The steel industry faces two major challenges. The first is increased volatility in both demand and raw-material prices. Compounding these factors is the shift of consumption and production from traditional to emerging markets.
This volatility is underpinned by the movement away from traditional yearly benchmark contracts toward quarterly, or even shorter-term, pricing. Experience from other industries that have undergone this transition leads us to believe that this trend is irreversible unless there is an unexpected downturn in China. This means that companies will have to develop new skills in market intelligence and trading.
At the same time, the shift in production and consumption to developing markets leaves limited growth options for companies in traditional markets. When a business environment changes in this manner, so too do the assumptions governing company strategy.
Este relatório analisa as maneiras pelas quais a indústria siderúrgica pode responder a essas mudanças. Prática de bens industriais do Boston Consulting Group, segue duas publicações anteriores do BCG.
Em primeiro lugar, a flexibilidade terá que operar em toda a cadeia de suprimentos. As empresas precisam analisar como adquirem matérias-primas, bem como o respectivo valor em uso no processo de produção. Eles devem garantir que os produtos atendam aos requisitos do cliente e possam ser vendidos no mercado. O sistema rígido estabelecido, no qual as empresas obtêm materiais de qualidade fixa para uma determinada mixagem de saída estática, serão complementadas por opções mais flexíveis, conforme observado em outras indústrias, como petróleo e gás. O ajuste do forno de explosão, a capacidade e a utilização do rolling e a jusante de processamento pode ser usado não apenas para obter maior flexibilidade, mas também para obter economia de custos. A recente crise viu as empresas siderúrgicas “aprendendo” a lidar com a utilização mais baixa da explosão de explosão, às vezes tão baixas quanto 30 %, o que é muito menor do que o considerado viável. Uma maneira de responder ao aumento da volatilidade da demanda e a constante dos níveis de serviço é aumentar as ações de estoque, mas isso certamente aumentará os custos gerais. As empresas precisam encontrar maneiras de equilibrar os níveis de inventário de segurança sem arriscar o potencial de receita ou aumentar significativamente o capital de giro líquido. Unidades de tamanhos diferentes podem trazer benefícios sustentados, equilibrando a eficiência e a flexibilidade. A adaptação de recursos e a gestão enxuta podem contribuir para a flexibilidade, reduzindo a base de custo fixo e tornando as empresas mais capazes de reagir a oscilações de demanda. O mesmo se aplica à segunda fita na estratégia adaptativa - inovação focada. A necessidade de inovação é impulsionada por um ambiente em que muitas empresas tendem a se tornar nicho ou operadores de multiniche. Em um setor altamente fragmentado, a maioria das empresas é, para fins práticos, os operadores de nicho que dependem de uma vantagem geográfica de proximidade com clientes ou produtos especializados que podem ser vendidos nos mercados globais. Isso tem implicações para o local de inovação na estratégia da empresa. Para ficar à frente, as empresas devem inovar. Como as empresas podem garantir a eficiência e a eficácia de sua organização de P&D? As empresas precisam decidir se as inovações devem gerar principalmente lucro ou crescimento e precisam determinar para cada produto se pretendem ser um primeiro motor ou um seguidor.
- Short-term pricing will make it increasingly important to optimize raw-material sourcing while continuing to meet output requirements.
- Varied sourcing and sales models are likely to emerge. The established rigid system, in which companies source fixed-quality materials for a given static output mix, will be supplemented by more flexible options, as observed in other industries, such as oil and gas.
Flexibility measures will extend to an increasing emphasis on capacity management. Adjustment of blast furnace, rolling-mill, and downstream processing capacity and utilization can be used not only to achieve higher flexibility but also to realize cost savings. The recent downturn saw steel companies “learning” to handle lower blast-furnace utilization, sometimes as low as 30 percent, which is much lower than had been considered feasible.
- Inventory management will become increasingly important. One way to respond to increasing demand volatility and hold service levels constant is to raise inventory stocks, but this will certainly increase overall costs. Companies need to find ways of balancing safety inventory levels without risking revenue potential or increasing net working capital significantly.
In addition to these short- and medium-term changes, companies need to develop longer-term strategies that will ingrain flexibility in their culture in the same way that concepts of efficiency are ingrained.
- The creation of diversified-capacity networks by mixing integrated and electric-arc-furnace routes and units of different sizes can bring sustained benefits by balancing efficiency and flexibility.
- There will also be a role for more traditional flexibility measures as part of an evolving strategy. Resource adaptation and lean management can contribute to flexibility by reducing the fixed-cost base and making companies more capable of reacting to demand swings.
None of this is likely to happen overnight, but companies that ask themselves the right questions and apply the answers sensibly over time will rise steadily toward market leadership. The same applies to the second strand in adaptive strategy—focused innovation. The need for innovation is driven by an environment in which many companies tend to become niche or multiniche operators. In a highly fragmented industry, most companies are, for practical purposes, niche operators relying either on a geographic advantage of proximity to customers or specialist products that can be sold on global markets. This has implications for the place of innovation in company strategy.
- Rising producers in China and other developing countries will compete for established technology niches. To stay ahead, companies must innovate.
- The steel industry traditionally spends less than many other industries on R&D, but steel companies that have spent more on R&D are not always the most profitable or innovative.
- This raises some questions: What drives R&D success? How can companies ensure the efficiency and effectiveness of their R&D organization?
Answering such questions helps generate a coherent and effective strategy for focused innovation. Companies need to decide whether innovations are intended primarily to generate profit or growth, and they need to determine for each product whether they aim to be a first mover or a follower.
- Como eles respondem a essas perguntas definirão as áreas de foco para investimento em P&D e, portanto, a estratégia de inovação necessária para ficar à frente da concorrência. Estratégia. Instituições e universidades que participaram de nossa pesquisa e compartilharam abertamente suas opiniões. Além disso, gostaríamos de agradecer aos nossos colegas do Boston Consulting Group, que contribuíram para esta publicação, incluindo Martin Fink, Hiltrud Gehrmann, Thomas Geike, Ingo Mergelkamp, Marius Rosenberg e Alex Xie. Felix Schuler
- No matter which decisions are made, many companies can still make their R&D effort more effective by aligning it with the overall business strategy.
In this report, we provide fundamental questions and a step-by-step framework outlining how companies can progress toward a fully adaptive strategy.
- Decision makers have to ask themselves whether the capabilities of their company have advanced far enough to support an effective adaptive strategy.
- If a company lacks the necessary capabilities, decision makers must then ask themselves how those capabilities are to be acquired.
Acknowledgments
First and foremost, we would like to thank the steel companies, research institutions, and universities that participated in our research and openly shared their opinions. In addition, we would like to thank our colleagues at The Boston Consulting Group who contributed to this publication, including Martin Fink, Hiltrud Gehrmann, Thomas Geike, Ingo Mergelkamp, Marius Rosenberg, and Alex Xie.
