Customer stories

Steely determination

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At a glance

  • NZ Steel joined Callaghan Innovation’s Digital Lean programme to improve the steelmaker’s capability to track large coils of steel used across NZ for roofing, cladding, gutters and spouting.

  • Wireless digital tracking of inventory has the potential to reduce costly distribution errors and customer frustration caused by misplaced and delayed orders.

  • NZ Steel sees scope to extend use of the wireless technology to its customers’ systems for seamless handoff in the supply chain.

COLORSTEEL® is the homegrown brand of pre-painted sheet metal that’s widely used in the construction industry for roofing and cladding homes, rural buildings and commercial properties all over the country.

But the thousands of tonnes of pre-painted steel that roll out the doors at NZ Steel’s South Auckland Glenbrook Steel Mill each year start their journey as massive coils of rolled-up steel.

“They can weigh between one and four tonnes each,” says Jeremy Smith, Product Launch Manager at NZ Steel.

“They aren’t small but they do occasionally get lost or end up in places you wouldn’t expect,” he adds.

NZ Steel set out to find a more effective tracking system through Callaghan Innovation’s Digital Lean pilot programme. The steelmaker’s reliance on manual labelling, scanning and recording systems has caused misplaced inventory, and a lack of visibility of order status and traceability of the finished coils, and is ultimately inefficient. 

“It was a great investment to spend the time and money exploring innovative solutions, and find a fast, proactive and timely order notification system that increases customer satisfaction.”

NZ Steel’s regular stocktakes track inventory that’s missing or unaccounted for. This stock is a tiny fraction of NZ Steel’s orders, but with each coil of pre-painted steel a high-value inventory item, the cost quickly adds up. Reducing the unaccounted inventory for this one product could save up to $220,000 each year. If the same improvement was applied to upstream business units, that would result in savings of up to $500,000 per year. 

“As a well-established manufacturer in a competitive market, we can improve our profitability and customer experience by offering value-added services and reducing waste,” says Smith.

“That's what will keep us in business in NZ and keep NZ manufacturing competitive.”

Tracking the coils

NZ Steel’s pilot focused on trialling smart-tag technology that could be applied to each steel coil. Beca, NZ Steel's Digital Lean supplier, considered a range of alternative technologies – wireless RFID tags, barcodes scanning and image recognition cameras – but the best fit for the job turned out to be the wireless technology that lets you connect your smartphone to gadgets such as wireless headphones – Bluetooth.

Beca’s analysis predicted automating tracking of the steel coils would reduce shipping errors and give NZ Steel and its distribution partner, K&S New Zealand, full visibility into the status and location of its COLORSTEEL® inventory.

Bluetooth Beacons placed in warehouse distribution zones were able to detect a low-energy Bluetooth tag attached to each coil, at a range of up to 60m, with 100% accuracy.

“That wasn’t possible with RFID tags, which basically required line of sight [no obstructions between the tag and the reader] to work,” says Smith.

With the right technology in place to tag and trace each coil, NZ Steel had to find a way to make sense of the data beamed to its Bluetooth beacons, and that turned out to be the real challenge.

“At the moment we have a mix of a new enterprise resource-planning system and legacy manufacturing systems,” says Smith.

“Any new process systems that we decide to use need to be able to integrate with both at the moment.”

Faced with months of development work to allow the Bluetooth tag data to be integrated into its core systems, NZ Steel looked for an alternative. Beca paired up the company with Auckland-based Bluetooth tracking and integration specialists, OnSight, which used its cloud-based software platform to make sense of the raw beacon data in real-time for NZ Steel.

“It was hugely beneficial to be able to transform the raw data into a visual tool which could be easily understood and communicated throughout the business,” says Smith.

Beca also supported NZ Steel with its project management, a role the steelmaker really benefited from. 

“A project like this can be challenging in a large enterprise,” says Smith.

“Having an experienced third-party facilitator involved really smoothed the waters in that respect.”

A big picture view

Use of OnSight’s sandboxed data platform meant NZ Steel's pilot project was able to be completed in around four months. 

The Digital Lean implementation showed that NZ Steel could effectively automate data gathering and analysis at its warehousing and national network of distribution centres. 

“Now we can get a big picture view of all the inventory in the warehouse, wirelessly, without manual scanning or recording,” says Smith.

“When the coils leave the warehouse or distribution centre zones we can see that they've started their journey to the customer.” 

Smith says the technology could be scaled up for use with NZ Steel’s upstream business units and eventually also its customers, who could use the same underlying technology to improve their own supply-chain processes.

“There are a lot of people involved in steel’s journey to the customer from manufacturing to warehouse to building site, so if we can provide some leadership in improving the supply-chain process, then the industry will be better for it,” says Smith.

The next phase: integration

Making the Bluetooth-based technology a mainstay of NZ Steel's operations will require considerable work to make its core systems compatible, and likely take at least a year to complete. Although the specific solution might look different when implemented, NZ Steel says it can incorporate many of the lessons from the pilot into the business in the future. 

The Digital Lean pilot has given NZ Steel the impetus to tackle a key area of inefficiency in its processes

“The way Callaghan Innovation ran it, providing in-kind support, mentorship and a bit of funding, was excellent.

“Having the input of OnSight and a facilitator like Beca on board was key to the pilot's success.  Digital Lean is a fabulous programme. I'm a big supporter.”

 

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Updated: 28 January 2021