Information Technology at the Pipe Metallurgical Company (TMK)

2023: Plan to complete digitalization projects by 2027

The Pipe Metallurgical Company (TMK) plans to complete the main digitalization projects by 2027 and begin the transition to smart production in order to increase the efficiency of business processes. The company announced this on November 23, 2023.

Within the framework of the Digital Production of TMK program, four key components of the production systems of the company's industrial enterprises are automated. This is a production execution system responsible for accounting for operations of the main production, technical control and warehouse operations (MES), a system for identifying and tracking the production process (FLOW), a system for testing products in laboratories of enterprises (LIMS) and a system for maintenance and repair of equipment (maintenance). The pilot projects are scheduled to be completed in 2024.

The digital transformation of production should ensure a significant increase in the efficiency and quality of operation of production systems at TMK enterprises. It is implemented in two stages. On the horizon until 2027, the company will complete the automation of key production systems and the data accumulation process, which will provide a further technological leap from digital to smart production. At the second stage, starting from 2028, thanks to the introduction of breakthrough technologies and services, data and information will become one of the main drivers of the company's development, "said Boris Pyankov, Deputy General Director - Technical Director of TMK.

The digital transformation process often requires the reengineering of business processes from the logic of their operation to the management of master data. In the course of the implementation of the digital transformation strategy, the company will create a data warehouse that will ensure comprehensive production analysis with great depth and detail, as well as allow you to move from classical descriptive analysis to diagnostics and forecasts, which will make it possible to determine the causes of emerging problems and prevent their occurrence.

The transition to prescriptive analysis will mark a whole new level of production and optimization of management processes through the use of cyber-physical systems operating on the basis of constant collection and processing of production data.

2022: Pipe Metallurgical Company has merged all its IT divisions under the TMK++ + brand

On March 1, 2022, the Pipe Metallurgical Company (TMK) announced to TAdviser the creation of the TMK++ brand, which united the areas of development and support of IT solutions within the company's perimeter. Under the TMK++ brand, reengineering of information systems, development of multi-level integration systems, automation of business processes, as well as technical support and consulting services will be carried out. Read more here.

2021: TMK made a profit of half a billion rubles from the introduction of digital twins

The Pipe Metallurgical Company (TMK) received about half a billion rubles of additional profit from the introduction of digital counterparts of rolling mills at the Volzhsky (VTZ) and Seversky (STZ) pipe plants. The economic effect was achieved by improving the quality of pipe products, producing pipes from new grades of steel and reducing costs.

TMK made a profit of half a billion rubles from the introduction of digital twins

Digital twins of the VTZ and STZ pipe rolling units have been created since 2018. The solution simulates the processes of pipe production at continuous rolling, extraction and calibration and reduction stations. The technology allows you to select and test hardware settings in a virtual environment, and then apply the most efficient option in production.

Thanks to the design of caliber systems for continuous rolling mills with the help of digital twins, it was possible to significantly increase the accuracy of products, establish the production of new special casing pipes and make an additional profit of 70 million rubles. The technology also made it possible to improve the operating modes of mill mandrels in order to increase the service life of the tool, product quality and reduce metal consumption - this gave about 60 million rubles of additional profit.

A methodology for faster and more accurate adjustment of the pipe rolling unit based on contactless 3D measuring systems was introduced, which made it possible to achieve stable results in the production of high-precision pipes and obtain an economic effect of more than 120 million rubles. Also, with the help of digital twins, the company mastered the production of pipes from new steel brands and received more than 240 million rubles of additional profit.

"The introduction of digital technologies is one of the key areas of TMK's transformation, designed to create a new production culture in the company. IT solutions are implemented in all areas of business - from administrative tasks and interaction with customers to production planning and product quality control. We are consistently increasing investment in this area and are already getting impressive results. Thus, the economic effect of the introduction of digital twins has already significantly exceeded investments in their development. At the moment, we are replicating this decision to other enterprises of the company - Taganrog Metallurgical and Sinar Pipe Plants, "said Vyacheslav Popkov, First Deputy General Director - Chief Engineer of TMK.

The digital twin of the rolling mill created by TMK specialists has no analogues in the world. In 2020, the company's team - employees of the Russian Scientific Research Institute of the Pipe Industry (RusNITI) in Chelyabinsk, the TMK Scientific and Technical Center (NTC) in the Skolkovo Innovation Center, as well as VTZ and STZ - was awarded the Russian Government Prize in the field of science and technology for young scientists for the development and implementation of this technology.

2020

IT Director of TMK Dmitry Jacob - about the company's approach to digitalization

Speaking at the TAdviser SummIT online conference on November 24, 2020, TMKD Information Technology Director Jacob spoke about the company's approach to digitalization. Processes related to digitalization have been actively going to TMK for the past few years, he says, and in 2019 it became clear that they need to be consolidated and systematized. A directorate of digital technologies was created as a consolidating point.

Dmitry Jacob spoke about the digital concept of TMK at TAdviser SummIT

Approaching the issue of digitalization systematically, the company asked the question that caused a lot of controversy: "What is digitalization, digital technologies? How does it differ from informatization or from basic automation? " Following the discussion, a simple approach was chosen: TMK chose and listed technologies that the company considers digital. Accordingly, projects based on them are considered digital, and the rest are considered IT projects. A glossary of digital terms was published internally, reducing unnecessary questions and misunderstandings.

Slide from Dmitry Jacob's presentation

After that, the concept of digital technologies TMK was developed. It identified 4 main directions, and each of them has its own roadmap. At the beginning of the year, largely thanks to this concept, within the framework of the Technologies block, a cloud data center was created for TMK, which is, among other things, a testing ground for quick approbations, hypothesis checks, said Dmitry Jacob.

According to the results of a recent inventory, the company counted more than 340 support systems, of which 250 are internal development, said Dmitry Jacob. TMK has a development center in Skolkovo, on the basis of which the company, for example, is developing digital twins.

Slide from Dmitry Jacob's presentation

Many IT projects have been launched. As of the end of 2020, in the active phase, the project for the implementation of the integrated planning system, a new CRM system is being implemented, there is also a whole program of projects in the field of digital production for operational production management. Within the framework of the latter, an MES system is being implemented.

At the same time, the integration and interconnection of old systems, which are quite a lot in TMK, and new IT and digital solutions is a big challenge. There is a lot of data in both, which is an asset of the business.

Often, the block associated with people is underestimated, says Dmitry Jacob, while digitalization is largely about people, about mentality: to be ready to adopt new products, change your vision, master digital skills. He referred to the reports of consulting companies, according to which about 70-75% of failures in the implementation of digital strategies do not lie in the technical plane.

Slide from Dmitry Jacob's presentation

Dmitry Jacob added that initially he did not want to touch upon the topic of coronavirus, since it had already filled the oskomina, but in the end he decided to say this too, since the topic is very correlated with IT and the "figure." He singled out two chances. First, everything accelerated from the point of view of IT, "numbers," the coronavirus acted as a catalyst for this. Jokes that COVID-19 is a sponsor of digital transformation in the company "contain a large share of the truth.

We see how even very conservative colleagues were forced to learn some new skills overnight and become flexible and IT-oriented, "said TMK's IT director.

And the second - the crisis caused by the pandemic aggravated the situation and revealed moments that were previously not paid attention to or considered marketing statements. But the pandemic has turned into reality slogans about the need to be flexible and able to rebuild through the use of digital technologies.

TMK will build an integrated planning system based on SAP

In May 2020, the Pipe Metallurgical Company (TMK) began transforming its consolidated planning processes based on SAP the Integrated Business Planning (IBP) cloud system deployed in the Russian data center. The company expects that the new solution will allow the company to automate the processes of creating and coordinating plans for sales, production, procurement and transportation on the horizon up to 18 months. The project will be implemented by specialists from SAP Digital Business Services.

The construction of an integrated planning system will allow TMK to provide flexibility in behavior in a rapidly changing market through continuous planning, timely entry of up-to-date data on the market, orders and existing restrictions.

The solution used includes several modules, including for forecasting demand, scenario modeling and automating the process of planning sales and operations, optimization using various criteria, as well as supporting the interaction of participants and control over the process.

The project will automate the creation of forecasts of product sales by month in the context of product groups and sales markets, as well as planning the entire supply chain of the holding, taking into account data on stocks and supply of raw materials, production facilities and in-plant logistics^[1].

2019

TMK approved a cybersecurity strategy until 2022

TMK revealed the details of its cybersecurity strategy "(photo - TMK)"

TMK adopted in 2019 a strategy for ensuring and developing cybersecurity until 2022, according to the company's annual report, published in May 2020. Previously, TMK did not report this document. According to the annual report, one of the goals of the strategy is to create an effective cybersecurity system (KiB) in the company. Another goal is to create additional advantages for the company's activities by improving the reliability of business processes, reducing the costs associated with the operation of protective equipment, as well as reducing the risks of fraud and information leaks.

In 2019, as part of the implementation of this strategy, a system for collecting and correlating information security events (SIEM) was introduced in order to automate the processes of detecting information security incidents from various sources in the network to protect the IT infrastructure of the main enterprises of the Russian division of TMK. This system will become the technological basis for building a situation center TMK (SOC) in the company.

And in order to raise awareness of TMK Group employees in the field of information security, in the reporting year a course was developed on the basics of "digital hygiene," which was trained at all enterprises of the Russian division of TMK.

From TMK Annual Report 2019

Plans to implement the 2020 strategy include:

• Building SOC. The company expects that this will significantly increase the capabilities of TMK in the field of visibility of information security events and the ability to quickly respond to incidents, and will also allow fulfilling requirements No. 187-FZ;
• Continuation of the project on leveling the landscapes of used information protection technologies and information security practices;
• Implementation of a platform for organizing internal phishing mailings to consolidate the digital hygiene skills of all TMK employees;
• Continue to build a set of cloud data center (data center) security measures to mitigate the risks of digital transformation.

The annual report also provides a correlation of the strategy for ensuring and developing cybersecurity with the company's business goals:

From TMK's 2019 Annual Report (click on the image to zoom in)

Dmitry Pumpyansky - on the key tasks of digital transformation in TMK

In a public lecture on "Business Transformation. We determine the future today "in February 2019, the chairman of the board of directors of TMK and Dmitry Pumpyansky spoke about digital transformations at the enterprises of companies. For more details, see the footnote^[2].

TMK will create its own digital twin

The Pipe Metallurgical Company (TMK) plans to launch a digital twin of the company in 2020, which will allow working out various scenarios for supply, production, sales, interaction of units, Igor Korytko, Deputy General Director of TMK for Efficiency Management, told Vedomosti. The creation of the model will make it possible to reduce costs by 2-3%, he said: "In the market, an advantage of several percent is a lot," the company expects. In 2018, the cost of production of 1 ton of TMK pipes amounted to $981, that is, the digital twin will reduce the cost by $20-30. Last year, the company produced and sold 4 million tons of pipes.

A 2-3% cost reduction will ensure the Russian division of TMK EBITDA growth by 13% and profitability by 2 pp to $548 million and 16%, respectively, from the level of 2018, Raiffeisenbank analyst Irina Alizarovskaya calculated. Almost 70% of the cost of pipe production comes from raw materials - steel. The price of 1 ton of hot-rolled steel in June 2019 was $480-500, depending on the port.

The digital twin is the most promising technology for pipe production, Korytko is sure. Other metallurgists agree with him: the key technologies in the future for 5-10 years at the metallurgical enterprise will be precisely mathematical models and digital twins, Vadim Feoktistov, director of MMK-informservice, told Vedomosti. TMK already uses digital twins in the development of threaded connections, which reduces the time for the release of a new product by several months.

TMK approaches digital transformation pragmatically: it does not use raw startups, uses only technologies proven by the market, Korytko continues: "First of all, economic feasibility is important in any technology - if the technology is understandable, if it has implementation examples, has an effect, then the company introduces it. Based on this approach, the budget for the implementation of a project is determined. " The company does not^[3] investments in digitalization^[4].

2018

SAP and TMK will create a laboratory in UrFU to develop digital solutions in industry

In July 2018, UrFU, TMK and SAP CIS signed an agreement on the creation of the SAP Next-Gen Lab at the university. It is planned that in it students and teachers of the university will develop and test solutions for metallurgical companies using blockchain technology, the industrial Internet of Things, augmented reality, machine learning and computer vision.

The laboratory will be a physical space equipped with computers, drones, 3D printers and other necessary material artifacts that students can use to solve the problems of industrial companies. It was supposed to be the ninth project of the company at the Russian educational sites^[5] will^[6].

TMK completed the first stage of the project of comprehensive protection of infrastructure from cyber threats of zero day

In September 2018, TMK completed the first stage of the comprehensive infrastructure protection project against zero-day cyber threats. The solution is planned to be implemented at Russian and foreign enterprises of TMK.

Zero-day threats are associated with software (software) defects that are unknown to its developers or antivirus companies. In these cases, malware can reach workstations and servers of organizations, remaining undetected at all levels of protection. The term "zero-day threats" means that software developers do not have a single day left to develop measures against such vulnerabilities^[7]

IT passport of projects in TMK

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Notes