Severstal: How data is transforming the steel industry

Severstal: How data is transforming the steel industry

Russian industrial giant Severstal, one of the biggest producers of steel in the world, has created Russia’s largest data lake in its quest to remain competitive in the face of growing competition from steel producers in other parts of the world. Here we take a look at the company’s digital transformation, and how it’s leveraging Big Data technology for success.

How Severstal uses Big Data

Severstal’s huge data lake allows the petabytes of data created while producing thousands of tons of steel annually – data that would previously have been discarded – to be retained for future analysis. Now, instead of capturing just 5 percent of manufacturing data, the company can retain over 50 percent.

I spoke to Severstal’s head of public relations, Anastasia Mishanina, about the initiative. “We have to be constantly looking for ways to improve our responsiveness, and our competitive advantage,” explains Mishanina. “We started to look everywhere and ask, where can we go further? And if we are not going there now, we will be lagging behind.”

The company isn’t alone in its drive for new tech. Digital technology and innovation is expected to generate $320 billion worth of growth in the next decade – and that’s just in the Russian mining and metals sector.

So, thanks to its new data lake, Severstal has access to more data than ever before. But how will it use this data? Predictive maintenance for manufacturing plant is one important use, as is improving quality control by monitoring impurities introduced during steel production. The latter is already in action at the company’s vast Cherepovets plant in Russia’s Vologda region, and is expected to be rolled out across other major facilities soon.

Another major focus of the initiative is unstructured video data. While this data was previously too big to store for analysis, the data lake now allows for it to be kept. As Mishanina tells me, “We already have cameras all over the facilities, but often they are just monitored by operators, using their eyes, trying to see or hear if something is going wrong. None of that information is stored, and if they miss it, the opportunity to learn is gone. Now we will be storing all of that information. Not just what we can use today, but data that we will probably have a use for in the future. This transformation is going to be a constant and ongoing process of updating our capabilities to achieve maximum coverage of the data we have, and to make a lot of decision making within the plants automatic,” Mishanina tells me.

In another initiative, Severstal has launched an online store, “Which sounds bizarre,” Mishanina admits, “because buying steel is not like buying a pair of shoes! But Industry 4.0 gives us these opportunities.” There’s a very smart reason behind the move – online ordering generates useful data, as Amazon’s customer recommendation and segmentation operations show. Although the online store is currently only open to existing clients in the company’s home country, the plan is to roll it out to new and international clients in the near future.

So, what insights has the team garnered so far from these initiatives? The first was that in-house expertise was essential, “So we hired a CDO and he built a team of data architects.” Equally important was the need to get buy-in from those production and business teams whose work would be impacted by all this data. As Mishanina explains, “We tried to outsource here and there, but we realised it needs constant attention, and really deep integration of the team into the plant. If there is only IT guys, or digital guys, involved, then it’s not going to work.”

The technical details

Severstal’s data lake was built using technical expertise from companies like Microsoft and Lenovo.  

Ideas and insights you can steal

Severstal shows how even a seemingly traditional industry is being transformed by Big Data technology. What’s particularly interesting is Mishanina’s point about integrating the data tea with the frontline staff whose work is generating the data – after all, data is worthless if it doesn’t lead to action. Without proper integration and buy-in across all relevant parts of the business, you could end up spending a lot of money, with little real change to show for it.


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Written by

Bernard Marr

Bernard Marr is a bestselling author, keynote speaker, and advisor to companies and governments. He has worked with and advised many of the world's best-known organisations. LinkedIn has recently ranked Bernard as one of the top 10 Business Influencers in the world (in fact, No 5 - just behind Bill Gates and Richard Branson). He writes on the topics of intelligent business performance for various publications including Forbes, HuffPost, and LinkedIn Pulse. His blogs and SlideShare presentation have millions of readers.

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