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Saloni Meghani
The steel industry globally has held out from being
slotted into the traditional sector. It has been stretching
its markets, products, service and operations in innovative
ways to emerge a winner in the knowledge era.
Tata Steel too has remained ever
youthful to newer ways of thinking — in the use
of its raw materials, product offerings and mix, business
processes, production technologies, and even knowledge
management.
According to managing director
B. Muthuraman, the secret that keeps a company fresh
in its approach, lies in the questions the senior management
asks the employees. "If you talk only about issues
like targets, bottom line and price, there will be no
creative thinking. If you ask about the why and the
how instead of simply the what you will have innovation,"
he says.
Mr Muthuraman is not in favour
of 'managing' innovation. Instead, he would prefer to
nurture innovation. He says, "The word 'manage'
connotes system, structure, procedure, hierarchy and
departments. Each one of these is in opposition to innovation.
Instead, you should manage the ambience, the surroundings,
the culture and the relationships."
This is why Tata Steel does not
shy away from the maverick thinkers in the company.
It encourages people to have and exercise their own
take on innovation.
Here are some ways of thinking
inside Tata Steel and some of the results they have
created.
Take one
Innovation = (Invention + exploitation) n and n varies
between 2 and 3 — Amit Chatterjee, chief
technology officer
"The exploitation of an
innovation for the benefit of mankind is far more important
than the invention itself," says Mr Chatterjee,
who was involved with setting up the first sponge iron
plant in the country.
Tata Sponge uses an indigenous
technology called the Tisco Direct Reduction Process.
The iron is called so because under a microscope it
reveals pockmarks left after the oxygen is removed in
the reactor.
Mr Chatterjee recalls that in
1982 when the plant was set up, India’s production
of sponge iron, which retains its solid state instead
of becoming liquid after reduction, as it would in blast
furnaces, was almost non-existent. He recalls that there
were only lush green paddy fields on the site in Orissa
when the team went there for the first time. "It
was reminiscent of the way our predecessors located
the steel plant site in the middle of nowhere many years
ago. The only difference is that while they went on
horseback, we went by car," says Mr Chatterjee.
"Today, we have two kilns
and a third is on its way. We may put up at least another
three," Mr Chatterjee says. And India has now become
the world capital for sponge iron that yields higher
productivity in the blast furnace and provides an alternative
metallic source for steel making.
Mr Chatterjee also feels that
the way in which one goes about doing something new
requires innovation. Tata Steel's biggest innovation
in this light is the fact that it went in for modernisation
in stages instead of risking the 15,000–20,000
crore in one go. "To take it in steps at that time
was in itself an innovation," he says.
After adopting oxygen steel making
under its modernisation programme, Tata Steel added
a hard-earned feather of a process innovation in its
cap by producing low phosphorous steel. It pursued the
level of phosphorous in its steel from .040 all the
way down to .012 per cent.
One of the company’s biggest
competitive advantages is its captive iron ore. But
this raw material has phosphorus content at .080 per
cent. Earlier, this did not make a difference. But when
Tata Steel started supplying to the automobiles, white
goods, computer, and the brown goods industry, it discovered
that its customers wanted a maximum of .025 per cent
and some of them even wanted .010 per cent. "We
could get around this by giving up our competitive advantage
of indigenous captive ore," says Mr Chatterjee.
"But we didn’t. We innovated in such a way
that we could retain our advantage," he adds.
By changing the converter blowing
regime, bottom injection practice, and the lance geometry,
Tata Steel took the level down in stages. It is now
on the last lap and is working on taking the percentage
down from .012 to .010. It has been able to take care
of 95 per cent of the demand of the automakers and is
now targeting the remaining five per cent.
For a product innovation involving
Tiscon bars, Tata Steel created an example of how a
known technique can be adapted under Indian and Tata
Steel’s conditions through creative efforts.
Tiscon, the company’s product
for housing concrete, was being cold twisted —
literally, being held at one end and physically twisted
at the other — to increase its strength. This also
made it prone to corrosion. By putting in micro alloy
elements the problem with corrosion could get taken
care off without twisting but its cost would then suffer.
"This was not a problem
unique to us. So, we looked into available technology
and came across reams of literature that said people
were using controlled cooling by water spraying on the
bars when they are red-hot. We readied ourselves with
gumboots and paraded fire engines right into the merchant
mills. We sprayed the metal to prove that we don’t
need to cold twist or use an alloying element. With
water spraying, the strength of the steel develops because
of certain phase transformations. We were the first
ones to have brought this technology into India,"
says Mr Chatterjee.
Take two
Innovation is deployment of invention — C.
Mishra, chief, Mechanical Technology Group
Mr Mishra believes the maintenance
group’s job is not merely to maintain the status
quo of the process equipment and infrastructure assets
but also to release more importantly, releasing the
plant’s hidden capacity for production beyond the
slated limit.
Tata Steel's approach to maintenance
of the plant is innovative in that it is closely guided
by market and delivery requirements. It entails the
highest level of output (plant availability, equipment
reliability, and the rate of process and quality) with
the lowest input (cost of labour, material and maintenance
time) over the entire life cycle of the machines.
Even if the plant has high overall
capacity but is down at a crucial time, the customer
will be dissatisfied. To deal with this the department
requires foresight. Tata Steel has developed sophisticated
predictive maintenance technology for this purpose.
This facility is unique to the company in that it goes
beyond the usual practice of monitoring the health of
equipment using only one parameter.
"When we go to a hospital,
the doctor subjects us to four or five different tests
to find out exactly what is wrong. Similarly, for our
purpose we monitor temperature, thermal profile, vibration,
condition of lubricants or particle size count and then
synthesise all the information for an accurate diagnosis,"
he says. The department feeds the data online to get
not only a list of possible problems but also the probability
of their occurrence. This makes the maintenance planning
very cost effective.
Take three
Innovation is about using the best there is available
in ways that are most profitable to the enterprise
— Varun Jha, chief information officer
Tata Steel has received the Nasscom
and ET award for the best usage of IT in 2003. It has
used technology in a many-pronged manner across many
domains.
"Our greatest innovation
is in the area of warehousing and mining of data,"
says Mr Jha. By helping correlate product properties
with process parameters through statistical techniques,
the company has been able to not only improve the product
but also reduce wastage. Data mining helps discover
hitherto unknown patterns in the relationship between
the two and creates new insights. It has also helped
enhance individual performance by providing related
pieces of information on a subject to create knowledge,"
he says.
According to Mr Jha, innovation
is also about the way in which technology is adopted
and spread. Tata Steel has used video conferencing,
video streaming and telephone communications innovatively
for two-way communication with its mines and collieries.
Employees in all locations are able to hear the managing
director’s (MD) views and pose their questions
to him through the monthly event called MD Online. Again,
while the IT department hosts the intranet, various
business units and departments develop and manage their
own content on it.
Tata Steel has also used SAP
to optimise its business processes. As some plant-specific
requirements are not supported by commercially available
software the company uses custom-built versions. "Each
system is adapted or created keeping in mind the unique
requirement of the specific units," says Mr Jha.
The steel industry has been compelled
to respond to the ever-shrinking levels of service.
For instance, the modern assembly line has to cater
to varying specifics. Steel, as its prime feature, has
to respond nimbly and flexibly to this. To this end,
the company has developed slitting optimisation software
that enables it to cut or split coils with the least
wastage.
IT has also been used to provide
suppliers and key customers visibility across the entire
supply-chain. Under Tata Steel’s e-procurement
system, all vendors are connected and able to access
information. Earlier, these vendors would have to visit
the Accounts or Purchase department in person.
However, Mr Jha has a vision
that goes beyond just efficiency. "Manufacturing
industries have yet to use IT to transform themselves
in the same way as Financial Services. Imagine a future
where houses are built of prefabricated parts and customers
can design their dream house on the Internet and place
an order immediately," he says.
Take four
Innovation comes in small measures — P.
K. Sikdar, chief, Automation
Tata Steel has a special group
of people whose mandate is to take the company to the
cutting edge of technology by automating the plant.
The team has been scrutinising many operations to bring
about incremental changes that go a long way.
In the new coke plant, instead
of cables to connect the oven machines and the control
rooms, the department used wireless data communication.
To take the benefits of automation far into the company’s
captive mines as well, the department adapted global
positioning systems (GPS) and wireless technology to
monitor the equipment deployed on the site.
That it kept its eye on details
is evident in the camera used to view the stock inside
the blast furnace. To prevent the dust deposits on its
lens, the department came up with a simple idea. They
made a pinhole aperture!
Also, the old system of using
a winch to get an accurate reading of the stock was
replaced by a radar-based level measurement system.
In India, this has been done for the first time.
The hot metal detectors and crop
cut optimisation system used in the mills have been
developed in-house and are even being commercialised.
This has resulted in substantial savings for the company.
Says Mr Muthuraman, "Innovations
can happen by the hundreds every year and add up to a
few crores for the company." The time to innovate
is ripe right now because as head of R&D. Bhattacharjee
says, "Environment legislations, cost, and competition
from alternative materials such as aluminium have been
driving the industry to innovate". So, with the minds
of its most crucial resource – its people- buzzing
with ideas, it is no surprise that Tata Steel is already
prepared to take on the world.
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Uploaded on September 3, 2004
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