Cost Leadership

ptimising efficiency.
Maximising yield.

We deploy cutting-edge technologies and adopt global best practices to drive operational efficiency, which enables us to optimise cost, maximise yields and set industry benchmarks. We are further enhancing our capabilities and consolidating our cost leadership through data-driven decision-making with digitalisation and implementing automation and green technologies.

Strategic enablers

  • Operational excellence
  • Strategic raw material sourcing
  • Optimising fuel and resource efficiency
  • Digitalisation and automation

Material topics

  • Responsible supply chain
  • Material stewardship
  • Economic performance
  • Compliance
  • Ethical business practices

SDGs impacted

Capitals impacted

  • Financial
  • Manufactured
  • Natural

Operational excellence

Tata Metaliks aspires to be the lowest cost producer of hot metal and DI pipes. We have implemented various initiatives including Shikhar, TPM and digitalisation to enhance operational excellence. Under the strategic pillar of ‘Innovate and Excel’, we have implemented manufacturing execution system (MES), robotics, business on mobile, and Level II automation of blast furnace. At the same time, we undertook operational improvement of blast furnace through process study, gap analysis and monitoring by daily management techniques. We have implemented a robust review mechanism to achieve the targets.

Going a step further, we are driving process agility by constantly scanning the external environment, bringing relevant technological inputs, adapting to the changes through revision in process design, and reviewing the progress regularly with relevant KPIs identified for all processes.

Implementation of MES in DIP Division has strengthened the process and performance through improved visualisation and real-time data availability. Further, Level II automation, implemented in one of the BFs, is aimed at improving the fuel rate, productivity and furnace performance through a prescriptive model analysing process parameters in real time. Many of these initiatives have also led to reduction in GHG emission in our manufacturing processes.

We ensure superior product quality in line with customers' requirements through a comprehensive check at the end of each intermediate process in the value chain. Improvements are carried out based on detailed analysis by the QA team and also through customer feedback.

Other noteworthy initiatives include reduction of DI Pipe rejections via a predictive model, reduction in breakdowns in Centrifugal Casting Machines (CCM) via predictive and diagnostic models, to name a few.

To improve safety through reduced human-machine interface and to increase productivity, several robots proposed to be installed in the DIP plant, several of which are already operational at various workstations. Similarly, human-machine interfaces have been kept at a bare minimum to improve safety by eliminating material handling equipment inside the plant and re-designing the pipe transfer mechanism.

We remain one of the most cost competitive players in our industry due to operational efficiencies and continuous improvement through our cost take out projects despite unprecedented input cost pressure.

5.65 Lt

Highest-ever annual
Hot Metal production

2.36 Lt

Highest-ever finished
DI Pipe production

2.33 Lt

Highest-ever annual
Coke production

22.4 MW

Highest-ever annual
Power generation

Robust cost management system (CMS)

Cost Management System (CMS) is an integral part of our decision-making to maintain a competitive edge. A group under Finance & Accounts called Business Analysis Group (BAG), supported by Iron Making Technology Group (IMTG), monitors product and project costs including EBITDA mprovements. The Peer Review Group (PRG) reviews all Capital Projects of the Company before it goes for approval and helps in improving and optimising the Capital expenditure (Capex) by bringing rigour in the Capital Planning Process. This enables the Management to take informed decisions to take intelligent risks and allocate resources in a structured manner to enhance business or customer value. The three pillars of CMS are Cost Planning, Cost Control and Cost Reduction/Improvement.

Cost planning and control

Cost related plans for key cost elements at each stage of the value chain are prepared based on specific consumptions (KPIs) and price and volume assumptions which forms part of the Annual Business Plan (ABP). Cost of differentiated products at product (P), quality (Q) and section (S) level are defined through standard costing system (revised periodically by BAG) to arrive at product mix decisions at the PQS level and to maximise value.

Cost reduction/improvement

The entire cost base of the Company is evaluated through step-by-step/year-by-year approach, ensuring efficient use of resources while improving overall productivity. Aggressive cost improvement targets facilitated by Shikar initiative are set as part of ABP and LTP process to improve/sustain profitability. Cost reduction targets are also reviewed for any course correction during the financial year. While cost reduction and resource optimisation initiatives are taken at the hot metal as well as DI pipe manufacturing stage, value addition to products, as per Technical Delivery Conditions (TDC), is done at various stages. In many cases, cost increase is taken at one stage if the entire system has a net value gain or the customer stands to gain in net value.

Digitalisation and automation

We are an early mover in digitalisation and automation (D&A). Mechanisation, automation and digitisation, and data analytics are key enablers for problem solving, evaluation and monitoring of product and process performance. Digital strategy roadmap for the Company is being deployed by the Digital Core group. The roadmap has been rolled out in three waves where Wave I is completed and Wave II is under implementation. Wave I covered 16 digital projects on digital HR capability building including mindset activation and finalising the digital architecture. Wave II covers 20 digital projects encompassing value-driven analytics, mobility and robotics. Over and above this, there are several value-added analytics projects under implementation which has a potential of cost saving/value addition of over `30 crore per annum.


To drive all EBITDA-impacting projects and improvements, SHIKHAR is has been institutionalised and practised. This is a unique initiative with robust process and review mechanism to generate EBITDA savings. In FY 2021-22, SHIKHAR helped save `71 crore.

Strategic raw material sourcing

Availability of raw material of optimal quality and chemistry is crucial for our business, making strategic procurement imperative to our sustenance. We ensure supply chain security through a global supply network and strategic contracting, which provides flexibility to commercial operations to adapt to the changes in the external and internal environment. We use strategic contract management initiatives to improve our supplier interactions through structured supplier review of contract performance, supplier feedback, improvement plans and cost reduction projects.


Employees involved in improvement initiatives

` 71 crore

Shikhar savings

Optimising fuel, energy and resource efficiency

Our sustained investments in pulverised coal injection (PCI) in mini blast furnaces (MBFs) have helped to not only reduce coke consumption but also enhance productivity. Several initiatives taken in the DIP plant have also reduced energy and fuel consumption in induction furnaces and annealing furnaces respectively. These interventions improved production efficiency and helped reduce GHG emission, net fuel rate and cost.

As a part of the corporate function, Strategic Procurement leverages competencies and services across the organisation to establish common governance practices, tighter control and compliance. The scope of Strategic Procurement services encompasses all critical processes to achieve cost leadership. Strategic Procurement ensures supply chain security through global supply network and strategic contract management and domain expertise.

Way forward

As input costs remain volatile, reducing fuel rate, increasing productivity, and improving the supply chain along with reduction in GHG emission remain our top priority. While containing costs remain a challenge, our structural interventions, along with digitalisation and automation initiatives, should enable us to retain our cost competitiveness.