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Our expertise has helped Baosteel save $19M and reduce CO2 emissions by almost 600,000 tons
Our expertise has helped Baosteel save $19M and reduce CO2 emissions by almost 600,000 tons

Transforming global steel operations

  • Our expertise has helped Baosteel save $19M and reduce CO2 emissions by almost 600,000 tons

Iron and steel production is crucial to industrialised and emerging economies.

Loughborough research in Decision Support Systems (DSS) has transformed the production and logistics operations of China’s largest steel company – Baosteel.

Keen to move away from its long reliance on rule and experience-based manual planning methods to make production and logistics operations decisions, the company called on an international team of operations researchers to revolutionise its systems.

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

By 2011, the company had collaborated with the team to implement all four of their advanced Decision Support Systems (DSS).

Since then, there has been a significant improvement in production quality; a reduction in production, inventory and energy consumption costs; and, consequently, an increase in 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

  • Award winning research 

    The project was an Institute for Operations Research and the Management Sciences (INFORMS) Award Finalist in 2013

  • Improved efficiency 

    There has been a 16.8% improvement in Baosteel’s IT and operations management capability, and a 9% reduction in inventory costs

  • Reduced CO2 emissions 

    The company has reduced its annual consumption of coal by 293,967 tons, and its annual CO2 emissions by 585,770 tons

  • Annual savings 

    To date, the DSS have saved Baosteel more than $76m and will continue to deliver savings of $19m per annum

  • Widely published 

    The research findings have been widely published in international journals and publications.