Digitalization is a useful tool, not an end in itself
July 18, 2017 11:00 CET 6 min read
Digitalization is a buzzword that is hard to avoid these days. People talk about it as revolutionizing everyday life and business. But what does digitalization mean in practice in the steel industry?
Niko Korte, who took up the post of Senior Manager, Digital Business Development at SSAB in May this year, is the right person to answer questions about the importance of digitalization.
Niko, what do you think are the biggest challenges facing SSAB and the entire steel industry in the near future from the digitalization aspect?
Niko: “The manufacturing industry is in the midst of change: production is becoming automated and our customers’ production batches are growing smaller. At the same time, production chains are becoming more effective across businesses. In order for us to serve our customers’ changing needs, we need to be able to offer more information to improve the efficiency of customer production and logistics. It would seem that many solutions to these challenges now increasingly include digital components. Digitalization must be seen as a useful tool, not as an end in itself.”
At the same time, there are growing requirements for traceability and sustainability. These are two aspects we are seeking to respond to through our SSAB SmartSteel concept. The idea behind SmartSteel is to make available data and instructions relating to any steel item wherever that item is processed. Each link in the production chain can then utilize and add to this data. Traceability and documentation automation are the most obvious customer benefits of SmartSteel."
How do you think our role and that of our customers and collaboration will develop?
Niko: “Increased communication is a key factor. Digital tools will add to the ways we can be in contact with customers. On the other hand, it will be much easier than earlier to create new contacts.
Demand and supply are increasingly becoming more transparent and various online business solutions are growing, but that is just the start. I think the real value of digitalization is concealed in collaboration networks. In practice, this means more efficient manufacturing and logistics chains, which challenge traditional business boundaries.
Volatility and rapid cyclicality in the steel business are here to stay. Our systems need to be quick to respond since our customers’ world and operating environment is changing just as ours are. This is where digitalization once again emerges since speed requires us to have a lot of data and smart systems to maintain process controllability in all circumstances."
How is digitalization evident in everyday life at SSAB?
Niko: “I myself consider it important that digitalization is not just some high-level vision. SSAB has no separate digitalization strategy at all, but by doing real projects we are seeking to serve the business in implementing our common strategy. The intention is to integrate new digital solutions into our everyday work.
New tools will help us to better manage our fundamentals. For example, better customer communication than earlier to tell customers where steel is going and how much is in stock.
We at SSAB can divide digitalization into three areas. Firstly, the digitalization of products and services, of which the SmartSteel project is an excellent example. In future, steel will be able to communicate its properties and processing instructions to the machine that processes it. The machine will be able to adjust itself automatically. The result is less waste and shorter production time. The customer wins.
Secondly, digitalization will be seen as a better customer experience. This area will take Salesforce, for example, to the next level in customer relationship management and improving the sales process. Besides this, we are building a common customer portal for the steel divisions. New solutions will also be forthcoming in digital marketing.
The third area is digitalization of production and processes. We will launch some pilots in the fall to promote digitalization in the spirit of continuous improvements. We will progress by doing small things across the organization to gain experience and then scale our successes more extensively in the organization. New things can be so huge that they need to be split up into more tangible pieces. SSAB’s approach is pragmatic: trial and error through pilot projects."
Niko Korte has recently taken up his new position as Senior Manager, Digital Business Development at SSAB. He has sound experience of various responsibilities in the service of Ruukki and SSAB and most recently worked in the Group’s Business Development Team in Stockholm. The new team now set up is a “catalyst tasked with initiating and executing business sponsorship development projects”.