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.
Support Value-Added Services and New Business Models
Metals companies have recently shifted their focus from just selling physical materials to providing complete solutions. This can involve collaborative development, product configuration advice, product usage advice and even more advanced scenarios. In order to achieve a competitive advantage, companies will use experience management to assess the ability of their investments, such as service or product recommendations.
To better understand this, let’s consider there are two businesses where:
- 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:
- Schedules and consequences of steel manufacturing vary.
- Customers receive no or a limited number of notifications for deviations.
- Individual players for each phase in the metal value chain.
- Product data is gathered in a detailed manner during the manufacturing process.
- Information is siloed in separate local production or quality systems.
Although detailed information exists at each stage of manufacturing, metals firms are unable to fully exploit it since it is disconnected. As a result, insufficient integration of their traditional system resulted in a high involvement of manual processes.
Now let’s see about Company B, which uses an SAP-ERP system where:
- The specific needs of clients are analysed so that exact advice can be made.
- Creates the perfect product at the lowest possible cost and knows the details of each product unit.
- Advice to the consumer is provided on how to use each individual product unit (roll, batch).
- Customer performance rates are improved by gaining knowledge of the whole value chain.
- Proper planning, simulation, and forecasting of the most efficient schedule and operation are possible.
- All customers are provided with proper product information.
- Tracking and tracing movements all the way back to their roots were achievable.
Overall, Company B’s Intelligent ERP system [RISE with SAP Package] adds value to their interconnection. They generated new business, boost market share, deliver more product insights and build a more sustainable revenue stream as a result of this transition.
Top Value Drivers
The major value drivers in the metal companies post successful deployment of SAP S/4HANA are:
- Gaining a competitive advantage.
- The costs of operations are lower.
- Increase In revenue growth.
- An increase in the service profit margin by 3%–10%.
- The time it takes to process subscription invoices has improved by 25%–30%.
(Note: Data was taken from SAP’s statistics)
Now you may be asking, “How can RISE with SAP help us?”. Here are the primary business capabilities they offer to assist you in reaching your objectives:
- Use real-time data analysis to widen the breadth of client interactions and raise the amount of money that can be spent on them.
- Through collaborative networks, move from materials to intelligent solutions and new business models.
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!