TSK in WEF’s Global Lighthouse Network list
Tata Steel’s management believes that digital transformation initiatives will be a major contributor towards inorganic growth, according to a report by Gateway House.
In July 2019, Tata Steel Kalinganagar (TSK) became the first facility in India to be recognised by the World Economic Forum (WEF), and included in the ‘Global Lighthouse Network’ list of 54 global facilities.
As a result of this Tata Steel has since been organising ‘Go and See’ events for more than 30 Indian and international Multi-National Corp (MNCs) to increase awareness on Industry 4.0, said the report by Commander Amrut Godbole, (A Fellow, Indian Navy Studies Programme at Gateway House) and Sagnik Chakraborty (A Researcher in Cybersecurity and Manager of the Management Office at Gateway House).
The TSK plant, designed in 2005, provided the plant designers an opportunity to map and introduce technologically advanced infrastructure as part of the plant design. These features incorporated at the design stage have helped TSK plant upgrade to Industry 4.0 solutions with relative ease as compared to Tata Steel Jamshedpur (TSJ).
Sarajit Jha, Chief Business Transformation and Digital Solutions Officer, at Tata Steel, believes the maturing of IT infrastructure and Manufacturing Execution System (MES) under Industry 3.0 is a fundamental requirement for a successful, digitally driven, Industry 4.0 transformation.
Digital transformation initiatives at Tata Steel are not limited to TSK but are also being implemented at the older TSJ facility. With the aim to accelerate technology adoption, an Analytics and Insights (A&I) Centre has been setup in Jamshedpur.
In 2020, analytics projects worth approximately US$25 million were executed across the value chain, the Mumbai-based think tank said on 11 Mar 2021
Tata Steel has two steel manufacturing facilities in India, at Jamshedpur (TSJ) and Kalinganagar (TSK). The Jamshedpur plant has been operating for more than 100 years, while the Kalinganagar plant began operating in May 2016. The company currently has a capacity of 13 Metric Tonne Per Annum (MTPA) (10 TSJ+3 TSK) and plans to scale production by 17 MTPA to 30 MTPA by 2025.
Furthermore, the acquisitions of Bhushan Steel and Usha Martin in 2019, are set to contribute 5.6 MTPA and 1 MTPA respectively. The expansion currently underway at TSK will increase existing capacity from 3 MTPA to 8 MTPA. Additionally, Tata Steel has targeted organic growth of 5-6 MTPA.
According to Tata Steel, while the journey for digital transformation is internally driven, understanding and implementing global industry best practices is crucial for accelerating the transformation. Tata steel brought in McKinsey and Company as ‘Value Discovery Consultants’ to assist in establishing a framework and roadmap for a sustainable digital transformation infrastructure, at the Kalinganagar facility.
Tata Steel’s management believes that transformation cannot be driven by outsiders. Outsourcing of skill and expertise for digital transformation will not only prove costly but also fail to address a defined business problem. Process insights are crucial for a sustainable transformation and to consistently deliver valuable business insights. Across its HR chains, Tata Steel therefore encourages people to explore, fail and innovate in-house. Amit Kumar Chatterjee, Chief Analytics Officer, identifies the following as key drivers for a successful, enterprise-wide, digital transformation:
Leadership
Patience and perseverance
Tough strategic decisions
Collaboration
Resources
Mind-set transformation
Democratisation of analytics
It is interesting to observe that a majority of on-site engineers and technicians at TSK come from universities in Odisha and surrounding areas, making this a truly local effort at competing on a global scale.
Data Engineers from the IT sector were responsible for testing and maintaining digital architectures, such as databases and large-scale processing systems. They dealt with raw data from the field and delivered data to the data science team in a format that was easy to analyse.
Data Scientists from the IT sector were responsible for converting the data from the Data Engineers to generate meaningful business insights by using sophisticated data-analytics programs, machine learning and statistical methods. Once a solution was accepted, they presented a clear story to key business stakeholders on a daily, monthly or yearly basis.
Operations Translators, were vertical specialists and the eventual end-users of the digital solution developed. They were responsible for defining the problem and the desired outcomes, and also validating the effectiveness of a given solution at addressing a specific operational problem. This knowledge was essential for a viable and sustainable solution.
The Business Translator was a finance specialist responsible for ensuring financial prudence during the R&D process and to assess and certify the Return on Investment of deploying a particular solution based on the Proof of Concept.
The US$2 billion transformation program announced in Aug 2018 and has already saved US$1.47 billion for the company cumulatively till March 2020.
Some of the Use Cases developed through the above framework at Tata Steel have resulted in the following benefits:
- Tata Steel Jamshedpur (TSJ).
Reduction of scrap by 25% by optimization of bar drawing equipment through use of a camera
Digital twin of sinter plant that predicts performance 90 minutes in advance
Supply and network optimization to reduce cost in product distribution and logistics
Development of machine reliability model to detect anomalies and forecast performance 72 hrs in advance
Development of a raw material cost forecasting model
- Tata Steel Kalinganagar (TSK).
Optimisation of Coke Dry Quenching processes to improve quality and improve energy efficiency
Smart raking system to democratise decision making skills, to improve yield, and ensure compliance with set quality grades for the finished product
Optimisation of reagent utilisation for the desulphurisation process
Development of Tata Steel app store with more than 110 applications for Level 5 operations
The Tata Steel Kalinganagar facility, at present operates a large number of digital and data science initiatives that are aiding various manufacturing value chain processes.
As part of future digital expansion, Tata Steel aims to scale-up digital transformation across various elements of the entire supply chain so as to transform into the World Economic Forum’s Edge to Edge (E2E) lighthouse facility.
Towards this, a ‘Reliability Centre of Excellence’ has been setup to integrate current and future digital initiatives. Such digital architecture will provide a centralised and connected decision-making platform through the single-point access of plant-wide assets and operations.
MNCs Centric
Tata Steel has assessed a 20X multiple for ROI on the various digital initiatives implemented.
Many MNCs, large cap and SMEs with capital expenditure capacities should consider an internally driven transformation. Availability of skilled manpower and agile digital infrastructure are important components. The strategy must be carefully crafted based on individual business needs and inputs from experts. A top down approach is more successful than a bottom-up one.
Vintage facilities and assets will have to undergo a sensorisation and IT infrastructure upgrade to facilitate generation of data which is important to build business insights based on data analytics.
The recognition of Tata Steel, Kalinganagar, by the WEF as part of the ‘global light house network’ is an important consequence and acknowledgement of the sustained modernization drive by the group since 2005, despite hurdles, to become a global benchmark for digital transformation.
The metrics of manufacturing do not change. Yield, energy, throughput, quality, productivity and supply chains are equally important for MSMEs as they are for MNCs.
Considering the capital intensive requirements however, MSMEs should consider deploying solutions developed by the start-up ecosystem.
MSMEs are drivers for employment within India and have to therefore integrate employment generation considerations in their roadmap for digital transformation.
MSMEs are often in control of operations that are internal to their organisation but are often challenged in external value chains. They should consider a discontinuous digitisation approach, in specific external value chains nodes to maximise impact.
For MSMEs the concern is integration in the existing external digital value chains of MNCs especially if they are a Business to Business (B2B) provider. MNCs can be incentivised to collaborate with MSMEs that feed directly into their supply chains, and assist them with digital expertise for mutual benefits. #technology #investment #manufacturing #industry /fiinews.com
