How AI could transform the metal fabrication supply chain

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Think about the day of someone in a metal fabricator’s front office. A salesperson or estimator opens an email inbox to find all sorts of messages from customers. They address request for quotes (RFQs), change orders, maybe reply to questions asked days (or, alas, weeks) before. Some might be on the phone, calling customers for clarification about this or that spec on a drawing, or perhaps arrange or confirm a new delivery date. Messy desks might be full of spreadsheet printouts. Walk out to the receiving dock. Someone with a clipboard, perhaps an iPad and a scanner, stands there to log in all the material coming in the door.

The plant might be extraordinarily automated, full of robotics, but what about all those manual keystrokes?

On Monday, at the Steel Market Update (SMU) Summit in Atlanta, Mustafa Zafar, director of global transformation at Kloeckner Metals, Americas, described a different reality. The metal service center, which also offers fabrication services, has special scanning devices that trucks drives past on their way to receiving. They detect Bluetooth tags (which tends to work better with metal than traditional RFID), and the coil information is directly transmitted to software.

The conference speaker described an office where the tedious tasks, those that used to require emails or other forms of manual communication, is all automated. Some people might review certain items—unusual purchase orders, certain order changes. Other than that, though, the company is moving closer to what Zafar called a “zero touch” environment. Custom software, which Kloeckner developed in-house, is driving inventory management, predicting order trends in certain locations and sectors, automatically generating POs, and communicating with mills over electronic data interchange (EDI).

The company’s digital transformation has come a long way since it launched in 2014. The goal, Zafar said, is not only to streamline the flow of information but also allow people to spend more of their time where they truly add value: building relationships and dreaming up ways to make life easier for customers, both internal (Kloeckner employees) and external.

Digital transformation is about decluttering and demystifying information, which at Kloeckner extends to customer-facing portals. There, customers can place orders and view order status, see mill certs, and other information. The company also offers Nexigen, a service that tracks the carbon footprint of orders, drawing information from where that metal came from, what processing it’s undergone, the transportation involved, and other factors.

The company’s digital transformation largely entailed custom software developed in-house, one of which includes “Kloeckner System,” which effectively eliminates the keystrokes for request-for-quotes (RFQs) that arrive via traditional channels, like emails or (yes, even in 2023) fax.

”This tool is based on AI and machine learning,” Zafar said. “Once the model is trained, as an RFQ comes in, the system recognizes the SKU and creates an order. It cuts down the time our salespeople have to go through keying in data into our system. Again, this means they can spend more time on more important tasks, like building relationships.”

Zafar also described the company’s inventory planning tool, which aims to give more intelligence to the purchasing process. “We feed in our inventory usages. We feed in customer forecasts, whatever material is on hand, any purchase orders we might have, and anything in transit. All this goes into algorithm, which calculates by product category how many weeks on hand I want to stock.”

The system doesn’t make decisions for purchasers, but it does consolidate information so that they’re no longer running various reports, putting together spreadsheets, and piecing together the data they need from disparate systems. It’s all there in one place, enhanced with an algorithm that gives them useful information.

The company’s shop floor intelligence, using Bluetooth tags, tracks exactly where jobs are. This feeds information back to sales looking for new customers and executives strategizing about the future. When information flows like that, an operation grows.

The goal is for work to flow seamlessly from one operation to the next, with no friction of uncertainty and miscommunication--within companies and between companies up and down the supply chain. Hard automation has been doing this for years. Now, it’s software’s turn, either developed in-house or by third parties. Kloeckner’s experience might be a harbinger. Just like any manual handling or processing on the shop floor, any routine keystroke—in the office, on the floor, in the quality assurance department—is a candidate for elimination as fabricators strive for that “zero touch” workflow.

The Steel Market Update (SMU) Summit in Atlanta drew professionals from cross the steel mill, service center business, and metal manufacturing business.