Beating the Odds at Vardhman Special Steels
An Indian steel mill is running at full capacity, and still the orders keep coming. Management has decided the time has come. They need to expand the physical plant. But could they expand while still shipping new orders? Could they keep disruptions to a minimum and costs under control? Could they finish on time? How Realization’s SMART Project Delivery System helped a venerable Indian steel maker beat the odds.
Vardhman Special Steels is a successful Indian rolling mill steel manufacturer. They make sheets, rods and bars. As the company grew, they finally reached full capacity. The company ran overtime lines to meet customer demand. But it was clear they would need to expand. Management signed on to a bold expansion project. Cost, approximately $20 million. Time needed would be about twelve and a half months.
Managing two shutdowns
Expanding the plant would mean two 15-day shutdowns of existing production lines. The first would happen in the middle of the project. The second would happen towards the end. Any delay in the shutdowns would bring loss of production, frustrated customers, and cost the company $200,000 a day. Vardhman could not build inventory to meet unexpected demand. All output was already accounted for.
The project was highly complex for several reasons. Engineering, procurement, construction, installation and testing tasks all had to be coordinated within and across functions. Everything slated to happen over the coming year had to be worked out between the expansion project and everyday mill operations.
Tasks would have to happen in a certain order. Any delay in one area could quickly cascade into others. Everyone understood routine delays and changes were unavoidable. Delays in engineering, placing orders, communication and delivery with suppliers, labor, all of that would be part of this project as in every other.
A logistical issue was looming on the supplier side. The Italian supplier of the new manufacturing equipment had locations in Europe and in India. That made procurement a separate concern. Teams on both sides would need to be especially vigilant.
Speed was of the essence
Senior management feared losses from the expected delays. That’s why they stressed speed above all else. The company had a skilled operations team, but no one on site had the experience to coordinate or manage the many, many pieces that would soon be set in motion. Genuine experience and keen judgment were critical to identify and control delays. Even with their largest ever capital expansion project in front of them, Vardhman didn’t have the kind of project manager they needed.
That’s why senior management reached out to Realization. They would need a system—and a team—to help them with relevant schedules and information as the work began.
SMART Project Delivery saved time and money
Vardhman had looked at alternatives like Primavera and MS Project. They chose Realization because it was the only system they saw that went beyond planning. SMART Project Delivery’s ready-to-act information helped Vardhman convert plans into detailed task schedules. This allowed teams to work in a focus and finish mode instead of spreading resources too thin.
“For example, instead of all work packages in civil works being in progress, but none of them completed while structural and equipment erection teams wait for work-fronts to be available, SMART Project Delivery ensured that critical civil work packages were completed and handed over in their entirety.”
Sachit Jain, MD, VSSL
Mr. Jain reported that the advantage was that every team always had complete work-fronts available before they engaged. They could concentrate their resources, finish their work uninterrupted and hand over complete work-fronts to the next team. Similarly during installation, he said, instead of having the project team create workarounds during installation and commissioning due to work-fronts not being fully available, it ensured that all utilities were up and running before commissioning of production equipment started. As a result, the plant was ready for production the moment the production line was commissioned.
The contractor, he added, always started work with full work-front and drawings available to them. He was confident that his people would not get stuck in the middle waiting for either drawings or materials.
Instead of responding to delays by replanning the entire project, SMART Project Delivery kept the original plan, and identified schedule risks and future tasks that teams could expedite.
SMART Project Delivery highlighted risks to the project’s completion nearly seven months in advance. This early warning signal allowed the management team to start a process of joint reviews with the equipment manufacturer. So the team helped to manage and coordinate across all locations to ensure timely release of orders. This ensured a smooth flow of complete inputs to the design consultant, expedited release of approved GFC drawings to site teams, and on time completion of the project.
Mr. Jain’s team realized that coordination among the supplier’s various sites was a bigger problem than the coordination between his team and their contractors. So they worked to get that organization communicating better among themselves.
The SMART system integrated daily and weekly progress reports with the project plan. One pervasive reason project management systems don’t get successfully used, is that it's very difficult to ensure timely updates across the organization. People are loath to update multiple systems with similar information, especially when they get nothing in return. SMART Project Delivery directly feeds tracking data into the plans and automatically converts daily progress data into project progress information. By following the daily schedules generated by the system, and acting on its management information, Vardhman could minimize work stoppages and ensure that work got done in time while the mill continued operations.
Greater capacity, an early completion date, saving money
In a project with little room for error, SMART Project Delivery not only helped Vardhman meet its construction goals, it beat them. Both line shutdowns were shorter than expected, saving the firm hundreds of thousands of dollars. Better still, the overall completion time shrank from an expected twelve and a half months to just eleven, saving even more money.
Which meant Vardhman’s increased capacity translated into more revenue, faster.