Open Innovation (OI) is a well-established way to increase options for innovation. It is quite prominent in areas such as Fast Moving Consumer Goods (CPG), but much less so in manufacturing industries. That’s why I took the opportunity recently to find out more from Pete Longdon, who runs the OI programme at Tata Steel.
Tell me more about Tata Steel
Tata Steel (www.tatasteel.com) is part of Tata Group (www.tata.com), one of the largest business groups in the world. With a turnover of about $100bn, it has over 100 operating companies including Jaguar Land Rover, Tata Consultancy Services, Tata Power and Tata Motors; it makes everything from salt to steel to supercomputers! Tata Steel in Europe is the continent’s 2nd largest steel company and manufactures and supplies steel products into every major Industrial sector around the world.
Why have you embraced open innovation?
Open innovation is not new to the steel industry and in fact one of the earliest cited examples of industrial open innovation is the development of the wide hot strip mill in the 1920s.
Innovation within the Tata Group is seen as a core requirement. It’s a clear part of our strategy. Even though OI has been used in the steel industry a long time, it is not usually associated with industries such as ours. But it’s becoming increasingly relevant to steel, as the time required for us to develop and introduce new steel products is becoming shorter as we respond to known and anticipated customer needs. In the last 12 months alone Tata Steel has launched 30 new products and we have ambitious targets in the years ahead. Of course we invest significantly in R&D and have great strengths in this area. Equally, we have to be realistic and recognise that R&D is a finite resource that has to be prioritised. For us, OI is about recognising that for every talented person we employ internally there are thousands of people just as talented outside our organisation, so adopting an OI approach will create new opportunities and help maintain our market leadership position. It’s just good business!
What are the key elements of OI for you?
We believe one of our strengths is in how we build collaborative relationships: “Together we make the difference” is our philosophy, which is perfectly suited for open innovation.
Collaboration is not new to us and we have some great examples of working with partners and even competitors to develop new technologies. The collaborative HIsarna project, using the pilot iron making plant at Ijmuiden, could reduce carbon emissions from integrated steelmaking by 20%. The SBEC and SPECIFIC centres in Wales aim to transform the “Building Envelope” into an energy generation, storage and release system. Tata Steel is a major partner in The Proving Factory® based in Rotherham and Coventry, identifying new technologies initially developed by small enterprises in the automotive sector and helping them bridge the development gap to enable uptake by original equipment manufacturers and tier 1 suppliers.
We also have strong academic partnerships, which we have strengthened recently with the creation of new sponsored academic chairs at Warwick University, and we work closely with government. The Welsh Government, for example, has been a key partner in establishing SPECIFIC and SBEC but also in facilitating open innovation across Wales for its anchor companies, including Tata Steel.
Tell us about the new portal www.tatasteelinnovation.com/
If we want to find the right people to work with, it’s important to show the breadth of our technology and market interests in one place, which we’ve deliberately kept brief and to the point. The submission process is straightforward, seeking only non-confidential information to protect any potential IP the proposer has. After an internal review we’ll aim to respond within a month. If we feel that the submission looks interesting we’ll put a NDA in place quickly and take it from there. We also have a NineSights Gallery, www.ninesights.com/community/tata-steel where we use NineSigma’s ability to target specific expertise groups for our more detailed needs.
What are you looking for?
We want to innovate in everything we do. For example, one of our current technology challenges is to identify ways of helping the oil and gas industry extract hydrocarbons in the increasingly aggressive production conditions. We need to identify ways of protecting pipes that will allow the industry to exploit fields that may otherwise be financially unattractive using current technologies. Also, despite the steel industry having reduced the energy used in making steel significantly we always want fresh ideas to make further progress. We believe these can come from people outside the company and indeed outside our Industry. Although we are looking for new or improved products, processes and applications for steel we aren’t restricted to these. We are also interested in new service innovations and even new business models. From these few examples it’s easy to see the range of technologies potentially involved and why OI is an obvious route for us to take.
What kinds of collaboration are you looking for?
We’re very flexible. The collaboration could be with anyone and take a number of different forms. It could be a supply chain agreement or a licence to use patented technology. Indeed if it makes sense for both us and the technology provider, we’d look at all proposals to try and find the best approach for all parties.
What’s special about your programme? Why should people work with Tata Steel?
The scope of Tata Steel’s interests gives tremendous opportunity for people to get their ideas and technologies implemented quickly, at scale. It’s also not just about technology. Tata Steel has thousands of customers, so service is another area of strong interest.
This initiative represents an opportunity to work not only with Tata Steel but potentially also with the wider Tata group. If we receive proposals that are not quite right for us but we think could fit our other group companies, or perhaps even our customers, then we can discuss how to take those forward, with or without Tata Steel being directly involved.
How do you see Open Innovation developing at Tata Steel?
We are very excited about the future of the OI programme. Whilst we’ve always collaborated with partners in academia and industry we’ve never really gone out and said ‘these are the areas in which we want to work together’. We’re sure this will bring benefits immediately. We’re equally sure that other areas of interest will also become apparent. That’s what I’m really looking forward to the most, finding opportunities that we had no idea existed!