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Posco’s Innovation Activity Yields New Beginning for VSC-Posco
06/06/2011 - VSC-Posco Steel is a provider of low carbon steel wire rods and steel wires in Vietnam, where demand is strong, but the company has been competing with outdated facilities.
VSC-Posco Steel (VPS), Hai Phong, is a provider of low carbon steel wire rods and steel wires. Situated 102 km southeast of the capital, Hanoi, the company was founded in 1995 as a 50:50 joint venture between the government-owned Vietnam Steel Corp. (VSC) and Posco.
Demand for steel has been strong in Vietnam, thanks to a booming domestic construction sector. Last year, VPS reached the benchmarks of 238,000 tonnes of production, $165 million in sales. However, VPS had been competing with other players without a furnace.
VPS has enjoyed steady growth for the past 16 years, thanks to Posco’s strong brand value, efficient management system and differentiation strategies. It now faces a critical turning point as it needs to replace its outdated facilities and resolve environmental issues.
VPS launched QSS activities in January 2009, but failed, due to language and cultural barriers. Even 5S, the most basic innovation course, was met with difficulties. At this, VPS decided to adopt a new approach, with the executives and management staff taking the initiative to form a QSS-lead team. The team completely transformed the underground pit area, which crumbling and contaminated facilities that were avoided by field workers. After that, everyone changed their minds about QSS.
The 16-year-old VPS has been undergoing difficulties in production, stemming from outdated facilities. Thus VPS initiated My Machine activities and renewed the facilities. As a result, the failure rate and cobble occurrence rate fell dramatically, which led to significantly higher productivity and quality. This also helped raise employees’ trust and understanding for innovation.
Employees at VPS are now convinced of the need for QSS activities to achieve customer satisfaction and quality management. According to the company, everyone understands the critical role of innovation in promoting and maintaining growth and strong performance.
The field has undergone noticeable changes. Participation is strong and local employees take initiative in devising strategies and leading D+ activities. The company also operates talent training courses.
Demand for steel has been strong in Vietnam, thanks to a booming domestic construction sector. Last year, VPS reached the benchmarks of 238,000 tonnes of production, $165 million in sales. However, VPS had been competing with other players without a furnace.
VPS has enjoyed steady growth for the past 16 years, thanks to Posco’s strong brand value, efficient management system and differentiation strategies. It now faces a critical turning point as it needs to replace its outdated facilities and resolve environmental issues.
VPS launched QSS activities in January 2009, but failed, due to language and cultural barriers. Even 5S, the most basic innovation course, was met with difficulties. At this, VPS decided to adopt a new approach, with the executives and management staff taking the initiative to form a QSS-lead team. The team completely transformed the underground pit area, which crumbling and contaminated facilities that were avoided by field workers. After that, everyone changed their minds about QSS.
The 16-year-old VPS has been undergoing difficulties in production, stemming from outdated facilities. Thus VPS initiated My Machine activities and renewed the facilities. As a result, the failure rate and cobble occurrence rate fell dramatically, which led to significantly higher productivity and quality. This also helped raise employees’ trust and understanding for innovation.
Employees at VPS are now convinced of the need for QSS activities to achieve customer satisfaction and quality management. According to the company, everyone understands the critical role of innovation in promoting and maintaining growth and strong performance.
The field has undergone noticeable changes. Participation is strong and local employees take initiative in devising strategies and leading D+ activities. The company also operates talent training courses.
