MOTIVATION FOR STEEL WORKS COMPUTERIZATION AND IN'l'EGRATION

Every steel producer finds itself in an environment consist-ing of capital resources, manpower availability, raw material availability, demands for steel products, market situation and geography. Each of these factors influences the type of steelmaking organization required for successful operation, and this in turn affects the type of system for planning, scheduling and control best suited to the company's needs.

In many cases, the environment is not constant, e.g. the

demands for steel can vary from time to time, and consequent-ly the ideal system must be capable of adapting to the chang-ing circumstances.

Fully computerized works may be more economical than manual-ly operated plants for the following reasons: fewer employees, higher equipment productivity, decrease of inventory stock, improvement of delivery dates, ability to handle small orders, product quality improvement, and so on. These factors are

particularly important for the steel manufacturers in a mar~et

oriented .. economy due to the competitive situation. But the additional cost of a fully computerized works is very high

and this cost must be considered in the evaluation of alternative systems.

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-Capital Resources

The amount of capital available to a company is a function of the resources available in the parent country and the business health of the particular company. A restricted availability of capital may have a major influence on systems design and im-plementation. Thus, i t may well be that a fully automated works is more economical than a manually operated plant, but if there is insufficient capital to build such a plant the whole question is academic.

Manpower Availability

Many companies may appear to be moving towards a higher level of automation solely to save manpower. Undoubtedly, ,this is one motivation in countries where manpower costs are high but i t is by no means true universally, nor are costs the only reason for replacing man by machine.

The large new works which can produce 10 million tons per annum or more are mostly built in areas where there are in-sufficient numbers of people, let alone suitably experienced people, to even contemplate staffing such a works for manual operation. The automated works requires far fewer workers skilled in the steelmaking art and the main manpower problem is resolved by hiring young college graduates to operate and to maintain the computerized systems.

Considering steel works of small and medium capacity, these have been in the past predominantly manually controlled. The trend is clearly towards more and more computerization,

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-ing with the control of the technological processes, and extend-ing to computer applications in the field of management informat-ion and in operatinformat-ions control. This situatinformat-ion is most typical to companies in the USA and in European countries.

In some cases, companies computerize their plants because they cannot recruit and retain sufficiently highly experienced staff and because performance suffers through the need to continually train new staff. With a computerized plant, the very best prac-tice can be built into computer programs and control systems and a consistently high standard can be maintained.

Raw Material and Fuel Availability

All forms of material and fuel can be provided anywhere, at a

price~ The situation is likely to be quite different at diffe-rent works and whatever is costly and/or represents a signifi-cant expenditure will attract the attention of efficiency seek-ers. For example, many companies employ sophisticated selection and transportation cost minimization programs to determine a lowest possible cost solution to the problem of obtaining ad-equate quantities of suitable ores. There are examples of

computer controlled distribution and usage of electricity which results in avoidance of penalty charges (for highly fluctuating loads) while still maintaining high production rates.

Countries, which do not have their own ore and coal must import them, often from great distances, and hence, must compensate these additional expenses by decreasing production costs in order to remain competitive with steel manufacturers in other

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-countries. Thus, a country like Japan, not having its own raw materials for steel production, has developed the most advanced

computerized steel plants.

Demand for Steel Products

The manner in which a steel company receives its orders varies a great deal and ranges from a fully planned situation, perhaps over a one to several year period ahead, to a completely free competitive market situation.

In a completely planned situation there is a little need for a rapid response to, for example, quoting competitive delivery times. There must still be an efficient order entry system but speed is not a prime requirement.

For steel manufacturers in a market oriented economy, computer-ization is needed not only to improve the production efficiency but also to achieve prompt and effective processing of received orders. Thus, the order entry system should be able to respond quickly to enquiries about price, delivery date, etc., other-wise the company is liable to find the order has already been placed and thus lost. That is to say that an offer of price and promised delivery date must be available almost immediately and the probability that the delivery promise will actually be kept, must be very high.

Geography

The locations and distribution of steel works within a company mostly affects communications, both physical movements and

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-information transmissions, and will also have an influence on the level of computerization. The planning and control systems must operate with a speed and accuracy compatible with the company's environment and needs. For example, a company that is physically dispersed, e.g. a head office in the capital and plants in remote industrial areas, must ensure that there is a means of rapid communication between the important offices and functions.

The complications of scheduling product shipments depends on the geographical distribution of customers and the mode of shipment. Thus, if a company delivers most of its products by boat, the system which ensures that there is full boat load scheduled and that items are actually at the dock side at the proper time for loading must work to a higher standard of

precision than the delivery system for a company using lorries for delivery by road.

Summary

As can be judged from the above discussion, there are a number of motives for computerization and integration of steel works.

No general rule can be suggested for the decision-making con-cerning the degree of computerization, but the premise is that a company will be encouraged toward increased computerization if a) demand is greater than capacity, in which case automation would increase effective capacity, b) manpower is expensive, and c) i t is market oriented, in which case, production effi-ciency and the speed with which an ordered item moves through

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-the works are important. In general, there is a continuing trend toward more extensive and more sophisticated computeriz-ation of the steelmaking system ranging from plant level

control through to management information and decision funct-ions.