Tata Steel Mission 2025: Lead the Digital Steelmaking

Tata Steel continues to invest in new technologies for digital transformation, with the objective to render a more agile organization that responds to changing market dynamics. The pandemic has acted as a catalyst for accelerating its efforts in agile decision making. The company has initiated pilots to digitize its factories by creating "digital twins" - a simulated digital replica of factories through real-time analytics. This opens up possibilities for data-driven "smart factories."

"By leveraging current digital initiatives and designing new ones to bolster our key strategies, we aim to be the leader in digital steelmaking by 2025," says Sarajit Jha, chief of business transformation and digital solutions at Tata Steel.

Powering Steel With Digital Twins

According to Jha, the steel industry is at par with B2C industries in adopting digital for both back-end and front-end processes. Customer experience is constant across industries, including steel. Digital is at the core of powering it for both B2B and B2C. "By making a digital twin of key operations, where you can visualize, simulate, optimize and predict what's going to happen, we can live up to the core fundamentals of Industry 4.0," Jha says. Earlier this year, the company began a few pilots creating digital twins of its Jamshedpur factories to make operations feasible even from outside.

However, Jha acknowledges that Tata Steel is nowhere close to some of the most advanced steelmakers in Asia. "Running digital twins, our competitors in China can successfully conduct operations almost entirely remotely. They can run their blast furnaces from as much as 5,000 kilometers away. Korean steelmakers are running 'lights-out' (dark factories), which means the plants can operate in dark with near-zero human intervention on-site. We are not there yet," Jha explains.

In the context of the digital twin, Jha also underlines the importance of 'YET-QP.' YET-QP stands for yield, energy, throughput, quality and productivity.

• Yield: How well are the materials utilized
• Energy: A finite resource directly related to sustainability goals
• Throughput: Volume of output and cost related to it
• Quality: The ultimate objective directly proportionate to sales
• Productivity: A decisive factor in growth

"In precise terms, YET-QP is creating a system, which is encapsulated in what we call a digital twin that gives us the capability to visualize, simulate, optimize and predict. It is one of the most important factors in helping us move from a reactionary to anticipatory responsiveness," Jha says.

Making Digital Responsive to Customer Demands

The process of getting a customer onboard is the same across industries. It begins with marketing, chasing a lead and converting it into a prospect. Sales nurture the prospect into a customer. Then comes operations that deal with a customer.

"At every step in this journey, there is a possibility of creating magic. One needs to not only know the customer but also deliver on their aspirations. Therefore, the customer journey needs to be fully mapped digitally. Today, we execute approximately $3 billion worth of B2C business higher than some of the established B2C companies. And it's the digital technologies that help in making these relationships stickier," Jha says. The company besides manufacturing steel is now diversified into making doors, windows and houses where steel is consumed.

Tata Steel takes pride in its six connected platforms that enable true digital steel manufacturing and a seamless customer experience. These are connected operations, assets, stakeholders (customers and employees), transactions and margins. "We have integrated margin management, which runs across from buy-to-fulfillment to getting the cash back. We are continuously optimizing every part of it, which, in its glorious avatar, someday will look like an automated enterprise digital platform. That's the holy grail of digitization we are committed to achieve," Jha says.

Future With Digital

According to a Gartner study of approximately 1,800 organizations globally, Tata Steel is in the top six percentile when it comes to digital maturity. The company responded to the disruption caused by COVID-19; however, it is true that it transforms every five years. Another great endorsement of Tata Steel's capabilities comes from World Economic Forum that has a Global Lighthouse Network. This network is created to accelerate a comprehensive and inclusive adoption of advanced technologies in manufacturing.

To date, 103 manufacturing lighthouses have been identified from different industry sectors. "There are only 15 of them representing process manufacturing and three of them belong to Tata Steel. Against all odds, we have set ourselves to achieve an ambitious target to be the leader in digital steelmaking by 2025," Jha says.

The road to achieving the goal has its challenges. To be a truly digitally transformative company, a lot of factors need to fall into place. It includes both tech and non-tech stuff.

The delayed 5G rollout for enabling smart factories is one of the biggest impediments not to mention the social milieu in which the company operates. Another challenge that cuts across industries is talent. "Even if we are able to source talent, aligning and retaining that to reimagine the future as opposed to engineering the past is a tough ask," Jha says.

There are some challenges the company is preparing to overcome:

• How to manage the impact of success with automation
• How to reach the global productivity benchmarks
• How to manage environment sustainability and governance (ESG)

While Tata Steel strives to excel in agility, the organization is mostly crisis-triggered. "The true success will stem from a non-crisis-triggered agile company that has survived for over 115 years now. A company as large as Tata Steel will have to harness the power of AI, data and digital to lead," Jha says.