Last week, Tenaris, a leading steel manufacturer to the energy industry, hosted the 10thannual SAP Executive Advisory Council for Metals at its Dalmine mill in Italy, which included the top companies in the industry. IT executives from Tenaris, ArcelorMittal, ThyssenKrupp, Gerdau, NLMK, Outokumpu, Salzgitter, voestalpine, OMK, and Novelis joined SAP experts and leaders from the Mill Products and Mining industry business unit (IBU) for 2 days of in-depth discussions about the processes and technologies that will support and drive successful and sustainable metals companies of the future.
The industry council congregated in Bergamo, Italy, as noted in the New York Times last week: “Frank Lloyd Wright once said that this two-story city, with its panoramic mountain view and fairy tale architecture left him, ‘stunned and astonished.’” (Living the High Life in an ‘Undiscovered’ Italian City).
There was a certain juxtaposition going on. On one side we had a medieval backdrop where the town bell still rings 100 times every night promptly at 22:00, as it has for hundreds of years, to alert wandering villagers that the town walls would be closing. And on the other side we had comprehensive discussions about the newest digital advances that continue to revolutionize metals companies – and help them make and deliver products faster, better, and safer.
Below are highlights of 5 of the most interesting topics discussed.
1. Ecommerce and the increase in customer expectations
It seems the trend that has been catapulting across retail, consumer products, automotive, and many other industries is also impacting the metals industry. Many companies are putting forth renewed efforts to bring digitization both to the internal and external sales processes to support customer expectations. They are implementing the newest best practices, Big Data strategies, and analytics to drive proactive, profitable customer interactions. They are aiming to achieve this by collaborating across departments and channels and combining data from sales, service, manufacturing, supply chain, and even claims. They want to empower their salespeople to engage customers with real-time information about products, pricing, order status via any channel they want. And they want to deliver on customers’ expectations to be able to get the information they need anytime, anywhere – without needing to even talk to them. This self-service option looks like it is not only satisfying customer expectations but it is also cutting down on the time metal companies need to spend answering basic order, pricing, and delivery questions.
2. Embed experts into the customer’s process – automotive, construction, oil and gas
Extending from the last point about spending more time to focus on the custome, many metals executives talked about the importance of embedding key metals experts at their customer to participate in the research and development process. The main benefit is that they are able to give – and get – feedback directly to the production manager.
Similar to how SAP engages its customers in co-development, metals companies are putting an even greater focus on understanding their customers’ business. This has the additional benefit of reducing any quality issues as they get direct feedback from the production line without requiring escalations.
One example discussed was working with civil engineering and bridge building. It is useful to have steel experts involved when discussing what materials to use. Many still believe steel has more risks than materials such as concrete, and having an expert on site can serve to educate designers and builders on the newest advances and the benefits of steel as a lighter and more elastic material. Engaging in these discussions at the design phase is the best way to influence perceptions and decisions.
3. Is Amazon the next big competitor in metals?
Ok, this might be a stretch, but IT executives are hyper-aware of competition coming from various angles. Whether it is from an online retailer, a mining company, or a construction company, there is increasing pressure on metals companies to focus even more on the customer.
How are they planning to keep their lead? Metals companies are moving from a product focus to a customer focus, from mass production to customized products and services, from a product orientation to a product+service orientation, and from in-house controlled value changes to open ecosystems and value networks.
4. Predictive maintenance and predictive quality
One current hot topic the IT executives talked about involves combining and analyzing sensor data to track specific characteristics as products are being manufactured. In addition to preventing downtime by predicting maintenance requirements, the detailed sensor feedback can allow for real-time adjustments to control resulting product quality and ensure consistency.
5. It is still about delivering the perfect order
Most metals companies are continuously working on achieving the ultimate goal, which is to deliver “the perfect order” – meaning to deliver the goods on time, as expected, at the lowest possible cost and highest possible safety and margin. Of course, we know this is one of the most complicated goals a metals company has. Companies are spending a lot of time and effort with ERP, supply chain, and transportation management solutions to continue to reach this goal. In addition, IoT, RFID, and sensors are increasingly playing a new role. These have been in use for years and the use cases and benefits continue to intrigue metals companies.
The SAP executive advisory council and the relationships, discussions, and insights it provides are crucial to continue to develop the processes and solutions to help the metals industry thrive. SAP truly values, respects, and protects the special relationship we have with our customers, and we think this is a cornerstone for continued joint success. To learn more about what SAP is doing in the metals industry, check out our website.