Gerdau Digital Scrap Challenge

This challenge is seeking your ideas for how to automate the inspection of scrap materials in a way that is quick, accurate, and objective.

Challenge Overview

The Digital Scrap Challenge is seeking your ideas for how to automate the inspection of scrap materials in a way that is quick, accurate, and objective.


How is scrap inspected today?

To give you an idea of volume, the global market purchased 400 million tons of scrap materials in 2017. Our share of that was 14 million tons. That is a lot of manual inspection! We buy about 280,000 tons of scrap per month in Brazil, amounting to over 10,000 truckloads!

Each truckload of scrap is brought to us, containing up to 200 different types of scrap materials. Upon site entry, each truckload is weighed and the weight is immediately recorded into our ERP software, SAP. Then, the truckload is emptied into a pile in the scrapyard or meltyard. A scrap inspector visually analyzes the material, refers to a manual to determine standard pricing and value, and then records an estimated value onto the same ERP software, utilizing a tablet/smartphone app. Each type of scrap is assigned a different monetary value depending on the metal type, size and density. Any debris found in the truckload is considered a penalty and value is deducted. The scrap inspector must act fast, because within 15 minutes of dumping the load, cranes will get to work organizing the scrap materials into areas of like metals that already exist in inventory. Due to space constraints and scrap provider expectations for quick service, it is very important that the trucks can get in and out in a reasonable timeframe.

What is the Problem?

The way scrap is inspected today has a lot of room for improvement. The current method is very subjective, highly influenced by the personal opinion of the scrap inspector. This leads to inconsistencies in pricing. Additionally, our process requires manual review which is timely and likely inaccurate.


The Key Challenges we face day-to-day that impact our progress are:

  • Varied scrapyard layouts - No standardization
  • Chemistry of scrap is unknown - Wide variety of contaminants
  • Qualitative nature to sorting or grade determination - Currently relying on subjective, visual inspections
  • Unpredictable market - Price, incoming materials (supply), and demand constantly vary
  • Tramp element accumulation - copper, zinc or tin that compromises the quality of scrap


Get Involved

We welcome entrepreneurs, researchers, scientists, students, and anyone eager to contribute, to jump into this challenge and to find a solution. Here's what you can do:

  • Read the Challenge Guidelines to learn about the requirements and rules
  • Click ACCEPT CHALLENGE above to start your entry
  • Start a conversation in our Forum to ask questions or connect with other innovators
  • Share this challenge on social media using the icons above


About the Sponsor


Headquartered in Sao Paulo, Brazil, Gerdau is the largest producer of long steel in the Americas, and the 14th largest steelmaker in the world.



Did you know that steel is an endlessly recyclable material?


We believe in the transformative power of social projects and are committed to protecting and respecting the environment. This challenge is one of our many initiatives designed to promote sustainability in our industry.

Most of the scrap recycled by our company comes from materials that are no longer used by the community, such as: stoves, refrigerators, and old cars. Also, we recycle the steel resulting from the production process of industries such as automotive, packaging and appliances. This material is recycled into new steel products, which are present in the everyday lives of millions of people.

The use of steel scrap as raw material in our production process reduces the consumption of energy in the steel process and consequently, it minimizes emissions of CO2. Moreover, we generate jobs for thousands of people through an extensive chain of scrap collection and processing for recycling. We also contribute to the preservation of the environment and reducing the amount of material deposited in landfills and inappropriate sites.

For us, recycling is not just a minor initiative for environmental protection, it is a major part of our overall business strategy. Every year, we transform more than 14 million metric tons of steel scrap into new steel present in the everyday lives of millions of people in many ways.


Challenge Guidelines


Gerdau is committed to awarding up to $45,000 in total prizes.

  • Grand Winner: $30,000
  • Second Place: $10,000
  • Third Place: $5,000

Additionally, Gerdau is interested in working with the winning innovator(s) to develop and implement the proposed solution. This may include additional funding or partnership for R&D efforts, prototyping, or manufacturing. If applicable, an agreement will be made  that is mutually agreeable to both parties, at the conclusion of this challenge.


How Do I Win?

To be eligible for an award, your proposal must, at minimum:

  • Be scored higher than your competitors!
  • Thoughtfully address the Submission Form questions
  • Satisfy the Judging Criteria requirements


Judging Criteria

At a minimum, the inspection must:

  • Be able to inspect at least 15 metric tons of scrap containing at least 75% of ferrous material
  • Be done on-site, visible to the truck driver
  • Be completed in 30-minutes or less
  • Be able to be conducted in a variety of potentially harsh external environmental conditions including wind, rain, heat, cold, etc.

Additionally, submissions that meet the minimum eligibility criteria will be ranked according to the following criteria:





Does the proposed solution reduce human subjectivity and the potential for human error?



How accurate is the proposed solution?



Does this submission differ from the solutions we have already tried? Is the solution innovative, sparking new ideas that haven’t been considered?



How mature is the proposed solution? Is it well reasoned and supported by research? Has a proof-of-concept been created?



How well does the proposed solution fit into the current inspection process flow?




Participation Eligibility:

The challenge is open to all adult individuals, private teams, public teams, and collegiate teams, with the exception of current Gerdau employees. Teams may originate from any country. Submissions can be made only in English. All challenge-related communication will be in English.

No specific qualifications or expertise in the field of steel manufacturing, metal recycling, scrap inspection or automation is required. Prize organizers encourage outside individuals and non-expert teams to compete and propose new solutions.

To be eligible to compete, you must comply with all the terms of the challenge as defined in the Challenge-Specific Agreement.

Registration and Submissions:

Submissions must be made online (only), via upload to the website, on or before December 14th, 2018 @ 5pm ET. All uploads must be in PDF format. No late submissions will be accepted.

Intellectual Property:

As detailed in the Challenge-Specific Agreement – Innovator will retain all intellectual property rights to their technology. Due to the nature of ideation challenges, Submissions will likely not contain any intellectual property. However, in the event a Winner Submission  does contain intellectual property, The Sponsor will require the Innovator to share a license to any intellectual property contained. This allows both the Innovator and Sponsor to independently use the intellectual property for their own use. Any intellectual property Rights derived from eventual additional funding or partnership for R&D efforts, prototyping or manufacturing will be mutually negotiated between the parties in an eventual future agreement.

Selection of Winners:

Based on the winning criteria, prizes will be awarded per the Judging Criteria section above. In the case of a tie, the winner(s) will be selected based on the highest votes from the Judges.

In the case of no winner, Gerdau reserves the right to withhold the Prize amount. In place of the original prize amount, Gerdau may issue a Consolation Prize to the team or individual closest to the winning solution in the amount of at least 10% of the total original prize purse.

Judging Panel:

The determination of the winners will be made by a group of people including Gerdau internal employees. 

Additional Information

  • Void wherever restricted or prohibited by law.
  • No purchase or payment of any kind is necessary to enter or win the competition.
  • All ineligible applicants will be automatically removed from the competition with no recourse or reimbursement.
  • All applications will go through a process of due diligence; any application found to be misrepresentative, plagiarized, or sharing an idea that is not their own will be automatically disqualified.
  • By participating in the challenge, each competitor agrees to submit only their original idea. Any indication of "copying" amongst competitors is grounds for disqualification.


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