IMPLEMENTING TATA BUSINESS

EXCELLENCE MODEL IN TATA STEEL

Introduction:

In April’01,TATA Steel (TISCO) was ranked as the world’s lowest cost producer of steel. Operating Cost : $ 75 Finished Steel : $ 152 Reason of achievement : Implementation of TBEM. TISCO was the first and only company to achieve the JRD QV award Objective of TBEM was to achieve business excellence and establish themselves as leaders in their respective industries.

Achieving Business Excellence Through

TBEM

Business Exellence It is achieved by integrating or synergizing all the areas of business-

Processes, systems, technology, productivity & so on.

It focuses on the holistic performance of the organization rather than the performances of a part of the organization.

“In Search Of Excellence” The significance of ‘organizational excellence’ was not much appreciated in the corporate sector.

Earlier organization focused on a single aspect to improve quality.

Focusing on a single aspect was not sufficient to improve overall performance of organization.

Malcom Baldrige Model In 1987, Malcom Baldrige proposed a business excellence model for achieving organizational excellence in quality management.

Companies that successfully adopted the model were given the Malcom Baldrige National Quality (MBNQ) value award.

This award was conferred exclusively on the US based companies.

TBEM TATA Group introduced the TATA Business Excellence Model in 1996.

The TBEM framework was brainchild of G.Jagannathan, CEO of TQMS.

The management of the group aimed at bringing about organizational transformation, which was necessitated by the rising global competition.

Objectives of TBEM To improve the performance and efficiency of the TATA Group in various business areas to enable them to successfully overcome the global competitive challenges.

The attitudes & perceptions of people had to be changed first before a major change could be brought about in the functioning of the organization.

Tata Quality Management Services Tata Quality Management Services (TQMS), a division of TATA Sons, was given the responsibility of implementing TBEM in various TATA Group companies.

TQMS collaborated with Tata Management Training Center (TMTC).

TISCO – Implementing TBEM Tata Steel (TISCO)

Tata Business Excellence Model (TBEM) was first introduced & implemented in 1996 in Tata Group.

Idea behind implementing TBEM.

Innovation program & reducing cost.

Since early 1990’s, TISCO laid more emphasis on quality across all its division.

TQM Model

TISCO Focus

Focused aspect include Internal customer focus & External customer focus.

What TISCO did to reduce cost & Frame its business?

Reduced its workforce.

Stopped use of Manganese.

Efforts to reduce its product delivery time.

Used IT as a Strategic tool.

Redesigned two core business processes

1) Order generation & fulfillment 2) Market development

The program begin with a study on cost competitiveness & its aim was to enhance customer focus, enabling better credit control & reduction of stock.

TISCO – Implementing TBEM Implemented SAP

What is SAP R / 3 ?

TISCO integrated SAP

By Nov 2000, SAP was implemented at 50 locations in 26 Cities.

Advantage.

TISCO – Implementing TBEM Business process more efficient

Customer service improved

Raw material cost came down

1998 US $ 200/tonne

2000 US $ 140/tonne

Cost of carrying inventory

1999 Rs 190/tonne

2000 Rs 155/tonne

Performance Ethic Program (PEP) Promote young people

Adopting the best people practices

Absence of Hierarchy

Cut the management staff

PEP focused on Leadership & Human Resource aspects of TBEM

Organizational Structure

Growth in businessFlexibility in decision makingEncourage teamwork

Performance Management System

Identify & reward strong performerOffers development opportunitiesTransparent performance appraisals

Also focused on conserving the environment

Company received ISO 14001 certification

Analysis of negative impact on atmosphere

Four-tier review conduction

Substantial reduction in energy, resource consumption and discharge of environmental pollutants

TISCO’s score –

2001 - 649

2002 - 666

Tata Business Excellence Model –

The Future

Out of 80 companies in the TATA group, around 50 had signed the BEBP agreement by 2002.

Implementation of TBEM was beneficial for TISCO and many Tata Group companies.

Ishat Hussain, former executive director of Tata Sons, explained the benefits of TBEM TBEM is a very process oriented approach to management.

It integrates all the business processes.

It helps to develop a structured environment to conduct business.

The average score of the Tata Group companies implementing TBEM increased from 290 to 450 between 2000 and 2002.

Limitations of the process

The process does not automatically translate into higher profits.

It cannot replace judgement and intuition.

It cannot be an end in itself.

Modifications made by the TATA Group Existing parameters were redesigned and a few more parameters of business excellence were included.

It included:

- new guidelines for evaluating strategy planning and business results

- major focus on customer-orientation

- relationship with supply chain partners

- redesigning of work systems and processes

Knowledge management and technology acquisition were also regarded as important factors

WSD’s Ranking

CompanyCompany RankingRanking ScoreScore

TISCOTISCO 11 131131

Usinor (Russia)Usinor (Russia) 22 129129

Posco (Korea)Posco (Korea) 33 127127

CSN (Brazil)CSN (Brazil) 44 123123

Baosteel (China)Baosteel (China) 55 121121

China Steel (China)China Steel (China) 66 119119

Gerdau (Brazil)Gerdau (Brazil) 77 118118

Nucor (US)Nucor (US) 88 116116

Car-TechCar-Tech 99 112112

Nippon Steel (Japan)Nippon Steel (Japan) 1010 111111

Severstal (Russia)Severstal (Russia) 1010 111111

Dofasco (US)Dofasco (US) 1111 109109

Objectives of the ‘JRD QV Award’ For Excellence in QualityThe JRD QV Award was given to the Tata Group for achieving excellence in quality. The following were the objectives of the award.

To create awareness about the significance of quality, and enhancing customer satisfaction by delivering value in various streams of operations of the Tata Group.

To secure and uphold excellence and leadership in the competitive market through perfection in quality which will lead to recognition as ‘the best’.

Four Categories of JRD QV Awards

AwardAward PointsPoints

Recognition for serious Recognition for serious adoptionadoption

450-500450-500

Recognition for active Recognition for active promotionpromotion

500-600500-600

The JRD QV AwardThe JRD QV Award >600>600

Sustained Excellence AwardSustained Excellence Award For Tata Group companies For Tata Group companies that achieved sustained that achieved sustained performance growth for 3 performance growth for 3 years following the receipt years following the receipt of JRD QV Award.of JRD QV Award.

Tata Group Companies Competing for JRD QV award for 2002 and Points Scored by them on the TBEM Scale

Tata Group CompaniesTata Group Companies Points scored on the TBEM Scale Points scored on the TBEM Scale

Tata steelTata steel 666666

Titan WatchesTitan Watches 524524

TCSTCS 515515

Tata EngineeringTata Engineering 503503

Tata Steel-TubesTata Steel-Tubes 501501

Tata SSLTata SSL 463463

The Tinplate CompanyThe Tinplate Company 443443

Tata HoneywellTata Honeywell 436436

TelconTelcon 407407

Tata MetaliksTata Metaliks 360360

TRFTRF 356356

Tata InternationalTata International 353353

Tata RefractoriesTata Refractories 337337

Winners of Different Categories of JRD QV Awards For 2002

AwardAward CompanyCompany

Recognition for Recognition for Serious adoptionSerious adoption

Tata SSLTata SSL

Recognition for active Recognition for active promotionpromotion

Tata Steel – Tubes SBUTata Steel – Tubes SBU

Tata Engineering CVBUTata Engineering CVBU

Titan Titan

TCSTCS

Conclusion Implementing Tata Business Excellence model in Tata Steel helped TISCO to become worlds lowest cost producer of steel.

It helped them to enhance the quality of their business process.

Improve productivity of their company.

Adopted several innovative programs to improve its business performance & focused on reducing costs.

In November 2000, after the implementation of SAP in the business, TISCO’s customers were able to achieve information of their order status this improved its customer service.

TISCO not only aimed at achieving their business objectives & expansion of business but also focused on conserving the environment as well for which they received ISO 14001 certification.

Presented By :

Pooja Moudgill Reshmi Nair Shrikant Karande Ketan Nagotkar Bhavana Sonawane Punit Poojari