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How Will The Steel Supply Chain Recover Post-COVID?

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According to the Thomas 2021 Q3 Sourcing Activity Snapshot, the demand for steel has increased in 2021. The main drivers of this demand were the building industry (with lots of large-scale construction projects all over the world), the car manufacturing industry, the machinery industry, and others. 

However, the energy crisis and the constant problem with the supply chain are seriously hindering the recovery of the steel industry. As the pandemic grew in reach, many businesses were forced to change their actions by either stocking up on steel (when it was possible) or trying to find suppliers closer to home. 

While the economy and various industries have popped up right back in many areas of the world, the increasing energy costs and the fact that many supply chains are either broken or delayed put everything on pause. Worldwide, we still have a huge problem to solve. The pandemic showed the rulers of the world that we need to re-think the supply chain and its management in order to make it more flexible and less dependant on the human factor. 

Still, for now, industry leaders and businesses are alone in their efforts to recover and continue making a profit even in the current situation. However, this is a lesson to be learned, as now is the time to analyze what could’ve gone differently.  

Support from Key Players

Key players in the production chain, such as the Steel Supply Company, must be more involved in smoothing out the supply chain. This can be done by optimizing the storage space and inventory to make room for more ready-made products. This way, when the demand increases, it will be easier to get contracts when you already have the product. Also, your production won’t be affected by any temporary supply shortages. 

Data Analysis and Forecasting

Most companies involved in the steel industry might have had an easier time with the pandemic if they would’ve made use of modern data analysis and forecasting software. This type of software is used by businesses everywhere to understand market trends and find new ways to improve production without increasing costs. 

While the pandemic was an event that no software could have predicted, once it happened and things started to go haywire, a bit of analysis and forecasting might have been useful. Still, not everything is lost. If you start using data analysis and forecasting moving forward, it will be easier to identify problematic supply chains and find solutions using different providers or supply routes. 

This type of software is backed by real-time Big Data and Artificial Intelligence algorithms that can be trained to find holes in your planning and offer pertinent solutions. 

Technology

While we don’t have self-driving trucks (yet), companies can use technology to optimize the supply chain and automate their own warehouses. 

At a large scale, automation technology can be used to speed up the supply chain by using an automated admittance system in border crossing points, international ports, and airports. However, the implementation of such a mega-project can take years. 

At a business level, automation can help reduce warehousing costs by cutting down the number of employees needed for stocking, handling, and managing merchandise. An automated warehouse can improve efficiency and reduce labor costs, but it also requires a major initial investment. 

It’s also a matter of better organizing the space inside the warehouse (machines don’t need that much extra space to operate), which means more storage space during times of crisis. 

Wrap Up

With better planning and better use of new technology, the steel supply chain has a proper chance to recover to its former glory. Furthermore, if we move forward applying these rules, there’s a good chance we’ll see an improvement in the years to come.

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Latest Issue

BDC 317 : Jun 2024