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in Opinion: International Journal of Management 24

ISSN: 2277-4637 (Online) | ISSN: 2231-5470 (Print) Opinion Vol. 3, No. 1, June 2013
The Quest for Excellence: A Case Study of
TQM Practice in Tata Steel
Dr. K.K.Garg*
Pranav Mishra**
ABSTRACT
The case examines the quality initiatives taken by
Tata Steel is the first integrated steel company in
the world to win the worlds highest award of quality,
the Deming Application Prize. The company TQM
experience and its preparation for winning the award
explored and the case also provides information
about Deming prize. This paper aims to address the
issue of excellence of quality strategy in a Deming
Application Prize winner company.
Keywords: Business Excellence, Deming prize, Total
Quality Management,
I. INTRODUCTION
Given the historical background to quality which started
as a assurance functions through inspection prior to
dispatch or sale, the concept of a quality appears to
have its roots more in manufacturing than trading or
service organizations, especially large manufacturing
organizations. After the logical follow-up to this, TQM
as a company-wide management philosophy started
getting attention by a large number of manufacturing
organizations. Given an environment of competition and
concern for productivity and effectiveness, as also global
opportunities, many organizations including private and
public sectors appear to have appreciated the need for
implementing a quality conscious culture across their
companies different functions. Indian industry is facing
stiff competition from rivals like, china, Korea, and many
other nations. It is high time that is focused more upon
attaining world-class standards in terms of the quality
of its products and services. Of late, Indian companies
have demonstrated many successes on this front, such
as winning Deming prizes. Prior to globalization of Indian
economy in 1991, the competition in steel industry was
limited. By adopting measures leading to marginal
improvements, Tata Steel was ahead of its Indian
competitors. However, the environment changed
dramatically and the company had to think out of the
box. It became necessary to redefine the business
elements (processes, products, market-segment, human
resource, input materials, plant location, etc.), business
priorities, vision, strategies, management tool and
techniques etc. In effect, the company redefined and
reoriented itself in a turbulent environment. It started
*, **Associate Professor, Dept. of Management, Lingayas Lalita Devi Institute of Management & Sciences Mandi road,
Mandi, New Delhi-110047 *** Research Scholar, Lingayas University, Faridabad, Haryana, India
Sumit Sehrawat***
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with ISO 9001 certification of various manufacturing
and later service units. Process Improvements through
Quality Improvement Projects (QIPs), Value
Engineering Projects and Statistical Process Control
projects and Operations Research Projects by
managerial teams was making great contributions in
various departments and divisions of the company.
Quality Circles and 5S as strategic tool for employee
involvement and improvement were adopted in all
departments of the company. It adopted the J N Tata
Quality Award Model based on Malcolm Baldrige
Model for its various divisions in the company in 1992.
Later it adopted the JRDQV Model for Business
Excellence in 1994 for competing with other group
companies. Benchmarking and Business Process
Reengineering (BPR) emerged as powerful Management
Tools in this direction complimenting the TQM efforts
at Tata Steel in terms of continuous improvement in
process and practices. Concept of Balanced Score
Card was integrated with the TQM strategy of the
company in 1998. It was integrated with the Annual
quality Improvement Plans (AQUIPs) of various
departments.
II. QUALITY JOURNEY IN INDIA
It is known fact that that concept of quality has been
around for a long time, but the stress on the word quality
in every aspect of life i.e. in business, service or social
life has increased in the last few decades. Quality has
awakened all the nations, industries and organizations
around the world. The word quality means different
things to different people. The ranges of meanings
include that quality is excellence, value, conformance to
specifications, conformance to requirements, fitness for
use, customer satisfaction, meeting taj Mahal, located
in Agra, is one of the seven wonders of the world, the
konark sun Temple in Orissa, are the testimony to the
rich cultural heritage are all. Architectural marvels which
boost of high degree of excellence and excellent quality.
Indian companies are also participating in the quality
race, although slowly. They are facing a challenge from
the multinational companies since the Government of
India implemented the policies of liberalization,
privatization and globalization. In the light of this, the
Indian companies are in dire need of new ideas,
approaches and techniques for attaining a competitive
edge. Industry associations like the Confederation of
India (CII), Federation of Indian Chambers of
Commerce and Industry (FICCI), Indian Statistical
Institute (ISI), Nasscom, and specialized institutions like
National Productivity Council (NPC) have a part of
their organizations devoted to helping the industry in the
formulation and implementation of quality management
programmes, education and training programmes and
provide consultancy services. The bureau of Indian
standards, has also established quality standards in
accordance with international system standards, with
main task of product standardizations. Today we witness
a world that has changed a world that has changed
dramatically since the nineties. Globalization is here to
stay.
III. TQM IN INDIAN COMPANIES
THROUGH DEMING PRIZE
Indias interest about TQM came about by years of
selfless contribution of one Japanese Professor yoshikazu
tsuda, invited by confederation of Indian industry (CII)
to introduce TQM to Indian manufacturing industry. He
was the guide assigned by Japanese union of scientist
and engineers that is responsible of the promotion of
TQM in Japan & the world over.
The resounding success of several Indian
manufacturing and service firms in recent times has
invariably been linked to excellent practices to quality
management. If you consider the auto-component
manufactures in India, many of them won the Deming
Award for quality, the largest number outside Japan.
Similarly, India has the largest number of CMM Level
5-certified Software Company in the world. With such
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international recognition in quality, these two sectors of
our industry were able to compete globally.
Fig.1
Road map for implementation stages of TQM
Indian companies seem to be in the favorites list of
the Deming Awards (termed as the Nobel Prize in the
world of manufacturing) of Japan. The Japanese Union
of Scientists and Engineers (JUSE) Started the Deming
prize in 1951. Initially, this prize was open only to the
Japanese industry, but in 1985 it was open thrown open
to the rest of the world. From 1998 onwards, Indian
companies started figuring in the Deming prize list, with
Sundaram Claytons brakes division claiming the honor
first. Deming Grand Prize is the highest honor in quality
awarded to a company for excellence in Total Quality
Management. This prize given to companies for
demonstrating practicing TQM in areas of production,
customer service, safety, human resource, corporate
social responsibility, environment
1998 Sundram-Clayton Limited, Brakes Division
2001 Sundaram Brake Lining Limited
2002 TVS Motor Company Limited
2003 Brakes India Limited, Foundry Division
Mahindra and Mahindra Limited, Farm
Equipment Sector
Rane Brake Linings Limited
Sona Koyo Steering System Limited
2004 SRF Limited, Industrial Synthetics Business
Business Lucas- TVS
Indo-Gulf Fertilizers Limited
2005 Krishna Maruti Limited, Seat Division
Rane Engine Valves Limited
Rane TRW Steering System Limited, Steering
Gear Division
2007 Aashi India Glass Limited, Auto Glass Division
Rane (Madras) Limited
2008 Tata Steel Limited
2010 National Engineering Industries Limited (India)
2011 Sanden Vikas ( India ) Limited
The Deming Grand Prize
2012 Tata Steel Limited (India)
Rane (Madras) Limited (India)
Lucas-TVS Limited (India)
IV. CASE: TQM JOURNEY
OF TATA STEEL
Tata Steel is among the top ten global steel companies
with a crude steel production capacity of 26.5 million
tones per annum (mtpa). Tata steel has been practicing
TQM since the late 1980s which was when the Tata
steel initiated several quality activities quality circle,
ISO certification, quality improvements using juran
methods, etc. The steel giant won the deming application
prize 2008 & deming grand prize (DGP) 2012 for
achieving distinctive performance improvement through
the application of total quality management. In 2000,
after winning the JRD QV Award, by going through the
deming process, Tata Steel discovered the deeper
meaning of TQM for achieve the next quantum jump in
performance and improvement. In 2005, Tata Steel
conducted a TQM diagnosis along with the JUSE team
for getting the status of TQM implementation in the
organization.
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Fig. 2
Road map for TQM Practice for
performance excellence
Strategic & Policy Management- Tata Steel is
committed towards sustainable development and
growth as an integral part of its business
philosophy. First adopting the Total Quality
Management (TQM) philosophy as a part of
Competitive Strategy was formally launched in the
company in late 1980. It started with massive
effort on education and training on TQM.
Daily Management - Daily Management is the
fundamental of TQM in Tata Steel. Its needs to
institutionalize processes leading to long term
substances to its performance. Daily management
provides the solid foundation for substance to Tata
Steel. The company established a standardized
approach for integrating daily management
activities in various functions such as operations,
maintenance, customer services etc.
People Management - the most fundamental
challenge was to create a mindset that looks at
improvement activities as essential for achieving
targets and goals. TATA Steel create guidelines
and reference manuals to have uniformity and
alignment across the organization, dealing with
35,000 employees, in explicitly stating and
documenting improvement targets and how to go
about achieving these in a systematic manner, in
standardized approaches and creating alignment
to profits and goals and so on.
V. AFTER WINNING THE PRIZE
The defect rate in the manufacturing process at Tata
Steel decreased substantially and customer returns came
down as a result of these quality control initiatives. Tata
Steel noticed many tangible and intangible benefits in
their journey of TQM. There were all-round
improvement in customer satisfaction, new product
development, supplier satisfaction, employees and their
family satisfaction, breakthrough achievement in business
results. Tata Steel believes that Deming Prize is not only
a ticket for TQM journey towards organizational
excellence. Quality goals are moving targets. It knows
that its future lies in further improving the product quality
and productivity along reducing costs and implementing
lean manufacturing systems and TPM.
VI. LEARNING
Compulsion of competitive business environment is not
merely to do well, but to do well than the
competitiveness. This challenging situation is compelling
industries to opt for new strategies leading to superior
performance: the goal of TQM system. This calls for
rethinking and reworking of an organizations existing
processes, position, posture and attitude with a view to
transforming the organization to enable it to cope with
the changing context of business, where customer is king.
TQM provides the vehicle for change and transformation
by making the organization more customers focused
people driven, flexible and committed to continuous
improvement.
The present study has resulted in the following
valuable lessons:
1. Globalization has thrown new challenges as well
the opportunities.
2. Implementation of TQM leads to improvement in
performance.
3. Culture is an important issue for the success of
TQM.
4. Awards models provide a roadmap, a framework
for excellent.
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Fig. 3
Benefits of TQM System
VII. CONCLUSION
Continuous improvement is an integral part of culture in
Tata Steel. Tata Steel addresses all aspects of social,
environmental and economic performance like safety
and health of the people, resource conservation,
development of innovative products and processes,
value creation for all stakeholders and contributing to
the prosperity of the communities and nations. Tata Steel
Quality policies guide in its approach such that quality
principles and practices are applied throughout the
business using ISO9001, the global quality and customer
relationship standard. With the Tata Steel better
understanding of TQM on the Deming Application Prize
journey, its customer focus and market orientation have
undergone a sea-change. We must understand that
although our companies have won the crucial battle of
saving their home turf, the war is still not over as long as
we do not make our stronghold in the international arena.
So far, our companies have been attaching the highest
priority to attaining ISO certifications, but they keep in
mind that if ISO clauses are not implemented seriously,
the companies may be deceiving themselves. The crux
of the issue is that whatever quality philosophy we follow,
be it TQM, Six Sigma, ISO 9000, or something else,
we must have a continuous zeal and serious intentions
of improving the quality of our products and services.
Tata Steel has inculcated the philosophy of Total Quality
Management and Business Excellence as part of the
companys Corporate Business Strategy. Any company
can gain competitive advantage and move towards
Business Excellence as described in this paper. Tata
Steel has done this because of its foresight and the vision
it had among the Top Management Leadership and
support from all its employees in the company. These
companies have as prepared themselves to compete
and be successful in a competitive globalize world.
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