Corporate Responsibility Report 2022-2023
Outcome 07 – Supply chains that our customers trust
In a competitive market, customer focus is key to success. Our ambition is to become our customer’s preferred supplier in terms of service and quality. To achieve this, it is important to have uniform and sustainable systems and processes for the launch of orders, planning, follow-up, transport and quality of our finished products.
Customer Service serving the customer in a significantly changing economic climate
The overall consequences linked with the pathway to carbon neutrality has a significant impact on us as a steel producer, as well as on our customers, leading to a search for a new operational equilibrium. Electrification among our automotive customers, along with a general trend towards greening among our industrial customers, is causing shifts in order volumes and mixes as well as in transportation modes. Furthermore, we have been facing major disruptions in production lines in Europe, both within and outside the ArcelorMittal group for some time, resulting in important disturbances in the supply to our customers.
This has led to a nervous and unstable supply chain. Despite these challenges, we were able to navigate through this situation. Within the cluster ArcelorMittal Belgium, we have backup options for most of our products in case of disruptions in customer supplies and we can also rely on support within the ArcelorMittal group when backup is needed.
Within these circumstances, ArcelorMittal Belgium remains capable of continuing product innovation and offering new products with optimal service: expanding Magnelis® and Optigal® capacity, developing advanced high-strength steels for the automotive sector, deliveries of advanced organic coatings and further expanding our Xcarb®-related shipments to support the journey towards carbon neutrality.
Effectively and efficiently managing these deliveries on time and in the right manner is crucial for the customer service department.
Cluster logistics runs well
The logistics optimization program, launched in 2019, was continued in 2022 and 2023. In the Ghent cold rolling mill, the stock capacity for annealing was expanded with approximately 8.5 kt allowing less internal destorage and standstills due to limited logistics.
For deliveries to Eurogal in Liège, the intermediate stock was excluded by introducing direct trains between Ghent and Eurogal. In 2022 and 2023 direct supply to Eurogal results were further improved (reaching 85% of direct supply in 2023) after putting in place a new delivery schedule by rail. In Liège, the Eurogal stock redesign was finished allowing an extra 950 coils that can be stored and kept internally to avoid external storage activity and costs. Also in Ramet some extra storage capacity (230 coils) was created (former Arceo hall + H15). In Genk the former ArcelorMittal Tailored Blanks hall has become a full Sikel storage hall resulting in smoother internal storage performance, avoiding the need to destock externally).
The implementation of the Genesis (warehouse management system) in Liège sites Eurogal and Kessales (as in place in Gent,Genk and Geel already) was finalized. The Ghent-Liège supply by rail was boosted up to 96% by rail in 2023, despite worsening rail tariff conditions.
New procedures were put in place to plan maintenance in shipping halls better aligned with shipment needs – e.g. to avoid urgent material ends up in halls out of service -. The supply chain transport & logistics team, together with Purchasing, decreased the extra costs on truck shipments significantly thanks to new contracts, higher contract fulfillment and a more flexible way of chartering trucks (‘best carrier’ process).
Primary Route Usage use has improved slightly from 78.8% to 80.6%, mainly after intense follow up of some barge and maritime regular routes.
With automation programs starting in 2024 in the shipping halls of Eurogal (H52), Kessales (K2) and Ghent (UV) including automatic loading and unloading of railcars, the ambition to improve storage and handling performance further in 2024 is demonstrated. Also thanks to a new transport management system (Sultan project / introducing the Oracle TM package) ‘coming soon’ (2024-2025) we shall continue external logistics optimization in the next years.
Together with Ghent and Antwerp University and IMEC or VIL research institutes, we explored some innovative ideas of better logistics organization thanks to data spacing and federated information sharing.
Scale-up (Supply Chain, Quality Chain, European Project)
The Scale-up (Supply Chain, Quality Chain, European Project) project of ArcelorMittal Europe – Flat Products steers the strategic processes in the field of supply chain and quality. Our cluster ArcelorMittal Belgium is pilot for the next major subproject Sultan. Sultan (= ScaleUp Logistics and Transport ApplicatioN) will replace the current Transport Management System ‘ISLA’ within ArcelorMittal Belgium, and in the meantime serve as template for ArcelorMittal Europe – Flat Products. The core role of Sultan is to plan the transport needs for supply chain transport in cost efficient way, with as little as possible manual intervention by the transport & logistics department. The rollout of the Sultan project Belgium has started end 2023. The rollout is divided in three release phases: release 1 will cover the truck transports between the different sites of the cluster ArcelorMittal Belgium, release 2 will then cover all the rest of the truck logistics and during release 3 we will cover the other transport modes (train, vessel and barge). Deadline of the whole program is the end of the first quarter of 2026.
Permanent challenge to guide our products through the production chain on time in full
We further optimize our scheduling systems to guarantee an optimum flow of our products through our installations. New innovation products, as ultra-high-strength steels, require more complex routings which of course makes it more difficult to schedule the different production steps assuring an as short as possible and reliable lead time for our customers. Products have to be produced in specific campaigns more frequently, as Magnelis® and Optigal®, limiting again the freedom of scheduling our production chain. We continuously aim for the perfect equilibrium between service and production costs when making production planning, assisted by our dedicated IT-tools such as line scheduling, multi-day and campaign planning software. The next big challenge ahead for production planning and scheduling will be the complete new primary production route with the DRI/EAF installation.
In the meantime we have developed an external supply route from the Sestao EAF production installation in Spain, to process their hot rolled coils further to finishing products at our finishing installation to meet the request from our customers for green steel (XCarb®).
Towards more ‘green’ transport modes
A European program to prepare the ArcelorMittal Supply Chain organization and the commercial organization (CMO) towards organizing, selling and reporting on green(er) transport solutions was initiated in 2023. Modal shift towards greener solutions, find new transport solutions and ‘greening’ existing solutions (e.g. electrify) shall be key elements in lowering our transport ecological footprint. In this respect, a full delivery by electric truck lane was installed between Gent and Moerdyck and some first tests on using HVO fuels on truck transports are explored. We are also aiming to stop the downward trend in rail transport by using more rail operators and optimizing our proper ‘Steeltrack’ railcar fleet usage, using it on a European scale.
