Laying the Groundwork

Costello would have to agree. Even with all the early groundwork, he admits e-Steel is just getting into heavy lifting as far as integration is concerned. Most of the 3,500 e-Steel members are now just beginning to use the DataJet mapping tool as a way to get inventory from their back-end systems posted to the site without manually rekeying. And as a one-way pipe into the marketplace, DataJet is really only an interim solution, offering a level of integration far less than what large steel players are after. E-Steel’s real differentiator, Costello says, will come with the webMethods software, and that effort—which currently requires months of integration work with consulting partners—is only beginning at a handful of sites.

U.S. Steel in Pittsburgh, which is a minority stakeholder in e-Steel as well as a beta customer, is furthest along in integration, having used DataJet and started work with UEC as an integration partner for the webMethods software. Since February, when it made the decision to partner with e-Steel, U.S. Steel has done limited transactions on the site, mostly with nonprime sheet products—mill-downgraded materials, secondary products or excess prime offerings. U.S. Steel’s use of e-Steel has been limited mostly because it requires a high degree of integration to do any type of volume transaction, according to Robert McClintock, commercial systems manager for U.S. Steel.

Specifically, U.S. Steel needs to link proprietary manufacturing resource planning systems in each of its four plants, which run on IBM mainframes in Pittsburgh, to e-Steel so that materials available for sale could get automatically posted to the exchange. "To do any volume, we need to get inventory seamlessly transferred to e-Steel—the overhead associated with manually inputting data into the site would make it not worth our while," explains Gene Trudell, U.S. Steel’s general manager of computer services.

Integration on the back end is also required once a negotiation is consummated. There, U.S. Steel needs to be able to take the result of the deal struck on e-Steel and flow it through its back-end order entry systems built on Oracle Corp.’s Oracle Applications so that it can be invoiced, billed, shipped and so on, like any other transaction. Finally, to maximize efficiencies, there needs to be integration at the customer level so that U.S. Steel’s partners can seamlessly upload their purchasing requirements to the exchange.

McClintock and Trudell are confident that by working with e-Steel and UEC, they’ll be able to achieve the right levels of integration. However, they know it will take time and require significant development resources on their part as well as a willingness to reevaluate business processes. For instance, while DataJet addresses volume uploading of data to e-Steel, U.S. Steel realized it had no easy way to present inventory data for transfer since it resided in four separate plant systems.