Digital forces are disrupting and transforming the world, trailblazing a revolution set to change every industry, including the steel industry. Like many other sectors, the steel industry has adopted and incorporated digital technologies in its operations and processes. While its full potential has not been harnessed, it is safe to say that the steel industry has progressed to a point where turning back is no longer feasible nor beneficial.
Historically, the steel industry has always been both capital and labour intensive. Value chains in this industry are highly complex with its multiple industry players and a myriad of moving parts.
Steel manufacturers have to dip their toes in many areas of production and manage all kinds of processes – juggling and connecting volatile assets to a centralised system, handling a vast amount of product units as well as complicated distribution channels, tracking production, and overseeing a diverse customer base with varying needs and channels. Among all of these, the biggest challenge that many steel companies face is making sure that the supply chain is in perfect working order on both sides of the operation. However, this is a herculean challenge as companies aren’t able to anticipate industrial changes due to the lack of accessibility to real-time information, translating to missed business opportunities.
Enter Industry 4.0, the fourth wave of the Industrial Revolution characterised by the bridging of physical industrial assets and digital technologies. To help streamline and enhance the processes, digitalisation offers a myriad of solutions, including Artificial Intelligence (AI) solutions, big data analytics, and Internet of Things sensors.
These technologies allow companies to drastically improve the monitoring of complex systems and build a more holistic, inter-linked ecosystem, especially those that dabble in manufacturing and supply chain management. By combining the physical and digital, companies will be empowered with real-time calculations, resources, and applications to better control every stage of the operation. Digitalisation is practically the only available solution to the supply chain issue, helping the steel industry unlock its full potential.
The steel industry will never be the same. Industry 4.0 has allowed for rapid acceleration of real-time data collected throughout various key parties involved in every stage of the supply chain management process. A compilation of comprehensive, accurate data has opened up multiple opportunities by way of predictive analytics. The analytics techniques break down component drivers and enable independent forecasting for each respective driver. By aggregating these factors, companies can make better and faster business decisions in terms of asset investments and management, and labour and resource allocation.
New technologies have also been demonstrated to revolutionise the highly complex supply chain whose inefficiencies have prevented the steel industry from flourishing in its full potential. Providing a distinct roadmap that offers greater visibility into the supply chain enables companies to have a clear picture of their inventory and activity. Not only does this translates to better management of inventory in motion, but a greater supply integration also mitigates risks and disruptions.
With the booming construction and infrastructure projects, it’s clear that Indonesia is in big need of expanding the nation’s steel production capacity. In fact, the government expects to see domestic steel production capacity increase by 22.7 million tons by 2024.
In order to meet this demand, integrating digital solutions into our working processes is crucial. Unfortunately, there is still a long way to go before we can fully harness the power of big data. But until then, the steel industry will continue to evolve and transform, shaping the future of the metal industry in Indonesia and beyond.