Loughborough University
Leicestershire, UK
LE11 3TU
+44 (0)1509 263171
Loughborough University

Enterprise Awards 2014

International Impact

photo of Jiyin Liu

Baosteel – transforming global operations

Loughborough experts
Jiyin Liu, Business and Economics
Project partners
Baosteel, China
Northeastern University, China
University of Maryland, USA

Baosteel is China’s largest – and the world’s third largest – steel company.

In a bid to maintain – if not improve on – this position, the company was keen to move away from its long reliance on rule and experience-based manual planning methods to make production and logistics operations decisions.

In 2005, a team of operations researchers from Loughborough University, Northeastern University (China), and the University of Maryland (USA) was tasked with devising a set of advanced operations planning tools to transform the company’s in-plant production and logistics operations in four key areas.

The team developed four Decision Support Systems (DSS) – all of which have been implemented.

Since the introduction of the innovative planning tools there has been a significant reduction in production, inventory and energy consumption costs; improved production quality; and increased revenue.

As well as improving Baosteel’s performance, the project has increased awareness of the positive impact this kind of scientific approach can have on industry in China.

IMPACT

  • The project was an Institute for Operations Research and the Management Sciences (INFORMS) Award Finalist in 2013.
  • There has been a 16.8% improvement in Baosteel’s IT and operations management capability, and a 9% reduction of inventory.
  • The company has reduced its annual consumption of coal by 293,967 tons, and its annual CO2 emissions by 585,770 tons.
  • To date, the DSS have saved Baosteel more than $76m and will continue to deliver savings of $19m per annum.

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