Process flexibility in steel plants

This post is an edited excerpt from my thesis “Strategic and operational capabilities in steel production”. You can download a full PDF here.

Capabilities that follow from flexibility on the machine level become more important when a steel plant is producing a wide product range and production volumes are low for each variant. Setup costs increase, and so does the amount of WIP and general complexity of operations.

Flexibility is a characteristic of the interface between a system and its environment that can be seen as “an absorber for uncertainty”. It has a buffering function, as for example volume flexibility that allows production to adapt to variations in demand.

Process flexibility yields the capability to process an arbitrary sequence of products with minimum time and cost penalty. It provides the ability to change quickly among a group of known products, and to move quickly, smoothly and cheaply from one state to another without great cost and/or organisational disruption.

Hence, flexibility serves as a “buffer against variability” by increasing the short–term ability to process an unplanned sequence or combination of products.

The degree of process flexibility depends on both available technology, the policies that guide its operation, and the presence of organisational capabilities needed to realise the desired policies. For example, proficiency in Shingo’s SMED method provides a systematic approach to increase process flexibility in production.

How does process flexibility help to improve productivity? It eliminates the need for buffering with inventory. In the context of steel production, process flexibility determines (at any given time) the capability

of the meltshop to produce a particular steel grade;
of the continuous caster to cast a particular steel grade and slab geometry; and
of the hot strip mill to roll a slab of a particular grade, width and thickness into the desired target thickness.

Different companies must make their own prioritisations regarding what technological and work related changes to implement in order to improve process flexibility. I will return to this subject in a coming post.

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