Final Internal Audit Report

Secondary sales (Steel) - NCO and Arising

ArcelorMittal Nippon Steel India Limited

Bhushan Power
and Steel Limited
Draft Internal Audit Report – Production and
Maintenance review
Period covered: April 2021 till March 2022

Date of Issue: 22-June-22

Private and Confidential

PwC
 Detailed Observations
SECTION 2

2
Plant Operations
CRM – PKL and HRS

Variances noted in the critical parameters from the defined targets not supported with reasoning and action plans
Background: Targets are defined for critical parameters such as yield%, acid consumption, Average thickness and width. On a monthly basis, production data are
recorded against defined targets and reported to the management.

Findings:
• KPI targets to measure the department performance were not defined for Pickling and HRS related production sections for the period of April 21 to March 22.
• Also, deviations noted in the target yield %, Acid Consumption and power consumption (target of power consumption / MT production not defined) as tabulated
below, which were not supported with management review, reasons and action plans for the deviations.
Yield loss ACID(LTR/MT) Power consumption
Process
Standard Actual yield loss range Observations Standard Actual (Ltr/MT) Observations Standard Actual (KwH/MT)
Actual yield loss
WPKL1 0.80% 0.64% to 0.85% 60 LTR/MT 53 to 69 Actual consumption higher for 2 months Not defined 3.93 to 6.38
higher for 2 months
Actual yield loss
WPKL2 0.80% 0.69% to 1.09% 60 LTR/MT 47 to 70 Actual yield loss higher for 5 months Not defined 5.37 to 10.29
higher for 8 months
Actual yield loss
NPKL 1.20% 1.33% to 1.91% 60 LTR/MT 31 to 75 Actual yield loss higher for 6 months Not defined 8.08 to 18.27
higher for 12 months
Actual yield loss
HRS2 1.50% 1.66% to 4.77% Not defined 1.74 to 3.93
higher for 12 months
 
Actual yield loss
HRS4 1.50% 1.42% to 4.37% Not defined 2.02 to 13.58
higher for 11 months
• Further noted that Idle running hours of WPKL, NPKL and HRS were not monitored for optimization purposes. Noted idle running hours for various lines during April
21 to March 22 as below:

Process % Average idle running % Idle running hours range

WPKL1 16.75% 2% to 29%
WPKL2 21.75% 13% to 33%
NPKL 28.04% 20% to 40%
HRS2 14.44% -2% to 36%
HRS4 16.51% 6% to 32%

4
CRM – PKL and HRS

Nature Classification Business Impact

Design Operating effectiveness Financial Operational Compliance • Higher cost of production
a a a a

Root Cause
People Process Technology
• Process of periodic review to identify actionable in case of deviation to optimize
the yield%, consumption of Acid and Power and running efficiency not in place.

Recommendation Management Action Plan

• Departmental KPI targets should be defined and the same should be periodically A) We have excess capacity of lines in respect of order’s. We will review
reviewed to identify deviations and their actionable to optimize the cost of the same in monthly meetings with Operational Section Head & PPC.
production B) KPI will be revised as per previous achievement.

Implementation Responsibility: Section Head & PPC

Target date of implementation: From 1 July 2022

5
CRM - ARP

Inadequacies noted in the Acid Regeneration Plant Root Cause Business Impact
Background: Acid Regeneration plant is used for acid regeneration which is used at Proces • Environmental norms violation may
People Technology
CRM for pickling. s not be identified.
• Absence of periodic review for • Higher cost of acid regeneration
Findings:
consumption and actionable to
1. It was noted that processed gas exhausted in the atmosphere did not have
optimize the same.
periodic quality check process. As understood, acid content in the exhaust should
• Online monitoring of exhaust gas
be less than 0.00001 micron as per environmental norms.
quality monitoring not in place.
2. Power consumption per KL of Acid production was higher than (range of 98 Recommendation (s)
Kwh/Kl to 147 Kwh/Kl) the defined norms of 95 KwH / KL, however, reasons for
the same along with actions to optimize the same not in place.
• Periodically quality of exhaust gas being emitted to the atmosphere should
3. Further, standard norms were not defined in case of LPG consumption to be checked.
optimize the cost of production. Noted LPG consumption in the range of 95 kg / • Actionable should be identified based on periodic review of various
KL to 156 kg / KL. Further, reasons for the variances in the LPG consumption / consumption to optimize the cost of production
KL acid production was not documented along with actions to optimize the same.
Management Action Plan

• Our Environment team doesn’t have Lab facility regarding examination of

exhaust gas right now and we are on the job and it may take at least 06 months.
• From May-22 it is analyzed by third party with coordination of EMD.
• Utilities & Power consumption will be defined & same to be reviewed on monthly
meeting.

Nature Classification
Implementation responsibility: Section Head
Design Operating Effectiveness Financial Operational Compliance
a a a a Target date of implementation: For A started from May-22,For B July-2022.

6
CRM – 6 hi Mill & trimmer

Inadequacies noted in the coil quality process Root Cause Business Impact
Background: Individual coil of mill CRFH (Cold Roll Full Hard) is inspected by the Proces • Delay in implementing actionable
People Technology
quality team and quality deviation is reported with necessary action plans. s identified may lead to delay in
• Current status of exceptions not product delivery
Findings: • Inefficiency due to oversight by the
updated on timely basis as per
Sample review of CRFH quality details for Jan’22 to Mar’22 noted following: production team
action plan identified by the
• In case of 79 out of 302 Mill coils with quality defects along with action plans
quality team
identified by the quality team, Current status of these coils were as "Coil available
• Oversight by the mill operator
at floor" or "Coil available at Mill area".
• Further, in 12 out of above 79 instances, actions were yet to be taken as decision Recommendation (s)
was pending from the quality team.
• In 171 out of 302 mill coils had defect in the entire coil (1.87% of total CRFH
produced for Jan’22, 2.24% for Feb’22 and 2.05% for Mar’22), out of which • Quality tracker should be periodically reviewed to ensure that identified
following were the main reasons of the defects which could have been avoided for actionable are implemented on a timely basis.
the entire mill roll by ensuring adequate controls at the time of production: • Necessary training should be given to production team so that avoidable
quality issues can be addressed on a timely basis.

Defect in the no. of Management Action Plan

Type of defect
mill rolls (entire roll)
Gauge variation 16 • Action against the quality observation are implemented after daily CRM
Hole in full coil 27 meeting.
Buckling 9 • All defects are discussed in department daily meeting and action has
Coolant drop in full coil 17
been taken.
Edge ridge 37
Roll shade / shining / skid mark in full coil 19

Nature Classification
Implementation responsibility: Section Head
Design Operating Effectiveness Financial Operational Compliance
a a a a Target date of implementation: Started from Apr-22.

7
CRM – 6 hi Mill & trimmer

Variances noted in the critical performance parameters not supported with reasoning and action plans
Background: Departmental KPI targets are defined. However, performance measuring targets for critical parameters of the mill area not defined.
Findings:
1. On review of KPI target of Prime grade production, noted that production team reported prime grade production target of 98% as achieved, however, noted that in
11 out of 12 months, diversion due to quality issues was more than 2% leading to lower than 98% of prime grade production for the month as tabulated below:
CRFH Inspected Qty (MT) Till day ok (MT) Diversion (MT) Difference Prime grade production
Apr-21 58,808 56,817 1,990 3.38% 96.62%
May-21 46,396 44,940 1,456 3.14% 96.86%
Jun-21 45,055 43,481 1,574 3.49% 96.51%
Jul-21 36,253 35,131 1,122 3.10% 96.90%
Aug-21 41,608 40,491 1,117 2.68% 97.32%
Sep-21 48,026 47,088 938 1.95% 98.05%
Oct-21 60,387 59,041 1,346 2.23% 97.77%
Nov-21 45,603 44,369 1,234 2.71% 97.29%
Dec-21 40,519 39,484 1,036 2.56% 97.44%
Jan-22 47,736 46,697 1,039 2.18% 97.82%
Feb-22 42,421 41,387 1,033 2.44% 97.56%
Mar-22 49,508 48,372 1,136 2.30% 97.70%
2. Variations noted in the following critical parameters and consumption, however, standards or targets were not defined by the management:

Area Month Apr-21 May-21 Jun-21 Jul-21 Aug-21 Sep-21 Oct-21 Nov-21 Dec-21 Jan-22 Feb-22 Mar-22 Apr-22 Average
Mill efficiency % 88.12 91.32 87.98 85.12 86.32 87.12 93.64 87.31 85.46 89.22 87.18 87.21 85.08 87.78
Mill utilization % 70.01 82.12 65.79 54.32 60.98 62.51 85.61 64.91 59.64 70.32 62.13 62.32 56.01 65.9
Power KWH/MT 117.35 103.09 114.36 143.05 119.95 123.86 110.71 120 134 118.03 113.62 118.47 133.21 120.75
6 hi mills Coolant LTR/MT 0.55 0.5 0.5 0.53 0.78 0.61 0.52 0.56 0.54 0.55 0.51 0.56 0.59 0.56
Rolls MM/MT 0.03 0.02 0.03 0 0 0 0.03 0 0 0 0.01 0 0.01 0.01
Steam MT/MT 0.08 0.78 0.09 0.1 0.1 0.09 0.07 0.09 0.09 0.08 0.09 0.09 0.11 0.14
Compressed Air M3/MT 123.12 52.31 111.23 198.47 184.55 152.94 51.07 59.94 153.91 121.58 111.19 110.63 129.56 120.04
Trimmer Power KWH/MT 17 20 21 22 20 19 16 18.38 21.15 17.95 17.35 16.18 21.75 19.06
3. No load mill running hours / idle running hours were not monitored and reviewed to optimize the power consumption. It was informed to us that unless any
maintenance activity is planned, mill is kept on running condition even after at no load condition.

8
CRM – 6 hi Mill & trimmer

Nature Classification Business Impact

Design Operating effectiveness Financial Operational Compliance • Higher cost of production and delay in the production impacting overall
a a a a
process efficiency

Root Cause
People Process Technology
• Absence of defined process for periodic review of critical performance parameters
and consumption
• Standards for consumption of various materials and utility not defined

Recommendation Management Action Plan

• Opportunities should be identified to avoid idle running of mills and the same • A)1.Material yield at mill’s achieved below 98 % as per target.
should be implemented as per defined process. • 2.Prime Quality yield of CRFH will be revised from 98 % to 97 % as per
• Reasons for lower prime grade production should be identified and acted upon previous achievement.
based on periodic review to avoid amount of rework efforts and cost. • B) Utilities consumption will be defined as per rolling size &same to be
• Targets should be defined for consumption of materials and utilities and the same reviewed on monthly meeting.
should be reviewed periodically to identified exceptions which can be • C) During Idle conditions we have shut the power excluding Coolant power
subsequently acted upon. systems.

Implementation responsibility: Section Head

Target date of implementation: For A & B STARTED FROM 1 July-22. For C already
implemented from 10 June 2022.

9
CRM – Coating and CCL

Variances noted in the Actual production declared by Production team vis-à-vis SAP production details
Background: Production for the day is reported in the SAP against production orders issued by the PPC team.
Findings:
• On review of actual production done by the plant vis-à-vis production declared in SAP for Coating and CCL section noted deviations as tabulated below. We were
apprised with reasons such as SAP server issue, unavailability of production orders, delay in confirmation of orders by the previous production line etc, however,
documented review and reasons along with actions to ensure Realtime booking in SAP not in place:

Line CGL 1 to CGL 6 CCL 1 and CCL 2

Actual SAP Actual SAP
Difference Difference
Month production Production % Difference production production % Difference
(MT) (MT)
(MT) (MT) (MT) (MT)
Apr-21 53,308 51,925 1,383 2.59% 10,316 9,466 850 8.24%
May-21 48,835 48,095 740 1.52% 9,107 7,293 1,814 19.92%
Jun-21 51,310 54,158 -2,849 -5.55% 14,416 13,724 692 4.80%
Jul-21 39,195 39,242 -46 -0.12% 15,318 15,006 312 2.03%
Aug-21 32,069 32,134 -65 -0.20% 19,523 19,441 82 0.42%
Sep-21 41,204 41,109 95 0.23% 19,942 19,807 135 0.67%
Oct-21 47,187 47,282 -95 -0.20% 18,997 18,932 66 0.35%
Nov-21 43,327 43,228 100 0.23% 17,714 17,652 62 0.35%
Dec-21 37,508 37,551 -43 -0.11% 18,077 18,006 70 0.39%
Jan-22 39,828 39,922 -94 -0.24% 18,497 18,465 32 0.17%
Feb-22 39,403 39,333 70 0.18% 13,859 13,650 209 1.51%
Mar-22 46,145 46,219 -74 -0.16% 17,125 17,125 - 0.00%

10
CRM – Coating and CCL

Nature Classification Business Impact

Design Operating effectiveness Financial Operational Compliance • Incorrect reporting of actual production in the books
a a a a

Root Cause
People Process Technology
• Delay in production booking due to SAP issues, unavailability of Production order
or delay from the production team in timely reporting in SAP

Recommendation Management Action Plan

• Actual production should be reported in SAP on a real time basis by identifying From April-2022 department considered only SAP production.
way to automate the production reporting in SAP.

Implementation Responsibility: Section Head -Operations

Target date of implementation: Started from April-2022.

11
CRM – Coating, CCL and CRCA

Variances noted in the yield% and utility consumption

Findings:
1. On review of actual prime grade yield% against the departmental targets for CGL lines, noted deviations, however, reasons for the deviation along with action plans
based on periodic review were not evident. During April 21 to March 22, noted deviations in each line as follows:
Production Target prime Actual prime grade
Deviation from the target
lines grade yield yield range
CGL 1 98% 96.86% to 99.23% Prime yield% lower for 1 month
CGL 2 97% 95.44% to 99.51% Prime yield% lower for 1 month
CGL 3 98% 71.25% to 98.04% Prime yield% lower for 4 out of 5 months
CGL 4 98% 92.83% to 98.27% Prime yield% lower for 9 out of 11 months
CGL 5 97% 94.72% to 99.02% Prime yield% lower for 2 out of 12 months
CGL 6 97% 90.80% to 98.68% Prime yield% lower for 3 out of 12 months
2. Targets for utility consumption not defined to ensure optimum consumption. Further, periodic review of actual consumption and action plans to avoid excess
consumption not in place. On sample review of consumption for CCL and CGL lines revealed following variations:

Production lines Month Apr-21 May-21 Jun-21 Jul-21 Aug-21 Sep-21 Oct-21 Nov-21 Dec-21 Jan-22 Feb-22 Mar-22
Actual Prod. 53308 48835 51310 39195 32069 41204 47188 43327 37508 39828 39403 46145
Power KwH/MT 114.79 124.07 118.79 149.59 178.21 146.21 129.93 135.08 160.73 151.94 139.3 133.87
LPG KG/MT 12.81 12.69 12.9 15.32 16.27 15.04 15.62 15.51 15.79 16.47 17.12 16.14
CGL 1 to CGL 6
Actual Prod. 51102 47365 48011 36118 30811 39094 46043 40751 34714 36565 36368 43280
H2 NM3/MT 3.95 3.73 3.83 4.17 4.52 4.29 3.88 4.56 4.82 5.03 5.16 5.01
N2 NM3/MT 22.47 24.01 23.02 25.53 29.57 26.65 23.83 28.78 33.21 25.13 29.56 25.86
Actual Prod. 9869 8136 15646 15631 19523 19942 18997 17714 18077 18497 13863 17136
Power KwH/MT 81 98 51 51 41 40 42 45 44 43 57 46
CCL 1 and 2 LPG KG/MT 10.28 12.22 18.86 23.84 22.94 19.79 19.73 18.6 19.7 20.96 21.34 21.48
• We further noted that in case of CGL 3 line, no production was done during April, May, Aug, Sep and Oct months, however, LPG and Power consumption was
booked against CGL 3 line during these months as shown below:

MONTH Apr-21 May-21 Jun-21 Jul-21 Aug-21 Sep-21 Oct-21 Nov-21 Dec-21 Jan-22 Feb-22 Mar-22
ACTUAL PROD.     502 360         2019 3263 1074  
POWER IN KWAH 37588 21000 49887 64104 41702 50745 48742 38521 145843 197267 96160 47032
LPG MT 9.05 13.39 21.28 22.31 18.35 7.22 5.29 0.00 0.00 0.00 0.76 0.00 12
CRM – Coating, CCL and CRCA

Nature Classification Business Impact

Design Operating effectiveness Financial Operational Compliance • Higher scrap generation and higher cost of generation and re processing of
a a a a
scrap.
• Higher cost of production in the absence of defined targets for utility
Root Cause consumption.

People Process Technology

• Process to review yield % drop on a periodic basis not in place.
• Process to review utility consumption and their targets not in place.
• Actual consumption of LPG should be measured by installing flow meter and
power consumption in case of stopped line should be justified with reasons.

Recommendation Management Action Plan

• Process should be constituted for periodic review and actionable to optimize the A) 1.Target Prime yield of (GI) CGL-1,3 & 4 decided 98 %.
yield of production and utility consumption. 2.Target Prime yield of (GL) CGL-2,5 & 6 decided 97 %.
• Actual consumption of LPG and Electricity should be quantified and the same In case of any deviation CAPA prepared.
should be reviewed periodically to identify deviations. B) Utilities Consumptions target will be decided as per Size & Temper.
C) LPG and Electricity booked in CGL-3 for heating of Zinc pot. Now we have
switch over to mix gas since Nov-21.

Implementation responsibility: Section Head -Operations

Target date of implementation: For A and C Started from April-2022. For B GP-2 targeted
01 July 2022 & rest of coating lines by Aug-22 after installation of flow meters.

13
CRM – Coating, CCL and CRCA

Lines running idle impacting higher cost of production and overall efficiency of lines not acted upon
Background:
Based on the maximum capacity of the individual line, idle running hours of the lines are calculated and recorded.

Findings:
• Process to periodically review line idle running time of lines for Coating, CCL and CRCA to optimize the efficiency of line and cost of production not in place.
• On sample review of actual running of CGL and CCL lines vis-à-vis production from each line noted idle running hours impacting lower line efficiency and higher
cost of production. Line wise details are tabulated below:

Process % Average idle running % Idle running hours range

CGL 1 3.38% -3.69% to 15%
CGL 2 30.00% 13% to 41%
CGL 3 68.00% 58% to 82%
CGL 4 47.00% 15% to 89%
CGL 5 17.00% 4% to 27%
CGL
Table 1: 6Idle running-2.00%
hours of CGL lines -10% to 12%

Line Apr-21 May-21 Jun-21 Jul-21 Aug-21 Sep-21 Oct-21 Nov-21 Dec-21 Jan-22 Feb-22 Mar-22
CGL 1 98.53 86.98 97.13 92.47 103.83 100.20 99.37 94.08 95.65 94.10 99.73 101.13
CGL 2 75.57 88.13 84.56 80.47 73.37 75.30 79.94 73.84 76.03 70.77 71.64 75.58
CGL 3     57.34 60.13         55.07 62.14 63.36  
CGL 4 67.35 68.64 72.60 70.48 66.96 67.55 86.91 55.77 52.96   76.55 73.17
CGL 5 96.44 89.45 87.58 82.14 78.49 82.63 89.80 81.76 80.08 82.55 79.98 95.40
CGL 6 104.84 100.41 104.63 100.51 100.39 88.94 104.66 105.21 97.50 99.35 106.29 111.25
CCL 1 96.53 81.29 93.6 95.05Efficiency
100 100 90.64 86.87 83.5 85.66 96.29 96.58
Table 2: individual lines’ Running %
CCL 2 100 95.47 111.76 84.12 91.58 100 94.93 90.19 90.42 88.24 84.33 83.7

14
CRM – Coating, CCL and CRCA

Nature Classification Business Impact

Design Operating effectiveness Financial Operational Compliance • Higher cost of production
a a a a

Root Cause
People Process Technology
• Process to periodically review line idle running time of lines for Coating, CCL and
CRCA to optimize the efficiency of line and cost of production not in place

Recommendation Management Action Plan

• Idle running of lines should be reviewed periodically to optimize the running We have excess capacity of lines in respect of order’s. We will review the same in
efficiency of each line. monthly meetings with Operational Section Head & PPC.

Implementation responsibility: Section Heads

Target date of implementation: 01 July 2022.

15
Plant Maintenance
Preventive Maintenance Schedule & Root Cause

21. Non fulfilment of preventive maintenance leading to breakdown and production loss (2/3)
2. Why-why analysis & CAPA report not prepared for high delay cases or not adequately prepared.
On review of why-why analysis and CAPA reports made for sample instances of production loss and breakdown maintenance across all plants, we noted the following:
• Root Cause Analysis and CAPA reports were not prepared for 62 out of 116 samples selected across plants from April 21 to March 22. the details of which are
tabulated below in the next slide.
• Further, at BF 2 (mech. & Elec.), Power plant (Mech.), CRM-CRCA (mech. & elec.) details of overall delays/production loss relating to their departments were not
maintained. Hence, we could not verify the completeness of activities related to root cause analysis and CAPA reports.
• Root cause analysis & CAPA reports are not adequately prepared & reviewed by HOD. Details such as corrective, preventive actions, target date for completion,
person responsible etc. are not mentioned in sample cases reviewed. Details are tabulated below:

Plant Department Total Breakdowns Period of samples Samples Verified RCA & CAPA not available Delay Range (Hrs.) Production Loss/Delay (Hrs.)
Mechanical 3 May 21 & Feb 22 3 3 (100%) 1.55 to 3 7
BF 1
Electrical 14 Feb 22 13 6 (46%) 2.5 2.5
Mechanical 164 Apr 21 to Mar 22 52 26 (50%) 0.7 to 15 77
SMS 2
Electrical 53 Apr 21 to Mar 22 31 14 (45%) 0.6 to 2.8 21
CRM Electrical 228 Jun 21 to Mar 22 13 10 (77%) 0.35 to 288 317
Power Plant (100MW Electrical 4 May 21 to Oct 21 4 3 (75%) 12 to 107 152

17
CRM Preventive Maintenance Schedule & Root Cause

Nature Classification Business Impact

Design Operating effectiveness Financial Operational Compliance • Inadequate and irregular preventive maintenance will lead to untimely and
a a a a
frequent breakdowns and production loss.
• Key reasons for failure may not be identified for longer duration due to
Root Cause inadequate RCA analysis and CAPA reports.
• Ineffective RCA & CAPA may result in more production loss and downtime
People a Process a Technology due to ineffective maintenance.
• Oversight by the maintenance department.
• Comprehensiveness of Root Cause Analysis and CAPA reports not ensured.

Recommendation Management Action Plan

• SAP PM Module should be implemented across all plants with proper training so We have started delay report & CAPA on monthly basis for FY-22-23.
that maintenance schedule, its actual compliance, delayed PM, breakdown
notifications etc. could be monitored.
• RCA & CAPA should be prepared for major and frequent defects/breakdowns
especially in cases which results in production loss.
• Completeness of Root Cause Analysis & CAPA reports to be ensured capturing
all relevant details and actioned upon accordingly.

Implementation responsibility: Area In charge

Target date of implementation: Started from April-2022.

18
Protection Bypass

23. Protection bypass register not maintained adequately

Background:- Protection bypass register is maintained wherein reasons, approvals and status of software protection bypassed are monitored.

Findings:-
On review of software protections bypassed by the electrical maintenance department during the audit period, it was noted that:

1. No Protection bypass register maintained:

• At Blast Furnace 2 & CRM-Narrow Mill, we could not verify the approval mechanism and instances of protections bypassed during the FY 22 as such details are
not maintained by the department in any register or list. Further, we were told that there is no approval mechanism for bypassing software protections.

2. Protection Bypass register not adequately maintained:

• At Blast Furnace 1 & CRM (6HI Mill & CRCA), details such as type of bypass i.e., permanent/temporary, reasons for bypass & date of normalization are not
mentioned for all instances recorded during the audit period.

19
CRM Protection Bypass

Nature Classification Business Impact

Design Operating effectiveness Financial Operational Compliance • Unauthorized bypass of electrical protections in place.
a a a a
• Inaccurate review of electrical parameters.

Root Cause
People A Process A Technology
• Oversight by Department.
• Non-monitoring of controls bypassed.

Recommendation Management Action Plan

• Protection bypass register should be adequately maintained covering all the WE HAVE MADE BYPASS REGISTER AT EACH DEPTT. FROM APRIL-2022 , EARLIER IT
necessary details such as reason of bypass, bypass requested by, type of WAS ONLY IN LOOGBOOK.
bypass, date of normalizing.
• Approval signature should be taken for each bypass by the person requesting it.

Implementation responsibility: Electrical Area In charge

Target date of implementation: Started from April-2022.

20
Permit to Work procedures

22. Violation of permit to work (PTW) procedures

Background:- As per safety code of conduct, all maintenance jobs to be performed by obtaining a permit to work which should be valid during the period of job and
approved by concerned authority.

Findings:-
On review of PTW for maintenance jobs carried out during the audit period, the following gaps were noted:
• Permit to work not taken for sample maintenance activities carried out during April 21 to March 22. Summarized details are given below:

Plant Department Sample Instances Production Loss/Delay (Hrs.) LTIs due to communication failure
BF 1 Electrical 6 out of 13 2.5 -
BF 2 Electrical 8 out of 8 - -
SMS 1 Mechanical 6 out of 9 36 -
Electrical 17 out of 18 30 -
CRM Mechanical 15 out of 28 61
1
Electrical 13 out of 22 317
Power Plant Mechanical & Electrical No process of -
3
taking valid PTW
• PTW are manually maintained. There is no list of permits issued during the period.

Further, in case of hot work permits, concurrence of safety officer was not taken in any sample cases reviewed.
• There was no Job Safety analysis, Toolbox talk in all the permits issued during FY 22 as per old format. Though, new format of PTW has been implemented in a
phased manner across all plants from March 22 and April 22, where these documents have been made mandatory.
• In case of CRM-6HI Mills (Electrical), approvals for permit to work in case of shutdown activities were given by Shift-in-charge of Electrical dept. instead of
Operations.

Permit to Work

21
Permit to Work procedures

Nature Classification Business Impact

Design Operating effectiveness Financial Operational Compliance • Unsafe act may result in Loss time injury, Accidents, Fatal etc.
a a a a
• Failure of proper communication between departments may lead to
production loss.
Root Cause
People a Process a Technology a
• Absence of PTW
• High dependence on manual records

Recommendation Management Action Plan

• Valid permit along with necessary documents shall be taken for all kinds of Implemented from Apr-22 with new format given by safety
maintenance and breakdown activities.
• Automated Permit to work system could be explored.

Implementation responsibility: Area In charges

Target date of implementation: Already started from Apr-22

22
Annual Business Plan & KPI

24. Non availability of Annual Business Plan and KPI

Background: Annual Business Plan (ABP) and Key Performance Indicator (KPI) gives detail indication and key parameters like maintenance, cost, budget, targets,
etc.
Findings:
1) On review of documents available at plants w.r.t Electrical and mechanical maintenance for FY 2021-22, we observed that:
• ABP of maintenance cost not found on record and there is no process for monitoring and reviewing maintenance cost with the budgeted cost.
• Departmental KPI document is not maintained setting specific KPI targets for delay, MTTR, MTBF, maintenance cost/ton etc. along with its actual compliance
results for the year.

Plant name (Mechanical) Plant name (Electrical)

Details Power Power
BF1 BF2 SMS1 SMS2 CRM BF1 BF2 SMS1 SMS2 CRM
(130&100 MW) (130&100 MW)
ABP document X X X X a X X X a X a X
KPI document a X X X a X X X a X a X
2) CRM plant (Mechanical) :
• Maintenance cost per ton as per department’s MIS report is Rs. 28.97/MT whereas it was declared as Rs. 21.47/MT as per yearly review ISO document in CCL-
1.
• Maintenance cost as per SAP for August 21 was Rs. 3,49,399 whereas it is Rs. 2,91,299 as per departmental review document. There is a difference of Rs.
58100. (Crane)

23
Annual Business Plan & KPI

Nature Classification Business Impact

Design Operating effectiveness Financial Operational Compliance • Non review of maintenance cost may lead to cost overrun.
a a a
• Department wise performance may not be available in absence of KPI
defined.
Root Cause
People Process Technology
• Absence of ABP and KPI records.
• No defined process for ABP & monthly review.

Recommendation Management Action Plan

• Annual Business plan & KPI document should be prepared containing all the 1. Already we have taking KPI according to ABP in all sections of CRM.
necessary parameters such as maintenance cost, delay percentage, machine 2. Cost of CCL-1 is already corrected ,it is manual typing mistake.
availability etc. It should be reviewed on monthly basis for any deviation for which
reasons and expected action plan should be documented.

Implementation responsibility: Area In charge

Target date of implementation:Apr-22

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Other Observations

Nature Classification Business Impact

Design Operating effectiveness Financial Operational Compliance • In case of breakdowns, unavailability of critical spares may lead to longer
a a a
production loss.
• Non review of deviations in condition based monitoring may lead to
Root Cause breakdowns.

People Process Technology

• Absence of defined review process of critical spares
• Absence of review process of condition based monitoring.

Recommendation Management Action Plan

• There should be a defined process for review of critical spares. Minimum quantity, CRM is doing already and monitoring review started from Apr-22.
Re-order level etc. could be defined for critical spares so as to avoid stock out
condition.
• Condition based monitoring should be reviewed on periodic basis and deviations
if any should be identified and reasons and actions plan for resolving it should be
documented.

Implementation responsibility: Area In charge

Target date of implementation: Apr-22

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 Thank you

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