Bridging the Gap in Metals Enterprise Systems
The technology landscape in the metals industry has changed dramatically over the past decade. At one time, service centers had to make a choice between two alternatives: They could rely on traditional industry-neutral enterprise technology platform applications that tried, but commonly failed, to balance general functionality with the specific requirements of their industry. Or they could adopt niche solutions that were specifically designed for the metals industry, but did not integrate with other business management and reporting systems or offer the flexibility, growth capabilities and in-depth support of the more widely used platforms.
Faced with these choices, most service centers were unable to take full advantage of the benefits that enterprise systems were delivering in other industries. More recently, however, that situation has changed, with software companies building metals industry functionality directly on top of leading technology platforms offered by vendors such as Microsoft, SAP and Oracle. Often called “industry accelerators,” these solutions bridge the gap between traditional and niche systems, offering metals companies the best of both worlds.
Traditional enterprise systems
Traditional enterprise platforms were not designed specifically for the metals industry. These systems were designed to support 80 percent of business requirements that would be found in any industry. Although this point typically is viewed as a negative attribute, the fact that these systems are widely adopted across multiple industries brings advantages not found in niche solutions, such as the ability to scale as business grows, support multiple deployment options, and work seamlessly with other technologies used by a workforce.
Traditional enterprise systems allow more rapid assimilation of new businesses into the existing technology framework, instead of taking the months of work that could be required to incorporate a change in the business into a heavily customized system. Effective enterprise systems support organic growth, as well as growth via merger and acquisition activity. They allow a service center to implement at a single entity, but also are robust enough to support a multisite international organization. The availability of various currencies, time zones and languages in addition to compliance with multiple banking and reporting standards and legislative codes are key offerings in these systems.
In addition to supporting a business’s growth requirements, traditional systems typically provide the breadth to support multiple deployment options. An enterprise system must support a business today and be flexible enough to adapt to future business strategies, including new markets, products, customer requirements, and manufacturing and distribution processes. Many enterprise solutions have a 10- or 15-year life expectancy, so it is critical to consider long-term potential strategies when evaluating systems.
Traditional enterprise systems also accommodate either a single, federated deployment strategy or a decentralized strategy. Centralized systems allow companies to bring disparate systems and data together under one solution, giving management a clear and relevant view of their business operations. Decentralized strategies are especially relevant for companies looking to grow via acquisition or that contain multiple, distinct business units.
For a system to function effectively, it must work seamlessly with all of the relevant technologies employees use every day. This includes business productivity software, mobile and tablet devices, and shop floor systems. The seamless integration among these different products and technologies provides improved data reliability. This, in turn, gives management a clearer picture of the business operations and helps management make timely business decisions.
Niche enterprise systems
Although niche software solutions might be lacking from a technology platform perspective, they do offer benefits in terms of industry-specific capabilities. These systems are tailor-made to address the unique requirements of metals companies, including customer specification management, material optimization, and inventory tracking by attribute and dimension, which is vital in the metals industry because service centers do not track inventory simply by product numbers and text descriptions. Software built for the industry can define attributes and dimensions by product form (coil, bar, sheet) and manage the unlimited combinations of commonly changed dimensions such as gauge, width and length.
Niche solutions designed for the metals industry allow customer specifications to be managed efficiently. These systems allow service center salespeople to enter and track customer order specifications such as dimensional tolerances, quality requirements (for instance, AMS or ASTM), and chemical and mechanical properties. The specifications can be transferred to purchasing and manufacturing to make sure the right material is purchased or produced at the right time, in the right quantity, and to the correct specification.
Prominent niche solutions provide material optimization capabilities to help make the most of service center inventory—a vital asset in the industry. Slitting optimization tools, used to minimize scrap and maximize yield, are paramount, and niche systems have provided this capability to service centers for years.
The technology options in the metals industry have seen a period of growth and maturation in recent years. Having to choose between a traditional or niche system is a decision of the past now that leading solution packages offered by Microsoft, SAP and Oracle offer industry-specific functionality. These industry-focused systems are a robust option for service centers looking to upgrade their IT systems. Enterprise system implementations will still involve challenges for service centers, but the technology changes have made now the right time to invest in the future. .
[Software companies now offer "industry accelerators" that build metals industry functionality into leading technology platforms such as Microsoft, SAP and Oracle.]
Editor's note: This article was contributed by the experts at Crowe Horwath.
Crowe Horwath LLP, Indianapolis, Ind., is one of the top 10 public accounting and consulting firms in the U.S., providing technology solutions for the metals industry. For more information, visit www.crowehorwath.com/microsoft