February , 2020
Technological innovations enhance efficiency
11:55 am

Aritra Mitra

The steel industry is generally overlooked when one thinks of digital and technological innovations. The industry needs technological upgradation to achieve its true potential, especially considering the challenges the industry is presently facing. A report titled, ‘The Indian steel industry: growth challenges and digital disruption’ by PwC and Indian Steel Association (ISA) states, “The new and possibly more disruptive improvements can challenge the traditional steel company’s business models. Digital disruption will enable the steel industry to prepare itself for unexpected challenges and become more competitive.”

As per the Global Digital Operations Study by PwC and Strategy&, companies all over the world are expecting to increase their digital ecosystem maturity over the next five years. According to industry insiders, companies can benefit from emerging technologies like predictive analytics, Internet of Things (IOT) and data lakes through agile pilot tests and get positive results within a few weeks or months. Again, most organisations can start gaining positive return of investment (ROI) in the first few years.

While talking about the necessity of innovative technologies for the steel industry, Sanjeev Dalodria, Executive Director, Visa Special Steel, told BE, “China is much ahead in technology in comparison to India. In India, the industries are struggling from bank regularisations, litigation cases, NCLT, high debts and various other local issues.” He further added that because of all these factors, the Indian industries are not coming up with the best technological innovations which can reduce the cost of production.

The report by PwC and ISA states, “Complex value chains pose a serious challenge to the metal and steel industry. Organisations must take steps to deal with the vast amount of interconnected assets, a varied client base, and a large number of items with changing quality requirements and services, and complicated distribution channels with various margin implications.” Market insiders say that plants and resources tend to work in silos, instead of working together to meet a larger strategic goal. There is either a lack or little access to real-time data among the inventory network administrators that make them almost incapable of foreseeing changes in the market. Hence, due to the lack of capacity installed to minimise risks and leverage short-term opportunities, which ultimately amounts to significant losses, companies end up acting defensively.

According to International Data Corporation (IDC), a total of $6 trillion is likely to be spent on IoT solutions between 2015 and 2020. It is speculated that IoT investments by businesses will grow from $215 billion in 2015 to $832 billion in 2020. Also, consumer spending on IoT solutions will rise from $72 billion to $236 billion. The IoT marketplace will be worth $1.7 trillion in 2020, with the biggest portion being hardware, followed by services, connectivity and software.

Industry insiders say that in India, the steel companies are required to install specified pollution control technologies. They also need to operate within the prescribed norms in respect to air, water and noise pollutions. Dalodria emphasised on the ambiguity in regard to pollution control. 

He said, “On one hand, the government is asking to reduce pollution and there are various norms. At present, industries are struggling and they are looking for better equipment so that the pollution is low. In return, the government should offer some incentives so that they can get some tax benefits.” He is of the opinion that without any benefits, it is not possible for them to invest extra money to control pollution.

The government has taken certain initiatives on this issue.  One of the plans in the National Action Plan for Climate Change (NAPCC) is the National Mission for Enhanced Energy Efficiency (NMEEE). Regarding the functions of the plan, the Annual Report 2018-19 by the Ministry of Steel, Government of India states that it is aimed to replicate energy efficiency in steel re-rolling mills and expand the interventions to other SME sectors.

Technology is of immense importance for the transformation of the steel industry. Emerging technologies such as robots, drones and IoT provide businesses with valuable solutions. In addition to automating processes, these technologies connect all units in a plant, allowing them to interact in real time and enhance the efficiency of the whole system. Technological adaptation is also important for environmental enhancement.


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