Gerdau achieves 95% accuracy in standards and new product analysis with Microsoft Azure AI

Gerdau faced challenges in manually analyzing about 1,000 annual quotes from corporate clients, resulting in time-consuming and error-prone processes. The company turned to the Microsoft Azure AI solution to increase accuracy and efficiency.

Gerdau implemented a Microsoft Azure generative AI solution, integrating cognitive services. The new architecture allows for high-quality processing, increasing the accuracy of the data for quotes.

Gerdau's implementation of Microsoft Azure AI increased the accuracy of quotations to 95%, reduced costs by 65%, and improved the customer experience, resulting in greater agility and accuracy in processes.

Headquartered in Brazil, Gerdau is one of the largest steel producers in the world, with operations in several countries in the Americas. With more than 124 years of history, the company stands out as one of the leading recyclers of ferrous scrap in Latin America, transforming approximately 11 million tons of scrap into new steel products each year.

The company continuously seeks to modernize its processes to offer high-quality products and agile services to its customers. As an important player in the steel sector, where precision and speed of response are crucial, Gerdau saw AI as a strategic opportunity to optimize the quotation process for new orders for special steels—an essential factor for its global competitiveness, because the more accurate and agile the quotations, the better their customers' experience will be and the faster they will be served.

The challenge of automating a thousand annual quotes efficiently and accurately

The main problem faced by Gerdau was the manual analysis of approximately 1,000 annual customer quotations. A study carried out by the company revealed that the biggest bottleneck in the quotation process occurred during the technical stage, in which customers provided technical specifications for the production of their products. This manual approach resulted in lower accuracy and extended turnaround times, which ranged from 29 to 51 days. Orders containing detailed material specifications require fast and accurate processing to maintain the company's competitiveness in the market. Not only was the manual method time-consuming and man-resourceful, but it was also prone to errors, affecting the accuracy of quotes and, consequently, the customer experience. Initially, the company used an alternative AI solution; however, to amplify its customer base, Gerdau adopted a more advanced and efficient solution, providing a superior experience to customers, with faster and more accurate responses, ensuring greater scalability.

A new level of agility and accuracy with Microsoft Azure AI

To address its challenges, Gerdau implemented an advanced architecture leveraging Microsoft Azure cognitive services, including Form Recognizer and Microsoft Azure OpenAI Service.

The automated workflow begins with the submission of documents to an application created by Gerdau. Documents are stored securely, with their status tracked. The technology available in Form Recognizer extracts the content, while GPT extracts specific entities according to prompt settings, such as chemical compositions and mechanical properties. The processed data is then delivered in a structured format to the Gerdau team, speeding up the preparation of quotes.

The services offered by Microsoft Azure used by Gerdau ensure a robust solution and the accuracy of the responses, offering a more agile and personalized experience. This comprehensive integration not only improves operational efficiency, but also empowers Gerdau to deliver superior service to its customers.

Agility that impacts customer satisfaction and experience

The implementation of the AI solution has made a big difference for Gerdau, increasing both efficiency and business impact. Now, more than 60% of interactions for company quotes utilize AI to streamline processing, leading to a 34% increase in overall productivity. Accuracy in information extraction jumped from 73% to 94% for chemical compositions and mechanical properties, making quotes more accurate and significantly reducing errors.

In addition, Luís Felipe Barrera Salamanca, Data Scientist Lead at Gerdau, mentioned about the reduction in cost per extraction: “The percentage of cost reduction was about 95%, considering the monthly rate of the previous software.”

Response times to customers have also improved a lot. When quotes can be met in full, response times have dropped by 65%. For orders that need adaptations, response times have decreased by 70%. These changes have made the customer experience much more efficient and satisfying.

Internally, the automation of processes allowed the commercial team to focus on strategic activities, making better use of human resources and improving the quality of customer service. Rafael Alves Reifschneider Coelho, Marketing Manager at Gerdau, highlighted the significant advantages that customers experienced: "They felt a huge benefit from this new integration."

The scalability of the solution allowed Gerdau to serve more customers, growing from an initial group of 10% to more than 80% of active customers in the tool. This expansion has been supported by Azure's robust infrastructure, which handles an increasing volume of requests without compromising the quality or speed of responses.

Overall, the AI solution has helped Gerdau achieve impressive improvements in efficiency, cost savings, and customer satisfaction, showing the powerful impact of advanced technology.

Targeting AI to grow sustainably

In view of the positive results, Gerdau plans to further expand the use of AI in its processes. In 2024, the company launched the AI Innovation Center, which aims to capture business opportunities through the use of AI. This includes experimentation with new techniques and engines, and scale in the company's global context.

The partnership with Microsoft will continue to play a key role in this process, offering expert technical support and helping to refine the solutions implemented. "The idea is to further expand the use of AI within Gerdau by 2025," said Rodrigo Silveira, Chief Data and AI Officer at Gerdau. The company also plans to expand the use of generative AI to other areas of business and operations, strengthening its role in the global steel sector.

Gerdau is already experimenting with the use of Copilot in pilot areas for daily tasks. The goal is to further improve the efficiency of internal processes, facilitating the creation of documents, data analysis, and decision-making. With these initiatives, the company aims not only to remain competitive, but also to lead the digital transformation of the steel sector, setting new standards for agility, precision, and innovation.