3. Agenda
• Understanding of Industry
• Challenges & Possible Options
• How Technology Can Help?
• Typical Steel IT Landscape
• Supporting Entire Value Chain
• Sneak Peek! Global Steel Template
• Our Solutions…Pumping Growth
• Case Study – SAP Variant Configuration
• Case Study – Factory Planner
• Case Study – Manufacturing Execution System
• Case Study – Slab Yard Management
• Case Study – Business Intelligence
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4. Understanding of Industry
Global steel capacity Vs. Supply Vs. Demand • Global Steel sector is expected to grow at a lower rate.
• The sector is expected to grow only 5% in North
America Free Trade Agreement region.
• This is due to the continued financial uncertainty and
volatility in markets.
• Government rationalization is unlikely to occur in short
term.
• Overcapacity, one of the biggest challenge.
Growth Outlook
• Traditional markets are becoming stagnant.
• Demand is shifting from developed economies to
emerging and developing economies.
• Not all players would be able to expand across borders to
capitalize on this growth.
• Increasing risk in western markets is breaking the
confidence of investors in the sector.
• Strategic realignment is the ‘demand’ of this sector.
Source: Ernst & Young Report ‘Global Steel – 2011 Trends,
Confidential 2012 Outlook’ (Pub: January 2012) 4
5. Challenges & Possible Options
The nature of Industry makes Lacking
Shift to Emerging Steel production is shifting
Markets it difficult for the sector to Operational Agility
from mature to emerging
adjust quickly to changing
economies. There are fewer
Customer Reach
circumstances. There is a gap Operational Agility
domestic growth prospects, as
Steelmakers need to broaden between demand fluctuation Steelmakers need to focus on
product service offerings, focus well as increased competitive effectively managing capacity
and production adjustments
on more profitable segments threats for steel players with utilization apart from bringing
and prioritize markets to as there is structural flexibility in their supply chain.
an established footprint in
compete. It is still important to overcapacity in certain
focus on existing clients. Europe and North America.
product segments.
Cost Competitiveness Stakeholder Confidence
A considerable cause of Steelmakers need to focus on
Steelmakers need to adopt
different strategies like vertical volatility for steel makers is stabilizing the diminishing
Steelmakers need to change investor confidence by
integration, passing on the cost the cost of raw materials. The
pressure, use of steel their business models by neutralizing various immediate
shortage of these supplies in risks to the operations of the
derivatives, optimization of introducing greater operating
capital and strategic cost the market has allowed industry.
reduction. flexibility and becoming more
suppliers of iron ore and
customer-focused in their
metallurgical coal to rebuild
product mix and more
the pricing mechanisms
innovative in how they price
Increasing through the shift from annual
their products. Need of Evolution
Market Volatility & to shorter-term price
contracts. in Business Model
Margin Pressure
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6. How Technology can Help?
Customer Reach Cost Competitiveness
The insights to the existing customers and potential To attain cost competitiveness, steel enterprises are
markets can be derived using Business Intelligence required to understand and optimize the use of
Solutions. Business Intelligence solution can help: working capital in entire supply chain. This can be
• Understand customers (potential and existing) achieved by:
• Understand market dynamics and opportunities • Reducing / Automating non value adding
• Uncover key product and market trends. activities
• Continuous measurement and optimization of
working capital across value chain
Operational Agility Stakeholder’s Confidence
Steel enterprises are required to adapt the changing Managing stakeholders has become an integral part
environment fast as compared to competition. This of the business. The confidence of these
demands more flexibility in the operations. stakeholders is primarily associated with:
• Demand driven and financially oriented Sales & • Risk profile
Operations planning systems empowers supply • Regulatory changes
chain • Transparency in reporting
• Introducing Manufacturing Execution Systems Addressing these parameters in reporting while
helps in eliminating inefficiencies, hence makes having smooth operations helps in improving the
the processes more flexible confidence.
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7. Typical Steel IT Landscape
Human Resource
Retail Store Operations Analytics Applications
Management
Customer Relationship Financial Accounting &
3rd Party Management Control Market
Advanced Sourcing
SOA Middleware
SOA Middleware
Collaboration Information
Advanced Planning &
Materials Management
Internet
Internet
Scheduling
KM & DMS
Sales & Operations
Production Planning
Planning
Manufacturing Enterprise Dashboards
Plant Operations
Execution Systems
Warehousing & Employee Self Service
Sales & Distribution
Transportation Systems
Workflow System
Solutions
Management
Customer Transaction Data
Product Data Vendor Data
Data History Warehouse
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8. Supporting Entire Value Chain
Mining & Beneficiation Solution Capabilities Supported Business Processes
SAP IS – Mining (end-to-end Integration of remote locations
implementation) Optimal utilization of machinery
SAP PM Integrate daily fluctuation of prices
SAP Sourcing & Procurement Bulk shipment management
SAP Bulk Transportation Operational Risk Management
SAP Commodity Management Infrastructure management
VSAT Connectivity
Steel Service
Making Centers
Iron Making Retailing
Mining
&
Beneficiation
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9. Supporting Entire Value Chain
Solution Capabilities Supported Business Processes Iron Making
Standardization of Level II & III systems Level II & III Systems (Mfg.
EAI Solution, SAP XI, Standardized Operations)
Connectors Mfg. Planning and Execution
Advanced Planning
Wireless Telephony Asset Management
Interfacing with Weigh Bridges Demand & Supply Planning
Standardized Costing Storage, Weightment & Costing
Simulation & What If Scenarios Logistics & Material Handling
Steel Service
Making Centers
Iron Making Retailing
Mining
&
Beneficiation
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10. Supporting Entire Value Chain
Solution Capabilities Supported Business Processes Steel Making
SAP IS – Mills (end-to-end
implementations)
Planning & Scheduling Solutions
Optimization Solutions
Material Tracking Solutions
What If scenarios for Cost Simulation
Steel Service
Making Centers
Iron Making Retailing
Mining
&
Beneficiation
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11. Supporting Entire Value Chain
Solution Capabilities Supported Business Processes Service Centers
SAP IS – Mills (end-to-end • Scheduling
implementations) • Optimization
Order Clubbing & Yield Optimization
Solutions • Order Clubbing
RFID Solution for Tracking • Batch Tracking
JIT Deliveries • Customer Servicing
Steel Service
Making Centers
Iron Making Retailing
Mining
&
Beneficiation
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12. Supporting Entire Value Chain
Retailing Solution Capabilities Supported Business Processes
JDA MMS – POS & Merchandise Product Assortment
Mgmt. Merchandise Planning
SAP SCM
Demand Forecasting
SAP AP/GL
SAP BI/BO Inventory Optimization
eCommerce using MS Web Tech. Replenishment
SAP CRM Customer Loyalty
VMI Solutions
Steel Service
Making Centers
Iron Making Retailing
Mining
&
Beneficiation
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13. Sneak Peek! Global Steel Template
All processes relevant to Steel Business have been classified as Global process or Local process
and each process in the template had six key elements
Process requiring change on account of
• Local business environment
• Local statutory needs
Process comprises of
Org structure Master Data Process Global Global
Security
and elements Definition Definition Customization Developments
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14. Our Solutions…Pumping Growth
Accelerating Processes Enhancing Supply Chain Flexibility
• Knowing the customer and monitoring changes in • Taking sales and operations planning beyond the
demand supply chain to become demand driven and financially
• Adapting fast as compared to competition oriented.
• Identifying and eliminating inefficiencies • Understanding the role of IT in optimizing operational
• Evaluating players in supply chain flexibility.
• Efficiently using MIS & data • Assessing the ability of supply chain to respond to the
• Getting integrated to suppliers and customers in IT last change in demand from customers.
systems • Making a flexible supply chain from supplier choice
through manufacturer to customer.
• Out-executing competitor to drive change through the
organizations
Improving Innovation Management Re-engineering Business Model
• Innovations like new product introduction, product • Monitoring efforts spent on continuous improvement
differentiation, pricing and market segmentation process of business support functions
• Bringing agility in innovation process and collaborate • Aligning services with functions
with stake holders • Making business units flexible enough to add or reduce
• New and specific implications for innovation and functions on demand
innovation management • Assessing effectiveness of organization’s business
• Monitoring and controlling the process of innovation. model
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15. Case Study - SAP Variant Configuration
The client is an end-to-end producer of steel products with a footprint that straddles 5 continents –
Asia, Africa, Europe, the Americas and Australia.
The client commands uninterrupted access to some of the world’s finest iron ore deposits. Its products
find wide acceptance in highly discerning consumer sectors such as automotive, white goods,
construction, engineering, hydrocarbon and shipbuilding.
Benefits
The Solution
Business Situation
SAP Variant Configuration
was selected as the solution.
Individualized metallurgical Achieved standardization in
knowledge was converted into order processing
Highly individualized process
business rules. Order processing time
knowledge and expertise led
Plant capabilities and reduced 21 to 2 days
to rework overheads
capacities were defined in Use of one configurable
Huge Material Master due
system to plan production material reduced material
to market specific variants
Entire primary and master from 90,000 to 90
Long sales order processing
secondary steel metallurgy Curtailed data entry errors
time of 21 days led to poor
was brought into Variant saved about 3,000 man hours
order promising capability
Configuration Price determination process
Provisions were made in the was automated
system to copy repeatable
orders
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16. Case Study – Factory Planner
The Client is one of India's largest exporters of flat products. The site is 4th largest single location flat
steel plant in the world.
The casting of slabs is planned periodically, taking into account the orders, the slabs stocked in the
slab yard and knowledge about the status of the casters and upstream facilities. Due to many
variables in planning process, it was a complex, time consuming and crucial activity.
The Challenge
The Solution
Benefits
There are many possibilities More frequent planning, based
available in planning, and hence a The technical team reviewed on the business requirements
variety of possible solutions. In many solutions in the market to Significant reduction in defaults
order to stay competitive, client match with the requirements. in delivery
needed an integrated planning Team selected ‘i2 Factory
Planner’(FP) as the solution. WIP started movin quickly,
system across the production preventing problems like aging,
lines. It had set the following Some features available in rusting, scaling etc.
goals: Factory Planner are:
Improved manufacturing and
Maintain low inventory • Just-in-time inventory planning dispatch compliance
Hit high productivity, short and and assembly coordination
• Resolving the capacity Improvement in manufacturing
infrequent downtimes and zero lead time
waiting time overloads
• Scheduling of tasks on work Tight WIP control and
Maintain tight customer improved WIP profile
deadlines centers
• Quoting orders delivery dates Improved Finished Good
Balance work load inventory turns
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17. Case Study – Mfg. Execution System
The Client is a fully integrated steel producer based in Sault Ste. Marie (Ontario) with a current
production capacity of 4 MTPA. The plant specializes in providing total steel solutions to North
American flat roll customers.
The Solution
Business Situation
Benefits
After review of manufacturing 95% Reduction in shop-floor
The plant was dependent on operations, Automation team paperwork
Islanded legacy systems, running implemented the solution with
following key features 5% increment in material
on Mainframe Technologies. salvage due to system based real
Manual effort was required to User friendly intuitive GUI time data availability
integrate data. Challenges faced system was developed
were: Implementation of hold logic
Scheduling of input material in led to better accountability of
High human intervention system NCO, Diverted and Prime
Low production rates Production data recording in Material
High dependency on the system System based scheduling &
paperwork Defect recording was started in inspection enhanced timely
system readiness and quality of material
Non-integrated information
shipments
No real time visibility System was integrated with
other process interfaces to User friendly GUI enabled
Lack of analytical reports comprise the complete material shop-floor person to use it with
information at shop-floor ease
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18. Case Study – Slab Yard Management
The Client is one of India's largest exporters of flat products, exporting to the US, European, South
East Asia and the Middle Eastern markets. The client is globally-renowned Steel Corporation with a
production capacity of 14 MTPA. This is 4th largest single location flat steel plant in the world.
After understanding client’s Yard
Business Situation
The Solution
Benefits
management process, team
implemented a solution with
following key features Elimination of line stoppage
The client was suffering from due to lack of material
poor customer fulfillment A flexible, user configurable traceability
Including wrong material application with web based
reporting; integrated with hand- Reduced truck-turnaround time
dispatch, delayed material
shipment and high logistics costs. held devices Elimination of time consuming
Challenges faced were: Implemented strategy based searches
Complex material movement storage allocation rules which Reduced errors synonymous
benefited the users to find out with prior manual systems
Lack of proper tracking system the required slab quickly.
Reduction in wrong material
Tardy inventory book keeping SMS based searching and dispatch
resulting longer truck turnaround reporting capability was built in
times the application. Reduced delay in material
dispatch
Visual charts and graphs were
developed in system for easy slab
tracking.
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19. Case Study – Business Intelligence
The client is an end-to-end producer of steel products with a footprint in most of the continents. It is the
first among the players in industry to setup an end user distribution chain for steel products. The
company manufactures flat carbon steel products ranging from iron ore to finished goods targeted at
automotive, white goods, construction, engineering, and shipbuilding industries.
Achieved consistency in KPI
Business Situation
The Solution
Benefits
The client has a complex
definitions organization-wide
application-architecture with
multiple software products Following solutions were Comprehensive dashboards to
running simultaneously. Different implemented monitor and measure
technologies are implemented to performance facilitated timely
support the complex SAP Business Warehouse and strategic decisions
manufacturing processes. The Business Objects Reduced time and resources
challenges faced were required for data preparation
Enterprise Portal offered by SAP
Single view of all the KPIs was resulted in reduction in TCO for
As a part of pre-implementation MIS teams
not available
assessment phase KPIs were
End-to-end management of identified. One version of truth created a
supply chain single and reliable reference for
A proof of concept was created reviews by the management
Analytical reports on the and a mock report was presented teams
operations was not available which ultimately led to the
implementation of SAP BW. The intuitive reporting layer of
Multiple versions of the truth
the BI platform helped the users
were not giving the clear picture
become self sufficient on
of operations
reporting
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20. Contact Us:
For any further information, please contact us at ebssales@agcnetworks.com
