Just as the introduction of computers and digital electronics in the 1970s ushered in the third industrial revolution, the digital landscape of automation and data exchange we now find ourselves in could easily be considered the brink of the fourth industrial revolution, or in other words, Industry 4.0. Either we take advantage of the opportunities of Industry 4.0, or we lose touch with the changes and fall behind.
As Charles Darwin said, “It is not the strongest of the species, nor the most intelligent that survive… It is the one that is most adaptable to change.”
Gartner has published data showing that currently 75 percent of companies are using the Internet of Things to become more efficient and responsive to their customers. As well, 40 percent of industrial manufacturers use digital technologies to monitor products sold to customers.
You don’t have to look far to realize how digital technologies are changing our lives. Take, for example, the Apple iPhone, which is just a little over 10 years old and yet has already given all of us the ability to have AI-enabled Siri in the palm of our hands. Amazon Alexa, Google Home and Microsoft Cortana, which have all brought voice-activated smart technology to the average family home, are also developing voice-activated capabilities for the enterprise and corporate environments.
Before I get too far into the benefits of the cloud, let me be clear that we are not currently digital trendsetters at Samuel, Son & Co. In fact, as I’m sure a number of long-running manufacturing businesses can relate, we have found ourselves in a bit of a time capsule concerning digitization. However, rather than being scared away by the changes, we’re looking forward to the unique advantage presented by being able to upgrade to technologies that are miles apart from what they were even five years ago.
Our current ERP systems are old and disparate, with over 14 different systems on green screen, plus tier 2 legacy ERP systems and AS400 RPG-based code. This outdated set-up is changing soon, however, with our dedicated ERP design team working hard to transition our entire company to the Microsoft Azure Cloud using their ERP-Dynamics 365 platform.
Our first go-live with the new system is scheduled later this year. This ERP system, as wide-scale and transformative as it is, will be just the first step in our journey to being cloud-based as a company and will be our foundation for the exciting road ahead. Let me describe a few of these other cloud-based projects:
Artificial Intelligence enables computer systems to perform tasks that typically require human intelligence, including visual perception, speech recognition and decision-making. Inventory management in our industry is paramount to success; you either have too much and suffer the cost of working capital tied up in inventory, or you don’t have the right product at the right time to ship to your customer.
To address these challenges, we have been working with Google to use its AI platform to develop an inventory planning and demand forecasting model, which will also eventually use an intelligent quoting model. When completed, this technology will help us significantly improve our inventory planning and management, cutting costs and allowing us to always have what our customers need when they need it.
Internet of Things
The Internet of Things provides the ability to monitor products and equipment remotely and collect data from sensors within our plants. At Samuel, we have more than 300 cranes across North America, and the cost to maintain those cranes is significant.
To improve efficiencies, we have now installed several autonomous cranes from a Canadian company, Carego, with great success. We have placed sensors on these autonomous cranes that use IoT to bring data into our Business Intelligence modules and MS Azure Cloud services. This data enables machine learning to monitor the use of the cranes, the cycles, the stress and strain of the loads, and to notify us if there has been an anomaly that can impact the function and safety of the crane and optimize the maintenance program. This program will also be expanded to other crucial manufacturing equipment in the future.
Robotic Process Automation
Robotic process automation uses software to execute business processes in a controlled manner that are repetitive and audited, all in a way that requires very limited human participation. McKinsey and Company estimate 85 percent of a typical firm’s 900-plus business processes can be automated.
As part of our journey to the cloud, we intend to use RPA for all repetitive non-value add work processes. As examples, the capabilities within just cash flow management and credit functions are enormous.
E-commerce has been around for some time, and in our industry, people generally look to Kloeckner as the leader in digital transformation around customer interaction.
At Samuel, our strength has always been around our strong customer relationships, consistently high product quality, strong technical support and a wide variety of products. However, as with technology, the demographics within our industry are also changing rapidly.
Development of a common customer experience digital platform is imperative to allow Samuel to deliver new customer interaction capabilities that meet the needs of the generations that have grown up in a digital-era, where the use of technology is second nature for their interaction with businesses. On the cloud and within our new digital framework, it is much easier to launch and manage a unified digital commerce suite of solutions enabled through multiple channels, including mobile, allowing us to adapt to the needs of our customers.
Samuel is the oldest manufacturing company in Canada and the largest private service center in North America, and yet even with that success, the pressure to become a digital business is ever-present. It all comes down to disrupt or be disrupted – and being disrupted isn’t about to happen on my watch!Bill Chisholm is the president and CEO of Samuel, Son & Co., Ltd. He has spent his entire career in the steel industry, working at Dofasco and ArcelorMittal before joining Samuel.