|
One
of India’s Old Economy giants, the Steel Authority of India
(SAIL) has realised that size alone is not enough to prosper
in today’s times. What’s needed are processes that cut costs
to the bone, manage the supply chain, and help administer
mammoth operations smoothly—and IT is the only way this can
be achieved. Shipra Arora explains just how SAIL is
going about this task
 |
According
to S K GUPTA, information technology is today an
integral part of business at SAIL |
Mere
statistics India’s largest, and the world’s ninth
largest steel producer give just a glimpse of this company’s
scale of operations, from infrastructure, to manpower, to
geographical spread. Given such size, it’s no surprise
that IT has evolved from being one of the tools to become
‘the’ tool for conducting business at the Rs 14,000-crore
Steel Authority of India (SAIL), a navratna PSU.
According to S K Gupta, additional director, Computer, Control
& Communication, (C,C&C), SAIL, the application of
information technology has become imperative at SAIL. Taking
into account organisation, standardisation, obsolescence management
and security issues, SAIL’s IT philosophy revolves around
applying IT to achieve customer-centric, responsive leadership;
cost effectiveness that enhances profitability; product quality
and shareholder satisfaction by fulfilling information needs
across the organisation.
The pro-active approach to IT at this PSU is reflected across
the company’s IT initiatives which touch every employee
from the chairman down. Says Gupta, “The chairman and
the company’s top management have a very open approach
towards automation for improving operational efficiencies.
Hence, all suggestions for upgradation and improvements of
IT systems are taken in a very positive way.”
This is the reason why the company has been fast enough to
adapt its IT systems to its ever-growing and ever-expanding
base, whether it be moving from second generation systems
to client-server and finally a three tier architecture model,
or moving from a hierarchical database to an object-oriented
database, or for that matter, from a hub-based network to
a more efficient switch network.
SAIL’s basic automation drive started in the 1960s, with
the setting up of second generation systems. SAIL’s major
plants at that time, including Bokaro, Bhilai and Durgapur,
used these systems. The in-house IT team at SAIL developed
very preliminary applications pertaining to critical functionalities
like financial accounting, payroll, sales and human resource
development (HRD). While these systems and applications ensured
that the basic automation was in place, 100 percent computerisation
was still a long way off. “Systems and applications were
limited in their scope because of constraints in terms of
cost, storage, RAM space, etc,” says Gupta. Further,
SAIL’s stand alone systems restricted the scope of these
applications. Data processing was quite a cumbersome task
as all the documents had to be first punched, data entered
and then processed.
With the volume of data increasing at a rapid pace and the
means not being robust enough to handle it, SAIL was finding
it extremely difficult to keep pace with growing operations
on its existing systems. Hence, in 1978 the company upgraded
from second generation systems to mainframes. These included
Unisys mainframes. Since then, SAIL has been constantly upgrading
its systems as newer technologies appear on the horizon. With
the technology scene moving towards client-server technology,
the department took a conscious decision of adopting this
architecture. In order to further enhance the use of IT, the
company is now in the process of moving towards a three-tier
architecture.
Here, it plans to have a middle tier with an application server,
comprising of functional modules that will actually process
the data. “While on the one hand ensuring that the database
is very secure, the architecture will also help us keep track
of the various applications that are running on the application
server,” explains Gupta.
While systems have undergone constant upgradation within the
PSU, so have the various applications running on these systems.
According to Gupta, SAIL’s strategy in terms of upgradation
of applications has been two-pronged either migrate existing
applications that need to be upgraded, or evolve a new application
depending on the extent and scope of upgradation. The PSU
has move ahead from its standalone and island applications
that catered to very basic and critical operations for the
company. Undergoing various changes as per the two-pronged
strategy, SAIL has today arrived at applications that are
comprehensive not only in terms of their scope and magnitude
but also in terms of their efficiency. According to Gupta,
most applications running within SAIL today are integrated
and largely online, to ensure their full potential is used.
Currently all applications are running on SAIL’s Wide
Area Network called SAIL Net. Set up in the 1980s, the WAN
comprises of VSAT connectivity linking all the units of SAIL,
including the corporate office, plants, regional and branch
offices.
Business apps
SAIL has clearly categorised all its applications into two
broad categories, namely business applications and plant control
systems, both of which have been developed completely in-house.
Elaborating on business applications, Gupta explains that
they cater to all the commercial requirements of SAIL’s
massive operations. These applications include a Wagon Movement
System, Hospital Application, Production Planning and Control
(PPC), apart from the regular, sales, inventory, financial
accounting and HRD systems.
 According
to Gupta, the Wagon Movement System is basically an application
developed for the management of rail wagon traffic moving
within plant premises. The Railways (with whom SAIL has tied
up) has various provisions concerning additional charges,
depending on factors like size of the wagon, delays, extra
use, etc. The application helps in planning out all wagon
traffic so that it can be managed more efficiently to minimise
extra charges. The factors considered in this exercise include
taking into account the volume of goods (below or above the
capacity of the wagon), distance to be covered and time to
be taken.
The Hospital Application provides for management of all operations
related to hospitals that SAIL has provided for its employees.
The application has features like maintenance of patient history,
billings record and all aspects relating to efficient administration.
On the other hand, the Financial Accounting application is
used for preparing online vouchers, journal vouchers, plant
expenditure, trial balance, general ledger, preparation of
cheques and generating various general books of accounts viz.
bank book and cash book. According to Gupta, all compilations
and finally the closing of accounts takes place at the corporate
level. The system is completely integrated at the Bhilai and
Rourkela plants and 100 percent integration is currently underway
at SAIL’s other locations.
The HRD application developed by the SAIL IT team is a comprehensive
application, and comprises of features like leave accounting,
medical claims, recruitment, a corporate cadre information
system, and an employee information system. The application
also includes information related to the company’s appraisal
system and promotion policy. Thus, the system provides for
complete management of the manpower resources within SAIL.
The application attains great significance in terms of the
company’s internal functioning, considering its huge
workforce, the management of which would not have been otherwise
possible. In order to make the functioning of the application
more robust, it has been further interlinked with the payroll
system. According to Gupta, the payroll system is used for
pay slip generation and printing, collecting data, as well
as information about loans and HBA, HRA, lease, LTE and incentives,
taxes, etc.
The salary system within the PSU has also been computerised
to a great extent with the payroll system linked with banks,
leaving out any scope for manual intervention. Explains Gupta,
“Instead of sending across hard copies to banks, salaries
are transferred from SAIL to most banks electronically. While
the HRD system in the company is currently manpower-based,
SAIL plans to upgrade its systems to make it more of a knowledge-based
system, and has already initiated work in this regard. This
includes having a knowledge management system within the company.
“As soon as any knowledge comes within the company, the
system should be able to upgrade it to the server so that
employees can use it,” explains Gupta. It also means
preserving the knowledge that flows within the company even
if employees leave the organisation.
Being a manufacturing major, supply chain management is a
vital issue for SAIL. The company has developed an online
material management system, which is integrated with other
systems. There are certain procedures that need to be followed
for all purchases made by PSUs. All these steps are automated
and computerised today, thanks to the Metal Management System.
All orders are placed with suppliers through the system, and
there is automatic processing of purchase orders. The system
is also linked with the tenders system for automation of the
tender invitation process. When an order reaches the stores,
and when it is unloaded from freight trucks, SAIL has complete
information relating to the vehicle number, order number,
etc. in order to avoid last minute delays and confusion.
While one the one hand, the system is linked with the financial
accounting application to update balances, on the other hand,
it is also linked with the stock system to check stock positions.
The company is also looking for maximum optimisation in terms
of inventory management and minimising inventory holding time.
“We are currently looking at ways for reducing the lead
time, so as to hold inventory for the shortest required time,
which is very critical for a company like ours. This is possible
if the supplier can meet our requirements on time,” explains
Gupta. For this, the C,C&C department is deliberating
upon setting up an extranet for suppliers.
SAIL has also recently developed an application for automating
its public deposit system. Under its public deposit scheme,
the company invites deposits from the public at a fixed rate
of interest. According to Gupta, there are a lot things which
are considered for arriving at the figures like rate of interest,
equity, net worth, etc. The scenario changes in case of withdrawal
or re-investment. The application holds special significance
for the company, as this is SAIL’s first initiative towards
migrating to a three-tier architecture. During the second
phase of the application, SAIL will be moving towards making
the PDS application Web-based. The company has also developed
an application for the processing of the bonds scheme which
is for the wholesale investors like banks and corporations.
The application helps to keep track of factors like receipts,
maturity, and the company’s liability in bonds at any
point in time. It further allows for investors to check on
their accounts and records through the folio numbers generated
by the system.
Apart from these existing applications, the C,C&C department
has also planned out various other applications for SAIL’s
operations. This includes the development of the customer
relationship management (CRM) and data warehousing applications.
The step towards initiating the CRM application in SAIL has
come as a result of increasing competition in the industry.
Realising that one of the key differentiating factors can
be through establishing better communication channels with
customers with the help of CRM, SAIL has gone all out on this
front.
On the sales side too SAIL has automated processes and operations
to a large extent. The sales application generates online
sales invoices. In addition to this, the system also develops
test certificates, which need to be dispatched with invoices,
which are online. It also automatically calculates excise
duty to be paid. Elaborating on the functioning of the sales
application, Gupta elaborates that the invoices generated
by the marketing department are automatically sent to the
Production Planning and Control (PPC) system, which then automates
the production process. When the finished material is dispatched
from the production unit to the customer, the information
related to the vehicle in which it is being dispatched and
other information related to the order is fed into the application.
Controlling production
 The
other set of applications running within SAIL relate to the
Plant Control system, catering from basic automation of plants
to controlling and management of machinery. Comprising of
shop floor applications and process control applications,
the system helps the PSU control and manage its plant operations
with greater efficiency. According to Gupta, there are various
shop floors within the plants like the coking unit, blast
furnace, etc. Under the shop floor application, all instruments
and machinery are connected to an instrument, which is further
connected to the computer. Information from the machines are
fed into the computers on a real-time basis, through the mediating
machine, which converts analog signals to a digital format.
This helps in keeping track of the performance of machines
as well as helps in controlling their functioning. On the
other hand, process control applications are geared towards
monitoring the whole process. This includes monitoring as
well as controlling heat consumption, oxygen flow and use
of iron ore or phosphate. Explains Gupta, “A slight difference
in the amounts of each of the input materials has an effect
on the output. Process control applications help us not only
in monitoring, but also controlling these inputs to have the
desired output.” In order to produce a particular quality
of steel, there are various variants of input materials and
also processes. In order to arrive at the right configuration
for a particular output, the plants use various models, which
are nothing but software systems. The plants also use sensor
equipment, which are mechanical and hydraulic equipment for
sensing the levels and extent of the various input materials.
In this way, each unit of the plants uses various levels of
control, in the form of models, sensor equipment, etc, to
make the functioning of plants more efficient and cost-effective.
Future focus
 Keeping
up with its dictum of moving with the times, SAIL has also
been constantly upgrading its back-end technology infrastructure
as well. The company has been switching gears from a flat
system to a hierarchical database, followed by a network database
to an RDBMS approach. Finally, the company is moving towards
an object-oriented database. Elaborating on the advantages
of such an approach, Gupta points out that there is a need
for only changing the parameters and not the business rules,
thus avoiding duplication of development. Further, the company
is also planning to migrate from Oracle 8i to Oracle 9i as
the back-end. Pointing towards a major initiative being taken
by SAIL, Gupta explains that the company is currently working
towards building a unified database for the company. “We
have developed many legacy systems over the years. Now our
effort is towards linking all these systems and build up a
unified database,” he explains.
In fact ever since the upsurge of the ‘information revolution’
wave within SAIL, the force has been steadily guiding the
organisation towards its corporate objectives that is, to
utilise the power of informatics through decision support
systems in all key application areas to improve productivity,
quality and profitability. Going by all
accounts, SAIL is well on
the way to achieving these
goals.
|
