Track: Value Chain T h e m e : Xcel For The Planet

Project Sponsor: Mr.Prakash Singh, Chief CoE ( Supply Chain)

Project Guide : Mr.Abinash Pani, Sr.Area Manager Technology Excellence, CoE (Supply Chain)
Name of the Case: Future ready road transportation management system to enhance delivery
capability with minimal cost.
Introduction: Tata Steel is 10th largest steel producer in the world with an annual
crude steel production capacity ~21 MTPA. It has five major production units spread across
Jamshedpur, Kalinganagar and Meramandali(base operations sites). In addition, there are Steel
Processing Centres (SPCs) which are contracted manufacturing centres doing further processing
of our semis/finished goods. Some of the SPCS are located at the base production sites while
many of the SPCs are located across the country, close to the customer, to meet their specific
requirements. In addition, there is network of ~25+ stockyards around the country.

For Semis and finished Goods, the movement is done both by Rail and Road. The Finished Goods
movement is done over two stretches:
1. 1st leg material movement from Mills/Base Location SPCs to SPCs/SYDs/Customers:
Mode: Rail/Road
2. 2nd leg Movement between SPCs/Stockyards/Customers: Mode: Road
There is some material movement via Coastal, but the volume is lesser. Further Tata Steel buys
scrap for steel making from North and Eastern part of India mostly despatched via road.

Majorly, the finished goods are move by Rail/Road. The decision for selecting the right medium
depends on the delivery cost (all inclusive), lead time to deliver, asset availability over that stretch
and associated CO2 emissions (Road Co2>Rail).

Going forward, Tata steel has a growth plan to reach 40 MTPA capacity for which supply chain
readiness is a critical enabler.
Background:
For FG road transportation, TSL engages with multiple transporters both for 1st leg and second leg
movement as per fixed freight rates for a lane and defined contract terms. In first leg movement, a
certain ratio of fleet is owned by the transporter while the others are managed by the transporter
through market vehicle pool.

Current contracted assets are GPS enabled where we receive geo location tagging at all intervals
starting from origin plant to destination location (Stockyard, SPC & customer location). The GPS
data sharing stops post trip closure.

With the overall crude production increasing from 20 MTPA to 40 MTPA, the overall FG despatch
requirements will also double and stress the rail and road infrastructure which are already a
bottleneck.

An important point to note is that there is acute shortage of drivers in the country. As per a survey
finding released by MoS in 2022, nearly 84% truck drivers don’t want their family members or
relatives to take up driving as a profession and about 53% of them are unhappy with their work. An
industry estimate suggests that by 2022 the driver and truck ratio would have fallen to 450 drivers
for every 1,000 trucks.
Challenges faced:
1. The standard lead time against which contract and capacity planning happens is higher
than (~50%) of the standard lead time.
2. There are intermittent stoppages across routes due to reasons related to city level
restriction, pilferage issue some required stoppages like daybreaks.
3. Due to backhaul unavailability, certain transporters negotiate with a higher lead time for
compliance.
4. On an average, each driver drives for ~12 hours, so they feel fatigued or sleepy
5. With planned expansion, without proper optimization and visibility, there will be unutilized
asset movement leading to higher carbon cost to company.
 Critical case questions:
1. Strategy & business process to manage and optimize the current capacity. Is there an
opportunity to provide backhaul?
2. Design & benchmark performance metrics, key elements of cost model for deciding the
transportation freight for a particular lane for utilization improvement.
3. Digitalization scope and sensor selection to manage the execution level visibility for
operations, safety and people(drivers).
4. How can we enhance vessel utilization of transporter assets for improved material
movement?
Critical case questions:
Annexure 1- Overall Supply Chain Footprint,
Annexure 2 – Current Stockyard & SPC location
Annexure 3 – Relevant data elements

Annexure1: Supply Chain Footprint

 Annexure 3 – Relevant data elements

GPS data structure(illustrative example) – assumption can be made to populate the data and
analyze
Asset No. Date Waypoint 1 Waypoint 2 Distance Cumulative Status Latitude Longitude
Time Distance
NL01XXXXXX 21-Jun-23 TRANSPORT PARK GATE-JSR - TATA STEEL HSM GATE - JH/0.40 km 0.86 km 0.86 km Stopped 22.77957357 86.21472982
19:12:42 JH/0.04 km
NL01XXXXXX 21-Jun-23 MARINE DRIVE_END POINT - MARINE DRIVE_MID POINT - JH/2.59 Moving
23:21:43 JH/2.07 km km 4.77 km 9.26 km 29 km/h 22.82361654 86.18202311