Benchmarking is a valuable practice widely used by steelmakers to compare their processes and products against industry leaders under a fair “apples to apples” comparison. According to data from McKinsey, disciplined benchmarking has helped some producers identify improvement of up to 10 percent of the cost base. Understanding and measuring key performance indicators and comparing those against industry leaders is a good approach. Important process benchmarks to consider when manufacturing a new product include: costs, safety and process yields.

Let’s look at costs as an example. There are a few different factors at play that can be used to summarize production costs. According to World Steel “over 60% of production costs–time, buffer stocks, quality losses, energy, product damage, safety are directly and indirectly influenced by the efficiency and effectiveness of the operation and maintenance activities. Energy is a significant portion of those costs and improved energy efficiency will result in reduced production costs. Maintenance/down time is another component that shapes overall production costs. Differences in technology and equipment often an be the key driving factor influencing performance and reliability. Making use of newer more modern tools will usually result in higher quality product and will present less maintenance issues.

Benchmarking allows the key decision makers to have an objective idea of how well the company or plant is performing compared to top competitors. This kind of analysis provides a key benefit when evaluating performance goals and expectations.