Aiming for delivery compliance
Supply chain is a critical element inTata Steel’s value-creation process forensuring on-time delivery of the rightquality of raw materials, other goodsand services to manufacturing locations,and finished products to the customers.Storage of semi-finished and finishedproducts is a critical process with respectto timeliness of delivery, security andpreserving quality.
Supply Chain
KEY
AREAS
SO2
- Optimising inbound &outbound logistics network
- Managing suppliers & channelpartners
Managing a DiverseSupply Chain
Our major manufacturing locations are located in the eastern part of thecountry, in the states of Jharkhand and Odisha, while Profit Centres such asWires Division, etc. and customer delivery points are located pan-India. Tomeet the delivery and quality requirements of customers, we have steelprocessingcentres and stockyards at strategic locations across the countryto optimise the delivery time and cost. Our captive iron ore mines andcollieries are located at sites around Jamshedpur and Kalinganagar.
- While railways are the most preferred mode of transportation inIndia from an environment point of view, it is wholly owned by theGovernment, which allocates the wagons to various agencies in thecountry. For the raw material segment, we are totally dependent onthe Indian Railways for inbound transportation. We have closed-circuitrakes running between the captive mines, ports and manufacturinglocations. We are one of the first in the steel industry to capitalise onincentives by the Indian Railways – Special Freight Train Operator(SFTO) Scheme and long-term tariff contract.
- The road conditions are not ideal for transportation of high-endsteel products, which have to travel as far as 1,700 kms fromthe manufacturing locations to pan-India. Inland waterways inthe country are in the early stages of development. Hence, itis not an open option at this stage, even though it is the mostenvironment friendly mode.
- Tata Steel plays a pivotal role in ensuring close co-ordinationand planning between overseas miners, load ports, ship owners, port authorities in India, the Indian Railways and our plantsreceiving the raw materials. We are one of the first major steelmanufacturers to initiate the deployment of energy-efficient andenvironment friendly vessels for ocean transportation.
Therefore, we need to adopt multiple modes of transportation, takinginto consideration the above constraints, aiming for the best possibledelivery compliance and cost while taking utmost care of safety andthe environment.
In FY 2017-18, Tata Steel imported almost 8.3 Million Tonnes (MnT) ofcoal from Australia, New Zealand, and North America, Canada/US andCIS; 4 MnT of fluxes were imported from the Middle East and Vietnam.
With increasing focus on environment and on de-risking our supplychain from emerging regulatory and other climate change risks(Refer 30 and 31 on Risk Governance and Management), we are now enhancing our focuson a Green Supply Chain and exploring the concepts of third-partylogistics, modern state-of-the-art warehouses, use of energy-efficientand newer design eco-friendly ships, coastal shipping to reducelandside tonne miles and use of digital meals to simplify the cargoflow of raw materials and other bought-out goods (maintenancerepair operations, bulk, etc.) and services. We ensure theimplementation of Human Rights throughout the supply chain. Theschematic depiction of our supply chain with the flow of materials isshown below:
Central warehouse at Jamshedpur
ᐳ 1,500
Number of localsuppliers
Key Enablers and Initiatives
| project description | impact |
|---|---|
| 1 Reduction of carbon emissionsby hiring at least 50% vesselswith GHG emissions rating ofclass A to D | Almost 65% vessels hired of GHG classA to D. Average grams of CO2 emissions pertonne nautical mile for vessels hired by Tata Steelin FY 2017-18 was 4 gm as compared to theglobal average of 10.9. ** |
| 2 Reduction in the consumptionof wooden dunnage used in FGsteel dispatch by introducingSFTO rakes with inbuilt saddles |
|
| 3 Develop and increase businesswith underprivileged and DP(Displaced) Vendors | Development of the few first-generationentrepreneurs from the underprivileged section ofthe society with a business volume of ~`80 Cr. |
| 4 Implementation of the SolidState Interlocking (SSI) systemto improve safety in railnetwork |
|
| 5 Implementation of Engineon Load (EOL) concept in rawmaterial circuit for the firsttime in the steel industry |
|
* Selected projects. Not comprehensive.
** Source: BIMCO (Baltic International Maritime Council) and Rightship – a Maritime Risk Management and Environmental Assessment Organisation.
Pan-India retailer reach and a network of servicepartners in key consumption centres provide aunique competitive advantage to the TSL market
| PlantWarehouses | Jamshedpur andKalinganagar |
| Hubs | 6(Delhi, Faridabad, Kolkata, Nagpur,Vijayawada, Chennai) |
| Stockyards | 18 (pan-India) |
Key Facts
- 100% fleet covered by vehicle tracking system
- Judicious mix of rail (~60%) and road (~40%) movement (costeffective and timeliness)
- 150 sales officers in 26 locations (customer account managers forrelationship building and ensuring service)
- 193 distributors, 1,500 distributors’ feet, 11,883 dealers (strongnetwork across India) reaching out to ~650 districts (95%coverage)
- Theory of Constraints (TOC) supply chain implemented in allproduct categories for retail sales (central warehouse enabled)
- Local/ customised production enabled by 24 Steel ProcessingCentres (SPCs) across Steel and Profit Centres
- Company distributor owned service centres for last pointprocessing
Raw Material handled (MnT)
Supply Chain
Way Forward
- Network optimisation for improvingthe reliability and cost performanceof the supply chain
- Asset-light and agile growth throughutilisation of Private Freight Terminals(PFTs)
- Coastal steel shipping as ade-risking mechanism, for reductionin transport-related CO2 emission andensuring sustainable supplies for ourcustomers in South and West India
- Connecting North-East India throughbarge transport on inland waterwaysfrom Kolkata/Haldia throughBangladesh – this route would avoidlong-winding and expensive truckroutes to North-East India
- Economic speed management ofvessels whenever and whereverpossible – close co-ordination by allentities in the supply chain
Our Performance
Number of underprivileged suppliers(Suppliers from the Scheduled Castes andScheduled Tribes Community) | (No.) |
Suppliers trained through VendorCapability AdvancementProgramme (VCAP) | (No.) |
Outbound despatch volumes: Rail(TSJ and TSK) | (kT) |
Outbound despatch volumes: Road(TSJ and TSK) | (kT) |
