IOD Product Direction Project Portfolio GP QS -Business cases- Paris , 18 th June 04

1. IOD Product Direction Project PortfolioGPQS-Business cases-Paris, 18thJune 04 DRAFT V0.4

2. Request For Quotation / Product Specification Catalogue Management (LCPS / A2C) Module 1 Arcelor Advanced Catalogue Production Launching Specification Metallurgical Route Management(EPC M1) Module 2 Metallurgical Route Module 3 On Line Product Qualification Product Qualification on Production Line(EPC M2) Anomaly diagnosis Decision Support Tools(EPC M3) Anomalies Detection & Diagnosis Module 4 Module 5 Product Allocation & Re-allocation Product Allocation / Re-allocation Module 6 Available Products Available Products Management / Comet Module 7 On Line Measurement On-line Measurement Methodology / AQP Knowledge and Capitalisation Management Module 8 Knowledge Management Performance indicators Balance Score Cards Score Boards Module 9 Module 10 Transversal Issues Transversal topics of PLM modules Preamble This document is aimed at presenting the Global Product Quality System project (GPQS)This project refers to modules 3 and 4 of the Product Line Management modules A CONSERVER ?

3. On line models • On line availability : On line allocation using models • Detection of drifts of captors or within the process • mean of capitalization of knowledge • First automatic detection of anomalies and events Generic platform • Sharing of information via the Web • Savings on IT developments • Common vocabulary within Arcelor On line measurements • Requirements are mainly covered Recognised advanced IT tools • Expert process systems (SACHEM, APACHE…) • Rules manager (A2C) • Proximity engines • Automatic surface inspection system GPQS Background During the past five years a lot of resources has been invested in measurement devices, in modelling, in events detection algorithms, in automatic diagnosis modules leading in This enabled to implement preventive quality insurance and to make first productivity benefits

4. GPQS Background The existing situation highlights the following statements, showing that more benefits can be expected : • There is a lack of efficiency from human resources • Operators • There is very often a profusion of data and operators are not always ready to detect anomalies in the forest of signals • A lot of human resources is spent to check everything is normal. The 0 event detection is time consuming • « Day men » • Simple operations could be processed automatically on line since technical skill exists • Experts • They are scattered, they have very few problems to solve, their knowledge need to be frequently updated • Due to the lack of time, diagnosis of incidents is sometimes superficial and be misleading. Countermeasures aren’t always so clear • A low level of reactivity concerning environment (products, process, systems) exists

5. GPQS Background Therefore, GPQS project addresses the two following major improvement axis identified : Making control tasks more simple • Since a lot of expert operators will soon retire, we need to make « quality driving » simpler and more secure. • There are only a few but easy to read signals which are displayed. « IHM » implemented on Florange HDG is representative of such a trend. • When there is a problem an alarm (visual + oral) is made. Signals with no problem detection aren’t displayed. • A « non event » permanent watch help the operators. This has been implemented for surface inspection systems and it works successfully Implementing help to decision • When an alarm is generated, it’s possible to associate symptoms to diagnosis and countermeasures recommendations. • This would help for operators coaching. It could be a way too to capture expertise of operators

6. GPQS Objectives Arcelor GPQS project is defined by the following objectives • GPQS Project Objectives • Phase Objectives • Arcelor Objectives • x • To detect and make a diagnosis on line automatically, enabling to focus only when problems occur • To increase reactivity (countermeasures) • To share data ( « shared experts » ) • To capitalise knowledge and provide on line access • Phase 1 : pilot on three plants • Dunkerque • Florange • Aviles • Phase 2 : Roll-out A COMPLETER -Développer davantage les idées

7. GPQS Scope - Overview A VALIDER The project consists of the implementation of a new information system. Main principles are described below : • The system receives parameters from the lines (about 200 per line) ; two levels of parameters exist: • Parameters referring to product quality • Parameters referring to the malfunction of the lines, finally affecting product quality and costs • Through mathematical engines, the system detects events • The events are displayed to the Operator and to is directed to the right Expert • The system provides the signature of the event thanks to a data referential • All information are transmitted at distance from the line (wireless tool, web…) • The Expert solves the problem, provides then countermeasures to the Operator • All the countermeasures are shared by all actors in a common database Central database for countermeasures Expert ManualDiagnosis Expert PLANT Raw material Parameters Automatical events detection and classification by signature Problem/Alert Manufacturing line Operator Correction Finished products Countermeasures

8. GPQS Scope - Overview A VALIDER Mapping of next generation Product Line management : project scope 6 Events & non events detection PROJECT SCOPE On line material automatic qualification 3 Signals validationmodules 2 Automatic calibration control 1 New sensors 7 Simplifieddata basisJPEG 8 Events classificationby « Signature » 4 Risks & costs modeling 5 Physical properties modeling 10 Shared expertiseRemote Helpdesk 9 Help for decisionsystem 12 New organizationsand methods of workingtogether – Remote expertiseNet-meetings… 14 Portable applicationsPersonal organizer era 11 Diagnosis andauto-learning engine 15 Metallurgical routescomputer assisted design – Constraintsdecrease 13 Knowledge basis:ModelsRules Similarities - Proximity 16 Arcelor offer managementTransparency – Easy access 19 Seconds choices management 17 New products managementFast industrialization process 18 Customers supports

9. GPQS Scope - Overview Experts systems can easily check nothing is happening….or detect events ILLUSTRATION A CONSERVER ? • The « no event » detection is one of the most useful performance of automatic surface inspection systems. If not enough effective it induces a lot of false alarms… • An effective expert system must be reliable for the « no event » watch and for true events detection + classification. • Detection and classification are completed through signature identification. This apply to surface defects detection but also to all metallurgical significant event

10. Coil identification alarm CPP model of skin pass effort Gap of 135 t Between model and measurement GPAQS Scope - Overview Detection and classification : detection of coil identity confusion ILLUSTRATION A CONSERVER ? • An error in coil identification is easy to detect when watching gap between measured and forecast values. • This is one of the most simple application of modelling. Model Measurement

11. GPQS Scope - Business Location Organisation Business Process • X • Product Line Management • Pilot : three plants • Dunkerque • Florange • Aviles • Roll-out In Scope • Final decision systems : supply of information only • X • X A COMPLETER Out of scope

12. GPQS Scope - IT Technology Application Data • X • X • X In Scope • X • X • X A COMPLETER Out of scope

13. GPQS Constraints The implementation of GPQS has the following constraints : Business constraints IS / IT constraints • Instrumentation of lines must be at the right level : today, the level is not everywhere the same ; some lines are not fully equipped • Skills are required to tune the system accurately • Experts have to be available to collect information. They skills must be at different levels according to the problems • Operators have to have a good working knowledge and respect of the rules to prevent the system from being permanently apprenticed • Computing process must be at the right level : the service rate for some lines is low (interface speed,…) • The software must be multi-lingual • Wireless tools have to be implemented to get information from anywhere A COMPLETER

14. GPQS Assumptions - Benefits Potential benefits are estimated to XXX M€ / year in regards of project objectives Should be added stakes related with strategic issues but accurate evaluations are subjective. Thus, we did not include them although they probably are the most important STAKES DETAILS CALCULATIONS Labor reduction • Operators : ~100 people • 100 x XX k€ = XX M€ / year Service level Improvement • Service rate improvement • Drecrease in technical and manufacturing lead time A COMPLETER - Données chiffrées nécessaires Non quality events decrease • Decision as soon as possible • Costs reduction • Better capability of re-directing the products (WIP) • Reduction of customer claims Anticipation of future demand • Production facilities will be prepared to face the future tightening of customers requirements Better reactivity in taking decisions • Automatic devices detect events through their signature. Identifying an event can trigger help decision systems for counter measures…

15. GPQS Assumptions - Costs and ROI A COMPLETER - Données chiffrées nécessaires

16. GPQS Assumptions - IS / IT The implementation of GPQS is submitted to the following assumptions : Business assumptions IS / IT assumptions • ? • ? A COMPLETER

17. GPQS Reporting The planning of the project is the following : 2003 2004 2005 2006 T3 T4 T1 T2 T3 T4 T1 T2 T3 T4 T1 EPC NG POC Project Roll-out (other lines and plants : 4 lines per year) Pre Project FLORANGE plant Project : CAL line POC DUNKERQUE plant POL Project : SPQR line Opportunity study AVILES plant Preproject ? A retravailler pour rendre consistent. Nécessité de conserver les notions de préprojet, étude opportunité, POC, POL EPC Galva Project : HDGL line Project : HSM line Project : Steelworks line

18. GPQS Reporting GPQS Project Organisation A DEFINR