More Related Content
Similar to Designing, Manning & Operating a World-Class Downstream Business (20)
More from Innoval Technology (20)
Designing, Manning & Operating a World-Class Downstream Business
- 2. Summary of Presentation
Innoval Technology
Background
g
Designing an Efficient and Viable Downstr
ream Plant
Market Analysis
Equipment Specification
Plant Design
Cost Modelling
Developing the Right Skills
Achieving World-Class Standards
Commercial-in-Confidence, © Innoval Technology Ltd
IP08-006, Slide 2
- 4. Innoval Technology – Our Credentials
Innoval Technology is an independent commpany providing a unique resource of
expertise to the downstream aluminium industry
Formed in 2003 as a result of closure o one of Alcan’s Global R&D centres
of
We are a group of 26 aluminium experts – our strength is the breadth of our
aluminium knowledge
Rolling and extrusion process expertise
Metallurgy product expertise
Surfaces expertise
p
Our engineers have an abundance of prodduct and process experience
Most have been supporting the industry for over 20 y
pp g ry years
Many have held Senior Management p positions in global aluminium companies.
Commercial-in-Confidence, © Innoval Technology Ltd
IP08-006, Slide 4
- 5. Innoval Technology – Strategic Support
Innoval has undertaken the following types of strategic support work for potential
s
investors in downstream fabrication busine
esses:
Technical Due Diligence on existing plants
Pre-Feasibility Studies and Greenfield plant design
Plant investment and upgrade support
t
Commercial-in-Confidence, © Innoval Technology Ltd
IP08-006, Slide 5
- 7. Methodical Approach
Market Analysis
Equipment Specification
Technical Configuration
Technology Choices
Plant Design
Cost Modelling
Commercial-in-Confidence, © Innoval Technology Ltd
IP08-006, Slide 7
- 8. Market Analysis
Review all potential products for the plant
Home market
Export market
Gather data on product sales prices
Important to have understanding of marke price vs. production costs
et
Some products cost more to produce
High sales price does not necessarily m
mean high profit
Analyse competition in home and export m
y p p markets
Quality required to compete in chosen market
Decide on which products to manufacture
Commercial-in-Confidence, © Innoval Technology Ltd
IP08-006, Slide 8
- 9. Methodical Approach
Market Analysis
Equipment Specification
Technical Configuration
Technology Choices
Plant Design
Cost Modelling
Commercial-in-Confidence, © Innoval Technology Ltd
IP08-006, Slide 9
- 10. Assess Technical Challenges for Chosen Products
Products vary in their complexity and in their difficulty of manufacture
The products determine what equipment is required in the plant
s
Type of rolling or extrusion equipment
Type of finishing operations
Example – Can Body Stock (CBS)
A single can line manufactures 2,000 cans per
r
minute (1 billion per year)
10,000 tonnes of aluminium per year (2 x 14
tonne coils per day)
Some may think this is a simple product
… BUT actually it is technically demanding
Commercial-in-Confidence, © Innoval Technology Ltd
IP08-006, Slide 10
- 11. Can Body Stock - Thickness Reduction an Tighter Control
nd
Coca-Cola’s First All Aluminium Can, 1967
, Coca-Cola Aluminium Can, 2009
,
(weight 21g) (weight 12g)
Commercial-in-Confidence, © Innoval Technology Ltd
IP08-006, Slide 11
- 12. Can Body Stock - Thickness Reduction an Tighter Control
nd
Extremely tight specification for aluminium
m
sheet thickness
Correct thickness tolerance can only b be
achieved with state of the art thicknesss
control systems ...
… AND the know-how to get the most from
know how
these systems
Unlikely to be achieved at start-up
Failure to meet specification will lead to ca
an coil l
il length
th
plant jams and can strength issues ~10,000 m
Profile
(
(crown) )
~0.5%
Al strip 250 +/- 5 microns
Strip wid ~ 1.8 m
dth
Commercial-in-Confidence, © Innoval Technology Ltd
IP08-006, Slide 12
- 13. Can Body Stock – The Challenge of “Earin
ng”
Ears
“Earing”
Anisotropic mechanical properties caused
by crystallographic texture
Sheet with “earing” that is out of specificat
tion
will
Risk jamming and stoppage of the can n
plant line
Result in volume of can being too sma all
can after re-draw and wall ironing
with severe earing
Commercial-in-Confidence, © Innoval Technology Ltd
IP08-006, Slide 13
- 14. Can Body Stock – The Challenge of “Earin
ng”
World-class earing can only be achieved w
when rolling DC ingot through a Hot Line
that includes a Hot Tandem Mill.
Source: SMS
Commercial-in-Confidence, © Innoval Technology Ltd
IP08-006, Slide 14
- 15. Summary of Sheet Rolling Process
DC Hot reversing Hot tandem
Caster mill mill
ng
Pre-heatin
Hot coil
Scalper
Furnaces Filter
Furnaces Filter
Continuous caster
Hot ll
H t roller
(Self-
anneal)
Cold coil
Cold finish
hing Cold mill
mill
Coating Final
Inter-anneal Cold roughing mill
anneal
Doubling mmill Cold mill
(foil)
Commercial-in-Confidence, © Innoval Technology Ltd
IP08-006, Slide 15
- 16. Rolling Technology Configurations for Var
rious Products
Hot Band Option
HRM + 4-stand HTM coil-to-coil HRM Belt Caster Roll Caster
Typical Capacity (tonnes pa) 700k 150k 120k 20k
Can Body S
C Stock (C S)
(CBS)
Can End Stock (CES) & Tab
Foilstock
Standards - Low Mg
Products
Standards - High Mg
P
Surface Sensitive Products
S f S iti P d t
Thick Products
Clad Products
Others
meets world class quality requirements
can be made but does not meet all quality requirements
e
cannot be ma or fails to meet most quality standards.
ade
Commercial-in-Confidence, © Innoval Technology Ltd
IP08-006, Slide 16
- 17. Making the Appropriate Technology Choic
ces
Need to identify correct technology options to achieve current customer quality
s
standards
E.g. on-line measurement technologies
There are significant variations in performa
ance and price of equipment
Consider future proofing the equipment to meet evolving customer needs
Tightening of specifications
Increasing coil weights (width and l gth)
I i il i ht ( idth d length)
Commercial-in-Confidence, © Innoval Technology Ltd
IP08-006, Slide 17
- 18. Methodical Approach
Market Analysis
Equipment Specification
Technical Configuration
Technology Choices
Plant Design
Cost Modelling
Commercial-in-Confidence, © Innoval Technology Ltd
IP08-006, Slide 18
- 19. Plant Design – Capacity Calculations
Correct sizing and multiples of equipment type
E.g. What size of furnace and how many?
g y
Assessment of spare capacity within key a
assets
What other products could the plant make to fill any spare capacity?
Awareness of the magnitude of process lo osses at every stage (recoveries)
To sell 1000 tonnes of final product the rolling mill may need to roll 1200 tonnes
e
Example – Rolling Mill
The capacity of a rolling mill depends on t products being rolled
the
A rolling mill represents a significant comp
ponent of Capex so must be specified
very carefully
Commercial-in-Confidence, © Innoval Technology Ltd
IP08-006, Slide 19
- 20. Example – Rolling Mill Capacity Calculatio
ons
Product One Two Thre
ee Four Five
Final gauge [mm] 0.1 0.22 0.5
5 0.8 2
Percent of production 33% 23% 22%
% 9% 13%
Rolling time [min] 54 18 10 6 3
Handling time [min] 30 20 20 15 10
Overall capacity [ktonne/yr]
Overall capacity [ktonne/yr] 110
Product One Two Three Four Five
Removal
R l Final gauge [mm]
Final gauge [mm] 0.1
01 0.22
0 22 0.5
05 0.8
08
of heavy Percent of production 39% 28% 26% 7%
gauge Rolling time [min] 54 18 10 6
product Handling time [min]
g [ ] 30 20 20 15
Overall capacity [ktonne/yr] 83
Product One Two Three Four Five
10% Final gauge [mm] 0.1 0.22 0.5 0.8
increase Percent of production 39% 28% 26% 7%
in pass
Rolling time [min] 49 17 9 6
speeds
p
Handling time [min] 30 20 20 15
Overall capacity [ktonne/yr] 87
Commercial-in-Confidence, © Innoval Technology Ltd
IP08-006, Slide 20
- 21. Plant Design – Optimising Layout of Equip
pment
Based on knowledge of world-class opera
ations
Need to account for potential expansion
Ensure efficient process flow
Important safety considerations
WIP Calculations (buffer sizes, WIP storag around plant)
ge
“Discrete Event Simulation”, if necessa
Discrete Simulation ary
Commercial-in-Confidence, © Innoval Technology Ltd
IP08-006, Slide 21
- 22. Methodical Approach
Market Analysis
Equipment Specification
Technical Configuration
Technology Choices
Plant Design
Cost Modelling
Commercial-in-Confidence, © Innoval Technology Ltd
IP08-006, Slide 22
- 23. Cost Modelling
It is easy to build a simple Excel-based co model ... BUT …
ost
Need realistic model inputs based on expe
erience and expert calculation
Product recovery vs year from startup
Efficient staff levels
R&D costs (~0.5% of turnover typical)
Calculation f Capital Costs
C l l ti of C it l C t (CAPEX)
Inclusion of all key and ancilliary equipment
Calculation of Operating Costs (OPEX)
Requires a good understanding of the process s
Computer models can be used to p
p predict utility usage (electricity, gas, etc.)
g ( y, g , )
Useful to attribute costs correctly to differe products
ent
More complex tools can be used to analys the model (e.g. Monte Carlo)
se
Commercial-in-Confidence, © Innoval Technology Ltd
IP08-006, Slide 23
- 24. Example of Cost Model Output
400,000 6,000,000
NPV [US$'000] 182,502
350,000 5,000,000
IRR 12%
Cumulative Cash Flow [US$'000]
300,000 4,000,000
US$'000]
250,000 3,000,000
CAPEX [U
200,000 2,000,000
150,000 1,000,000
100,000 0
C
50,000 -1,000,000
0 -2,000,000
2009 2014 2019 2024 2029 2034
YEAR
Commercial-in-Confidence, © Innoval Technology Ltd
IP08-006, Slide 24
- 25. Pre-Feasibility Study – Flow Diagram
Market products
d t Equipme
ent equipment
i t Plant
Analysis volumes Specifica
ation Design
extra capacity capex & opex
Cost Sales
IRR, NPV, etc.
Modelling prices
no
Viable?
yes Bankable
Study
Commercial-in-Confidence, © Innoval Technology Ltd
IP08-006, Slide 25
- 27. Typical Staff Requirements for a Downstre
eam Plant
Typical 250,000 tonne rolled products plan operating in Western World
nt
Per Shift 4 Shift S
System Day Staff TOTAL
Graduate 60 60
Skilled Labour 60 40
24 70 310
Unskilled Labour 15 60
6 60
430
Commercial-in-Confidence, © Innoval Technology Ltd
IP08-006, Slide 27
- 28. Typical Skills Requirements for a Downstr
ream Plant
Managerial Planninng
Schedu uling
Finance e
HR
Sales Sales mmanager for each major product group
Technic Representatives at customer plants
cal
Technical
Metalluurgists
Engineers
g
Chemis sts
Materia scientists
als
Plant d M i t
Pl t and Maintenance Statistic
cian
Engineers
Electric
cal
Mechan nical
Other Craftsmmen
Medica al
Fire pro
otection
Driverss
Commercial-in-Confidence, © Innoval Technology Ltd
IP08-006, Slide 28
- 29. Recruitment Issues
Graduates
Need a good supply of the correct disc p
g pp y ciplines
They will need further development an training
nd
Experienced Staff
Internal transfer from other group operrations (if they exist)
Access to “early retirees” from world-class operations
Head-hunt from competitors
Retention of Staff
Risk of competitors headhunting your g
good people
Threat to both existing and new compaanies
May come from a related industry, eg S
y y, g Steel and aluminium rolling need similar
g
skills
Potential loss of knowledge
Commercial-in-Confidence, © Innoval Technology Ltd
IP08-006, Slide 29
- 30. Approaches to Graduate Development
University-based “Centres of Excellence”
Specialised focus ( g Aluminium, Rolling or Extrusion, Surface Science)
p (e.g. , g , )
Sponsor students, projects and depart tments
In-house R&D Centre
Develop specific skills within R&D projects
Transfer R&D people to plants in opera ational roles
Ongoing Development of Staff
Use specialist training courses
Mentoring from experienced profession l
M t i f i d f i nals
Can be provided by independent exterrnal organisations
Commercial-in-Confidence, © Innoval Technology Ltd
IP08-006, Slide 30
- 31. Training Example – Aluminium Rolling Tec
chnology Course
ALUMINIUM ROLLING TECHNOLOGY COURSE - Innoval Technology, Banbury 11-15th May 2009
MONDAY 10 TUESDAY 11 WEDNES
SDAY 12 THURSDAY 13 FRIDAY 14
Intro K Smith / T Farley
y
Outline of Sheet Rolling Thermal Aspects Lubric
cation Vibration Flatness
Process of Control
Rollng Tom Farley
The Business of Rolling Mark F
Foster Flatness Control
Tom Farley COF
FFEE Condition monitoring Workshop
COFFEE Chris Davenport Tom Farley Dan Miller
COFFEE COFFEE COFFEE
Mechanics Thermal Aspects Surface G
Generation
of Rolling Workshop Flatness
Gauge Control Control
Chris Davenport Chris Davenport Mark F
Foster
Mechanics of Rolling Mechanics of LUNNCH Dan Miller
Workshop Profile & Flatness enroute Jaguar
e Wrap up Session
Chris Davenport Kyle Smith Dan Miller
LUNCH
LUNCH LUNCH LUNCH
TOUR OF INNOVAL
Machinery of Rolling Control Systems Profile Measurement
COURS VISIT
SE and Control
(JAGUAR)
Tom Farley Dan Miller Kyle Smith
COFFEE COFFEE COFFEE
Process Metallurgy
Control Systems Profile Measurement
Gary Mahon and Control
Dan Miller
Process Metallurgy Kyle Smith
Workshop Rolling Process Models Wrap up Session
Gary Mahon
Wrap up Session Chris Davenport
Free Social Event Fr
ree Social Event
Commercial-in-Confidence, © Innoval Technology Ltd
IP08-006, Slide 31
- 32. Managing Knowledge Assets
Important to maximise the knowledge that exists in employees
t
Staff with valuable knowledge which is not being exploited
s
Share knowledge of manufacturing to improve product quality
Determine gaps i th k
D t i in the knowledge b e (R&D programme)
l d base )
Loss of long-serving, knowledgeable e
employees
Standardise operations and develop “B
Best Practice”
Knowledge Management using K-Maps
Team-based Workshop approach invo
olving
– Manufacturing
– Technology
– Sales
Commercial-in-Confidence, © Innoval Technology Ltd
IP08-006, Slide 32
- 33. K-Map of Aluminium Extrusion Operation
How to Build a K-Map
Assemble those with
knowledge
Define Product
Attributes
Define the Process
Stages
Define the strength of
relationship
Develop content via
Intranet
Commercial-in-Confidence, © Innoval Technology Ltd
IP08-006, Slide 33
- 36. State-of-the-Art Equipment is Not Sufficien
nt
Realisation that investment in world class equipment does not on its own give world
class products.
Many examples in aluminium rolling mills a extrusion plants.
and
Return on investments taking longer th planned
han
Cannot match quality of world-class prroducts
Need expertise that equipment supplie do not usually possess
ers
Equipment manufacturers looking to partner with product specialists to
deliver a com
mplete package
Commercial-in-Confidence, © Innoval Technology Ltd
IP08-006, Slide 36
- 37. Benchmarking & Technical Audits
World-class companies frequently use the internal resources to benchmark their
eir
operations against their own “Best Practice”.
Team assembled f several days to re
for eview and observe operations
– Experienced operators
– Technical experts
– Host plant
– Experienced facilitator
Output is a “gap analysis” of areas to be im
mproved.
Action plan established
Progress then reviewed at regular intervals
Repeat visits to provide additional support, as required
For single-site companies the same function can be carried out by external
consultants
Can also be of benefit to large multi-na
ationals to get a “fresh view”
Commercial-in-Confidence, © Innoval Technology Ltd
IP08-006, Slide 37
- 38. Typical Check-list for Technical Auditing & Due Diligence
Environment, Health & Safety
Accident recording and rates
Equipment Operation
Standard Operating Practices
Use f St ti ti P
U of Statistic Process C t l
Control
Maintenance schedules and strategies
Investment plans
Operational Efficiency
Machine utilisation
Recoveries
Product Quality
Test p ocedu es
est procedures
Reject Rates
Technology System
Approach to problem solving
Product and Process improvement methods
Commercial-in-Confidence, © Innoval Technology Ltd
IP08-006, Slide 38
- 39. Summary
An efficient and viable downstream plant c be designed using Innoval’s methodical
can
approach based on >20 years working in t industry
the
Market Analysis
Equipment Specification
Plant Design
g
Cost Modelling
A key stage is matching equipment specifi ication to the optimum product mix in order to
maximise the financial returns from the pla
ant
We have emphasised the need for a broad range of technical skills and routes to
d
develop this important resource locally
Achieving the anticipated financial returns requires more than just state of the art
equipment and technology – but also input from world-class expertise and know-how
Commercial-in-Confidence, © Innoval Technology Ltd
IP08-006, Slide 39
- 41. Innoval Te
echnology
An independent c company providing
expertise to the aluminium industry
www.innov
valtec.com