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 Performance Management
System
Growth in business Identify & reward strong performer
Flexibility in decision making Offers development opportunities
Encourage teamwork Transparent 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
Company Ranking Score
TISCO 1 131
Usinor (Russia) 2 129
Posco (Korea) 3 127
CSN (Brazil) 4 123
Baosteel (China) 5 121
China Steel (China) 6 119
Gerdau (Brazil) 7 118
Nucor (US) 8 116
Car-Tech 9 112
Nippon Steel (Japan) 10 111
Severstal (Russia) 10 111
Dofasco (US) 11 109
Objectives of the ‘JRD QV Award’ For
Excellence in Quality
The 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

Award Points

Recognition for serious 450-500

adoption

Recognition for active 500-600

promotion
The JRD QV Award >600

Sustained Excellence Award For Tata Group companies

that achieved sustained
performance growth for 3
years following the receipt
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 Companies Points scored on the TBEM Scale
Tata steel 666
Titan Watches 524
TCS 515
Tata Engineering 503
Tata Steel-Tubes 501
Tata SSL 463
The Tinplate Company 443
Tata Honeywell 436
Telcon 407
Tata Metaliks 360
TRF 356
Tata International 353
Tata Refractories 337
Winners of Different Categories of JRD QV Awards
For 2002

Award Company

Recognition for Tata SSL

Serious adoption
Tata Steel – Tubes SBU
Recognition for active Tata Engineering CVBU
promotion Titan
TCS
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