Severstal puts $122 million in digital transformation this year, provides every employee with digital training

13 February 2021

The Russian steel and mining giant Severstal plans to invest no less than 9.1 billion rubles ($122 million at the current exchange rate) “in IT and digital projects” this year.

This year will see “a significant change [in] the company’s IT process model and organizational structure,” following the creation of “four new client teams responsible for the development of the company’s IT functions” last month.

These teams “develop new initiatives, promote the use of digital tools at the company’s business units and manage the implementation of projects aimed at increasing production growth.”

Under plans, in the course of the year, Severstal’s IT teams will implement more than 200 projects of various scales – in the fields of production, sales and logistics, supply chain management, customer sales models, internal logistics, as well as medium-term planning for extractive assets.

Other significant projects include:

  • further development of the online marketplace;
  • the introduction of an engineering data management system;
  • the launch of an SAP S / 4 HANA system – replacing the current generation of ERP-SAP ECC – “one of the company’s most ambitious transformation projects in the last decade;”

Meanwhile, Severstal Digital’s Center for artificial intelligence and machine learning – which includes departments for data analysis and computer vision – will support the company’s plans to “increase” the energy efficiency of industrial equipment and the performance of key components.”

For example, digital solutions will help the company increase production at the Cherepovets metallurgical plant’s (CherMK) Mill 2000, and accelerate the heating of slabs in the sheet rolling shop for the production of rolled pipes at CherMK.

Last year Severstal introduced a solution based on artificial intelligence technology at the CherMK continuous pickling unit #3. The company says this led to an increase in productivity of more than 6.5%. In addition, a machine learning model for automatic control of air compressors has been successfully put into operation, “which makes it possible to use electricity more efficiently.”

CFO Alexey Kulichenko touts Severstal as “the steel industry’s leader in digitalization,” with “one of the largest IT and digital departments in the Russian industry.”

“We consistently employ a data-driven approach, which involves not only the digitalisation of production processes, but also the development of a special digital culture within the company; a culture of trust in data and new technologies,” he says.

Within a few years, under plans, all Severstal employees will undergo training courses as part of an in-house education program called ‘Digital Steel,’ which was launched in 2020.

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