How digital and analytics can unlock full potential in steel

Our recent survey of 30 leading global metals companies indicates there are five main factors to successfully scale digital and analytics.
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Metals manufacturing companies have been successful in achieving impact at scale from digital and analytics. This was recently highlighted when the World Economic Forum selected four steel players 1 as Industry 4.0 Lighthouses among a total of over 50 organizations across all industries.

To better understand what the metals industry is doing to capture the digital opportunity, we surveyed over 30 leading metals companies across the world on their digital and analytics journey (Exhibit 1).

The majority of surveyed metals players have a digital program running and  see it as top strategic priority.
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The survey indicates that, although the majority of players have already rolled out digital and analytics programs over the past few years and started to generate impact, a lot of potential still remains untapped (Exhibit 2). Our research indicates that there are five main success factors to scale digital and analytics. They set bold targets and strategies; they invest; they set up a flexible data and tech architecture; they build skill sets; and they set up the right governance behind data and analytics programs.

We observe a big disparity in realized impact and significant potential remains untapped for steel companies.
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The survey indicates that process digitization, advanced analytics, and robotization and automation are emerging as the biggest opportunities for impact, whereas new business building has had limited application until now (Exhibit 3). Though all the steel companies realized value across the value chain, most of them drew significant impact from process control in production/manufacturing as well as maintenance and engineering areas.

Metals players are capturing opportunities primarily across three digital levers and along the full value chain.
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As per our research, robotization and automation is creating value where impact originates from new next-generation sensors and better process control loops. The players that have invested in automating their process control system have made significant gains in yield and quality improvement, reducing their overall energy consumption and maximizing throughput.

The survey clearly highlights the unprecedented impact from digital and analytics application in steel that traditional approaches could never achieve. According to our view, companies that successfully harness the potential of digital will be the first to capture breakthrough increases in top-line revenues, capture the next 10–15 percent of cost improvement, and leapfrog ahead of the rest of the industry. However, digital transformations can fail easily ... Most of them get stuck in the digital use case “pilot trap” as they focus on deploying digital use cases (Exhibits 4 and 5). To prove successful, digital transformation should take into account three key areas: business, organization, and technology, as well as return-on-investment payback mindset with CxO attention and sponsorship.

Digital leaders share a common set of enabling characteristics.
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Top five themes that companies in the pilot trap group would do differently to scale up digital.
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