hattar steel mills furnace

FUNDAMENTALS OF PROJECT MANAGEMENT

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The study is significant in that it attempts to explore the project management practices of the selected re-melting unit. The study is also important in a way that it reflects the need of innovation in the selected field.

HATTAR Steel MillsPlot #. 8-9, phase 04 , Hattar

industrial state , Haripur Hazara , NWFP Pakistan

SUBMITTED TO: MADAM IBTISAM MIRZAMuhammad Aamir Shahzad

Naveed Ishtiaq Ikram ul Haq Abdul Wahab


ACKNOWLEDGEMENT................................................................................................................................................... 4

EXECUTIVE SUMMARY.................................................................................................................................................. 5

INTRODUCTION............................................................................................................................................................ 6

OVERVIEW OF THE STEEL RE-MELTING INDUSTRY.......................................................................................................... 6

FLOWCHART................................................................................................................................................................. 8

RE-MELTING UNITS IN PAKISTAN..............................................................................................................................................11

COMPANY PROFILE..................................................................................................................................................... 11

STAKE HOLDERS IN HATTAR STEEL RE-ROLLING MILLS.................................................................................................12

INSIDE STAKE HOLDERS..........................................................................................................................................................12OUTSIDE STAKE HOLDERS......................................................................................................................................................12

SCOPE OF THE STUDY.................................................................................................................................................. 12

OBJECTIVE OF THE STUDY............................................................................................................................................ 13

PROJECT PROPOSAL.................................................................................................................................................... 13

TECHNICAL APPROACH..........................................................................................................................................................13IMPLEMENTATION PLAN.........................................................................................................................................................13PLAN FOR LOGISTIC SUPPORT AND ADMINISTRATION..................................................................................................................14ORGANIZATION STRUCTURE AND DESIGN..................................................................................................................................14

WORK SPECIALIZATION............................................................................................................................................... 15

DEPARTMENTALIZATION............................................................................................................................................. 15

CHAIN OF COMMAND...........................................................................................................................................................16SPAN OF CONTROL...............................................................................................................................................................16CENTRALIZATION AND DECENTRALIZATION.................................................................................................................................16FORMALIZATION...................................................................................................................................................................16

PROJECT SELECTION.................................................................................................................................................... 16

DATA COLLECTION................................................................................................................................................................16OPTIONS AVAILABLE.............................................................................................................................................................17

Inductotherm..............................................................................................................................................................17Electrotherm...............................................................................................................................................................17

EVALUATION OF OPTIONS......................................................................................................................................................17Choice of the Best........................................................................................................................................................17

IMPLEMENTATION.................................................................................................................................................................17PROJECT SELECTION MODEL...................................................................................................................................................17

SELECTION OF PROJECT MANAGER.............................................................................................................................. 18

RESOURCE BREAKDOWN STRUCTURE.......................................................................................................................... 19

PROJECT TEAM............................................................................................................................................................ 19

CIVIL WORKS....................................................................................................................................................................... 19ERECTION OF FURNACE....................................................................................................................................................20OPERATION.........................................................................................................................................................................20

RESPONSIBILITY ASSIGNMENT MATRIX....................................................................................................................... 20



RESOURCE HISTOGRAM.............................................................................................................................................. 21

PROJECT PLANNING.................................................................................................................................................... 22

DEFINITION PHASE................................................................................................................................................................22ANALYSIS PHASE..................................................................................................................................................................22DESIGN PHASE.....................................................................................................................................................................22PROGRAMMING PHASE..........................................................................................................................................................22SYSTEM TEST PHASE.............................................................................................................................................................22OPERATIONS PHASE..............................................................................................................................................................22INITIAL PROJECT COORDINATION.............................................................................................................................................23PROJECT PLAN ELEMENTS......................................................................................................................................................23

Overview.....................................................................................................................................................................23Objectives....................................................................................................................................................................23Schedules....................................................................................................................................................................23Personnel.................................................................................................................................................................... 23Evaluation Methods....................................................................................................................................................24Potential Problems......................................................................................................................................................24

NEGOTIATION......................................................................................................................................................................24CONFLICT RESOLUTION..........................................................................................................................................................24

BUDGETING................................................................................................................................................................ 25

SCHEDULING............................................................................................................................................................... 25

RISK LEVELS................................................................................................................................................................. 27

ASSIGNING RISK IMPACT............................................................................................................................................. 28

PROBABLITY IMPACT MATRIX..................................................................................................................................... 24

COMMUNICATIONS MANAGEMENT PLAN................................................................................................................... 25

OVERVIEW..........................................................................................................................................................................25PURPOSE............................................................................................................................................................................ 25GOALS................................................................................................................................................................................25SCHEDULED MEETINGS..........................................................................................................................................................26

COMMUNICATION MANAGEMENT MATRIX................................................................................................................ 29

QUALITY MANAGEMENT PLAN........................................................................................................................................30

ISSUE LOG................................................................................................................................................................... 35

FINANCIAL ANALYSIS................................................................................................................................................... 36



ACKNOWLEDGEMENT

First of all we are thankful to Allah Almighty for giving us the strength and courage to complete this project. Secondly, we would like to thank our course instructor, Madam Ibtisam Mirza, for schooling us and providing encouragement and much needed moral support. The development of this project has enabled us to understand the contents of this course in a better way. The project has given us a practical experience, which will prove to be very beneficial in our forth-coming practical life (Insha Allah).

Then, we would like to acknowledge the help and moral support of the Proprietor, General Manager and the staff members of Hattar Steel Re-Rolling Mills for providing us all the appropriate material that could be gathered for the completion of our project.

Last but not the least; we would like to thank SZABIST University for giving us the opportunity to display our skills.

Although this is the first step in the promising field of understanding, but we are confident that it will give us a jump-start in a positive direction. Hopefully, our efforts will be duly regarded and appreciated.



EXECUTIVE SUMMARY

A comprehensive research was carried out in this field and researchers tried to cover all the aspects from all angles. Despite the importance of the topic, its implication cannot be ignored in today’s competitive environment. The main stress is to study any project undertaken by an organization in light of the course i.e. HUMAN RESOURCE MANAGEMENT COMMUNICATION MANAGEMENT For this purpose, the researchers selected M/S Hattar Steel Re-Rolling Mills, as it is being technologically upgraded in terms of replacement of its old low frequency induction furnace by a high frequency induction furnace.

As high frequency induction furnaces are a new concept in Pakistan, and are growing rapidly, within a short time span it would be almost impossible for low frequency units to compete in the market. Reason being that, high frequency furnaces significantly reduce the manufacturing cost as well as time, and on the other hand increase the production of the enterprise. Keeping in sight all these factors, M/S Hattar Steel Re-Rolling Mills has imported a high frequency induction furnace from Inductotherm India.

There is less awareness about this technology till now, so the study will prove to be beneficial for the future project managers. A proper study will help the project managers to better understand the practical situation and all the problems involved in it.



INTRODUCTIONToday organizations face increasing competition and more critical scrutiny due to environment dynamism. Managers have been confronted with greater challenges in securing organizational survival and competitive advantage. Consequently they have sought strategies and practices to meet outside pressures. Management faces a conflicting set of demands and they are expected to minimize costs while increasing quality and fostering innovation and creativity.

Now, innovation can be brought in by modifying an existing project or starting a new one. This is a situation where Project Management intervenes. The past several decades have been observed to have a rapid growth in the use of project management. Project management provides an organization with powerful tools that help improving its ability to plan, implement and control its activities.

The basic purpose of initiating a project is to accomplish some goals by keeping innovation in view. Same is the case here. We too are studying a project being carried out to achieve some preset goals.

The project hereby under consideration is the technological up gradation of a re-melting furnace of Hattar Steel Re-Rolling Mills. The old one (low frequency induction furnace) has been demolished and in place of it, a new unit (high frequency induction furnace) is being installed.

OVERVIEW OF THE STEEL RE-MELTING INDUSTRYSteel, as we know, keeps a very historic background. It has been a component of prime importance in every construction concern. As a rule of thumb, wherever demand arises, supply also takes birth.

Similarly, in order to fulfill the requirements of steel in Pakistan, both, re-melting furnaces and re-rolling concerns were set up by entrepreneurs. Government made industrial estates in different regions of the country, in which Gadoon Amazai, Hattar Industrial Estate, Estate of Peshawar, Lahore, Karachi and Islamabad are worth mentioning.

As stated above, the steel industry we are concerned is the re-melting furnaces one. A re-melting furnace manufactures ingots and billets that are the raw materials used for the manufacturing of MS (Mild Steel) Bars in re-rolling units.

Steel being one of the bumper components of construction, followed by cement etc, is directly related to ingots, billets and scrap and resultantly gets greatly affected by the change in fiscal policies, economic conditions and other external factors. It is a chain by which scrap is converted into ingots and billets, and finally into MS bars, being the end product.

Presently, the furnaces found common in Pakistan are the low frequency induction furnaces. Low frequency inductions furnaces are semi power packed, and get operated by a heavy labor. But over the last three years, there has been a trend of switching from low frequency to high frequency induction furnaces. There has been quite a reasonable activity regarding the setting up of new high frequency units, but still low frequency units dominate the Pakistani Industry. The reason being for shifting that high frequency induction furnace is a power packed one (having a totally automatic control panel)



requiring slightly lesser man power, whereas on the other hand, production is tremendously increased followed by significant saving of electricity.

The following figures have been obtained and would make the position more clear and easy to understand.

Figure 1: STEEL MELTING PROCESS



FLOWCHARTThe crucible process has been superseded by the high frequency induction furnace in which the heat is generated in the metal itself by eddy currents induced by a magnetic field set up by an alternating current, which passes round water-cooled coils surrounding the crucible. The eddy currents increase with the square of the frequency, and an input current which alternates from 500 to 2000 hertz is necessary. As the frequency increases, the eddy currents tend to travel nearer and nearer the surface of a charge (i.e. shallow penetration). The heat developed in the charge depends on the cross-sectional area which carries current, and large furnaces use frequencies low enough to get adequate current penetration.



Figure 2: STEEL MELTNG FLOWCHART



Re-melting units in Pakistan

Peshawar 2Gadoon Amazai 2Hattar 2Islamabad 7Gujrawala 23Lahore 29Quetta 1

Total 66

Number of units replaced by high frequency ones till now 8

Units shipped / ordered to be shipped 22(All under LCs and would be arriving Karachi Port within a time period of three months)

Pakistan’s market share in terms of long steel (MS bars, ingots, billets) comes out to be around 2,200,000 (2.2 million) tons per annum, which has a breakup as follows:

Pakistan Steel Mills (Karachi) 0.4 million tonsShip breaking companies 0.2 million tonsRe-melting furnaces 1.6 million tons

Total 2.2 million tons

COMPANY PROFILEM/S Hattar Steel Re-Rolling Mills started its commercial production in July 1999, under the sole proprietorship of Mr. Mohammad Dawood Khan. It is a composite unit, comprising of two re-melting furnaces and a steel re-rolling mill in addition to a sister concern named Nomee Industries (Pvt.) Ltd.

It would not be out of place to mention here that the product (MS Bars) of Hattar Steel was approved by reputable organizations like CDA (Capital Development Authority), NHA (National Highway Authority), Dong Fong Electric Corporation (Ghazi Borotha Hydro Power Project), NLC (National Logistic Cell) etc. and achieved a record business for being a quality supplier of MS bars.

The production plants are situated in Hattar Industrial Estate, NWFP, and the Head Office in Industrial Area Islamabad. The re-rolling plant has a capacity to produce 80 metric tons of MS bars per day on a double shift basis, whereas the furnaces when combined can produce 105 metric tons of ingots in 20 hours. MS bars are manufactured according to local as well as ASTM and BSI standards, whereas



ingots manufactured are only used for re-rolling of local MS bars. The unit is fully equipped having its own steel-testing laboratory, billet/ingot and steel cutting machines, a cooling bed, followed by an independent weighing bridge.

STAKE HOLDERS IN HATTAR STEEL RE-ROLLING MILLSStake holders are defined as people who have an interest, claim or stake in the organization. Following are the stake holders in Hattar Steel.

Inside Stake Holders Sole Proprietor Managers Workforce (Labor)

Outside Stake Holders Customers Suppliers Government

Scope of the StudyThe study is significant in that it attempts to explore the project management practices of the selected re-melting unit. The study is also important in a way that it reflects the need of innovation in the selected field. The future project managers can find themselves making rational decision regarding the management of a project of relative nature. Since this decision-making involves application of analytical abilities to motley of situation, managers will feel more satisfied with such back up support. It gives the management and the stake holders an opportunity to have an insight into the impact of various aspects like productivity enhancement, cost saving etc.

As high frequency induction furnaces are a new concept in Pakistan and there is less awareness about this technology so the study will prove to be beneficial for the future project managers. A proper study will help the project managers to better understand the practical situation and all the problems involved in it.



Objective of the StudyThe study targets to achieve the following objectives.

To carry out a project under the supervision of the instructor in order to understand the course contents in a better manner.

To apply whatever is studied in the course so far.

To fulfill the course requirement in order to secure a good grade.

As the course is highly applicable practically and mainly revolves around the Project Manager, the researchers intend to carry out a research which would help understanding the tough job of a project manager.

To get some practical know how that will give us a jump start in the forth coming life.

To know various potential constraints that could be faced by the management while starting the new project.

To know the importance of emergence of new technology in today’s competitive environment and its effect on cost structure of the enterprise.

Project ProposalThe project proposal involves the following phases.

Technical ApproachIt was noticed that the trend for high frequency furnaces was increasing, to which low frequency units could not compete in terms of time and cost of manufacturing. The only solution was to upgrade the existing technology. Due to this up gradation, both time and cost get slashed down significantly.

Implementation PlanThe first step in implementation of the plan was to establish an LC for importing the unit. Now, direct import from India is restricted, so the unit was first shipped to Dubai. The vessel was changed and again shipped by showing Dubai as the origin to Pakistan. Following are the estimates about the time and cost of the project.

Estimated time for the unit to reach from India to Karachi 1 month(Via Dubai)

Estimated time for civil works 1 month

The furnace gets operated within a time span of almost 1.5 months



The total estimated cost of the project Rs. 18,500,000

Plan for Logistic Support and AdministrationA printed layout was sent by Inductotherm India which demonstrated the specifications and marks for placement and fitting of the equipment. Local labor was hired for the civil works whereas an erection team is to be fitting the equipment. All the teams are being supervised by the designated project manager.

Organization Structure and DesignOrganization structure relates to how tasks are formally divided among people, grouped, and in the last coordinated. The selected company is having a simple or a functional structure as it has low degree of departmentalization, wide spans of control, centralized authority and high formalization. As a simple structure is a flat organization; it usually has two or three vertical levels, a loose body of employees, and one individual in whom the decision-making authority is centralized.

The re-melting furnace has a structure where employees perform tasks under the direct guidance of the GM. The production department is immediately supervised by a foreman, who is further supervised by the production manager. The production manager in return reports to the general manager. We are considering the following six elements to be discussed separately to enlighten the structure of the selected organization.

Work Specialization Departmentalization Chain of command Span of control Centralization and Decentralization Formalization



Figure 3: OBS

Work SpecializationWork specialization is the degree to which tasks in the organization are subdivided into separate jobs. Both skilled as well as unskilled labor is used by the organization that performs the task till the finished product. The unskilled labor is hired at contractual basis that is lead by the foreman. The foreman is solely responsible for the actions regarding the labor under him. Labor is hired on contractual basis due to ease in availability.

DepartmentalizationOnce jobs are divided up through work specialization then they are grouped together so common tasks can be coordinated, the basis by which jobs are grouped together is called departmentalization. Hattar Steel has grouped activities into two main categories on the basis of functions performed. As discussed above that is skilled and unskilled labor. The unskilled labor performs tasks under the direct supervision of the foreman whereas skilled personnel are hired upon salary according to qualification and experience for the departments like accounting, quality assurance, production, administration etc.



Chain of Command Chain of command is the unbroken line of authority that extends from the top of the organization to the lowest echelon and clarifies who reports to whom. In this regard the final authority to give orders and expect the orders to be obeyed lies with Mr. Mohammad Dawood Khan (Sole Proprietor).

Subordinates are directly accountable to their immediate bosses, who in return report moving upwards till the proprietor.

Span of ControlSpan of control is important to a large degree as it determines the number of levels and managers an organization has and how the number of subordinates a manager can effectively and efficiently direct.

As visible in the organization chart, the selected organization is somewhat flat, i.e. a number of managers are immediately supervised by the general manager. Each manager has a group of subordinates to supervise.

Centralization and DecentralizationThe organization is quite centralized as the degree to which decision-making is concentrated at a single point in the organization lies solely with Mr. Mohammad Dawood Khan (Sole Proprietor). Moreover authority and decision discretion is just passed over to the GM and not pushed down to lower level employees.

FormalizationFormalization is the degree to which jobs within the organization are standardized. The company employees job are highly formalized, which creates no discretion over what is to be done, when to be done, and how is it to be done. Employees are expected to always handle the same input in exactly the same way, resulting in a consistent and uniform output.

Project Selection

Data CollectionThe furnace was firstly seen operating in Gujranwala. Soon afterwards another unit arrived at Gujranwala and started its commercial operation. Their performance was monitored for two months and after necessary working, the project was found feasible to be undertaken.



Options AvailableIn this regard, i.e. choice of high frequency furnaces, there were two options available.

InductothermWith its roots tracing back more than half a century, Inductotherm originates from America. It has been the first company in the business of manufacturing low frequency as well as high frequency induction furnaces.

ElectrothermIt is a British originated company and manufactures low frequency as well as high frequency induction furnaces. Electrotherm is quite younger in this business as compared to Inductotherm.

Evaluation of OptionsOne interesting fact observed that all the units imported in Pakistan are holding the brand name of Inductotherm. The reason being:

a) Inductotherm holds the greatest experience in manufacturing of low frequency as well as high frequency units.

b) The results of Inductotherm have been monitored to be better than Electrotherm in terms of production, electricity consumption and after sales service.

Choice of the BestDue to the above mentioned advantages, M/S Hattar Steel also went for Inductotherm.

ImplementationAfter choice of the best, an LC was established in order to implement the decision.

Project Selection Model

The selection model used in this case is Non-Numeric in nature. The project happens to be:

a) A sacred cow as it has been selected and initiated by the top management i.e. Mr. Mohammad Dawood Khan and Mr. Motasim Rashid Siddiqui.



b) An operating necessity, due to availability of room for technological up gradation. Implementation of the selected project would result in significant cost and time saving.

c) A competitive necessity. As the trend for high frequency furnaces is growing, it would be almost impossible for low frequency units to survive within the next few years. Moreover low frequency units are now getting obsolete.

Selection of Project ManagerA project manager is chosen and appointed as soon as the project is stated or selected. Same is the case of Hattar Steel. Internal recruitment was preferred over external and as a result the manager selected for this project is Mr. Motasim Rashid Siddiqui, GM of Hattar Steel. Following are the reasons for him being selected as the project manager.

1. He is holding an experience of 39 years in the steel industry.

2. He holds a post graduate degree in metallurgy.

3. By looking at his past record, he has proved himself to be a leader with strong decisive powers.

4. He has been with Hattar Steel for the last 11 years, due to which he fully understands the organization.

5. Being part of the organization, he would be working with the same devotion on this project too.

6. As a project manager, he has been recommended by a number of steel mills of Islamabad and Gujranwala.



Resource Breakdown Structure

Figure 4: Resource Breakdown Structure

Project TeamThe project involves the under mentioned phases followed by the team involved in each phase.



Civil worksThe civil work mainly involves demolishing the old furnace and building foundations for the new ones. This job is done by local masons. The foundations and the base are built according to the specifications mentioned in the printed layouts.

Erection of FurnaceThe erection of furnace (fitting of power pack, transformer, capacitors, chokes, control panel, main frame, re-melting containers, hydraulic jacks, etc.) is being carried out by a special team. The team originates from Lahore and has been approached by the GM of Hattar Steel. The same team has worked over the erection of the furnaces in Gujranwala. Besides this team, other specialized teams would be manufacturing and installing cooling towers, overhead water tanks, and ingot moulds.

OperationAfter the erection, an engineer would be coming from Inductotherm India, in order to switch on the furnace to be tested on trial. Furthermore, the engineer would keep a follow up for after sales services.

RESPONSIBILITY ASSIGNMENT MATRIXA Responsibility Assignment Matrix (RAM), (also known as RACI matrix or Linear Responsibility Chart (LRC)), describes the participation by various roles in completing tasks or deliverables for a project or business process. It is especially



useful in clarifying roles and responsibilities in cross-functional/departmental projects and processes.

The responsibility assignment matrix is commonly known as a RACI matrix. RACI is four key responsibilities most typically usedResponsible

Those who do the work to achieve the task. There is typically one role with a participation type of Responsible, although others can be delegated to assist in the work required (see also RASCI below for separately identifying those who participate in a supporting role).

Accountable (also Approver or final Approving authority) Those who are ultimately accountable for the correct and thorough completion of the deliverable or task, and the one to whom Responsible is accountable. In other words, an Accountable must sign off (Approve) on work that Responsible provides. There must be only one Accountable specified for each task or deliverable.

Consulted Those whose opinions are sought; and with whom there is two-way communication.

Informed Those who are kept up-to-date on progress, often only on completion of the task or deliverable; and with whom there is just one-way communication. When the time comes for the project management team and or the project management team leader to assess all of the work that needs to be done and all of the members of the project management team that can potentially be assigned to those elements, one helpful tool to put into play is known as the responsibility against matrix tool, also known by the three letter anagram RAM.

RESOURCE HISTOGRAMThe resource histogram is a tool that is often used by the project management team and or as a means of providing a visual representation to the team and to all of those interested parties. Specifically speaking, the resource histogram is specifically a bar chart that is used for the purposes of displaying the specific amounts of time that a particular resource is



scheduled to be worked on over a predetermined and specific time period. Resource histograms may also contain the comparative feature of resource availability, used for comparison on for purposes of contrast. Resource histograms are indeed handy tools to utilize for the project management team and or the project management team leader because they allow a quick and easy single page view of exactly what resources are available, what resources are being utilized at the present time (or at whatever time the project management team and of project management team leader is seeking information on), and how long those resources are expected to be tied up.

Project PlanningThe project planning involves the following set of phases:

Definition Phase Analysis Phase Design Phase Programming Phase System Test Phase Operation Phase

Definition phaseAs mentioned before, the unit installed was firstly seen operating in Gujranwala. Within a short span of time, a meeting was arranged in which the Proprietor, GM and managers of all departments were present. The idea was laid down by the GM over which comments and thoughts were invited.

Analysis PhaseAs the project was a replacement of the old furnace, there was no need of selecting a location. The existing operating unit was to be totally replaced by a new one.

Design phaseIn order to practically implement the project, operations were started immediately after establishment of L/C. Marks for equipment are laid down as per the diagrammatic layout.

Programming PhaseMachinery was hired to break down the foundations of the old furnace unit in order to dismantle it. Soon after, relevant civil works were started.



System Test PhaseUpon full assembly of the unit, an Engineer from Inductotherm India came to operate it. The unit was firstly switched on for a trial under strict observation.

Operations phaseAt this stage, after green signal by the Engineer from India, the unit started its commercial production. Further more, it was kept under observation for a week and upon 100% satisfaction, the Engineer handed over the control to operating personnel.

Initial Project CoordinationThe project under consideration was fully selected, initiated and coordinated by the top management. As the project was a sacred cow, an operating necessity and a competitive necessity, it did not take much time to get the managers/working staff convinced over the idea.

After the approval of the idea, the order was placed to Inductotherm India followed by an L/C, over which they immediately sent a layout diagram indicating the civil works to be done within the transportation period, required for the installation of the unit. The civil work was immediately started, followed by the supervision of the project manager by distributing the work to different specialized teams.

Project Plan ElementsFollowing elements were considered while planning for the installation of a high frequency re-melting furnace.

OverviewThe reason for installation of a high frequency re-melting furnace was, firstly the cost factor, i.e. the manufacturing cost gets cut down significantly, and secondly, in the near future low frequency furnaces would become obsolete and would not be able to compete with high frequency ones, both in manufacturing cost as well as production efficiency.

ObjectivesThe main objectives of carrying out the project were as follows:

Technological up gradation, as low frequency units were growing obsolete.

To reduce time and cost of manufacturing.



Schedules After placing an order to Inductotherm India, civil works were started under a strict schedule to utilize the furnace unit’s transportation time available.

PersonnelThe personnel involved in the whole project were as follows:

1. Project Manager2. Local Masons3. Cooling Tower Manufacturers/Installers4. Water Tanks Manufacturers/Installers5. Ingots Mould Manufacturers/Installers6. Electrical Engineers7. Engineer from Inductotherm India

Evaluation MethodsThe evaluation of the project against standards is carried out by the engineer coming from Inductotherm, India. He was the one to signal the unit in order to step into commercial production.

Potential ProblemsAs the setup was totally new for the company staff and unawareness added to the problems, so in order to overcome potential problems, the engineer from Inductotherm stayed in Pakistan for a week.

NegotiationNegotiation is known as a favored technique for resolving conflict. More specifically, it refers to the process through which two or more parties seek an acceptable rate of exchange for items they own or control.

M/S Hattar Steel Re-Rolling Mills negotiates with its raw material suppliers in different countries like UK, Sudan, South Africa, Egypt, Dubai etc. in terms of the price. International prices of iron and steel scrape are set by the London Metal Exchange (LME), which acts as an official price ceiling. Now over this price, suppliers charge an underhand amount over every ton of material. All the firms importing iron and steel scrape have to negotiate prices for each consignment.



Now this underhand amount can be negotiated to some extent by increasing the quantity of the consignment or by signing a contract, binding the buyer and seller, which is valid for some time, say semi annually.

Conflict ResolutionConflicts are a definite part of any project. Managers wish to avoid conflicts but they are totally involuntary and can arise at any time and stage of the project. Conflict, either small or large in size, regardless of its category, can prove to be harmful to a project in terms of delay in schedules, misstatement in budgets and so on. Proving the above statement, conflict did arise in the selected project.

Conflict in this case was at the very beginning of the project and related to uncertainty about who had the authority to make decisions after the proprietor. The conflict was soon taken care of, by appointing Mr. Motasim Rashid, GM as the project manager.

BudgetingBudget refers to a plan for allocating resources. A budget is neither just a facet of a plan, nor is an expression of organization policy, but also a control mechanism. In order to develop a budget, resources involved in a project must be calculated in terms of quantity and cost.

As mentioned before, M/S Hattar Steel Re-Rolling Mills follows a centralized approach in decision making. The major decisions are made only by the Proprietor, or by the GM, in absence of the Proprietor. Similarly, the project budgeting was also done by the top management. The budgeting strategy opted in this project was top – down budgeting. The reason being that top management allocated the budget by looking at similar projects. In this case, the cost estimates were not given to the lower level managers. Instead, the project manager controlled all the fund based activities (civil works, installation etc) under the supervision of the proprietor.

The budget in case of the project of Hattar Steel Re-Rolling Mills refers to the following costs:

Civil Works (dismantling the old unit and preparation of base for the new one)

Furnace Unit (includes Power Pack, Transformer, Capacitors, Control Panel, Chokes, Re-Melting Containers, Hydraulic Jacks, Coils, Copper Sheets, etc)

Transportation cost of the Furnace Unit

Cooling Tower (Equipment Cost + Installation Cost)

Installation of Lifting Cranes of Different Sizes

Water Tanks (including Reinforced Steel Base)



Ingot Moulds (Manufacturing + Installation Cost)

Split + Window Air Conditioners (to be installed in the power pack cabin)

SchedulingA schedule refers to conversion of a project action plan into an operating time table. In a project environment, scheduling function is more important than it would be in an ongoing operation because projects lack the continuity of day to day operations and often present much more complex problems or coordination.

Below mentioned is the schedule prepared for civil works and erection of the high frequency furnace. It would be worth mentioning that Hattar Steel is the Pakistan’s first concern till now able to start the operations within a short time span of two months.

Estimated arrival time of the unit from India 30 – 45 days

Estimated time for civil works to be completed 30 days(Civil works include dismantling the old furnace,Preparing the base for furnace re-melting containers Powered by hydraulic jacks, transformer base,Capacitors’ base, installation of cooling tower,Water tanks, ingot moulds etc).

Estimated time for erection of furnace (after arrival) 10 - 15 days



RISK LEVELSWe have categorized the risk levels depending upon the numbers of their occurrence and the trend

analysis. The first step is to list them in an order so that no risk can be missed. Therefore we have

priorities the level of risk on the basis of following study

Higher authorities’ approval is always a challenge for project managers. In our case the higher

authorities them self partially convinced to update the present setup. PM expertise and analysis

resulted to put less effort to pursue the higher command staff

Technology awareness for the present staff and technician is considered as very important

factor for fruitful change. Specialized training of 07 Engineers & 20 Technicians on OEM

site for 30 days is arranged for the said purpose

Low frequency inductions furnaces are semi power packed, and get operated by a heavy labor.

Our case study suggest that the induction of Inductotherm will ease the labor and helpful to

utilize them in more reason able place .This will also help to provide them health security

High frequency furnace requires less man power and is computerized programmable

mechanism. Therefore they are more accurate and more productive

Electricity consumption of higher frequency furnaces are normally higher than the lower one

so we have to make some tradeoff between electricity consumption and their efficiency

The feedback support is very important for every new technology implementation. Induction of

inductotherm is not finalized before consulting with other organizations that have already

higher frequency furnaces from inductotherm



The transportation cost of equipment , hands on training program and the product cost

are traded off with the quality of their productivity

Table 1: PROBABLITY

ASSIGNING RISK IMPACT

The risk impacts are calculated by detail study with PM of Hattar steel mils

Rank Value

Very Low .05

Low .20

Medium .40

High .60

Very High .80

Table 2: RISK IMPACT


Risk number

Risk Event Probability

1 Higher Authorities Approval Med

2 Technology Awareness High

3 Manual Operations Low

4 Productivity Enhancement High

5 Electricity Consumption Med

6 After Sales Services High

7 Cost Analysis Very Low


Table 3: PROBABLITY IMPACT MATRIX


ID RISK DESCRIPTION

STAKEHOLDER CURREENT STATUS

D=DoneU=Under ProgressF=Future task

PROBABLITY

VERY HIGH=0.9

VERY LOW=0.1

IMPACT

VERY HIGH=0.8

VERY LOW=0.05

RISK FACTOR

(Prob x Impact)

RESPONCES

01 Higher Authorities Approval

Sole Proprietor D 0.5 0.40 0.2 PM expertise and analysis

02 Technology Awareness

Furnace Operators U 0.7 0.80 0.56 Specialized training of 07 Engineers & 20 Technicians on OEM site for 30 days

03 Manual Operations

Labors F 0.7 0.60 0.42 New Work procedures are designed

04 Productivity Enhancement

Project Team F 0.9 0.60 0.54 Efficient use of Resources

05 Electricity Consumption

Personnel from Budget & Account Dte.

U 0.5 0.20 0.1 Trend Analysis of available technologies

06 After Sales Services

MES Staff D 0.7 0.05 0.03 Response Checking from OEM

07 Cost Analysis PM D 0.9 0.20 0.18 Tradeoff with Quality

PROBABLITY IMPACT MATRIX

HATTAR STEEL MILLS PROBABLITY & IMPACT MATRIX

.9 .09 .27 .45 .63 .89

.7 .07 .21 .35 .49 .63

.5 .05 .15 .25 .35 .45

.3 .03 .09 .15 .21 .27

.1 .01 .03 .05 .07 .09

.1 .3 .5 .7 .9

IMPACT

LOW PRIORITY RISKS

MEDIUM PRIORITY RISKS

HIGH PRIORITY RISKS


PRO

BA

BLI

TY

COMMUNICATIONS MANAGEMENT PLAN

Overview The (project name) Communications Management Plan defines the regular meetings, reporting structure, and other communications activities that take place during the project. Its purpose is to help ensure that all the project stakeholders and team members receive the information they need in a timely manner.

This document identifies: • What information needs to be communicated

• Who communicates the information (Project team, sponsor, etc.) • Who receives the communication (Management, all Systems, etc.)

• The means of communication (Training, Documentation, Outlook E-mail, etc.) • How often the communication is made

• Where the communication is stored and for how long (Records Management)

PurposeThe purpose of the (project name) Communications Management Plan is:

• To proactively address the communication processes needed to ensure effective, efficient, and thorough communication.

• To provide individuals/groups with the information needed to easily adapt to changes that result from implementing the contract deliverables.

• To provide the contract sponsors with information that is relative and needed to successfully complete their responsibilities.

• To maintain team member awareness of program and project goals, activities, deliverables, and schedule.

Goals • To provide proactive, honest, and consistent communication.

• To ensure the project team members are aware of their contributions to the project and their ultimate success.

• To ensure the sponsor is informed of issues needing resolution and changes needing authorization.

• To ensure the stakeholders have an understanding of impacts to their area and can respond with the desired behavior.

• To ensure management has information for planning their business activities.


Scheduled Meetings MEETING Weekly Status Meeting Purpose Review project status, issues, change requests, and financials. Location Conference room and occasionally face-to-face in TAB 412. Frequency Every Thursday, 1:00PM – 2:00PM Chairperson Mr. Mohammad Dawood Khan.Attendees Agenda Project status, issues, change requests, financial status Distribution list All project members. Media Updated documents are mailed to individuals emails

MEETING Monthly Project Sponsor Status Meeting Purpose Review project status, issues, change requests, and financials. Location Technology Administration Building (TAB) Chairperson Mr. Mohammad Dawood Khan.Minutes by Mr.Ali will redistribute updated status report, change log, and

issues list. Attendees Agenda Project status, issues, change requests, financial status Distribution list All project members. Media PowerPoint, updated documents are mailed to individuals emails

MEETING Executive Steering Committee Meeting Purpose Address and resolve Re Rolling issues outside the scope of the

project team. Location VCU TAB Building Frequency Monthly Chairperson ZAKA BAJWAMinutes by HASAN JAVEDAttendees , Steering Committee Agenda Project status and issues. Distribution list Steering Committee Media Word Document

MEETING Building Kick-off Meeting Purpose Meet with building contacts the first day of “Week 6” to discuss

activities and begin work. Location Site area where the work will be performed Frequency Meeting will usually be held Monday mornings for one hour. Chairperson HASAN JAVED or designee Minutes by HASAN JAVED or designee Attendees ZAKA BAJWA (PM), site office Manager Agenda Access to building, work to be performed, schedule, and issues. Distribution list If issues are raised, they will be added to issues list. Media Updated documents are mailed to individuals emails


MEETING Station Migration Kickoff Meeting Purpose Kickoff the “Week 14” station migration activities. Location Place where the work will be performed. Frequency Meeting will usually be held Monday mornings for one hour. Chairperson HASAN JAVEDMinutes by HASAN JAVEDAttendees Site office manager, project coordinator Agenda Work to be performed, schedule, and issues. Distribution list If issues are raised, they will be added to issues list. Media Updated documents are mailed to individuals emails

Project Deliverables The documents referenced below are required deliverables in the Statement of Work

REPORT Initial Project Plan Purpose Provide a project management structure for the project. Frequency Produced in June 2006 for review and approval, updated monthly

as necessary Author HASAN JAVEDDistributed to First ZAKA BAJWAfor review and approval, then all team

members Media The Project Plan is a set of project management documents that

will be mailed to all the team

REPORT Project Status Report Purpose Provide status of the project - describe activities that took place,

significant accomplishments, milestones, and issues. Frequency Updated monthly Author HASAN J AVED Distributed to All team members Media Mailed to all the team. Comments Used to update HSM Project console

REPORT Assessment Summary and Requirements Definition Report

Purpose Provides results of Re-Rolling assessment of current environment.

Frequency Produced in June 2006 for review and approval, updated monthly as necessary

Author FARMAN ALIDistributed to First ZAKA BAJWA and HASAN JAVED for review and approval,

then all team members Media Mailed to all the team.


REPORT High Level Implementation Plan Purpose Provides the repeatable tasks that will be utilized to upgrade. Frequency Produced in June/July 2006 for review and approval, updated

monthly as necessary Author HASAN JAVED Distributed to First ZAKA BAJWA for review and approval, then all team members Media Mailed to all team members

REPORT Communications Plan Purpose To inform stakeholders and end users as to project progress,

expectations, and impact on their environment. Frequency Produced in June/July 2006 for review and approval, updated

monthly as necessary Author ZAKA BAJWA, HASAN JAVED Distributed to First ZAKA BAJWA for review and approval, then all team members Media Mailed to all team members

7 HSM End User Communications:

REPORT Stakeholder Communications Presentation Purpose Provides status and benefits of the project to key stakeholders. Frequency Monthly Author FARMAN ALIDistributed to Key stakeholders Media PowerPoint format, presented face-to-face


Audience Area of Interest Frequency Communication Tool Project Sponsors Project status

Project events

Weekly; Monthly; As needed Email; Meeting; Conference; Web site

Executive Management Project status Timeline Project risks/issues/ successes

Monthly Email; Meetings; Written reports; Web site

Program Staff Project status Project events Timeline

Bi-monthly (1st and 3rd Wednesday of Month)

Email, Meetings; Web site

Project Manager Office Project status Project events Timeline Issue resolution

Monthly and as needed Email; Web site

QA/QC Directorate Project documents Melting Reports Rolling ReportsOutput of each phase and samples

Monthly Email (Committee List); Meetings, Web site

Production Directorate Assigned Targets Report Target Achieved Reports Change requests

Quarterly Meeting, Hard copy

Rolling and Melting Directorates Project status Project events Timeline

As needed Email; Web site; Presentations

Budget & Account Dte. Project report Product Cost Analysis

Weekly Softcopy/ Hardcopy

Procurement Dte Logistic supportRaw material providers R

As needed Email /Fax


COMMUNICATION MANAGEMENT MATRIX


QUALITY MANAGEMENT PLAN

The quality management plan provides guidance on how quality will be ensured on the project through design reviews, documentation, and other protocols. It gives management and the customer a clear understanding of how quality will be maintained and what documentation they can expect (addressing quality) during the life of the project.

Applications

The plan is generated by the project team and is used as both a cross-reference for other documentation and as a guide for responsibility on the quality aspects of the project. Team members refer to it to find documents (either in whole or be reference) that they need to examine regarding quality standards for their deliverables. Managers refer to it to clarify what practices are considered essential for quality performance and to affirm who is responsible for those practices. The customer may refer to the quality management plan for assurance that quality practices are in place for their deliverables (and to identify any specific practices for which they are responsible).

Quality Approach

The quality approach often includes extensive reference documentation that supports the quality plan, including the documents needed to validate deliverable performance. It will also outline how specific practices, such as design reviews, management reviews, customer reviews, and records management will be carried out.

In installation of high frequency furnace we have checked different measures for quality such as performance of furnace, features, reliability, conformance, durability. Then we have to develop a hierarchy for quality from inspection to the total quality management.

Quality Planning

• Quality planning involves identifying which quality standards are relevant to the project and determining how to satisfy them.

• It is one of the key processes when doing the Planning Process Group and during development of the project management plan and should be performed in parallel with the other project planning processes.

• For example, the required changes in the product to meet identified quality standards may require cost or schedule adjustments, or the desired product quality may require a detailed risk analysis of an identified problem.


Quality Control

The project management team should have a working knowledge of statistical quality control. Among other subjects, the team may find it useful to know the differences between:

Prevention (keeping errors out of the process) and inspection (keeping errors out of the hands of the customer). Quality control includes operational techniques and activities that are used to fulfill requirements for quality. Quality control emphasis more on feed back of system that is how the product is working. In our project we have focus on efficient working of furnace after installation. In this we have to check out physical characteristic of our product. Quality control mainly relies on inspection and is based on defect recording and defect recording.

Different tools and techniques are used in quality control like cause and control diagram, run charts, flow charts, histograms etc.

For our project we have selected cause and effect diagram illustrate how various factors might be linked to potential problems or effects. It assists the generation of ideas for problem cause and in turn serves as a basis for solution finding.

CAUSE AND EFFECT DIAGRAM

In our project there were different causes for failure of up gradation of furnace from low frequency to high frequency. Several steps were taken to mitigate these problems.

Some points from cause and effect diagram are as follow.

Communication: - Internal and external communication is the basis of a project. If there is gap or miscommunication among PM, CEO and other technical staff, also between steel mill authority and vendor then there is more chance of project failure. For minimization of this problem there was a continuous internal communication among mill staff as well as mill authority with vendor company (Inductotherm).

Technology Failure: - It is also a main factor in failure of a project. This is due to the selection of technology and analysis. In our project we have tackle these problems by proper analysis and selected state of the art technology for this up gradation program.

Inexperienced work force: - This was also included in main problems because staff of Hattar steel mill was familiar with old low frequency furnaces and there was an installation of latest high frequency furnace so training was a must for the staff handling newly installed furnace. Training was arranged by Inductotherm and staff members were properly trained for handling of the product.


Lack of resources: - Bad financial position was also cause of failure of project. To rectify this problem there must be proper budget for up gradation program.

Backup plans: - As there was an arrangement of electricity for the proper processing of high frequency furnace so there must be a backup plane for electricity failure. For this purpose high voltage gensets were installed in mill if there was any sort of power failure.

Unavailability of after sales services: - It was among the major problems that if there is some sort of mechanical or technical problem which was not solved by mill workers then services were available from Inductotherm.


FIGURE: CAUSE & EFFECT DIAGRAM


Quality Assurance

All the planned and systematic activities implemented within the quality system, and demonstrated as needed to provide adequate confidence that an entity will fulfill requirements for quality. As in quality control we have more emphasis on product but now in quality assurance we have more emphasis on process.

This cycle for quality assurance consists of four steps: Plan, Do, Check, and Act. These steps are commonly abbreviated as PDCA.

The four quality assurance steps within the PDCA model stand for:

Plan: Establish objectives and processes required to deliver the desired results.

Do: Implement the process developed.

Check: Monitor and evaluate the implemented process by testing the results against the predetermined objectives

Act: Apply actions necessary for improvement if the results require change


http://www.wisegeek.com/what-is-the-difference-between-troubleshooting-testing-and-debugging.htm

ISSUE LOG An issue is a risk that has occurred. In other words it is something undesirable and which generally requires action outside of planned activity and hence may be a threat to timescales.Issues are typically a standing item on management meeting agendas. They typically form the majority of discussion and hence require careful management in meetings.

All projects have issues. But that fact doesn’t mean that your project has to suffer. A good project manager is always prepared for problems by looking out for new issues and documenting each one’s progress and resolution.

FIGURE: ISSUE LOG


FINANCIAL ANALYSIS

The main objectives of financial analysis are: To determine whether there is financing for each and every element of the project cost To determine whether the project generates enough returns to recover the initial outlay of

capital, the operating expensesand generate a surplus To determine whether the project investment generates enough returns to adequately

compensate every financial stakeholder in the project To determine how the level of financial returns from the project compares with

alternative investment opportunities. To determine the level of tariffs and/or subsidies required for maintaining the production

and delivery of goods and/services from non-commercial or commercially non-viable entities.


hattar steel mills furnace

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