Improved ERP offers resources for metal producers

Sep 30, 2012 | 07:00 PM | Gregory DL Morris

Tags  enterprise resource planning, ERP, SAP, Microsoft, Oracle, Gavin Lavelle, Brady Plc, CTRM Peter Zalevsky

In many ways, big metal companies—especially steel and primary aluminum producers—are proud to be distinct from other heavy manufacturers, even other process industries. But being sui generis also means that many aspects of information technology, especially enterprise resource planning (ERP) systems, often have to be custom-made or developed internally rather than bought off the shelf from big vendors, such as SAP AG, Microsoft Corp. or Oracle Corp.

That is now starting to change, and at an accelerated pace, due to forces both inside metals and in the broader economy. Most notably, the normal capital investment cycle post-recession is now turning, favoring upgrades. As that happens, vendors have added capabilities that better fit the making of metals. In addition, formerly tangential areas of management—especially supply chain and risk management, which have their own specialized solutions and platforms that can be readily linked to ERP—have become more a part of senior executives’ daily responsibilities.

“There definitely is a rise in ERP and other technology systems in the metals market,” said Gavin Lavelle, president and chief executive officer of Brady Plc, a provider of commodity trading and risk management (CTRM) software. There are several reasons for that. “The most immediate driver is that after the economic crunch of 2008-09, there has been unprecedented volatility in commodity prices worldwide. That is especially true all along the metals supply chain. We saw prices drop 80 to 90 percent and then shoot back up. So all the players—mines and mills and fabricators and service centers—are much more aware of, and focused on, risk management.”....