Improvement Initiatives
Over the years, Tata Steel has placed 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 in its operations across the world have gradually evolved to become recognised models of improvement and growth.
Since the formal incorporation of Total Quality Management (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.
Major Financial Initiatives for Performance Improvement
The Company’s financial strategy is focused on managing the capital structure effectively and to undertake financing based on the Company’s funding requirements for growth. In the past one year, the Company’s financing strategy was focused on raising capital from portfolio divestments and external financing methods to rebalance the capital structure and finance the growth projects. All these financing initiatives coupled with substantially better internal generations enabled improvement of the financial metrics of Tata Steel Group significantly.
With 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. The first phase of initiatives involving around 100 people across the sales & marketing teams 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.
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. During the year, a new cross-functional improvement initiative ‘Kar Vijay Har Shikhar’ was launched in India.
- 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. Two critical elements in creating value for customers and other stakeholders are the commitment to business excellence and innovative approach. Tata Steel does this by:
- Producing high quality products and services in ways that demonstrate effectiveness, efficiency and continuous improvement.
- Developing cutting-edge solutions in technology, processes and products.
The Company’s Quality and Research & Development Policies guide Tata Steel in its approach such that quality principles and practices are applied throughout the business using ISO 9001, the global quality and customer relationship standard.
In the face of high raw materials price volatility and an overall trend of rapidly increasing prices, the Procurement Division of Tata Steel India focused its efforts on keeping these trends 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.
Tata Steel India Corporate Objective
From the Vision of the Tata Steel Group, Tata Steel India has undertaken the following corporate objectives –
For Value Creation
- Creating value through enhanced offerings to customers
- To increase availability of products to customers in chosen segments
- Operational improvements for cost competitiveness
For Corporate Citizenship
- To become Indian steel industry benchmark in CO2 and dust emissions
- Achieve benchmark levels in safety performance
- Developing proficient and engaged employees
- Impacting a million lives – improving the quality of life in communities around us
Performance Improvement Initiatives
Performance Improvement Teams
Tata Steel has set up the Performance Improvement Committee 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.
As 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 in 2002, ASPIRE (acronym for Aspirational Initiatives to Retain Excellence) was launched on 2nd May, 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 - T3
The 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 comprises TOC (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.