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Digitising the Steel Industry

The world being a fast-paced economy where everything is being digitised, the need of the steel and metal industry to keep up with the pace is really important. The Indian economy has benefited greatly from the steel industry's assistance. According to data collected recently, India is the world's second largest producer of crude steel with a total output of 9.8 million tones. The driving force behind the growth of the Indian steel sector is easy availability of raw material along with cost-effective labor. Due to this, the steel sector has been a major contributor in increasing the overall manufacturing output. Even though the steel industry has tried it best to keep up with modernisation, we are still lacking in digitising the industry. Only a certain percentage of the overall industry have put their foot in digitising their services along with manufacturing but a lot of them are unaware and still facing challenges to a greater extent. By implementing the most recent digital technology, steel and metal manufacturers have a great opportunity to transform their operational model. This will enable improved operational efficiency, inventory levels, profit margins, and customer services, which will result in a two-fold increase in services.

Challenges

 

The intricacy of the supply chain is just one of the many difficulties the sector is currently facing, as was previously highlighted. Apart from the actual production there lies numerous factors and objectives in supply of finished product, such as raw material availability, price volatility, and the dramatically varying demand,  that could negatively impact the production of steel. Asset utilisation is frequently regarded as a high priority in such a complex industry, and incentives are designed around it accordingly. The lack of real-time data necessary to forecast changes and adapt to them is another significant problem. Data is a tool that could give enough advantages and an edge over the competitors in the market, if used appropriately. 

The steel industry is in need of huge finances and the availability of the same in a country like India is not very efficient. When compared to the cost of availability in industrialised nations like China, Japan, and South Korea, the cost of finance in India is astronomically high. Demand of steel is cyclical, that means during a downturn, the return on investment gets eroded. For most Indian steel makers, managing logistics requirements is arduous, challenging and costly. The logistics needs of the domestic steel sector would become unmanageable if India doubles its steel production in the next ten years unless measures are taken to expand and strengthen the physical infrastructure. The steel industry specifically pays a number of non-creditable taxes, tariffs, and various cess that make Indian steel goods less competitive in the international market. Eliminating these levies or making them creditable will boost India's competitiveness, which would benefit both upstream and downstream businesses that produce and consume steel. The traditional approaches just offer an alternate to the problems rather than a solution. If we want to work toward growth and progress, we must find better solutions that will last longer. Metalbook has built a robust and easy to use digital procurement platform for stakeholders which aims to optimise and streamline the Iron and Steel industry.

How digitisation is a solution

Digital technologies are strengthening the online marketplace and ecosystem by being accessible to all customers in the present scenario. Digital disruption will only enable the steel industry to prepare itself for all unprecedented challenges and to become more competitive in the market. Running pilot projects in particular areas is one of the most fundamental and straightforward ways to digitalise the services. This will assist in gaining confidence and alignment when dealing with any potential problems. In order to discover a solution, the problem will be broken down in this way. There is a need to identify all of these inefficiencies and determine how digitisation may help because the traditional methods of producing and acquiring steel are seen as being quite drawn out and time-consuming. Companies must use the digital tools at their disposal to shorten lengthy delivery times and improve their ability to handle order modifications and minimum runs.

In terms of speed, affordability, and simplicity of deployment, predictive analytics has already demonstrated its potential to change the operating paradigm. It sifts through massive amounts of data using cutting-edge, self-learning algorithms to produce insights and spot trends. The conventional prediction techniques are based on specific people's experiences, where just a small amount of data is gathered and evaluated to find trends. Digital solutions can help to increase forecast accuracy with the most recent machine learning algorithms and give time to address potential issues. It has a great deal of potential to provide steel firms with the vital information they need to eventually make more informed business decisions on asset management as well as the best use of labor and resources. Through continuous laboratory sensor feedback, advanced analytics and machine learning models deal with a wide range of data to deliver real-time process stimulation and insights. This aids in improving output across the facility in terms of quality, price, and productivity. By overcoming the human capacity barrier and creating broad real-time performance systems throughout the steel industry's supply chain, digitisation can help with a number of difficulties, various items listed on the platform are items linke TMT bars, Sheets/Coils, Plates, Pipes, and other fabricated material which are difficult to procure.

Conclusion

To fully utilise the promise of digital technology, businesses must focus on a clear road to value by merging all actions into quantifiable benefits and actively measuring against it. A meaningful digital transformation is a process that demands a long-term strategy. Digitisation is a process rather than a sudden advancement. Companies can quickly and easily test the situation and find solutions to current issues with the help of some market-proven tools and initiatives, positioning the business for future, extensive digitisation. While the majority of organisations are attempting to digitise, there is still much to be done. Those who have already begun the process have not yet realised their full potential or made an impact. Our opinion is that businesses who successfully utilise digital potential will be the first to experience significant improvements in top-line revenues, capture the following 10-15% in cost reduction, and outperform the competition.

by Meghna Arya, Metalbook