Tata Steel Is Shaping a Green, Clean and Circular Future
![Tata Steel Is Shaping a Green, Clean and Circular Future Tata Steel Is Shaping a Green, Clean and Circular Future](https://i1.wp.com/imageio.forbes.com/specials-images/imageserve/66b1e58ec6521d67311d6613/0x0.png?format=png&height=900&width=1600&fit=bounds&w=780&resize=780,470&ssl=1)
From toasters to tin cans, from cars to the buildings we live in, society is built on steel. There’s no escaping it. The question is – how sustainable is the steel around us? In the future, if it’s coming from Tata Steel Nederland, it will be green, clean and circular.”
The Green Steel plan
“I love the imagery we use on our website to depict the power of steel,” said Emma McKay, director enterprise architecture and digital technology platforms at Tata Steel Nederland. Speaking at the SAP for Process Industries and Natural Resources Conference in Vienna, she described a pure, blue planet on a fresh, blue background topped by things made of steel that depict how indispensable it is in our daily lives.
The company aims to produce steel with 40% less CO2 emissions by 2030 and become a fully CO2-neutral steel producer by 2045. On its journey to green steel, Tata Steel Netherlands is increasing circularity by increasing the use of scrap from 17% to 30% as of 2030 and reducing the impact of the production process on the environment.
“Our contribution consists in switching to fully sustainable steel production as quickly as possible,” said McKay.
Part of the Indian Tata Steel Company, today’s operation started out as the IJmuiden steelworks in the Netherlands. Built between 1920 and 1940, it first produced iron and steel, and in the 1960s, the company diversified into aluminum production. A huge plant in a tiny country has obvious environmental implications, and the company is very mindful of its relationship with the people living around the steelworks.
Clean, green and circular
Tata Steel Nederland
“There is a lot of pressure to be as clean as possible,” McKay commented. “We work very closely with the government and local communities to implement a number of measures to reduce noise, light, odors, and other effects. If a tiny country like the Netherlands can do it, we hope to inspire others to try as well.”
Applying AI to an old way of selling
Transitioning to green steel is not without its challenges. One is the need to finance the development of more circular products and processes, and the other is the need to reduce waste in all its forms. The two go hand in hand.
McKay is very excited about the possibilities to generate additional income by selling materials online.
“The SAP Commerce Cloud solution is helping us make money and reduce waste,” she said. “Together with our own platform called ‘Arisings,’ we’re using the SAP solution to sell excess materials or products that were made to customer-specific recipes but remained in our inventory for whatever reason. Besides generating income, we’re reducing waste because manufacturing those products already consumed a lot of energy. Instead of recycling them, which would use more energy, we’re selling them.”
The flexibility of SAP Commerce Cloud allowed Tata Steel Netherlands to implement an innovative sales approach. McKay recounted the story of reverse auctioning, which has been popular throughout the centuries to sell Dutch staples such as flowers and cheese. Unlike forward auctions, where bids increase as the auction progresses, in reverse auctions, the price of the product =decreases gradually. The first to bid wins.
“We adapted this concept to sell steel online,” said McKay, as she went on to explain the role of machine learning (ML) and AI in the process. “With over 300,000 different SKUs, the most difficult part is determining the starting price. We’ve been doing that manually for years, but now we use ML to look through all the historical data on selling prices based on predictive characteristics to set the price automatically. This frees up our salespeople to focus on talking to customers to build better relationships.”
Prepping for the fun part
McKay is equally excited about the upcoming upgrade to SAP S/4HANA, set to take place early next year, which is linked to the go-live of the company’s green steel assets.
“The move to SAP S/4HANA is so important to transform our business,” she said. The old legacy landscape, plus the combination of SAP ERP Central Component and old mainframe applications currently powering the order-to-cash process, will be completely transformed. “This will increase our ability to innovate and respond to customer requests for data, provide confirmation on lead times, and perform other actions that can’t be completed now because it’s all buried in old systems. The move will help us get that system in place to transform, so we can start to focus on the fun stuff.”
For McKay, the fun stuff starts with having everything all in one system, so you can easily lay your hands on it. Being able to gather necessary information at every step of the way is essential if you want to enable visions and create big changes. The goal is to let machines do the mundane work, so people can focus on the things only humans can do.
“The real opportunity with technology is that it frees up time and space for people to connect with others, build relationships, and think about opportunities,” McKay concluded. “The real fun part is that we can’t even imagine how it will evolve over the coming decades.”
What it certainly will do is enable the people at Tata Steel Nederland to make the Green Steel plan a reality, making the world a better place for all.
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