Business System

Business System of Severstal (BSS) is a series of projects and initiatives aimed at achieving long-term competitive advantage through operational and  organizational excellence, and customer care. The Business System of Severstal (BSS) is the logical development of more than ten years of ongoing efforts to  optimize production and standardize internal processes through many projects striving to achieve maximum efficiency of labor and production. In 2010 we integrated and formalized these into a united improvement system, which also  includes projects for corporate culture change – The Business System of  Severstal.

The five major development lines of the Business System are as follows:

• Continuous improvement
• Safety
• Customer care
• People of Severstal
• Business standard

By August 2013, the Business System has been distributed all over the company. It covered 108 areas at Severstal Russian Steel, 31 areas at Severstal Resources and 16 areas at Severstal International.

In 2013, the Business System projects resulted in saving approximately 171  mln dollars for the Russian Steel. The ingredients for this success: reduction of production cost for cast iron, saving in consumption coefficient costs, increase in generation of own electric power and cancelling to use a part of purchased electricity, reduction of administrative costs, etc. Thousands of  employees contributed to the success of the company through implementing own  ideas, using new instruments and approaches.

In August 2013, the following projects joined major development lines of  Business System of Severstal: cross-functional projects and projects on  unblocking of bottlenecks, replacing a goal-setting system with lean KPIs. The  following cross-functional projects are top priority in 2014:

1. Projects with key promising customers aimed at developing new products, reducing time of delivery and increasing Severstal’s delivery share in  compliance with customers demand rate;
2. Equipment reliability control;
3. Flow projects focused on enhancing delivery performance and developing the  lean system of motivation, which provides support to improvements in the flow;
4. Energy efficiency;

Quality flow control means end-to-end flow quality control of products and  manufacturing process. In 2015 the Business system will still deal with cross-functional projects. New BSS projects are intended to develop brand new  quality control instruments, determine minimum level of expenses to get high quality final products with required physicochemical characteristics, reduce variability in manufacturing, speed up production and improve relationship between customers and suppliers.