A digital transformation Project partners
A digital transformation Interface Magazine talks to Vladimir Arshinov, IT Director at steel producer SIJ Group regarding the company’s massive digital transformation
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WRI T T EN BY
Andr ew Wo o d s
PRODUCED BY
And y L l oy d
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G
oing into 2017, SIJ Group (Slovenian Steel Group) – Slovenia’s biggest steel
producer and one of the largest manufacturers of stainless and special steels in Europe had typical IT structure with semi-independent IT departments on each plant. And like many modern enterprises, SIJ was at work drafting a strategy to transform its operations, systems and processes into a more unified structure in a bid to improve productivity, safety and the all-important bottom line. Vladimir Arshinov is SIJ’s IT Director and his initial focus in 2017 was trained on the digital transformation of SIJ’s IT department to a more transparent organization with a clear workflow. Previously, IT was a department of innovation with each individual plant having its own independent function, none of which connected with each other, often across varying geographies. “This meant that lots of efforts were wasted solving the same issues with different solutions,” Arshinov reveals.
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SIJ GROUP
At the end of 2017, SIJ established a Project Management Office. PMBOK was selected as a master methodology and the Head of PMO received PMP certification and developed internal regulation documents, rules and methodology. After finalizing the initial establishment phase, hiring project managers and the organization of the operational work, SIJ came to the conclusion that to raise the scope and complexity of the projects program, they needed a tool. The MS Project Management Server was duly selected and implemented allowing SIJ to simplify observation of the progress of projects and control, while ultimately reducing duration. Project team meetings were almost eliminated, and the distribution, control and execution of project tasks, were assigned to the project team members who managed and controlled projects including budget consumption. Each project member would then be measured for effectiveness. w w w.t h e i n t e r f a c e . n e t
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Turning the IT department into a
companies SIJ had a bulk of different IT
leaner function was a massive first step
systems, which were supplied or devel-
for SIJ as it needed a firm foundation
oped in the past and had to be either
upon which all future innovation could
permanently supported, or, due to the
sit. And so, the next step in SIJ’s inter-
business requirements, changed. One
nal IT transformation was aimed at the
concern with the legacy system was the
most sensitive and critical area: software
reliance on locally based productive soft-
development. As with many metallurgical
ware developer engineers developing
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SIJ GROUP
Vladimir Arshinov IT Director SIJ Group Arshinov has 17 years of experience within the metal industry working across several territories including Russia, Saudi Arabia, Bahrain, USA, Italy and Slovenia. Arshinov’s work includes roles as varied as SCM Director, CIO, Architecture and Developing Center Director, Commissioning engineer and software developer at institutions such as Moscow State University of Steel and Alloys, Automation.
new solutions and then, after, support-
SIJ IT considers people as its major
ing them, resulting in a massive drop in
asset and were determined to break
development speed, as development
the vicious circle of “one system - one
and the subsequent support increased.
person - forever”.
This situation was causing overload-
“What we did from an organizational
ing, burnout and frustration, triggering a
point of view was to unify all geographi-
desire to change something; sometimes
cally distributed developers from 4 differ-
resulting in employer change. However,
ent companies into the several virtual w w w.t h e i n t e r f a c e . n e t
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groups in each department,” Arshinov
board monitoring and control. Process
explains. “Each group has a Team Leader
and technical solutions now allow SIJ to
role, who assigns tasks to the group
involve external software development
members and controls the execution of
partners into the development process
each individual task.”
while controlling their activities, deliver-
Development at SIJ is now organised
ables and costs. Developers can now
according to an agile approach using
use the Azure DevOps Server with the
scrum boards and Microsoft Project
scrum board and are now able to regis-
Server to control all the time sheets
ter change requests in their system by
of the people involved in the projects,
themselves, where they see the progress
plus their schedules and budgets. SIJ
of all individual change requests coming
uses Microsoft Azure DevOps Server
through the process with the integration
for unified storage of inter-company
of the IT Director informing the exchange
source code and Change Request Scrum
and updating the status of the task
system was changed (from Oracle BI) to
development. In October 2019 SIJ revamped
MicroStrategy for usability and a unified
and migrated its Corporate Business
interface. Now, SIJ has a system that
Intelligence system to a new
looks the same no matter the device
MicroStategy platform. The project
it’s accessed from. This project allows
took six months and provided SIJ
us to organize and develop the team
with an extensive corporate Business
that tests the trial usage and devel-
Intelligence system with more than 180
ops the processes of the PMO (Project
different dashboards covering produc-
Management Office) inside the IT
tion, finance, sales, procurement, HR,
function.”
Legal and investment functional areas.
The BI System contains the entire
The overwhelming majority of the data
spectrum of corporate data and allows
now uploads automatically and the
SIJ to move quickly and transparently
business intelligence tool has created
when taking a management decision,
a unified reporting system across the
while reducing the number of mistakes,
group utilizing the same source of
misunderstandings and time-consuming
data in order to integrate it. “There
meetings.
was huge involvement of the busi-
The next system to be unified across
ness customers with Oracle BI and this
the group was the Salesforce CRM
year, we moved to this new platform,”
system, which is now fully integrated.
Arshinov explains. “The front end of the
Then, an Oracle supplier portal followed,
“We are not an IT company, that’s understood,” Arshinov explains. “But we are supporting services inside the business, and of course our main concern will always be supporting the production of steel” — V L A D I M I R A R S H I NO V, I T D IR E C T O R AT S T E E L P RO D U C E R S I J G RO U P
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which opened the possibility of organ-
incorporating the Oracle Business
izing tenders, thus massively simpli-
Suite, has improved the delivery, safety
fying the purchasing process. Oracle
and performance of SIJ’s plants. “We
Innovation Management is another
improved Delivery Performance OTIFF
successful implementation, which,
(on time and in full) of a stainless
although a relatively small project, has
steel plant by 12.8% in six months,” he
had a big influence on the business
enthuses. “And we shortened the produc-
transformation and innovation through
tion cycle by 15,4% from ordering to ship-
increased flexibility. “It is also used to
ping, which is a brilliant result within six
motivate people to suggest improve-
months of going live.”
ments and new innovative ideas,” he
In SIJ Matal Ravne has replaced the melt shop technology system and entire
says. So, what have been the major
plant manufacturing execution system
successes, according to Arshinov, follow-
to replace the obsolete legacy system
ing the ongoing digital transformation
– which had zero planning functional-
at SIJ? “The main difference between
ity – with PSI Metals. “First of all, we’re
now and then was that each individual company was living alone, and I see now that the IT function in this case is unifying the people and allowing them to speak in a single language. It doesn’t matter if it’s a steel center or a big plant,” he explains. Costs have been dramatically reduced too, outsourcing being a prime example. In 2016, SIJ was spending more than 70% annual budget for operational external services. For 2020, that part of budget reduced to 40%. Meanwhile, the capital investments part of the budget has grown from 4% in 2016 to 56% in 2020. The implementation of a Supply Chain Planning system (from Quintiq) 10
SIJ GROUP
“Through this massive digital transformation, SIJ has also managed to increase quality control through sophisticated AI, which has massively impacted its operations” — V L A DIMIR A RS H I NO V, I T D I R E C T O R AT S T EEL P RO D UCER S I J G RO UP
increasing the level of understanding and the knowledge of the internal IT team, while dramatically decreasing project cost by involving internal specialists into the supplier team. That allows us to save several hundred thousand Euros of project budget and it’s a win-win situation for the supplier as well. First of all, the supplier is receiving our team, which knows the production and the limitations and has extensive inside knowledge. At the end of the day, the commercial value, in this case, is the cheaper price. Cheaper than anybody else is able to receive.” Another and no less important project for Sij Metal Ravne is the joint development work with Comtrade Laboratory Information Management System (LIMS). Laboratories in metallurgy companies are complicated and highly demanding environments with unique processes required for quality control of all products and this solution covers and improves core laboratory processes and will be highly integrated with the PSI manufacturing execution system from one side and Oracle ERP on the other. w w w.t h e i n t e r f a c e . n e t
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“ …the IT function in this case is unifying the people and allowing them to speak in a single language” —
V L ADIMIR ARSHINO V, I T DIR E C T OR AT S T EEL PRODUCER SIJ GROUP
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SIJ GROUP
Through this massive digital transformation, SIJ has also managed to increase quality control through sophisticated AI, which has massively impacted its operations. The acquisition of scrap metal, a major influence on SIJ’s bottom line, can now be influenced through advanced detection systems that can detect impurities, thus representing huge savings when it comes to procurement. “The conservative saving is €1.4m,” he says. The digital transformation at SIJ is touching every aspect of the company’s growth and is certainly an ongoing journey rather than a destination. “We are not an IT company, that’s understood,” Arshinov says. “But we are supporting services inside the business, and of course our main concern will always be supporting the production of steel. But we’re not there yet.”
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www.sij.si