The Tata Steel Group’s growth and globalisation strategy is driven by its business expansion while maintaining

profitability and mitigating risks. The Tata Steel Group over the years has focused on enhancing raw material security

and announced major joint ventures in various parts of the globe. Tata Steel completed FY'12  with an overall

increase in Production & Sales. The year registered its  best ever performance in Hot Metal, Crude Steel, Saleable

Steel production and  total Sales. The key production and sales figures are given below:

Production

G Blast Furnace achieved its best ever production of 2.13 million tonnes (Previous best 2.11 million tonnes

in FY'11)

Both the Steel Melting Shops LD#1 and LD#2 & SC achieved their best ever production of 3.12 million

tonnes (Previous best 3.05 million tonnes in FY'11) and 4.0 million tonnes (Previous best 3.80 million tonnes

in FY'11) respectively.

Hot Strip Mill achieved its highest ever production of 3.94 million tonnes (Previous best 3.73 million tonnes in

FY'11).

New Bar Mill achieved its highest ever production of 0.78 million tonnes (Previous best 0.72 million tonnes in

FY'11).

Wire Rod Mill achieved its highest ever production of 0.42 million tonnes (Previous best 0.4 million tonnes in

FY'10).

Merchant Mill achieved its highest ever production of 0.38 million tonnes (Previous best 0.37 million tonnes

in FY'11).

West Bokaro Division (one of the Collieries) achieved its highest ever production of 5.9 million tonnes

(Previous best 5.6 million tonnes in FY'09).

Sales   

Flat product sale in FY'12 increased by 6 % at 3.735 million tonnes y-o-y.

The Flat Products division achieved one million tonne sale to Automotive segment with Highest ever Skin

Panel sale of 0.06 million tonnes (previous best 0.049 million tons in FY11)

Highest ever sale of Tata Shaktee GC sheets at 0.211 million tonnes (previous best 0.207 million tonnes in

FY10)

The Long Products division achieved total sales of 2.897 million tonnes (2.878 million tonnes in FY'11)

The Long Products division achieved best ever TISCON sale of 2.085 million tonnes (previous best 1.826

million tonnes in FY'11)

TISCON also crossed its one million ton sale in the retail segment 1.111 million tons (previous best 0.779

million tonnes in FY11)

 

 

TOTAL QUALITY MANAGEMENT  Total Quality Management (TQM) is an approach that seeks to improve quality and performance which will meet or exceed customer expectations. This can be achieved by integrating all quality-related functions and processes throughout the company. TQM looks at the overall quality measures used by a company including managing quality design and development, quality control and maintenance, quality improvement, and quality assurance. TQM takes into account all quality measures taken at all levels and involving all company employees.TATA STEELSTata Steel , formerly known as TISCO and Tata Iron and Steel Company Limited , is the world's seventh largest steel company with an annual crude steel capacity of 31 million tonnes. It is the largest private sector steel company in India in terms of domestic production. Currently ranked 410th on Fortune Global 500, it is based Jamshedpur   , Jharkhand, India . It is part of Tata Group of companies. Tata Steel is also India's second-largest and second-most profitable company in private sector. Its main plant is located in Jamshedpur, Jharkhand, with its recent acquisitions, the company has become a multinational with operations in various countries. The Jamshedpur plant contains the DCS supplied by Honeywell. The registered office of Tata Steel is in Mumbai. The company was also recognized as the world's best steel producer by World Steel Dynamics in 2005.Thecompany is listed on Bombay Stock Exchange and National Stock Exchange of India, and employs about 82,700 people (as of 2007).TQM AT TATA STEELSTata Steel has maintained the confidence to improve performance globally even in the face of a challenging economic climate in which the steel industry happens to be severely affected. One factor that contributes to this confidence is the Company’s adherence to Total Quality Management (TQM) to achieve its goals. Since the formal incorporation of TQM for Business Excellence in the late 1980’s Tata Steel has adopted a number of improvement initiatives popular around the world. At Tata Steel’s European operations, Continuous Improvement activities are focused on providing Business Units with the ability to drive business through Lean Management, a common strategy deployment process, training of CI coaches and knowledge sharing through operations. NatSteel maintains a systematic approach towards improving productivity and enhancing quality while reducing cost at the same time. The Singapore operations concentrated on yield improvement, reduction in power consumption and a significant bottom line benefit. The Xiamen operations have also adopted measures to reduce vulnerability caused by price fluctuations.the Company’s better understanding of TQM and the Theory of Constraints (TOC) on the Deming Application Prize journey, its customer focus and market orientation have undergone a sea-change. Tata Steel has initiated a culture of value creation with customers and suppliers. Specific approaches focus on the 'needs' of the customer as opposed to 'wants'. Programmes include those on Customer Value Management, Retail Value Management, Solution for Sales and Supplier Value Management. The Company emphasises effective daily work management practices, a clean and safe work environment and consistency and stability of processes as important factors in sustaining development and growth. Tata Steel in Europe seeks to create a single, global and strategic marketing team with a goal to become the "best supplier to best customer" and deliver profitable growth. To this end, around100 people across the sales & marketing teams worked on the first phase, which was completed in February 2010. Subsequent phases are now in progress, which include developing three to five year plans for each of eleven industry-focused sectors, identifying initiatives for executing these plans, identifying quick wins and developing a customer satisfaction tool. Product catalogues have been developed and high-level metrics have been defined. The activities included:

Categorising customers to ensure the right level of focus and developing account plans for the highest opportunity customers.

Creating group-wide key performance indicators for marketing & sales, implementing a customer satisfaction programme and developing a single products and services catalogue.

 

The Improvement Philosophy: Keeping up pace with the different changes in the global business arena, Tata Steel believes that to be prepared for the future it needs to ‘plan’ improvements with three main areas of focus.

Increasing the pace of standardisation to strengthen the base,Improve quickly on existing operations. Innovate continuously in order to be differentiated from others. Tata Steel’s TQM journey has encompassed in its

fold all the people down the line, so that process and performance improvement becomes a way of life. Ensuring value creation for the system as a whole is the only means of achieving success in the long run. In the face of high raw materials price volatility and an overall trend of rapidly increasing prices, in 2009-2010 the Procurement Division of Tata Steel India focused its efforts on keeping these in check by leveraging long-term contracts and relationships, and on minimising risk by hedging and through various other strategic sourcing tools, including innovations and improvement initiatives using Total Quality Management precepts.

Performance Improvement Initiatives: Performance Improvement Teams. Tata Steel set up the Performance Improvement Committee (PIC) in January 2008 to accelerate performance improvement on a continual basis. Seven (7) PI groups have started functioning under the PIC identifying Key Performance Indicators (KPI) to be improved and improvement projects to be undertaken. Considerable progress has been made in strengthening the work of the Performance Improvement Teams (PITs), charged with improving manufacturing processes. At the moment,17 of these teams are operating across the Tata Steel Group and initial estimates indicate the value of PIT-facilitated projects being undertaken in FY 11 to be more than £ 110 million. Change in Performance Culture: The Performance Improvement journey has resulted in some positive

changes in the performance culture. 

KPI Comparisons - KPI comparisons across groups have led to identification of performance gaps within the Company enabling the initiation of improvement projects in the area of concern.

Bottom Line Orientation -Most projects are being conceptualised with an expected financial benefit to consider.

  People Involvement- The People Involvement team meetings have had a positive influence on having more

people participate actively in different performance improvement initiatives.

PIT Improvement Initiatives Ironmaking Group

Usage of cheaper coals (LCCS) in the coke making blend increased to an all-time high of 41%, 33.6% and 29% this year at IJmuiden, Port Talbot and Scunthorpe, compared to earlier rates of 13%, 20% and 8% respectively.

  2 blast furnaces at IJmuiden and Port Talbot were salamander tapped as part of temporary blow-down due

to the contraction in market demand. This process is useful in reducing the risk of hearth failures while still allowing quick restarts.

The usage of iron-rich steelmaking waste reached record levels of 164 kg/tcs and 143kg/tcs during the year at Port Talbot and Scunthorpe respectively, compared with baseline usage of 128 kg/tcs and 72 kg/tcs.

As a result of shared best practice from Corus’ Scunthorpe and Teesside plants, the number of coke ovens in Batteries 5, 6 and 7 at Jamshedpur that were subject to down-time during the year fell to zero from 48 in 2008.

The slag volumes at the Port Talbot blast furnaces were reduced from the initial baselineof 245 kg/thm to 221 kg/thm in FY 10.

Steelmaking Group

Increasing the number of tuyeres at both Ijmuiden and Port Talbot from 4 to 6 is improving the yield from the BOS vessels. The changing of the tuyere design at the BOS converters at IJmuiden to bottom stirring is bringing benefits through improved converter life and yield.

Improved fleet management systems and the introduction of ladle coordinators helped increase the life of steel ladles from 110 heats in 2008 to 120 heats in February 2010 at Port Talbot.

LD #1 in Jamshedpur achieved its highest ever vessel life of 5,202 heats in November 2009, thus saving on the cost of relining the vessel; LD #2, at Jamshedpur achieved an increased average casting speed of 1.19 m/min from 1.17 m/min year-on-year after implementing a shop tracking system learnt from IJmuiden.

Learnings achieved through the PIT process enabled Vessel 1 at Scunthorpe to achieve its highest ever vessel life of 6,153 heats in January 2010, thus saving the cost of relining the vessel. The number of tuyeres at Scunthorpe was increased from 3 to 4, improving the yield from the BOS vessels.

Flat Rolling Group

Based on learnings from Jamshedpur and facilitated through the PIT, the Hot Strip Mills at IJmuiden and Port Talbot have been able to increase their coil weights from 20.2 t to 21.7 tand from 19.0t to 20.6t over the period April 2008 to March 2010, achieving significant fixed cost reductions.

The Hot Strip Mill at Jamshedpur successfully implemented a planned maintenance schedule that was followed at IJmuiden. This initiative, coupled with back-up roll changes, resulted in a higher number of net operating hours.

The Cold Rolling Mill at Jamshedpur achieved zero roll failures after implementing mill and roll shop practices learnt from Corus plants.

  Port Talbot reduced the electricity consumption of its HSM from baseline 92 kwh/t to88.5 kwh/t in FY 10.

Long Rolling Group

An energy saving campaign was rolled out and various initiatives taken across the Sections Mills in TSE resulted in 12% year-on-year savings across all section mills.

The Hayange Rail Mill in France is developing the capability to produce 108-metre railsthrough sharing experience with Scunthorpe’s Medium Section Mill.

There was an increase in yield at the Teesside Beam Mill and improvement in yield across plate mills of Scunthorpe and Dalzell.

ASPIREAs the new millennium was ushered in with a growth and globalisation plan supported by several technological interventions it also became imperative that an all-inclusive improvement model be evolved to give a systematic direction to the myriad measures that had to be taken. With this came the added challenge of becoming an EVA positive Company even when market conditions were not favourable, and also sustaining and improving EVA year on year as envisaged in the Group Vision 2007. Tata Steel felt the need to adopt an integrated improvement programme to accelerate the speed of change. The seeds of conception having been sown in2002, ASPIRE (acronym for Aspirational Initiatives to Retain Excellence) was launched on 2ndMay, 2003 as a means of reaching the ultimate goal set in Vision 2012 of becoming the global industry benchmark for Value Creation and Corporate Citizenship.The ASPIRE philosophy evolves around self-confidence and the desire to excel. In a global scenario of high paced competition, Tata Steel has been quick to anticipate the emerging needs of individual aspirations and the professional drivers that motivate its employees. Focusing on the tenet that aspirations, and therefore improvement knows no bounds, ASPIRE seeks to find ways of mitigating the difficulty posed by limited resources in the way of ambition fulfillment. ASPIRE includes improvement tools like Suggestion Management, VE, TOP, Six Sigma, TPM, Knowledge Management, TOC and some others. The broad improvement processes relate to TQM principles of Daily Management, Policy Management, Problem Solving and Task Achieving under the Aspire model.ASPIRE - T3The most important milestone in Tata Steel’s history has been its transition from a company operating in a controlled economy to one that is flourishing in a globally competitive environment.When it became imperative to include factors like modernisation, growth, and customer satisfaction in the improvement focus along with cost-competitiveness, a few modifications evolved in the existing system. The Company is now in the process of bringing improvement initiatives under a single umbrella of Aspire T3 that comprisesTOC(Theory of Constraints),TQM(Total Quality Management) and Technology to enthuse its people to newer heights of excellence. Through ASPIRE T3, a strong improvement framework which supports a culture of inclusive growth has been put into place.TOC is primarily being applied to improve service quality for customers and develop a competitive edge based on reliable delivery service. TQM provides the fundamental structure for customer and quality focused continuous improvements. The Technology focus is aimed at improving the capability for new Product and Process development.TATA STEEL ASPIREAspire Tools

ASPIRE includes improvement tools like Suggestion,Management, VE,TOP,Six Sigma,TPM, Knowledge Management,TOCand some others. The broad improvement processes relate to TQM principles of Daily Management, Policy Management, Problem solving and Task achieving under the Aspire model. The various improvement initiatives adopted by Tata Steel which are recognized as Aspire Tools are: •Value Engineering (VE):Value Engineering is an organized approach for identification and elimination of unnecessary cost.•QIP, QC & Benchmarking: Tata Steel adopted Juran Trilogy concept for undertaking Quality Improvement Projects (QIP). Quality Circles (QC) are small group activities which involves first-line employees who continually control and improve the quality of their work, products and services. Benchmarking is a process of exploring for best practices and performances across the world and putting systematic efforts to bridge the gap.•Total Operational Performance (TOP):Total Operational Performance initiative was launched in 1998 with the help of McKinsey. Major focus of this initiative was on cost reduction, quality & throughput improvement.•Knowledge Management (KM):Tata Steel decided to embark on formal KM initiative in the year 1999. The beginning was made in July ’99 to place a Knowledge Management(KM) program for the company and systematically as well as formally share and transfer Learning concepts, best practices and other implicit knowledge.•Define-Measure-Analyse-Improve-Control (DMAIC):The fundamental objective of the DMAIC methodology is the implementation of a measurement-based strategy that focuses on process improvement and variation reduction.•Define-Measure-Analyse-Design-Improve-Control (DMADIC):This tool is based on Design for Six Sigma Philosophy. DMADIC focus is predominantly on design aspects. Itis generally used for Task Achieving Projects like New Product Development, New Market Development etc.•TOP in Marketing: Launched in 2002 with the help of McKinsey, TOP in Marketing was the first new ASPIRE initiative launched with a focus on creating value through partnership with customers.•Supplier Value Management (SVM):This aims to reduce costs and resources in the entire value chain of supplier and Tata Steel. Value creation is focused through better understanding of customer (internal) requirements and supplier capabilities.•Quality Management Systems (QMS):Quality Management Systems as required, like ISO 9000, TS16949, OSHAS, ISO 14000 etc. are adopted by various units to establish basic management systems.•Small Group Activities (SGA):Small Group Activities (SGA) are promoted under daily management through SGA teams who meet, identify, discuss and implement small improvements (Kaizens) in the area of work. QC circles and TPM circles are known as SGA teams.•ASPIRE T3:ASPIRE T3 Launched in November, 2006 this initiative focuses on implementation of Theory of Constraints (TOC), Total Quality Management (TQM) and Technology. This will help the company to become more competitive and a global leader by achieving excellence in product & service quality. TQM & Technology will help to achieve superior product quality through process consistency, process capability and technological capability, whereas service quality is being focused through TOC implementation.•J. N. Tata / S. Vishwanathan Total Quality Assurance Process: Tata Steel has instituted J N Tata / S Vishwanathan Total Quality Assurance process. This process is developed in line with Tata Business Excellence Model (TBEM) which is based on US Govt. Malcolm Baldridge Model.•Deming Assessment:This assessment is done by Japanese Union of Scientists and Engineers (JUSE) for the companies implementing TQM practices and applying for  Deming Application Prize.

 

Tata Steel is the first integrated steel company in the world, outside of Japan, to win the Deming Application Prize.The steel giant won the 2008 prize for achieving distinctive performance improvements through the application of total quality management (TQM). Avneesh Gupta, chief (TQM) at Tata Steel spoke to Gayatri Kamath about the journey of enlightenment and the sense of responsibility that comes with winning this coveted prize awarded by the Japanese Union of Scientists and Engineers (JUSE).

What is the significance of this prize? The Deming Application Prize is considered to be the highest award in the area of TQM. Total quality stands for not

just quality of products and services, but also the processes and activities that are needed to achieve quality. In the world of quality awards, this prize is like a gold standard.  The prize was started in 1951 in memory of Edward Deming who was instrumental in teaching the concepts of quality to the Japanese. The Deming Application Prize tests the application of TQM within a company. The criteria include: Objectives and strategies of the company and whether they are challenging and customer-focused How TQM has been applied to achieve these objectives, and the thoroughness, consistency and depth of its application across the organisation The outstanding effects achieved as a result of the application of TQMThe focus here is on application – what sort of systematic methods and activities have been applied to achieve our objectives and strategies and what is the effect of this. The concept is that we need to demonstrate our ability to use TQM to achieve our desired goals rather than our capability (potential).     How does it impact Tata Steel's profile in the steel industry?Firstly, outside Japan, no steel company has won this award. We are the first. Secondly, in the past many years smaller sized companies have won this prize. It’s been almost 20 years since a company the size of Tata Steel has won the award – an indication of the effort that is necessary. Thus the impact is significant and lasting.  What practices did Tata Steel adopt to achieve this award? Tata Steel has been practising TQM since the late 1980s which was when the company initiated several quality activities – quality circles, ISO certification, quality improvements using Juran methods, etc. After winning the JRD QV Award in 2000, the question we faced was how to achieve the next quantum jump in performance and improvements. By going through the Deming process, we discovered the deeper meaning of TQM.  Tata Steel has been preparing for this prize for about four years. In 2005, we conducted a TQM diagnosis along with the JUSE team; that gave us the status of our TQM implementation and helped us uncover a lot of areas that required improvement in both our processes and culture. The TQM diagnosis gave us deeper understanding and clarity on our approach to quality: what areas should be addressed, who should get involved in what activities, etc. We specifically looked at: Strategic aspects or policy management: relooking at the balanced score card, looking at areas needed to change the business, etc Daily management: managing the day-to-day operations, ensuring that they are stable, looking for incremental improvements, etc  People involvement: involving people in thinking about improvement activities such as quality circles, suggestion management, knowledge manthan, etc.  What is the short term and long term impact of this initiative?The short term impact is that this has galvanised the organisation. Our people had rallied behind the goal of winning the Deming prize and a lot of improvement activities had been further refined.  The long term impact is that we have been able to push forward in our excellence journey. More importantly we have put in place some fundamental approaches in the organisation which will help us to leverage them for the performance improvement of Tata Steel. We have established that TQM is necessary for achieving business goals. Our revised half-yearly (H2) plan has identified enablers that address savings and benefits for the company; many of these methods use TQM approaches – for instance, how to optimise use of consumables such as lime, zinc, etc, how to reduce turnaround or shut down times through critical chain project management, etc. Basically, what has changed is our approach, how we apply TQM to attain our business targets. We are looking at more than double the improvements we have achieved in the past years.    Who were the main leaders and drivers of the Deming initiative?It started with the top leadership and the TQM team, but later on nearly everyone in the organisation was a part of it. We were able to engage many of the front line or operating units in this; there were champions in each of the departments.  What were the challenges and hurdles to achieving this award? How were they overcome?The most fundamental challenge was to create a mindset that looks at improvement activities as essential for achieving targets and goals. This is where the examiners focus. The biggest challenges lay in creating this understanding across the organisation, dealing with 35,000 employees, in explicitly stating and documenting improvement targets and how to go about achieving these in a systematic manner, in standardising approaches and creating alignment to profits and goals, and so on. Equally challenging was to bring quality to the forefront, which was addressed by formulating customer focused objectives and strategies in the various divisions and departments.    

The other problem was that for Tata Steel there were six examination units – the corporate unit and the five major divisions (raw materials, coke, sinter and iron, flat products, long products and shared services). Each unit had two applications – one for the overall unit, and one representing each of the departments of the division. We had to create guidelines and reference manuals to have uniformity and alignment. How does the Deming award criteria differ from the Tata Business Excellence Model (TBEM)?The difference is in the focus rather than the content. The Deming award criteria looks for application which runs vertically cutting across processes/ items, rather than looking at processes horizontally the way TBEM criteria are applied. They test the application rather than only the approach. Deming looks at applying the basic principle of TQM – the Plan-Do-Check-Act method.  The other key difference is the rigour of the examination process. It looks for application both in business units and the corporate functions. For us there were six examination units covering 52 departments in all. Each unit was examined for two days, so there were 12 days of examination which spread for about a month (4th of August to the 5th of September). There were 26 examiners, each having a lot of experience and expertise both in theory and application in their field.  

 

Will Tata Steel apply for the 2009 award as well?

As far as we know no company applies for this award every year. It is a very intense and time consuming effort both

for the company and the examination body. Usually organisations continue to reap benefits out of one such effort for

many years and put some internal diagnosis (assessment) system in place. Tata Steel will also not apply again for

the Deming award in 2009. There is a next level – called the Japan Quality Medal. You become eligible three years

after winning the Deming prize. We will decide in due course.

Continuous ImprovementFrom the year 2002, the global steel industry grew with the steel demand shooting from 2% to 8% year on year. The

Indian steel industry with its 43 million tonnes of steel production in a booming economy, was also showing rapid

growth. At such a time when the situation could not have been any better, in 2008 the global economic slowdown

cast its shadow on almost all industries including steel. The steel industry was suddenly faced with a high locked up

capital and is now having to resort to serious firefighting measures to overcome the current scenario.

Tata Steel India was also impacted by the economic slowdown. However, it still had the confidence that it would be

able to continue to perform much better than many others in the industry. This confidence is an outcome of its

understanding the cause and effect and its ability to use Total Quality Management (TQM) to achieve its desired

goals. While there is no quick fix approach on this journey, Tata Steel believes that long years of perseverance and

belief are needed to continue the journey of excellence.

Tata Steel has been pursuing TQM for business excellence formally since the late 1980s. With the vision of becoming

a world-class steel company, it adopted various popular improvement initiatives practiced around the world. All this

has resulted in recognition by various agencies from accreditation on ISO standards for quality systems, business

excellence awards based on Malcolm Baldridge model- JRDQV award, EFQM (European Foundation for Quality

Management) model- CII Exim Bank award and JIPM (Japanese Institute of Plant Maintenance) – TPM Excellence

award to name a few.

With these laurels, Tata Steel believed that it was on the right track to be deemed a TQM company.The process of

working for and winning the coveted Deming Application Prize in 2008 has also been a humbling and enlightening

experience for Tata Steel. Humbling, because it helped Tata Steel pinpoint inconsistencies in its approach of

managing its business based on logical principles that are often camouflaged during the good times and surface only

during a crisis. Enlightening, because the same process has helped Tata Steel focus on its strengths in areas that are

most critical to its business.

The road to the Deming Application Prize forced Tata Steel to research some of the basic systems which exist (but

may not be apparent) in an integrated steel industry. Understanding Customer Needs

Integrated steel plants are capital intensive with a long payback period. It is natural therefore, for steel plants to

maximise capital productivity through volumes. Like any other steel plant in the past, Tata Steel’s focus had been

internal, primarily on cost and volumes. With its growing understanding of TQM and Theory of Constraints (TOC) on

the journey towards the Deming Application Prize, its customer focus and approach to the market has undergone a

significant change. It started changing the levers of improvement from an internally focussed efficiency driven culture

to a culture of value creation with customers and suppliers.

Some specific approaches in the market that Tata Steel started were Customer Value Management (CVM), Retail

Value Management (RVM) and Solution for Sales (SFS). These approaches focussed on the “needs” rather than

“wants” of the customer. It is important to note that these approaches were continued or initiated in a supplier’s

market condition when the steel cycle was on a high. Even as the overall market experienced seasonality of demand,

the retail sales (through which a significant volume of construction bars is sold) of Tata Steel India was rather

insulated.

In a downturn, it is often tempting to chase sales. This inevitably results in a price war which is detrimental to the

organisation and the industry. The objective therefore should be to create value for the customer or in other words,

should help the customer make money. The assumption that the customer makes money when prices are low can

often be unfounded. The journey towards the Deming Application Prize using TQM, provided a deep insight of the

needs of the customer and how to capitalise on the need without jeopardising mutual interests.

Mirroring the CVM process, Tata Steel initiated the Supplier Value Management (SVM) programme with its key

suppliers, which also works on the ‘one firm concept’ with the objective of mutual value creation. Similarly, focussed

approaches to improve and effectively manage raw materials have been undertaken with the objective to maximise

the use of captive resources. Infrastructure Strengthening

In its zeal to constantly conquer new frontiers especially during a boom period, maintenance, sustenance or

standardisation of the current practices are often ignored by an organisation. In good times, the weaknesses in the

daily work management system are not focussed upon which later are exposed even during mild storms in the market

or economy. Robust daily work management practices, a clean and safe work environment and consistency and

stability of processes are essential building blocks to weather the economic storm. A robust base is essential to

improve and sustain gains. The road to the Deming Application Prize emphasised the importance of a robust base

and the process of ensuring deployment of the same. The Improvement Philosophy

Just sustaining the current performance is inadequate under any environment. Today, most organisations

continuously strive to improve. However, the following three aspects often remain as weaknesses:

1. Improvement is often inward looking and relatively less effort is made in distinctly differentiating the offerings

to the customers

2. The objectives may not be challenging (aspirational)

3. The means to bring about improvements are often not tested for causality i.e. the means are not checked for

necessary and sufficiency conditions to meet the desired objective. Failure to test interventions against appropriate

causality leads to making the ‘One size fits all’ approach to target setting as well as the choice of tools and

techniques.

The company’s ASPIRE technique helps to set goals and choose the appropriate tools. Under this, certain parts of

the planned improvements are checked for causality, explored for means (causes) and then the implementations are

carried out using differentiated tools and techniques. For the remaining parts of the aspirational goals the means are

innovated as we proceed in the implementation journey.

The future belongs to organisations that can increase the pace of standardisation (to have a robust base), improve

quickly on their current operations and continuously innovate to differentiate themselves from the rest.

This can only be achieved by leadership, passion, process and knowledge.

Tata Steel’s TQM journey has made it acknowledge the fact that the only sure way to prosperity in the long run, is to

ensure value creation for the system as a whole, starting from the customers to the suppliers.

 Performance Improvement in the Tata Steel Group

Following its principle of driving all processes towards quality under TQM, Tata Steel in January 2008 set up the

Performance Improvement Committee (PIC) to drive performance improvement on a continual and accelerated basis.

In the next few months, the framework and structure of the PIC was finalised, with Performance Improvement (PI)

Groups for iron making, steel making, flat rolling, long rolling, maintenance, distribution service centres and building

systems. RD&T also represented in most of the PI teams under each of the groups.

Initially, projects were identified with bottom-line impact of $180 mn, of which 30% were cost projects and the balance

were throughput (volume) related. With the change in market situation in H2, the sites reworked their projects and

now cost related projects comprise 40%, though the total benefits have reduced to $ 150 mn.

Early Success Areas

Some areas where Tata Steel’s effort at continuous improvement bore fruit include:

Higher usage of processed reverts at Scunthorpe and Port Talbot

Reduction in hot metal manganese at Port Talbot

Bottom stirring at IJmuiden leading to improved converter life and yield

Higher usage of Low Cost Carbon Source (LCCS) in the blend at IJmuiden, Port Talbot and Scunthorpe

Vessel life improvement at Jamshedpur and Scunthorpe

Blast Furnace and Coke Ovens operating process for lower production levels developed and successfully

implemented in Tata Steel European operations without compromising equipment health and safety

Coke Self Sufficiency

Coke oven availability improvements

Improvement in caster speed at LD2, Jamshedpur by implementing shop tracking system

Improvement in HSM productivity, Jamshedpur by mill pacing model and effective shutdown management

Improvement in PLTCM productivity at CRM, Jamshedpur by looper optimisation

Change In Performance Culture

The Performance Improvement journey has resulted in some positive changes in the performance culture:

KPIComparisons

Each PI team has identified its top three to seven KPIs which are being tracked and compared across sites each

month – commencing from July 2008. Such KPI comparisons have led to discussions on areas where there have

been significant performance gaps within the Group and often, these have resulted in improvement project

opportunities.

BottomlineOrientation

Most projects are being identified with a view towards impacting bottom line improvement and most of the projects

are conceptualised along with an expected financial benefit.Knowledge Exchange with a Purpose

Within the PI teams, knowledge exchange is principally to address common operational issues, address common

weaknesses and pain areas and significant KPI gaps. For example, Blast Furnace PIT and Coke PIT have discussed

how to manage operations at lower production levels in a safe manner and without damaging the equipment.

As part of the agenda, the PIC meetings drive specific knowledge exchange opportunities.People Involvement

The PI Team (PIT) meetings and the resulting project opportunities have had a positive influence on involving more

people at each site in taking on improvement projects and participating in PIC / PIT reviews.

With a legacy of over 100 years, Tata Steel already had practices in place to manage its operations and situations. In

the last twenty years, it has explored and practiced a number of improvement initiatives with TQM forming the holistic

approach to manage its processes by quality.

Tata Steel believes that this approach will ensure sustainability while continuously improving its current practices to

keep pace with changing market requirements.

It constantly strives to break away from the common place and to set new industry benchmarks for others to emulate.

Daily Management is the fundamental of TQM. Any organisation, before it wishes to improve continually or wants to change innovatively, first needs to institutionalise processes leading to long-term sustenance of its performance. Daily Management provides this solid foundation for sustenance to any organisation. This book is about the discrepancies such as no clear roles and objections, non-systematic identification of KPIs, inadequate knowledge of SPC tools, etc; found in Tata Steel in 2005. Post the diagnosis in 2005 the company established a standardised approach for integrating daily management activities in various functions such as operations, maintenance, and services, one learns. Pankaj Kumar and his team in the TQM department of Tata Steel prepared a ‘Daily Management Workbook.‘ This organised activity spread the concept of Daily Management and its implementation process to the entire workforce, exceeding 35,000 of the company. This workbook became so popular that it was demanded by many people even from outside Tata Steel. In 2008, Tata Steel India operations won the Deming application prize. In the process to challenge the award, Tata Steel considerably improved many aspects of its processes and systems by deploying Daily Management. The mindset of its front-line workforce changed remarkably. The authors Yukihiro Ando and Pankaj Kumar have summarised a very practical book, which explains the concept of daily management and how to deploy the same in a systematic manner in any organisation. Detailing the basic principles of Daily Management as well as the steps to be followed to implement the concept in a plant, this winner of ‚The Masking Book Medal 2011‘ also includes how Tata Steel used this process and promoted the Daily Management concepts across the company to reap rich fruits. This book is for those who want to improve their organisation by applying daily management in the TQM way.

She Leads a team of 5 managers and senior managers to establish the Daily Work Management, Quality Management and Small Group Activities (initiative for frontline employees) at Tata Steel.The TQM department of Tata Steel was formed in 1992 to integrate and focus on all improvement initiatives in the company. After achieving “Deming Award” in year 2008 the organization is now preparing to challenge JQM (Japan Quality Medal).

It may not make sense to many in the steel industry to invest in various quality control drives during such a tough time, but for Tata Steel, pursuing such goals has been a passion and the very essence of its existence. The company has recently won the Deming Application Prize for its excellence in total quality management (TQM), the only steel company in the world outside Japan to bag the award.

The steel major, which in earlier years had been saving around Rs 200-300 crore annually, would, aided by Deming this year (2008-09), target to save around Rs 600 crore.

"This is not because of the effect of market prices or impact of raw material costs going up or down, it is purely internal—from improvements in the work processes the company has brought about," said Avneesh Gupta, TQM chief of Tata Steel.

The steel major’s commitment to the best practices

can be gauged by the remarks of Tata Steel managing director B Muthuraman recently: "In every walk of life, whether it is in running a business, in sports or education, if you take care of the processes, the results will take care of themselves." He was speaking at the ‘JJ Irani award for excellence in education in Jamshedpur schools’.

Tata Steel, which expects to emerge strongly from the ongoing global recession, has already put in place a revised plan for the second half of 2008-09 (Oct onwards). The plan includes techniques/benefits learnt in Deming and the target has been set in crores.

Various items, right from the raw material side to marketing & sales, several daily management items which could be done better while bringing about cost reduction, cost-cutting contributions from its ‘Aspire’ projects (problem solving, Six Sigma application, etc), efforts from supply chain management by following inventory replenishment models

while ensuring that whatever the customer was wanting was readily available to him) have been listed.

"It (Deming) is a very robust and a very involving process in which you cannot escape the enlightenment at the end of it," Gupta told FE here recently. It is only the application of the steps involved in Deming and the consequent effects that emerged gives one the real insight into its working, he added.

"Each key performance indicator (KPI) is being tracked by the company, like zinc consumption, coal rate, coke rate, etc, including whether any delays were taking place or not," Gupta said. Even the monthly performance improvement review of the company’s TQM efforts by chief operating officer HM Nerurkar ensures that things were moving in the right direction

Tata Steel launched Vision 2007 on May 2, 2002. 2007 is a landmark year for Tata Steel as it will be its centenary

year. The new Vision envisages a relentless effort, by the employees of the company, to achieve the unique

distinction of being the word's best wealth creator in the steel industry. It also continues to emphasise the age-old

philosophy of the Tata's, to return to society more than what it takes from it.

On the first anniversary of the launch of the new Vision, the company has formulated a programme that seeks to

unleash the creative potential of all its employees through a combination of the best practices and improvement

methodologies. The programme, called ASPIRE, stands for ASP initiatives to retain excellence.

Under this programme, the company has combined some of its well-proven techniques of improvement, such as total

productive maintenance - the Japanese technique of total employee involvement, by complete ownership of

equipment and work processes. Similarly, it has also combined the best practices of Six Sigma, TOP, suggestion

management, quality circles and even the Tata group's Tata Business Excellence Model into the new ASPIRE

programme.

Learning from its success of using trained facilitators in the TOP programme, the company has decided to extensively

train about a hundred middle management executives as Black Belts and TPM co-ordinators to work as full time

facilitators of the programme. There will be thousands of Green Belt projects which will be mentored by these Black

Belts. They will also train their colleagues and other employees as Green Belts, to enable them with superior problem

solving techniques.

All the improvement initiatives in Tata Steel will henceforth be facilitated actively by the Black Belts and TPM co-

ordinators. Even the facilitators of its earlier, highly successful programme will undergo a rigorous training regime in

project selection and problem-solving techniques, that the company will bring in with the ASPIRE programme.

The programme is also an open platform to incorporate new improvement techniques as they appear on the horizon.

It is already contemplating the adoption of techniques such as value innovation, theory of constraints and lean

manufacturing. The company will also be inviting the guru of value innovation, Professor Chan Kim of INSEAD

University, to kick-off value innovation projects in the company. Tata Steel is also drawing up a three-year rolling

programme for ASPIRE, to draw out the creative potential of the employees whereby they can contribute to the

achievement of Vision 2007.

The launch of the ASPIRE programme by Mr Muthuraman, managing director, along with Mr Singh, president, Tata

Workers Union, kickstarts the improvement initiative and makes a case for all employees of the company to raise

standards and to take the company to greater heights of excellence.

Aspire has become Tata Steel’s brand for internal improvements through involvement of its employees. The month of

November is celebrated as the 'quality month'. On the first of this month (November 1, 2006), Tata Steel re-dedicated

itself to Aspire with the objective of emphasising the role of improvement initiatives in Tata Steel’s ever growing

aspirations. The programme focused on motivating the employees in dedicating themselves to TOC (Theory of

constraints), TQM (Total Quality Management), and technology, in the company’s journey toward becoming a world

leader in steel.

Dr T Mukherjee, deputy managing director (steel), Tata Steel, set the perspective by emphasising the necessity to

dream big, and described how Tata Steel, through the Aspire programme, is converting its dreams into reality.

The programme was ceremonially launched by B Muthuraman, managing director, Tata Steel, and Shailesh Kumar

Singh, deputy president, Tata Workers Union, in the presence of many senior officials, union office bearers and

employees, on the evening of November 1, 2006. The glittering function was held inside the Jamshedpur works of

Tata Steel. The focus on TOC, TQM, and technology has been captured at Aspire with T3 ('Teen se jeet’).

Speaking on the occasion, Shailesh Singh stressed the importance of the role of each and every employee in helping

Tata Steel achieve its aspirations through people involvement. He stressed the need for employees to take more

training and increase their knowledge to improve their individual and organisational performance.

On the occasion of the launch, B Muthuraman emphasised the need for synergy and integration in the efforts of the

employees through TOC, TQM and technology initiatives. He asked each and every employee to re-focus on the

fundamentals of TOC and TQM. Also, in the changing scenario, each one should build confidence to develop their

own technology rather than depending on others. Muthuraman stated that Tata Steel is aiming to become one the top

steel companies in the world not only in size but in all other ways like corporate governance, human resources,

product and service quality, and so on. Quoting from Patanjali, he stressed the setting of extraordinary aspirations

and then aligning all actions towards the same.

The Aspire programme, introduced in May 2003, evolves round the philosophy of setting aspirations (which may be

beyond the current capability), then getting determined about reaching those aspirations, mustering required

resources which leads to achievement, and thus the self confidence to aspire for more.

With the focus on T3,  Tata Steel is making another confident leap forward to earn its right to become one of leading

steel companies of the world.

Performance Improvement TeamsTo leverage synergies between Tata Steel and Corus and accelerate performance improvement through learning and sharing, a Performance Improvement (PI) Committee had been constituted. Under this committee 7 PI groups started functioning, identifying Key Performance Indicators (KPI’s) to be improved and improvement projects to be undertaken across various sites of the Tata Steel Group.The formation of the Performance Improvement Committee (PIC), was part of systemising Process Improvement in the Tata Steel Group.

Lean ManagementA workshop comprising all of the CI Managers from the individual BU’s was organised. The objective was to understand the kind of knowledge and skills that were required by line managers to accelerate the rate of improvement. The output of this, along with a summary of all training activities being undertaken at BU level was to centralised into a common training programme.

Strategy DeploymentA Strategy Deployment process, backed by an established standard was launched for all BUs. The standard described what a BU must have in place with regards to Strategy Deployment, but did not dictate how these activities were to be carried out. A ‘How To’ guide was published in 2008 to help BU’s fill in knowledge gaps. An audit of the process was also completed in all BU’s. All BU’s were required to have auditors who participate in cross BU audits. An audit score was produced and reported back to the BU management team, with improvement opportunities. All BU’s had a target of achieving an audit score of six in 2008-09

TrainingContinuous training was carried out for all CI coaches. During 2007, a course was developed entitled ‘How to Improve Flow’ – which was intended to help BU’s implement the Theory of Constraints (TOC). Six different BU workshops were run and many had attributed significant increases in throughput and reductions in working capital due to the knowledge gained in the workshops. Courses were also held on strategy deployment to help BU’s in achieving the audit target of six.

Knowledge SharingKnowledge sharing was a fundamental cornerstone of CI and a number of activities had been undertaken to improve performance in this area. A bi-monthly newsletter called ‘Improving Corus’ had a wide circulation and contained information regarding good practice and contact details for employees to connect with others who had faced similar problems for themselves. The CI Gateway was also made more user friendly. During 2007-08 many exchange visits had also taken place between Corus and Tata Steel.

TBEMMany BU’s continued to assess how TBEM could be used to drive business excellence. In order to facilitate the process, Ashorne Hill Management College had been established as the European centre for TBEM training. A number of courses have helped BU’s understand the building blocks required to achieve business excellence and how TBEM could help.

Process Improvement – A continuing initiative

Over the years, Tata Steel has placed a continuous emphasis on improving processes, with a view to consistently

increasing efficiencies, enhancing quality, and thereby achieving better performance benchmarks in all areas. The

various initiatives taken by the several companies in its operations across the world have seen the development of

several models, that have sustained over the years and have now become institutions. These initiatives typically have

been designed to encompass in their fold all the people down the line, so that process improvement becomes a way

of life.

Performance Improvement TeamsTo leverage synergies between Tata Steel and Corus and accelerate performance improvement through learning and

sharing, a Performance Improvement (PI) Committee has been constituted. Under this committee 7 PI groups have

started functioning, identifying Key Performance Indicators (KPI’s) to be improved and improvement projects to be

undertaken across various sites of the Tata Steel Group.

The formation of the Performance Improvement Committee (PIC), is part of systemising Process Improvement in the

Tata Steel Group. Six new group chairs have been put in place for the key work areas. The group chairs will report on

progress directly to the PIC. This will ensure that Continuous Improvement (CI) will become central to how the groups

operate.

Initiatives in EuropeThe emphasis of the CI activities in Tata Steel’s European operations are focussed on providing Business Units

(BUs) with the tools and knowledge to be able to drive the business forward under the banner of Continuous

Improvement using Lean Principles. During the year gone by, the focus has been on transferring the knowledge and

capabilities into line management and making the link between strategic delivery and CI through a common Strategy

Deployment process.

 

 

Lean ManagementA workshop comprising all of the CI Managers from the individual BU’s was organised. The objective was to

understand the kind of knowledge and skills that were required by line managers to accelerate the rate of

improvement. The output of this, along with a summary of all training activities being undertaken at BU level will now

be centralised into a common training programme.

Strategy DeploymentA Strategy Deployment process, backed by an established standard was launched for all BUs. The standard

describes what a BU must have in place with regards to Strategy Deployment, but does not dictate how these

activities are carried out. A ‘How To’ guide will be published in 2008 to help BU’s fill in knowledge gaps. An audit of

the process was also completed in all BU’s. All BU’s are required to have auditors who participate in cross BU audits.

An audit score is produced and reported back to the BU management team, with improvement opportunities. All BU’s

have a target of achieving an audit score of six in 2008-09.

TrainingContinuous training is carried out for all CI coaches. Today, approximately 450 coaches throughout Europe have

been trained. During 2007, a course was developed entitled ‘How to Improve Flow’ – which was intended to help

BU’s implement the Theory of Constraints (TOC). Six different BU workshops have also been run and many have

attributed significant increases in throughput and reductions in working capital due to the knowledge gained in the

workshops. Courses are also held on strategy deployment to help BU’s in achieving the audit target of six. The Corus

courses have also been made available to the wider Tata Group and Tetley will start sending attendees this year.

Knowledge SharingKnowledge sharing is a fundamental cornerstone of CI and a number of activities have been undertaken to improve

performance in this area. A bi-monthly newsletter called ‘Improving Corus’ has a wide circulation and contains

information regarding good practice and contact details for employees to connect with others who have faced similar

problems for themselves. The CI Gateway has also been made more user friendly. The vision for 2008-09 is to adopt

a web based system that is more searchable and will enable employees who are part of CI to connect on a real time

basis to share and learn. During 2007-08 many exchange visits have also taken place between Corus and Tata Steel.

There have been many examples of good practice sharing and this will continue throughout 2008-09. Corus is also

participating in the European Network Forum (ENF). This forum will initiate a number of special interest groups open

to all Tata enterprises and cover jects such as TBEM and Innovation and will provide the platform for inter

organisational knowledge sharing.

TBEMMany BU’s continue to assess how TBEM can be used to drive business excellence. In order to facilitate the process,

Ashorne Hill Management College has been established as the European centre for TBEM training. A number of

courses have helped BU’s understand the building blocks required to achieve business excellence and how TBEM

can help.

 

Initiatives in Indian Operations

ASPIRE T3 – The 3 Pronged approachA strong improvement framework which supports a culture of improvement has been put into place. ASPIRE is the

Tata Steel way of implementing improvements that are currently focussed on three T’s (ASPIRE T3) which is an

integration of 3 models : TOC (Theory of Constraints); TQM (Total Quality Management); and Technology. ASPIRE

T3 provides the platform for setting aspirations and enabling breakthrough and continuous improvements.

• Theory of Constraints (TOC):The key objective is to develop a competitive edge based on reliable delivery service and thereby create value for

customers. One of Tata Steel’s key initiatives, this provides more value to customers while also improving realisations

and share of business with select customers and market segments.

This programme has 3 major components:

1. Building and selling win-win market offers based on delivery service reliability.

2. Building supply chain capability for reliable service.

3. Building operational exploitation capability.

Tata Steel has so far rolled out two specific market offers based on this model:

a. Pull based Replenishment offer for its distributors: Through this model, the Company is able to cater to the

final customer needs in a proactive manner and is also able to control its pricing structure on a real time basis,

thereby contributing to its bottom line.

b. VMI offer for OEM customers: This helps ensure high availability to key customers. Customers are

reciprocally sharing the gains with Tata Steel – in the form of lock-ins and even an increase in share of business.

c. The Company plans to roll-out two more market offers in FY 2008-09 (Reliability and Rapid Response offer

to customers for whom timely delivery is a critical success factor).

A robust back end supply chain redesign based on TOC buffer management principles and its implementation has

helped in achieving a service reliability of over 83% (weighted month average of FY 2007-08 for FP, LP, Tube and

Wire divisions) which is a benchmark in the steel industry.

Tata Steel adopted Critical Chain Project Management (CCPM – project management the TOC way) to plan and

execute projects (maintenance and expansion) at the earliest within the limited means. In the past two and a half

years Tata Steel has applied CCPM in more than 55 projects to complete projects 10% to 35% ahead of earlier

planned schedule.

• Total Quality Management (TQM):TQM provides the fundamental structure for customer and quality focussed continuous improvements. The key TQM

elements as practised by the company are:

a. Policy management – A structured strategy development and deployment process.

b. Daily management – A structured methodology to carry out activities on a regular basis to attain the purpose

of the job efficiently involving operating employees.

c. Problem Solving and Task Achieving – A structured methodology for identifying root cause and solving

major problems or accomplishing major tasks.

Tata Steel is planning to challenge the Deming Application Prize in FY 2008-09. This prestigious prize is presented

by JUSE, Japan to a company that has achieved distinctive performance improvements through the application of

TQM. Intensive preparations are underway with mock audits being conducted by external and internal auditors to

identify areas for improvement. In the process, considerable improvements have been made in bringing about a

process orientation across all levels in the organisation.

• TechnologyThe goal is to foster a technology mindset amongst a cross section of employees. The ASPIRE T3 Knowledge

Management Programme - including Knowledge Manthan and Manthan Ab Shop Floor Se - provides the platform.

From FY 2006 to FY 2008, 10650 employees have been engaged in the process of knowledge creation and

dissemination.

Process Improvement in South East AsiaNatSteel Asia has initiated process improvements in the past and current financial years based on impact on

operations.

The main thrust in improvements has been made in different areas, with a focussed intent of having quantifiable and

measurable process improvements, with a resultant impact on productivity and efficiency.

At the Meltshop, the optimisation of oxygen Virtual Lancing Burners brought down EAF electricity consumption from

300-310 kWh/mt to below 290 kWh/mt. Through strategic sourcing, the Company saved S$326,000 from better

purchasing of fuel oil, ferro-alloys, graphite electrodes and coke.

The establishment of activity-based Time Models for Mesh Welding Machines, together with data downloading led to

improved production planning and productivity. Improved processes and machine capabilities enabled an increased

capacity from 2,600 tonnes/month to 4,500 tonnes/month in BP Caging. In the area of logistics, a consultant study

was implemented to better optimise finished goods space utilisation through alternative stacking methods and

material handling systems.

The installation of a Global Position System for all prime movers enabled tracking of every delivery made to

customers. In Total Operational Performance, the Company identified targeted savings of S$16 million/year across

different departments and successfully implemented 99% of them to achieve a S$19 million of savings in FY 2007-08.

Process efficiency was achieved in Vietnam across Sales and Distribution. Improved product quality has resulted in

the company being awarded the ISO Gold Cup by the Ministry of Science and Technology.