By Amit Harlalka, CFO, ArcelorMittal Nippon Steel India
At ArcelorMittal Nippon Steel (AMNS) India, we are fully aware that it is crucial to stay ahead of the curve on technology adoption and innovation, for long-term success. Over the last three years, we have deployed various digitalisation strategies to transform processes and enhance efficiencies across functions from Finance, Sales & Marketing, Logistics and procurement to Human Resources, Mining, and Projects as well as in Safety.
Here is a look at some of our digitalisation initiatives:
We have implemented 50+ projects in areas such as working capital management, treasury, taxation, business performance management, and project management. The objective was to identify the pain points and automate them. This has significantly enhanced the process efficiencies and productivity of the respective teams.
With Robotic Process Automation (RPA) and machine learning tools, the entire process from receipt of invoices to payments has been automated. Various projects include a vendor portal for invoice submission, digital signatures, auto clearing of sales invoices and generation of Goods Receipt Notes (GRN) and job work challans, and auto entries of LC discounting, among other things.
It has resulted in several improvements for accounts payable and accounts receivable functions. For Accounts Payable alone, efficiency per FTE in handling payable invoices has improved to 174% with 96% of invoices paid on time from the date of receipt and process turnaround time reduced to two days. All this has improved the service experience of our vendors.
Similarly, for Accounts Receivable, automation of customer collections by integrating AMNS SAP with bank’s server, has resulted in real-time transactions processing and auto posting of collection in customer’s account every 45 minutes. The turnaround time for collection is drastically reduced.
In the area of digitalising trade payments too, big strides have been made. AMNSI executed the industry’s first domestic paperless bill discounting transaction with ICICI Bank on the Contour blockchain platform, which enhanced our working capital efficiencies. The transaction was seen as a precursor to the adoption of blockchain technology by Indian banks and businesses.
We also executed a paperless export bill discounting transaction with Universal Tube through HSBC, using the same Contour blockchain platform, which reduced our transaction time from eight days to one day.
In another industry first, we executed a blockchain-enabled domestic trade transaction with Axis Bank and Lalit Pipes & Pipes Ltd on the government-backed Secured Logistics Document Exchange (SLDE), as well as the first-ever eDocs transaction for iron ore pellet exports from India using the Cargo Docs platform.
Over the next 24 months, we will continue to leverage blockchain, advance analytics, RPA and artificial intelligence (AI) for productivity and process improvements.
Moreover, we have recently upgraded our enterprise resource planning (ERP) system from SAP ECC to S4 Hana. This forms the digital core for our Intelligent Enterprise journey. Our move to a cloud environment will also improve our ability to digitally transform the ecosystem.
Sales & Marketing
To significantly improve our customer experience and provide a high level of convenience, we moved to the Salesforce customer relationship management (CRM) system. This will enhance our lead management, case and opportunity management, new product development, and account and customer management capabilities.
We have also enhanced customer experience by introducing an e-sales digital platform. Its features include order integration and easy digital payment methods along with engagement features such as chatbots.
We also now have ERP to ERP connection with our customers through electronic data interchange (EDI) messages, which has expedited data flow, such as on shipment dispatches and receipts.
By the end of 2023, we will integrate our Salesforce CRM and e-sales platform to further enhance customer experience.
Logistics & Procurement
We are implementing a Sales & Operating Planning (S&OP) system to transform our existing processes. As part of this, we have implemented a transportation management system to provide better visibility to our transport partners and customers. We are also working on a logistic dispatch process with end-to-end RPA to deliver ease of dispatch 24/7.
Our digitalisation journey in HR has begun with the goal setting and performance management process. This will improve the employee experience, bring transparency to our people processes, and support career development.
Our people are a source of competitive advantage, and we are committed to supporting them in achieving their aspirations and potential. Over the next two years, we will deploy tools such as Online Campus, the new Fiori for employee self-services, and the Oracle talent management suite to improve our employee engagement systems. We have already digitalised and automated the onboarding process to provide a seamless joining experience to new employees. Plus, we are investing in technologies like AI-based chatbots to enrich employee engagement and productivity. This should take us one step closer to our ambition of becoming an employer of choice.
The digitalisation and integration of outbound logistics at the mines has led to faster turnaround time, a 6% reduction in logistics costs, and 100% increase in truck throughput. Moreover, real-time monitoring of truck movements has reduced theft and pilferage by more than 98%. We are now exploring the use of 5G for seamless connectivity and information sharing.
AM/NS-India has embarked on an ambitious plan to almost double its plant capacity to 14 million tonnes per annum (mtpa) in the next three years with a total capital outlay of $7.5 billion. To manage such large, complex projects, we have adopted a project management information system, which comprises schedule tracking, workflow configuration, engineering design and drafting, and data exchange with internal and external partners. A digital dashboard presents a condensed view to the management about the projects’ progress, issues, and risks.
For visual control, we have deployed drones, and time-lapse, CCTV and virtual reality cameras to provide a live and immersive view of the construction site. We are also using drones to monitor construction, and for thermal imaging and volumetric estimations.
Everyday thousands of people enter the AM/NS-India plant premises, and we are committed to ensure that each one of them goes back home without any mishaps. Apart from investing in training, we have digitalised the safety management system to identify and record potential hazardous conditions and reduce any breach within the plant. We have also ensured road safety by using speed detection systems.
AM/NS India is moving swiftly towards a more digitally enabled ecosystem, and the way we work and operate will alter significantly in the next 12 to 24 months.