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Company Case Study - POSCO, Affymetrix -

Company Case Study - POSCO, Affymetrix -. POSMIT LAB. Case1 - POSCO. Agenda. POSCO in Steel Industry. World steel association predicts further growth Challenges: Innovation Environment Sustainable growth POSCO 4 th largest producer POSCO established 1969 by government

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Company Case Study - POSCO, Affymetrix -

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  1. Company Case Study - POSCO, Affymetrix - POSMIT LAB

  2. Case1 - POSCO

  3. Agenda

  4. POSCO in Steel Industry • World steel association predicts further growth • Challenges: • Innovation • Environment • Sustainable growth • POSCO 4th largest producer • POSCO established 1969 by government • Now private company World crude steel production [million metric tons]

  5. FINEX - Background

  6. FINEX - Development • Challenges: • Increasing prices for plants • Reinforcement of pollutants restriction • Increasingly competitive steel market • Research and Development • Started in 1992, based on COREX technology • Invested 550 billion KRW (470 million USD) • Finalized in 2002 & commercialized in 2007

  7. FINEX - Technology

  8. production pollutants FINEX - Advantages Blast Furnace FINEX Innovative, next-generation iron-making technology!

  9. Agenda

  10. Porter’s Value Chain

  11. POSCO’s Infrastructure • FINEX R&D Project Department • POSPIA IT systems • Corporate culture • 6 Sigma initiative • Loyalty and high working moral of employees • Corporate responsibility • Sustainability • Environment & social contribution

  12. HR Management • Emphasis on learning, developing employees to obtain market leadership in the steel industry • HR training • POSTECH • Knowledge management system • Communities of Practice (CoP)

  13. Tech Development of FINEX • Sources and Types of Innovation • Manufacturer innovation • Technological process innovation • Technological paradigm • Emerging technology to replace current technology • Cooperation & Strategic Alliance • Development agreement with VAI, which later became part of Siemens, in 1992

  14. Procurement • Steel-N.com • Customer and supplier interaction through i2 SRM & Oracle9i SCM • e-Sale Portal • Solutions for online transactions • Offline transactions guidelines • e-Procurement • POSCO’s suppliers and trading partners connected

  15. Inbound Logistics • Coal and iron • Online bidding for suppliers • Investments in mines • Joint venture between POSCO and Rio Tinto Coal • Techno Partnership program • Diversification strategy • POSDATA, POSRI, POSCO E&C

  16. Operations • FINEX R&D Project Department • 1992 ~ 1995 Lab Scale Test • 1996 ~ 1998 Model Plant Test (15 ton/day) • 1999 ~ 2002 Pilot Plant Test (150 ton/day) • 2003 ~ 2005 Demo Plant (0.6 mil. ton/yr) • 2004 ~ 2007 Commercial Plant (1.5 mil. ton/yr)

  17. Outbound Logistics • POSTEEL • Easy access to customers • Plants nearby water • Easier shipping

  18. Marketing & Sales • Commercialization • Media coverage • Annual report and website • FINEX in global market • Steel project in Orissa (India) • Steel project in Vietnam • Protecting innovation • Some processes patented • IP through business secrets

  19. Agenda

  20. Value Chain Analysis • Industry Dynamics with FINEX • Towards dominant design • Gain competitive advantage • Success in technological innovation • Innovation Strategy with FINEX • First-mover advantages • IT opportunities • Process improvement

  21. The Korean Way • Hypothesis # 1 vs. FINEX • Top-down ownership • Diversification strategy • Project-focused organization • Americans & Japanese vs. FINEX • Radical innovation, over time • Americans - lost focus • Japanese – not invested • Further investigation • Innovation plan • Sustainability plan • Innovation process

  22. production pollutants The Korean Way Blast Furnace • Hypothesis # 2 vs. FINEX • Process improvement • Cost reduction • Production improvements • Americans & Japanese vs. FINEX • No short-term profitability and high risks • Americans – “No go” • Japanese – high risk and investment • Further investigation • Increased profitability • Increased market share • Industry and external environment FINEX

  23. Agenda

  24. Conclusion • FINEX • Successful now • Interesting for the future • Hypothesis 1 • True? • More detailed information • Hypothesis 2 • True? • Early to prove profitability and market share FINEX?

  25. Discussion Issues • What are the benefits of dominant design? • In POSCO’s case, do you think POSCO takes the first-mover advantages through FINEX?

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