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Pakistan Metal Mills Operations Engineering Essay

After independence in 1947, it did not take miss Pakistan to come to the realization that progressive industrial and inexpensive development would be impossible with no ownership of a self reliant flat iron and metal making herb. The reliance on imports would cause serious setbacks to the country along with an extortionately high transfer invoice which would be impossible to support.

The preliminary idea for a domestic iron and material mill was submit in the first five yr plan of Pakistan (1955 - 1960). Debates above the manufacturing process, source resources of the requisite machinery and raw materials, plant site, home ore versus brought in ore, ownership routine, product mixture and above all foreign funding credit maintained the project on hold for a significant time.

In 1968 besides other factors, it was considered by the federal government of Pakistan a basic steel industry should be set up in the general public sector, as public sponsorship of the project would enable integrated development of the material industry in the country. As a result on the 2nd of July, 1968 Pakistan Metallic Mills Firm was set up as a private limited company in the public sector in accordance to the Companies Work of 1913, with the objective to establish and run metallic mills at Karachi and other areas in Pakistan. Pakistan Material Mills Firm (PVT) LTD. Groundwork Natural stone laid on 30th December, 1973 Base Stone Laid By Zulfiqar Ali Bhutto (Shaheed) Prime minister of Pakistan.

Location: Production Vegetable 40 km East of Karachi

Capacity: 1. 1 Million Ton of Metallic Expandable up to 3. 0 Million Ton per annum.

Main Product:



Cast Billet



Business Strategy:-

Our goal is to be the leader in longer portion of metallic catering to the constructions company.


Pakistan Metal Mill Company wants to become the main steel manufacturing company in Pakistan by offering high quality material products to its customers in an innovative way.

The metal mills of Pakistan targets the present and future needs of its customer, retaining the production and quality of its products as to fully meet its customer. The business enterprise strategy of the metallic mills includes motivating the employees by using empowerment and rigid outcomes. It means that it provides safe working and environment friendly conditions. Last but not least the strategy also would like the company to satisfy its social responsibility and be ethically responsible(http://www. paksteel. com. pk/).

Operational Strategy:

Definition of OS

Operational strategy specifies the means where functions implements the firm's business strategy. In essence, operations strategy links long and short term procedures decisions to commercial strategy. In order to carry out the businesses efficient there should be an effective cross-functional communication among the departments.

Core Competencies

They will be the unique resources and talents an organizations management considers while formulating a technique. Pakistan Material Mills key competencies rest in its:

Workforce: Pakistan Material Mills has the privilege of having skilled workforce which includes qualified engineers, experienced management, dedicated personnel and motivated labor.

Facilities: The principal edge that PSM looks forward to is their located area of the flower in Karachi and office buildings in major provincial hubs.

Market and financial know how

Technology: Pakistan material mills production place has the capacity to fulfill its current customer's requirements and has the ability to cater future needs.

Competitive priorities.

Operating advantages must be related to each one of the companies. We call these competitive priorities. Now, we would concentrate on PSM competitive priorities for procedures which relates to the product or services itself.

Quality: To provide customers with superior quality billet. Fine flat iron ore should be used in which pollutants are minimized. International specifications should be found about the products. PSM uses 'blast furnace extraction' method rather than 'direct decrease method'. This method is relatively expensive. But, the final product consists of less percentage of impurities as compared to the later one. To create products that are durable and will be able to take care of maximum pressure. Strive to work and offer consistent quality so that the product meets the design specifications. Staff is effective courteous, friendly and helpful in working with the clients. Quality should not only be limited to plant activities only somewhat implementation of quality management systems across the whole firm.

Speed: to finish and deliver the mandatory orders promptly. Making sure it requires the least time to complete a process. Focus on reducing circuit time and through-put time. Because the plant is near to the slot hence it's much easier to transport the recycleables to the seed swiftly with bare minimum cost. The time between customers putting an order of a specific specification and getting it placed to the very least.

Dependability: mainly raw materials are brought in, so PSM has to make sure they get these RM promptly so that there surely is no halt in the creation process. To deliver the order on the given date.

Flexibility: SMP uses 'blast furnace extraction' method. This technique uses coal as energy which is expensive. In the event, the coal is not available then they may use the approach of 'immediate reduction iron' method. Also, sometimes they use scrap of ships as raw materials instead of iron ore. Because, sometimes the ore is expensive.

Cost: At SMP the major cost is incurred on recycleables, their transport and on the maintenance of the seed and equipment. The second portion of cost is allocated staff. Since, R&D office is not very efficient. Hence, little amount of cost is assigned to it.

The Types Of Operating Process

The operating process found in the material mills will be categorized according to the level of their output. All of the the output is merely limited by few products, the deviation dimension remains the same because the demand will not vary based on the customers need, however the development remains the same over summer and winter. The amount of visibility is actually very low since the customers don't actually go to the steel mills to start to see the production.

The Change Process Model

Input Resources

Input transforming resources



Coke Oven

Blast Furnace

Pig Casting Machine

Top Blown Basic Oxygen Furnace

Steel Pumping


Management, Administration and the work force.

Input changed resources:-

Material, information and customer are mentioned above in the benefits.

Transformation Process

Lump of flat iron ore and fluxes is put into blast furnace, then it is send to top blown blast air furnace after that it goes to steel pumping and then its previous location is continuous casting and following that it comes out as final product in the form of slab, bloom and cast billet. Coal is first send to coke range from there the company gets some of its by-product and the others of it undergoes the same process to be converted into the ultimate product. On the other hand fine iron ore has to first proceed through sintering and then remaining process for fine flat iron ore is identical to for others to be converted into the ultimate products.


Output transformed resources are also mentioned above in the release.


Every business is faced with the problem of deciding the best site for location of its plant or factory. Seed location refers to the decision of region and selecting a specific site for establishing a small business or factory. Place location decisions are very very important to any business as it places the foundation of the business enterprise to proceed for in its activities. It includes a direct have an impact on on factors like financial, work and syndication, and transport. This decision must be very thoughtful because after the vegetable has been lay out it cannot be changed quickly as it will incur significant cost and time for the business. Hence in the beginning of any industry the company should create several options for seeking the vegetable, and after inspecting the best site is usually to be chosen for the vegetable location. A perfect location would be one where the price of the product is held to least, with a large market share, minimal risk and the maximum public gain.

In January, 1969, Pakistan Material accomplished an arrangement with V/O Tiajpro export of the then USSR for the preparation of the feasibility report in to the establishment of your metallic mill at Karachi. The building blocks stone for this massive job was laid on the 30th of December, 1973. In the beginning location was determined as Kalabagh but due to certain geo-political factors it shifted. PSM now could be strategically located 40km southern east of Karachi in close area to port Muhammed Bin Qasim. Pakistan Metal is a costal site which is on the Country wide Highway which is from the railway network. Pass on over a location of 18, 600 acres (29 rectangular kilometers) with 10, 390 acres for the key vegetable, 8070 acres for the township and 200 acres for this particular reservoir.

The major factors that resulted in the decision of this site were:

Transportation cost: As most of the raw material for the metallic mill was brought in from in foreign countries it was very difficult to move the raw material to the plant as it added too much to the cost. Therefore the PSM was located In close proximity to the port bin qasim as it significantly reduced the vehicles cost.

The infrastructure also was a vital concern for PSM location as it needed facilities like vitality, water, removal of waste material etc. As metal, steel, are ability extensive and must be located near the sites of power generation failing which the scarcity of, or increase in cost of making power may spell problems because of their survival.

Labor skills and salary is another essential factor when deciding location. Flower location should be in a way that required labor is easily available in the region. Getting labor from outdoors is usually costly and it triggers great deal of administrative problems.

Suitability of the land: Site selection should also take into account topography. The soil structure must manage to bearing plenty of foundations. Though modern building techniques can overcome the limitations of the dirt, but if substantial improvement is necessary then collection of an inexpensive and may finally turn out to be expensive.

Availability and cost of the land: PSM required huge portion of land to support the development facilities in case necessary for development purposes.


Plant layout refers to the arrangement of physical facilities such as machinery, equipment, furniture etc. within the manufacturing plant building in that manner to be able to have quickest circulation of materials at the cheapest cost and with the least amount of handling in processing the product from the receipt of material to the delivery of the done product.

Pakistan metallic mills are based on the idea of product structure. Under this, machines and machines are arranged in one line depending upon the series of operations necessary for the product. The materials move in one workstation to some other sequentially without the backtracking or deviation.

Advantages of product design to PSM

Low cost of material handling, anticipated to upright and short course and absence of

Back tracking.

Smooth and uninterrupted operations

Continuous circulation of work

Lower cost of making per unit

Drawbacks of product design to PSM

High preliminary capital investment in special purpose machine

Heavy overhead charges

Breakdown of one machine will hamper the complete production process

Lesser overall flexibility as specially laid out for particular product.

Capacity management

By this term this means dealing with fluctuation popular, capacity can also refer to produce the task in confirmed time. How much good or services a corporation can provide is determined by the capability management of the company. The capability management of the material mills will be defined in conditions of the a great deal of steel produced each day. PSM has got tons of resources and folks at its removal and if the business would like to it can increase its CM, but sadly the talk about of the PSM is merely 20-25 % of the full total industry anticipated to certain other factors such as weight shedding and the high prices of fresh material. But if the company does not have to face weight shedding and high prices of organic materials then its CM may easily be improved upon since it's facing no problems at its end.

If the PSM would like to boost its CM it will firstly make an accurate demand forecast, the labor should be encouraged and they must have the most advanced technology and equipment. On the other if it wants to control its existing capacity then it should change its staff maybe, change the equipment or even present new methods.

Scheduling and control of resources

The issue of scheduling orders at each center of a big integrated metallic mill is known as. Purchases are received arbitrarily, and delivery times (PAYMENT DATES sequencing) are proven immediately. Each order is packed by converting raw materials into a done saleable steel product by a fixed series of processes( scheduling orders in a metal mill). In the planning and scheduling, all the duties starting from the establishment of the project office to handing over of the Steel mill to the plant management were clearly worked out in detail, indicating the period of each process, using recycleables on FIFO basis and the accountable person to perform the said process. There have been about 20 major jobs, each having an in depth sub-task. The sub-tasks themselves again were scheduled further to sub-activities displaying their duration, achievement and sensible person.

The critical course was:

- civil works,

- refurbishing and erection of mechanical elements of the mill,

- electrical engineering jobs and

- other power works, specifically the mill central normal water coolant system.

The civil job has the following critical activities:

- the developing part,

- Supervision activities,

- Maintenance of the re-heating furnace groundwork and

smoke way with the refractory materials lining.

Supply String Management and the Pakistan Metal Mill: Supply string management (SCM) is the management of your network of interconnected businesses interested in the best provision of product and service plans required by end customers. Supply string management spans all motion and storage space of recycleables, work-in-process inventory, and done goods from point of source to point of utilization (supply chain). In Pakistan Material we have detected a very effective and efficient Source string network from the Creation houses to the Warehouses and in addition to the consumers. The Supply string management is the main element for just about any business's success and Pakistan Material has been able it very well so far as we have witnessed.

Quality Management and Pakistan Material Mill: Quality management can be looked at to possess four main components:

Quality planning

Quality control

Quality assurance

Quality improvement

Quality management is focused not only on product/service quality, but also the means to achieve it. Quality management therefore uses quality assurance and control of operations as well as products to attain more regular quality. According to our study of the Pakistan Steel, we discovered that they produce less level of Steel nonetheless they make sure that they produce the very best quality Steel in the market. The Quality management is very effective and reliable in the business and they have coped up pretty well with their competition for a long time. They Declare that they produce the BEST Quality steel on the market.

Human Tool Management in Businesses:

The production functions prevailing at Pakistan Steel Mills are highly computerized. The chemical formulation for the development of all three types of steel remains fixed. The number to be produced is controlled through databases and is very computer-operated. So, a big volume of labor can proved to be inefficient. The real human source requirements for this automated flower are:


Highly-skilled computer staff

Chemical Experts

Machinery maintenance workers

Information Technology to aid the Businesses:

Since, the seed of Pakistan Steel Mills is controlled at high degree of automation. Hence, the utilization of it is formidable.

They use computerized directories to manage inventory control.

Auto fault recognition computer established software is utilized for the maintenance of plant's machinery.

The record of all the operations is monitored through databases.

Quality investigations are also run through computerized evaluation devices.


The recommendation that we as a group would like to make to PSM;

R&D: Metallic Mills is utilizing a a century old development process to manufacture steel. This process produces high quality billet. Countries like India and China are using direct removal method through impure flat iron ore. The steel produced through this process is not of very high quality but its demand in the market is higher due to its low price. The expense of producing metallic through direct extraction method is lower when compared with traditional blast furnace method. By implementing this technique of producing metallic, material mills can extend their target market.

Capacity utilization: Since, Material Mills Limited is not operating its plant to full capacity. Hence, they may be losing their prospect of export. While interviewing from the businesses brain of PSM we surely got to know that Middle East countries are willing to purchase material from them. But credited to lack of financial resources and poor management control and planning they cannot accomplish that. Therefore, now they need to layout a competent strategy to optimise their capacity. So that they can export metal and conquer their financial crises they may be facing.

Cheaper petrol: They should be using cheaper petrol instead high octane (48 Carbon) diesel. Instead they can use high octane diesel (Carbon 36 or Carbon 24). This might help in reducing the production cost.

Proper usage of local natural resources; According to the Geological study of Pakistan, Kalabagh (Mianwali area) holds significant iron ore reserves at an approximate 9, 300 million tons. Which will lead to a substantial decrease in the price of raw materials?

The PSM should focus on developing and assisting mini metallic mills which require less capital investment and predicated on source from local flat iron ore debris in Punjab, Khyber-Pakhtunkhwa, and Baluchistan.

Maintenance: Pak. Steel Mills need to revise its maintenance system of its durable equipment. The old equipment needs proper and timely maintenance to ensure that process of steel mill moves in an efficient manner.

Collaborate with foreign countries on the procedure and management of the steel mills. PSM should also try to get complex and financial the help of foreign countries.

PSM needs to frame a technique for energy saving, create linkages between industry and college or university circles and make sure the availability of skilled manpower and establishment of factory colleges. So that they can have significantly more skilled, educated and expert people.

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