Integrated Decision Optimization - Drive towards Improved Cost Competitiveness in a Steel Industry 4.0 Era

Over the past few years, global steel industry has been in deep crisis. It was largely driven by a combination of several factors such as declining demand, overcapacity, tumbling steel price, high volatility of raw material market, etc. Although the market condition is getting better now, some fundamental issues are not completely solved. “Be vigilant in peacetime” many companies have realized the significance of continuously improving cost competitiveness in order to prevent from another possible crises in future. However, some steelmakers may face great challenges while trying to cut cost. These challenges were identified and analyzed in this paper. Following key principles of Industry 4.0, a strategic planning and decision optimization platform was presented. It aims at helping senior managers of steel plants improve profitability by optimizing raw material procurement, adjusting operating parameters, balancing energy consumption and identifying value creating investment opportunities in a “integrated” and “intelligent” way. This system is able to make effective trade-off between cost control targets of different operation units so as to maximize company’s overall profit. Several industrial examples were discussed, which illustrated an annual cost saving of 2-6 Euros per ton of steel could be achieved.