Bringing order to chaos at BlueScope Steel

How $1 million in resource management software saved the day.
Written by David Braue, Contributor

Maintenance work is a major expense for BlueScope Steel, whose Port Kembla Steelworks, just outside of Wollongong, New South Wales, produces some five million tonnes of steel annually.


source: BlueScope Steel

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bluescope steel
A major global manufacturer and distributor of raw steel and finished products, BlueScope Steel exports its COLORBOND, ZINCALUME, rolled coils, plate, galvanised, tinplate and slab steel through sales offices in 15 countries.

Thanks to a $1.1 million investment in resource management software, however, primary BlueScope Steel maintenance contractor Transfield Services has been able to completely rework its people scheduling and significantly improve its efficiency.

Impetus for the investment built gradually after 2001, when Transfield won the contract to provide maintenance services at the site. BlueScope spends around $300 million annually on site maintenance, and this year around $145 million of that will fund the work done by Transfield and its subcontractors.

The nature of that work is varied and essential to the business, covering everything from 55 scheduled equipment maintenance shutdowns monthly to a continuous flood of ad hoc service requests. All told, Transfield manages more than 150,000 individual schedulable maintenance tasks every year -- more than 500 a day on average, although demand varies widely and some days the number has passed 1,200.

For Transfield, ensuring that it and its subcontractors had the right number of staff onsite at any given time proved extremely complicated. BlueScope Steel's nine internal divisions each had their own maintenance schedules and staff, managed by standalone workforce scheduling applications and a preponderance of Microsoft Excel spreadsheets that were created and used by individual managers.

This structure severely limited visibility of available workers from one department to another. Although efforts were made to manually synchronise some maintenance jobs, Transfield managers often ended up bringing in expensive subcontractors to handle peaks in demand for certain skills -- even when another division might have appropriately skilled staff sitting idle, but no way of knowing they were needed elsewhere.

mark halligan, Transfield Services project manager

"We're getting a constant stream of work," says Mark Halligan, project manager with Transfield, "but we had very poor visibility of our workload. In some instances, we would have permanent employees sweeping floors, painting handrails, and doing other things because they didn't have anything to do on that particular day -- while on the other side of the plant, we had casual employees coming on. We really needed to optimise our resource utilisation."

Centralised scheduling benefits
To deliver that optimisation, in 2004, Transfield roped in Deloitte Consulting for a five-month audit of its performance.

Observations of job order workflow confirmed what Halligan and his peers already intrinsically knew: the use of 23 poorly coordinated, disparate and often manual legacy systems was limiting workload visibility; introducing potential errors and wasting time by forcing employees to enter data into multiple systems; preventing changes in one system from being carried to other systems; and generally stopping Transfield staff across the BlueScope Steel divisions from working together as efficiently as they would have liked.

"There was just a lack of control," Halligan explains. "Even though we were doing all the work and doing a reasonable job of it, there were still opportunities for improvement. Multiple legacy systems make it difficult to review the workload for all the systems, especially when that workload is continuous and doesn't come in batches. We wanted to get rid of those systems and just have one system that was able to span the whole business."

Transfield and Deloitte teams laid down plans for a new process that would centralise the management and scheduling of maintenance work. In February 2005, a competitive evaluation led Transfield to Primavera Systems, whose project management and scheduling tools offered a single method for managing a large number of projects from inception to completion. To smooth the handling of work orders, the project also involved integration of Primavera with BlueScope Steel's own SAP R/2 manufacturing resource planning environment.

R/2 had already been slated for replacement with the more modern R/3 enterprise resource planning environment, but the long timeframe for that project forced Halligan's team to go ahead and implement Primavera V4 against R/2. The resulting system was up and running by May 2005, with around 100 users regularly accessing it to manage their ongoing and frequently changing workload.

Integration between the systems provided a seamless flow of work orders, generated using R/2's asset management capabilities, to Primavera, which keeps track of available people, their work schedules and their individual skills. webMethods for SAP middleware provides and enforces business rules for translating the data between the two systems, ensuring that jobs are assigned to the right people and monitored through completion.

Constant visibility of jobs in progress, and projections of future demand, have given managers more information than ever about the work their employees are handling. In the near future, Web and wireless handheld interfaces into Primavera's reporting functions are expected to further expand usage of the system.

"Alignment with SAP has given us this workload visibility and reduced our effort in communicating our resource demands to some of the departments," says Halligan. "Graphs of our centralised information give us transparency and views of resource availability that we can drill down into, that we didn't have before. We can see which departments are overutilised and underutilised, and from there we can start discussions about sharing those resources."

Managing change, again
As if one successful implementation wasn't enough, by October 2005 the team faced the challenge of tying Primavera in with BlueScope's new SAP R/3 system, which had gone live and introduced significant changes in the company's core business processes. The team decided the R/3 migration was also an opportunity to upgrade to Primavera v5 -- making the four-month project a complete second implementation of both systems.

Handling so much change in such a short time has required more than just technology. With divisional managers often possessive of their skilled engineers and manual processes long-entrenched in the workforce, the implementation also involved a considerable commitment to building and maintaining buy-in across Transfield's operations.

To ensure that buy-in throughout the implementation, the project team was careful to treat both Transfield and BlueScope Steel as its customers -- even though the team was composed of employees of both companies.

"The only interaction from us to them was 'we want these people at this time'," says Halligan. "I came from the business and the guys that worked on the team came from the business, but we were separated from it. It's pretty hard to get people to let go of resources even for a short period, and you've really got to have the people inside to make it happen."

Even after the system had gone live, ongoing buy-in was critical to ensure users would warm to the system, and take the time to ensure they were inputting clean data. Halligan found a simple solution to this challenge: "exceed the end user's expectations."

"All too often, implementations fail based on training philosophy," he explains. "They'll put in systems and either put training off to last, or forget about it. We really wanted to focus on training to minimise the cutover impact on the business, giving users truly what they needed and drilling down into their roles to find out what was relevant to them."

This end-user focus saw the implementation team take an active role in user education from the project's early stages. Users were put through mandatory three-week training sessions that ran for two hours every day, and included extensive role-based training that guided workers through use of the Primavera system within their respective job roles.

Development of a quick reference card and role-based instruction manuals reinforced the training, and in the future the team plans to develop a formal Primavera proficiency model that will allow for quantitative testing of users' capabilities within the system. Proficiency will be regularly modelled and incorporated into employees' annual performance reviews, providing an added incentive for them to get up to speed with the system.

Through diligence and technical expertise, centralised maintenance has become part of everyday work at the Port Kembla facility. Reliance on casual labour has decreased, saving costs and further improving allocation of skilled workers where they're needed. With the latest upgrade providing improved reporting and correlation of project and financial metrics through SAP R/3, Transfield is well-equipped to continue streamlining its contractual performance well into the future.

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