it strategy @ thyssenkrupp steel · 9/11/2012 · it strategy @ thyssenkrupp steel sep 11th, 2012...

ThyssenKrupp Steel Europe

Dr. Michael Kranz – Mannheim, Sep 11th, 2012

IT Strategy @ ThyssenKrupp Steel

IT Strategy @ ThyssenKrupp Steel Sep 11th, 2012 Dr. Michael Kranz 2 ThyssenKrupp Steel Europe

Steel Europe

Sales: €12.8 bn Employees: 28,843

Steel Americas

Sales: €1.1 bn Employees: 4.060

Materials Services

Sales: € 14.8 bn Employees: 36,568

Stainless Global1)


Elevator Technology


Plant Technology


Components Technology

Sales: € 6.9 bn Employees: 31,270

Marine Systems


ThyssenKrupp 2010/2011

Sales € 49.1 bn EBIT: €1,762 mn Employees (September 30, 2011): 180,050

Group structure

Materials Division Technologies Division

1) Discontinued operations, effective September 30, 2011 Inoxum


Steel: Company profile

Key figures Steel Europe 2010/2011 Sales €12.8 bn EBIT €1,133 m Employees (30.9.) 28,843

Operating Units

Volumeplayer

Nicheplayer

Key figures Steel Americas 2010/2011 Sales €1.1 bn EBIT €(1,071) m Employees (30.9.) 4,060

Focus on high-quality flat steel products

Sustainable value enhancement

Customer orientation

Prozess - Innovation Employees Process

excellence Growth

Key strategic elements


Steel Europe pursues “Large Scale - Multiple Niche“ strategy

Multiple Niche

Large Scale

• Competitive processing costs

• Secure position in volume

markets

• Diversified high-grade

product portfolio

• Exploiting of profitable niches

• Compensation of market

volatility and improved risk

profile

• Metallurgy • Industry • Auto

• Rasselstein • Hoesch Hohenlimburg • Electrical Steel • Tailored Blanks • Color/Construction • Heavy Plate


Sustained economies of scale

Optimum plant configuration

Optimum specialization and logistics of downstream activities

Short distances to key customers with long-standing relations:

Efficient Operations & Customer Proximity Business Model ThyssenKrupp Steel Europe

21 % 41 %

38 %

59 %

18 %

23 %

250 km

500 km

> 500 km

Sales volume

Customers

Duisburg


High-value added products strengthen market position Sales breakdown flat products Steel Europe 2010/2011 Figures in %

Full product range in flat carbon steels

Permanent development of new grades and products

Joint R&D with major customers

secures dealing in a premium market

Cold strip

Coated products

Hot strip for electrical steel

Tinplate

Construction

Tailored blanks

Hot strip/ narrow strip

Medium wide strip

Heavy plate

8

15

8

7

8

34

12

2 6


2.6 km 6.5 km

4.8 km

3.8 km

1.3 km

ThyssenKrupp CSA

Coking plant: 1.9 m t/yr

Sinter plant: 5.7 m t/yr

2 blast furnaces: 5.3 m t/yr

Steel shop: >5 m t/yr

Power plant: 490 MW

Sepetiba Bay, Santa Cruz,

Rio de Janeiro, Brazil


ThyssenKrupp Steel USA

Site on the Tombigbee River, Calvert, AL, USA

Hot strip mill: >5 m t/yr

up to 74” width / 1” thickness,

7 stands

Tandem/cold strip line: 2.5 m t/yr

4 galvanizing lines: 1.8 m t/yr


Factors to influence IT Strategy

IT Strategy

Business Strategy

Regional Aspects

Technology (IT Trends)

Employees

(Social Trends)

Corporate (Governance, Compliance)


Focus on high-grade flat steel products



Growth Employees Innovation Process

excellence

Starting situation


low high

low

h

igh

Efficiency

Efficiency

Working together with Business towards success

IT without effect

unbalanced towards users

unbalanced towards IT

IT strategy and roadmap


IT‘s task is to enhance IT‘s value proposition

100 %

Run

Percentage distribution of IT costs (schematically)

Change

Run

Optimize

Invest


IT Megatrends 2012


Regulation framework of the Group IT Levels of standardization and harmonization

ThyssenKrupp AG wide Solutions

(e.g. IT Infrastructure, Platforms, Identity, Directory, Networks, Workplace, Office, Messaging, HR Solutions, Business Service Solutions)

BA Steel wide IT Solutions

(e.g. Planning System, BI)

Steel Production IT Solutions

(i.e. specific Template, e.g. Steel Europe AG)

Location specific IT Solutions

(e.g. MES)

Production line

(i.e. Level 2 Systems

…

Production

line

… Steel

Location

Regional Templates

(e.g. CSA, TKS USA)

Niche Player

Templates

(e.g. RA, ES, HHO)

Rea

l-T

ime-

Req

uir

emen

ts

Sta

nd

ard

iza

tio

n R

equ

irem

ents

Other BA

… Other

BA



Electrical Steel Hoesch Hohenlimburg

Rasselstein

Other Companies

Steel Europe

TK AG CIO

BASE CIO Office

BA SE/AM CIO

… CFO

CEO

…

TK level

BA level

OU level

KU level

Dotted-line responsibility, includes ▪ Functional managerial authority ▪ Incentive co-determination for functional managers ▪ Serious say on staffing

Business Area IT – Current state Governance & Organization

TK CSA TKS USA

CFO

CEO


Business Area IT – Current state Governance & Organization

BA CIO Office

IT Governance Board (IGB)

BA SE/AM CIO

IT Control Board (ICB)

BA SE/AM CFO

Architecture and Blueprint

Project

Portfolio Management

Skill & Resources

Management

IT Controlling

Information

Security

Contract &

License Management

IT Innovation &

Technology Management

IT

Transparency & Communi-

cation

BA level

IT Areas of Activity

BA SE (IGB) (CIO BA SE,

IT Heads GCs, Heads of Areas of

Activity)

BA SE (ICB) (Executive Boards,

Managing Directors, Senior Vice Presidents)

IT Areas of Activity (Staff of

Integrated IT)

Decision-making board Supervisory board

Policy-making power

IT Service-Portfolio-

Management


IT solutions call for holistic view Domains, solutions and interfaces of IT

Semantic business intelligence

Collaboration, communication Apps, GUIs, portals

Information access

Business logic Business applications Level 3-4

Processes

Networks, identities Server Storage

Infrastructure


IT strategy development

Strategic dialog Business Area Steel Europe

Overall IT strategy

IT governance & principles

Demand

IT organization / IT personnel

IT processes

Applications

Infrastructure

Business intelligence Supply Risk Security

Opportuni-ties

Technology

IT services

Top down

Bottom up

Concerted approach


BA SE – IT executives intensively discussed our IT strategy during workshop in April 2012

What is my contribution, my idea? Initiatives

Success

Worth retaining

Change

Where is success reflected?

What promotes our strategy?

What prevents our strategy?


The IT strategy is subdivided into five strategic fields BA SE / BA AM

IT orientation towards “Global

Steel“

Data and process harmonization

Excellent IT management – strengthening of

Integrated IT

Future-oriented IT infrastructure & communication

Supply Chain & Production Excellence


IT orientation towards “Global Steel“

• Ramp-up of Americas • Integration of IT Americas in Integrated IT

Short- and medium-term measures

• IT services for overall planning and control processes

(mainly planning, sales, controlling, logistics, procurement)

Long-term measures

Guideline

• We provide support to the ramp-up and the integration of Americas in the Integrated IT

IT orientation towards “Global Steel“


Overview - Process & IT Challenges at TKS USA

• IT took the accountability

o Identify the area of concern (department / process)

o Identify the kind of issue:

Data Software Engine

Business Rules

Usage

- Missing, incorrect data

- Data discrepancies between systems

- Not recorded data

- System not (fully) used, workaround

- Missing or incorrect data input

- Workaround, value giving features ignored

- Missing business rules

- Business rules don’t fit to System

- Missing Process (i.e. no maintenance of master data)

- Not usable functions - Missing functions - System unstable - Release process

unstable

Status by December 2011


Summary: Status July 2012 Process Issues at TKS USA

Data Software Engine

Business Rules

Usage

- Missing, incorrect data are monitored and manual corrected

- Data discrepancies between systems in further analysis

- System much better used, minor usage of workarounds

- Missing or incorrect data input are monitored and corrected

- Value giving features no longer ignored

- Missing business rules defined or project started

- Business rules aligned with System

- Missing Process started (i.e. no maintenance of master data)

- Increased usability of MES functions

- 80% of missing functions accomplished

- Systems stable

- Release process stable



• Operational concept • Medium-term process/system redesign • Purchase to pay • Adaptation primary and secondary chart of

accounts • Harmonization of cost centers


• Long-term process/system redesign

• Order to cash • Introduction of new ledger and coupling to Group

ledger • Integration of cost units, calculation of stock, and

income statement by products

Long-term measures

Data and process harmonization

Guideline

• Together with the departments involved, we harmonize data and processes to ensure an integrated process landscape

• We transform our system landscape into the target state defined in our IT architecture


Architecture and Blueprint Application architecture - Landscape blueprint Steel

Level 4 - ERP

Maintenance Inventory

management IT

Raw materials

logistics Production KVP (cont. improvement

process)

Energy management Quality R&D

Waste management EH&S Stock of materials

Sales

Finance

Procurement

Level 3 - MES

Rolls/rollers

Production handling

Material data/quality

Equipment

Level 2 - PCS

Business planning

Utilization planning

Scheduling

Transports

Shared Applications

Recruiting

Finance Partner

Consolidation

Payroll

eProcurement

ePurchasing

Customer service

Staff assignment

Material quantity/storage areas

Transport logistics

Production planning

Materials planning

Sequence planning

Aggregate control

Condition monitoring

Dynamic models

Control center visualization

Laboratory management

Quality data acquisition

Inventory/transport

tmanagemeentg Crane management

Energy management

…

…

Engineering-Software

Office Automation

Collaboration/Information



• Modernization of order-related planning

processes/systems • Modernization of production processes/systems


• Modernization of production processes/systems • Harmonization of interfaces Level 2

Long-term measures


Guideline

• Modernize planning processes and systems in order to optimize e.g. the delivery performance

• We consolidate production control systems to optimize processes and costs


Inter-site production at BA SE calls for autarkic production network segments to avoid production losses

Complex network of processing units

Cold rolling mill (tandem mill Pickling line

HCL H2SO4

Blast furnace

Roheisen

Coking plant

Coal

Steel mill

Crude steel

Scrap and fluxes

Continuous casting line or casting rolling line + hot strip mill

Hot strip finishing

Hot strip

Plate mill

Heavy plate

Sintering plant Ore

Slab

Batch annealing Skin pass rolling mill

Continuous annealing

Sheet metal Electrolytically sch coated sheet metal

Cold strip finishing

Electrolytic coating line

Zn

Hot-dip galvanizing line

Hot-dip galvanized sheet metal

Zn

Organic coated sheet metal

Strip coating line

Sales products

Burden materials

Major input and output factors:

Hot strip

Input stock for processing at subsidiaries

Hot-dip galv.

Slab

Business requirements to be met by IT

•Support of continuous production and discrete production processes, integrating them in business control systems •Uninterruptible supply of the delimited production stages specific and highly available IT services • Improvement of planning and control processes and systems in order to improve adherence to delivery dates

Customer

Dispatch


28

Planning process must also take into account broad product portfolio and complex plant structures

▪ Complex network consisting of 13 structurally different sites

▪ high logistic effort of on average ~ 3 site changes per order


Duisburg, Meeting30.07.2010

3

Beeckerwerth

Bruckhausen

Duisburg Süd, HKM Eichen, Finnentrop

Strangguss

Warmband

Adjustage, Nacharbeit

sonstige Dimensionierung

Kaltband (inkl. Kombi)

Glühen

Feuerbeschichtung

EBA, BBA

Dortmund

Nachwalzen

Bochum

Komplexes Unternehmensumfeld

Werksübergreifender Materialfluß Network

▪ > 300,000 customer order items per year involving an order volume of ~ 12 million tonnes

▪ High flexibility conc. order modifications at short notice by customer

▪ Requirement of short delivery times

▪ Dynamic allocation of material to customer orders (subsequent reallocation of material)

▪ Fluctuating backlogs of orders

Orders

▪ Broad product portfolio including ~ 28,000 articles of~ 950 steel grades

▪ Almost exclusively customer-specific production ab initio and of products with by-product/by-program requirements

▪ Complex system of rules comprising ~ 15,000-20,000 rules for determining the technical production parameters for an order (up to 2,800/order)

Portfolio

▪ Many technical restrictions have a non-deterministic impact on the sequencing at the units

▪ Finalization problems in continuous casting

Techn.

require-

ments


Future-oriented IT Infrastructure and Communication

• Modernization of works LAN/WAN concepts • Overall IT infrastructure concept in the Group and

roadmap derived from it • Establishment of demand mgmt. /IT service mgmt. • Concept of “Workplace of the Future” • Identitymanagement


Worldwide uniform accesses to IT infrastructure: • E-mail, telephony, video • Document-based cooperation • Social media-based communication • Personalized portal access

Long-term measures

Future-oriented IT Infrastructure and Communi- cation

Guideline

• We orient the IT infrastructure towards the future and ensure our users uniform access to the necessary IT services

• We establish a consistent identity management


Elements of a future TK wide IT infrastructure

Support Security

Priv

ate

Clo

ud

(Data C

enter)

Ma

na

ge

me

nt

Pro

ce

ss

es

ThyssenKrupp Global Network

Identity & Access Management

Workplace Environment (Managed Enduser Devices inkl. Messaging/Voice/Video)


Outlook on „Future ThyssenKrupp IT“

Groupwide IT standards

Harmonized high-maturity IT processes

High and stable security level

Optimum services at low costs

Flexibility in supplier selection

IT focus on business processes (value adding)

Developing the future.


Excellent IT Management – Strengthening of the Integrated IT

• New IT field of activity IT Service Management and

development of support concept • Elaboration of strategy development and updating

process incl. process interfaces • Introduction of IT Performance Scorecard based on

strategic planning


• Established IT service management system for Steel

IT with high degree of process maturity and continuous improvement process

Long-term measures

Excellent IT Management – Strengthening of the Integrated IT

Guideline

• The Integrated IT strengthens the “Large Scale“ – “Multiple Niche“ strategy by combining central and decentralized elements

• As a learning organization we review and improve our processes regularly within the scope of a Best-Practice IT management system and encourage the cooperation based on partnership within the Integrated IT


Excellent IT Management – Strengthening of the Integrated IT Success Factors

Integrated IT

Integrated IT 2.0

Steel IT

Improvement of customer service

Integration IT respons. and key users

Communities (involvement!)

Rules with central coordination

Continuation of Areas of Activity incl. IT Service Portfolio Management

Consulting services

Auditierungen

Today


The IT strategy is subdivided into five strategic fields BA SE / BA AM

IT orientation towards “Global

Steel“


Excellent IT management – strengthening of

Integrated IT

Future-oriented IT infrastructure & communication


A E

B

C

D


The five IT strategy fields are geared to the strategic Best-in-Class dimensions

Focus on high-grade flat steel products



Innovation Mitarbeiter Prozess -

exzellenz

Wachstum

Innovation Employees Process

excellence Growth


The five IT strategy fields are geared to the strategic Best-in-Class dimensions

Ramp-up Americas A

Excellent IT management Strengthening of Integrated IT E

Data and process harmonization B

Supply chain & Production excellence

C

Infrastructure & communication

D


„We will be the ideal partner of the Business Area and render excellent IT services, thus ensuring a flexible Steel business model and an increase of both value proposition and customer benefit.“

• We support the ThyssenKrupp Steel business processes with excellent expert, process and methodical competence … Competent

• … in close collaboration with our customers, suppliers and colleagues in a spirit of partnership … Coopera-

tive

• … using customized, cost-effective and sustainable IT technologies … Innovative

• … with regular process improvement and highest standards in terms of compliance with deadlines, budgets and quality. Qualitative


Thank you !

Contact Dr. Michael Kranz ThyssenKrupp Steel Europe CIO [email protected] +49 203 52 22290

it strategy @ thyssenkrupp steel · 9/11/2012 · it strategy @ thyssenkrupp steel sep 11th, 2012...

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