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Author's profile photo Jennifer Scholze

Evolution of IT in the Metals Industry as told by American Metals Market

The latest issue (November/December) of American Metals Market is focused on Digitization in the metals industry and has several articles that are highly relevant to our customers. Below is a link to one of the articles titled, “Program Directors” focused on the evolution of IT in the metals industry.

Program directors


When economic forces in the dark days of the 1980s made most metals companies downsize, the ensuing turmoil led to the rapid growth of service providers to those very companies.

American metal producers struggled for survival during a severe recession and shed functions not essential to their core businesses of making and selling metals. But the outsourcing of that decade led to the growth of consultants at the same time information technology was increasingly being recognized as a critical partner to metals and manufacturing firms. As a result, metals companies sought to partner with consultants who had as their core business the development and application of information technology for the metals industry.

That symbiotic relationship, born out of crisis, has helped metals companies throughout the world improve all measures of business performance, including operations management and productivity, quality, environmental health and safety, financial reporting and most facets of human resources management. And instead of exclusively managing their data in-house, metals companies have partnered with outside providers of technology and services to achieve greater operating and business efficiencies.

Beginning with its founding in 1976, Global Shop Solutions Inc. has grown as the needs of its customers have become more sophisticated and enabling technologies have been developed. “The company started with a focus on the production floor and quickly evolved into a full ERP (Enterprise Resource Planning) provider always focused on helping manufacturers make smart business decisions with accurate data from our software,” Adam Grabowski, director of marketing and communications for The Woodlands, Texas-based firm, said.

“Thirty years ago, companies had information technology people on staff writing software. Today, there are IT firms in the business of writing software,” Perry Zalevsky, industry principal, mining, metals and materials for OSIsoft LLC of San Leandro, Calif., said.

France-based Schneider Electric SE’s Klaus Lachmann, mining, minerals and metals solutions, marketing and business development director, agreed. “There was a general trend in the 1980s to concentrate on what firms do best. That trend is still current today, and consultants play an important role in companies in the areas of operations management, ERP systems and software offerings.”

SAP SE believes the tremendous growth in information technology (IT) consulting has mirrored the exponential growth and increased relevance of software solutions to the business over the past 30 years. “The advent of cloud-based software is beginning to change the world of consulting as companies purchase functionality as a service. Nonetheless, for many companies the software side needs the consulting side to make it come to life—you can’t have one without the other,” according to Stefan Koch, lead for the metals industry for Walldorf, Germany-based SAP.

The evolution of IT in the metals industry started with process control software, generally written in-house to support a specific mill or company. “What began as site-specific efforts of optimization has grown over the years to be an integrated level of optimization through the entire value chain. The silo optimization of the past does not ensure that the other parts of the business are running as effectively as they can,” Schneider Electric’s Lachmann said.

Integration is one of the strongest drivers of trends in today’s IT world. It’s not only the integration of software, frequently tied together through ERP systems, but also the integration of the outside IT company with the customer it serves.

SAP has been providing specific software for the metals industry since the mid 1970s, first at the German steelmaker ThyssenKrupp AG from the SAP headquarters in Walldorf. Today, SAP has thousands of metals clients and almost 300,000 customers in nearly 200 countries around the globe. Gaining additional clients involves “acting on behalf of the customer with assigned colleagues—account managers—who learn the client’s company and anticipate needs as they are emerging,” Koch said.

The process of responding to the client has changed over the years as SAP grew in prominence in software development. “In our earlier days, we would develop specific software based on what the client said it needed. We would do internal checks and then send it off to the client. On occasion, we would find out that the software was not what the client wanted,” Koch said.

These days, SAP takes a more integrated approach with the customer through engagement initiatives in a structured manner. “We ask the customer to become involved in the development cycle for the software so it can benefit from influencing the outcome. The customer is involved in quality checks every few weeks to ensure the software will perform as anticipated and not deviate from the intended functionality or process need,” Koch noted.



Integration of business and operational solutions is also the thrust of software provider OSIsoft and its flagship offering of an enterprise-wide PI System. The company said that 10 of the world’s 14 largest global metals, mining and materials firms use the PI System to “pull all real-time operating data into one place—one system, one pool of data,” according to OSIsoft’s Zalevsky. For one large aluminum client, the PI System collects and presents data in real time from about 300 different smelting pots of different generations for real-time decision making and operational intelligence that has led to millions of dollars of savings per excursion.

The architecture of the PI System is built around templates to create an asset framework that collects and standardizes operating information. “We work closely with the companies to identify the operating parameters important to them, and then provide software with templates configured to their business. We help them define the data they want to collect and deliver foroperational decisions and data analytics, and then provide the right software to achieve that end,” Zalevsky said. He added: “Benefits of the PI System include increasing energy efficiency, managing water consumption, maximizing asset performance, mitigating risk and achieving regulatory compliance.”

IT companies increasingly work with other established software and information services companies to their and the customer’s mutual benefit. OSIsoft uses Microsoft products to achieve higher degrees of integration “because nobody has it all, and customers want to see that collaboration and integration,” Zalevsky said. His coworker Enrique Herrera, OSIsoft’s industry principal for new markets and emerging technologies, echoed that sentiment. “There is a collaboration of technology ecosystems and the data to best understand how to optimize business processes to maximize operating efficiencies. You need to enable the enterprise to access the right data to augment value within and between companies.”

Over the past decade, Schneider Electric, headquartered near Paris, has grown its offerings to become a leading provider of information technology solutions to the power industry as well as becoming an energy management supplier for power-intensive industrial businesses. “We view ourselves as a specialist for energy management vs. a power and control provider,” Schneider Electric’s Lachmann said. “For the metals industry, we provide energy-management tools for more than 100 million tons of metal capacity to help those companies achieve environmental and operations efficiencies, power management and enterprise optimization.”

Schneider Electric is currently focusing on several areas of expertise for metals and power companies. “Ensuring cyber security is a significant focus to safeguard the enterprise and close any gaps that may exist due to the presence of old data. We also work to help companies maintain regulatory compliance in the areas of operations, environment and power management. Through interfacing with the software of others, particularly with ERP systems, we help our clients improve operating efficiencies and enterprise-wide solutions throughout their value chain,” Lachmann said.

Another major focus is the increased integration between applications “as an ongoing desire to look at global performance through benchmarking operations in various parts of the world, “ according to Tom Kinney, vice president of Schneider Electric’s optimization business known as SimSci, for simulation science. This newer area of Schneider Electric’s business was greatly enhanced through the early 2014 acquisition of Invensys Ltd., which develops and supplies industrial software, process design, and simulation and optimization for real-time operations management and asset management. The work of its simulation science unit also “supports increased integration between applications across the enterprise and throughout the world, and not just providing a site-by-site view of the company,” Kinney stated.

Forty years ago, Global Shop Solutions began providing software to the oil and gas industry to help better manage the business and production sides of those companies. “We started out providing software to manufacturing suppliers of Honeywell to help customers control inventory and other costs. But we grew through the years to provide a more robust solution for business management software through today’s ERP systems including for the metals industry,” according to Daniel Carranco, a Global Shop Solutions project manager and consulting team leader.

While remaining rooted in customized ERP software for more than 20 industries, Global Shop Solutions today is a software development company with a dedicated department of more than 40 manufacturing, technology and IT consultants. The company’s service, reserch and development (R&D) and consulting units work hand in hand, and are staffed by experts with deep experience in manufacturing operations averaging over eight years in tenure. Global Shop Solutions uses a direct development, sales, consulting and service model that relies on the manufacturing experience and expertise of its employees “instead of passing off to a third party for the manufacturing perspective,” Carranco said. He noted that their employees “understand both the software functionality and our customers’ businesses leading to one of the highest rates of successful implementation in the industry.” His colleague Adam Grabowski termed Global Shop Solutions “a trusted partner and advisor to its manufacturing customers. We are not just a software vendor.” Global Shop Solutions recently opened a new research and development center to further foster communication and collaboration among its software developers and its manufacturing business consultants.

Moving forward, companies see further collaboration and integration of information technology into their clients’ operations. SAP sees continued digitalization of information including “Big Data” and the “Internet of Things.” “For metals, we will continue to move closer to the manufacturing space with predictive maintenance, predictive quality, sensor data and artificial intelligence,” SAP’s Koch said. He also predicts more information technology tools to support further integration of the sales force with its customers and for improved logistics to complement real-time data throughout a company’s supply chain.

Over the next five to 10 years, Schneider Electric sees continued rapid development of software with increasing capabilities. “We have a global reach that brings together the appropriate industry and technical knowledge to implement our software solutions at customer sites. And as we implement our current solutions, we are continuously improving them based on feedback from the customers,” Bill Poe, senior technology consultant within Schneider Electric’s mining, minerals and metals business, said.

The view of the next few years from Global Shop Solutions focuses on more mobile and wearable technology and a greater use of sensors. Radio Frequency Identification technology using sensors will grow in acceptance to help calculate the time and movement of both people and material, with motion and time being two key factors in determining costs in manufacturing environments. Dashboards and wireless devices will be used in different manufacturing situations and will show more and more real-time data. “Calculators through software can help estimators better anticipate the material and time needs of a project. That helps a company more accurately purchase material needs without overbuying and with metals ensure that the right amount of metal is on hand to meet a customer order and to track and schedule all phases of production,” Casey Moes, a project manager and consulting team leader, said.

“Everything is becoming integrated today,” OSIsoft’s Zalevsky said. His company’s products are becoming even more integrated with Microsoft offerings in that “nobody has it all. The technology of integration means increasingly working with partners to gain additional leverage for all parties. We are also working on further integrating business analytics and advanced visualization with the PI System. Discussion fosters integration and identification of the most useful data for our clients and to build applications for that data into our systems.”

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