Continuous improvement

Operational improvement is the initiatives implementation process aimed at maximal efficiency achievement in production-and-technological, innovation, power-and-resource saving, environmental and social activities of the enterprise in compliance with the following principles:

• continuity;
• expediency;
• reliability;
• optimality;
• priority;
• consistency;
• monitoring.

Operational improvements include the initiatives implemented in optimal terms and aimed at product manufacturing costs reduction on the basis of the following requirements:

• streamlining of production and rational utilization of resources;
• increase of labour productivity and production efficiency;
• improvement of labour conditions and ecological situation;
• revealing and elimination of the factors restraining production growth (debottlenecking);
• application of advanced experience and organizational-and-technical  developments borrowed from the other enterprises;
• sophistication of technologies, creation and follow-up revision of the applied items and equipment design;
• efficient selection of utilized materials;
• following the outsourcing principle for auxiliary and repair shops and subdivisions;
• increase of manufactured products quality (from semi-finished to finished products);
• investment activities (including IT-investments).

The following activities are not referred to operational improvements:

• financial activities;
• procurement of the Assets;
• finished product sales;
• Security Administration activities;
• legal activities of the Assets.

Operational improvement goals:

1. 1. Reduction of costs for operational activity and respective improvement of the enterprise financial result and the Company result through managing the operational efficiency of the units and equipment to ensure technological and economic benefits; managing efficiency of power facilities with maximum possible reduction of fuel-and-power consumption and decrease of energy resources losses. 
2. Implementation of activities to ensure safe labor conditions and environmental protection.
3. Creation of efficient organizational structure for continuous improvements management in long-term prospect within business development process.
4. Improvement of the Company image through each of the implemented initiatives.
5. Company's compliance to advanced European standards.
6. Maximum effective synergy of Metallurgical Division assets.

Methods of development and achievement of continuous operational improvements:

1. Benchamarking performed using own resources and external consulting companies and specialized institutes;
2. Development and implementation of operational improvements project under the supervision of the Team consisting of the Company's top management;
3. Participation of qualified specialists from all the Company's organizational levels in continuous improvements process (setting up of execution teams);
4. Operative and effective interaction with other activities (purchasing, production and sales planning, product quality etc.);
5. Development of procedures and regulations in the given activity.

Process structure

1. Setting of tasks and objectives;
2. Determination of work streams.
3. Development of detailed step-by-step action plan;
4. Development and approval of regulatory documents applicable to all Group's operations;
5. Engagement of competent, initiative and experienced specialists from the related departments of the assets;
6.  Engagement, at certain stages, of consulting companies and specialized institutes;
7. Coordination of all successive actions and prepared documents with the Managing Company.

Monitoring of continuous operational improvements projects:

1. Sources of information for reviews, calculations and summaries shall be the official documents in the sphere of activity: technical reports, calculations, management reporting documents, official reports of the consulting companies and specialized institutes etc.
2. Continuous tracking and reporting on all the initiatives implemented and under implementation;
3. Availability of a single information base of study cases in the given activity.

The result of implementation of the continuous operational improvements is:

• higher competitiveness of the company;
• adaptation of the company to the changing environment and to market requirements;
• further improvement of the company's image.
• creation of stable "lean" culture with the company employees.

First and foremost, the results of comprehensive continuous improvement program implementation are tied to the everyday well-coordinated team work. Weekly workshops on experience exchange between the shops, cross audits involving assistants for continuous improvements, standardization of continuous improvement tools within the enterprise and high involvement in the continuous improvement process contribute to such strong performance results. An additional point is that championship system played a major role in the result achievement. A champion from directorate being change leader and assisting subdivision in its problem solving is assigned to each structural subdivision.

In 2014, activities oriented to the development of continuous improvement system maturity level will be continued. Priority development trends will be as follows: personnel training, 100% personnel involvement in the process of focused improvements through the participation in continuous improvement teams, tools standardization and consistent activities on exchange of experience and best practices.