Product Instead of Project as IT Strategy

Vallourec has been working with PSI Metals for over ten years. Why is this long-standing relationship so important for Vallourec?

Mr. Groos: The plants’ IT systems usually have a very long lifespan and are highly integrated both in the automation level of the machines and in the Level 4 or ERP systems on the planning side. It is therefore extremely difficult to change or adapt them. For this reason, it is very important for a company like Vallourec to have a reliable partner at its side in order to be able to maintain the software in the long term.

Why does Vallourec prefer product-based solutions to project-based solutions?

Mr. Groos: Today we still feel the effects of the fact that the software we use is legacy software. It is therefore an important aspect that we are able to update the releases of our software in the plants. This is how we want to benefit from new developments and react to new customer requirements. In order to achieve these goals, we rely on a standard system. 

Another important aspect is of course that working with a standard system enables us to carry out a kind of benchmarking. When we were working with PSI on a joint project, we carried out the so-called “fit gap analysis.” We analyzed how we see the production processes and what kind of processes we want to support with the software in the future. We then compared these with the functions and possibilities of PSImetals, which is a kind of industry standard in our industry.

It always makes sense to compare one’s own processes with an industry standard in order to look beyond one’s own nose!

Standard products often require restructuring and changes in processes. How does Vallourec deal with this?

Mr. Groos: We started the project on the business side, initially without IT in business process analysis. On this basis, we created a process design in which experts from all plants were involved. Finally, we received confirmation from our top management that these business processes are really the ones we want to apply in the future. Next, we went to the individual plant managers and asked both them and the management teams from each plant involved to confirm that they were all really new business processes. Achieving this personal commitment was an important step for us.

We know from the past how important it is to focus on business processes in IT projects, because "business knows what business needs ". On the other hand, of course, IT must also play a central role, because otherwise business often tends to design things too specific. Our goal is a balanced and uniform project organization on both the IT and the business side.

Vallourec has numerous plants in China, Brazil and Europe. How are production management systems implemented and rolled out at plants worldwide?

Mr. Groos: First of all, before the project started, we defined that we wanted to work with a template concept. This means that we have the same business processes in all plants and therefore ideally wanted to establish the same software solution for all of them. 

The template approach is important because it significantly reduces the effort required for later rollouts.

This is why experts from the various mills were involved from the very beginning to ensure that we covered the aspects relevant to all plants. Since we work with a standard product, stable interfaces between the automation level and the ERP level are also important. In this way, we want to limit the integration costs for future rollouts.