A PRESENTATION ON THE OPERATIONS & SUPPLY CHAIN OF TATA STEEL

By Dewki Nandan

Company Profile
    

 

Established in 1907, Tata Steel is Asia's first and India's largest integrated private sector steel company. Tata Steel is the ranked sixth in the global steel sales. Tata Steel with Corus is the fifth largest global steel producer with a combined output of 23.5 MT. Tata Steel is among the lowest cost producers of steel in the world. Its sales mix today comprises approximately two thirds flat products hot rolled, cold rolled and coatedand one third long productsvalue added finished products such as wires, wire rods and merchant bars. Over 9 MT production in FY 2006 IN 7 locations. Green field expansion plan : In India: 12 MT in Jharkhand, 6MT in Orissa & 5 MT in Chhattisgarh) and Overseas : Iran 3+2 MT and Bangladesh: 2.4 MT 2005-06 Revenues : $4.64 bn, Profit : $842 million

Business Units
Apart from the main steel division, Tata Steel's operations are grouped under the following strategic business units :
      

Bearings Divisions Ferro Alloys and Minerals Division Rings and Agrico Division Tata Agrico Tata Growth Shop (TGS) Tubes Division Wire Division

Supply Chain
Distributors & company owned retail outlets

Suppliers

Tata Steel

- Raw materials - Packaging material

- Manufacturing - Packaging

- Individuals - Industries

Strategic Sourcing

 At Tata Steel, Strategic Sourcing has delivered 80 million US $ over last 5 years and these savings continue to grow every year. This has played a key role in making Tata Steel the lowest cost producer of steel.

Cost comparison

Retail value management

Before The managers were hardly aware of the market dynamics. wholesalers controlled the market and dictated the prices. Tata Steel failed to assess the quality of the retail network in terms of its coverage and capacity to absorb volumes. Lack of control led to unethical practices at retail points. After Reduce volatility in its revenue streams and consequently stabilize profit margins for the distributors and retailers. The marketing team was better positioned to appreciate the nuances of retail marketing and to develop area-specific initiatives. This initiative has helped Tata Steel to gain number one spot in term of sales of galvanised corrugated sheets.

Operations: Steel Manufacturing

Iron ore Fluxes Coal

Sinter Plant

Coke Plant

Blast Furnace

LD 2

LD 1

Slab Caster

Continuous Billet Caster

Slabs Wire Mills Cold Roll Mill Hot Strip Mill Reinforced bars

Billets

(semi-finished steel)
Merchant Mill

Wire Rods

Cold Rolled Coils

Hot Rolled Coils

Implementation of SAP
Before implementation The employees and management at Tata Steel faced a cumbersome task exchanging and retrieving information from the system. The reliability of information obtained was questionable because of inconsistency and duplication of data from different departments. There was no built-in integrity check for various data sources. Several times the information against certain items was found missing. Results of SAP implementation The manpower cost has reduced from over $ 200 per ton two years ago, to about $140 per ton in 2000. The overdue outstanding has been brought down from Rs 5170 millions in 1999 to Rs 4033 millions by June 2000. The inventory carrying cost has drastically deflated from Rs 190 per ton to Rs 155 per ton. With SAP's solution Tata Steel can now update their customers on a daily basis and provide seamless services across the country improving customer management. The availability of online information has facilitated quicker and reliable trend analysis for efficient decision-making.

Implementation of PHOENIX -- i2 Technologies



Reasons for chosing i2

- To improve productivity through the best possible use of its assets. - To enhance customer satisfaction by identifying and delivering products according to the needs of its specific customers.

Benefits
- Increase supply chain responsiveness through reduced manufacturing lead time, which in turn can lead to improved performance delivery and increased customer satisfaction. -Better management of planned versus optimal product mix.

THANK YOU