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Nilesh Gandhi
1 May 2018

The hallmark of a steady and successful business is the ability to offer superior customer experience with an increased chance of repeat business. An efficient Supply Chain Management (SCM) process serves as a prime influencer in this process. A well-oiled Supply Chain should promise a smooth flow of information, raw material, finances, etc. from the start of the supply chain i.e. supplier to the very end of the chain i.e. the customer. While this is an ideal scenario, the reality, especially for the steel industry, is very different, even today.

While the industry is finally showing signs of recovery, following a nine year slump, businesses are still grappling with a number of challenges hounding their supply chain. Some of the key challenges include:

  • Demand Forecasting: Supply chain managers need to accurately predict the future demands of their products and services based on the past events and prevailing trends. However, with this industry defined by make-to-order demands and zero visibility of the end-to-end supply chain, this is a difficult task, to say the very least.

  • Inventory Management: Absence of an integrated view of the inventory across manufacturing plants and distribution warehouses can lead to inaccurate demand planning and poor forecast of material availability at customer locations. 

  • Cost Management: The influx of raw materials in the market, due to recent geo-political issues, has made it difficult for supply chain managers to accurately calculate the cost of production at every stage of the supply chain.

So, what does the future hold for the steel industry?

Fortunately, the world’s largest steel producer, Arcelor Mittal’s, bid for Essar Steel, is evidence that the steel industry is not ready to give up and is on a steady path to recovery. But, the recent decision by the United States, to impose tariffs on steel and aluminum imports into the US, is being perceived by some as additional confusion to a slowly recovering industry.

“Supply chain managers today, are being presented with a unique opportunity to transform their supply chain and their business as a whole. The choice is a simple one – transform today or forever disappear into oblivion.” 

While some supply chain managers may view these geo-political changes as further hurdles to business growth, others have embraced them and resolved to transform their business instead. By leveraging the power of the digital era – Cloud Technology, IoT, Big Data – customers can enhance the maturity levels of their supply chain and completely transform their business.

Manual trackers and bar codes, which can be time consuming and tedious to use, can be replaced by smart sensors and actuators. Supplies in stock, embedded with these sensors, can be easily tracked and granular information like shortage of raw material can be swiftly identified. Data collection and analysis, previously dependent on human intervention, can be conducted by exploring cloud technology in conjunction with IoT. Segment-based forecasting, inventory classification methodologies and advanced optimization algorithms can be considered to improve the accuracy of inventory orders and resolve demand-supply disparity. Cost of production at every stage of the supply chain can be easily identified as supply chain managers can gain complete visibility of the supply chain.

Are your ready to take on the transformation challenge?

The steel industry has experienced quite a boom and bust business cycle. The disarray that seems to dominate can have a direct impact on business growth. However, companies that choose to have a fighting spirit are sure to emerge victorious. 

Supply chain managers today, are being presented with a unique opportunity to transform their supply chain and their business as a whole. The choice is a simple one – transform today or forever disappear into oblivion.

About the author(s)
Nilesh Gandhi

Nilesh Gandhi is Global delivery head for SAP across major industry units at TCS. A proven leader and strategist with wide-ranging experience of over 20 years in Enterprise Application Software - delivery management, practice management, enterprise architecture and consulting, he specializes in providing delivery leadership for business transformation centric large global programs.