Digital transformation of Chinese iron and steel enterprises: Problems and countermeasures

I. Research background

In recent years, driven by the new round of scientific and technological revolution and the accelerated development of industrial transformation, the digital economy, including digital industry and industrial digitalization, has achieved rapid development, and has become an important way to promote China's economy from high-speed development to high-quality development. In the modern economic system, the digital economy has become the source of new economy, new driving force and new model development. During the "14th Five-Year Plan" period and for a long time to come, the digital economy will become an important engine for China to implement supply-side structural reform under the new normal and promote the development strategy of replacing old and new growth drivers.

Manufacturing is the main body of the real economy and the foundation of the country, as an important basic raw material industry, steel industry is an important part of China's manufacturing industry. From the perspective of input and output, the main inputs of the steel industry are iron ore and scrap steel, the auxiliary inputs are coke, limestone, energy and electricity, and the output products are various types of steel products. From the perspective of the technological characteristics of the industry, the iron and steel industry is a typical process industry, and the upstream and downstream ore raw material mining and processing → iron making → steel making → steel rolling → steel deep processing → steel application is closely related to the technical process, and the interdependence is strong, and the production process is irreversible. From the perspective of the economic characteristics of the industry, the investment scale of fixed assets such as steel industry equipment is large, the precipitation cost is high, and it is a capital-intensive heavy industry. Reaching a certain initial scale has an important impact on the economic benefits of the steel industry. In recent years, due to the impact of multiple factors such as rising manufacturing costs, serious overcapacity and pressure on energy conservation and carbon reduction, the existing development model and profit model of China's iron and steel industry enterprises have been severely challenged. Data show that in the first three quarters of 2022, China's steel production and steel exports both fell by 3.4% year-on-year, the number of loss-making enterprises and the amount of losses in the national key large and medium-sized steel enterprises increased by 7.8 times and 53.8 times year-on-year, respectively, and the total profit of the national key large and medium-sized steel enterprises fell by 71.3% year-on-year. Faced with such a grim situation, Chinese steel enterprises can only accelerate the deep integration of digital technology and the real economy, accelerate the process of digital transformation of enterprises, in order to greatly improve the production efficiency and energy efficiency of the steel industry, reduce production costs and carbon emissions, and accelerate the quality change, efficiency change and power change of the steel industry.

Second, the current situation of digital transformation of the steel industry

In order to adapt to the new round of scientific and technological revolution and industrial change brought about by the digital, networking, intelligent development trend of manufacturing industry, in recent years, China's iron and steel industry has increased the information, digital, networking, intelligent capital, technology, talent investment, 2021 more than 10 billion yuan of special investment for the digital transformation and upgrading of iron and steel enterprises. The progress of digital transformation of steel enterprises has been accelerated, and remarkable results have been achieved.

(1) The level of industry digitalization has been significantly improved

In recent years, Chinese iron and steel enterprises have continued to organize digital transformation activities to promote the "integration of the two" as a starting point, and the automation, informatization, digitalization, networking and intelligence level of iron and steel enterprises has been continuously improved. In 2018, the integration index of China's iron and steel industry was 51.2, the numerical control rate of key processes was 68.7%, and the proportion of enterprises applying e-commerce was more than 50%. In 2020, the integration index of the two aspects of China's steel industry will reach 54.3, the numerical control rate of key processes will reach 64.6%, and the digitalization rate of production equipment will reach 46.9%. In 2021, the integration index of China's iron and steel industry rose to 59.9, the numerical control rate of key processes reached 70.1%, and the digitalization rate of production equipment reached 51.3%. Compared with 2015, the integration index of China's steel industry in 2021 has increased by 19.4, and the level of industry digitalization has been significantly improved, which has initially reversed the industry image of the iron and steel industry in the past.