Tata Steel is the first integrated steel company in the world

8/8/2019 Tata Steel is the first integrated steel company in the world

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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)

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.

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

The quality movement in the Tata group is defined by a framework known as the Tata Business Excellence Model

(TBEM), which has been adapted from the renowned Malcolm Baldrige archetype. The model works under the aegis

of Tata Quality Management Services (TQMS), an in-house organisation mandated to help different Tata companies

achieve their business objectives through specific processes. These processes which have come to characterise the

Tata way of enhancing and conducting its business endeavours ² essentially relate to two factors: business

excellence and business ethics.

TQMS plays the role of supporter and facilitator in the journey that Tata enterprises undertake to reach the peaks of

business eminence while, at the same time, adhering to the highest ethical standards. There are, primarily, two tools

that define the pathways and scope of this journey. The first of these is TBEM and the other is the Tata Code of

Conduct.

While quality has always been one of the cornerstones of the Tata way of business, the need to introduce a formal

system that calibrated how different group companies were faring on this scale began being felt in the early 1990s.

That led to the institution, in 1995, of the JRD Quality Value Awards, the forerunner to TBEM. Named after JRD Tata,

the late chairman of the group and a crusader for the cause of business excellence in Tata companies, the awards

have now been incorporated in TBEM.

There is a formal arrangement that governs the relationship between individual Tata companies and the

superstructure that is the Tata group. In order to use the Tata nomenclature, a group company has to sign a contract

called the Brand Equity and Business Promotion (BEBP) Agreement. This places an obligation on the company

signing on to adopt TBEM as a means to attaining business leadership.

TQMS

TQMS helps Tata companies gain insights on their strengths and their opportunities for improvement. This is

managed through an annual process of 'applications and assessments'. Each company writes an application wherein



it describes, in the context of the TBEM matrix, what it does and how it does it. This submission is then gauged by

trained assessors, who study the application, visit the company and interact with its people. The assessors map out

the strengths and improvement opportunities existing in the company before providing their feedback to its leadership

team.

TQMS trains and certifies assessors, who are selected from across the group, and it designs and administers anassessment apparatus that helps them evaluate different Tata companies. The point person in each company is the

'corporate quality head', nominated by the CEO as the business excellence process owner. Typically, each company

has a network of business excellence people from a variety of functions and locations.

The commitment a company makes when it signs the BEBP contract compels it to attain explicit business excellence

scores over specific time periods. A result-driven scoring mechanism enables the company to track its progress over

time, and ensure that it keeps improving. There is also an annually administered, group-wide recognition system for

companies that exceed a certain score, thereby reflecting excellence, industry leadership and consistent

improvement.

Implicit in the TQMS approach is the belief that its wide-ranging methodology will enable Tata companies to become

exemplars ² on business as well as ethical parameters ² in their respective spheres.

TBEM

The TBEM methodology has been moulded to deliver strategic direction and drive business improvement. It contains

elements that enable companies following its directives to capture the best of global business processes and

practices. The model has retained its relevance thanks to the dynamism built into its core. This translates into an

ability to evolve and stay in step with ever-changing business performance parameters.



The TBEM matrix is used for the organisational self-assessment of Tata companies, recognition and awards, and for

providing feedback to applicants. In addition, TBEM plays three important supportive roles in strengthening the

competitiveness of Tata companies:

y It helps improve business excellence practices, capabilities and results.

y

It facilitates communication and sharing of best practices among Tata companies.y It serves as a working tool for understanding and managing performance, for providing planning guidance,

and for identifying learning opportunities.

The TBEM methodology comprises a set of questions that applicant Tata companies have to answer. Its main

objectives are to enhance value to customers and contribute to marketplace success; maximise enterprise-wide

effectiveness and capabilities; and deliver organisational and personal learning. The methodology is built on the

following set of interrelated core values and concepts: visionary leadership; customer-driven excellence;

organisational and personal learning; valuing of employees and partners; agility; future focus; managing for

innovation; management by fact; social responsibility; results and value creation; and systems perspective.

The core values and concepts of TBEM are embodied in seven categories: leadership; strategic planning; customer

and market focus; measurement, analysis and knowledge management; human resource focus; process

management; and business results. The TBEM system focuses on certain key areas of business performance:

customer-focused results; product and service results; financial and market results; human resource results;

organisational effectiveness results; governance and social responsibility results.

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Tata Steel is the first integrated steel company in the world