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Guest Editorial

Metal fatigue

Written by By Kevin Ameche, president, Wolcott Group LLC

December 2021 - The metals industry has a long history of dealing with volatile materials costs, but the added strains of skyrocketing shipping costs and ever-changing lead times create unprecedented challenges. Disruptions in your supply chain cascade through every aspect of operations, undermining profits and threatening critical customer relationships.

How does your organization respond when a supplier changes the price or extends the lead time again? Does the new data point flow through the system, automatically making adjustments down the line? Or does that critical piece of information need to be entered many times—in multiple systems, spreadsheets and documents?

Data has become the lifeblood of business and can be harnessed to support profit-saving agility. The continuous flow of data through the entire organization is critical to keeping pace in a constantly changing digital world. Fortunately, it is more affordable and easier to connect your company’s data than ever before.

The power of connected data

In metals supply chains, manual processes simply can’t keep up with the inputs there are from upstream and downstream variables. By consolidating all relevant data from both internal and external sources (like suppliers and outside processors), organizations can begin to make agile decisions in purchasing, scheduling and production.

Analytics applied to a comprehensive set of business data allow organizations to monitor supply chain activity and recommend action downstream within defined constraints. Often referred to as “intelligent supply chain” and supported through cloud-based business management systems, data analytics empower metals operations to:

• Track materials with precision, including pricing and delivery changes.

• Automate job routing to optimize the matrix of materials and resources.

• Support accurate quoting to allow your sales team to set realistic expectations.

• Deliver relevant, real-time information to decision-makers.

The dimensional, chemical and physical attributes of materials, combined with the range of processing options, make agile data management even more important. The matrix needed to accurately forecast, quote, schedule and deliver orders is more than legacy ERP systems or spreadsheets can handle. Only analytics built on complete data—gathered from all relevant sources and combined in the cloud—can provide the instant and dynamic computations needed to outcompete one’s peers.

Intelligent supply chain for all

In the not-so-distant past, intelligent supply chain was only possible for the big players. Large organizations could dedicate IT resources to integrate data sources and host systems in expensive cloud services. Today’s cloud services are accessible and affordable for metals businesses of all sizes.

Using cloud-based ERP as a bridge to centralize data and augment current software systems, organizations are combining data from suppliers, legacy systems and outside processors. Connected data provides purchasing agents and production managers the clear visibility into inventory, orders and actual usage to respond to changing material costs and availability.

With timely, accurate data shared across functions, purchasing agents can place orders with precision, fully aligned with production scheduling. Automated job routing will optimize the matrix of materials and resources to help production managers keep orders flowing. By connecting materials and processing data from sales through shipment, an intelligent supply chain can:

• Allocate inventory at order entry and automate routing of jobs through the entire production process.

• Support digital workstations for operators to enter actual materials usage and track scrap.

• Manage materials required by outsourced processors.

Centralizing supply chain data in the cloud is the first step in digital transformation for many organizations. Productivity soars as employees take full advantage of the data flowing across the supply chain and production. People connected to processes, insights and cross-functional team collaboration make better decisions and contribute more to the bottom line.

Create an agile business

The volatility of the global supply chain is likely to become even more extreme. Those agile organizations ready to respond and pivot quickly to change and disruption should thrive. With an intelligent supply chain, key employees—outside salesperson, purchasing agent working from home, production scheduler in the office, operator on the shop floor—will have the information they need to better serve customers and protect profits.

Kevin Ameche, president and co-owner of Wolcott Group LLC, has spent 30+ years as a technology executive in the metals and manufacturing sectors.

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