thyssenkrupp Materials Services integrates AI for logistics support

Since early 2019 an artificial intelligence (AI) system, supported by Microsoft’s Azure cloud platform, has been integrated into the processes at thysssenkrupp Materials Services.

Known as “alfred,” the system helps manage the company’s global logistics network, which comprises 271 warehouse sites and more than 150,000 products and services.

Named after German industrialist Alfred Krupp, the AI alfred helps optimize transport routes, making materials available more quickly at the right locations. The company is able to make all processes along the supply chain more flexible, taking into account specific customer requirements for delivery speed, pricing, and material quality.

“Artificial intelligence is one of the technologies that will make a decisive contribution to competitiveness in materials distribution in the future. With alfred we are taking an important step towards making our processes even more efficient and optimizing our value chain. At the same time, he gives us better insight into our customers’ needs so that we can align our offerings accordingly,” said Klaus Keysberg, CEO of thyssenkrupp Materials Services.

With the AI system, the approximately 14 million order items received annually by Materials Services can be processed and analyzed more efficiently. For the first time, the materials experts are also bringing all company data together on a single platform. Using self-learning algorithms based on Microsoft Azure Machine Learning, alfred analyzes all relevant information, generates important findings, and supports employees with appropriate recommendations, such as:

• Which materials have to be assigned to which industry?
• Where are materials processed?
• What would be the most intelligent transport route to supply the customers with materials in the best possible way?
• What are the needs of the individual locations?

At Materials Services, the digital transformation is aligned along the value chain and consistently placed at the service of customer benefit, whether directly or indirectly.

“From procurement through warehousing and logistics to sales, we rely on integrated digitalization concepts. We simplify co-operation with our suppliers in the area of procurement by means of a cloud-supported platform,” said Keysberg.

In the company's Digital Transformation Office in Essen, Germany, all strands of digitalization flow together. Here, integrated teams of IT experts, engineers, and business co-ordinators work on various digitalization projects that arise directly from the core business of Materials Services – including alfred. The materials experts were supported by Microsoft and Azure.

“Joining forces with Microsoft allows us to use advanced technologies for our in-house developments. This enables us to ensure that the projects are very closely linked to our core business on the one hand, and that they are technologically state-of-the-art on the other,” said Axel Berger, head of digital transformation office.

"At this point in history, manufacturers need to become digital companies to lead in their industries. thyssenkrupp Materials Services is not only adapting digital technologies, they are building their own digital capabilities and portfolio to elevate their logistics business with AI services to the next level,” said Çağlayan Arkan, Global Lead Manufacturing & Resources, Microsoft.