Relevance of Key Performance Indicators in Steel Production

Steel manufacturing is one of the few production businesses that require copious amount of investment

This fact necessitates that the organizations in this sector to find a potent tool for tracking the progress in a holistic manner. Moreover, since the numbers of large players working in this sector are limited in number, "Management of Performance" is necessary to keep the overall industry in good shape. Thus it necessary to implement a monitoring system that takes care of every "attention deserving" aspect; right from judging the properties of the product to the financial standing of the organization. This is because one of the factors that usually have a bearing on a nation"s infrastructural progress is the "Volume of Steel Production and Quantity of its Exports".

Among the roadblocks of operating in this industry, one is expected to deal with the consistent entry of technological advancements that keep entering in it every now and then. Tasks like casting, rolling require constant look out for increasing the effectiveness of the process and improving the quality of the output. This makes it necessary for devoting some portion of revenues to Research and Development route.

An ideal methodology for managing and measuring progress in this industry involves framing of indicators, called KPIs for various categories, generally four in number. These perspectives are according to the areas which the organization sees worthy enough to be assessed. One can frame perspectives in areas like- Process, Properties, Employee and Growth. Process can be evaluated using parameters- Corrosion Decline Ratio, Processes Range, Reduction in Process Costs and By-products usage index. Properties can be had from indicators such as hardness, ductility, Yield Stress and Poisson Ratio. Workforce can be taken care of by following the KPIs like % drop in accidents, number of training sessions, number of health check-ups and labor turnover due to safety issues. Lastly, growth can be maintained at a respectable pace using the indicators- Volume enhancement ratio, Expertise level and % rise in operating revenues.

An additional advantage which emerges out of the "BSC" approach is the Effective balancing between supply and demand of the product. The reason is the optimization of operations in the process, thereby minimizing the futility of both tangible (material) and intangible (efforts) attempts. Consequently, the group becomes better equipped in matching the two factors and adding to the chances that fluctuations in any of these will be better absorbed; thereby minimizing the effect on financial drawings.

Moreover, increasing evidences that steel production contributes significantly to the CO2 emissions thrust "Environment Compliance" to an ever greater degree. Also, taking care of the health of the work force is the organizational responsibility. The instances of accidents have been rising, calling for greater emphasis to be laid on this subject and ensure the dilution of both occupational and non-occupational hazards.

To sum it up, confronting the innumerable hurdles one faces in the path of huge production house like that of steel, asks for both technical expertise and responsiveness to the societal and climatic conditions. Putting BSC (Balanced Scorecard) in place for tracking the pace and exactness of movements will ensure meeting of the strategic goals.

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