MMK Saves RUB 500m+ on Digital Coal Spending Optimization Model

UrBC, Magnitogorsk, June 13, 2019. Magnitogorsk Iron & Steel Works (MMK) saved more than RUB 500m last year by using a special mathematical model to optimize its coal purchases and spending, MMK’s Information, PR & Advertising Department reports.

The savings stemmed from getting better structured coal charge and higher quality coke.

‘The model is part of MMK’s large-scale digitization strategy. The core task is to create a multi-faceted, multi-tier sintering/coke/blast furnace production model that will optimize our first-level processing production flow,’ the company says.

According to MMK, the coal purchase and spending optimization model has been in use since February 2017. The model is based on the analysis of the plant’s coke-chemical and blast furnace production departments’ performance in 2011-2017 and is MMK’s own development. The model has been designed and introduced and is now being improved by the Math Modeling & Systemic/Analytical Studies Group at MMK’s R&D Center. The model ensures process optimization both at the tech expert’s level and at the purchasing specialist’s level. The goal is to obtain the amount of coke coal needed at the lowest cost possible.

‘The model is currently being applied to our coal concentrate purchasing routines; the system integrates the expertise of and the requirements from all of MMK’s departments that have to do with the process (including the Category Purchases Department, which owns the model, the R&D Center, the Coke-Chemical Department, and the Economic Issues Department). Every month, calculations get done so as to 1) predict the coke quality based on the given structure and amount of raw coal stuffs; 2) optimize the coal charge delivery and spending; 3) see just how well the optimization estimates can take price dynamics into account; and 4) produce an efficient price recommendation for purchasing coal concentrates,’ the company says.

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