case tata toc

7/23/2019 Case Tata Toc

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Case : TOC

TATA GROUP RIDES ON THOERY OF CONSTRAINTS

Starting 1868, Tata Group is now over 142 years old. In the year

2008, it has reported over US62.! "illion revenue. Under its

u#"rella, there are $8 %o#panies, whi%h are supported "y over

&!0,000 %o##itted e#ployees worldwide. It is undou"tedly the

#ost glo"al o' Indian "usiness groups and one o' the "est (nown

Indian %orporate "rands a%ross the glo"e. Its )agship %o#pany,

Tata Steel has ran(ed 2&1 a#ongst the *ortune !00 %o#panies. It

is the si+th largest steel produ%ing %o#panies o' the world. Tata

Steel India- re%orded a turnover sales and other operating

in%o#e e+%ise duty- o' /s.14,&2$ %ore in nan%ial year 2008

0$. It has loyal wor('or%e o' a"out &!,000 e#ployees,3 #any o'

the# are asso%iated 'or the last 'ew generations.

In the year 2001, #ainly due to a slowdown in Indian e%ono#y,

Tata Steel witnessed one o' the toughest "usiness environ#ents

in its history o' over 100 years. It was "eing %alled as the sunset

industry, Indian steel %o#panies were apparently at a "rin( o'

"an(rupt%y and Tata Steel was no e+%eption.1. EVA Positive Coma!" 57 stands 'or 5%ono#i%alue

7dded,9 whi%h is the di:eren%e "etween return on invested

%apital9 and weighted average %ost o' %apital.9 This part o'

new vision involved

alue %reating partnerships with %usto#ers and

suppliers

;oving 'ro# %o##odities to "rands, and


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progra#, %alled ASPIRE9 to help it in #a(ing an 57

postiive growth.

#. Im$ove t%e &'a(it" o) *i)e The se%ond i#portant aspe%t

o' the new vision was to i#prove the quality of life o' its

e#ployees and the %o##unities that are "eing served.

>roadly, this involved

5nthused and happy e#ployees, and

Sustaina"le growth.

THE I+PROVE+ENT PHIOSOPHY OF TATA STEE*

The three #a?or wea(nesses in the operating pra%ti%es o'organi@ations, pursuing %ontinuous i#prove#ent path are

i- 7pproa%h inwards %ontinuous

i#prove#ent is generally inward

loo(ing and relatively lesser

attention is paid on distin%tly

di:erentiating the o:erings to the

%usto#ers.

ii- The o"?e%tives #ay not "easpirational %hallenging-.

iii- There is not #u%h e:ort on testing the situations o'

%ausality during the ?ourney o' %ontinuous

i#prove#ent, i.e. the #eans are not %he%(ed 'or

ne%essary and su=%ien%y %onditions to #eet the

desired o"?e%tive. *ailure to test interventions against

appropriate %ausality leads to #a(ing the Aone si@e ts

allB approa%h to target setting as well as the %hoi%e o'tools and te%hniCues.

To over%o#e these wea(nesses, the re%ently adopted 7SDI/5

Drogra# o' Tata Steel is designed to rst set goals and then


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%hoose the appropriate tools 'or delivering these goals.

Eertain parts o' the planned i#prove#ents are %he%(ed 'or

%ausality, e+plored 'or #eans %auses- and then the

i#ple#entations are %arried out using di:erentiated tools

and te%hniCues. *or the re#aining parts o' the aspirationalgoals, the #eans are innovated during the i#ple#entation

?ourney.

In Fove#"er 2006, Tata Steel %o#e out with ASPIRE T,9

initiative, whi%h ai#ed at #otivating the e#ployees in

dedi%ating the#selves to &TBs, i.e. TE Theory o'

Eonstraints-, TH; Total Huality ;anage#ent-, and

Te%hnology 'or #a(ing the %o#pany a world leaderin steel

"usiness. TH; and Te%hnology helped in a%hieving superior

produ%t Cuality through pro%ess %onsisten%y, pro%ess

%apa"ility, and te%hnologi%al %apa"ility. Si#ilarly, TE

i#ple#entation helped it in i#proving the servi%e Cuality. To

over%o#e #any %onstraints in a%hieving superior

per'or#an%e in operations, 7SDI/5T& is playing a #a?or role.

The 7SDI/5 T& evolves round the philosophy o' settingaspirations whi%h #ay "e "eyond the %urrent %apa"ility-,

then getting deter#ined a"out rea%hing these aspirations,

#astering reCuired resour%es, whi%h lead to a%hieve#ent,

and thus the sel'%onden%e to aspire 'or #ore. It was

laun%hed in the presen%e o'


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e+plained the 'unda#entals o' TE to Tata Steel and

e+plained that the TE approa%h loo(s at "usiness pro"le#s

'ro# a syste# level, in %ontrast to so#e other #ethods that

are 'o%used on spe%i% pro%esses. *o%using on visi"le vision

i#ple#entations, using TE, industrial organi@ations %oulda%hieve unpre%edented i#prove#ents in their "otto#line

per'or#an%es. e e#phasi@ed the needs to identi'y and

%apitali@e on those 'ew ele#ents that govern an

organi@ational syste# and are %onstraining in the goal o' the

organi@ationBs per'or#an%e indi%ators.

TE approa%h has helped Tata Steel in its #a?or

restru%turing o' supply %hain and replenish#ent pro%ess.


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&UESTIONS:

1. 5+plain the role o' TE in #anu'a%turing environ#ent.

Khat was the #otivation o' Tata Steel to adopt TE 'or its

growthL2. 5+plore the latest status o' TE appli%ations in India.&. ow are TE, TH; and Te%hnology ;anage#ent relatedL

REFERENCES

1. httpMMwww.tatasteel.%o#MinvestorsMannualreport2008

0$Mht#lMnan%ialNhighlights.ht#l a%%essed on 0$ ;ay

2010-.2. httpMMwww.tatasteel.%o#MinvestorsMannualreport2008

0$Mht#lM%ontinuousNi#prove#ent.ht#la%%essed on 0$ ;ay2010-.&. httpMMwww.tata.%o#Marti%le.asp+LartidO%II'/'Pto;%O

7E5SS5S F 0$ ;ay, 2010-4. httpMMwww.idiaprwire.%o#MpressreleaseM#ining

#atalsM20061102$08.ht#a%%essed on 0$ ;ay 2010-!. >usiness Qine 7rti%le on Tata Steel /eva#ping Supply Ehain

;anage#ent9 "y SantanuSanyal, 22ndRul 2006, availa"le on

httpMMwwwwM"lonnet.%o#M2006M0M22MstoriesM20060220208

000 .ht#a%%essed on 12 ;ay 2010-.6. ttpMMwww.tat.%o#%o#pany 7rti%les inside asp+L

artidOdehaS* O a%%essed o 12 ;ay 2010-.

So'$-e :
http://www.tatasteel.com/investors/annual-report-2008-09/html/continuous_improvement.htmlhttp://www.tatasteel.com/investors/annual-report-2008-09/html/continuous_improvement.htmlhttp://www.tata.com/article.aspx?artid=cIIfRf+toMchttp://www.idiaprwire.com/pressrelease/mining-matals/20061102908.htmhttp://www.idiaprwire.com/pressrelease/mining-matals/20061102908.htmhttp://wwww/blonnet.com/2006/07/22/stories/2006072202080700%20.htmhttp://wwww/blonnet.com/2006/07/22/stories/2006072202080700%20.htmhttp://www.tat.com/http://www.tata.com/article.aspx?artid=cIIfRf+toMchttp://www.idiaprwire.com/pressrelease/mining-matals/20061102908.htmhttp://www.idiaprwire.com/pressrelease/mining-matals/20061102908.htmhttp://wwww/blonnet.com/2006/07/22/stories/2006072202080700%20.htmhttp://wwww/blonnet.com/2006/07/22/stories/2006072202080700%20.htmhttp://www.tat.com/http://www.tatasteel.com/investors/annual-report-2008-09/html/continuous_improvement.htmlhttp://www.tatasteel.com/investors/annual-report-2008-09/html/continuous_improvement.html


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perations and Supply ;anage#ent, Ehase, Shan(ar, Ra%o"s,

7Culano ;%Graw ill

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