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The Tata Group of Companies has always believed strongly in the concept of collaborative growth, and this vision has seen it emerge as one of India's and the world's most respected and successful business conglomerates. Over 395,000 people worldwide are currently employed in the seven business sectors in which the Tata Group Companies operate. It is the largest employer in India in the Private Sector and continues to lead with the same commitment towards social and community responsibilities that it has shown in the past.
The Tata Group of Companies has business operations (114 companies and subsidiaries) in seven defined sectors - Materials, Engineering, Information Technology and Communications, Energy, Services, Consumer Products and Chemicals. Tata Steel with its acquisition of Corus has secured a place among the top ten steel manufacturers in the world and it is the Tata Group's flagship Company. Other Group Companies in the different sectors are - Tata Motors, Tata Consultancy Services (TCS), Tata Communications, Tata Power, Indian Hotels, Tata Global Beverages and Tata Chemicals.
Tata SteelÂ formerly known asÂ TISCOÂ andÂ Tata Iron and Steel Company Limited was established in 1907 by Shri Jamshedji Nusserwanji Tata. It is the world's seventh largest steel company with an annual crude steel capacity of 31 million tonnes. It is the largest private sector steel company in India in terms of domestic production and it is ranked 410th in Fortune Global 500. Tata Steel is also India's second-largest and second-most profitable company in private sector with consolidated revenues ofÂ 132,110Â croreÂ (US$29.33 billion)Â and net profit of overÂ 12,350Â croreÂ (US$2.74 billion)Â during the year ended March 31, 2008. Tata steel is the 8th most valuable brand according to an annual survey conducted by Brand Finance and The Economic Times in 2010.
Its main plant is located in Jamshedpur, Jharkhand; however it has its plants all over India and across the globe. With its recent acquisitions, the company has become aÂ multinationalÂ with operations in various countries. The Jamshedpur plant contains the DCS supplied byÂ Honeywell. The registered office of Tata Steel is inÂ Mumbai. The company was also recognized as the world's best steel producer by World Steel Dynamics in 2005. The company is listed onÂ Bombay Stock ExchangeÂ andÂ National Stock Exchange of India, and employs about 82,700 people (as of 2007). The company always tries to provide good services to the stakeholders and improve the quality continuously through improved innovations. The company has captive mines at Noamundi, Joda, West Bokaro, Khondbond and Katamati spread over West Singhbhum district of Jharkhand and Keonjhar district of Orissa.
Tata Steel West Bokaro:
West Bokaro is a small captive mine of Tata Steel. It came into existence in 1976. The business objective of WB Division is to produce clean coal at optimum cost for captive use in the steel plant of Tata Steel at Jamshedpur. The strategy is to reduce Ash with minimum loss of yield so that quality of coal improves and yet the cost is beneficial vis-a vis imported coal. The primary product of WB is the metallurgical grade coal (also called CC), for Coke Ovens, which converts coal into coke for use in the Blast Furnaces. The type of coal deposit in WB is that of medium grade metallurgical coal containing a very high percentage of Ash.
West Bokaro has 4 functional coal mines i.e. Quarry A, B, C, D and SEB (South Eastern Block). To process this coal it has three washeries. It has its own power generation plant which uses the ash produced from the washeries. It has other departments like coal benefication, electrical, Raw materials, projects and planning, Accounts, Town maintenance etc.
Problems faced before ERP:
The West Bokaro Division of Tata Steel is mainly into production of raw material i.e. coal. The coal is then processed and sent to Jamshedpur steel plant. Everyday it has to handle a large amount of data like how much coal is mines, what is the quality of the coal, how much overburden is there, how much coal has been dispatched etc.
Before implementation of an ERP process, this whole thing was done manually. There was an officer who would collect all this data. Early in the morning he would call all the mine incharges about the day's production and compile it in an excel sheet. This resulted in a lot of problems like:
Errors in data collection
No proper quality standards
High cost and inefficient system
Poor customer relationship
No proper method of human resource management
Every department used to work as individual units.
Tata Steel decided to change its business model. It adopted a new "3-Cs Excellence Model"
3 - Cs Excellence Model
Change - Mutate & improve continuously
Cost - Ruthless cutting of wasteful exp.
Customer - Strive relentlessly to build relationships and influence consumption
The major change drivers were:
Changes were carried out in a specific direction to achieve certain objectives.Â
TATA Steel adopted new strategic objectives:
Create culture of continuous learning and change
Achieve world class status in services and products
Reach the position of the most cost competitive steel producer
Establish industry leadership
Cost is a sustainable competitive advantage.
Cost was checked in two major areas:
Raw Material Cost
Improved sinsters to use not only iron ore but also 'blue dust' found in mines thereby increasing the life of mines
Developing the technology of using medium-coking coal available in India rather than good quality coking coal which had to be imported, through a R&D effort of 10 years.
Cost Pertaining To Manpower
78,000 employees in late 80s
Started chipping away workforce by few thousands every year.Â
The process still continues and the optimum workforce number keeps evolving.
Resentment among workers and unions
MANAGING THE UNIONS
Created awareness for the upcoming change by giving examples to the unions.
Sent some union leaders to South-East Asia and Japan to see the high levels of productivity.
Message given out was 'Better productivity and better safety' is beneficial to both management and workers.
All this could be achieved by being open and transparent to the unions and treating them well.
SPREADING THE PERFORMANCE CULTURE
Started by installing a new CRM, fencing it and calling it new plant
People selected to work had different layers than others, and had profit sharing type bonus.
Within 2 to 3 years others also started asking for similar schemes.
Unions realize that it better to have few people earning better than many earning small amounts.
Adopted many good quality practices like benchmarking, value engineering, six sigma, ISO 9000 etc.Â
Won JRDQV award in 2001
Enticed the workers to be quality conscious by
. Giving emblems to the members of quality circles.
. Recognizing the man of the month.
. Convinced the unions by contributing aroundÂ
Rs.3-4 crore to improve the quality of wmployees by getting their quarters repaired.
Major IT implementation:
The management at Tata Steel wanted the software to seamlessly integrate with its existing information system and further provide compatibility with its future implementations. After an in-depth study of functionality, cost, time, compatibility, esteem, operability, support and future organizational requirements was done, SAP topped the list of contenders.
The implementation of SAP software was associated with certain strategic goals in mind. With this implementation, TISCO wanted to bring forth a culture of continuous learning and change. This would enable TISCO to achieve a world-class status for its products and services and strengthen its leadership position in the industry. Besides this, TISCO also wanted the software to result in quick decision-making, transparency and credibility of data and improve responsiveness to customers across all areas.
The major IT implementations which took place are:
Various departments were SAP has been implemented are sales, Production, Finance and Accounting, Planning System, warehouse management, human resource planning.
Lotus Notes is used for document management.
All details are available on the internet as well as the intranet.
Videoconferencing is used to communicate across geographies.
The path was set to achieve success through SAP. All the branches, which had huge numbers of transactions and complexity, were identified as a HUB while the smaller branches along with the consignment agents were defined as SPOKES which were attached to these branches. In January 99 the team from TISCO was decided and christened 'TEAM ASSET' an acronym for Achieve Success through SAP Enabled Transformation. The TEAM ASSET had two simple axioms:
Go-Live date - 1st November 1999
There are only 24 hours a day
Preparatory task forces activities were conducted and core business processes were mapped to SAP modules. Also another parallel activity called 'Change Management' was initiated within the company. The prime objective of 'Change Management' was to reach out to people involved non-directly in the project to apprise them of the developments taking place.
Tata Steel planned a big-bang approach of going live with all the modules at the same time, in just a span of eight months. Driven against the speed of time, the pace of implementation was fast with all activities backed by a lot of thought process and meticulous planning. On 1st November 1999 Tata Steel pulled off a big bang with implementation of all SAP modules at one go across 46 countrywide locations, as per the set deadline.
Improvement in the system:
With the implementation of IT things have become more simple and convenient. Now all the data of the everyday production is collected automatically. The process is now faster and error free. Integration with the other departments has now become simpler. After the implementation of ERP, the results have improved drastically. Close to Rs 40 crore has been spent on its implementation and had saved around Rs 33 crore within a few months. The manpower cost had also reduced tremendously. The overdue outstanding had been brought down. The inventory carrying cost had drastically deflated. With the implementation of SAP, there has been efficient management of resources and hence a lot of cost savings has been done. With SAP's solution Tata Steel can now update their customers regularly and provide better services thus improving the customer relationship and has better customer management across the country. It has helped in efficient and faster decision making as all the information is now available online. Besides streamlining the business process, it provides consistent business practices across locations.
The main data center is located in Jamshedpur. The replica of it is maintained in every remote location. It can be depicted in the following pictorial form:
HEAD OFFICE (KOLKATA)
IT implementation in other departments:
West Bokaro division of Tata Steel runs its own hospital. Earlier there was no IT implementation there for outdoor patient department. There would be long queues of patients outside the doctor's cabin. Often the doctors were not aware of the medicines that were not available in the hospital. All these things used to create a lot of confusion and was also time consuming.
But recently the whole OPD (outdoor patient department) of the hospital was computerized. It has been linked to the personal numbers of the employees. Now the employees can just login to their account and take and appointment with the required doctor. They will be given a token number and the same request will be reflected in the account of the requested doctor.
The Doctor while treating the patient can see his entire profile and medical history and all the medicines which he had been earlier prescribed. The record of the available medicines is also visible to the doctor. So he can prescribe medicines accordingly. As soon as he prescribes some medicine to the patient, the same is reflected to the section from where the patient has to take the medicine. Now whole system has become very simple. Patient does not have to wait for the doctor nor has to stand in queues to collect medicine.
Thus I saw that with the simple implementation of IT the whole system changed completely.
Proper records of the patients can be maintained.
Inventory management of the medicines became simple.
No long queues.