Strategic and Operational Management with Optimization at Tata Steel

Optimize Operations

Scarce Resources

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Capacity Imbalances
Marketing Constraints Energy Constraints Yields Profitability ...

Plant Layout

7 Blast Furnaces

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4 Steel Melt Shops
2 Primary Mills 7 Finishing Mills Captive Oxygen Plants. Power Generation Unit Maintenance

Power Crisis

Maximizing Production = Maximizing Profit??

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Not necessarily!
Depends on what is being produced. Optimal use of scarce power.

Power Sources

50% Tata Thermal Power Plant

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Last two are fluctuating sources Contractual Obligations

Power Consumption

Fixed and Variable Loads

Only Fixed Loads
Processors <=> productions units (variable power) Use linear regression technique to estimate variable power requirement.

Correlation of production tonnage to KWH consumed is very high

Power Allocation

Minimum power required to keep critical units running
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Blast furnaces Pump houses Large power requirements Short startup time Large startup time

Primary mills
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Finishing mills
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Lesser power requirement


Township has a variable power consumption patter. Oxygen Plants

Four of them producing 250x2,100x1,500x1

Power intensive

Subsidiary mills (TCIL etc.)

The Mathematical Model

Decision Variables
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Integer Binary

Variables – All real

Some Decision Variables


Fuel to meet thermal deficit
Production of items
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Rolleable portion Saleable portion

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