Circored project key points

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Circored project key points:

The Circored project was the result of the joint efforts of the two big name of U.S. ore provider Cleveland-Cliffs and other one is Germany Lurgi Metallurgy Gmbh who in collaboration came together to produce a pure iron which is one of its kind. The technology consists of converting iron ore into Hot Briquetted Iron by reducing the iron ore in the pressurized and heated circulated hydrogen gas so as to achieve cost efficiency and reduction in overall cost. Cleveland Cliff had experienced in the field of mining industry and wanted to enter into new segment of market whereas Lurgi had a good experience of working with Circulating Fluid Bed process.

Construction started in the year 1997 after estimation of all the risk, time and capital involved and strategies are made accordingly. In February 1999 the project started with the low pressure and temperature and everything goes off well as expected. But the problems also started encountering followed by one after another. Each time the team solves one problem it gave rise to another problem, and one of the worst part was that the risks that the company predicted does not rise but the unexpected risk occurs. The iteration also take few days to cool down and to remove hydrogen gas from it. After the leadership was exchanged in the year 2000, the problems started getting controlled and by March 2001 the facility finally got the success and the technology worked out efficiently.

How the risks were managed:

The project faces many risks which are influenced by many factors such as market trends and tastes, logistical constraints, technical variables etc. There are three approaches which can be used to manage risk are i) Instructionism ii) learning and iii) selectionism.

In instructionism method there is a planning first and then the plan is executed which is mainly undertaken by every project before starting it.

In learning method the adjustment is made in the project in according to the changing environment. The project is change in according to the information obtained during the development process. This approach helps in providing new insight and information which is very helpful in revising the project plan. The changes can be minor but will be quite different from the original project. This will help in improving the present as well as future projects.

In selectionism method there are various independent parallel trials and from that many trials choosing the best alternatives or favorable outcomes. The more the complex project the more the trials should be done and if the team doesn’t know the project terrain than several solution should be tried so as to reach or get the appropriate outcome.

The risk method should be chosen in accordance with the requirement of the company and the cost effectiveness of each method. Management of risk is geared to identify and control the variation and foreseeable uncertainty, unforeseeable uncertainty and chaos . Variation comes from many small influences which ranges from a particular activity. Variation can be from incorrect mixing of the substance which causes the failure of the project. So it’s the duty of the team to correctly monitor the variation.

Foreseeable are the uncertainty that the team members are not sure whether they will occur or not but the team has some alternative plan for it.

Unforeseeable uncertainty cannot be identified at the time of project planning like in the case of Circored in which there occurred many of the unforeseen uncertainty for which there is no Plan B. this can be manages by developing new approach midway through the original project.

The risk or the uncertainty can be managed by adopting the flexible approach so as to adopt right approach at right time. There should also be a balance between planning and learning as planning promotes discipline in carrying out the activities whereas learning permits to adopt the unforeseen or chaotic events. The correct management of the risk helps the company to produce spectacular success.

The three lessons from a project manager to know the future projects are

i) first lesson is that they the initial planning phase should be taken into considerations as in this project the process was new and the operators do not have an appropriate knowledge about the new DRI and HRI processes onsite. Since the project is first of its kind then more safety measures should have been taken so as to avoid any kind of uncertainty and failure of the process.

ii) The second lesson that can be learned from the managers for the future projects are that they should have properly analyze the unforeseen uncertainty and tried to carry on different alternatives so as to achieve or get the best alternative out of it and should make changes in the existing project accordingly so is to get the success in the project and to adopt in according to the changing environment.

iii) The third lesson that is learned from the managers for the future projects are that the managers too often ignores the evident that suggests that the project is on the wrong track and the strategy need to be reinvented. And the managers of the Circored project to ignores the same thing that causes failure of the process and it is clearly evident in the Circored project that when the managers get changed and they analyze the problem and bring changes to the process it showed the results and finally Circored project got successful.


Clark K and T. Fujimoto, 1991, Product Development Performance. Cambridge: HBS Press. Weick, K. E., Sutcliffe, K. M. 2001. Managing the Unexpected. Jossey-Bass.

Chapman, C., and S. Ward. 1997. Project risk management: Processes, Techniques and Insights. Chichester: Wiley

Meredith, J.R., and S.J. Mantel. 2003. Project Management – a Managerial Approach. New York: Wiley (5th edition).

Schrader, S., W.M. Riggs and R.P. Smith. 1993. Choice over uncertainty and ambiguity in technical problem solving. Journal of Engineering and Technology Management 10, 73-99.

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