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