Russian steelmaker reaps benefits of innovation investment

In 2018 Russian steelmaker Magnitogorsk Iron and Steel Works (MMK) has invested around RUB 500 million into energy efficiency initiatives. 

According to MMK, one of the key tools of energy efficiency improvement is through 'the elaboration and implementation of relevant innovation proposals', such as an Idea Management unit with an Energy Management Platform (EMP). This significantly increased the number of ideas submitted and the percentage implemented. Over the course of the past year, a total of 680 ideas were submitted though the EMP, 139 of which were implemented with an anticipated annual cost of RUB 73.25 mln.

Initially, the platform only dealt with questions of energy-efficiency, but its effectiveness encouraged a decision in 2017 for the adoption of a wider area of preoccupation and for it to cover additional topics, including more economic use of materials and technical resources, as well ecology, labour protection, industrial health and safety, and more.

In 2018, information from pre-existing platforms was transferred to the EMP, resulting in the creation of an archive of previously submitted and implemented proposals currently comprising over 19,000. In addition, in 2017 and 2018, an initiative was launched to introduce an Idea Management unit in all MMK Group companies. Currently, information is being transferred to the EMP from MMK Metalurji (Turkey).

Following the successes of the Idea Management unit, MMK employees can now suggest their own ideas and submit them electronically. The reliability of decision-making on capital-intensive energy-efficient projects, including those financed by baby-capex schemes and energy service contracts, has significantly increased, claims MMK. Last year, a total of 17 projects with a total anticipated cost of RUB 350 million were implemented under the baby-capex scheme, including a contract for the installation of frequency converters for MMK's central power plant's raw water pumps, implemented under the energy service scheme. The total cost of the projects put in place in 2018 – and over the preceding years – under the energy service scheme, amounted to RUB 97.9 million.

MMK claims that the development of the Energy Management Platform made it possible to automate many operations that were previously performed manually. "Not only can the author of an innovation proposal submit an idea via an electronic form, but it is also possible to track the proposal’s progress on a mobile device, and to make amendments to it if necessary," the company explained. This became possible as a result of the integration of the EMP into MMK's Evolution mobile app. MMK is also testing a function which would enable the author of a submitted innovation proposal to charge a fee in return for the idea being used or implemented.

In cases where it is hard to evaluate the result of the implementation of a particularly original project, a special review algorithm is applied. These projects are also overseen by R&D, which in turn is overseen by the Energy Management Platform.