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BS/020416/SH-WZ(2000)CONFIDENTIALEnhanceCapacityStabilityUtilization,ProductQualityandAccuracyTimelyDeliveryPerformancethroughLeanTransformationThisreportissolelyfortheuseofclientpersonnel.Nopartofitmaybecirculated,quoted,orreproducedfordistributionoutsidetheclientorganizationwithoutpriorwrittenapprovalfromMcKinseyCompany.ThismaterialwasusedbyMcKinseyCompanyduringanoralpresentation;itisnotacompleterecordofthediscussion.April24,2002LeanManufacturingDiagnosticPhaseProgressReview
BS/020416/SH-WZ(2000)1TABLEOFCONTENTLeanManufacturingDiagnosticResultsBaoSteelLeanTransformationApproach
BS/020416/SH-WZ(2000)2BaoSteelispressuredtoincreasethecapacityutilizationofitsHRC,currentlythekeyandbottleneckpartofBaosteel’sproductionprocessistomeetgrowingdemandbothdomesticallyandinternationally Source: Baosteel,TeamAnalysis,McKinseysteelexpertsinterviewsBAOSTEELNEEDTOQUICKLYENHANCECAPACITYUTILIZATIONTOMAINTAINANDGROWMARKETSHAREHRC2001capacityutilization%OEEcapacityutilization158020502001Production3.256millionton5.056milliontonCapacityutilizationbestpracticeOEEbestpractice80-85%70-75%
BS/020416/SH-WZ(2000)3BAOSTEELNEEDTOCONTINUOUSLYIMPROVEPRODUCTQUALITYTOMEETEVERDEMANDINGCUSTOMERREQUIREMENTBaoSteelhasbeencontinuouslyenhancingcapabilitytomeeteverdemandingcustomerrequirements… Source:Baosteel…there’ssomegapvs.everdemandingcustomerrequirementsonqualityandhistoricalbestlevel.ReworkRate%158020502000200120002001Downgraderate%158020502000200120002001CustomerComplaintsnumberQualityCompensationtocustomerRMBYuan/10,000Yuan2000200120002001CustomerRequirementsHRCqualityenhancementOnecustomer’srequirementsforsurfacequalityarehighashotrolledplatesareusedasitsproductfaceplatesdot:3within1metervertically,area3mm2,depth0.5mmscratch:length5mmOnecontainer-producingcustomer’
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