Production Excellence
Outokumpu's Production Excellence programme (OK>1) made good progress in 2009. Total benefits from the Group-wide Operational Excellence programmes, which include Commercial Excellence, Production Excellence and Supply Chain Excellence, totalled EUR 150 million. Targeted benefits for OK>1 in 2009 were realised and the number of improvement teams increased by more than 75%. Annual audits of the Group's manufacturing plants also showed an improvement in the average audit score. Most of the work done in 2009 was carried out using internal resources, minimising external consulting costs.
Understanding losses
The purpose of the Production Excellence programme is to reduce waste, i.e. to indentify and take advantage of improvement opportunities. Work on developing a good understanding of operational losses has continued. This allows local management teams to prioritise the necessary improvement activities. This process will allow more focused activities to be undertaken in 2010 and consequently increase the achieved benefits.
The purpose of the Production Excellence programme is to reduce waste.
Deploying resources
Dedicated improvement teams have investigated and addressed the prioritised losses. The number of improvement teams increased by 75% in 2009, achieving significant cost and inventory savings. The number of people involved in workplace improvements increased significantly and enabled the development of autonomous maintenance and safety activities. Approximately 60% of all employees have now been involved in providing support for improvement activities in 2009.
Sustainable achievement
Sustaining the gains is proof of the improvement work. Although temporary and permanent layoffs in 2009 caused some operational difficulties, OK>1 tools and techniques were used to identify and resolve issues and restore operational capability. The development of improved daily management, performance control and autonomous maintenance activities continued to provide a good platform to maintain operational improvements.
Training and development
Training of Outokumpu personnel involved in Production Excellence continued in 2009. Investment in training continued in the form of the 15-month Production Excellence Change Agent training programme. More than 150 change agents have now been trained or are currently in training. Further training and development took place to support Outokumpu's autonomous maintenance activities in most plants.
A development platform
The OK>1 programme supports development of supply chain improvements at most of Outokumpu's large production units. Safety improvements using OK>1 tools were also introduced in 2009 and a number of production units enjoyed a full year without lost-time accidents. This will also be a focus area in 2010.
Sharing of best practices and the development of improved corporate standards will also continue in Outokumpu in 2010.