MMK to enhance efficiency through low-budget projects
10 February 2016 (09:22)
UrBC, Moscow, February 10, 2016. Magnitogorsk Iron & Steel Works (MMK) is going to rely on a set of low-budget projects as one of the key ways to enhance its efficiency. The company intends to direct some 1bnRUR to these projects every year, MMK Business Development & Efficiency Management Director Maxim Lapin said at the annual summit on Russia’s metal and ore mining industry in Moscow.
One of the world’s low-cost production leaders, MMK will keep on working to increase production efficiency in order to retain its share of the market, Lapin says. To achieve this goal, the company will try to reduce its produce prime cost by 2-3% every year. This will help the business remain competitive even when demand is lower and quality requirements are higher than before.
MMK also plans to invest in its personnel’s professional development, as workers are also interested in making the company more operationally efficient. It was the management’s idea that the company employees can develop and present their low-budget efficiency enhancement projects in a special contest. These projects must pay off within two years’ time and cost under 100m RUR to implement. The contestant behind a winning and successfully implemented project gets rewarded proportionally to the project’s economic effect.
Every such project normally costs the company 5 to 10m RUR and pays off in less than a year. According to Lapin, this is not typical of the conservative metallurgical industry, where one has to wait for the ROI for several years at least.
One of the world’s low-cost production leaders, MMK will keep on working to increase production efficiency in order to retain its share of the market, Lapin says. To achieve this goal, the company will try to reduce its produce prime cost by 2-3% every year. This will help the business remain competitive even when demand is lower and quality requirements are higher than before.
MMK also plans to invest in its personnel’s professional development, as workers are also interested in making the company more operationally efficient. It was the management’s idea that the company employees can develop and present their low-budget efficiency enhancement projects in a special contest. These projects must pay off within two years’ time and cost under 100m RUR to implement. The contestant behind a winning and successfully implemented project gets rewarded proportionally to the project’s economic effect.
Every such project normally costs the company 5 to 10m RUR and pays off in less than a year. According to Lapin, this is not typical of the conservative metallurgical industry, where one has to wait for the ROI for several years at least.
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