What Industry 4.0 Means for the Steel Industry

Industry 4.0 and Steel
Maybe you’ve heard of “Industry 4.0.” Odds are good that even if you have, you’re not entirely sure what it is or what it means to those of us in the steel industry.  While it’s revolutionizing some industries, others are lagging behind, either because there isn’t pressure to adopt these cutting edge processes and heavy investment seems unnecessary, or because it’s difficult to adapt existing Industry 4.0 technologies in a meaningful way to the industry.  

In the steel industry it has been a bit of both.  With multimillion dollar plants and good profit margins, pressure is low.  With a global supply chain that was running like clockwork prior to 2020 and relatively old and established technologies dominating the industry, there didn't seem to be a lot of room nor an urgent need for this kind of development.

What Exactly Is “Industry 4.0?”
Industry 4.0 refers to an emerging model of organization of industrial processes using smart machines and digital communication between machines to improve control of the supply chain, efficiency of production, and introduce new automations. The value this organizational philosophy offers through the product life cycle and manufacturing systems that support the new IIOT (Industrial Internet of Things) is unprecedented. The industries that successfully take advantage of this approach are taking advantage of all that information technologies make possible.

Industry 4.0 encompasses the entire supply, production chain, and product experience including product design, sales, inventory management, planning manufacturing, quality control, product engineering, and both customer and field service.  As a complete paradigm shift, this fourth wave of the industrial revolution offers as dramatic a generational improvement as computerization and the assembly line had when they were introduced in the 20th century.

Mechanically, this is a process to leverage the intensive use of the internet and cutting-edge technologies such as machine learning, with the primary aim of developing new, smarter industries that are more respectful of the environment and production chains that are more transparent to manufacturers and consumers alike. 

In short, Industry 4.0 is a way of detecting opportunities for improving efficiency and streamlining supply chains with intelligent automations that don’t rely upon human judgement to make decisions using machine learning.

How Does This Affect the Steel Industry?
One of the greatest pain points in steel right now is the combination of logistics problems brought on by the freight crisis and labor shortfalls that have resulted from the spread of Covid infections and governmentally driven quarantine protocols.  These are both problems that Industry 4.0 is perfectly suited to help with.  

Supply chain and logistics management can be automated by AI decision making models based on the real world data reported autonomously by hundreds or thousands of connected machines over the internet.  This effectively solves much of the freight problem, in terms of added predictability of supply and delivery chains.  Of course, this cannot fundamentally alter the reality of the inflated costs of freight, but smart investment in automated logistics will make such a crisis less of a problem by reducing its impact on production and relegating the problem to one of pricing to account for the additional costs (which Industry 4.0 can also help with by analyzing real world costs, competitor pricing, and more). 

New and sophisticated automations can reduce plant reliance on manual labor enough that labor shortfalls won’t stagnate production when they arise.  Humans, especially engineers and operators, will always be necessary for any serious manufacturing process, but the fewer specialist and generalist labor is needed to meet minimum requirements, the less downtime plants can expect, even under the worst labor conditions.

In addition to these immediate and obvious difficulties, Industry 4.0 provides the robust data and insights needed to make major refinements to your manufacturing process, increase safety for employees, speed up production, and find carbon reduction and energy savings opportunities with the deployment of sensors throughout the production process.  If you want to learn more about these opportunities, you can watch the short video from WorldSteel.org below or read this comprehensive overview published by MDPI.


 [video link: Steel rises to the challenge of Industry 4 0 (https://youtu.be/mjiezzfeDvE)]

The bottom line is that as we move into the middle of the 21st century and the demand for greener, more efficient steel rises further, those who haven’t made investments in Industry 4.0’s paradigm shift are going to fall behind.

How Is FRC Participating In the Revolution?
FRC Global has invested in an intuitive ERP (Enterprise Resource Planning) system that has not only helped us manage production and supply chains, but also increased innovation, efficiency, and transparency across the board.  We use this system to help us manage many elements of our international operations as we continue to innovate and grow as a global vendor and developer of great steel supplies and technologies.  Ultimately, we recognize that by adapting to this new philosophy we can better support our clients, which is always our priority

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