Your Directors take pleasure in presenting the 107th annual report on the business and operations of your Company along with
the standalone and consolidated summary financial statements for the year ended 31st March, 2014.
` crores
Tata Steel Standalone Tata Steel Group
2013-14 2012-13 2013-14 2012-13
Net revenue from Operations 41,711.03 38,199.43 148,613.55 134,711.54
Total expenditure 28,894.13 27,073.19 132,202.54 122,390.33
before finance cost, depreciation
(net of expenditure transferred to capital)
Operating Profit 12,816.90 11,126.24 16,411.01 12,321.21
2013
Tata Steel has implemented a 3 million tonne per annum expansion plan at its existing Jamshedpur facility. This increased the capacity to 9.7 million tonnes, he said.
The Kar Vijay Har Shikhar programme to spot improvement opportunity across the value chain had resulted in a cost saving of Rs. 1,100 crore last year, said Mistry.
The restructuring initiatives taken by the management in Europe resulted in savings of over £200 million.
Euro zone steel demand contracted 9.3 per cent last year and total steel production was almost 30 per cent lower than the pre-2008 financial crisis level, said Mistry in his first address to the company’s shareholders.
http://www.thehindubusinessline.com/companies/tata-steel-braces-for-tough-times-with-cost-cutting-new-products/article5022955.ece
2012
The Company continued its pursuit of value creation for all stakeholders following the Total Quality Management (TQM) approach systematically. In 2012, the Company became the first integrated steel company in the world to win the "Deming Grand Prize" awarded by JUSE, Japan.
In Indian steel industry labour productivity is low. In Sail it 75 mt/man year, in Tisco it is 100 mt/man year.
For Posco Korea it is 1345 mt/man year. For Nippon, Japan it is 980 mt/man year.
http://www.cci.in/pdfs/surveys-reports/Iron-and-Steel-Industry-in-India.pdf
Tata Steel, for instance, improved its output per worker by a factor of eight between 1998 and 2011, largely by adapting its operational and management practices to India’s unique conditions. Tata Steel reduced the number of managerial layers to 5, from 13. It also began investing heavily in building analytical and interpersonal skills among frontline managers and staff to ensure access to scarce competencies. Today, the company’s Shavak Nanavati Technical Institute trains more than 2,000 employees a year in both “hard” skills as well as “soft” ones, such as conflict resolution.
The company dramatically improved the output of its blast furnaces, for example, by learning to adjust them continually to account for the large variations in the ash content of Indian coal from shipment to shipment. In this way, the steelmaker can burn coal with a high ash content more efficiently than would otherwise be possible. These moves strengthened the company’s focus on continuous improvement—Tata Steel won the coveted Deming Prize in 2008 for advances in process excellence and quality improvements—and helped it become one of the world’s lowest-cost steel producers.
http://www.mckinsey.com/insights/operations/fulfilling_the_promise_of_indias_manufacturing_sector
2001
The agenda: to overhaul the production process and turn Tata Steel into a customer-driven company. To identify market segments and get around to dominating them. To admit to being a niche player with global economies of scale (on a unit basis) and undertake ruthless cost-cutting exercises.
By benchmarking itself with and adopting the best practices of companies like Nippon Steel, and POSCO, Tata Steel has been able to reduce its cost of production from $225 a tonne in 1998, to $150 a tonne, today. which is amongst the lowest in the world.
Tata Steel no longer uses manganese to increase the strength and flexibility of its steel-it uses an alternative method-as the manganese metal is too expensive. Critical to the cost-reduction drive is also the company's new make-to-order philosophy. The company's delivery-time, for instance, has shrunk from three-four weeks in 1998, to two weeks now (and is expected to become one week by end-February, 2001).
Aligning production process to market dynamics required the IT-enabling of Tata Steel's marketing and sales function. The marketing and the sales functions were segregated; ensuring that sales people had to worry about understanding the customer and little else (which they seem to have achieved as most of the company's production is now based on accurate demand-forecasting).
These done, and the entire Order To Receipt (OTR) cycle e-enabled.
More important, Tata Steel's operational improvements have resulted in an increase in profitability. ''Our ratio of profit to revenue is improving with every passing year,'' says Irani.
Realigning human resources
The agenda: Reduce employee strength by at least 35 per cent through a fair employee separation scheme.
In 1994, Tata Steel had a workforce numbering 75,000. By the end of July, 2001, this number will read 48,000. The company's new cold-rolled steel plant (it went live in mid-2000) is a case in point. ''The 1.2 million tonne mill is run by a mere 500 workers and the plant is highly automated.
Part of Tata Steel's new avatar is the lean mentality.
http://archives.digitaltoday.in/businesstoday/20010221/cf.html
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