Interview - Digital Innovation: Bedrock for Improvement
What are some of the digital interventions in iron & steel manufacturing that has enabled Tata Steel to become one of the lowest cost steel producers in the world?
Tata Steel embarked on a digital modernization journey through the 90's with the launch of Online Analytical Processing (OLAP) in the mid-1990s. The creation of Manufacturing Execution Systems (MES) and Human Machine Interfaces (HMI) automated large parts of the plants creating significant advantages of productivity, scale and standardization. The Level 1 automation systems in Tata Steel allow it to capture significant real time data, whilst the Level 2 automation systems have helped Tata Steel to control processes via live feedback. Tata Steel has utilized the data thus generated for optimization which has led to identification and exploitation of significant cost reduction opportunities. Tata Steel has also utilized process simulation and modelling to design low cost interventions and reduce the cost of experiments over the years. These systems have been the bedrock for our improvement programs, that have led to savings in thousands of crores year on year.
The Enterprise Resource Planning system launched in 1998 and subsequently upgraded in 2004 led to visibility across the value chain that has been exploited for both control and improvement. In the last few years Tata Steel has simplified processes utilizing mobiles, analytics and IT interventions that have enhanced productivity. We are taking the same forward by migrating to SAP Hana S4 via the Digital Foundation Program. This would lead to significant gains via making information available to facilitate decision making.
We have identified significant value savings that can be derived via adoption of new technologies and have a Digital Value Acceleration Team, which has been tasked with the responsibility of identifying opportunity and enabling delivery.
Tata Steel’s Centre at Warwick University is working on next-gen technologies for the iron & steel sector. What are some of the digital enablers leveraged by the Centre to develop innovative technologies for the sector?
The R&D centre at Warwick essentially leverages two types of digital technologies.
In the first type, our product application engineers use state of the art modelling software that help digitise product properties and component shapes. Such digitisation helps modelling and evaluation of performance of products in application situations such as in automobiles, heavy vehicles and structures. The results of such digitisation and modelling demonstrate the benefits of newly developed (and existing) Tata Steel products to the original equipment manufacturers. This is an established capability at our Warwick R&D centre with frequent and valued contact with engineers of our key customers.
In the second type of digitisation, Tata Steel data scientists utilise the data generated by the plethora of sensors located in manufacturing processes. This data is analysed using big data analysis techniques on powerful computers to seek patterns which would be otherwise invisible. These patterns can provide solutions to problems or improvements to current processes and products. The data scientists are also part of the company-wide, cross-functional team working towards a digital steel manufacturing and supply chain.
R&D investments have long gestation period and uncertainty of returns. Being at the helm of affairs, are you looking to acquire technologies or invest long term to build internal capabilities?
We believe technology is a key differentiator in the short run and a disruptor in the long term. Our approach has been guided by adopting and adapting technologies with a focus on product development for focused segment needs in the market, and on process efficiencies in the back-end.
As far as emerging technologies are concerned we are confident that analytics, which allows us to extract value from the data we generate and Internet of Things, which allows us to gather intelligence from equipments and assets, will lead to significant value. These we plan to keep in- house. We would also look out for emerging technologies like Artificial Intelligence, Blockchain and Smart Dust and look at Pilots to establish proof of concept and proof of value against business use cases. If successful we would scale in-house if that makes sense. The key variables for decision include the maturity of the technology, the estimated impact and life of the same, and whether we would be able to retain talent and scale in house.
We maintain a collaborative approach through engagement with start-ups, solution providers, technology experts, academia, research focused institutions and other players in our industry to ensure we are on top of the technology curve, whilst delivering value to today’s business.
While traditionally we have focused on building our internal capabilities, we are conscious that R&D heavy industries like pharmaceuticals are moving towards acquiring capabilities or products through investments or inorganic growth. We are also watching with interest other emerging options, models and will take a call as appropriate.
Please elaborate on the partnership with CSIR-NML to develop online solutions and improve blast furnace efficiency.
Over the years there have been several initiatives towards this end.
Late 90s and early 2000s:
There was an ambitious national project to raise Blast Furnace (BF) productivity by 20% from the then existing level of 1.5 t/m3/day. There were three partners - SAIL, TSL and NML - and funded jointly by the Steel Development Fund (SDF) grant by the Ministry of Steel and investments by companies involved. While TSL and SAIL did work on installing special purpose probes for measuring phenomena inside the BFs, NML had the role of developing models which would use that information as well as doing laboratory work to establish material characteristics - such as coke and sinter properties - needed for the modelling effort. This was a cross-functional effort and several insights were generated - which allowed the modelling work to be actually carried out by all participating agencies. The project would be considered largely successful - judging by the fact that BF productivity did in fact rise - and knowledge created through this effort certainly contributed to decisions which led to the improvement.
Now that the BF performance level - in terms of productivity and efficiency - is at a much higher level, there is effort to look for pockets of opportunity for further improvement. One such area is managing the more difficult and variable properties of raw material resources available today:
- NML and TSL have jointly worked on infra-red thermography for estimating the alumina content of iron ore on an online basis - as against doing less frequent periodic samples. This work, implemented at our iron ore mines in Noamundi, allows alumina to be rapidly estimated - enabling online adjustments in mixing of iron ore streams - to get a more consistent alumina level in the ore fines dispatched to steel works. Less variability in inputs allows processes to squeeze out further efficiency by less frequent adjustments.
- Similarly, work is now on to establish the infra-red thermography technique for measurement of coke and coke breeze moisture levels in an online manner - so that the energy input to BF and sinter plants can be better controlled leading to higher efficiency.
- Online models need a lot of material properties - such as reducibility, decrepitation, softening-melting of ferrous burden, strength and reactivity of coke, and solid flow behaviour (repose, voidage) of all materials. Given the volume of work involved, both organizations have pooled the data generation to enable faster development.
- Higher productivity and lower coke rate also pose challenges to hearth refractory in the BFs. Ascertaining refractory health (remaining thickness in an online manner) based on limited thermocouple data is challenging and often defensive strategies have to be adopted to guard against possible break-out events. In one of the projects with NML, a technique was devised to physically simulate the lining and cooling system - to enable translation of measured thermocouple data to refractory thickness.
- Several joint forums exist to debate unanswered questions and problem solving efforts towards making further gains in efficiency through better understanding.
How is Tata Steel using digital interventions to develop products for the rural and semi-urban markets?
In FY16, our Branded Products business contributed ~Rs 13,400 crores to the revenue of Tata Steel. These branded products cater primarily to semi-urban, rural geographies and small & medium enterprise segment. The brands in this space include Tata Tiscon, Tata Shaktee, Tata Steelium, Tata Astrum, Galvano, Durashine, Tata Structura & Tata Pipes. Consumers assign a premium to these brands and each of them is a market leader in their category.
New Product & Service introductions, engaging our eco-system and customers, play a significant role in this business. Tata Steel engages with our large family of distributors, dealers and Enterprise Corporate Accounts (ECA) customers on various digital platforms such as Websites, Webinars, WebApps, Crowdsourcing etc. to capture product feedback and generate insights on customer needs. These numerous insights are then translated into product development ideas. Few digital initiatives for capturing customer feedback which could be mentioned are Customer Relationship Management (CRM) module in SAP for insight management, Web Apps extended to 7500 dealers to capture product feedback for rural markets and 'Ecafez', a web based platform for capturing needs and pain points of ECA customers.
The ‘Ecafez' online engagement platform for small and medium enterprise customer, is aimed to provide a single click answer to all their queries. Webinars are conducted as part of Ecafez to connect with Owners, Managers and Quality Heads for more than 10,000 small and medium enterprises who want to know more about subjects such as GST, Theory of Constraints (TOC) based supply chain, Kaan Baan and Quality. The topics are chosen based on feedback given by customer through the Ecafez portal. The digital platform also has the repository of Knowledge Bank, Case Studies, Industry Best Practices.
Our New Product development process follows a stage-gate approach. In our stage-gate system for New Product development, Prioritisation for new products is done on an IT platform wherein multiple stakeholders such as Marketing & Sales, Technology Group, Manufacturing and Business Analysts interact for product and service development.
Post launch of the products, customer feedback, and customer satisfaction surveys conducted on digital platform across the product segments.
Project Innovent is an initiative to promote innovation and business excellence. What are some of the significant technology ideas fostered through this initiative?
Tata Steel is constantly striving towards innovating and creating sustainable differentiation through various initiatives including project 'Innovent'. Our endeavour is to embrace technologies while developing solutions for customers in new opportunity areas which are in the adjacencies of steel business. The technologies embraced include Materials, Coatings, Digital etc. Many other technologies are being considered in Solution ideas which are currently at various stages of development and would be communicated through our product launches. Our wood finish steel doors 'Pravesh' launched for the individual house builders, uses Heat Transfer printing for various textures options on doors as per consumers choice. Self-Cleaning technology are being considered as enhancements in the toilets launched and unique Coating Technology has been used for various wardrobe shutter options being provided to home makers.
Tata Steel plans to make the Kalinganagar steel plant a global benchmark in the iron and steel sector. How can digital technologies be blended with manufacturing best practices in this endeavour?
A) Level 2 process control:
a) Use of windows tablets and hand held device to update inventory in coil yards and slab yards.
b) In house developed control system for coke oven machine co-ordination and positioning in Coke Plant.
B) Level 3 (Manufacturing Execution System):
a) This is one of the most important pioneering initiatives undertaken at Tata Steel Kalinganagar (TSK). A mobile App named ‘TSK Plant Status’ was launched, where the status of various units in plant are updated every 10 seconds. This is the First Live app in mobile launched for the first time in Tata Steel Limited (TSL).
b) Multiple Objective based optimisation tool used to create Rolling Schedules using PSI Software.
c) Introduction of Slab Material Allocator using chemistry based Slab re-grading logic in SMS.
C) Level 5 Business MIS :
a) First time in TSL, an Integrated Steel Processing Centers (SPC) Information System (SPIS) to have end to end tracking of SPC Customer Orders in TSK.
b) New planning system (Factory Planner) in use for fulfillment of customer orders using flow management concepts.
In addition to the above, there are some initiatives being planned in the near future:
1) Inspection in conveyor galleries:
a) TSK is in process of developing new methodology for remote inspection of conveyor galleries using digital technology.
b) Access control at critical points is also being explored in a similar manner.
2) Inspection of analyzers in stacks at heights:
a) Using drones / robots for inspection of chimneys at heights is being explored.
With digital interventions, Indian businesses are seeing improvement in customer experience, productivity and turnaround time. In your opinion, what should be the strategic focus – disrupting with new technology or improving existing technology for competitive advantage?
We don’t see these as alternatives wherein we can only choose one or the other. Continuous improvement in existing technologies will provide higher benefit in short run and no business today can do without a certain level of efficiency. Core steel manufacturing process technology is progressing on a linear scale and we don’t foresee much disruption.
However, digital technologies like Social, Mobile, Analytics, Cloud computing are already disrupting different sectors. We have done a Digital Readiness Assessment survey and have identified adoption of new business models and disruptive technologies as a significant opportunity. Digitally enabling Customer Decision Journeys and creating moments that matter for customers by utilizing both our digital and physical assets, is a key area where we want to move.