Drones and artificial intelligence are already helping industry save resources. Interview with Sergiy Detyuk, Chief Executive Officer of Metinvest Digital
Digital transformation for large enterprises is a complex and multi-stage process. Changing processes established over the years or even decades, moreover, at the scale of huge production, is a serious challenge. Despite frequent discussions of the benefits of digitalization, the practical result of innovation efforts is far from obvious. Metinvest Group has approached the issue of digitalization systematically. Three years ago, the holding began combining IT functions, and in 2018 created a separate IT company — Metinvest Digital. Why did one of the largest industrial holdings in Ukraine create a single center of digital expertise and what business results the digital transformation helped achieve, says Metinvest Digital CEO, Sergiy Detyuk.
— For what purposes Metinvest has created a separate IT company?
— The international group of companies Metinvest is one of the largest vertically integrated holdings in Ukraine. The group unites more than 30 companies. Managing such a large-scale IT infrastructure is possible only with the help of a single center of expertise. Previously, each enterprise had its own IT department. But over time, as a result of scaling up IT projects and solutions, we came to the idea of centralizing the IT function and, as a result, creating a separate IT company Metinvest Digital.
The creation of a single digitalization management center is a global trend for large B2B companies and a market necessity. When the company is ready to embark on the path of digital transformation, the effectiveness of the introduction of new technologies, in the first place, will depend on an integrated approach and preparation of a digitalization strategy within all business processes.
For example, in the metallurgy, the Indian Tata Group and the Korean Posco created their digital companies. In Ukraine, companies that have only centralized their IT departments can be counted on the fingers, not to mention the separation of units into a separate company. Metinvest Digital is the first such IT company in the country.
— How did you come up with the idea of creating Metinvest Digital?
— The official date of birth of Metinvest Digital LLC is September 7, 2018. But the history of our transformation is much longer and went through several stages. We have grown from the IT departments of various Metinvest Group companies into a separate IT company. We began to consolidate the IT function in 2016. Rebuilt management processes, combined all service divisions. Established quality control, change management, monitoring and infrastructure development. Now we are ready to help our customers carry out a digital transformation that will bring real business results.
— What results have you achieved with the help of digital transformation and the creation of a separate company?
— Our portfolio includes more than 100 projects annually. We understand that it is not necessary to automate a separate function, but the entire value chain. Therefore, we approach the issue comprehensively.
Advanced technologies are being introduced at all levels of production in the Metinvest group of companies — from the automation of specific units and technological processes to the integration of units, workshops and enterprises into single information systems. This allows you to reduce the cost of production and improve quality, as well as make the work of employees more safe, intelligent and comfortable.
For example, the use of drones for measuring bulk solids at GOKs. It would be possible to simply replace part of the work of the surveyor, which involves physical measurements and calculations of the volumes of raw materials manually. But we approach digitalization projects comprehensively. Besides the fact that drones take measurements, all received information is centrally entered into the ERP system. Up-to-date data is received throughout the product production chain. Thus, we can timely control stocks of resources and efficiently manage logistics. And mine surveyors do not have to spend so much time going around the vast territories of GOKs to take measurements.
— It turns out that technological innovations can find application in industrial production?
— Today, in order to remain competitive in the market, industrial enterprises can no longer do without digital modernization of production. As an example of the use of AI and machine learning at Metinvest enterprises, I can tell you about a gas consumption planning case at a metallurgical plant.
As you may know, there is gas regulation at the state level. Group companies need a lot of this resource. For example, only the Zaporizhstal plant consumes 450 thousand m3 / day. We were faced with the task of minimizing value through accurate forecasting. We downloaded a huge amount of historical data on about 20 parameters. This is the specification of steel grades, and the characteristics of the heat, the actual volume of previous consumption. Artificial intelligence independently builds a model of correlation of parameters, analyzes the relationship between data and predicts numerical trends. At the exit, we obtained the predicted value of gas consumption for the next settlement day with an accuracy of more than 97%. And our plans are to use Data Science to optimize the cost of ferroalloys.
— How does digitalization affect the financial performance of group enterprises? Are there any cases of this format?
— Each digital project or a new technological solution is, on the one hand, a business request, and on the other, a solution to its pain point.
I will cite the same Zaporizhstal as an example. We have implemented a unique control room in the gas workshop of the enterprise. On the video wall, around the clock in real time, more than 100 technological parameters of the gas supply to the plant are displayed. They are based on the signals of several hundred sensors on more than 60 kilometers of gas pipelines and equipment. Received data is processed in seconds. Now we can quickly respond to the slightest deviations in the operation of equipment, distribute secondary energy resources and replace expensive natural gas.
— Did the transformation affect such a conservative sphere as workflow? Innovation is often the last to come to these departments.
— We did not wait long and have already implemented a pilot project for the coordination of contracts using innovative technology SAP Fiori. This is a convenient web-based interface to the main functions and business operations in SAP systems, as well as a set of applications that can be used on any device. This step greatly facilitated the process of negotiating contract documents.
In addition, we have already migrated systems and data to the SAP HANA Enterprise Cloud (SAP HEC). Metinvest Holding became the first SAP cloud service user in Ukraine. At the same time, data migration is recognized as the largest in volume in Central and Eastern Europe: 138 systems and more than 18,000 users - employees of the company work in the cloud.
— Which companies may use Metinvest Digital expertise?
— Our potential customers are large B2B companies with digital transformation tasks. We work with the mining and metallurgical complex, are ready to solve problems for the telecommunications business, banks and the energy sector. I can definitely say that in 2019 we have already begun negotiations with external clients. There is interest.
The conclusion of an agreement on integrated solutions is not a month or two, the sales cycle is quite long. These clients are located in Ukraine, with two of us we are already at the stage of discussion of contractual conditions.
We provide comprehensive business solutions, end-2-end IT solutions, which include IT infrastructure, automated systems in production, accounting and information systems, support systems for key business processes and business support. An integrated approach implies a full cycle of IT solutions: implementation, monitoring, integration, support and further development.
At Metinvest Group, we strive to build an interconnected multi-level automation of all processes. At each enterprise, automation and digital transformation projects are already being implemented. But success alone is not enough for implementation. The effective functioning of any modern systems depends primarily on how actively each employee will use them in their daily work.
Digital transformation is supported by innovations and technological solutions, but, first of all, the drivers of such changes are leaders who are open to changes and able to quickly adapt to changing market and industry conditions.