Project Management: A Case Study of Zuquala Steel Rolling Mill

PROJECT MANAGEMENT:
A Case study of Zuquala Steel Rolling Mill
Wondimu Degnitu
Head, Project Engineering and Monitoring Unit,
Basic Metals and Engineering Industries Agency, P.O. Box 1180, Addis Ababa, Ethiopia
Published in the Journal of the ESME, Vol. III, No. 1, September 2000
Reprinted with ESME permission by the African Technology Forum

Project management requires more special attention than the common management practice because of the need to
- deliver a specific end result within agreed quality, cost and time constraints and
- create and manage a project team to be disbanded completely upon completion
or keep some of the well- trained staff for smooth continuation of operation.

Such attention, which is properly managed, ensures
- the project establishment with effective plan
- detail tasks planning and scheduling
- effective implementation and problems resolution and
- proper assessment of the project.

In this regard and context the experience of Zuquala Steel Rolling mill project is presented as a case study. As it is known, ZuSRoM is the biggest steel plant in terms of capacity (100, 000 tons per annum of rolled reinforcement bars, square and flat bars, and angle iron product). It has effectively introduced PLC technology in the country. Apart from that, the project was completed in the projected time and budget limit; though there were minor constraints as revealed due to role ambiguities in the management hierarchy.

The presenter of this case study was the site manager of the project and has worked with the South African team from the beginning of the overview planning to the post implementation review of the project.

Basically, project management has a defined route map. This route map incorporates project definition, overview planning, detailed planning and scheduling, plan implementation and post implementation review defined sequentially in bounded times. Zuquala Steel Rolling Mill Project had passed through a stitch project management route map as discussed here under.

According to the feasibility study conducted by IPS (Industrial Project Services), the projected demand for rolled products (reinforcement bars and structural steel) for the year 2009 was estimated to be in the range of 132,532 tons. For the year 2000, the estimate was about 85,000 tons.

Ethiopian Iron and Steel factory produces about 12,000 tons of RC bars annually if it is utilized efficiently. To supply such demand gap, import substitution is the solution. Such a situation had to be improved by establishing a rolling mill to cover at least about 75% of the demand. On the other hand the market advantage has to be exploited. Furthermore, the issue of getting quality rolled RC bars to secure economical construction by designers has to be answered along with the other problems. It is within this problem-solving context that the ZuSRoM project was defined.

To solve these problems based on the available limited resources and existing financial constraints, appropriate technology had to be searched. It was on this search process the idea of second hand mill transplanting came into the project definition. Surprisingly, at that moment ISCOR (Iron and Steel Company of South Africa) was ready to sell the Durban Mill just to clear up the site to establish a stainless steel plant. A technical team was sent to Durban, South Africa to conduct an assessment. The team submitted a report and price negotiation was conducted by BMEIB (Basic Metals and Engineering Industries Bureau). Based on this negotiated offer, the bureau worked out a preliminary budget and a thorough feasibility study was carried out by IPS in March 1995.

After the government approved the budget, in order to facilitate for contract agreement, terms of reference and scope of service of ISCOR were prepared very cautiously, creating farsighted objectives of know-how transfer, local capability improvement and use of local resources for refurbishing the transplanted mill. Hence, to fulfill these objectives, BMEIB had to create an appropriate project organization to minimize the impact on its over all organization role. Thus, BMEIB and ISCOR jointly organized the project management team on the basis of a cooperative counterpart organization set up, that is, for each accountable activity there was a one to one mixture of ISCOR and BMEIB professional counterparts being represented with full responsibility. The project site was chosen to be at Debre Zeit where the mill is now located, due to the fact that two 20 ton capacity overhead cranes were available in the building and the government was willing to have the mill erected there.

Type	Size	Length
Reinforcement bar	Ø 10 - Ø 32 mm	6-15 meters
Square bar	10 x 10 mm	6 meters
Square bar	20 x 20 mm	6 meters
Flat Strips	20 x [5-12] mm	6 meters
	25 x [5-12] mm	6 meters
	30 x [5-12] mm	6 meters
	40 x [5-12] mm	6 meters
	50 x [5-12] mm	6 meters
Angle Iron	25 x 25 x [3-5] mm	6 meters
	30 x 30 x [3-5] mm	6 meters
	40 x 40 x [3-5] mm	6 meters
	50 x 50 x [5-6] mm	6 meters

The imported billet, l00 x l00 mm - 3.5 m long, guarantees the quality of the products for producing
- RC bars - high strength billet which has Tensile Strength 550 MPa and Yield Strength 420 MPa,
- other sections; mild steel billet which has Tensile Strength 450 MPa and Yield Strength 300 MPa, is used.

When preparing the over all planning of ZuSRoM project, the identification of key issues associated with the project were under taken by group generated ideas rather than analytical process. Activity dependencies, critical stages in the plan and early decision requiring activities were identified when preparing the overview planning. The overview planning was prepared by both ISCOR and BMEIB senior staffs.

In the overview planning, major tasks and their respective deadlines such as dismantling of the mill from Durban site, orderly packing, Durban port delivery, shipment time to Assab Port and delivery to Debre Zeit site were clearly indicated. On the same master schedule, civil work design that enables the existing building to accommodate the mill, refurbishment of big electric motors and control panels in South Africa and their delivery to Debre Zeit were clearly planned before hand. All these activities were destined to be completed in six months time, from September 1995 to February 1996. Within this time, the BMEIB counterparts planned to complete the roofing of the building, installation and commissioning of 2 x 20 ton and 4 x 5 ton over head cranes with their support structures in place, clearing site and preparation of temporary stores and a residence house for the ISCOR team. The task had to be completed by the end of December 1995.

From January 1st, 1996 to early January 1997 the main construction of civil works, electrical installation, refurbishment, erection and commissioning of the mill were planned and the main activities were shown on the same master overview plan.

In the detail planning and scheduling, all the tasks beginning from the establishment of the project office to handing over of the mill to the plant management were clearly worked out in detail, indicating the duration of each task and the responsible person to accomplish the said task. There were about 20 major tasks, each having a detailed sub-task. The sub-tasks themselves again were scheduled further to sub-activities showing their duration, accomplishment and responsible person.

The texture of the tasks in the detail planning and scheduling show initial administrative and supply tasks, civil works, refurbishing and mechanical erection activities, electrical engineering works and other utility work activities. The relations of each task were identified and shown in the master schedule. Resources required and potential problems with their preventive and contingent action were overviewed in detail when preparing the detail planning.

The critical path was:
- civil works,
- refurbishing and erection of mechanical parts of the mill,
- electrical engineering tasks and
- other utility works, specifically the mill central water cooling system.

The civil task had the following critical activities:
- the designing part,
- initial contract administration activities,
- actual construction of the re-heating furnace foundation and
smoke way with the refractory material lining,
- the 420 mill foundation,
- the 8 meter deep 10 x 40 square meter cooling bank foundation and
- the electrical cable trenches construction.

All these actual construction tasks had to be completed with in three months time.

The refurbishing and reconditioning task, which was the major engineering activity, included refurbishing of the mechanical parts and electric motors starting from sand blasting and reconditioning of mechanical components to rewinding of electric motors.

The erection task, which had task relations with the electrical engineering activities, was composed of all erection activities of the mill mechanical components, control boards and electrical motors. The most difficult tasks were the erection and aligning of the 420 mill and the cooling bank.

The electrical engineering tasks were installation of high voltage line from EELPA 20 MVA / 15 KV output substation to the mill 5 MVA substation which is supplied by 2 x 2.5 MVA / 525 V output transformers, 1 x 2.5 MVA / 11 KV output transformer that supplies only to the 420 mill motor and 2 x 630 KVA / 380 V output transformers; erection of these transformers, cabling work to all destinations from these transformers to control boards and motors, central earthing wiring and PLC wiring from motors, guides and sensors to the central PLC board. The PLC system wiring installation, connection and commissioning tasks were the most difficult activities apart from the cable installation activities.

The central cooling system, furnace fuel system and compressed air system were also planned in detail, scheduled and assigned to a responsible and accountable person.

All the tasks in the detail planning of ZuSRoM project were worked out and processed by using Microsoft Project (version 4) software which was practiced by almost all senior erection engineers.

The only drawback in the detail planning was the commissioning of the mill through the production of representative product sample types with specified quantities. This crucial activity was done erratically during the commissioning phase. This was because of the common malpractice of rewarding the non-participant at the completion of the phase of erection and commencement of the project commissioning phase. A lot more people who were looking at the project standing in the corner appeared very caring after the first successful commissioning of Ø 20 RC bar. Had the erection not been up to the standard and promising, the next action of looking for the guilty could have followed with certainty.

Excellent detail and scheduling alone can not entirely guarantee the fulfillment of a project objective. For the ZuSRoM project this was clearly understood; tasks were initiated on monthly, weekly and daily basis. These initiated tasks were then monitored for progress as per their scheduled time through reports made by the responsible and accountable persons of both ISCOR and BMEIB staffs up and down the organization hierarchy.

The civil work was awarded to Varnero Construction S.P.A. and BMEIB had Africa Consult Enterprise monitoring the quality and progress of the work and submitting a report. In addition, the designer of the mill civil work was a full time project team member of ISCOR who had a title of chief engineer.

Varnero S.PA finished the civil work and the additional variation works with in the agreed time. It was surprising for all of us (both the ISCOR and BMEIB team) when Varnero's staff cast 140 cubic meters of mixed concrete in a single day, which was beyond belief because the usual practice in Ethiopia at that time was casting not more than 40 cubic meter in a day. The other perfection in work of this contractor was the exactness on grouting the foundation of high-tension anchor bolts. This saved a lot of chiseling work and as a result shortened the erection time.

For the reconditioning and refurbishing work of the equipment, the staff of Akaki Spare Parts and Hand Tools Factory who were in charge at that time played a remarkable role by finishing the work orders on time. They had worked along with the detail-refurbishing plan with minor monitoring from the project office side and excellently reported to BMEIB and ISCOR project offices, as well as to respective staffs that initiated the task orders.

During the implementation phase of the project morning meetings of forty-five minutes duration were conducted daily to review potential problems and critical activities and initiate preventive and contingent actions. ISCOR and BMEIB project staffs together with the board members of the project used to conduct weekly and monthly performance appraisal meetings. These meetings helped a lot in updating the project plan and ensuring corrective action.

In addition to monitoring the project progress and reporting, there were effective monthly performance appraisals made through a protracted incentive scheme which webbed all the project workers in a group and individually, even including the daily laborers based on the organization set up. Holding a get together party when objectives were met helped to raise the effectiveness of the project workers very much.

Zuquala Steel Rolling Mill project had been completed on time and the comparison of the results with the objectives did not show major differences. As it was discussed on the project definition, its main objectives were import substitution of RC bars and rolled sections for local consumption, assessing and improving local capabilities for reconditioning second hand equipment by transferring know-how and securing better quality products that guarantee designers will be able to look for economical designs and construction.

In all these aspects, the project has met its objective to an undeniable degree of acceptance. Know-how transfer by developing technicians to run modern rolling mill was achieved. Our engineering capability in reconditioning sophisticated second hand equipment and gearing ability to the use of local resources for such kind of project was assessed and evaluated. The process has revealed that there is enough potential capacity in the country that needs to be nurtured.

The product quality, specifically the RC bars of the mill, have prompted designers to be dependable for economical design. This tendency is revealed at the moment by the fact that most of the plant customers are well-reputed big construction firms. In regard to the other products, the plant is further expected to fully penetrate the market by producing flat strips and angle iron to create favorable conditions for the local manufacture of power and communication transmission towers and other light structures that can replace imported ones which are now abundantly required in infrastructure building.

Finally, it is worth suggesting that establishing billet manufacturing mini steel plants can help ZuSRoM to be competitive and improve its capacity utilization, which at the moment stands at around 15%, due to working capital constraints on import billets and the availability of low quality and low priced imported products in the market. Such mini steel plants can also encourage and pave the way for the establishment of flat sheet hot and cold rolling mills, provided that their economic design capacity is studied and determined based on potential savings of foreign currency. This is high time for investors to consider the establishment of hot and cold rolling mills since all local metal industries are entirely dependent on imported materials.