Digital Transformation: A case study on tata steel

"Tata Steel looks at digital as solution-oriented, design-outcome-oriented & business led," said Sarajit Jha of Tata Steel
Advanced industrial Iot for process optimization.
Al- powered processed control
Cycle time optimization through big data analytics on lines programmable logic controllers
Digital twin for flexible production
Real- time locating systems (RTLS) for key manufacturing components
Analytics platform for remote production optimization.
Digital dashboards to monitor overall equipment effectiveness performance.
Enterprise manufacturing intelligence system to upgrade operations management.
Real time asset performance monitoring and visualization
Digital twin of sustainability
Energy optimization by predictive analytics
Iot real-time energy data aggregation and reporting dashboards
Sensor based data collection for energy management

1. Managing Digital Transformation Sameer Joshi PRN103 Neeraj Kalekar PRN105 Devesh Jadhav PRN101 Vaishnav M PRN097 Harender Singh PRN099 Rahul Dandge PRN096 Diksha Waghmare PRN098 Revati Jadhav PRN102 Indrajeet Hulyalkar PRN100 Jyotsna Bajpai PRN104 3 Team

2. INTRODUCTION Sameer Tata Steel was created in 1907 by Jamshedji Tata and is a component of the Tata Group Consolidated turnover of US $32,836 million in the financial year ending March 31, 2022 10th largest steel producer in the world with an annual crude steel production capacity of 34 MnTPA Agriculture Automotive Steels Construction Consumer Goods Energy and Power Engineering Material Handling Hot Rolled Steel Cold Rolled Steel Coated Coil Tubes Rebar Wire Rods For the 2022 financial year, the total turnover of Tata Steel Limited was about 2.4 trillion Indian rupees . This was an increase of about 56 percent in comparison to the previous financial year Integrated operations in India Product portfolio STRENGTHS Overdependence on Europe Disintegrated operations in Europe WEAKNESS Adapt newer technologies Increasing demand in India OPPORTUNITIES Government & Environmental Regulations Decreasing steel prices THREATS Product Segments Key Products SWOT Analysis

3. BUSINESS MODEL Vaishnav Market Players Growth Drivers Limited availability of raw materials (coal, crude steel etc.) Shift in product quality ( Ultra high strength steel for automotives) New steel grades ( TRIP & TWIP) National steel policy by ministry of steel Subsidiaries: JUSCO, Tata Pigments, TS Alloys, TSPDL etc. Joint Ventures Tata sons Major shareholders 7. Key Partners 8. Key Activities Supply Chain Management Procurement, Storage, Maintaining Inventory, Order Delivery Manufacturing Raw material mining, Hot Material production, crude steel production Order Fulfillment Resource planning, Order allocation, optimum delivery route Managing finance Marketing and Quality management 1. Value Preposition Supplier Compatibility Customer needs Customized Offerings 6. Key Resources 5. Revenue Stream Financial Manufacturing Intellectual Human Natural capital 4. Customer Relationships CSR Initiatives Customer feedback networks & Support Vendor Capacity Advancement Programme Other business Raw materials value chain Steel value chain 3. Channels B2B B2ECA B2C through Distribution 2. Customer Segments Automotive Construction Finished goods General engineering 9. Cost Structure Manufacturing Salaries & wages Technology Warehousing Marketing

4. BUSINESS PROBLEMS Diksha 01. How to handle the projected increase in steel demand? India’s apparent steel use per capita stood at 70 kg in 2018 India has a huge potential for steel demand growth. Rapid urbanization , increasing population , and infrastructure development . Government initiatives - ‘ Make in India ’ will provide impetus to growth in steel demand. Other Business Problems 02 Changing nature of steel consumption Evolving consumer needs The demand for automobiles, white goods and other consumer goods is also increasing 03 Climate change driving newer business models Tata Steel Jamshedpur is a national benchmark in CO2 emission. There is growing regulatory requirement to reduce carbon emission.  04 Opportunities arises from the changing technological landscape Large opportunity for new materials Tata Steel aspires to be a technology and innovation leader in the industry, and create new businesses in high-potential alternate materials

5. DIGITAL SOLUTION Rahul "Tata Steel looks at digital as solution-oriented, design-outcome-oriented & business led," said Sarajit Jha of Tata Steel Advanced industrial Iot for process optimization. Al- powered processed control Cycle time optimization through big data analytics on lines programmable logic controllers Digital twin for flexible production Real- time locating systems (RTLS) for key manufacturing components Analytics platform for remote production optimization. Digital dashboards to monitor overall equipment effectiveness performance. Enterprise manufacturing intelligence system to upgrade operations management. Real time asset performance monitoring and visualization Digital twin of sustainability Energy optimization by predictive analytics Iot real-time energy data aggregation and reporting dashboards Sensor based data collection for energy management Their focus is on……. Business Transformation Digital Solution @TATA Steel Work with Start-up with ambition Depth of capabilities Digital Enabled Sustainability Digital Performance Management Digital Assembly and Machines

6. DIGITAL TECHNOLOGY Neeraj The Global Lighthouse Network by World Economic Forum “The new factories of the future light the way for the Next New Normal in manufacturing” MoU with BHP to explore low carbon iron and steelmaking technology in India Tata Steel has signed an agreement with Shell India Markets Private Limited to evaluate and co-develop short- and long-term options for improvement in energy efficiency Blockchain enabled Material Test Certificate generation to prevent sales of counterfeit tubes Structured data sharing ensures a better tomorrow, every day 1st enterprise in India to adopt Enterprise Google Search Forecast using data bricks tool for complete digital transformation Data product mimicking data lake Providing customized UI as well as integration with our Azure cloud

7. Operational risks Inadequate controls in operating procedures leading to interruption in operational processes. Logistics constraints due to inadequate rail , road and sea infrastructure may lead to disruption in operations Information Security Breach of information security incidents leading to business disruption and damage to reputation. Non-compliance to IT legislations and regulations leading to penalties Regulatory risks Withdrawal of favorable trade measures such as minimum import prices, antidumping laws, countervailing duties and tariffs, trade restrictions may impact profitability Safety risks Non-compliance in implementation of safety laws and regulations, which may lead to stoppage of operations RISK INVOLVED Jyotsna

8. BENEFITS Devesh Key benefits of Blockchain Transparency Traceability Security Smart Contracts Efficiency Cost Reduction Brand Image Digital assembly and Machines Reduce time in traceability Increases energy & workforce efficiency Improve OEE and proactive actions Reduce assembly line downtime Digital performance management Measurement of Corrective Actions to Customer Issues Reduction of Returned Materials Lead Time Reduction Conformance with Outside/Government Regulations Digital enabled sustainability Reducing energy consumption Reducing waste Material substitution

9. ROADMAP Revati Blockchain Implementation Product Beta Release Smart Contract Creation Implementation of Identified U s e Cases Use case exploration & Prioritisation March 2023 July 2023 October 2023 January 2024

10. GANTT CHART Indrajeet Blockchain Implementation Task / Month 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Platform Selection Manufacturer & Supplier Search Initiate agreement with smart contracts Supplier uploads documents Smart Contract Creation Tagging of materials with RFID Manufacturer tracks the production line Add QR code & RFID chips to package Create smart contract agreements with verified distrib. Shipment Tracking Tracking from distributor end Shipping the products to retailer Retailer tracks the shipment Product Delivery Application for end customer The customer tracks the order through QR code

11. ROI PROJECTION Assumptions: 1. Teams take a 12-month time to develop and integrate these use cases. 2. A team of 11 consisting (of 5 developers, 4 for integration, and 2 consultant.) 3. Team Salary (Developers-2000000 ctc , Integration-1300000 ctc , and Consultant-3000000 ctc ) Company Data Rate Required rate of return 10% Tax rate 30% Development Costs involved for use cases YEAR 2023 2024 2025 Development team salaries ₹ 1,00,00,000.00       Integration team ₹ 52,00,000.00       Consultant fees ₹ 60,00,000.00       Total Initial Investments ₹ 2,12,00,000.00       Assumptions: 1. Already we have 200 customers, we can provide service with improved traceability and transparency. 2. 30 new client-transaction for 1st year, 50 new clients for 2nd year, and 70 new clients for 3rd year. 3. They will charge 100000 more for the implantation for each customer transaction Benefits from Blockchain YEAR 2023 2024 2025 Increased sales from existing customer   ₹ 2,00,00,000.00 ₹ 2,30,00,000.00 ₹ 2,80,00,000.00 New customer sales   ₹ 30,00,000.00 ₹ 50,00,000.00 ₹ 70,00,000.00 Total Benefits   ₹ 2,30,00,000.00 ₹ 2,80,00,000.00 ₹ 3,50,00,000.00 Blockchain Implementation Haren

12. ROI PROJECTION Assumptions: 1. Customer support team of 1 for first year, 2 for second year and 3rd year. (400000 per year) 2. Companies should spend 8% of their total revenues on marketing. Costs (Excluding Initial Capital Investments) YEAR 2023 2024 2025 Project management, customer support   ₹ 4,00,000.00 ₹ 8,00,000.00 ₹ 8,00,000.00 Marketing Expenses   ₹ 1,00,000.00 ₹ 1,00,000.00 ₹ 1,00,000.00 Other Expenses   ₹ 50,000.00 ₹ 50,000.00 ₹ 50,000.00 Depreciation on capital expenditures (calculation uses three-year period)   ₹ 70,66,666.67 ₹ 70,66,666.67 ₹ 70,66,666.67 Total Costs   ₹ 76,16,666.67 ₹ 80,16,666.67 ₹ 80,16,666.67 Totals YEAR 2023 2024 2025 Net Benefits (Costs)   ₹ 1,53,83,333.33 ₹ 1,99,83,333.33 ₹ 2,69,83,333.33 Tax   ₹ 46,15,000.00 ₹ 59,95,000.00 ₹ 80,95,000.00 Value after tax   ₹ 1,07,68,333.33 ₹ 1,39,88,333.33 ₹ 1,88,88,333.33 Depreciation added back   ₹ 70,66,666.67 ₹ 70,66,666.67 ₹ 70,66,666.67 Cash flow ₹ -2,12,00,000.00 ₹ 1,78,35,000.00 ₹ 2,10,55,000.00 ₹ 2,59,55,000.00 Cumulative cash flow ₹ -2,12,00,000.00 ₹ -33,65,000.00 ₹ 1,76,90,000.00 ₹ 4,36,45,000.00 Evaluation Metrics Values Net present value (NPV) ₹ 3,19,14,838.47 Internal rate of return (IRR) 78.32% Payback period (in years) 1.16 Blockchain Implementation Accurate ROI = Initial Investment NPV x 100 Accurate ROI of 150.5% * with above state assumptions Haren

13. Thanks! Do you have any questions? h arender.singh@siom,in [phone]

14. APPENDIX – I https://www.statista.com/statistics/755155/india-turnover-of-tata-steels/ https://www.tatasteel.com/products-solutions/india/ https://www3.weforum.org/docs/WEF_GLN_2021_Reimagining_Operations_for_Growth.pdf https://www.tatasteel.com/investors/integrated-report-2018-19/risk-and-opportunities.html https://online.hbs.edu/blog/post/how-to-calculate-roi-for-a-project https://www.cisin.com/coffee-break/enterprise/blockchain-development-how-much-time-and-cost-does-it-require.html https://www.leewayhertz.com/cost-of-blockchain-implementation/ REFERENCES

15. APPENDIX – II Cost Benefit Analysis Tata Steel - BlockChain Implementation         Cost Benefit Analysis         20-Mar-22         Company Data Rate Required rate of return 10% Tax rate 30% Assumptions: 1. Teams take a 12-month time to develop and integrate these use cases. 2. A team of 11 consisting (of 5 developers, 4 for integration, and 2 consultant.) 3. Team Salary (Developers-2000000 ctc , Integration-1300000 ctc , and Consultant-3000000 ctc ) Development Costs involved for use cases YEAR 2023 2024 2025 Development team salaries ₹ 1,00,00,000.00       Integration team ₹ 52,00,000.00       Consultant fees ₹ 60,00,000.00       Total Initial Investments ₹ 2,12,00,000.00       Assumptions: 1. Already we have 200 customers, we can provide service with improved tracibility and transparency. 2. 30 new client-transaction for 1st year, 50 new clients for 2nd year, and 70 new clients for 3rd year. 3. They will charge 100000 more for the implemtation for each customer transaction Benefits from Blockchain YEAR 2023 2024 2025 Increased sales from existing customer   ₹ 2,00,00,000.00 ₹ 2,30,00,000.00 ₹ 2,80,00,000.00 New customer sales   ₹ 30,00,000.00 ₹ 50,00,000.00 ₹ 70,00,000.00 Total Benefits   ₹ 2,30,00,000.00 ₹ 2,80,00,000.00 ₹ 3,50,00,000.00 Assumptions: 1. Customer support team of 1 for first year, 2 for second year and 3rd year. (400000 per year) 2. B2B SaaS companies should spent 8% of their total revenues on marketing. 3. 15000 trips per customer, and avg 3 transactions per trip accounting as per 1.49 Costs (Excluding Initial Capital Investments) YEAR 2023 2024 2025 Project management, customer support   ₹ 4,00,000.00 ₹ 8,00,000.00 ₹ 8,00,000.00 Marketing Expenses   ₹ 1,00,000.00 ₹ 1,00,000.00 ₹ 1,00,000.00 Other Expenses   ₹ 50,000.00 ₹ 50,000.00 ₹ 50,000.00 Depreciation on capital expenditures (calculation uses three-year period)   ₹ 70,66,666.67 ₹ 70,66,666.67 ₹ 70,66,666.67 Total Costs   ₹ 76,16,666.67 ₹ 80,16,666.67 ₹ 80,16,666.67 Totals YEAR 2023 2024 2025 Net Benefits (Costs)   ₹ 1,53,83,333.33 ₹ 1,99,83,333.33 ₹ 2,69,83,333.33 Tax   ₹ 46,15,000.00 ₹ 59,95,000.00 ₹ 80,95,000.00 Value after tax   ₹ 1,07,68,333.33 ₹ 1,39,88,333.33 ₹ 1,88,88,333.33 Depreciation added back   ₹ 70,66,666.67 ₹ 70,66,666.67 ₹ 70,66,666.67 Cash flow ₹ -2,12,00,000.00 ₹ 1,78,35,000.00 ₹ 2,10,55,000.00 ₹ 2,59,55,000.00 Cumulative cash flow ₹ -2,12,00,000.00 ₹ -33,65,000.00 ₹ 1,76,90,000.00 ₹ 4,36,45,000.00 Evaluation Metrics Values Net present value (NPV) ₹ 3,19,14,838.47 Internal rate of return (IRR) 78.32% Payback period (in years) 1.16