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DMADV Project Saves $2 Million for Samarco Mining

by Janet Jacobsen

Many things in life require balance—we need to eat healthy foods while being mindful of high-calorie dishes like pizza or ice cream to avoid gaining weight. When college freshmen arrive to campus, they must strike a balance between enjoying the myriad social opportunities life offers with the time necessary to earn good grades.

Samarco DMADV Case Team

Samarco leadership and improvement team

At Samarco Mining, a Six Sigma improvement team sought to achieve balance as well—between a top customer’s product needs and Samarco’s internal goals.

The key to striking this balance within the company was to develop a new product through a litany of problem-solving activities. The hard work resulted in a $2 million savings for the organization.

Case Study At a Glance . . .

DMADV Project Saves $2 Million for Brazilian Mining Company

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-A Six Sigma team at Samarco Mining developed a low-energy iron ore pellet to meet customer needs and internal goals.

-Using the DMADV methodology and a variety of quality tools, the team helped Samarco realize more than $2 million in savings annually through this project.

-The team was named a finalist in ASQ’s 2015 International Team Excellence Awards competition.

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Samarco Mining Case Study

About Samarco MiningSamarco Logo

Samarco Mining, a Brazilian company founded in 1977, is under the equally shared control of BHP Billiton and VALE SA. The company’s main product is iron ore pellets, which are produced during the transformation of low-grade iron ore into a high added-value product that is used globally in the steel industry for consumer products, such as cars and appliances. The company’s iron ore pellets are sold in 19 different countries across the world. Headquartered in Belo Horizonte in the state of Minas Gerais, Samarco has four production facilities with a capacity of 30.5 million tons of pellets annually.

Selecting the Project

Problem-solving activities are an integral part of the culture at Samarco. In 2015 alone, the organization supported 780 kaizen projects and 180 Lean Six Sigma projects. These efforts focused on a wide variety of topics, from pelletizing to shipping operations, as well as processes from support areas. The goal of these projects is improved processes that lead to better products.

While the company’s product development model focuses on the customer, it did not always adequately address the use of the product once it reached a customer’s facility. To help close this gap, Samarco recently created a more sustainable marketing plan with a renewed focus on uncovering customer needs through voice of the customer (VoC) data.

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This data, along with the results of customer segmentation activities, helped marketing and business analysis teams discover improvement opportunities that would benefit customers and Samarco alike. Through this effort, a high-value improvement opportunity was uncovered—one of the organization’s largest customers, based on its percentage share of Samarco’s portfolio, was less profitable compared to company forecasts.

This discovery highlighted an opportunity to redefine the product specification for this customer, while continuing to meet the customer’s needs as well as those of other stakeholders.

This opportunity led to a possible Six Sigma improvement project, but first a careful evaluation of the situation was necessary. Maycon Athayde, who served as senior pelletizing process engineer at Samarco and was team leader for this project, said customer specifications, market trends, and customer needs were all studied.

Samarco Iron Pellets

Several quality tools such as Pareto charts and decision diagrams were also useful in prioritizing the project.

This proposed project scored 125 out of 150 points in a selection matrix exercise, which indicated high impact on the organization’s goals as well as the need for a Six Sigma approach led by a Black Belt.

The selection matrix also noted that among the possible Six Sigma approaches to employ, the define, measure, analyze, design, and verify (DMADV) method was most suitable because this framework focuses on the development of new products or services compared to existing ones. The DMADV approach is often used when implementing new strategies because of its basis in data, its ability to identify success early, and its method, which requires thorough analysis.

Once the project was formally accepted, the following goal statement was established: Develop a new product specification for customer X by taking into account internal and external constraints to increase product profitability by 5 percent.

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About the Author 

Janet Jacobsen is a freelance writer specializing in quality and compliance topics. A graduate of Drake University, she resides in Cedar Rapids, IA.

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