Dominating the World of Steel

In recent years, Indonesia has chartered impressive economic growth and is rapidly growing as a nation. Despite the considerable challenges and uncertainties brought about by the global pandemic, we still see a positive outlook on certain areas of demand. One such area is the steel manufacturing industry.

In the best-case scenario, steel consumption in Indonesia is expected to rise sharply, with a predicted increase to 17 million mt in 2021. The credit for a large portion of this increase should be given to government infrastructure projects.

Indonesia poses a bright spot in the ASEAN steel market, citing increases in both steel production and imports. A multi-functional and versatile material, steel remains a necessity for the facilitation of economic and social development.

Emphasis on Disruptive Innovation

The demand for steel is not slowing down anytime soon. However, to meet the growth momentum, it is imperative for the industry to reinvent itself. Taking the lead in the road to reinvention is Gunung Raja Paksi (GRP), one of Southeast Asia’s largest, private-owned vertically integrated steel companies. Putting agility at the core of their business, the organisation made many transformation efforts – with digital transformation sitting as the top priority.

Why Digital is the Way to Go

Digitalisation represents a paramount process that impacts all the process and manufacturing sectors, including the steel production industry. To understand and meet the demands of the marketplace, the industry must align growth product and service innovation around hot growth areas being created by the economy. We live in a digital age – digitalisation will be the key driver for our industry’s evolution.

Digitalisation refers to the transformation of interactions, communications, business functions, and business models into digital ones. In the steel sector, this coincides with the invention of the production area, the improvement of transportation technologies, and the electrification of industrial processes – all of which strengthen the steel value chain.

The effect of technology working in perfect harmony with metal production can be likened to an orchestra performance. Similar to the many instruments of an orchestra, a digitalised steel plant would contain numerous components working together to perform at their full potential.

GRP Leading the Way

To maintain its position as a market leader as well as to strengthen the principle of good governance, Kimin Tanoto, the Board of Commissioner of GRP, has led GRP to take many bold steps in making changes to become a world-class steel producer. The organisation has stayed consistent with the transformation – transitioning itself from a family company to a professionally managed company.

Kimin Tanoto believes that digital transformation is a way to improve production quality, re-create business passion and build greater good for the steel industry in Indonesia. Admittedly, the company stakeholders are not always on board with business transformation. To overcome this, his party chose to have a constructive discussion to reach an agreement.

A more transparent company management process is also introduced by Kimin Tanoto to ease supervision and coordination. Using a dashboard to monitor the company’s operations, production, sales, and finance, they can get real-time data on all company performance indicators. 

Taking a quantum leap forward, GRP also collaborates with two international companies, namely IBM Indonesia and SAP Indonesia. This collaboration has paved the way for interactions to run more effectively, efficiently and transparently in the supply chain and customer processes.

Management teams from GRP, IBM and SAP Indonesia met in August 2020 for a Digital Transformation meeting
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