The Future Steel Forum that I spoke at last week gathers steel industry professionals and equipment suppliers to discuss the opportunities presented by the so-called fourth industrial revolution, a revolution in digital technology marked by historically unprecedented breakthroughs in artificial intelligence, robotics, 3D printing and digitisation in all areas of human activity.
In the steel industry, what stands out for me is the speed at which our business processes and supply-chain connectivity are becoming guided by the customer’s changing needs. The future will not see steel companies producing large volumes of steel put into storage until the sales department finds a buyer. Instead, an Industry 4.0 steel company will be one that increasingly produces hyper-customised steel for high-value specialised applications.
These are exciting times for the steel industry in that they provide opportunities to rethink the way we manage our assets and extract the best value from them, but we are not without our challenges; all of this will require advanced digital capabilities.
Steelmaking assets are typically designed to last two or three decades, which was adequate during the previous industrial revolutions when the pace of change was much slower. The speed at which we are developing entirely new hardware and software will mean that ‘future-proofing’ will need to become an important part of any new investments. In other words, any software or hardware system developed in-house or acquired from a vendor should be standard-based and able to connect with other equipment irrespective of the frequency of the updates.
Let’s take the example of database engines: Microsoft SQL, MySQL, IBM, Oracle etc. - all use different versions of the syntax but despite this they can communicate with each other if the applications are developed considering interoperability and standards.
Future-proofed hardware and software capable of communicating with each other throughout the steel facility has the potential to make huge efficiency savings. Imagine an intelligent factory with different software systems that can communicate in such a way as to take orders from customers and, for example, position the most energy-intensive grades of steel on the production line at a time of day when energy is cheapest.
A lack of standardisation in communication acts as an invisible roadblock and the total cost of ownership from implementation to managing and upgrading can become much higher if standardisation is not the guiding principle behind any new acquisition or transformation. Faced with competition from other steel producers and from producers of competitor materials, any steel company that is hesitant to embrace these new technologies and business practices will soon find itself struggling to keep up in a race of increasingly nimble and digitally-savvy runners.