Digital Disruption and the steel industry in India

When one looks at what impact digital disruption can have on various sectors and organisations, they often tend to overlook the steel companies. Given the various challenges being faced by the steel sector, this sector needs to especially focus on upgrading via digitization to achieve their real potential. The steel industry needs to develop a strategy to deal with the constant threats such as the debate over whether aluminium is better or steel for auto manufacturing and that the world’s greatest economies are at constant trade wars with one another. These are the threats one is aware of, other unexpected challenges that need to be given due consideration are rising digitization and changing consumer expectations. These disruptive improvisations pose a real challenge to the legacy traditional steel manufacturers in India and their business models.

What can Digital Disruption do for Steel Manufacturers in India?

Just like any other sector that is digitizing its processes, digital disruption will equip the steel industry to be better prepared for unexpected challenges & deal better with its competitors. It will streamline processes and a digitized value chain will enhance service levels and ensure seamless client servicing. It will improve the inventory turnover ratio and help increase the top line by 2-4%.  Emerging technologies such as Internet of things, predictive analytics, machine learning, big data among others can yield positive results within weeks of implementation. PwC’s global digital operations study has claimed that companies globally are aiming at increasing their digital maturity

What challenges need to be solved by Steel Companies?

Intricate value chains– the complexity of these value chains is a serious issue faced by the steel industry. There are numerous interconnected assets, a diverse client base, large inventories, multiple quality requirements, improved service levels, and complex distribution channels and all of this impacts the end revenue of the manufacturers – steel manufacturers need to find a solution to streamline these efficiently. 

Working in Silos - Instead of working together towards a larger common goal, often plants and resources act as individual identities. Inventory administrators have limited access to real-time data making them incapable of foreseeing market changes and acting proactively. Due to this, they end up in defensiveactions with increased risks ultimately leading to significant losses in the value chain. These resources need to be utilized judiciously and work together to drive revenue, increase profit and enhance service levels. 

Steel manufacturers in India are struggling to overcome these operational and administrative challenges using conventional improvement techniques but have not seen much of a difference due to theirshortcomings. Adopting modern digitisation techniques, on the otherhand, can improvise the overall supply chain with its real time performance systems. 

One of the leading steel manufactures in India,JSW steel for instance has implemented IoT to change how things work at their manufacturing units.  One of it plants is using machinesnetwork, data analytics and highly skilled IT professionals to monitor the machines remotely throughmobile device registration on the IoT cloud. They have significantly been able to improve the productivity & efficiency of the plant.

Of course the same technology won’t impact all manufacturers the way it has played out for JSW Steel – but one cannot ignore the importance & requirement of digitization in a traditional sector such as steel to achieve operational excellence and improve RoI.