A transactional relationship was transformed into a partnership, delivering savings and putting the steel company at the forefront of technological innovation.
British Steel and supplier Heraeus Electro-Nite (HEN)’s relationship is based on creating value. “We can make steel without Heraeus, but not so well,” explains Sara Fletcher, a senior sourcing lead at British Steel. Its supplier provides instruments that analyse and measure the temperature and levels of gas in the molten metal, optimising quality throughout the conversion to steel and casting into the final shape before it becomes solid.
The two businesses have a long relationship that historically was transactional, says Fletcher, where the sensors were simply bought from Heraeus. But when the European long products division of Tata Steel – which makes rolled steel joists, rail rods and bars – was sold on and became the new British Steel, it revisited its legacy contracts.
“Here was a new, vibrant business looking to carve a more successful future, and realising it had to change. That was the spark for the new relationship,” adds Mark Lee, MD of HEN.
The procurement team looked for ways to work strategically, streamline logistics, develop products and integrate technology into the manufacturing processes. With Heraeus, “it was a lightbulb moment”, says Fletcher. “The relationship took a massive step forward.”
The changes that have since taken place are generating over £2 million savings over three years. And if evidence is needed of the companies’ ability to work together, it is that they submitted a joint entry to this year’s CIPS SM award for Best Supplier Relationship Management – which they won.
It began with closer communication, and then the contract grew, with HEN managing the application of its product on site. “Instead of just being responsible for supplying probes, we became responsible for logistics, maintenance,” says Lee. “Everything was down to us. The level of trust grew. We became more open and saw more opportunities.”
Heraeus technicians now work on site, monitoring equipment, using a service workshop for maintenance, and delivering the products to the point of use. “We calibrate the instrument system and do repairs,” says Lee. A new wireless technology is being rolled out now, which will reduce issues of immersing cables in high temperature molten metal, and eliminate trip hazards.
Between the two companies, a direct delivery model has also been introduced where goods from four different countries are combined and shipped directly to a British Steel warehouse. This has cut out 1,500 pallet movements a year, reduced wastage and stock, and improved lead time.
HEN is investing in a technology fund with the company to cooperate on new developments. And each year senior people from both organisations meet to review and agree priorities. HEN presents its new technology, while British Steel explains operational forecasts and challenges, leading to joint improvement projects.
With all the changes, British Steel is making significant savings and is at the forefront of introducing the latest technology into its plant.
On top of technology
Working on the shop floor with the British Steel team helps HEN to innovate, and with input from the caster manager and technologist, HEN developed its newest product, the CasTemp Superheat. This gives the steel maker a real-time measurement of the temperature in the steel casting bucket as well as an indication of the temperature at which the steel solidifies, which varies depending on the composition. This gives the steel maker greater control of the casting process, helping to avoid costly break-outs or freeze-offs.
“If you are not in control of the temperature the bucket freezes up [solidifies], or if it is too hot it leaks out of the casting process, damaging the machine,” says Lee.