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Profitability and Leadership

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Tata Business Excellence Model (TBEM) and JRD QV helped improve the bottomline, too. Says Irani: "Productivity is more than double of what it was five years ago." It was in 1995-96 that an extensive training programme was taken up by the senior management of the company including the managing director, six vice presidents, and 5,800 officers. Once the top management was convinced of the need to develop JRD QV model, the entire organisation was geared up. A senior executive was assigned as the `category owner' to each of the seven categories that constitute TBEM-J.J. Irani was put in charge of leadership; B. Muthuraman, Vice-President (CRM) would speerhead strategic planning; Firdose Vandrevala, Vice-President (Sales and Marketing) would fine-tune customer and market focus; N.P. Sinha, Vice-President (Engineering) would shore up information and analysis; S. Pandey, Vice-President (HR) would handle human resources; T. Mukherjee, Vice-President (Operations) would oversee process management, and Manzar Hussain CEO in the MD's office would watch over business results.

Leadership is critical. Hence, TBEM gives it the second-highest weightage while evaluating a company. An important aspect of the model is continuous improvement and learning. As part of the work systems, Tata Steel felt it was not only necessary to encourage continuous improvement, but also in keeping with the changes in the external environment, to institutionalise the initiative to improve. Erog, a programme of total operational performance was launched at its iron and steel works at Jamshedpur. The single biggest achievement of the programme has been its ability to create a climate, whereby, its own people throw up ideas and innovations so as to make steel competitively and efficiently.

Tata steel chose LD Shop No. 1 to initiate the pilot wave. It was the right choice since the steel melting shop is referred to as the heart of the steel plant, being at the end of the iron-making process when hot metal is converted to liquid steel. Moreover, it was here that consultancy company McKinsey had identified the maximum potential for cost savings. LD Shop No. 1 has six divisions and nine sections. Each section with a common workflow and a common cost-base was defined as a unit. One team was assigned to each such unit. During a two-week period, each team holds intensive sessions to study and analyse the processes and the cost base of the section. Then it interacts with the workers and supervisors to go through each process and question the way it is done. This way Key Performance Indicators (KPIs) are calculated. This gives an indication where the maximum impact can be obtained with the minimum investment. For each process and at every stage the cost, efficiency and productivity parameters are benchmarked against the best in the world under similar conditions. The TOP initially looks at the details of the manufacturing and production process, and encourages people working on the process to come up with ideas that gives a better, cheaper, and more efficient way of doing it.

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