Importance of supply chain efficiency during steel market change
28
Importance of Supply Chain Efficiency during Steel Market Changes . Nasser M. Zaky – Ezz Steel – Egypt September 2010
-
Upload
nasser-zaky -
Category
Business
-
view
215 -
download
2
description
Importance Of Supply Chain Efficiency During Steel Market Change Metal Bulletin Events
Transcript of Importance of supply chain efficiency during steel market change
Importance of Supply Chain Efficiency during Steel Market Changes .
Nasser M. Zaky – Ezz Steel – Egypt
September 2010
Contents
September 2010
Insert your Company Logo here
1.Global Steel Market Changes.
2.Global Crude Steel Production Trends.
3.How have needs changed over the past two years?.
4.How logistics management support steel makers during steel market changes?.
5.Conclusions.
Global Steel Market Changes
June 2010
Source: Metal Bulletin
647
192
400
Global Steel Market Changes(continued)
June 2010
Source: SBB Steel Prices
Global Steel Market Changes(continued)
June 2010
Source: Metal Bulletin
1174
622
Global Steel Market Changes(continued)
June 2010
Source: Metal Bulletin
Global Steel Market Changes
June 2010
Source: Metal Bulletin
1100
404
738663
Global Crude Steel Production Trends
June 2010
Source : World Steel
June 2010
The first six months of 2010 was 706 mmt, 27.9% higher in comparison with the same period of 2009
The first six months of 2010 increased by 7.2% compared to 2007.
Asia and the Middle East showed increased crude steel production compared to the first six months of 2007.
Crude steel production in the EU, CIS, US and Canada is still more than 15% below 2007 levels.
Global Crude Steel Production Trends
World Steel Capacity Utilization Ratio
June 2010
Source : World Steel
June 2010 Crude Steel Production Compared With June 2009 (mmt)
Country Jun-09 Jun-10 Change %
China 49.0 53.8 + 9
Japan 6.0 9.4 + 35.9%
South Korea 3.7 4.8 + 21.9
Germany 1.8 3.9 + 53.4
Italy 1.5 2.3 + 32.8
France 1.0 1.5 + 31.4
Turkey 2.2 2.5 + 13.8
Russia 5.1 5.4 + 6
Brazilian 1.5 2.9 + 46.8
June 2010
June 2010
How have needs changed over the past two years?
Information, Product, Services, Funds, and Knowledge flows
Supply + Cash Flow Demand
Suppliers Steel Makers Customers
Supply Chain Interfaces and operates in global marketplace :
Customers Needs Changes – Global Automotive.
June 2010
Source: www.worldometers.info
June 2010
Customers Needs Changes – Construction Market.
Overall, world construction spending growth have slowed to less than 1% last year to reach $4.8 trillion (£3.4 trillion).
This will be the lowest rate of growth since 2002, where the world construction spending growth was between 3% and 6%.
June 2010
Customers Needs Changes – Construction Market.
Logistics Needs Changes – Maritime Transport of Dry Bulk.
June 2010
June 2010
Logistics Needs Changes – Maritime Transport of Goods.
June 2010
Gross Weight of Seaborne Goods handled In EU-27 main ports
How Logistics Support Steel Makers During Steel Market Changes ?
1.Internal supply chain (hidden supply chain):
Internal supply chain is the design which link all internal members in a way follow each item step by step from inception to demise and it’s crucial for the following:
Organizing the flow of incoming materials.
Recycling and selling of all generated by-products .
It will lead to smooth operation, improve efficiency and finally production cost reduction.
As an example for applying integrated internal supply chainJune 2010
Mixing of steelmetals with slag
Status before
June 2010
Status after
Processed Slag
Recovered steel metal from slagAccumulation
of Slag
June 2010
Accumulation of scrap dust
Accumulation of scrap dust
Separated valuable metals
Separated ferrous scrap.
Scrap dust after screening
Status before Status after
June 2010
Results of Applying Integrated Internal Supply Chain Design.
June 2010
Results of Applying Integrated Internal Supply Chain Design.
2- External Supply Chain : Supply chain drivers are :
Facilities .
Inventory.
Transportation .
Information.
Sourcing.
Pricing.
Note: Inventory is the most important driver affected the efficiency of steel makers during market changes.
June 2010
How Logistics Support Steel Makers During Steel Market Changes?
Market status :
1-Market collapse:
Steel makers generate losses equal to the price change multiplied with the level of inventory.
2-Market Peak:
Steel makers generate profits equal to the price change multiplied with the level of inventory.
June 2010
Impact of Inventory Management In Steel Making Efficiency
1. The global steel market is cyclical with no firm rules about timing of each cycle and regularity is not a part of the process.
2. Understanding of the interfaces between supply chain managements is crucial to have integration between all members.
3. Supply chain integration is maximizing supply chain overall value through:
Cost reduction.
Demand enhancement.
Increasing ability to respond quickly and accurately to market change
June 2010
Conclusions:
4. Firms must evaluate the risks and potential profits awaiting them in global market to optimize the opportunities and overcome the challenges.
5. Efficiency firstly achieved through internal supply chain (hidden supply chain).
6. All supply chain players must define carefully the level of inventory and where it is held which optimize overall supply chain value.
7. As we efficiently managed the inventory levels and then cash to cash cycle as we become stronger in front of market changes.
June 2010
Conclusions
June 2010
Address : 44km katamia Road, Ain Sokhna Road, Suez, EgyptTelephone : +2 062 325 0361/63/70Fax : +2 062 325 0362E- Mail : [email protected], [email protected] : www.ezzsteel.com
