Tempered Vertical



The steel
vertical demands completely a different set of IT infrastructure. Right from
mining the iron ore to a finished product, steel making is a complicated
process. Take for instance Tata Steel, a behemoth in every sense. Tata Steel’s
products include hot and cold rolled coils and sheets, galvanized sheets, tubes,
wire rods, construction re-bars, rings and bearings. The company has introduced
brands like Tata Steelium (the world’s first branded cold rolled steel), Tata
Shaktee (galvanized corrugated sheets), Tata Tiscon (re-bars), Tata Pipes, Tata
Bearings, Tata Agrico (hand tools and implements) and Tata Wiron (galvanized
wire products).

Best Practices for 2006
  • Select the ERP that best fits the
    business objectives

  • ERP selected has to support
    leading SCM solutions

  • Integration is the key; hence
    solution adopted has to seamlessly talk with each other

  • Utmost care has to be taken in
    terms of shop floor automation

Steel
is different in the following contexts: there are two distinct supply chains.
The first is an inbound supply chain that takes multiple raw materials in the
form of iron-ore, coke, limestone, and converts into single products (hot
metal). The other outbound converts the single product (hot metal) into various
forms of finished steel products as per the customer requirement. Steel has
therefore the distinct requirement of the ‘A’ and ‘V’ types of supply
chain. Moreover the steel making process experiences ‘strike rate’. This
adds to the challenge of managing variability in the process and keeping the
promise made to the customer. The lead-time of steel making is high while the
lead-time that the customer expects is rather low.

The
solutions in steel are ERPs; SAP and Oracle are most commonly used. Meanwhile,
companies like Tata Steel use i2 solution for outbound supply chain in many of
its steel plants and integrates with its various modules as well as with the
SAP.

In
addition to best of breed, custom built solutions are commonly used for
scheduling on the shop floor as well as for integrating the level-2 systems
(process computers) with planning and scheduling systems, often called as
level-3 systems. Also on the horizon is a solution called Broner that is
emerging as a viable option for shop floor scheduling. If we take the case of
Tata Steel, the company over the last few years have embarked on some major
initiatives: most significant being the expansion of SAP to business units that
were not covered before. The company’s major business applications run on SAP,
which it started rolling out in 1999 in a phased manner.

IT is
involved at each and every stage of the production process

A
phased deployment also makes sense, as every module of the enterprise wide
solution needs to be fine-tuned and aligned with core processes. If we look at
Tata Steel, the first process it did was the order generation and fulfillment
part. Subsequently, it went ahead with the procurement process and the
associated accounting functionalities. The production planning system for the
steel plant was custom built using the APO module of SAP.

Consulting Panel

Shreekant Mokashi, CIO,
Tata Steel

Every
vertical has its unique requirements and steel being extremely labor intensive,
poses many challenges to the CIO. The biggest challenge being aligning the IT
with the core processes and numerous sub-process. Hence a CIO needs to adopt
many best practices to create an agile IT set up that meets the unique vertical
demands.

Shrikanth G  
shrikanthg@cybermedia.co.in

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