By Bruce Lenzer, CVS-Life, FSAVE, CQM/OE, CLA, ACQMSA – President, Lawrence D. Miles Value Foundation
Steve Kirk and Don Parker reviewed 61 papers submitted to SAVE International for the 2017 Value Summit for the Miles Value Foundation Paper of the Year Award.
The award is given each year to the paper that best describes the accomplishment of a “Function Inspired Change.” Each paper was evaluated and scored on the following six factors: 1) the use of Function Analysis, 2) FAST diagramming, 3) listing of Function Ideas, 4) use of Creativity, 5) the Change Identified and, 6) its Magnitude of Savings.
The winning paper this year was titled, “Electrical and IT Requirements for a Central Warehouse” authored by Chandan Sinha, AVS. Chandan is the Manager Projects, Engineering & Projects Division, Tata Steel Limited, Jamshedpur, India.
The Supply Management Department (SMD) of TATA Steel Limited currently operates a network of 27 warehouses across the Jamshedpur works for catering to the requirements of operation, maintenance and process consumables. Following capacity expansion of the Jamshedpur plant from Three Million Ton per Annum (3 MTPA) in 2005 to Ten Million Ton per Annum (10 MTPA) in 2012, the warehousing requirements within the Jamshedpur steel works increased significantly. Accordingly, approval was obtained from Tata Steel management to set up a new infrastructure requiring facilities to operate 24 hours per day and 7 days per week. The project scope was as follows:
- Upgrade existing ferro alloys & refectories stores
- Construct a new store for heavy spares
- Provide modern facilities and IT system for handling spares & process consumables
- Relocate existing Incoming Material (IM) Section for warehousing capital stock items
- Procurement and installation of modern “storing & handling” equipment
Robust performances of the facilities were dependent upon high availability, reliability and quality of Electricals. Subsequently a cross functional team was formed and the Value Engineering Methodology was selected to study the Electrical & IT Requirements for the Central Ware House & Relocation of IM Section projects. The team was also mandated to explore opportunities for 15% reduction in capital expenditure.
During the VM study, 21 functions were shortlisted for the Creativity Phase. Out of 18 alternate options generated, 15 options were short listed for implementation after evaluation. The outcomes (audited saving) are as follows:
- $ 258,824 (27%) reduction in capital expenditure
- $ 48,529 (15%) / Year reduction in power tariff
- $ 10,294 (15%) per annum reduction in maintenance expenditure
- 370 Tons / Year reduction in CO2 emission
- 193KW of reserve electrical power was created for meeting future requirements
This paper included – Voice of the Customer, accrual of technical – safety – and cost data during the Information phase of the job plan. The identification of 52 functions for the project are included in the paper and the use of Customer FAST and three Technical FAST diagrams, as well as weighted evaluation of alternatives is shown. The original project capital reduction goal was exceeded and life cycle operating costs were reduced to provide much better value for the Company.
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