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integrated steel plant was established by Tata Iron & Steel (popularly known as Tata Steel) in 1907. India
is currently the world's fourth largest producer of crude steel and is expected to become the second
largest producer by 2015.
Steel industry derives its demand from other important sectors like infrastructure, aviation, engineering,
construction, automobile, pipes and tubes etc. Thus its intense integration with other important industries
makes it a strategic sector for the Governments as well.
The Indian steel sector enjoys advantages of domestic availability of raw materials and cheap labour. Iron
ore is also available in abundant quantities, though the recent mining restrictions have put a strain on its
availability. This abundance has been providing a major cost advantage to the domestic steel industry.
Steel plays a vital role in the development of any modern and emerging economy. The per capita
consumption of steel is generally accepted as a yardstick to measure the level of socio-economic
development and living standards of its countrymen. As such, no developing country can afford to ignore
the steel industry.
Therefore, our endeavour, through this conglomeration of Governments, policy makers, industrial leaders
and potential investors from India and abroad is to discuss new growth drivers that are revolutionizing the
Indian steel industry and assess the challenges & opportunities associated with new technologies along
with identifying new growth frontiers
custom SKU to share this benefit along with additional cost incurred in rolling the
same. Executing this pricing decision is challenging as it requires understanding the
criticality of product attributes to the end customer and cost elements across the
value chain.
Improve pricing discipline to prevent margin leakage: Indian steel companies need
to balance price flexibility and monitoring to control off invoice leakages. Companies
can enhance pricing discipline by adhering to standard price-setting models
mapped to the segmented strategies and streamlining the invoice to-payment
process. This is typically done by using price waterfall approach.
Differentiated supply chains Firms will also need to develop nimble supply chains to
minimize working capital and improve customer service. Firms will need to
reevaluate their manufacturing strategies and adopt a differentiated approach for
specific segments. At the same time, they will need to build flexibility in their supply
chains, for instance, by pushing differentiation further down the supply chain and
adopting Finish-to-Order approaches in order to balance inventory and customer
responsiveness. As customers get more sophisticated and demanding, Indian steel
companies will need to move away from the one-size-fits all approach and
customize their service levels and supply chains by customer segments.
Historically, when the Indian steel market was a sellers market, Indian steel
companies would ration out the production and deploy a make-to-order (MTO)
strategy across products and customer segments. Going forward, companies will
need to reevaluate their manufacturing strategies and adopt a differentiated
approach for specific segments. At the same time, they will need to build flexibility
in their supply chains; for instance, by pushing differentiation further down the
supply chain and adopting finish to-order approaches in order to balance inventory
and customer responsiveness. Indian steel companies also would need to:
1. Segment customers and products by service levels and align manufacturing
strategy and supply chain to the customer segments Indian steel companies
need to do this in three steps. In the first step, they need to define customer
segments based on size and profitability, service levels and product
specificity. Post this, they need to define the manufacturing strategy and
supply chain for each customer segment.
2.Implement integrated order management To support order promising to large,
demanding and sophisticated customers based on capable-to-promise (CTP) and
available-to-promise (ATP) capabilities rather than on an ad hoc basis. This will
enable the companies to balance responsiveness and inventory carrying cost in
lower margin, over-supplied markets.
3. Deploy improved demand forecasting and sales and operations planning
(S&OP) techniques Indian steel companies will need to improve their demand
forecasting techniques as an over-supplied market will enable their customers to
demand lower lead times. Further, the companies will need to develop the ability
to assign the right order to the right plant as several of the Indian steel