The steel industry and digitalization – Iron hard conditions for plant traffic

by Luisa Walendy
Source: Pnor Tkk -

Around 1.7 million tons of steel was produced worldwide last year, which is ten times more than all the other metallic materials combined. This is because steel is one of the most versatile construction materials; alloying and heat treatment allow for the metal to be used in many different areas, for a variety of uses. More than a dozen alloying elements such as carbon, manganese, silicon, titanium and aluminum are used in modern steels. Behind this widely used material are complex logistical processes, the planning of which is often a difficult task to master. For this reason, the logistics dispatchers in this industry need nerves of steel.

Steel production is characterized by customer-specific production, small batch sizes, long technological lead times, high information requirements and plenty of production restrictions. Due to this high level of complexity, digital transformation in the steel industry is already in full swing. The industry is thus seizing the opportunity to simplify and improve processes.

Steel as a driving force for innovation in industrial production

According to a study by consulting firm PwC, steel is now regarded as an innovation engine for industrial production, because of its diverse applications across multiple industry sectors and shortened innovation cycles. The study shows that many steel and metal companies have already recognized innovation as a competitive advantage, significantly more so than companies in other industries. While 79 percent of the interviewed decision makers from the metal industry stated that their company already pursues a defined innovation strategy, the comparative value in the other industrial branches was 63 percent. There is a clear difference between the sectors when we consider the number of successfully implemented innovation strategies: 82 percent of the metalworking companies have functioning strategies compared to 64 percent of industrial companies in the other sectors.

What is the potential of internal logistics?

Innovation is an important competitive factor in times of digitalization. However, one area that often gets left behind during digitalization is intralogistics. Using intelligent software to support intralogistics operations could greatly benefit companies, helping to accelerate and improve processes.

The case context: Steel production is very transport-intensive. The supply and disposal of raw materials in the plant, the transport of intermediate products and the removal of finished products make it difficult to plan a smooth process chain. In addition, there are by-products such as bulk material or slag, which pose unique handling challenges. A manual planning system that is both efficient and conserves resources is virtually impossible to implement due to the general conditions.

Dillinger Hütte, the steel heavy plate manufacturer, is all too familiar with this problem. The steel producer has special software requirements for managing its very heterogeneous order structure, while using as few personnel and vehicles as possible. The manufacturer has to effectively manage transportation for six different fleet groups.

The most important prerequisite for optimizing transports: transparency

By using an intelligent transport control system, however, the steel producer was able to efficiently plan and control its internal transport orders despite the high level of complexity. As a result, it was possible to increase productivity and service levels and to cut costs. Additional pallets, vehicles and investment in additional resources were no longer necessary thanks to efficient transport planning. Dillinger Hütte now uses the system extensively for all transport processes in the plant. Gone are the days when transport orders were made via telephone. This method has been replaced by automatic transport assignment from the system to the data terminals in the vehicles. An optimal processing sequence of all transport orders is calculated by taking into account all of the important general conditions and adherence to deadlines.

Consequently, dispatchers can take care of the major challenges in day-to-day business and leave the routine tasks to the system. In addition to improved customer satisfaction and increased productivity, empty runs have also been reduced. Approximately 13,000 hours of driving time are scheduled each month for around 25,000 transport orders

Closing Thoughts

The steel industry produces enormous quantities of products every year. Companies are already focusing their efforts on digitalization to tackle the challenges of production in the industry. Although intralogistics is an area that is often neglected during a digital transformation, it offers a lot of potential for optimization. With the help of intelligent systems, transportation can be intelligently controlled in a way that improves the utilization of resources and reduces throughput times and empty runs. Companies should not miss this opportunity to make transportation more efficient and forge the "iron" for digitalization while it is hot!

Find out more about the entire success story at Dillinger Hütte here.




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About the author

  • Luisa Walendy

    Luisa Walendy started working for INFORM in 2015 and is interested in all topics related to manufacturing logistics and production planning.

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