METALS & MINING An Essar Enterprise © AGC Networks Ltd. 2012

© AGC Networks Ltd. 2012 All Rights Reserved Worldwide

The material contained in this presentation represents the proprietary,

confidential information pertaining to AGC Networks’ solutions and services.

Other products and brand names may be trademarks or registered

trademarks of their respective owners.

The information in this presentation should not be disclosed outside the

partner/customer organization and shall not be duplicated, used, or disclosed

for any purpose. The contents of this document are provided in confidence

solely for the purpose of showcasing the capabilities and competencies of

AGC Networks.

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Agenda

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• Understanding of Industry

• Challenges & Possible Options

• How Technology Can Help?

• Typical Steel IT Landscape

• Supporting Entire Value Chain

• Sneak Peek! Global Steel Template

• Our Solutions…Pumping Growth

• Case Study – SAP Variant Configuration

• Case Study – Factory Planner

• Case Study – Manufacturing Execution System

• Case Study – Slab Yard Management

• Case Study – Business Intelligence

Understanding of Industry

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Global steel capacity Vs. Supply Vs. Demand

Growth Outlook

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• Global Steel sector is expected to grow at a lower rate.

• The sector is expected to grow only 5% in North

America Free Trade Agreement region.

• This is due to the continued financial uncertainty and

volatility in markets.

• Government rationalization is unlikely to occur in short

term.

• Overcapacity, one of the biggest challenge.

• Traditional markets are becoming stagnant.

• Demand is shifting from developed economies to

emerging and developing economies.

• Not all players would be able to expand across borders to

capitalize on this growth.

• Increasing risk in western markets is breaking the

confidence of investors in the sector.

• Strategic realignment is the ‘demand’ of this sector.

Source: Ernst & Young Report ‘Global Steel – 2011 Trends,

2012 Outlook’ (Pub: January 2012)

Challenges & Possible Options

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Steel production is shifting

from mature to emerging

economies. There are fewer

domestic growth prospects, as

well as increased competitive

threats for steel players with

an established footprint in

Europe and North America.

Shift to Emerging Markets

A considerable cause of

volatility for steel makers is

the cost of raw materials. The

shortage of these supplies in

the market has allowed

suppliers of iron ore and

metallurgical coal to rebuild

the pricing mechanisms

through the shift from annual

to shorter-term price

contracts.

Increasing Market Volatility &

Margin Pressure

The nature of Industry makes

it difficult for the sector to

adjust quickly to changing

circumstances. There is a gap

between demand fluctuation

and production adjustments

as there is structural

overcapacity in certain

product segments.

Steelmakers need to change

their business models by

introducing greater operating

flexibility and becoming more

customer-focused in their

product mix and more

innovative in how they price

their products.

Customer Reach Steelmakers need to broaden product service offerings, focus on more profitable segments and prioritize markets to compete. It is still important to focus on existing clients.

Cost Competitiveness Steelmakers need to adopt different strategies like vertical integration, passing on the cost pressure, use of steel derivatives, optimization of capital and strategic cost reduction.

Operational Agility Steelmakers need to focus on effectively managing capacity utilization apart from bringing flexibility in their supply chain.

Stakeholder Confidence Steelmakers need to focus on stabilizing the diminishing investor confidence by neutralizing various immediate risks to the operations of the industry.

Lacking Operational Agility

Need of Evolution in Business Model

How Technology can Help?

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Customer Reach

The insights to the existing customers and potential markets can be derived using Business Intelligence Solutions. Business Intelligence solution can help: • Understand customers (potential and existing) • Understand market dynamics and opportunities • Uncover key product and market trends.

Cost Competitiveness

To attain cost competitiveness, steel enterprises are required to understand and optimize the use of working capital in entire supply chain. This can be achieved by: • Reducing / Automating non value adding

activities • Continuous measurement and optimization of

working capital across value chain

Operational Agility

Steel enterprises are required to adapt the changing environment fast as compared to competition. This demands more flexibility in the operations. • Demand driven and financially oriented Sales &

Operations planning systems empowers supply chain

• Introducing Manufacturing Execution Systems helps in eliminating inefficiencies, hence makes the processes more flexible

Stakeholder’s Confidence

Managing stakeholders has become an integral part of the business. The confidence of these stakeholders is primarily associated with: • Risk profile • Regulatory changes • Transparency in reporting Addressing these parameters in reporting while having smooth operations helps in improving the confidence.

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Typical Steel IT Landscape

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Inte

rnet

Warehousing & Transportation Systems

Manufacturing Execution Systems

Sales & Operations Planning

Advanced Planning & Scheduling

Customer Relationship Management

Retail Store Operations

SOA

Mid

dle

war

e

Sales & Distribution

Plant Operations

Production Planning

Materials Management

Financial Accounting & Control

Human Resource Management

SOA

Mid

dle

war

e

Employee Self Service

Enterprise Dashboards

KM & DMS

Advanced Sourcing

Analytics Applications

Inte

rnet

Workflow

Customer Data

3rd Party Collaboration

Market Information

Product Data Vendor Data Transaction

History Data

Warehouse

System Solutions

Management

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Supporting Entire Value Chain

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Steel Making

Service Centers

Retailing Iron Making Mining

& Beneficiation

Solution Capabilities

SAP IS – Mining (end-to-end implementation)

SAP PM

SAP Sourcing & Procurement

SAP Bulk Transportation

SAP Commodity Management

VSAT Connectivity

Mining & Beneficiation Supported Business Processes

Integration of remote locations

Optimal utilization of machinery

Integrate daily fluctuation of prices

Bulk shipment management

Operational Risk Management

Infrastructure management

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Supporting Entire Value Chain

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Steel Making

Mining &

Beneficiation

Retailing

Service Centers

Solution Capabilities Standardization of Level II & III systems EAI Solution, SAP XI, Standardized

Connectors Advanced Planning Wireless Telephony Interfacing with Weigh Bridges Standardized Costing Simulation & What If Scenarios

Iron Making Supported Business Processes

Level II & III Systems (Mfg. Operations)

Mfg. Planning and Execution

Asset Management

Demand & Supply Planning

Storage, Weightment & Costing

Logistics & Material Handling

Iron Making

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Supporting Entire Value Chain

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Steel Making

Retailing Iron Making

Service Centers

Mining &

Beneficiation

Solution Capabilities SAP IS – Mills (end-to-end

implementations) Planning & Scheduling Solutions Optimization Solutions Material Tracking Solutions What If scenarios for Cost Simulation

Steel Making Supported Business Processes

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Supporting Entire Value Chain

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Steel Making

Service Centers

Solution Capabilities SAP IS – Mills (end-to-end

implementations) Order Clubbing & Yield Optimization

Solutions RFID Solution for Tracking JIT Deliveries

Service Centers Supported Business Processes

• Scheduling

• Optimization

• Order Clubbing

• Batch Tracking

• Customer Servicing

Retailing Iron Making Mining

& Beneficiation

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Supporting Entire Value Chain

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Steel Making

Iron Making Mining

& Beneficiation

Service Centers

Solution Capabilities JDA MMS – POS & Merchandise

Mgmt. SAP SCM SAP AP/GL SAP BI/BO eCommerce using MS Web Tech. SAP CRM VMI Solutions

Retailing Supported Business Processes

Product Assortment

Merchandise Planning

Demand Forecasting

Inventory Optimization

Replenishment

Customer Loyalty

Retailing

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Sneak Peek! Global Steel Template

All processes relevant to Steel Business have been classified as Global process or Local process

and each process in the template had six key elements

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Process comprises of

Org structure and elements

Master Data Definition

Process Definition

Global

Customization

Global Developments

Security

Process requiring change on account of • Local business environment • Local statutory needs

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Our Solutions…Pumping Growth

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• Knowing the customer and monitoring changes in

demand

• Adapting fast as compared to competition

• Identifying and eliminating inefficiencies

• Evaluating players in supply chain

• Efficiently using MIS & data

• Getting integrated to suppliers and customers in IT

systems

Accelerating Processes • Taking sales and operations planning beyond the

supply chain to become demand driven and financially

oriented.

• Understanding the role of IT in optimizing operational

flexibility.

• Assessing the ability of supply chain to respond to the

last change in demand from customers.

• Making a flexible supply chain from supplier choice

through manufacturer to customer.

• Out-executing competitor to drive change through the

organizations

Enhancing Supply Chain Flexibility

• Innovations like new product introduction, product

differentiation, pricing and market segmentation

• Bringing agility in innovation process and collaborate

with stake holders

• New and specific implications for innovation and

innovation management

• Monitoring and controlling the process of innovation.

Improving Innovation Management • Monitoring efforts spent on continuous improvement

process of business support functions

• Aligning services with functions

• Making business units flexible enough to add or reduce

functions on demand

• Assessing effectiveness of organization’s business

model

Re-engineering Business Model

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Case Study - SAP Variant Configuration

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Highly individualized process knowledge and expertise led to rework overheads

Huge Material Master due to market specific variants

Long sales order processing time of 21 days led to poor order promising capability

The

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SAP Variant Configuration was selected as the solution.

Individualized metallurgical knowledge was converted into business rules.

Plant capabilities and capacities were defined in system to plan production

Entire primary and secondary steel metallurgy was brought into Variant Configuration

Provisions were made in the system to copy repeatable orders

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Achieved standardization in order processing

Order processing time reduced 21 to 2 days

Use of one configurable material reduced material master from 90,000 to 90

Curtailed data entry errors saved about 3,000 man hours

Price determination process was automated

The client is an end-to-end producer of steel products with a footprint that straddles 5 continents –

Asia, Africa, Europe, the Americas and Australia.

The client commands uninterrupted access to some of the world’s finest iron ore deposits. Its products

find wide acceptance in highly discerning consumer sectors such as automotive, white goods,

construction, engineering, hydrocarbon and shipbuilding.

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Case Study – Factory Planner

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The

Ch

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There are many possibilities available in planning, and hence a variety of possible solutions. In order to stay competitive, client needed an integrated planning system across the production lines. It had set the following goals:

Maintain low inventory

Hit high productivity, short and infrequent downtimes and zero waiting time

Maintain tight customer deadlines

Balance work load

The

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The technical team reviewed many solutions in the market to match with the requirements. Team selected ‘i2 Factory Planner’(FP) as the solution.

Some features available in Factory Planner are:

• Just-in-time inventory planning and assembly coordination

• Resolving the capacity overloads

• Scheduling of tasks on work centers

• Quoting orders delivery dates

Be

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its More frequent planning, based

on the business requirements

Significant reduction in defaults in delivery

WIP started movin quickly, preventing problems like aging, rusting, scaling etc.

Improved manufacturing and dispatch compliance

Improvement in manufacturing lead time

Tight WIP control and improved WIP profile

Improved Finished Good inventory turns

The Client is one of India's largest exporters of flat products. The site is 4th largest single location flat

steel plant in the world.

The casting of slabs is planned periodically, taking into account the orders, the slabs stocked in the

slab yard and knowledge about the status of the casters and upstream facilities. Due to many

variables in planning process, it was a complex, time consuming and crucial activity.

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Case Study – Mfg. Execution System

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The plant was dependent on Islanded legacy systems, running on Mainframe Technologies. Manual effort was required to integrate data. Challenges faced were:

High human intervention

Low production rates

High dependency on paperwork

Non-integrated information

No real time visibility

Lack of analytical reports

The

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After review of manufacturing operations, Automation team implemented the solution with following key features

User friendly intuitive GUI system was developed

Scheduling of input material in system

Production data recording in the system

Defect recording was started in system

System was integrated with other process interfaces to comprise the complete material information at shop-floor

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95% Reduction in shop-floor paperwork

5% increment in material salvage due to system based real time data availability

Implementation of hold logic led to better accountability of NCO, Diverted and Prime Material

System based scheduling & inspection enhanced timely readiness and quality of material shipments

User friendly GUI enabled shop-floor person to use it with ease

The Client is a fully integrated steel producer based in Sault Ste. Marie (Ontario) with a current

production capacity of 4 MTPA. The plant specializes in providing total steel solutions to North

American flat roll customers.

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Case Study – Slab Yard Management

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The client was suffering from poor customer fulfillment Including wrong material dispatch, delayed material shipment and high logistics costs. Challenges faced were:

Complex material movement

Lack of proper tracking system

Tardy inventory book keeping resulting longer truck turnaround times

The

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After understanding client’s Yard management process, team implemented a solution with following key features

A flexible, user configurable application with web based reporting; integrated with hand-held devices

Implemented strategy based storage allocation rules which benefited the users to find out the required slab quickly.

SMS based searching and reporting capability was built in the application.

Visual charts and graphs were developed in system for easy slab tracking.

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Elimination of line stoppage due to lack of material traceability

Reduced truck-turnaround time

Elimination of time consuming searches

Reduced errors synonymous with prior manual systems

Reduction in wrong material dispatch

Reduced delay in material dispatch

The Client is one of India's largest exporters of flat products, exporting to the US, European, South

East Asia and the Middle Eastern markets. The client is globally-renowned Steel Corporation with a

production capacity of 14 MTPA. This is 4th largest single location flat steel plant in the world.

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Case Study – Business Intelligence

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The client has a complex application-architecture with multiple software products running simultaneously. Different technologies are implemented to support the complex manufacturing processes. The challenges faced were

Single view of all the KPIs was not available

End-to-end management of supply chain

Analytical reports on the operations was not available

Multiple versions of the truth were not giving the clear picture of operations

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Following solutions were implemented

SAP Business Warehouse

Business Objects

Enterprise Portal offered by SAP

As a part of pre-implementation assessment phase KPIs were identified.

A proof of concept was created and a mock report was presented which ultimately led to the implementation of SAP BW.

Be

nef

its Achieved consistency in KPI

definitions organization-wide

Comprehensive dashboards to monitor and measure performance facilitated timely and strategic decisions

Reduced time and resources required for data preparation resulted in reduction in TCO for MIS teams

One version of truth created a single and reliable reference for reviews by the management teams

The intuitive reporting layer of the BI platform helped the users become self sufficient on reporting

The client is an end-to-end producer of steel products with a footprint in most of the continents. It is the

first among the players in industry to setup an end user distribution chain for steel products. The

company manufactures flat carbon steel products ranging from iron ore to finished goods targeted at

automotive, white goods, construction, engineering, and shipbuilding industries.

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Contact Us: For any further information, please contact us at ebssales@agcnetworks.com