For hundreds of years, metals companies have been innovating to improve material composition and production methods. The goal of this ongoing optimization process is to make metal materials lighter and stronger. Thus, leading metals companies have recently announced plans to anticipate and balance real-time demand and supply, reduce energy use, maintain robust supply chains and improve customer experience.
By focusing on vision 2025, metals businesses will shift their focus from pure production to a more collaborative model, by using their expertise to guide an industry network and provide services. These services will be built on highly customised items that are enhanced with digital data. But have you ever wondered how these services can be accomplished with an Intelligent ERP system? If you’re curious to know about the answer, keep reading the blog until the end.
Strategic Priorities for Metal Companies
The importance and values of Digital Transformation have been recognised by leading metal companies. Thus, they are concentrating on five strategic priorities outlined below in order to transform their organization into an intelligent enterprise.
- Achieve Customer Centricity
- Connect and Automate Enterprises
- Run Smart Factories and Digital Networks
- Support Value-Added Services and New Business Models
- Build a Responsible and Sustainable Business
In order to achieve this, Intelligent technologies embedded in RISE with SAP framework acts as a key-value contributor to enabling metals companies to become intelligent enterprises. Adapting to this enables your organization to redesign entire business models, processes, and products by driving enterprise digitalization through product development.
Connect and Automate Enterprises
In traditional engineer-to-order contexts, providing solutions that precisely meet the needs of a single customer was usual. But nowadays, manufacturers must now be able to successfully collect all client requirements, as well as forecast, plan, and create in an ideal manner at the lowest cost exactly what customers have requested. To accomplish this, all products and process information must be stored in a single location, and all business operations must be completed efficiently and monitored continuously.
To better understand this, let’s consider there are two businesses namely:
- Company A uses a non-SAP ERP system
- Company B uses an SAP-ERP system
As Company A’s entire business structure is governed by a non-ERP system, these were the pain points faced by them:
- Marketing and product management have pre-defined product variants, so adding new variants is difficult.
- The catalogue of product variation is restricted to a limited number of options.
- Every variant exists as a separate product, resulting in inconsistencies and errors in downstream variant management.
- A higher integration effort is required due to a unique design, engineering systems as well as bills of materials (BOMs).
- Each pre-defined variant has its own manufacturing BOMs and routing, making it require human handling of BOMs, routings and engineering adjustments.
- Manufacturing variants is inefficient, expensive and prone to errors.
As a result, insufficient integration of their traditional system resulted in a high involvement of manual processes.
Whereas Company B uses an SAP-ERP system, which enables them:
- Rules, analytics, and algorithms are used to manage product and production capacities.
- The right configuration is identified by using intelligent technologies.
- The entire process of design, engineering, manufacturing and sourcing is integrated.
- In the event that machinery failures, machine learning and image recognition aids in the ordering of the appropriate spare parts.
- For flexible and efficient operations, production planning and execution are intertwined.
- Manufacturing dashboards provide a complete picture of what’s happening in the company.
- Exceptional management helps to keep the focus on the most critical customer requests.
- When customised products are supplied as rapidly as standardised products, the satisfaction of customers increases.
Overall, Company B’s Intelligent ERP [RISE with SAP Package] system provides their customers with individualized products faster and at a lower cost with a 360-degree view of past and current customer activities.
Top Value Drivers
The major value drivers in the metal companies post successful deployment of SAP S/4HANA are:
- Time to market is reduced.
- R&D costs are lower
- Revenue from new goods is increased.
- 10-20% Reduction in manual rework through better product configurations
- 10%–20% Increase in on-time deliveries
- 10%–12% Reduction in total logistics costs
- Up to 10% Reduction in total manufacturing costs
(Note: Data was taken from SAP’s statistics)
Now you may be asking, “How can RISE with SAP helps us?”. Here are the primary business capabilities they offer to assist you in reaching your objectives:
- To add value to clients, it ensures that orders are completed quickly and custom solutions are delivered quickly.
- Allow automation and connected processes to drive efficiency and gain a competitive edge.
To conclude, using SAP software for metal companies helps you gain competitive insights into your operations, increasing efficiency and agility while simplifying operations from procurement to manufacturing, order administration, distribution and transportation.
Own your tomorrow with a guided journey and outcome driven practices of RISE with SAP. To know more about the industry-specific solution, do get in touch with us!