DMBA – “B”
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,
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.
“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
Treating suppliers as partners
Establish performance measures for the processes
EVOLUTION OF QUALITY MANAGEMENT
In Evolution of Quality first comes the invention of techniques then
Evolution of Techniques: A technique is a specific activity with a
clear and well-defined purpose.
Operator–End of 19th century
Foreman–Start of 20th century
SPC – 1940–Walter Shewart
DOE– Around 1945
Quality 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
The Methodologies of selected papers were Case Study (9), Simple Study (7) and
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:
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
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
Based on the business
needs, post DAP, the
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,
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
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
Overall EBITDA has grown by 10% and maintained much better than its
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.
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
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