Baosteel Equipment Strategy Handbook CONFIDENTIAL Training material November 27, 2002 This report is solely for the use of client personnel.No part of it may be circulated, quoted, or reproduced for distribution outside the client organization without prior written approval from McKinsey & Company. This material was used by McKinsey & Company during an oral presentation; it is not a complete record of the discussion. DRAFT 021128SH_BEO002_v5iINTRODUCTION This handbook was prepared after running two pilot equipment strategy analysis at Baosteel HRM in 2002 FM entry guide on 1580 F1 rolling mill on 2050 (excluding guide and looper) The team had successfully achieved to develop solutions to reduce downtime by more than 50% on pilot equipment and has been extensively trained Now the team is moving towards implementation of developed solutions and roll-out of equipment strategy analysis on all key equipment of HRM. This handbook is to be used as a support to roll-out and further train Baosteel personnel Equipment strategy specialist at Baosteel are Jiang XX, Li Fengxin, Li Haidong, Gao Chunhai.Please contact them for any further information 021128SH_BEO002_v5iINDEX (1/3) Section Pages Equipment strategy basic introductionDefinitions = Maintainable item and failure modeDefinitions = Primary and secondary actions 9Initial targets (2002) for equipment strategy at Baosteel Definitions = MTBF, MTTR and PFDetailing maintainable items and failure modes 17-18 Data to collect for fact base (check list)Fact base example 21 Methodology to calculate MTBF and estimate PF 22 Tips 23Template to be used in meeting in order to detail maintainable items and failure modes Building a fact baseExample of failure mode prioritization 25 Example of root cause tree written during problem solving meeting 27 Example of problem statement to be used at start of problem solving meeting 28 Tools to use = 5 Whys 29 Tools to use = Fishbone diagram 30 26 Example of problem solving meeting organization Identifying redesign opportunities 24 Tips 31 Introduction to equipment strategyDetails of equipment strategy methodologyEquipment strategy overall processPrioritize equipment 13-15