990603Ac.Jin_KPIMonitoring(E).KWI001.SECONFIDENTIALThisreportissolelyfortheuseofclientpersonnel.Nopartofitmaybecirculated,quoted,orreproducedfordistributionoutsidetheclientorganizationwithoutpriorwrittenapprovalfromMcKinsey&Company.ThismaterialwasusedbyMcKinsey&Companyduringanoralpresentation;itisnotacompleterecordofthediscussion.DocumentDateTitleCLIENT990603Ac.Jin_KPIMonitoring(E).KWI001.SE2ADVANTAGEOFKPIsASACHANGEMANAGEMENTTOOLKPIsisaneffectivetoolforKangwon’smanagementtomonitoroperationsandlookforimprovementapproaches.KPIsareatangibleactionstep,understoodbyCEOsTheyprovideacontextforimprovingmanagementprocessesTheyarticulateperformanceimprovementgoals.ImpactofTOPimprovementideascanbelinkedtoKPItreesfortargetsetting.TheyraiseimportantissuesaboutmanagementaccountabilitiesKPIshighlightfortheCEOwhetherhismanagersunderstandtheirbusinessMostmanagersreadilysupportaKPIinitiativeKPIscanprovidesomequickwinsontheroadtochange990603Ac.Jin_KPIMonitoring(E).KWI001.SE3PROCESSFORDEVELOPINGAKPISYSTEMDefineKPIsAccessdataDevelopKPIsMonitoringsystemSettriggerparametersandtestsensitivityBuildintomgmtprocessesRefine•BuildtheKPItreefromitemcost(e.g.,electricity,oil)tototalcostperqualityton•DefineKPI,basedonKPItree•GatherdatabyTOPunits•Gatherdatafrommonthlymanagementreportsforsteelmaking,rolling,overhead,andmaintenance•DesignflowchartandformatofKPImonitoringspreadsheets•DevelopKPIspreadsheets•Inputhistoricaldataandimprovementideasbyproductgroups•TestsensitivityofeachKPItotheROIC•Skilltransfer•Prepareforroll-outtootherlinesandROICtrees•EstablishasystemtoreviewKPIonamonthlybase•Establishamanagementandmonitoringsystem•Phase1ofTOPwaves•Phase1ofTOPwaves•Week1ofKPIproject(May10-14)•Line3:week1-5(May11-June11)•Week5-7•Anon-goingmanagementprocess•TOPunits(EAF,Rolling,etc.)•HCLee•IWJung•JinQian•HCLee•IWJung•KSKim•JinQian•HCLee•IWJung•JinQian•CEO•KangwonmanagementteamActivitiesActivitiesWhenWhenWhoWhoAsuccessfulKPIsystemisanon-goingmanagementprocess990603Ac.Jin_KPIMonitoring(E).KWI001.SE4KEYOBJECTIVESPhase1:May10-June25BuildcostKPImonitoringsystemforproductgroupsofLine3CompleteROICtreeandroll-outtootherlines•DevelopROICtreeforLine3•LinkactualandhistoricaldatatothecostpartoftheKPItreesperproductgroup•Nomanualdataentry(automaticdatalinks)•FocusonmonitoringoperationalKPIsandTOPimpact(targetsetting)•RolloutcostKPItreesforLine1,2,and4basedonproductgroups•DevelopROICtreesystemsforLine1,2,3,4andforthecompany•ContinuouslymonitorandupdateKPIsystemonamonthlybase•UseKPIsystemasatooltomonitorandanalyzeoperations,setoperationaltargets,andmakeimprovementsPhase2:AfterJune25Phase1ofKangwon’sKPIprojectwillfocusondevelolpingacostKPIsystemforLine3.Roll-outtootherlineswillbeexecutedduringphase2.990603Ac.Jin_KPIMonitoring(E).KWI001.SE5MASTERSPREADSHEETOFKANGWONKPIMONITORINGSYSTEMLine1ROICRevenueCostICRollingSMOHKPIsKPIsLine2ROICRevenueCostICRollingSMOHKPIsKPIsLine3ROICRevenueCostICRollingSMOHLine4ROICRevenueCostICRollingSMOHKPIsKPIsKangwonROICKangwonROICImprovementideasImprovementideasPhase1KPIsKPIsKPIsKPIsKPIsThefinalKPImonitoringsystemshouldcoverallthemajoroperationsinKangwon’ssteeldivisionKPIs990603Ac.Jin_KPIMonitoring(E).KWI001.SE6FURTHERBREAKDOWNOFROLLINGANDSTEELMAKINGBYPRODUCTGROUPSRollingTreeRollingTreeRBtreeRBtreeHBtreeHBtreeSPtreeSPtreeRLtreeRLtreeOtherproductstreeOtherpro...
