RHI Magnesita: How a Synapse Analytics data platform is transforming the refractory industry

“Transforming how we collect, process and share data is not only improving the efficiency of our business – it’s also reshaping the connection we have with our clients.” 

Thomas Fröhlich, Head of Data Platform at RHI Magnesita, is talking about how a new centralized analytics platform is enabling the business to offer customers new digital services that could never have been possible before.

“At our core we’re the world leader in refractories, but now we’re looking to use technology and data to help achieve our strategic purpose: to master heat, enabling global industries to build sustainable modern life,” he says. “That means doing more than just selling refractory bricks to our industrial customers. We also want to provide a Software-as-a-Service to assist our clients with their production and supply chain processes, so they can do things like accurately monitoring their heat levels and making predictions to help raise efficiency.”

Building these types of data-driven applications required RHI Magnesita to rethink its entire IT infrastructure and move to a cloud-based modern data warehouse approach – a more flexible and scalable landscape that would create the foundations to support the company’s new digital business model. 

“We want to foster a data exchange that removes those barriers between customer and supplier, allowing us to create a more integrated supply chain and raise efficiency on both sides,” says Fröhlich.

“That’s what Azure Synapse Analytics enables us to do.”

A driving force for the refractory industry 

In 2017, the two leading global refractory companies, RHI and Magnesita, merged to become the single largest refractory business in the world, with more than 100 locations and 14,000 employees worldwide. 

Refractory materials can withstand temperatures up to 2,000 degrees Celsius and act as a protective layer inside specially-designed furnaces used to manufacture products such as steel, glass, copper, aluminum and plastics. RHI Magnesita offers a full-line service to install and replace these refractory products when needed – controlling the entire life-cycle from extracting raw materials all the way to recycling, ensuring industrial production can stay up-and-running 24 hours a day.

“Refractory is an industry that’s been around for hundreds of years, so any digital innovation needs to be driven from within,” explains Fröhlich. “We used to have a very disparate IT infrastructure – different systems for business records, reporting, SAP, with no single system where you could retrieve data from. So in 2014, we set ourselves an initial milestone to consolidate everything into one data warehouse, which we did using Microsoft SQL server technology. 

“As an on-premises solution it worked well for a time,” he says. “But after the huge merger between RHI and Magnesita in 2017, consolidating additional data platforms and a second SAP system landscape put increased pressure on our data warehouse, which had reached its limit in size and complexity.”

Even before the RHI Magnesita merger, Fröhlich had been investigating Azure as a more flexible way to access and visualize data from across the organization. Although the business didn’t see the value in cloud databases at this time, Fröhlich could see an increase in customer demand on the horizon, so turned to Microsoft partner oh22 to help explore what migrating to Azure might look like.

Then in 2019 everything changed. RHI Magnesita’s board decided to invest heavily in digital solutions, such as predictive analytics and industrial IoT, and begin offering these additional data-driven services to customers to help optimize their operations. 

This business shift finally gave Fröhlich the board approval and investment his team needed to take full advantage of Azure. “Thanks to our prior work with oh22 we already had the building blocks to create this new infrastructure in Azure,” he says, “enabling us to build a future-proofed analytics platform that could handle big data from IoT devices and create the foundation for these new data-driven solutions.”

Building a central analytics platform

With the basic IT infrastructure in place to migrate its servers to Azure, RHI Magnesita worked with oh22 on how to structure and implement this new modern data warehouse, and explore what this transformation would mean for the company’s data and BI teams.

“The first discussion we had was focused on a kind of hybrid scenario where we would keep a lot of the existing functionality instead of recreating it in the cloud,” says Gabi Münster, Lead Data Architect at oh22. “As the conversation went on it was clear that the door was open for us to migrate to a real cloud-based modern data warehouse approach – allowing us to reshape any existing patterns and create new possibilities in terms of flexibility, scaling and importantly cost control.”

oh22 were also able to help RHI Magnesita to leverage Azure Synapse Analytics – creating the foundation the business needed to begin developing new data-driven solutions for their customers. 

This included storing data at a lower cost in Azure Data Lake, the ability to scale to different performance requirements through Azure Data Factory and Azure Synapse, and the flexibility to democratize RHI Magnesita data – enabling everyone to access the same analytics tools such as Power BI without needing any technical skillsets.

“Azure Synapse gave us a way to bridge our traditional SQL set-up together with next generation applications,” explains Fröhlich. “A comfortable environment where we could still run our day-to-day processes, while also providing a platform to build new software use cases. And as Azure Data Factory and Data Lake are integrated into Azure Synapse, our data engineers have a single platform to manage workloads for both front and back-end services. As well as having data from Microsoft Dynamics 365 connected to automated processes and at the fingertips of the data analysts and reports.”

“Integrating Azure Synapse was an easy process for us as RHI Magnesita has always been very open-minded to new technologies,” adds Tillmann Eitelberg, Managing Director at oh22. “And as the team already had a lot of knowledge of data warehouses and the building blocks Microsoft offers, we were able to support and guide them in creating a platform that met their needs.”

“It’s a bit like relearning how to drive a car, even though you already know how to drive it,” says Fröhlich. “It seems like a small technological evolution moving to Azure, but that’s still a new data warehouse with new principles and services that have to be understood before we can get it right. That’s where we really leveraged oh22’s expertise, as well as investing in training and education from Microsoft to help reskill our team.”

Pioneering next-generation applications

With the new infrastructure provided by Azure Synapse Analytics, RHI Magnesita has the foundation and data management capabilities to begin developing its industrial software solutions and enhance existing digital applications. 

With nearly 1,000 dynamically generated data pipelines now flowing through Azure Data Factory and Azure Synapse, such projects can be implemented up to 10x faster than before – helping the company react to market demand and quickly take advantage of business opportunities.

“It ultimately comes down to how we scale individual processes and what the cost implication will be,” explains Fröhlich. “Our old SAP costing run would take about 12 hours. But with Azure Synapse we can scale out and have that data in five minutes or even at the push of a button – helping us explore use cases based on customer demand and quickly understand how we can adapt or develop new technologies.”

He adds, “once we have a working component, we can easily apply it to different software models and help other customers buy into our whole ecosystem. Software-as-a-Service as a whole is opening up a completely new revenue stream for us, and we’re looking to create €100 million from digital products by 2025.”

Enabling global industries to build sustainable modern life

For RHI Magnesita, the future is clearly focused on developing more data-driven applications and selling these next-level digital services to several thousand customers worldwide. A significant transformation from the traditional SQL technology Fröhlich implemented just a few years ago.

“Our IT has always been more traditional with SAP at its core,” he says. “But this digital transformation is a new mindset that is changing the roles within our company – moving from projects that just focus on stability, forecasting and budgeting, to a more venture approach that requires MVPs and managing an entirely new workstream.”

With the insights and foundation offered by Azure Synapse, using Spark and SQL engines, the company is now looking to use these innovations to help monetize both internal and external data streams. A further step into the software industry that will ultimately help RHI Magnesita become the heat management company it set out to be.

“We don’t know where we’re driving to yet but we know the engine is hot,” Fröhlich says in summary. “It’s feeling more comfortable as we evolve further into this new world, and by investing in our people and new skills, we are creating the potential to go to new places that never seemed possible in our industry.”