Artificial intelligence, machine learning and internet of things may be concepts that are usually associated with IT and technology companies. Well, not necessarily.
India's two biggest steelmakers - JSW Steel and Tata Steel are currently undertaking a digital transformation that is changing the way they monitor blast furnace operations, or move raw materials like iron ore and coal from mines to manufacturing plants.
Tata Steel is spending $100 million in its units in India in the next three to four years on this digital transformation. "We are working on making Tata Steel more digital-ready," Global CEO & Managing Director TV Narendran told Moneycontrl in a recent interview.
The company's unit in Kalinganagar was recently included in the list of World Economic Forum’s Global Lighthouse Network, a community of manufacturers known for "applying Fourth Industrial Revolution technologies to drive financial and operational impact." The unit is the only manufacturing plant in India that is included in this network.
The Tata company's nearest competitor, JSW Steel is leaving no stone unturned in ushering in "industry 4.0 intervention." In its Dolvi unit in Maharashtra, for instance, the company has deployed 'digital tools' to track the ongoing expansion programme. This will help the company ensure on-time completion within the budgeted cost.
"We have created 'connected factories' in procurement and large capital projects to track and manage various processes, which has improved transparency and lowered manual interventions," Chairman and Managing Director Sajjan Jindal said.
The company is using big data and analytics-driven real-time models to reduce power consumption and associated losses. "In the past two years, we have implemented over 100 digital technology projects," added Jindal.
The initiatives have till now saved JSW Steel Rs 180 crore. The company now plans to save Rs 300 crore this financial year, through the digital tools. "Using analytics, robotics and hybrid cloud, we are aligning business processes," said Jindal.
Both the companies have brought in talent to drive this digital transformation.
Tata Steel tapped into the talent in Group company TCS, and roped in Jayanta Banerjee as Group CIO, in 2018.
"He has come from TCS, has seen the world from TCS point of view so he brings in a very different mindset. He is supported by a very good team of people from Tata Steel, so there is a good balance of external people and internal people, lot of youngsters involved," said Narendran of the team that pushes the digital strategy.
In JSW Steel, Vineet Jaiswal, who was earlier in GE Digital, came in. "Responsible for Digital Transformation at JSW Group and to strategically align the company’s vision for the future in the digital space," is how his Linkedin profile explains.
These initiatives in the digital space will especially come in handy now, as the steel industry is going through a downcycle, and every rupee saved will be welcome. JSW Steel, whose profit in the first quarter halved from a year ago, is sitting on an inventory of over a million tons. Tata Steel will be announcing its financial results later this month.
Digital is one way, these steel companies can survive the slowdown.