Line's Lader Gets 'Gold'

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Olle of 10 __ ......... y_ to Nalv. the Gold AwlUd. the

company'. hi.,.... recocnltlon.

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chief .xecutlv. omcer. MId the 10 .... pIoy_ .........

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