In 2017, by introducing the concept of "All Costs can be Reduced", working toward tapping potential, actively transforming the financial management system, highly focusing on technology and cost reduction, and other measures, Wusteel limited made every effort to promote synergic integration and achieved cost reduction of 3 billion yuan in the whole year, effectively boosted the rapid improvement of competitiveness.
At the beginning of the establishment of Wuhan Iron and Steel Co., Ltd, it has grasped the favorable opportunity of integration and coordination of financial system, and actively carried out the work of reducing costs and securing economic benefits. The project teams from Wusteel Ltd’s financial system and Baosteel Ltd’s standard financial system are fully connected, mutually launched"100- Day- Plan" financial special work, determined integrated projects, totaling 7 major categories and 59 items, including comprehensive budget and management analysis system coverage, centralized and uniformed fund management, cost management and control model linkage and etc.. Since the project kick-off, daily operation analysis of production and sales plan, profit/loss budget implementation, marketing management, special cost budget analysis, hot metal and process cost, financial index and others are steadily covered, making positive contributions to promote integration and coordination and cost reduction.
Meanwhile, by adopting the approaches of cross control between the functional management departments and the production plants, Wusteel Ltd has formulated the key work and responsibility division of the cost reduction from 11 aspects like purchasing, manufacturing, quality and labor productivity, and set the annual cost reduction targets for each unit. In order to ensure the the cost-cutting target is effectively materialized, Wusteel Ltd has changed the ways of costs control alignment, now the specific departments in stead of financial dept. plays the major leading role with full staff participation, simple apparent data analysis was replaced with business cleaning and technical index alignment.The top management of the Company led team to run through all warehouses, gave directions to carry out warehouse clearance and inventory check-up, got clear knowledge of available assets, revitalized the resources, and reduced the inventory of spare parts and materials. The operational finance department and each and every 2nd level subordinating units continued to carry out the cost alignment with Baoshan base, Meishan base, Ningsteel, and focused on key indicators to find the space for further improvement of the cost reduction work. A large number of best practices have emerged, namely, " 2.0 Version of cost reduction of iron-making plant", "A drop of 100 yuan in cost per ton steel in the Strip Plant", the "General contracting for refractory materials, purchasing with cost reduced and quality improved” and others.”
Last year, Wusteel Ltd has also highly focused technology to cut down cost, and further promote the development of low-cost manufacturing technology. Iron Making Plant has reduced fuel consumption by 11 kg / t comparing last year through a raft of measures taken, like optimizing structure of coal and ore blending, reducing the proportion of pellet use, increasing the proportion of sinter and lump ore, working to reduce fuel ratio, increasing blast temperature, improving the gas utilization rate, and lowing the downtime percentage,etc..According to the unified planning, Steelmaking Plant has formulated special control measures to reduce iron to steel ratio, maximized the utilization of scrap to the greatest possible extent, which led to the a significant outcome. Hot Rolling Plant has strengthened its energy control with notable energy consumption reduction: water consumption is lowered to 0.476 m3 per ton, and electricity to 97.27 kwh/ton. Besides, Wusteel Ltd has promoted medium strength & low cost melting, as well as low temperature rolling, improved the gas utilization ratio, lowered down the fuel ratio to 503.7 kg / t, hitting a all-time best record. By means of improving process, intensifying operation management, Wusteel Ltd has enhanced greatly its capability of energy saving and consumption reduction, with energy costs remarkably cut down.
Wusteel Ltd. has also built a highly efficient financial liaison mechanism, timely summarized the situation of cost-cutting indicators implementation of each unit, collated practical cases of cost management and control process, and made them known, promoted and discussed at different level meetings in the company; additionally, Wusteel Co.,Ltd has planed carrying out specialized publicizing on cost control transformation themes such as "Baowu Coordination", "Posts in Action" and others. It has further improved the incentive mechanism, giving sorted praise each month to the units according to their contribution to cost reduction, which effectively stimulated the enthusiasm and initiative of the staff to become “the master of cost improvement", and promoted the development of thinking of concentrating both the major and minor costs in regards of cost utilization improvement. Each unit has decomposed the cost target by levels, assigned it to teams and individuals for solid implementation.
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