A Steely Determination

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Jha, Director (IT Systems), is the key man behind the massive IT usage in Tata Steel,
which bagged the CSI award this year for ‘Best IT Implementation’. Having spent more than
20 years in the company, Jha’s experience and understanding has stood the test of time. In
an interview with Indranil Chakraborty, Jha talked about the IT functions of his company.
Excerpts:

Tata Steel is known for its
efficiency. What has been the role of IT in this?

IT can be very useful if aligned with organizational objectives. Tata steel has applied IT
to its core business processes of production, planning, and scheduling. This has made it
possible to increase delivery compliance while keeping inventories at a low level. Another
example of this alignment is the use of IT to streamline the invoicing process which has
made it possible to hand over invoices and test results to trucks transporting finished
steel.

Is using MRP or ERP solutions on
company’s mind?

We are in the process of implementing an ERP package called Avalon for two profit
centers-Tubes and Bearing divisions. Regarding application of an ERP solution to the steel
plant, we find that current ERP packages do not meet complex production planning and
scheduling requirements of the plant, which has traditionally developed its own systems.
Tata Steel has developed a fully-integrated system for its business processes. Information
systems for our Flat Product Complex has all the functionalities of an MRP system and it
is integrated with other business systems as one would expect from an ERP system. Linkage
with sales offices for order entry and online order status has been achieved using a
private VSAT network called Tatanet.

What are your plans for increasing
IT usage?

We have taken up a project for reengineering customer order fulfillment process which will
cut across the various functions involved. Our aim is to create an information system with
a clear focus on customer satisfaction. As part of this system, production planning will
cover processes carried out externally so that there is complete visibility in the order
fulfillment process.

How do you cope with rapid
obsolescence in the IT industry?

We would like to protect our investment in IT infrastructure as long as possible through
guarantees of long-term support from vendors. Obsolescence of hardware is accompanied by
falling prices and lower cost of ownership which make it possible to cope with
obsolescence.

How important is IT to the steel
industry?

Importance of IT to an industry depends on several factors such as criticality of business
transactions to be handled, complexity of processes, and the variability of products and
services. Steel industry is characterized by several complex production processes and thus
needs a good support through process automation. Further, production processes are
vertically integrated and thus need advanced production planning and integrated business
systems.

In user industry, IT is implemented
either due to technology push or due to demand pull. Which of the two is applicable in
Tata Steel?

In general, it is demand-pull, users identify opportunities where IT can help improve
effectiveness. Appropriate IT systems are then implemented to achieve these objectives.
There are some areas where rapidly evolving technology presents itself as a solution to an
existing need. Lotus notes or intranet are examples where technological advancement has
helped improve communication.

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