JSW Steel eyes $300-400 million cost savings in short-term via digitisation

The company is likely to achieve such savings is 2-3 years; intiative began in 2017

JSW Steel is eyeing cost savings of $300-400 million in the short-term through digitisation initiatives – a journey that started in 2017.

Senior executives at the company said that the short-term savings accrued from digitisation projects would be in the range of $300-400 million. The timeframe by which the company is likely to achieve this is 2-3 years.  

Dubbed “Project Athena”, JSW Steel embarked on its digitisation drive in 2017. The EBITDA impact since then has been to the tune of Rs 1,200 crore.

The first phase of the project was about how digital could help directly and indirectly across the board. The second phase entailed taking on smaller projects using machine learning, artificial intelligence (AI) and automation.

“A year and a half ago, we embarked on phase three of Athena that we are now in. In this phase, we are looking at much more transformational projects,” Siddharth Patel, head of Digital Centre of Excellence (DCOE) at JSW Group, said.

Technological interventions will enable JSW Steel to create a network of digitally connected smart steel factories in India by FY25.

As part of its digitally connected smart steel factory roadmap, JSW Steel’s first smart factory to go operational will be Vijayanagar Works in FY23. Dolvi Works in Maharashtra, Salem Works in Tamil Nadu, and downstream facilities and companies under joint control, will follow.

The transition to digitally connected smart steel manufacturing includes three critical parts: a smart iron zone for managing bulk raw materials across its steel factories; a smart steel zone and a smart milling zone.

More than 200 digital projects have been identified as part of the roadmap to digitise manufacturing. About a 100 projects are currently being implemented at the Vijaynagar plant alone.

At Vijaynagar, for instance, a fully automated yard management system is in the process of being implemented.

“A second project that we are institutionalizing right at this moment is an integrated control tower," said Patel.

So, all the data at the shop floor will be available right from the manager of the plant to the plant president going up to the chairman of JSW Steel, on a dashboard.

The dashboard will give data that will help with performance management, immediate decision making, dynamic corrective action and improve norms, explained Patel.

The company is also leapfrogging from preventive maintenance, past predictive maintenance to prescriptive maintenance.

“We are looking at prescriptive maintenance where machines will tell us when there could be an expected breakdown and allows for corrective actions to be taken using machine learning and AI. This is as advanced as it gets globally,” Patel further said.

For this, the company is currently in discussions with large companies like Google, Amazon Web Services, Microsoft Azure and a number of startups in India.

However, Patel said that as part of the digital strategy for 2021, JSW has set a target that a minimum of 15 per cent of digital projects would have to be conducted by Indian startups.