The Impact of Industry 4.0 on Steel Suppliers
It’s hard to believe we are now in the fourth phase of the Industrial Revolution, aka Industry 4.0. The first phase, at the end of the 18th Century, involved mechanization through water and steam power. The second, at the end of the 20th Century, was characterized by mass production of specialized goods. The third occurred in the early 1970s and furthered automation of production using electronics and Information Technology. Lastly, this fourth phase is characterized by increased autonomous systems that are fueled by Big Data, machine learning and artificial intelligence (AI).
In general, Industry 4.0 is having transformative effects on how all businesses operate–from strategy to innovation to operations to talent acquisition and development. The challenge, as with any “revolution” is how to continue to provide product and services to existing customers while investing in opportunities presented by new technologies. The digitalization of Industry 4.0 already has, and will continue to impact how steel suppliers work and how manufacturers across industries relate with their steel suppliers.
Supply Chain Effects
A Deloitte global survey of manufacturers and the impact of Industry 4.0 revealed a paradox around supply chain changes. While executives identified supply chain as a top area for transformation, those in the trenches of daily operations were a bit slower to embrace the investment in digital transformation. This tension between innovation and real-life operations is evident in the steel industry for certain. However, there’s a broad and strategic commitment among steel executives to access and incorporate the data that is increasingly available to them to improve the overall productivity and efficiency of their supply chain.
Safety
With the increase in autonomous steelworking technologies comes opportunities for steel suppliers to create safer places to work. Although robots require maintenance and can break down, they don’t get injured on the job. Also, data from robots and other connected devices can provide information about potential hazards from machinery or processes. Safer workplaces have less turnover in employees and are more efficient, which results in better pricing for customers.
Energy Conservation
Industry 4.0 has provided steel suppliers greater means for gathering more intelligence around their energy usage. For instance, different steel grades require different amounts of energy to produce. Sensors can measure exactly which grades of steel are the most energy-intensive and then analyze energy pricing and modify production times so that those grades are produced during times when power is least expensive. They can also install sensors to monitor their own CO2 emissions and then continuously monitor their energy usage and improve processes to reduce waste.
Staffing
The digital transformation of Industry 4.0 poses challenges across industries when it comes to finding the right talent for new jobs. Additionally, some work that is being done by robots means that certain jobs are no longer necessary, while new jobs are being created. Steel suppliers are in the thick of this organizational and cultural shift. They still need fabricators and welders, but they also need programmers and robotics talent. Ideally, steel suppliers are investing heavily in training and retaining top talent to be able to optimize production and meet the needs of their customers.
One steel executive sums up how the staffing shift should happen, “Automated processes and plants require employees who understand how robots function, their requirements, and how they need to be managed. That is a lot of work for humans.”
How Industry 4.0 is impacting your relationship with your steel supplier
While the steel industry is not typically a natural adopter of new technology, steel suppliers are connected to customers across industries and must adapt to meet their changing needs. Across automotive, trucking and construction industries, products are becoming more technologically advanced, and these evolutions mean new changes in steel parts. More than ever, it’s important to have a trusted steel supplier who is capable of customization, as well as mass production.
When evaluating steel suppliers, consider the following:
- Large Inventory of the products you need most
- Value-added Services such as stamping and forming, robotic welding, machining, forming, etc.
- Just-in-time delivery
- Staff with current certifications and affiliations
- Commitment to continuous improvement
