Many aspects of the world have been digitized or are moving in that direction, and the mill products industry is no exception. This industry includes the manufacturing of various materials, including metal, paper, textiles, packaging and building materials. Although the mill products industry is often thought of as a laggard, technologically speaking, it is not. Mill product companies are using digital innovation to streamline its processes and are keeping up with digital industry trends.
Mill products serves as a great example of how an industry can use digital innovation to run their businesses better and stay relevant in a modern, changing world.
Recently, Brian Fanzo and Daniel Newman, co-hosts of the popular S.M.A.C. Talk (social, mobile, analytics, cloud) Technology Podcast, caught up with Eckhardt Siess, vice president Mill Products Business Unit, SAP, on an episode of an extraordinary series entitled Digital Industries, which examines how digital transformation is affecting 16 different industries. Listen to a short clip from the podcast:
Siess was emphatic that these industries are not laggards when it comes to innovation. “We do see quite a bit of innovation in the industry, especially when we talk about digital transformation. This industry has been running IoT scenarios for many, many years.”
Siess continued, “These industries are, of course, very heavy asset-focused industries. Their assets have been connected with sensors for many, many years. I think the challenge that the industry is facing is that only a small fraction of the information they are taking from their assets via the sensors is actually utilized to drive meaningful business decisions.”
So how is this industry using technology to transform, and how can it continue to move forward?
Digital trends in the mill products industry
As Siess points out, mill products companies have been working with sensors to gather information from their assets for a long time. Nonetheless, there is an opportunity now to use that information better. By processing huge amounts of data in real time, the information collected from sensors can be used to make important business decisions at that moment. Improvements in analytics have been seen by using a digital core. So companies are now able to efficiently collect and analyze data to meet their needs.
Most of the products produced at mills are commodities with limited differentiation by quality, so mill companies need to consider different kinds of innovations. Yet Siess contends that there are areas of opportunity, such as innovative products or adding services to the product portfolio. Mill product companies are in fact offering more innovative products, allowing for more flexibility and individualization, and working directly with customers to provide the products they are looking for. They are creating B2B2C business formats instead of the B2B model, which not only allows them to work more directly with consumers, but also to provide more customization and collaboration.
Further, the industry is relying more on mobile technology. Mill products companies help customers interact through mobile and are working to create a seamless experience through multiple and varied devices.
Different segments of the mill products industry, having invested in IT technology, are moving toward working more in the cloud.
They have also progressed with analytics by using a digital core, which enables them to efficiently collect and analyze data to meet their needs.
Siess offers examples of how industry players have been progressing with digital trends. For example, SAPPI, which provides paper and packaging, previously offered products to wholesalers, but is now moving to a B2B2C format. Such a move is challenging because the company must offer more possibilities than in the past. But through the use of technology, it has been able to accomplish this transformation. For example, SAPPI uses a digital core to help it create flexibility for customers, track the status of products, and create insights for both the company and the customer.
ArcelorMittal steel production company represents another industry that is changing with digital transformation. Siess explains that this company now allows homeowners to directly purchase steel products through web channels instead of going through a middleman, thereby reducing cost.
Siess, who works first-hand with this industry, notes that many other mill products companies are leveraging digital trends similar to SAPPI and ArcelorMittal.
Where can the industry go from here?
While the mill products industry has made great progess, there are still many ways companies can use digital technologies to better meet the needs of customers while also mitigating global industry changes. Digital innovations can help these companies create better business models, create efficiency in business processes, and streamline and track the supply chain, all of which will help them handle increased regulation and reduce the impact on the environment.
IoT technology, for example, can be customized to fit the needs of each type of product and company, and Siess sees momentum with IoT technology in manufacturing. Additionally, the industry can streamline processes, particularly around predicting maintenance and quality capabilities.
Siess also sees more potential in use social media, which companies can use to promote their brands and to better understand customer sentiments toward their businesses. They will also begin to sell products directly through the various social media channels.
While the mill products industry might not seem like a technology-based industry, it is using innovative digital technology to make its businesses run more smoothly. The industry has made many strides in this area and continues to find ways to move forward.
To listen to this episode of Digital Industries for the mill products industry, co-produced by SAP and S.M.A.C. Talk Technology Podcast, click here.
Transforming into a truly digital business is much more than just implementing new technology to meet the demands of a digital age. It’s more than keeping up with the deluge of transformation happening all around us. Digital transformation is about understanding how to harness these changes and incorporate them into your business strategy. It’s about driving agility, connectivity, analytics, and collaboration to run a Live Business. A digital core empowers you with real-time visibility into all mission critical business processes inside your four walls, and in your interactions with customers, suppliers, workforce, Big Data, and the Internet of Things.
For more on how SAP can help you drive your own digital transformation visit us online:
1“Fit for the Future: 17th Annual Global CEO Survey,” PwC, February 2014.
2“Digital Transformation: Changing the Future of the Metals Industry,” LNS Research. January 2017.