Page 29 - Tata Steel One Report 2024-Eng-Ebook HY

Business Operation and Performance Driving Business Towards Sustainability Corporate Governance Policy Financial Statements Attachments
includes the use of the e-RFX system for procurement, as well as adopting Power BI, Robotic Process Automation (RPA), Online Workflow implementation and significant upgrades to the Scrap Reservation Application, which confirm the Company’s commitment towards developing the procurement processes. The e-RFX system is a crucial part of the procurement process, offering transparency, speed, and fairness. The enhancements in Power BI and RPA, combined with the inventory management and procurement processes, have significantly boosted Company’s service capability and responsiveness. Workflow system has been implemented by transitioning the approval process from a manual approach to a digital, online platform, thereby improving efficiency, transparency, and traceability across operations. Additionally, the Scrap Reservation Application has been developed further by adding functionalities and flexibility.
Steel scrap and Billet sourcing
The Company produces steel using Electric Arc Furnace (EAF) technology and steel scrap is a vital raw material. Accordingly, the Company has adapted the procurement strategy to respond to the continually changing steel scrap market. Scrap is sourced domestically amidst high competition from both domestic EAF steel producers and players using Induction Furnace (IF) technology. The Company employs the "Value in Use" (VIU) analytical framework as guideline for procuring steel scrap, which has led to the development of new types of scrap to optimize production outcomes. Additionally, the Company continually evaluates options for billet procurement to enhance efficiency and flexibility.
Raw Materials sourcing and Production Supply Other Service procurement
Geopolitical conflicts have now become a significant factor in sourcing raw materials and production supplies. By diversifying, sourcing from various countries, the Company mitigates the risks of supply disruptions, maintaining consistent inventory levels to ensure smooth Company operations.
Rising labor costs from annual minimum wage increases are addressed by reviewing non-essential tasks and optimizing manpower across all plants to maintain operational efficiency.
Services sourcing
The Company refines its service procurement strategy by consolidating jobs, developing new labor contract structures, and transitioning to a productivity-based rate model. These improvements, including the implementation of automated processes reflect the Company’s commitment to operational excellence and cost-effectiveness.
Sustainable Procurement
The Company’s approach to sustainable procurement aligns with the broader strategy of the Tata Steel Group, covering various dimensions such as environmentally friendly practices, social impacts, and governance in the procurement process. The Company monitors and selects its partners by considering these factors. In the past year, no supplier in the Company’s supply chain faced issues of compliance with sustainability standards. Continuous evaluation of key suppliers ensures that they meet the Company’s sustainability standards, reaffirming the commitment to responsible procurement.
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