“TQM PRACTICES IN

TATA STEEL”

Presented by

Abhinav Tushant

1018002

DMBA – “B”

Guided By:Mr. Pankaj Kumar, Head (TQM), Tata Steel

&Prof. Biranchi Prasad Panda, School of Management , KIIT University.

Objectives: To study and find the Quality Management Practices performing in world and Tata steel India.a) To study the evolution and Deployment of Quality

Management Practices in World by research papers.b) To study the journey of Tata Steel in field of Quality and

TQM Practices at Tata Steel.

Scope: The study of Quality Practices in world was done by selecting 22 research papers and in Tata Steel India, Jamshedpur.

Methodology & Procedure: It is a study of concepts and practices and their implementation across world and in Tata Steel India. The project was divided into study of research papers in 1st month of internship which can give better understanding of different practices in world and in 2nd month there was study on Tata Steel India from Description of TQM practices which was given to JUSE for applying Deming Grand Prize, 2012.

Vision: “benchmark in “value creation” and “Corporate Citizenship” through the excellence of its people, its innovative approach and over all conduct”

Three operations:1) Indian Operations–10mtpa – Jamshedpur.

2) European Operations–18mtpa-UK, Germany, France, Belgium

3) South Asia Operations–4mtpa–Thailand, china, Australia etc.

TATA STEEL“In a free enterprise, the community is not just another stakeholder in the business, but, in fact, the very purpose of its existence” - J. N. Tata.

Tata steel was Founded by J.N. Tata in 1907 near a village called Sakchi (now Jamshedpur). Tata steel is the world’s second most diversified steel producer with a crude steel production capacity of 26.5 million tons per annum. A Fortune 500 company, the Tata Steel Group recorded a turnover of US $26.13 billion in 2011-12, employing over 80,000 people in nearly 50 countries.

TOTAL QUALITY MANAGEMENT (TQM)Total Quality Management (TQM) is an enhancement

to the traditional way of doing business. It is a proven technique to guarantee survival in world-class competition by making continuous improvement a culture and focusing on customers.

Total – Made up of the whole

Quality – Degree of excellence a product or service provides.

Management – Manner of handling, controlling, directing etc.

TQM requires basic focuses on: A committed and involved management customers, both internal and external Effective involvement and utilization of work force Continuous improvement Treating suppliers as partners Establish performance measures for the processes

EVOLUTION OF QUALITY MANAGEMENTIn Evolution of Quality first comes the invention of techniques

then comes methodology.

Evolution of Techniques: A technique is a specific activity with a clear and well-defined purpose.

Operator–End of 19th centuryForeman–Start of 20th centuryInspection–1930-small groupSPC – 1940–Walter ShewartDOE– Around 1945Taguchi–1950–Genichi TaguchiQuality Management System–1960–for proper management systems of people, material and machine

Evolution of Methodologies: A methodology is a structured set of guidelines or activities to assist people in undertaking research or intervention.

The Methodologies of selected papers were Case Study (9), Simple Study (7) and Research (6).

Trends in world: No. of publication of TQM as the people was having believe in TQM for Improvement during year 1991 to 1994 but after 1996 No. of Publication had decreased as manager were impatient and needed improvement in short time. The people shifted their believe and implemented methodology like six-sigma & lean production.

GIST OF LITERATURE SURVEY

o Out of 22 research papers,10 papers of TQM, 7 papers of TPM, 2 papers of Six-Sigma, 2 papers of ISO 9000 and 1 papers of Lean. Out of all selected papers 16 were of outside India like Iran, UK, Japan, Ireland etc. and 6 were of Indian origin.

The journey was divided into 5 phases, they are: Standardization (1988-1992) Modernization of Mind (1992-1996) Cost competitiveness (1997-2004) Global outlook growth (2005-2008) Seeking World class (2009 & beyond)

JOURNEY OF TATA STEEL IN FIELD OF QUALITY

Standardization (1988-1992): to initiate the improvement and employee engagement. This phase comprises with ISO 9001 standard and start using IT system and Quality circles.

Modernization of Mind (1992-1996): Now Top management identified that to make continuous improvement in organization it is necessary to modernize the mind of employees for making continuous improvement as a culture of jobs. This phase initiates Value Engineering (VE), Quality improvement projects (QIP), Benchmarking, Total Operative Performance (TOP), Total productive/preventive Management (TPM and its pillar) and Annual Quality improvement plan (AQUIP).

Cost competitiveness (1997-2004): making company a cost competitive company as compare to its competitors. In this Phase basic TQM tools, Knowledge Management, Six-sigma and TOP were introduced. There was a revisit of vision and mission and improvement in EVA is done.

Global outlook growth (2005-2008): starts with TQM diagnosis for DAP 2005, started framework for Integrated TQM (complete value chain), ASPIRE, TOC, Technology sufficient and major contribution in area of customer awareness to delight customers.

Seeking World class (2009 & beyond): To be better from its competitors in world which starts with the end of DAP feedback in 2008 and there was TQM diagnosis for DGP Feedback in 2011. TSL had codifying the TATA Steel Way of creating and sustaining change. TSL introduce CQA, Kar Vijay Har Shikhar, and Benchmarking in innovation practices and Expert creation.

TQM PRACTICES IN TATA STEEL

“KVHS” was included as a focused problem solving approach to help TSL achieve its EBITDA aspirations. The Theory of Constraint (TOC) methodology was introduced under TQM framework specifically to ensure customer delight through logistics excellence.

In order to institutionalize TQM, the integrated TQM framework has been extensively promoted. Based on the business needs, post DAP, the framework was strengthened by introducing Cross Functional Management as one of the key vehicles to ensure robust systems like Quality Assurance, Safety etc.

Integrated TQM Framework

Policy Management: The Policy management was first introduced in latter half of 1960s by Bridgestone Company and is defined as activities that are conducted, with the cooperation of the entire company, to establish and efficiently achieve mid- and long-term business plans and short-term business policies based on fundamental management policies. The Policy Management is basically Strategic Planning which follows the principles of PDCA (Plan, Do, Check, Act).

It had been diagnosed in Tata Steel by: 1) MD Diagnosis-Sr. Executives & MD-twice in a year - Check for Robustness of Planning. 2) 4 student analysis- identify the weak areas in policy deployment.

Daily Management: Daily Management system was introduced in 2006 with the objective of achieving stability through identifying and removing abnormalities and in the process, achieving incremental improvement. It is defined as all the activities that must be carried out to efficiently achieve the business objectives of each department are responsible for. The steps of the DM system at TSL were mainly: (a) KPI Identification by departments based on customer requirement, role of the function and criticality of the process, (b) Process Standardization (SOPs) (c) Designing of Control Plan to keep the process stable, (d) Monitoring of Key Performance Indicator (KPI) as per control plan/ KPI tracker, (e) Identification of abnormality and (f) taking corrective and preventive action.

TQM VEHICLES

Employee Involvement: The Small Group Activity (SGA) at TSL includes TPM Circles, Quality circles and “MASS” teams to engage employees in improvement activities and thereby create a vibrant work place and improve the problem solving skills of employees. The number of Kaizen per circle has increased at the rate of more than 10% per annum whereas the employee involvement has reached to 93% of the total frontline employees.

Tata Steel is spending about Rs 1 core each year on Shabashi Reward (atleast one SGA each month) and Suggestion Award (10% of saving done by the company in a year with maximum of Rs 50,000 for period of 5 years if the saving from that suggestions are recurring).

Cross Functional Management: A job is chain of many task, if one task is not done than there is problem so it is also very important. It has introduced recently to Tata Steel for planning and easy communication among different departments. to ensure robust systems like Quality Assurance, Safety etc.

Tata Steel (TSL) had been a true follower of TQM with cultivating continuous improvement in its organizational culture and seeking to be a world class company.

Overall EBITDA has grown by 10% and maintained much better than its competitors.

Overall revenue has grown year on year by 10% from FY05. It has continuously improved Quality with reduction in defects at customers

end by 50% (4500ppm to 2500ppm) from last 5 years Continually works with the select group of customers to generate benefit for

them by identifying ideas and jointly implementing them. It has significantly enhanced its supply chain performance by applying ‘Theory

of Constraints’ and thereby improving its Due Date Performance (DDP) to customers.

TSL has improved its current (New Product Development) NPD process by analyzing the gaps in earlier years and incorporating the learning.

TSL’s sales have been increasing in both Flat and Long products, at the same time, has brought significant reduction in customer claims (89% in FP & 73% in LP).

The captive coal cost and iron ore cost has been maintained 1/5th of market price.

FINDINGS

Conclusion: Tata steel practiced all the Quality management practices following the Group values sincerely by top management. Tata Steel has followed TQM philosophies efficiently by TQM Vehicles. The effect of sincerely implementation of Quality Management practices made continuous improvement a culture of company in every section and practices done by the company, whether it is in field of Steel business or city development. This helps the company to compete throughout the world and being a world class company.

Recommendations: (a) TSL have made a good facilities for TQM training for higher level employee which should be done for lower level employees who are more related to shop floor because they knows more about job done.

(b) TSL should give importance and develop R&D works i.e. self technology sufficient by developing and improving their R&D works.

CONCLUSIONS & RECOMMENDATIONS

Thank you