THROUGH THE MILL
A new digital procurement service is hoping to revolutionise and rejuvenate
the UK’s steel industry and bring the entire value chain into the 21st century
The UK’s beleaguered steel industry
has received negative press for several
years. Job losses, Chinese takeovers and
a downturn in the global automotive
industry – even before the coronavirus
crisis ground the industry to a halt –
have combined to batter what is a key part of the
manufacturing supply chain.
According to fi gures (https://bit.ly/2RPcz2A)
released in May by UK Steel, a subsidiary of
Make UK, in April alone, British steel producers
experienced a 45% reduction in demand, equating
to an estimated £125 million loss in sale revenue.
All UK producers are now expecting, and planning
around, low levels of demand being maintained
through the course of this year and into 2021.
Changing traditional mindsets
Steel is also a fairly traditional industry, especially
as you move down the value chain and into stock
holder and service centres within the sector.
Looking to change this, and improve the fortunes
of UK steel as a whole, is Steel Scout, a Tata
Steel-backed initiative that is aiming to digitalise
the industry – and with it, breathe new life into
the downstream value chain. Launched in 2017,
the venture has two separate off erings: Steel
Scout Procure, which is a concierge procurement
platform for customers to fi nd the best deals;
and Steel Scout Direct, which is described by the
company’s managing director, Matt Yeates, as
“like Amazon for steel.”
“It’s about bringing some of the habits we have
as consumers to the B2B world
of procurement,” continues
Yeates. “It’s ground-breaking
for the steel industry.”
The steel value chain is
very long and complex, with
raw materials going through a
multitude of processes before
it becomes something usable,
such as a car or washing
machine. The steel industry
itself covers everything from
raw materials arriving at a mill
in Port Talbot from the other
side of the world, to complex
manufacturing processes.
“There are lots of players
in the value chain, and at the
smaller end it’s not very digital,”
explains Yeates. “There are
lots of people buying small
amounts of steel every day to
make their products. They all
buy at diff erent points in the
market and the complexities
of that don’t lend themselves
to the standard ecommerce
models that exist. Steel Scout is
essentially a catalogue solves the
problem of presenting products
online – nobody else in the
UK can do that across multiple
vendors. It provides price
STEEL OCTOBER 2020
transparency and, ultimately, a
fairer deal.”
Since its launch three years
ago, Steel Scout now supports
over 130 suppliers, has over
8,000 registered buyers and
has received over £50 million in
enquiries. It is now seen as the
go-to service for many in the
steel procurement industry – but
many took some convincing, says
Yeates, who compares it to the
early days of email. “People still
felt they could just pick up the
phone or send a letter, so what’s
the point in doing it digitally.
There are, of course, companies
that are early adopters and
understand the benefi ts it can
bring to their procurement;
suppliers understand that it
off ers a digital channel to the
market. At the other end, there
are some who say that they
BY CHRIS BECK
45%
reduction in steel demand
in April – equivalent to
£125 million of sales
24 www.manufacturingmanagement.co.uk
/2RPcz2A)
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