4 ways digital transformation is revolutionizing the steel industry

Industry 4.0 has seen technologies like cloud computing, artificial intelligence (AI), and machine learning (ML) improve customer service and significantly cut costs while increasing opportunities to create new revenue streams and remaining agile in times of uncertainty.

Digital transformation in the steel industry is referred to as Metals 4.0. Companies use new technologies to gain a competitive advantage and navigate unpredictable times. Here are four ways digital transformation is revolutionizing the steel industry:

1. Improved customer experience

Steel company customers expect a seamless experience in which they can be engaged on multiple platforms with clear expectations about their orders’ cost, timing, and quality. After all, many have their own customers who depend on predictable prices, time frames, and quality assurance for products and services.

If only it were as simple as communicating clear expectations to keep customers happy. Unfortunately, with price volatility and supply chain disruptions plaguing nearly every industry, sharing accurate details and offering confident assurances can be difficult.

It’s hard for a company to manage customer expectations if it can’t predict the cost of raw materials and doesn’t have an accurate picture of expected inventory levels. It’s only a matter of time before customers are frustrated – or worse, they go elsewhere.

A metals-specific enterprise resource planning (ERP) solution can offer business intelligence and predictive analytics to meet customer expectations with greater confidence. Business intelligence provides employees with valuable inventory, cost, and product trends, and predictive analytics can use algorithms and data modeling to forecast material costs, inventory, and projected timelines. With this kind of information available, it’s easier to keep customers happy.

2. Decreased costs

Digital transformation in the steel industry provides the potential to decrease costs and increase profit margins. The challenge is that many in the business are already driving down costs with technology that can increase efficiency. So if a company is not finding ways to save, someone else is.

Cloud-based ERP solutions can provide one unified solution that is updated and monitored in the cloud. As a result, a team doesn’t have to lose valuable time working among multiple systems, inputting information several times, or staying on top of reporting lag times. Instead, real-time data from one accurate, central source of truth can save time, money, and headaches.

Another benefit of using a cloud-based ERP solution is cost-saving mobile accessibility and functionality. Team members no longer have to be on the shop floor monitoring quality, production progress, and machine efficiency; they can see it all in real time through their mobile devices. In addition to mobile functionality, operational analytics from an ERP solution allows teams to track production efficiency and avoid unexpected and costly machine downtime.

3. New revenue streams

The steel industry has been around for a long time, and many companies have depended on the same practices for years. Tried-and-tested methods allow metals companies to continue delivering quality products – which is a good thing but also can be a weakness.

Doing the same things that have delivered past success can be easy but might lead to missing opportunities to innovate and find new ways to achieve even more. The reality is that some metals companies can get left behind if they fail to explore new ways to work.

Think about how technology can affect the metals value chain and manufacturing. Consider a world where the metal beam, pipe, or plate can relay real-time information about its end use back to engineers. This would allow them to study performance in real time and identify new ways to collaborate with customers to identify innovations. It’s a small illustration of how technology can offer new revenue streams while providing customer confidence.

As customers’ needs change rapidly, new technology can open the door to opportunities for metals companies. Customers need experience, but they also need suppliers to stay ahead with new technologies to help customers stay ahead in their marketplace too.

4. Increased agility

If 2020 taught businesses anything, it was that they need to be able to adapt and rethink how to do business. And while the commotion of a worldwide pandemic has subsided to some degree, volatility, supply chain disruptions, and uncertainty continue. The problem many metals companies can face is an inability to be flexible when a new opportunity arises – or worse, when volatility strikes.

Digital transformation in the steel industry can help companies engage volatility with increased agility and adaptability. Companies migrating to cloud-based solutions might find it easier to scale up or down quickly compared to those with on-premises or homegrown systems.

If customers want to make changes in their product line or specifications, it’s essential to respond quickly. With a metals-specific ERP solution, it’s possible to input changes, update specifications, and retool machinery quicker than with many traditional systems. And with increased mobile functionality, these tasks no longer have to be conducted on the shop floor.

The benefits of digital transformation can be huge for the steel industry, but change can be a challenge. Knowing where to start is often the hardest step, but we can help make it easier.

At Crowe, our specialized metals ERP team has vast experience guiding companies to digital transformation. So let us help you get started today.