01 November 2002

Realizing the Promise of Information Technology in Steel Service Centers

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Article from: Modern Metals Magazine November 1, 2002  Brody, Daniel and Weymouth, Peter  COPYRIGHT 2008 Pixmission, LLC

A sign on the office wall of a past client’s Chief Information and Technology Officer proudly declared “I.T. PRODUCED ZERO TONS OF STEEL THIS YEAR.” While at first this seemed more sarcastic than helpful, we’ve come to realize that this statement describes the true role of Information Technology (I.T.) in the world of steel production and distribution. I.T. does not run a service center—it exists primarily as a value-added service, which delivers tools that allow higher levels of efficiency, customer service and control. It is essential that I.T. does not become an impediment to performance improvement and growth.

Unfortunately, a large number of service centers today have yet to realize much of the promise that I.T. offers. Given the tightened purse strings seen throughout the steel and I.T. industries in recent years, many smaller companies have even avoided investing in I.T. at all, or have built homegrown systems to address immediate needs. This approach rarely returns the kind of value a commercial system offers, yet often costs nearly as much (or more) in the long run as obsolescence creeps in and maintenance costs escalate. There is a large gap in terms of capability, total cost of ownership and performance between the tier-one…