EVRAZ business system

Strategic goal

The EVRAZ Business System (EBS) is a combined approach to the Group’s operations. The key elements are setting targets, developing staff, improving processes, supporting management systems, fostering our corporate culture, and implementing necessary infrastructure improvements. The deployment of EBS is realised through a series of EBS-Transformations (EBS-T) with the aim to cover all main operations by the end of 2020. This approach is targeted to reach 100% employee engagement and help to generate initiatives with the effect of 3% from the cost base.

Overview

In 2017, EVRAZ executed several production-shop transformation projects in Siberia, which were focused on bottom-line costs reduction via EBS tools and were supported by full employee engagement. EBS teams were also formed last year to roll out EBS Transformation (EBS-T) to other divisions. Overall, we have identified a total potential economic effect of US$144 million from EBS initiatives.

Outlook

The key focus for 2018 will be on rolling out EBS transformations to other divisions, such as the Urals and Coal segments, using the special EBS teams that were formed in 2017, as well as on continuing the transformation process in Siberia. All told, the programme envisages completing up to 31 EBS transformations throughout these business units by the end of the year.

EBS Transformation

Main steps

Key applied tools

  • The idea factory is a programme aimed at collecting ideas from staff. A technical council reviews the ideas every two weeks, staff receive a monetary award for each idea that is accepted, and the best ideas are entered into a quarterly contest for valuable prizes.
  • The problem-solving board is a simple and accessible tool for gathering comments and problems from staff. It triggers a mechanism to quickly solve safety problems and improve working conditions.
  • The A3 thinking algorithm is a problem-solving approach, applied by EBS-T teams.
  • The improvement cycle is an analogue of rapid improvement event tool which helps to find solutions for previously unresolved problems using high level of interaction between employees.

Key developments and KPIs

EBS Transformation KPIs are used in areas involved in the EBS-T project. In 2016 and 2017, this included the EVRAZ ZSMK and Evrazruda, while in 2018, it will expand to the EVRAZ NTMK and the Raspadskaya Coal Company.

Number of areas
Number of employees involved
Number of initiatives (Idea factory)

Examples of initiatives generated by employees in 2017 and Potential EBITDA effect, US$ million

Implementation of new sampling device
US$ 2.5 million

Usage of one railcar for various cargo
US$ 0.5 million

Mill set-up process improvement
US$ 0.4 million