Steelmakers battle to catch up
on downturn-delayed maintenance
By Robert T. Woodings
(May 20, 2002) America’s steel industry today faces the challenge of running flat-out with equipment that was maintained on shoestring budgets because of lack of available capital during the downturn period that immediately preceded the current steelmaking upturn. With pricing favorable and demand strong, steelmakers have no choice but to run their equipment to the breaking point. This issue comes into even stronger focus now given the three-year window provided by President Bush’s section 201 ruling.
It is unreasonable to expect that beat-up blast furnaces, BOFs and casters will perform miraculously without fail, so managers and front-line employees are walking a tight rope now to keep up with operational maintenance and not impede their equipment’s output.
The challenge today for the steel industry is to complete required maintenance work while trying to maintain full operation schedules to stay abreast with order books bulging with favorably priced orders. Meeting customer demand for an increasing number of “rush” orders already is difficult without adding maintenance downtime to the scenario.
Today’s maintenance dilemma has roots that go back to the downturn through which the steel industry struggled recently and the resulting prolonged shift in plants’ focus on cost reduction, including the downsizing of internal maintenance departments. As business declined, capital projects were put on hold and preventive maintenance was limited to critical applications. Steel companies shifted into survival mode and pressures were placed on maintenance departments to reduce costs.
For economic reasons, spare part stocks were allowed to shrink without acquiring replacements. Due to reductions in spare parts, many equipment supply deliveries are on an emergency basis, making it essential that delivery commitments are met without fail.
I am not reporting I believe the current boom has loosened maintenance purse strings. Indeed, everyone in the industry continues working to reduce the cost of a ton of steel. They are looking at raw materials, capital budgets and the cost of suppliers and labor. Maintenance suppliers’ costs are being reduced by very aggressive bidding and forced price reductions.
With all of those factors and many more, maintenance is an issue demanding action today. Many maintenance managers are tearing their hair out and wondering in desperation, “What can I do to keep this equipment running?”
Having gone through many steel peaks and troughs over the past century, Woodings Industrial Corp. has a long history of helping steelmakers successfully manage their maintenance challenges. The solution involves relationships between the dedicated, experienced internal maintenance groups and suppliers who are more focused on equipment maintenance. Following are recommendations for steelmakers’ maintenance managers as they struggle to get maximum yields under difficult conditions:
Fix or replace?
The curtailment of much of what is considered routine maintenance during the recent downturn has brought many pieces of equipment to the point where replacement must be considered. Cost-benefit analyses driven by return-on-investment criteria are the tried-and-true means to help managers make the decision about whether to fix or replace their equipment.
Today, however, order delivery demands and downtime are bigger factors in cost-benefit analyses than in the past. Those facts tend to drive the decision more toward maintenance and tilt the scales toward suppliers with superior track records in fixing equipment to keep it running until replacement is feasible because the downtime can be endured.
New equipment purchases often are easier because they are based on a defined set of criteria and detailed specifications and drawings. On the other hand, repairing equipment to like-new condition so that it optimizes the operation presents challenges for the plant and service provider. Bringing a piece of equipment to like-new condition requires that the supplier have a skilled engineering group that works closely with the customer’s and the supplier’s plant personnel, including mechanics, machine tool operators and fabricators.
Thus, suppliers who can design, engineer, manufacture, recondition and assemble provide the most value in the decision-making process.
Ensure your equipment has a long productive life
There is a simple truth about steelmaking equipment: Proven, well-engineered equipment manufactured to rugged specifications delivers maximum productivity and longevity. That requires an investment in technology and in expertise gained by experience driven by a customer-service focus. Now is not the time to experiment with suppliers who are willing to gain your business with low-ball prices on unproven parts, repairs or new equipment.
Your equipment maintenance supplier also should be well-versed in new technology. What’s more, that supplier also needs to know when to recommend new solutions, how to incorporate them responsibly to the benefit of your company and when to rely on the good, old-fashioned remedies.
Today’s suppliers need to bring value-added services. The day of just “fixing and returning” is gone. Maintenance suppliers must integrate design with engineering support and have a manufacturing operation proficient in a variety of disciplines, including pneumatics, hydraulics, structural work, machining, fabrication and field work.
What to expect from maintenance suppliers
Steel companies are fortunate to have a good selection of suppliers to call on for maintenance and equipment solutions – many worthy competitors of Woodings Industrial Corp. Maintenance managers should base their decisions on which supplier to chose after weighing that company’s reputation, technology, experience and workmanship. Maintenance managers should expect nothing less than sterling service, top-shelf quality and competitive pricing on every project or job.
Remember, too, that your supplier also is in business to generate a profit so that he is here tomorrow; this is not to say, of course, that the customer should pay for supplier’s inefficiency and waste. As our world gets increasingly competitive, the burden rests on suppliers to win work based on cost competitiveness driven by customers’ macro circumstances. The big picture today for our customers includes the entire globe, a world full of competitors who continue to shrink costs.
At Woodings Industrial, we recognize the strictly low-bid decisions can work in some areas, but not all. In most cases, the supplier who deserves the work should be the one who is not only competitively priced, but also dedicated to working with the customer, totally focused on quality and on-time delivery, and willing to be there to service equipment after repair or installation.
Select a supplier who will become embedded
In making your choice on maintenance suppliers, it’s wise to determine whether that company and its people are willing to be a daily part of your business. Will they be at your plant more often than not or will they be in touch mostly by fax and email? Do they have the experience and facilities to meet your demands or do they sub out their work.
An embedded supplier often will spot trouble before you do. The field representative who is in your plant frequently will recognize signs of wear and tear – the telltale hum of a worn bearing, the odd squeak or rattle, the unusual whoosh or wheeze.
A supplier who is embedded in your business provides a win-win situation for both parties, a relationship driven by past mutual accomplishments and based on trust. Both must want the other to succeed. Your company’s primary job is to make steel and your maintenance supplier’s job is to make sure your equipment is in tip-top operating condition. If those jobs are done well, you both will be in business tomorrow.
History has proven the steel business is destined to endure cycles of ups and downs. Nevertheless, today many “experts” are singing the blues about the future of our steel industry. We here at Woodings Industrial see the industry in a more positive light. It can survive on the merits of good decisions. And many of those good decisions are waiting to be made in the maintenance departments at each and every steelmaking operation today.
-30-
(Robert T. Woodings is president of Woodings Industrial Corp., Mars, Pa., a worldwide leader in the manufacture of metals industry equipment such as tap hole drills, clay guns, tuyere stocks and engineered specialty products for continuous casters. Woodings is the North American steel industry’s oldest continuous family-operated business. Woodings has plants at its headquarters in Mars, and Pittsburgh and Harmony, Pa., along with offices in Detroit, Mich., and Gary, Ind.)