CORUS

With turnover in 1997 standing at £7.2 billion and pre-tax profit at £451 million, Corus remains one of the UK’s largest and most successful enterprises. The Group employs almost 53,000 individuals with over 9,000 of these being based outside the United Kingdom.

The sustained growth that the Group continues to enjoy (turnover in 1995 stood at £4.8 billion) has been achieved despite rapidly changing competitive and technological pressure. In a capital intensive industry, such as steel, producers seek to maintain high capacity utilisation rates. If demand levels in one region of the world are not sufficient to sustain such rates, producers increase sales to other regions to achieve desired outputs. There is a well developed international trade in steel which facilitates rapid changes in trading levels, leading to an equally rapid movement in price levels. At times of weak demand, this situation has previously been exacerbated, particularly in Europe, by the availability of state aid to support weaker and, very often, state-owned producers.

Further economic pressures exist in the form of exchange rates. Exchange rates are very important to Corus’s competitiveness and results. Sales revenues in Europe are especially influenced by the Deutschmark, reflecting the fact that Germany is both the EU’s largest national market for steel and its largest steel producing nation. Turnover in other export markets is mainly influenced by the US dollar. Approximately one quarter of Corus’s costs is related to the US dollar as most raw materials are purchased in markets where prices are set by reference to US dollars. A very significant strengthening of sterling such as in 1996/97 adversely affects Corus’s results in three ways. Firstly, it directly reduces export revenues, although the impact is delayed by some three to six months by currency hedging; secondly, it improves the relative competitiveness of steel producers in countries with weaker currencies enabling them to discount prices in Corus’s domestic market; and thirdly, it exposes Corus’s UK customers to similar pressures.

To counter the effects of such mercurial influences, Corushas a clear strategic vision which underpins every facet of its operation. Accordingly three major initiatives have been launched to improve costs and efficiencies further. These relate to reducing the number of employees and improving the skills of the remaining workforce, a drive for sustained reduction in the costs of raw materials, supplies and services, and perhaps most significantly to enhance and make better use of the Group’s information technology systems. Technology pervades British Steel and is an essential element of it’s competitiveness.
The fast implementation of process and product technology is key to improving profitability, whilst a sustained investment in technology development is important for growth and the future of the company. New process technology is being deployed both in new plants and in existing operations. In the UK, investments, include a new continuous annealing line at Port Talbot which will be commissioned during 1998 and produce high quality cold rolled strip for the automotive market, and a new bloom caster at Scunthorpe for the construction market, increasing its continuous cast output from 75% to 98%.

The Scunthorpe site has been subject to major capital investment with some £28m being allocated to a heavy section mill reheat furnace, £30m devoted to the rebuild of the Queen Bess blast furnace and £43m for the bloom caster scheme. The investment in production-oriented technology has been paralleled by an equivalent commitment to information technology and, in particular, heavy investment in a radio based infrastructure designed to secure operational improvements. This process began in 1996. As part of the enhancement of the Heavy Section Mill, the plant computer system was also being upgraded. Corus’s I.T. department wanted all material tracking and order stocktaking methods to be incorporated into an "automatic" system, rather than continuing with the predominantly paper-based system.

Phase One introduction was based around two distinct areas of the plant, the walking beam furnace stockyard and a new finishing mill despatch bay. The walking beam furnace was introduced to replace an existing soaking pit heating facility. The new furnace provided mill heating capability from cold concast slab as against hot charged ingots, the furnace now charges from ingots kept in a stockyard and fed via fork lift trucks. The general mill finishing end was re-organised to provide for handling longer rolled lengths, which are now cut up to order using a cold saw. The cut lengths are stacked onto lorry trailers using either of two stacker cranes or an existing overhead crane.

In order to capitalise on the new production philosophies it was determined that radio telemetry links to the new plant computer network were necessary. This was in order to provide an operator interface to mobile machinery enabling the mill feedstock and finished product to be tracked as individual customer order/product quality codes. Corus I.T. personnel had a clear understanding of the benefits that radio telemetry would bring to the Scunthorpe operation. Problems with the existing manual systems were well known; a very slow speed of operation, difficulty reading handwriting on pick lists, duplication of data entry etc. The introduction of radio allowed easier reinforcement of the Company’s strict Quality Control procedures, virtually eliminating stock control and picking errors. Equally critical to the success of the radio system implementation was the choice of the correct hardware supplier.

The chosen radio terminals would be required to provide links between the host computer and a variety of mobile plant including fork lift trucks, stacker and overhead cranes plus a limited number of portable hand held units. The British manufacturer, Belgravium, was selected because of it’s vast experience and extensive user base of companies requiring sophisticated data capture and communication systems. The company has the capability to act as both manufacturer and, more importantly for British Steel, system integrator. Equally important was the ability to provide a professionally trained and responsive service function.

Although Belgravium already has hundreds of blue chip clients such as Argos, RHM, Great Universal Stores, Grattan, etc. the Corus account was regarded as a key one. A successful implementation at Scunthorpe could be followed by further roll-outs of the technology, and so it proved. The installation phases of the radio implementation were all handled smoothly by Belgravium and the consequent operational improvements more than justified the decision of Corus personnel to invest in the technology. The choice of Belgravium as preferred supplier was therefore an easier one when the next phase of site expansion, the aforementioned £43m Bloom Caster project commenced. The Bloom Caster operation is a sophisticated marriage of man and machinery. Steel blooms arrive at the ends of four cooling banks.

A forklift truck removes between one and six blooms at a time from one of the cooling banks and places them down as a layer at one of five packing stations. It will build up packs of several layers at the packing stations. The driver is given information about the blooms on each bank via the Belgravium terminal, for example Whether the bank is full or one bloom short of being full How many blooms to take from the bank Which packing station they need to be taken to How many layers are needed at the packing station After moving a layer of blooms to a packing station he will record the: Number moved The bank from which they came The packing station that they were moved to Which wagon it went to The driver is also able to inhibit the cooling bank from moving automatically while he is removing blooms and to force the cooling bank to operate. These operations are all activated via function keys on the Belgravium radio terminals.

A second forklift truck removes the completed packs from the packing stations and places them on numbered railway wagons. The driver is given information on each packing station and after each movement heacking station the steel came from Communication between the Corus (DEC Alpha) plant computer and the terminals is via VT220 terminal emulation. To allow the control of the cooling banks a standard conveyor control relay card is used, providing volt free contact. The terminal eavesdrops on the data being sent to the DEC Alpha. The firmware within the terminal responds to the pressing of F1 and F8 function keys and chooses the appropriate relays on the conveyor control card. When implementing VT emulation on a radio system it is usual that the terminal will send an instruction to the host and wait for the host to respond before allowing another message to be sent. This is designed to eliminate the multiple key presses that can occur if the operator is unsure of a good key press.

This was clearly unsuitable for the manual operation of the cooling banks, therefore the lock facility was removed from these keys to allow an immediate response independent of the host. As Belgravium had anticipated, their success at the Scunthorpe facility has led to wider gains within the Corus Group. Most notable of these was an order mid-way through 1997, worth in excess of £1/2 million, for the development of a laser-based guidance and tracking system for use on overhead cranes at Corus’s Stocksbridge site. As Corus continue their progressive stance on capital investment, Belgravium are hopeful that the, thus far, mutually beneficial business relationship will continue far into the next millennium.