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Use of IT and GPS for Process Improvement in

Raw Material Handling of Tata Steel

Authors:
Shambhu Tiwary Head IT RMCSI
(sambhu@tatasteel.com)
M K Jha Asst. Manager RMM
(madhabjha@tatasteel.com)
Divik Gupta Sr. Manager IT RMCSI
(divik.gupta@tatasteel.com)

ABSTRACT
Traditionally, road logistics operation particularly with respect to raw material handling
within steel industry has seen limited automation whether it is related to monitoring of
operations, evaluating operator performance, safety behaviour or billing systems. This
project aimed at introducing radical changes in road logistics by raising the bar of
Automation. Problems were faced at various stages of the project implementation beginning
from changing the business model in road transportation by introducing a new contract
regimen and changing the mindset of people, integrating new GPS technology in the old
vehicle fleets which originally did not have a provision for the same and introduction of
innovative e-billing system through use of IT. However hurdles were overcome by the team at
each stage which lead to the successful deployment of the model. This resulted in increase in
productivity by more than 100%, reduction in dumper fleet size by more than half,
introduction of auto generated bills for vendors eliminating possibility of any discretionary
authority and additional benefits in terms of improved safety and environmental
performance.

Key Words: GPS, Logistics, Raw Material Handling, Tata Steel

INTRODUCTION

We were faced with a very complex scenario which did not have an off the shelf solution.
This project was triggered on account of following needs:
1) With expansion planned at Tata Steel Jamshedpur from a level of 7 mtpa to 10 mtpa, under
brown field expansion project, a need was felt to decongest road logistics particularly with
respect to raw material transportation.
2) Reducing number of dumpers plying on road for each unit of raw material transported by
improving productivity was key from safety and environment perspective (fatalities in the
past on road; also less dumpers means less fugitive dust emission)
3) A need was felt to minimize discretionary authority in the hands of personnel with respect
to evaluating vendor performance, generation and approval of bills, assessing operational
effectiveness etc thereby reducing the cycle time.
4) Need was felt to develop a scientific methodology to assess the performance of road
logistics operation which is generally found lacking across steel industries including ours

SOLUTON DETAILS
At an aggregate level, the innovation was primarily on account of bringing a radical change
in road logistics by moving away from an age old tonnage based system to a vehicle
utilisation basis through support of GPS and IT.
The project can be explained under the following stages:
1) Contracting Stage: Traditionally raw material transportation in steel industries is driven
on a per tonne basis leaving no incentive either to the vendor or the recipient of the service to
minimize the dumper fleets in a focussed manner. In other words, such a contract cannot
drive the process of efficiency enhancement by itself. It has to be externally imposed which is
generally found to be unsustainable.
Hence, the first major attempt of the team was to
devise an innovative business model which can drive the process of efficiency enhancement
of road logistics system automatically i.e. the business model should be such as to compel the
service provider as well as the recipient of the service to work towards this. A new business
model was thought through by introducing a contract regimen which discarded the tonnage
based road logistics operation and adopted a new system based on utilization of dumpers and
bringing in competitiveness amongst vendors (vendor whose dumper utilization is best gets to
run more dumpers). At the contracting stage, GPS was considered to be the facilitating
technology to sustain this business model.
2) Implementation of the business model: While use of GPS based systems is not new, use
of this technology to drive entire road logistics operation right from evaluating vendor

performance, operational efficiency as well as billing process is unheard of particularly in


bulk raw material transportation in an in-plant operation.
Implementation of the business model can be explained under following heads.
2a) Incorporation of GPS device in dumpers which were originally not provided with the
same. A GPS receiver along with a card reader was installed in each dumper to serve two
purpose
i) To track the movement of dumpers.
ii) To register the attendance of dumper operators. Also a device was installed within each
dumper to communicate with the operators if needed. Initially the team faced difficulties
during stabilization of the system which was overcome indigenously for e.g. use of spiral
antenna to increase the strength of GPS receiver.

Fig 1 Two way Communication channel between dumper and control room

Fig 2 Dumper Movement Report

Fig 3 Vehicle wise availability based on drive RFID swipe


2b) Devising different parameters to measure operator efficiency and safety performance.
GPS data was customized to measure operator efficiency based on dumper utilization %,
attendance swipe time delay, number of attendance days and speed violations.

Fig 4 Vendor wise dumper utilisation

Fig 5 Driver Performance Index Calculation

As per Fig 5 Performance Index (PI) = a + b + c d


a = Average % utilization
b = No. of present days/3
c = Avg. swipe delay factor (<15 mins 5 ; 16-30 mins 2.5; >30 mins
0)
d = No. of safety violations*5

2c) Use of IT for auto billing. GPS data collected for tracking of dumpers was transferred to
different IT platform (SAP) through customised interfaces and development. This has
completely eliminated manual intervention in the billing process and reduced the billing cycle
time

Fig 6 Auto billing based on GPS data

Challenges Faced
Contract conceptualization stage: Resistance to change The very fact that the system was
used to working with per tonne road transportation regime proved to be the biggest challenge
to overcome. The contractors had never worked in the new proposed system of hire and use
instead of per tonne basis and expressed their fears of uncertainty. Internally too, doubts were
raised on the new business model which bypassed the traditional practice of weighment. A
series of interactive sessions were held to project the benefits and win-win situation which the
new business model had the capability to usher in both for the contractors as well as for Tata
Steel.
Implementation of the business model: The second challenge was to implement the
business model by installation of GPS devices in the dumpers which were not provided with

these devices originally. Also, our special requirement of registering the attendance of drivers
when they reported for work in their respective dumpers had to be thought through. Even
after the devices were installed, many problems like loss of data, non-availability of
attendance record, non-familiarization of the drivers, who were mostly illiterates, with the
new system proved to be huge challenge. While the technical problems were overcome in
association with the providers of GPS devices (eTrans Solutions Pvt. Ltd), a series of training
sessions were held for the dumper operators to make them familiar with the system and
change the way they went about their jobs as compared to earlier system. A system of
measuring the performance of dumper operators and contractors was established which
ushered in a system of meritocracy and competitiveness which was lacking earlier.
Use of GPS data for auto-billing: Concept of service codes introduced in SAP and bills were
generated by the system based on business rules

Key Insights From the project


Key insights derived from the project are:
1) Performance follows the principle you tell me how you are measured and I will tell you
how you will behave. Tonnage based system is not an efficient way of running road
logistics system (even though it is the most widely followed system for bulk transportation).
Such a system focuses on the accomplishment of the task alone, not on efficiency. The fact
that the same task can be accomplished by lesser dumpers is not automatically triggered in
such a regime.
2) Particularly when safety and environment norms are becoming more and more stringent,
the process of efficiency enhancements in road logistics needs to be driven by the business
model itself as has been seen in the present case.
3) There was a big challenge to manage the change management arising out of the new
business model. The idea that it was a win-win situation for both the transporter and Tata
Steel was sold by having many interactive sessions.
4) In order to sustain the model, GPS implementation was taken to a new level by using the
data to generate auto-bills which were checked manually till the system stabilised. Such a
system eliminates discretion

Benefits of the Project


The implementation of the project has resulted in increasing the productivity of dumpers by
100 % which in turn has helped in reducing the no of dumpers to be used for carrying the
same quantity of material. There is a reduction of 5 crore per annum in the transporter bill
after the implementation of the project.

Increase in Dumper Productivity


600
500

494514
464
451

380 382 385


400 340 336 362
284

553
486469495501

478

441

423

300
Tonnes/dumper/day

200
100
0

Fig 7 Trend Graph Showing Increase in Dumper productivity

Decrease in dumper fleet size

No. of dumpers

120102
100 88 88
88 69
67 66
80
65
54 54 50 50 50 52 52 53 52 53 56
60
40
20
0

Fig 8 Trend Graph showing reduction in number of dumper used

Other Benefits
With less number of dumpers operation there has been a significant reduction in fugitive dust
emission
Reduction in Lost Time Injury Frequency Rate from 3 per annum to 0

Conclusion
Implementation of IT based GPS tracking system in TATASTEEL has resulted in improving
the productivity and utilisation of dumpers used for raw material handling. Before the project
was implemented around 120 dumpers were used for transporting materials. After the
implementation the number has decreased to 50. The project not only resulted in reducing the
money spent on raw material handling it has also helped in reducing congestion and
improving safety at work place.

Author Details
Sl
N
o
1

Name

E mail

Postal
Address

Shamb
hu
Tiwary

sambhu@tatasteel.
com

ITS
Builiding
TATASTE
EL
Bistupur
Jamshed
pur831001

M K Jha madhabjha@tatast

Divik
Gupta

eel.com

divik.gupta@tatast
eel.com

RMM
Office
TATASTE
EL
Bistupur
Jamshed
pur831001
ITS
Builiding
TATASTE
EL
Bistupur
Jamshed
pur831001