Exploring improvement trajectories with dynamic process cost modelling: a case from the steel industry

Abstract

Improvement trajectories are sequential managed chains of improvement initiatives required to handle changes in competition and market. This paper presents a five-step framework, based on dynamic process cost modelling, which was developed during a four-year research project at a major stainless steel producer, to support the selection of an improvement trajectory based on strategic requirements to combine high product diversity with cost reduction. The framework aims to develop insight into what manufacturing capabilities are required to reach the strategic goals by combining system dynamics simulation with process cost modelling and visual exploratory data analysis in an iterative modelling procedure. The applicability of the five-step framework is demonstrated through a case study from the steel industry, in which a goal driven analysis is used to assess process requirements based on performance and market considerations.

Keywords:

• cost analysis
• manufacturing strategy
• simulation
• process industry
• system dynamics
• exploratory data analysis

Acknowledgement

This research was funded by the Swedish Knowledge Foundation (KK-stiftelsen) and the Swedish Steel Producers Association (Jernkontoret).