“AI in the metals industry – where are we today?”
A survey of the sector
Artificial intelligence (AI) is currently the subject of intense debate and is seen as the next major milestone in digitalization and automation, which could revolutionize the entire economy and also the metal industry. Significant progress has been made in recent years, particularly in the field of large language models such as ChatGPT or DeepSeek. These developments open up new opportunities and prospects for many branches of industry. We conducted a representative survey inside the metal industry in order to assess its views on AI and shed light on the current status of its implementation. The results are discussed in this article.
Relevance of AI for the metals industry
When ChatGPT was asked ‘How do you rate the importance of AI for the metal industry in the future?’, the answer was unsurprisingly ‘very high’. Only 30% of the participants in the B&C study share this assessment (see figure 1), but the majority of participants (48%) still rate the relevance as ‘high’. This means that just under 80% of respondents consider AI to be of high or very high importance for the future of their company, while only 5% believe it will have a low impact. The rest are undecided or neutral.
In view of this assessment of the importance of AI, B&C believes it would only be logical to integrate AI into the corporate strategy. However, around 1/3 of the participants currently state that the role of AI in their strategy has not yet been defined and 1/3 that AI is only seen as a supplement to other important topics (see figure 2).
Possible reasons for this could be:
- The review and updating of the corporate strategy only takes place rarely and irregularly, which B&C actually encounters time and again in practice. Another possible assumption would be that other urgent issues such as the green transformation and the poor economic situation currently have a higher priority.
- It is possible that goals such as innovation leadership or cost leadership are priorities in the strategy while the introduction of AI is merely seen as a field of action for operationalizing the strategy and achieving these overarching strategic goals.
Potentials and future applications of AI
The results of our survey also show that the potential of AI is assessed differently for different areas of the company. A great deal of potential is expected from the use of AI, particularly in operations and planning/ SCM (with approx. 75% each) as well as in quality management and maintenance (with approx. 60% each) (see figure 3), whereas only approx. 40% of study participants see potential in IT or sales.
AI is primarily known from the area of language models and possible use cases for such models are therefore either already known or easily imaginable in business areas that are heavily based on communication and information processing and exchange. However, it is interesting to note that potential in these areas (see response distribution for sales, marketing or IT) is only seen as effective by a small number of respondents in the metal industry. In contrast, areas such as production and planning/ SCM, in which language models only make a relatively limited contribution, are rated highly in terms of potential by the metal industry.
This may be due to the fact that a number of applications based on technologies other than language models (including computer vision and machine learning) are already being developed and implemented in these areas in the industry and show relevant efficiency and cost potential.
From B&C’s point of view, there is an additional important aspect to consider when it comes to the potential of AI: The use of language models in the creation of program codes (IT) is a possible booster for leveraging potential in all areas of the company. This is because B&C sees the potential to increase efficiency by 20-50% in code generation and thus significantly accelerating the development of applications. This in turn has a positive impact on all other areas of the company where ideas for IT solutions are awaiting operational implementation. The use of AI in IT thus creates an important basis for realizing potential throughout the entire company.
However, the respondents’ view of the benefits of AI in their own company (see figure 4) is not surprising. Almost all participants identified potential in data analysis and decision support (95%), real-time monitoring and error detection (82%) as well as automation and efficiency improvements (80%). The area of creativity and personalized processes is slightly below our expectations, with hardly any potential seen by the participants (innovation and personalization with only around 20% each).
Challenges and necessary resources
As with all other initiatives in the organization, resources are required for the successful implementation of AI projects. Companies most frequently lack specialized experts/ know-how (75%) and, secondarily, budget (63%) (see figure 5). These two resources are certainly closely linked, but skilled labor and AI experts in particular are still hardly available on the market. This bottleneck can be bridged, at least temporarily, by external service providers, which are available to a sufficient extent for half of the respondents.
It is surprising for B&C that more than half of the respondents consider data availability to be guaranteed, which in our experience is often not the case in practice. For example, data is often not available in digital form (e.g. in the form of order books at the plants) or the data quality is insufficient (e.g. incorrect entries). In terms of the availability of technology, the picture is split (50/50). From B&C’s point of view, this is not surprising, as the market and the applications of AI technology are developing so rapidly that there is a high degree of uncertainty about the ‘right’ solution.
Unsurprisingly, respondents also rated a lack of know-how (77%) and the complexity of the technology (50%) as a major challenge or even an obstacle to the introduction of AI in their company (see figure 6). As usual with most IT projects, data security remains a relevant issue and is cited as a challenge by 48% of respondents. Less than half (43%) of the participants see budget as a challenge or obstacle, although 63% believe that there is not enough budget available (see figure 5). B&C believes that this apparent contradiction could be resolved by including artificial intelligence in the strategy in future. This would give more importance to the expansion of AI when allocating budgets.
AI piloting projects and roadmap to a successful implementation of AI solutions
Despite the existing challenges, a good 80% of respondents have already implemented their first AI pilot projects or are preparing to do so. Only around 20% have not yet gained any experience with AI in practice (see figure 7). The experience gained from the introduction of AI pilots is extremely important and B&C believes that pilot projects are the right approach to tackling the obstacles of AI implementation.
A look into the future shows that the metal industry is actively on the way to utilizing the technology, with 66% of participants planning to execute (further) pilot projects (see figure 8).
In addition, around a third of the participants plan to ‘invest in specialized staff’. This seems low considering that the majority (~3/4) of participants obviously agree that the implementation of AI projects currently suffers from a lack of know-how (see figure 6). However, even the willingness to invest in specialists in the form of recruiting or training would hardly change the situation. On the one hand, there are barely any AI experts available on the market and, on the other, the applications are developing so rapidly that training programs can only just keep pace. Some companies seem to want to bridge the lack of AI expertise with external know-how for the time being, as 1/3 stated that they are cooperating with technology partners. From B&C’s point of view, this can also lead to a transfer of knowledge to the companies, enabling them to realize future projects with their own employees.
Conclusion
AI is a very important topic for the future competitiveness of the metal industry, especially in Germany and Europe, which is currently burdened by weak overall economic development and the need to cope with the green transformation. AI can realize enormous potential, but there are currently also considerable barriers to implementation. The majority of participants are already looking into AI applications in practice, which is a good sign, as the path to the successful use of AI is not a sprint, but a marathon and takes time. From B&C’s point of view, it is important that AI is integrated into the strategy and that there is a well-developed roadmap that covers all the pieces of the puzzle (a.o. vision, organization, technology, pilot projects) for the successful use of AI and ensures that these interlock.
If you have any questions about the study or the introduction of AI in your organization, please contact
info@bronk-company.com.
Your contacts:
Benedikt Schmidt,
Senior Manager
Yannic Labrot,
Senior Consultant
