The JFE Holdings unit will spend some 70 billion yen (US$652 million) by fiscal 2022 to consolidate the computer systems, which currently differ from location to location, in the company's biggest such revamp since its founding in 2003 via the business integration between NKK and Kawasaki Steel.
A single database will help manage information from multiple plants to shorten production times and improve quality using big-data analytics. Four steel mills in Chiba, Kanagawa, Okayama and Hiroshima prefectures as well as a steel pipe plant in Aichi Prefecture will be managed together.
The systems traditionally have been developed and revised separately for each plant. Varying terminology and procedures have made it even more difficult to coordinate among the sites.
But the unified management of order and production data will create benefits, such as letting engineers at headquarters or the Kanagawa site detect early signs of equipment failure in Hiroshima. Successful process improvements in one steel mill can be enacted immediately in other sites, too. Production costs could drop by as much as 10% for some items.
The integrated system also will enhance the flexibility to respond to supply-demand changes. Sales staff will see when a specific product is to be made at a given site. Order delivery times are to be reduced by up to 30%.
Giant steelmakers have analyzed sensor-collected data since the 1980s to improve quality and productivity. But limits in data processing and transmission technologies have made it difficult to coordinate operations across multiple sites. JFE now sees an opportunity to tap advanced technologies in these areas to boost efficiency further.
Automotive, chemical and other industries that operate large facilities are likely to take similar steps.
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