Magazine

Posco


The Project: An online production-planning and order-tracking system that slashes the time and cost of steelmaking.

The Payoff: Inventory and delivery times have been halved. Costs saved by $17 per ton.

Posco may be the world's most profitable steelmaker, but these days silicon chips and software -- not blast furnaces and rolling mills -- are what's driving the Korean company's efficiency. Since 1999, Posco (PKX) has spent $179 million to network its 81 plants and take orders online. That lets the company gather and crunch data on production, orders, and deliveries. It helps send the steel products out the door faster. The service has helped Posco halve the time it takes to fill orders: Korean customers can get hot-rolled coils in just 14 days, compared with 30 days before. And Posco has slashed inventories of wire rods to five days' supply, from 12 days before. Thanks to the Internet, Posco carries thinner inventories of steel -- and fatter profits. By Moon Ihlwan


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