MCS PPT

TATA STEEL

GROUP MEMBERS

• SHIV SHANKAR MUNDHRA• VALLARI GUPTA• VIJAY GYANCHANDANI• ANSHUL MONGA• VISHAL LALWANI• VRINDA MANGHANANI

INDUSTRY PROFILE

Decrease in steel consumption due to economic

slowdown in the developed world

Demand for steel remains robust in India and Asia

Rise in iron ore and coking coal prices

Sharp depreciation of the Rupee affected the

economic environment of the industry

COMPANY PROFILE

Established in 1907 Among the top ten global steel companies Operates in 26 countries and has a

commercial presence in over 50 countries A fortune 500 company a turnover of US$ 26.13 billion in FY 2011-

2012 Around 81000 employees

ORGANISATION STRUCTURE

An organizational structure consists of activities such as task allocation, coordination and supervision, which are directed towards the achievement of organizational aims.

CENTRALIZED ORGANISED STRUCTURE

Centralized organisations keep their decision

making power at the top of their hierarchy.

They do not delegate decisions to local or

lower down levels of their hierarchy.

DECENTRALIZED ORGANISATIONAL STUCTURE

• Decentralized organizations rely on a team

environment at different levels in the business.

• Decentralisation is delegation not from one

individual to another but delegation to all units

in an organisation.

TATA STEEL

INTERNAL CONTROLS & SYSTEMS

The effectiveness of the internal controls is continuously monitored by the Corporate Audit Division of the Company.

It also assesses opportunities for improvement in business processes, systems & controls and may provide recommendations, designed to add-value.

It also follows up on the implementation of corrective actions and improvements in business processes.

RISK MANAGEMENT

The Company’s Risk Management framework was based on the Tata Business Excellence Model (“TBEM”)

Value Based Management in order to maximise the shareholders’ value

Enterprise Risk Management (ERM) Risk Dash Board Tata Steel has also adopted the best-in-class DuPont’s safety

programme Tata Steel's Performance Management System

MANAGEMENT STYLE AND CULTURE

• Ratan tata’s imprint is seen in all group businesses—be it the Rs 1-lakh car or the Ginger budget hotels or Titan’s low-end Sonata range. "The group should offer products and services catering to the larger part of the lower income pyramid in India and overseas. In India, this would mean that the addressable market for the Group’s products and services would be around 1 billion customers.

• He drives strategies across the group. He gives managers a free-

hand, but never hesitates to step in to make a directional change. JRD rarely did that,"

• He created the Tata culture of professionalism where managers as well as employees were given freedom and responsibility.

COMMUNICATIONS AT TATA STEEL

Communication is probably the most powerful tool within an organization. Successful companies are those who harness this power effectively to connect with their stakeholders in an open and transparent way.

Communicating the Vision: The new Vision for the Tata Steel Group which reflects the

aspirations and goals for the future was co-created collectively by senior executives of the

Tata Steel

CSR Communication : Tata Steel has created a brand called Pragati. In keeping with

the 100 years tradition of serving society, Pragati was developed to serve the long term

perspective of CSR communication.

Centenary Communication : A unique film, “The Spirit of Steel” was released to mark

the occasion. A four-day festival ‘Shatrang’ was hosted for the people of Jamshedpur

which comprised city-wide celebrations

THE COMMUNICATIONS FUNCTION

Supporting integration activities

Integration News

Creation of an integration micro-site

Publications

Websites

Building a strong brand

CONTROL PROCESS

Inventory Management: HYBRID JIT-MRP • The integrated hybrid system provides a better production planning, scheduling and control. It employs the logic of MRP and JIT, but it eliminates some of the inherent problems and drawbacks in both systems.

• According to TISCO MRP has better planning capabilities, while JIT has superior shop floor control capabilities which help them to produce at lower cost and achieve economies of scale.

VIHS FRAMEWORK AT TATA STEEL:

ERP SYSTEM

• TISCO faced two major problems from the systems that existed for a long time. Firstly they were not customer friendly. The whole system was tuned to the process and very little attention was paid to the customer demands.

• Secondly the systems were outdates and the modalities of operation were too complex and not error free. In order to rectify these issues which would otherwise prove to be major setbacks to the company the organization resolved to take up Advanced ERP.

ERP framework which TISCO implemented

AUDITING PRACTICES

• The Quarterly, Half Yearly and Annual books of account are audited by

internal and external auditors.

• The 2011-12 accounts were audited by Deloitte Haskins & Sells, Chartered

Accountants, Mumbai.

• The scope of external audit includes assessing the accounting principles

used and significant estimates made by management, as well as evaluating

the overall financial statement presentation.

• The audit is undertaken in accordance with auditing standards in India.

• Company has a strong and independent internal audit function. The chief

internal auditor reports directly to the chairman of the board. Professionally

qualified, technical and financial personnel of the internal audit function

conduct periodic audits to ensure that the Company’s Internal Control

Systems are adequate and are complied with.

CAPITAL BUDGETING PRACTICES

• The terms of reference of the Executive Committee of the Board (ECOB) are to approve capital expenditure schemes and donations within the stipulated limits and to recommend to the Board, capital budgets and other major capital schemes, to consider new businesses, acquisitions, divestments, changes in organizational structure and also to periodically review the Company’s business plans and future strategies. The composition of ECOB is given below:

HR STRATEGIES

Opportunities for employee wards - domain wise written test, assessment centre, personal interview.

We also select talent through Lateral Recruitment process which involves interview by HR, subject matter expert and personal interviews.

Group Migration Policy for our employees, which enables the group employees to explore opportunities to work at Tata Steel from other group companies.

Campus Selection - B schools, T Schools - written test, psychometric test, personal interview.

 Initiatives regarding employee relations,

employee development and growth.

Employee relations

Grievance Handling Mechanism

Trade Unions

HR Service desk

Employee Health

Benefits and Facilities

Employee development & Growth

70:20:10 Learning and Development Programme

• Initiatives regarding gender and diversity workforce?The core principles enshrined in the policy, and now applied across the Tata Steel Group worldwide are:

• Equality of opportunity• Continuing personal development• Fairness and• Mutual trust and teamwork• These principles are underpinned by the five Tata Group core

values: integrity, understanding, excellence, unity and responsibility.

HR policies planned for employees in the futureTo support the expansion of the existing facilities, they have planned the following initiatives:

Recruitment and selection: The process involves Reporting officers/ Heads of the process in counseling and training for their colleagues

Identifying talent and working with virtual offices Video simulations to assess the skills required for the job Employer Branding: Employer to “brand” the organization as a

preferred employer People centric - considering employees as customers

FINANCIAL STRATEGIES

• The Company’s financial strategy is focused on managing the capital structure effectively and to undertake financing based on the Company’s funding requirements for growth. In the past one year, the capital investment in Tata Steel has been defined by the long-term strategic plan of pursuing growth in the Indian market, raw material integration and downstream value addition.

MARKETING STRATEGIES

Several new initiatives have been undertaken to improve customer service in every market segment.

•  Tata Steel had implemented Vehicle Tracking system (VTS) way back in 2002. In line with the Company’s Endeavour to improve customer service, approx 1600 Global Positioning System (GPS) mounted vehicles have been deployed by transport partners of material movement across the Country. This is the largest implementation of GPS enabled fleet in the steel industry.

• To bring about improvement in delivery reliability, a billboard has been created and uploaded on CSD webpage to track vehicles on-line, again a first in the Indian Steel industry.

• Standard operating procedures for receipt, storage, handling and delivery of steel materials at all stock points have been implemented.

• Tata Steel has created transport parks in Jamshedpur to ease out traffic flow and educate all drivers on safety and health concerns. As a CSR initiative approximately 2000 drivers undergo medical check-up at our facilities every month.

OPERATION STRATEGIES

• TATA Steel main distribution channel is selling branded steel through Mjunction. It provides cutting edge of Information Technology, is a 50:50 venture of SAIL and Tata Steel. It is India's largest e-Commerce company and the world's largest e-Marketplace for steel. Mjunction offers a wide range of selling, sourcing and knowledge services that empower businesses with greater  process efficiencies. Tata Steel initiated the first online e-Sale through Mjunction in the month of February 2002 and since then has sold 221,259 MT. The products that Tata Steel has sold through MJunction are: HSM Defectives, HSM POR, GP Coils, LP Defectives, Prime Billets and Secondary Products.

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