KEY POINTS:
A "No 8 wire attitude" and "ballsy" decision-making saved NZ Steel up to $120 million after a catastrophic failure recently stopped production at its Glenbrook plant.
With too few spares and its Norwegian supplier closed, the company faced the prospect of having its 24-hour-a-day plant idle for up
to six weeks.
On July 19, the water cooling system at the South Auckland plant sprang a leak, leaving anodes used to make steel and their surrounding components unprotected.
"There was nothing in the [water] pipe so it just sent up hot gases and air and that completely melted all of the rubber componentry," said Dean Adams, who at the time had been acting procurement manager for two days.
It was not until the next day staff managed to get in and discover the full extent of the damage, he said.
"We carried recommended spares for one anode, but there are eight and we melted the rubber componentry for all eight," he said.
"We had 12 spare parts, but we needed 72."
A call to their parts supplier in Norway yielded more bad news. The factory was closed and no new parts would be available for up to six weeks. The parts had been expected to last up to 25 years, so the Norwegians did not keep spares.
"When you are losing $100,000 to $150,000 for every hour you are down , it doesn't take much for the shareholders to be affected in a negative way," Mr Adams said.
The plant usually runs 24 hours a day.
He started looking for local solutions.
NZ Steel enlisted 30 New Zealand companies to design, manufacture and install the parts required.
The biggest part of the project went to Skellerup, which became the lead company, given the job of making the rubber components from scratch.
"The Norwegians said, 'You are wasting your time. These are special moulds made with special tolerances and the rubber componentry has an intellectual property component that says only we know what the recipe for the rubber is'.
"And they wouldn't share that with us so we had to work out what components were made of as best we could," Mr Adams said.
Chemists from three rubber makers were asked to submit compound ideas and all them reached the same conclusion.
Mr Adams said it was a "ballsy" move for NZ Steel to commit large sums of cash to finding a solution, but "it wasn't a leap of blind faith". NZ Steel did a lot of hasty risk assessment work and was confident the job could be done.
At worst, failure could have financially crippled NZ Steel.
As the company commissioned multiple moulds for components, Mr Adams was glued to the phone seeking alternative parts from overseas. In the end the New Zealand parts fitted and worked first time.
"It was done in nine days, a remarkable feat," Mr Adams told the Shed magazine. "It's the No 8 wire attitude. After Norway said it can't be done, New Zealand said 'we're going to do it anyway'.
The New Zealand-made parts were still in use and NZ Steel now had plenty of spares.
THE PROBLEM
* Hot gases melted rubber components used in steel-making.
* The Norwegian factory which made the parts was shut and would not say what the parts were made from.
THE SOLUTION
* NZ Steel asked local manufacturers to find the right rubber and make replacements.
* The parts worked and the Glenbrook mill avoided a disaster which could have financially crippled the company.
- NZPA
