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Produced | Tiger Sniffing Technology Group

Author | Utada

The cover comes from Visual China

A few years ago, a report about “China can’t even make ball-point pen nibs” caused an uproar, and everyone denounced how backward China’s refined steel technology is.

Yes, at least 5 years ago, the tungsten carbide ball on the ballpoint pen tip we used, China did not have the production capacity of this special steel.

After that, the Taiyuan Iron and Steel Plant in China specifically made a technical attack on the production material of the ball seat with a diameter of only 2.3 mm, and finally produced refined steel for ballpoint pen balls in 2016.

Later, the stories of Chinese-made steel balls being used by ball-point pen manufacturers in production, mass production, etc. happened one after another.

Although many people blame “China can’t make anything” on the lack of strength in steel technology research and development, to some extent, we have overlooked the role of the market in the middle-The profit may be only a few dollars Will the new ballpoint pen attract a group of steel mills to make small steel balls with high technology content and large R&D investment but not profitable?

For the same reason, there is also the story of a celebrity who recently said in a speech that “China cannot make lighter gaskets and needs to rely on Japanese imports.

The steel ball of the ballpoint pen head cannot be made in China for a long time

Actually, stories such as “Steel Ball Battle” and “China Can’t Make Lighter Gaskets” only reflect a corner of the development status of China’s steel industry that is not well known to the public.

For many years, I have watched newscasts since I was a child, and now I am really exposed to the steel industry. There have been several pain points in this industry for more than 20 years:

• The production capacity is still excessive.

In 2020, China’s steel production is still growing, and the total amount is very large, reaching 1.05 billion, accounting for 60% of global steel production. However, most of the steel in it is plain carbon steel used in building (real estate). Obviously, the real estate boom has brought about 30 years of brilliant production capacity in the steel industry. However, after the economic benefits faded into the cold winter, the following two problems became more and more prominent.

• Structural imbalance and low technical content.

60% of the common carbon steel accounted for, which means that the steel with a higher technical content accounts for a very low proportion, and imports are more than self-produced. The steel used for the “ballpoint pen ball” mentioned above is a technical bottleneck in the industry (of course this is not the main reason). There are many related bottlenecks.

Especially in the early years high-grade steel materials such as automobile steel plates mainly relied on imports. Therefore, the National Development and Reform Commission has been strictly controlling new production capacity and suppressing backward production capacity.

In addition, “low concentration” is also a manifestation of imbalance. China’s steel-producing companies are numerous and scattered, and the top ten steel companies in the country only account for 38% of the 1.05 billion. The result of many “retail investors” is that on the one hand, the bargaining power of purchasing iron ore is weak, and on the other hand, it is easy to carry out low-level repetitive construction-Everyone is competing in the low tier, falling into the endless loop of “price war” strong>.

• Huge pressure on environmental protection and safe production.

As long as you understand the steelmaking process and the environment, it is not difficult to imagine the “pollution index” of steel plants. The gray-black ore dust rushing in the mines, the billowing smoke from the chimneys of the steel mills, and the discarded “poisonous” metals…to 20In 18 years, Tangshan, an important steelmaking town in Hebei, ordered the steel plants to relocate collectively if they did not rectify and transform.

Picture comes from the Internet

On December 31, 2020, the “New Recipe” issued by the Ministry of Industry and Information Technology was reflected in a “Guiding Opinions on Promoting the High-quality Development of the Iron and Steel Industry”. In summary, it is actually these three words——

Technology, talent and scale.

Steel experts from Aolin Technology, an industrial Internet company, told Huxi that the larger the company, the better the synergy between upstream and downstream, and the higher the requirements for technology (informatization).

Conversely speaking, the same holds true-The higher the informationization, the better the collaboration will be.

The direct benefits that this brings to steel companies, in general, are to “do not waste”, “reduce costs”, and “make more money” as much as possible.

『Previously there was a large steel plant, and the level of information automation was already very high, but some important data still have errors. For example, for a 300-ton converter, the error in the amount of scrap steel is also about ±3 tons. . This is already very good data.

Many smaller steel mills have small furnaces and relatively low automation levels, the errors will be larger, resulting in inaccurate data and affecting production. 』

The converter of the steel plant, the picture is from the video of “Museum of Chaos”

Therefore, the bargaining power, informatization level, and environmental governance of small and medium-sized steel mills are “lower than others”. From a macro perspective, they are more likely to be “victimized” by market price fluctuations, and more likely to be suspended for rectification;

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From a microscopic point of view, it is also more difficult to control quality inspection and weighing issues in the steelmaking process.

『Such companies are blind in matching supply and demand. For example, if a steel mill is making a production plan for next year, there is often a time gap between the forecast and the actual needs of the market. The research and judgment and feedback of market signals are not timely and accurate, so there will be such back and forth. Fluctuations. 』

The picture comes from the video of “Technology Fun”

Therefore, in 2018~2020, when the industrial Internet entrepreneurship climax is repeated, either technology companies aim at a certain process to cut vertically and optimize production efficiency for factories; or technology companies start from global data governance and platform business. Start with the horizontal “how fast, better and save planning” for the factory.

However, as a traditional industry that has been upgrading tortuously for many years, can steel really be “one hit” by the so-called industrial Internet?

Divide and conquer, defeat one by one

In fact, the business of steel production, Although it has always been hailed as a “manufacturing backbone” and “a modern industrial skeleton”, it is also dubbed a “silly” by people in the industry. Daheizuo’ industry.

This feature is not only derived fromThe perception is also derived from its technological characteristics-The steel output counted by “tens of thousands of tons”, no matter how finely made, there is a certain degree of “extensiveness”.

Steel rolling, the picture is from the video of “Technology Fun”

『Look at the big furnace a few meters high, that big piece of iron ore and crude steel. Since scale is required, it is bound to give up a certain degree of refinement. However, this does not mean that there is no work to do inside. “Aolin Steel experts pointed out that as a process industry, steel plants have technical optimization space in both the workshop and the office.

L1~L6 represent the continuous advancement of industry toward automation, informatization, and digitization. The pictures are from Aolin Technology

From the above “grading” map of industrial digitization, we can see that L1 to L6 are the “evolution” process of each factory from the bottom to the top.

The familiar PLC (programmable logic controller), MES (production execution system), ERP (enterprise resource planning system) and CRM (customer relationship management system) that we are familiar with all belong to L1~ L4 factory information transformation.

In many large automated factories, PLC cabinets and MES operating systems are very commonMost of them come from industrial giants such as Siemens, Rockwell and Schneider.

PLC cabinet, the picture comes from the network

I mentioned in the previous article “The River in a Cigarette” that industries such as cigarette manufacturing, automobiles, and precision equipment manufacturing (chips) have a high level of automation, which gives them a “solid foundation”. “Evolve to a higher level-L5~L6.

Therefore, many steel plants with good basic conditions will have higher requirements for the application of technology in production and management.

For example, The Baowu Group, after the merger of Baosteel and Wuhan Iron and Steel, will produce 100 million tons in 2020. They have a subsidiary called “Baoxin”, which specializes in informatization.

However, unlike the precision equipment production line, the particularity of the steel industry lies in its uneven development level.

The larger the scale of the large company (state-owned), the stronger the technology, and the faster it goes, and it has moved towards L6; smaller companies have relatively backward technology, even the entire product life cycle of L1 and L2. Finished. Some of them will also become the victims of the “shut down” era that we often see in the news.

Workers in the workshop, the picture is from Visual China

『Small factories in some places are very backward, and manual processes are common. For example, in the past few years, thousands of coal-fired soil shaft kilns were continuously banned, which is a very polluting and very backward manufacturing process. 』

Steel experts remind us that we must not think too much of the steel industry. Even in large factories, the operating environment is far worse than we thought.

The steel manufacturing process can be roughly divided into sintering, pelletizing, coking, blast furnace ironmaking, hot metal pretreatment, electric furnace steelmaking, secondary metallurgy, continuous Casting, reheating, hot milking and cooling process.

In other words, because each steel plant is at a different stage of development, the problems encountered are completely different and require different types of technology companies to help solve them.

『For example, there are technology companies that provide connectivity and coordination for industrial control equipment in the workshop, and there are also technology companies that specialize in reducing energy consumption for blast furnaces. It is also an incredible thing to cut out a point of energy consumption for you every year;

There are also some automation companies that bury thermocouples (a kind of sensor in the steel industry) around the hearth of the blast furnace to measure the temperature of the furnace wall, so that the system can monitor the hearth based on the temperature of the furnace wall Situation, make a risk prediction. 』

Blast Furnace, picture from Chaos Museum

But Aolin believes that from the perspective of cost, under the condition that the existing equipment is not replaced, by optimizing the process, after the cost is reduced by a point, the difficulty will become very difficult.

『Factory replacement equipment also has a long cycle. For heavy industry, it is impossible to build a blast furnace after two or three years of technology upgrades, then dismantle the blast furnace and build another one;

You can’t change the sensor in a short time, because steelmaking is a process operation, and the furnace is usually shut down for maintenance once in a few years, and the loss is even greater if it is stopped; nor can you purchase MES and ERP systems Later, two or three years to purchase new systems. 』

Of course, in addition to considering economic interests, there are also some uncontrollable human factors (everybody knows) widely existing in traditional industries.

For example, the sintering department purchases the ERP of company A, and the continuous casting department purchases the ERP of company B. Both departments have the right to decide which system to use. A steel plant can have several systems with the same function and different brands.

Therefore, even if you want to replace them all, it may be a big project that is completely out of sync with time and resources. The most likely solution for Party A’s factory is to rely on a third party to get it through.

On the other hand, “lightweight” technical service and platform companies that don’t want to compete with equipment manufacturers and traditional information system suppliers, jump out of the thinking mode framed by systems and equipment and use the Internet to think. Choose to cut in from another attribute that can be “connected” –

Data.

This is also the value created and created by the L5 and L6 layers.

Statistics of workers using computers, the picture comes from Visual China

“Achieving cost reduction and efficiency enhancement is not only to transform the production line, but also to make a horizontal collaboration within the steel plant,”

Aolin Steel experts talked about a concept called “Balance of Production, Supply and Sales“. In short, when we formulate the production plan, the figures reported should match the actual production capacity, raw material supply, and sales market trends as much as possible.

『In addition to quantity, grasping the product structure is also very important.

For example, how many rebars I have to produce each month and how many galvanized steel sheets can maximize the benefit, all need to set a number, which also corresponds to the requirements of ore procurement, production scheduling, logistics arrangements, sales strategies, etc. It’s a thing that affects the whole body. 』

Actually, “balance of production, supply and sales” is not a new concept.

On the contrary, you can see it frequently appearing in articles about industrial restructuring in journals in the 1980s. But decades later, with the continued surplus of steel production capacity, the solution to this problem is still very skinny.

When Aolin’s engineers visited local steel plants, they found that the horizontal and cross-departmental collaboration within the company was relatively primitive and a bit out of touch with modernization:

『Everyone has a so-called business analysis meeting, which is slow and not accurate enough. Once there are certain changes in market signals, there is no time to react, especially for individual companies. 』

They mentioned that the chairman of a steel mill wanted to see a visual report. This sounds like a very simple thing, and many software can do it. However, for this “little matter”, he finally waited for three and a half days.

『Because the table he wants to look at needs to collect data from different information systems, and the format, specification and sampling frequency of the data must be aligned, so that several peopleIt took three days to do it. 』

Informatization system on the production line, the picture comes from Visual China

To some extent, this is similar to the “data island” we talked about.

In the steel industry, the problem of data islands is also called “data chimney”. Each process has its own small network, one for continuous casting and one for refining. In the past, they were all isolated from each other. Like two small chimneys, the data is not accessible.

『The data and information communication between the steelmaking process and the continuous casting process of a steel plant is not very good, which leads to unstable continuous casting speeds and problems with the quality of the cast slabs, which affects production.

Now that these two processes have been opened up, the data chimney has been eliminated, the converter process and the continuous casting process can understand the production situation in real time, and both the production rhythm and cost control have obvious effects. 』

Continuous casting workshop, pictures from Vision China

Technology companies focusing on the L5&L6 layer, including Aolin, to some extent, what they do is “time business”——

Pull data that exists in many different systems and put them in a lake. Then do a sorting and analysis, and finally present a clear and comprehensive data and analysis results to the top leaders of this company, andHead of the department.

“Open up the interfaces of MES, ERP, and CRM, pull the sales and order data from the sales department in the past year and month, and pull the material inventory from the purchasing department And supply data, manpower and income data pulled from the financial department, as well as production capacity data on the production line, and macro market trend data, all in one library ,』

Picture from Aolin

In fact, we believe that this is not a highly technical process. On the contrary, Aolin also believes that this is a “hard work” with other factors far greater than technology. At this time, the technical department is auxiliary, and the market is the core department, which requires a lot of time and managers.

The more technical tasks and service value-added points they envisioned are whether the algorithm can produce more valuable things after the data is really opened up——

Smart decision-making assistance.

『We are not ERP, but a globalized data governance and globalized benefit optimization. In addition to the implementation fee paid on schedule, steel mills need to pay for continuous SaaS service fees.

Where can you squeeze out money and dig out benefits, I will help you find it, but only if the data is connected, and collect the money based on your true total benefits. Actually, customers don’t really care whether your millions were saved by purchasing or by increasing sales. In the end, he looked at the overall benefit. 』

In actual combat, all are pits made by data

Theoretically impeccable, often in the presentThere are huge traps in reality.

It is a big story not to do ERP, to do data governance and quantitative analysis of the whole life cycle. A big story means big trouble.

As mentioned earlier, L5 and L6 are based on sound L1~L4. If the industrial control coordination on the production line is not done well, or there are human factors in many links, then L5 and L6 will not be established. .

However, L5 and L6 re-process the data and rely entirely on the quality of the data collected by the automated system.

“Data quality is a big challenge for us,” Aolin Steel experts told us that due to the extensive nature, many aspects of the “big picture” are controlled by the system, and many details are mixed with human factors.

At present, many production links still require manual statistics, and in harsh environments, it is inconvenient for workers to use digital tools

Because a lot of data is not directly generated by machines, but manually entered into the system by humans (this also means that automation is achieved, but intelligence is not achieved), this situation is very common.

This is equivalent to, Workers are “data labelers”, and the quality of data depends on the uncontrollability of people.

Silk feeding machine. Wire feeding refers to crushing and reconciling additives into a certain shape, and wrapping it with thin steel tape to make a cored wire.

『For example, there is a “silk feeding” link in refining. The length and speed of wire feeding must be set by the workers on the machine and can be added based on experience. The data is not automatically collected into the system, and the wire feeding amount cannot be accurately controlled through the system, which will affect the quality of molten steel and production. 』

Aolin Steel experts also cited a very vivid example: in the refining process of steel, workers are required to use shovels to throw the slag-forming agent, but because the weight of the slag-making agent is inaccurate, It will affect the quality of molten steel and production cost, so workers will weigh it:

『If it doesn’t feel enough, just shovel two more shovels and throw them directly into the fire! 』

Therefore, using sensors to automatically collect data is something the industry is trying to promote. However, this involves cost, process difficulty and employment conditions, and the process is relatively slow.

In addition, the sensor will quickly become inaccurate in the harsh smelting environment of high temperature and high pressure, so it is very difficult to maintain the accuracy of the sensor and install it. And engineers are also correcting data quality through certain algorithm compensation.

Thermocouple is equivalent to a kind of sensor in the steel production process. It is mainly used to measure temperature and pressure. The picture comes from the Internet.

Secondly, sometimes it is not just the data quality, but the question of whether the data you want is there.

Take “predictive maintenance”, which is the ability of many industrial Internet companies to advertise. Many construction machinery, excavators, and aircraft engines have indeed applied very mature and effective predictive maintenance technologies.

However, in old factories in China where technology changes are not so fast, there are many so-called “Dumb device”, no PLC, few sensors;

On the other hand, some special equipment with advanced technology and complex technology does not leave “room” for third parties to open up data.

『Some foreign equipment has a “black box”, and data is required for predictive maintenance. However, except for equipment manufacturers, other companies cannot get the interface and data in the “black box”, so they do Can’t predict,”

The experts of Aolin Steel mentioned that there is a piece of equipment in the continuous casting process that is produced by a foreign company, but if they don’t give you an interface, you can’t predict it.

Continuous casting, pictures from “Technology Fun” video

In general, it is not just the steel industry. There is a problem that is common in all industrial industries-the data category and quality of management systems (ERP, CRM) are much higher than those of production systems (PLC, MES).

Therefore, if you want to manage the whole life cycle of a factory, it is necessary to solve the problem of “short boards”.

You must never ignore or skip any link.

The top project?

For a factory, it is obviously the boss who is most happy to “collect the complete data of various departments and do system analysis”.

But as I said just now, it is not difficult for all departments and workshops to happily hand out their data to engineers for unified management. Since interest is involved, it becomes a “hard work”.

According to the results of the implementation of emerging technologies in other industries that we have learned before, many so-called 5G, artificial intelligence equipment, or intelligent platforms are either left behind in a corner of the office after purchase; wantAfter being promoted as a “phased achievement” for a while, it ended without any problems as the support funds were interrupted.

These are all manifestations of the “No. 1 Project”.

Pictures are from Visual China

『We have served some private steel factories. Apart from the boss, the attitude of other leaders is also very good. The general manager of one factory held a special mobilization meeting and asked the employees to ask, “If anyone does not cooperate, I will ask you by the end of the year.” 』

The account manager of Aolin said that for each department of the steel plant, if you don’t take the lead, you will adjust the KPI slightly, and you will have to do the following.

『Some functions are not completely excluded from the executive level. For example, we have a client company that holds a project analysis meeting on data governance every two weeks to see how the project progresses. In order to achieve a unified goal, everyone is actually very willing to cooperate. 』

But Aolin engineer did not conceal his criticism.

For industrial people who are very dependent on experience and qualifications, many people think that “assistance decision-making” is a pseudo-need, and some people even leave them a sentence in person:

『I don’t use L6, my mind is L6. After communication, their biggest concern is that they feel that the system threatens part of their functions.

In addition, since it is a cross-departmental linkage of supply, production and sales, they feel that each department of the factory has completely different styles of work, and they often encounter a situation where “the sales department says it is good, but the production department says it can’t.” Therefore, we have to break them one by one:

『The finance department is very rigorous, but it is not good at talking about its own needs. It must rely on product managers to discover and guide their needs, otherwise they will not even express 30% of the potential needs;

The sales department is very talkative but very divergent thinking, and the demands mentioned are actually not well implemented. At this timeHow to control their demand later, after all, we all need to go online on time according to the cycle. 』

As of now, all of Aolin’s first projects in the industry have a cycle of more than half a year. Although on the supply side, they are pursuing the idea of ​​modularization and productization. But often the attributes of the industry determine this kind of The “hard work” of persuading customers to integrate into it takes a lot of time.

『Our boss also wears safety helmets. Whenever he goes to a factory, he goes back and forth between the construction site and the office. The good name is: integration into industry. 』

The traditional Internet, especially the consumer Internet, is like a highland or plain. If there is an industry predator with sufficient determination and capital to spread the industry, it is possible to get through. It’s like after a pouring of water is poured, the so-called card opens at once, and it rushes down.

However, the field of the Industrial Internet is a bit like a vertical and horizontal gap. There are barriers between individual industry segments. So if you want to pour water down, it is impossible to occupy this place. Because it will be separated into small puddles.

As for technology companies that specialize in industry, they can only do every small puddle step by step, without any shortcuts.

I’m Fu Bo (penname Utada) from the Tigersniff Technology Group. I am concerned about smart manufacturing, chips, and autonomous driving. Industry professionals are welcome to communicate together. (WeChat: fudabo001, please note your identity when adding WeChat)

This article is a case study of “Big Whale List·2020 Industrial Internet High-growth Enterprises List” (Details of “Big Whale List”) The fourth chapter.

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