Creating a Culture of Continuous Improvement

An article published in the NWI Times, April 7, 2013
By Bowdeya Tweh, Times Correspondent

Andy Harshaw says steel companies need to promote a culture of continuous improvement. Focusing on the future and being able to foster innovation is critical to the industry’s survival, he believes.

Harshaw, executive vice president of operations at ArcelorMittal USA, said people need to come to work recognizing the steel business isn’t the same as it was a few decades ago.

Dozens of companies have gone bankrupt or shut down in the domestic market since then. Improvements in technology have helped companies boost their facilities’ energy efficiency, product quality and safety performance.

“Steel mills are making a commodity,” said Roy Berlin, president of Berlin Metals, a Hammond-based steel service center. “So what do they have to do to compete? They’ve got to really nail their costs down. They’ve got to be the highest quality. They’ve got to be efficient.”

Partnerships foster change

Lawrence Kavanagh leads a Pittsburgh-based group that strives to help make steel producers more competitive. Kavanagh has been president of the Steel Market Development Institute since 2010 and serves as one part of an informal innovation consortium that includes companies, academia and government.

He said researchers and business development representatives work to determine what applications customers seek and whether steel could serve those markets with products.

The consortium then determines what research should be supported and oversees technology transfer when necessary. Then, companies use their resources to take basic research and adapt and continue it for their purposes.

“The properties of steel are fairly unique in that it’s iron, carbon and the way those elements bond together allows for the ready substitution of other elements,” Kavanagh said.

Part of the group’s manufacturing agenda in the steel industry calls for more public-private partnerships on pre-competitive research, he said. It is often difficult to move projects past their pilot phase because development costs increase as well.

Innovation efforts strong

Computer software programs and metallurgical research are critical to designing custom products for unique applications, Kavanagh said.

One of the most important research fronts in steel is the effort to develop a third generation of advanced high-strength steel products, said Blake Zuidema, director of automotive product applications at ArcelorMittal’s global research and development center in East Chicago. Millions of dollars have been funneled to research partnerships to retain a competitive edge as other materials, including aluminum, are used more frequently in automobile body production.

The products are able to improve fuel economy by removing weight from vehicles while keeping them strong enough to meet crash-test requirements.

The fleet of vehicles from each automaker also has to average 54.5 miles per gallon by the 2025 model year.

It takes time to bring a vehicle to full production so the steel produced has to be ready years earlier. “We’ve got a fairly short horizon,” Zuidema said. “It’s probably no more than four to five years that we need to have the full palate of steel grades available.”

Another important market in construction is bridges. A large share of the activity in the segment is on short-span bridges, many of which are 150 feet long or less. After research was completed in June as part of a task force to increase steel’s competitiveness in the short-span bridge market, more than 500 of those bridges have been designed. Kavanagh said high-strength steel is the industry’s answer to precast concrete used in those bridges. This could reverse the drop in the use of steel in short-span bridges.

Steel also could see a boost by gaining use in home construction, and advanced high-strength steel products also could find additional applications in farm equipment. The Steel Market Development Institute plans to work on a research road map guiding products tailored for the energy segment through 2030.

In summer 2010, U.S. Steel announced a one-of-a-kind project in Gary that it hoped could boost to its efforts to reduce emissions of harmful pollutants, increase process efficiency and lower its operating costs.

U.S. Steel paid a handsome sum, which has not been disclosed publicly, to license technology from a firm to produce an alternative to traditionally manufactured coke for blast furnace. The manufacturing process of blending and baking different types of coal and reusing waste gas was attractive to U.S. Steel. The initial price tag: $220 million.

The company secured permits from the Indiana Department of Environmental Management for the construction of four modules, but it initially chose to build two. Operations of the plant have not gone according to schedule and didn’t have both facilities running without significant problems earlier this year. Once fully operational, the new plants are among the ways the company is trying to reduce its reliance on spot market buying.


Chenn Zhou, a Purdue University Calumet mechanical engineering professor, believes the steel industry needs an image consultant.

Zhou has seen the industry evolve through her 30 years of research on projects, some of which have been for steel. But she has found many young people have dated perceptions about the steel industry and the amount of technology it takes to run modern facilities.

Four years ago, PUC created the Center for Innovation through Visualization and Simulation. The center allows students to use advanced simulation techniques and create 3-D images and virtual reality environments to interact with complex data. Students and university faculty have worked on projects that have included modeling the inside of the blast furnace to improve fuel-utilization rates.

She said more focus should be paid to the next generation of engineers and scientists who will make the discoveries and conduct research beneficial to the industry.

“In the steel industry, the way to attract young engineers is to get them attached earlier,” said Zhou, who also is PUC’s interim associate vice chancellor for research and graduate studies.

Zhou said partnerships between academia and industry will become increasingly important as companies seek ways to stretch research and development efforts.

Change the only constant

Steel has long been a capital-intensive business. But global competition among steel producers and from those who produce other materials is forcing companies to find cheaper ways to produce the metal.

Continuous casting, basic oxygen furnaces and electric arc furnaces in the so-called minimills were innovations that have been critically important in steelmaking in the last half century, said Larry Davis, a Hebron resident and ArcelorMittal electrical maintenance technician. He said the next frontier will be new steelmaking technologies that do not produce “anywhere near” the pollution of older, integrated steel mills.

In developed countries, the threat of more stringent regulation of greenhouse gas emissions has forced companies to look at implementing technologies to reduce pollution of carbon dioxide and other gases, said Zuidema, of ArcelorMittal’s research and development team.

Companies not only in the United States but also in other parts of the world are researching whether hydrogen can be used as a fuel to reduce iron instead of coke. Kavanagh said large-scale lab testing would be complete by the end of 2015 at the earliest. Also, researchers are working on building a furnace called a paired straight-heart furnace that would run on iron ore or iron-rich oxides to produce direct reduced iron for electric arc furnaces.