How digital can help transform the steel industry
07 October 2020 | Web Article Number: ME202020779
STEEL manufacturers have an opportunity to transform their operational model in more ways than one by adopting the fourth industrial revolution and digitising aspects of their business, allowing them to improve operational efficiency, customer services and inventory levels.
That’s according to Macsteel Logistics and Warehousing Executive Vojta Svoboda (pictured), who said, “Companies that recognise the opportunity and take action will have a competitive edge, which will continue into the future.”
He said a key factor was how to evaluate the current situation and invest in the right projects strategically. “People talk about automation, but what is the fourth industrial revolution? It means different things to different people. Most would think it’s just about automation in a factory or warehouse however Macsteel’s approach is of a more tactical nature where we are using information more specifically, statistical data analyses to better manage our business and streamline the effectiveness of our operations.
“Whilst we understand it’s a bit of a nebulous concept you want to be using this statistical data to be making informed decisions from across the wider supply chain, making use of that information as effectively and efficiently as possible.
“So, Macsteel’s journey of digitisation is to try and improve how we use systems for making key management information available to manage exceptions, so identifying and addressing challenges in the process rather than focusing on the areas that are operating seamlessly.”
Svoboda said systems should be designed to provide management information and assist the business in making key decisions. “They need to create transparency and visibility of information to all key decision makers regarding sales, logistics warehousing, production, procurement and finance and then merging all of it.”
According to Svoboda, the journey of digitisation is not a sprint, so companies can launch on a smaller scale, focusing on a specific area of the business or geographic market. “This approach can help to prove the value of the digitisation and establish internal confidence and alignment. This approach puts the business needs ahead of the technology, rather than the other way around.”
He said that in digitisation, predictive analytics has already demonstrated its potential to revolutionise the operational model, in terms of speed, cost, and ease of implementation. It uses advanced, self-learning systems to sift through large volumes of data generating insights and identifying patterns.
“However, for these systems to work requires the right information input. So, how should we be using information within our organisation, and are we dedicating the time to using the information well?”
Svoboda believes it’s all about taking it to the next level. “It’s about implementing processes that make provision for your teams to be doing what they need to, ensuring that they source the right suppliers with products of meticulous quality and negotiate competitive pricing and efficient service delivery.
“Our scale also creates a benefit to achieving the desired outcome, as we have an enormous amount of data at our disposal that helps in modelling and arriving at the best outcomes for the business and ultimately our customers.”
Complementing this should be a specialist planning team utilising an improved technology that is more modern and easier to use. This team should be using the sales input and the supplier data to understand how efficient we are at managing our working capital and ultimately our service levels.
“This ensures that we understand the lay of the land and by using key data we have a bird’s eye view of how smoothly our business is operating or where we need to regroup and refocus our efforts. It puts us in the advantageous position of knowing where the challenges are and where we need to be focusing attention.
“Whether this is done together with the sales team, using systematic methods or together with the customer or a combination of all three, we are now primed to be using collective analytics to improve on the business situation and make key inventory decisions.”
Svoboda said there are also pain points that can be eliminated through digitisation, delivering a significant rise in efficiency by merely eliminating bottlenecks and issues in material handling.
“We have a number of strategies to address the operational bottlenecks and to be able to respond to market demands. Digitisation is a key focus for Macsteel as it enables the business to have information at its fingertips as well as develop operational scenarios to make informed decisions.”