26th International Association for Management of Technology Conference - IAMOT 2017

Optimization of the steel industry in order to deliver on competitiveness includes many factors ranging from process improvements to strategic initiatives. This research focuses on a strategic approach with a focus on process specific initiatives. The strategic initiative relates to the two models of operations, Make-To-Stock (MTS) and Make-To-Order (MTO). This research focuses on investigating the two options for optimizing the plant and reducing the production costs of making steel in South Africa. Local companies have to constantly improve production efficiency levels and evolve at the same rate as the ever changing international manufacturing trends. The research conducted on the utilization of coke, electricity, production volume, product quality index, logistics and Mean-Time-Between-Failure (MTBF) at a steel plant illustrated that MTS results in better optimization of plants through improved MTBF and product quality than MTO. Process improvement under MTS results in improved utilization of coke and electrical energy which have a direct effect on the cost of steel production. Cost reduction through capacity utilization and improved product quality are the primary factors that are required to drive down the price of steel in the market, therefore improving competitiveness of the company.