Tata Steel

Data & Analytics @ Work in Tata Steel

Dr. Svend Lassen, Reporting & Analytics Commercial, Tata Steel in Europe

Future Steel Forum, Budapest 25/26th September 2019

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Tata Steel in Europe: One of Europe’s leading steel producers

Products and services that create advantage

Our advanced capabilities

▪ Comprehensive range of steel products

and related services supplying into
demanding markets
▪ Operations in 26 countries like the UK
and the Netherlands, Germany, France,
Canada, the US and Belgium
▪ Commercial presence in more than 50
countries
▪ More than 9.6 million tons deliveries
▪ Turnover ~7.1 £ billion (2018/19)
▪ ~20,700 employees
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Our key markets

Serving the most demanding markets worldwide

Construction & Engineering

Automotive Packaging
Infrastructure

Direct Indirect
Serving the most demanding markets
worldwide – through a variety of
channels, including ‘owned’ and
independent channels
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World Economic Forum identified TSE globally as a lighthouse in 2018

Phoenix Contact
Industrial
Automation, DE

Sandvik Coromant
Industrial Tools, SE
Tata Steel Procter & Gamble
Steel Products, NL Consumer
goods, CZ
Siemens
Industrial Automation
Products, CN
Danfoss
BMW Group Industrial
Johnson & Johnson Automotive, DE Equipment, CN
DePuy Synthes
Fast Radius with UPS Medical Devices, IR Haier
Additive Home
Manufacturing, US Appliances, CN

Bosch
Bayer Automotive, CN
Schneider Electric
Division Pharmaceuticals,
Electrical IT
Components, FR
Saudi Aramco Foxconn Industrial
Gas Treatment, SA Internet
Rold Electronics, CN
Electrical Components, IT

Criteria: Significant impact, roll-out at scale, injectors of human capital (training)

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Customer feedback indicated supply chain as highest priority

No responsiveness

Little connection to TSE Where is my steel?

Systems integration
Long lead time

Late delivery Coping with grade variations

'Real-time' order progress
Volatility in orders
Differentiating in end market
Low predictability of orders
Timely response to issues SME constraints
Market efficiency

Data & analytics is the main lever for additional business value
Source: TSE Strategic Marketing Customer Satisfaction Survey 2015
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Future Value Chain (FVC) program to create business value from data

Effective fulfilment
Integrated portfolio Optimize micro mix and create long term value and delivery
steering for our customers

Optimal demand-supply balance Agile deviation management

Create the best possible plan by Ensure

Intervene fast when deviations
better forecasting future demand and smooth execution
happen to maximize value
capacity

Aligned system
Design the most efficient set-up to reliably deliver the plan
design
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FVC use cases – Comprehensive, interconnected set of use cases

PVM – Effective fulfilment

Integrated portfolio PVM – Dynamic
Sales
Fact-pack Pricing
and delivery
steering Navigator

Outbound
Logistics
Optimal demand-supply balance Agile deviation management
Demand
Fore- Order
casting Fulfilment
Contract/
S&OP Sales Trading
Sector
Navigator Analytics Desk
Navigator
Capacity
Weekly
Fore-
S&OP Depannage
casting Digital twin
S&OP Eco-
system
Virtual
Mill

Flow Sustainable
Aligned system System Inventory
SKU
design Design
Design Mgmt.
Demand
Forecas-
ting

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Demand Forecasting: Advanced analytics (AA) models generate more accurate forecasts

Why? How?

▪ Understand business
opportunities Data processing Forecast generation Output

▪ Evaluate portfolio mix and

Plans
profitability Visual output in
Un-con- Blending Spotfire
▪ Increase demand planning Customer Filtering Input Input Input
invoices straining 9 forecast models
accuracy Demand planning in
Sector Anaplan
What? forecasts

▪ Apply predictive analytics Weighted average + seasonality = AA forecast

▪ Forecast with granularity of

customer, product and country

▪ Capture seasonality patterns

Increasing profitability and performance with more accurate sales & operations plans
Virtual
Mill

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Virtual Mill Design: Digital twin of the supply chain to simulate scenarios

Why? How?

▪ Create realistic supply plans

Simulation resulting Material flow diagram
▪ Understand supply chain risks in confidence intervals showing constraints

▪ Optimize bottleneck assets

OVERALL SYSTEM KPIS SYSTEM OUTPUT RISK FLOW DIAGRAM

▪ Intervene on supply chain

issues

What?

▪ Model supply chain assets

and linkages

▪ Capture asset performance

Top-level indication of
volatility risks based on system
Confidence levels
provide detailed view
simulation – and
▪ Simulate possible scenarios different time horizons
on risk by asset

Reducing supply chain risks and acting better on deviations

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FVC approach for business value requiring new capabilities

1 Concept development (user stories)

Get it Sort it Improve it Show it Embed it Celebrate it!

Source Data/IT Combine data/ Tooling/ Process & Impact on profit/

systems architecture advanced analytics integrated behaviours performance
(AA) planning

At the start of FVC, external support

filling the inhouse capability gap 2 Minimum viable product (MVP)

3 Sustainable solution

IT Business
functions
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New data & digital roles driving developments

Business
functions
BUSINESS OWNER PRODUCT OWNER USERS
Sets objectives and Develops, implements and Uses tools in business
ensures delivery runs use case processes

DATA DATA DATA DIGITAL PROCESS

ENGINEER SCIENTIST STEWARD MODELLER
Builds and manages data Applies statistical Ensures data fitness Designs and implements
pipelines methods/machine learning planning processes

IT / other
functions
ARCHITECT AGILE COACH
Develops IT and data Coaches agile process
architecture and resolves issues
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R&A teams in “The Loft” – a new co-working environment

▪ Activity-based, open-plan
work environment

▪ Co-location of R&A teams

to link data & analytics

▪ Close interactions for agile

ways of working

▪ More flexibility and better

space utilisation

▪ External partners
becoming part of the teams

Working together with business teams on Commercial use cases

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One data platform needed for sustainability and scalability

From: Realizing individual use cases To: Linking use cases to one platform

▪ Focus on speed of use cases and value delivered ▪ Solution for sustainability and scalability of use cases
(fully use case-driven) and value delivered (platform-supported)

▪ Difficulty to ensure consistency across sites and ▪ Caveat: Potentially conflicting demands from different
reusability of data in use cases use cases to balance
Illustrative Illustrative

Use cases Demand Capacity Other Use cases Demand Capacity Other
with Fore- Fore- use building on Fore- Fore- use
individual casting casting cases same data casting casting cases
data feeds

Stocks and orders data

Data &
Analytics
Customer master data
(DnA)
Platform
...

DnA breaking the compromise of speed versus consistency

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Data & Analytics (DnA) Platform set up in the cloud

Business Insights

Data Access Control

Reporting/Data Exploration Advanced Analytics (AA)

Data Enterprise Data Warehouse (SQL DB) Meta Data

Management/
Quality Control Data Repository (Hadoop) Master Data

Data Loading (ETL)

Heterogeneous systems and

data landscape across entities Data Source 1 Data Source 2 Data Source …

MS Azure Informatica Cloudera Python / R Spotfire, WebFOCUS, etc.

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Ecosystem of value creation tools growing rapidly Examples

Reporting Data Exploration Business Planning Advanced Analytics

Weekly Depannage Tool Demand Demand

Operational Planning Forecasting
Flash
Deviations Stocks Portfolio mix Portfolio mix

Weekly Order Fulfilment Sales & Capacity

Operational Analyses Operations Forecasting
Forward View Planning
Performance Performance Portfolio mix Performance

Aged Stock Order Book Supply Chain Logistics

Reporting Review Planning Predictions

Aged stocks Product mix Performance Costs

Order Status Sales Deviation Stock Target Virtual Mill

Dashboards Analyses Setting Design

Performance Value retention Stocks Deviations

Teams encouraged to use DnA data for value creation

Value driver
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Extracting the full business value by changing the way of working

2016 2017 2018 2019

Minimum Viable
Tools scale-up Day-to-day operation Transformation
Products
▪ First 10 algorithms ▪ >15 FVC solutions ready ▪ New S&OP tools in BaU ▪ Growing ecosystem of value
launched creation tools:
▪ Reporting & Analytics ▪ Data- and AA-based – Data & Analytics platform
▪ MVPs in use function set up decision-making – Integrated, scalable and
maintainable tools
▪ S&OP process redesign ▪ Advanced analytics (AA) ▪ Alignment with other
training academy started functions ▪ Agile transformation
▪ Agile methodology – Tribe and squad structure
applied ▪ Agile teams in place ▪ DevOps teams set up – Empowered teams

Prove new concepts & Land value & build Achieve sustainability Transform &
quick wins capabilities & alignment create more value

~xx €m  ~xx €m  ~xx €m  ~xx €m

Steady-state business value of triple-digit € million over 4 years

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Four beliefs on Data Governance shaping the future direction

1
Data is the most valuable ▪ Main additional business value comes from data & analytics
resource for modern business ▪ Business must transform data into actionable insights

Governance is instrumental to ▪ Data governance enables the business with qualitative data
unlocking the value of data ▪ Master data and meta data form the backbone

3
Business requires ▪ In a data-driven culture, business treats data as an asset
a data-driven culture ▪ Business needs to take ownership for qualitative data
and data ownership ▪ Data must be shared across functional silos

4
▪ One CDO leads the change to a data-driven culture company-wide
One Chief Data Officer (CDO)
▪ All business functions and IT must align on a common data vision and strategy
should lead the change
▪ Mission is to make data a competitive advantage

Open challenges with company-wide data governance (in bold)

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Key points summarized

❑ Data & analytics delivering hard results in the steel value

chain through multiple use cases

❑ Extracting value from data requires new people

capabilities and agile ways of working

❑ A company-wide data & analytics platform can break

the compromise of speed versus consistency

❑ Business and IT need a common approach for

managing agile teams and speeding up

❑ Outlook: Challenges with company-wide data

governance are still to address