Abstract
M.Phil. (Engineering Management)
In South Africa modern steel making plants faced challenges that emanated from inefficiencies caused by old equipment and a lack of skilled manpower. Lack of continuous research in the steel industry also meant that local companies could not stay ahead of competition in the global economy. In order to survive, local companies had to constantly improve production efficiency levels as well as evolve at the same rate as the ever changing international manufacturing trends. These improvements had to consider the local operating environment so that adopted ideas could be successfully implemented in the country. The continuous importation of steel products that could be manufactured locally had to be reconsidered because they resulted in company closures. This had negative socio-economic repercussions for the country.
A steel producing company in the Vaal Triangle was used as a case study in this research. As the largest in-land steel works in Africa it provided a good research ground for steel production in South Africa. The company was an integrated iron and steel works that was labor intensive and consumed vast amounts of resources in the form of iron ore, coke, coal, manganese, dolomite and sinter. The manufacturing process started at the Raw Material Handling (RMH) department which fed inputs to the Blast Furnaces (BF). Pig iron from BF was then transported to the steel making department where slabs were produced. These steel slabs were used to make coils at the hot and cold rolling departments. Figure 20 in appendix B highlights the important plants in the steel manufacturing process. In all these plants the blast furnace was the center of activities as it supplied various departments with gas that was used for energy purposes. Blast furnace operation also had an influence on the overall performance of the company and could easily affect the profitability of the steel making business.
As a strategic operational move the company changed the customization operation model and adopted a mass production model in June 2014. This was in response to financial and market share challenges the company was facing. This research paper compared these two production models in order to come up with a cost effective model for the South African steel industry. The production models under consideration were Make-To-Order (MTO) and Make-To-Stock (MTS). MTO and MTS were the independent variables in this research. The MTO concentrated on producing according to the order book while the MTS aimed to produce steel in large volumes with the hope of selling the resultant stock to customers. There were common and dependent parameters to both models which could be used to compare them. These parameters included production volume, product quality and energy consumption. Logistics...