During the Alacero Conference attended by SteelOrbis this week, three presenters led the discussion on the 4.0 Industrial Revolution that has begun in the steel industry. Alexandre De Campos, Senior Vice President of Vallourec Group in South America; Dr. Pinakin Chaubal, General Manager of ArcelorMittal Global R&D; Dr. Jun Goh, Managing Director of Posco’s Research Institute; and Richard Oppelt, Principal Director for Accenture Strategy at Posco all hailed the 4.0 Initiatives as having the potential for better products, processes and human capital management.
The 4.0 revolution, as it was dubbed in the presentation, has resulted from increased data management systems and digitalization. As storage costs have declined, processing power has increased, and cloud connectivity has become common place, firms are moving toward big data analytics, system integrations, and greater use of artificial intelligence according to Chaubal. The new implementations will enhance coil traceability from manufacturing details to end of life recycling, for example. Chaubal stated, “China was the first to adopt the new revolution and claims systematic implementation of 70-80 percent by 2020.”
Goh added, “POSCO has adopted [4.0] at all levels and is taking account elements such as the new mobility paradigm shift (in electrification, autonomous driving, and car sharing) and changes in global energy consumption in its steel global plans along with other factors.” The research discussed forecast some growth in global steel with growth moderators, but long-term, demand is expected to remain relatively steady for 20 years. Oppelt added, “World-wide steel demand is expected to decline according to his Accenture’s model and reinforced the concept that any assumption that global steel demand will increase would be flawed.”
All panelists agreed on the fact that the shift in strategies was focusing on innovation of high strength, high corrosion, and high-performance steel products.
Finally, employment was discussed. Goh shared that in the POSCO plan they expect a 30 percent reduction in employees in 10 to 15 years not only affecting line workers but sales as well. As digital platforms are expected to increase within the industry, the role of traders is expected to evolve. Independent steel distributors were also encouraged to begin thinking along the lines of the 4.0 revolution. Oppelt stated, “Distributors need to reassess business models since producers may seek to take greater control unless distributors clearly retain control of the end demand signal.”