Cut Fat off your Production Lines but Keep the Flesh and Bone
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Sustaining asset performance while managing quality of production with reduced production costs is like keeping your balance while walking on a high-wire. When the market sets the sales price and the shareholders sets the net profit expectations, the only choice left is decreasing production costs. Labor-cost appears to many managers as an easy target when cutting costs. On the contrary, investing in improving the labor qualifications can result in higher efficiency and by default lower costs. The market is pushing organizations who are looking for sustaining or improving profits in this direction, including the steel industry that also faces this challenge. How do organizations select optimum production levels, minimum manpower numbers in order to sustain their productivity and profitability while maintaining a flexibility in following the market demands? The short answer is "do more for less". However, it is not an easy task. The Target is to demonstrate this situation and the analysis that has been done at Rajhisteel, where the results are promising so far. Planning to upgrade the QMS to ISO 9001:2015 will help the organization improve and shift the focus to sustainability and effectiveness.