The steel industry is one of the oldest of all the industry sectors and has seen relatively slow adoption of B2B technologies for one reason or another. The steel industry has some interesting B2B related challenges:- Extensive Merger and Acquisition activity has led to a requirement for considerable B2B network consolidation- Resourcing issues are starting to occur with key personnel nearing retirement, this will leave a shortage of skilled personnel to manage B2B platforms in the future- The desire to try and establish consolidated B2B platforms has led to an increased requirement to integrate to back office systems such as ERP platforms- B2B adoption, especially across small to medium sized steel companies is relatively low within the steel industry- There is a requirement to improve visibility into steel shipments and provide stock levels held at steel storage and service centres- Finally, many governments around the world are imposing tough carbon emission standards and this is placing extreme pressure on the steel companies to introduce greener and more sustainable steel production and business processes
Extensive merger and acquisition activity across the steel industry over the past few years has led to a significant requirement to consolidate B2B and ICT infrastructures. We already know that consolidation normally provides the best opportunity to re-evaluate B2B infrastructures.The shift from regional to global steel production has led to an increasing need for steel companies to support numerous communication protocols and various document formats. In addition, the global steel companies have to provide local language support for the new countries that they operate in and of course ensure that they adhere to the local cultures where necessary. As well as integrating remote plants to a consolidated B2B platform, the steel companies will need to onboard many trading partners to the new B2B platform as well. Unless the steel companies have dedicated resources to do this it will be incredibly difficult to roll out a single global B2B platform by themselves.Consolidation of B2B platforms following a period of restructuring will help to streamline B2B processes and improve operational efficiencies across the steel value chain.
A high proportion of the workforce in the global steel industry is nearing retirement. This will potentially lead to a shortage of skilled B2B professionals within the industry. In addition to an ageing workforce the steel industry, due to its non dynamic image, has found it very difficult to recruit younger ICT professionals. If the steel industry can find a way of attracting younger ICT professionals into the industry then there will be more chance of seeing new B2B technologies being adopted across the industry. If the steel industry does not do anything in the next few years to attract younger ICT professionals then combined with the ageing workforce, the industry will face an increasing B2B skills shortage in the near future. The steel companies will have no choice but to outsource the management of their B2B infrastructures.
Consolidation of B2B platforms normally provides the ideal opportunity to undertake integration related projects. Integration to back office systems such as ERP platforms can help to improve visibility across the extended enterprise. It will also help to streamline business processes in order to lower operational costs.Many companies, not just in the steel industry, have found that integrating ERP and B2B platforms together can help to improve the accuracy of information entering the ERP system from external sources. A recent AMR Research study into ERP/B2B integration highlighted that on average 34% of data entering an ERP system was sourced externally and of this 1% of the data needed rework. Integrating ERP and B2B systems will help to reduce the rework of externally sourced information entering an ERP system.
The adoption of B2B technologies is relatively low amongst the small and medium sized companies operating across the steel value chain.Many employees who work within the sector are relatively low skilled regarding the use of IT solutions and therefore will need access to simple and easy to use B2B solutions. Simple B2B applications for small businesses are especially important in emerging markets such as China. For this reason many steel companies would like to see their smallest trading partners exchanging B2B documents via web based solutions that are quick to deploy, simple to use and easy to maintain.
The global nature of today’s steel industry means that it more important than ever before to keep track of shipments right across the steel value chain.Providing end to end visibility of steel shipments allows the steel companies to be fully integrated to their customers’ production processes. Many discrete manufacturers have realised that it is important for steel components to arrive trackside to ensure the smooth operation of Just-In-Time production processes.Finally, steel companies need to improve the visibility of inventory levels held at steel storage depots. This will help to ensure that storage depots do not suffer out of stock situations and they are able to service their customers as and when required.
The global steel industry is widely recognised as being one of the main polluters into the atmosphere. Many countries have signed up to reducing their carbon emissions and this has led many governments around the world to set stringent carbon emission targets for the steel companies to meet over the next few years.Steel companies will in effect be forced to find more sustainable methods for producing steel and managing their business processes. Anything which can contribute to the reduction in carbon emissions will help the steel industry to develop a greener image for itself.The need to adopt greener business processes provides the ideal stimulus for steel companies to automate out of date manual business processes and remove large amounts of paper from the steel value chain.
So to conclude this presentation, the global steel industry is continuing to restructure and increased adoption of B2B technologies would allow steel companies to:- Consolidate legacy B2B infrastructures and automate manual, paper based processes- Provide true end to end visibility of steel shipments anywhere in the world- Ensure that all trading partners are able to interact with a B2B platform by way of easy to use and quick to deploy B2B solutions
B2B Challenges Across the Global Steel Industry
Mark Morley, Industry Marketing DirectorB2B Challenges Acrossthe Global Steel Industry