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A New Order

By Mel Duvall Print this article Print

The biggest American steelmaker would have the world—and the Bush administration, which is trying to save the company with fresh tariffs on products of foreign rivals—believe it is one of the most efficient producers around. Is it?

A New Order

Tom Zielinsky, senior director of information technology strategy at competitor Weirton Steel, for instance, figures that how a steel company takes care of its orders is one of the clearest ways it can separate itself from its competitors. Zielinsky says that when a steel company gets an order right—when it smoothly handles order entry, produces the exact quality of steel the customer wants, and delivers the product in the quantity requested and at the right time—that company is more likely to win repeat business.

"You need a way to differentiate your business," Zielinsky says, "and I think you can do that with repeatability of customer orders."

At U.S. Steel, David Sherwin, the company's director of order fulfillment, knew that the prime objective should be to allow customers to place orders electronically, specifying the products and quantities they wanted, with the system automatically figuring prices and shipment dates.

"Everyone was producing the same steel," says Sherwin. How to fulfill orders would be different.

But taking orders electronically is complicated, even in a seemingly stolid industry as steel. In addition to quantity, price, and delivery date, information on each steel product's composition, size and thickness must be calculated before an order is produced and shipped.

"The whole methodology of coming up with an order that was correct from a metallurgical standpoint was a very difficult process," Trudell says.

U.S. Steel tried to get started with an order fulfillment part of an Oracle software package. But then it added a product configuration system from a company called Concentra (which Oracle bought in 1998) that it thought could handle the intricacies and peculiarities of ordering a product like steel. Such orders require blending of raw materials and the manipulation of heat, tensile strength and other physical factors.

The system could crunch metallurgical rules, production capability and limitation information, and the customer's exact product specifications. There was just one problem: The system needed to be populated with U.S. Steel product and metallurgical information.

This turned into a lot more than U.S. Steel anticipated. "We underestimated how time-consuming and tedious the task of extracting and understanding the business rules and procedures would be," Trudell says. Many order processing business rules and procedures were encapsulated in thousands of lines of code on the company's mainframe computers. These had to be built into the configuration software.

Software engineers needed to sit down with engineers and develop programs that could deal with the intricate mix of product specs and prices needed to serve customers. "This required thousands of hours of interviews and logic revisions before the application was considered acceptable," Trudell says. "Much of the knowledge was resident in the minds of our metallurgical engineers."

But, when done, the product configurator put U.S. Steel at the forefront of handling customers' orders with intelligence—and fewer hands. Order changes—to compensate for inaccurate order entry or to redo an order taken that a mill couldn't handle—have dropped by two-thirds.

This article was originally published on 2002-06-17
Contributing Editor
Mel Duvall is a veteran business and technology journalist, having written for a variety of daily newspapers and magazines for 17 years. Most recently he was the Business Commerce Editor for Interactive Week, and previously served as a senior business writer for The Financial Post.

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