SAP Customer Success Story Arcelor Mittal Distribution / Steel Service Center

Customer testimonialArCelor MittAl DiStribution - Steel ServiCe Center

“We’ve been using SAP for over ten

years now and we’ve had no more

than two upgrades - which is very

acceptable. With minimal efforts and

minimal costs, we’re now equipped

with an advanced system to support

further growth.”

Jean-Charles Schmitt, Head of IT, ArcelorMittal Distribution

Why SAP• Positive experience with SAP for over

10 years• robust and flexible solution

Benefits• upgrade implemented in the space of

three months• Full transparency• State-of-the-art and future-proof solution

Company• name: ArcelorMittal Distribution &

Steel Service Center• location: reims, France• industry: steel company• Production and services: steel• turnover: eur 3.5 billion (2006, reims)• employees: 1200 (2006, reims)• Website: www.arcelormittal.com

Challenges and Opportunities • needed an advanced system to be

rolled out to other and newly acquired ArcelorMittal branches

• Software to be used internationally, by users speaking different languages

Objectives• one single, fully-integrated and manageable

system that can be easily integrated into any other company

SAP Solutions and Services• SAP eCC 6.0 + unicode

Upgrade at a glance• release: SAP eCC 6.0• upgrade time: 3 months

QuiCk FACtS

today’s steel industry is characterised by an exhilarating sense of flux. Consolidations - an adept reaction to globalisation - are the order of the day. ArcelorMittal is diving into the sector’s consolidation wave: in June 2006, Mittal and Arcelor - the world’s numbers 1 and 2 respectively at that time - joined forces to become the undisputed market leader in the global steel market. “ArcelorMittal was born out of the mergers of Arbed, Arcelor and Mittal but we’ve integrated several smaller companies into our corporate structure as well ” explained Jean-Charles Schmitt, Head of it at ArcelorMittal reims. this consolidation is a must to accelerate our footprint and consolidate our market position.”

Harmonised IT

For the group’s it platform, however, acquisitions are often detrimental, leading to an amalgam of systems with diverse - or overlapping - functionalities. And, as a result, to high maintenance costs and a lack of efficiency. Didier Collot, Commercial and logistics Support Domain Manager: “A group of our size and complexity, with a growth-through acquisition strategy, can only function properly by introducing unique standards, guidelines and having a uniform it platform. Flexibility, robustness and future-orientedness were three key requirements on ArcelorMittal’s it wishlist.”

SAP: the ArcelorMittal standard

For several years now, SAP has been the backbone at many Arcelor and Mittal subsidiaries at the reims-based headquarters of ArcelorMittal Distribution, for example, SAP has been the standard software since 1998. “We chose SAP, back then, to counter the problem of Yk2000 compliance and the switchover to the euro,” recalled Jean-Charles Schmitt. “in 2000, we did an upgrade. All that time, the system supported our business very well.” it seemed logical, therefore, to opt for SAP as the standard solution after the merger in 2006 as well. there was, however, one prerequisite: ArcelorMittal had to upgrade its existing SAP software to the latest version available: SAP eCC 6.0, which had been launched in May 2006.

Only the best SAP will do

the new version of SAP’s erP software offers a larger functional scope, more transparent processes, enhanced features to meet the ever-growing need for it security, etc. it would also allow ArcelorMittal to better harness its business intelligence solution, a project that was high on the group’s agenda.

Steel giant ArcelorMittal: does it need an introduction? With annual shipment of 118 million tonnes and revenues of over uSD 88.6 billion, ArcelorMittal is the world’s number one steel group, employing 320,000 people in more than 60 countries. reims, France, is home to the headquarters of the ArcelorMittal Distribution business unit and to a branch of the Steel Service Center. to help drive their business strategy of acquisitions, these ArcelorMittal business units decided to upgrade to SAP eCC 6.0 while converting to unicode. An exercise that went well.

arCelormittal Distribution anD steel serviCe Center, reimsAll geAreD uP For FurtHer ConSoliDAtion AnD groWtH - tHAnkS to SAP eCC 6.0

Moreover, SAP maintenance of the 4.6 version ended in 2006, which implied that maintenance costs would increase if the group was to stick to that release. “the most important argument to upgrade, however, was that we needed a future-proofed solution that would enable the smooth integration of new companies and new countries and that would allow us to extend our services package,” balison summarized.

Smooth upgrade

ArcelorMittal reims was the first company in europe to upgrade to SAP eCC 6.0 on that scale. the transition went well, taking no more than three months. “our it team had built up a wide knowledge base and experience during the 2000 upgrade,”said Jean-Charles Schmitt. “And we could count on the support of SAP. Moreover, the gap between the old and the new SAP version is not that big. We did a lot of testing, of course, and in october 2006 we went live. A couple of months later, in December, we had converted to unicode as well.”

Future-proofed platform

today, ArcelorMittal Distribution and Steel Service Center run the latest SAP platform in a unicode version. the platform is centralised at the Datacenter in reims. the Steel Service Center in reims uses SAP Financials/Controlling to do the accountancy for ten different countries. ArcelorMittal Distribution uses every component of the erP system to manage operations

throughout France and italy. “our users can now log on to the SAP solution and immediately work in various languages. unicode is a great help to ensure the exchange of information between all companies in the group,” Didier Collot explained. “the loss of information and the number of errors during data exchange is greatly reduced thanks to this universal character set.”

Future-proofed, solid foundation

the upgrade itself was worth the effort too. Jean-Charles Schmitt: “We’ve been using SAP for over ten years now and we’ve had no more than two upgrades - which is very acceptable. With minimal efforts and minimal costs, we’re now equipped with a solid system to support further growth. SAP eCC 6.0 is a robust platform, adapted to a powerful group like ArcelorMittal. it provides business transparency, which is a must for a global company that acquires distressed plants all over the world. And, what’s crucial, it’s future-proofed: we can easily add extra functionality, integrate newly acquired companies quickly and efficiently and roll out the it infrastructure in any other ArcelorMittal company. With the steel industry on the move, we’re expecting many changes in the near future. but we’re confident SAP is a stable foundation to build our growth on, both today and tomorrow.”