“A study on benchmarking techniques used by companies with

reference to TATA STEEL”.

Submitted To:- Submitted By:-

MISS POOJA MENGI. CHETAN KHAJURIA.
Faculty Marketing. 8NBJM012.
• INTRODUCTION.
• OBJECTIVES.
• METHODOLOGY.
• COMPANY PROFILE.
• PRODUCTS
• BENCHMARKS.

• DATA ANALYSIS.

• COMPARISON.
• LIMITATIONS.
• CONCLUSION.
• REFERENCES.
Benchmarking is the process of comparing the cost, time or
quality of what one organization does against what another
organization does.

The result is often a business case for making changes in order to

make improvements.

Also referred to as "best practice benchmarking" or "process

benchmarking", it is a process used in management and
particularly strategic management, in which organizations evaluate
various aspects of their processes in relation to best practice,
usually within their own sector. This then allows organizations to
develop plans on how to make improvements or adopt best
practice, usually with the aim of increasing some aspect of
performance.

Benchmarking may be a one-off event, but is often treated as a

continuous process in which organizations continually seek to
challenge their practices.

Benchmarking, originally invented as a formal process by Rank

Xerox, is usually carried out by individual companies.
Collaborative benchmarking:
Sometimes it may be carried out collaboratively by groups of
companies (e.g. subsidiaries of a multinational in different
countries).

Procedure:
There is no single benchmarking process that has been universally
adopted. The wide appeal and acceptance of benchmarking has led
to various benchmarking methodologies emerging.

“The most prominent methodology is the 12 stage methodology by

Robert Camp.”

He wrote the first book on benchmarking in 1989.

The 12 stage methodology consists:-

1. Select subject ahead

2. Define the process

3. Identify potential partners

4. Identify data sources

5. Collect data and select partners

6. Determine the gap

7. Establish process differences

8. Target future performance

9. Communicate

10. Adjust goal

11. Implement

12. Review/recalibrate.

Cost of benchmarking:-
Benchmarking is a moderately expensive process, but most
organizations find that it more than pays for itself. The three main
types of costs are:

• Visit Costs - This includes hotel rooms, travel costs, meals, a

token gift, and lost labor time.
• Time Costs - Members of the benchmarking team will be
investing time in researching problems, finding exceptional
companies to study, visits, and implementation. This will take
them away from their regular tasks for part of each day so
additional staff might be required.
• Benchmarking Database Costs - Organizations that
institutionalize benchmarking into their daily procedures find
it is useful to create and maintain a database of best practices
and the companies associated with each best practice now.

The cost of benchmarking can substantially be reduced through

utilizing the many internet resources that have sprung up over the
last few years. These aim to capture benchmarks and best practices
from organizations, business sectors and countries to make the
benchmarking process much quicker and cheaper.

Technical Benchmarking/Product Benchmarking:-The

technique initially used to compare existing corporate strategies
with a view to achieving the best possible performance in new
situations (see above), has recently been extended to the
comparison of technical products. This process is usually referred
to as "Technical Benchmarking" or "Product Benchmarking". Its
use is particularly well developed within the automotive industry
(“Automotive Benchmarking “)
Types of benchmarking:-
1. Process benchmarking - the initiating firm focuses its
observation and investigation of business processes with a
goal of identifying and observing the best practices from one
or more benchmark firms. Activity analysis will be required
where the objective is to benchmark cost and efficiency;
increasingly applied to back-office processes where
outsourcing may be a consideration.
2. Financial benchmarking - performing a financial analysis
and comparing the results in an effort to assess your overall
competitiveness.
3. Performance benchmarking - allows the initiator firm to
assess their competitive position by comparing products and
services with those of target firms.
4. Product benchmarking - the process of designing new
products or upgrades to current ones. This process can
sometimes involve reverse engineering which is taking apart
competitors products to find strengths and weaknesses.
5. Strategic benchmarking - involves observing how others
compete. This type is usually not industry specific meaning it
is best to look at other industries.
6. Functional benchmarking - a company will focus its
benchmarking on a single function in order to improve the
operation of that particular function. Complex functions such
as Human Resources, Finance and Accounting and
Information and Communication Technology are unlikely to
be directly comparable in cost and efficiency terms and may
need to be disaggregated into processes to make valid
comparison.
• To know the various benchmarks set by TATA
STEEL.

• To have a comparison between TATA STEEL and

other Steel Players.
Secondary Data:-

• By collecting information from various resources available

on the internet through Google search engine.

• Books from various authors.

History of Tata Group
The Tata Group is a multinational conglomerate based in
Mumbai, India. In terms of market capitalization and revenues,
Tata Group is the largest private corporate group in India and has
been recognized as one of the most respected companies in the
world over the years.
It has interests in steel, automobiles, information technology,
communication, power, tea and hotels.

The Tata Group has operations in more than 85 countries across six
continents and its companies export products and services to 80
nations.

The Tata Group comprises 98 companies in seven business sectors,

27 of which are publicly listed. 65.8% of the ownership of Tata
Group is held in charitable trusts.

Companies which form a major part of the group include:-

1. Tata Steel
2. Corus Steel
3. Tata Motors
4. Tata Consultancy Services
5. Tata Tea
6. Titan Industries
7. Tata Power
 8. Tata Communications
9. Tata Teleservices
10. Tata Auto Comp Systems Limited
11. Taj Hotels

The group takes the name of its founder, Jamsetji Tata, a

member of whose family has almost invariably been the chairman
of the group. The current chairman of the Tata group is Ratan
Tata, who took over from J. R. D. Tata in 1991 and is
currently one of the major international business figures in the age
of globality.The company is currently in its fifth generation of
family stewardship.

Tata logo:-
The Tata logo was designed by the Wolff Olins consultancy. The
logo is meant to signify fluidity; it may also be seen as a fountain
of knowledge; maybe a tree of trust under which people can take
refuge.

Some though say it just looks like the letter T.

 Company Profile: Tata Steel Limited
2008 Sales: 1,315,400,000,000
Major Industry: Metal Producers & Products Manufacturers
Sub Industry: Steel Producers - Integrated
Country: INDIA
Employees: 37205

Established in 1907, Tata Steel is Asia's first and India's largest

private sector steel company. Tata Steel is among the lowest cost
producers of steel in the world and one of the few select steel
companies in the world that is EVA+ (Economic Value Added).

Its captive raw material resources and the state-of-the-art 5 MTPA

(million tonne per annum) plant at Jamshedpur, in Jharkhand State,
India give it a competitive edge.

Determined to be a major global steel player, Tata Steel has

recently included in its fold NatSteel, Asia (2 MTPA) and
Millennium Steel (1.7 MTPA) creating a manufacturing network in
eight markets in South East Asia and Pacific Rim countries. Soon
the Jamshedpur plant will expand its capacity from 5 MTPA to 7
MTPA by 2008. The Company plans to enhance its capacity,
manifold through organic growth and investments. The Company's
wire manufacturing unit in Sri Lanka is known as Lanka Special
Steel, while the joint venture in Thailand for limestone mining is
known as Sila Eastern.
Tata Steel's products include :-
1. hot and cold rolled coils and sheets,
2. galvanized sheets, tubes,
3. wire rods,
4. Construction rebars , rings and bearings.

In an attempt to 'decommoditise' steel, the company has

introduced brands like

• Tata Steelium (the world's first branded Cold Rolled

Steel),
• Tata Shaktee (Galvanized Corrugated Sheets),
• Tata Tiscon (re-bars),
• Tata Bearings,
• Tata Agrico (hand tools and implements),
• Tata Wiron (galvanized wire products),
• Tata Pipes (pipes for construction) and
• Tata Structures (contemporary construction material).
The company has launched the Customer Value Management
initiative with the objective of creating complete understanding of
customer problems and finding solutions jointly. The company's
Retail Value Management

Tata Steel's products are targeted at the quality conscious auto

sector and the burgeoning construction industry. With wire
manufacturing facilities in India, Sri Lanka and Thailand, the
Company plans to emerge as a major global player in the wire
business.

While the Company is focused in the pursuit of its operational

goals, it is also committed to being a good corporate citizen.

Tata Steel extends support to the economically underprivileged

not by charity but by strengthening and empowering them with
expertise and knowledge. Its community outreach programmes
covers the Tata Steel managed city of Jamshedpur and over 600
villages in and around its manufacturing and raw materials
operations.

Other Projects: -
India
• MTPA Metcoke project in West Bengal
• Deep sea port in Dhamra, Orissa
• Titanium Dioxide project in Tamil Nadu
• Joint Venture with BlueScope Steel for metallic coating and
painting steel unit
Overseas:
• Development of a source of low ash coal from Queensland,
Australia
• Ferro Chrome production in Richards Bay, South Africa

Future Plans :-
Steel Plant Projects:
India
The Company has embarked upon setting up three green field steel
plants in eastern India:

Overseas
3 MTPA in Iran 2 MTPA in Bangladesh addresses the needs of
distributors, retailers and end consumers.

The company has also launched India's first steel retail store – steel
junction - for making steel shopping a happy and memorable
experience.

. With 48,000 employees, an asset base of US$2.3 billion, and

annual turnover of US$1.5 billion, the steel manufacturer sells long
and flat steel products to over 5,000 customers around the world.
The journey of Tata Steel since 1922 has been marked by
steady growth through various Benchmarks.

1922:- The Tinplate Company of India prompted along with

Burmah Oil Company (India trading), Glasgow

1959:- The Tata Pigments, a wholly owned subsidiary,

incorporated.

1962:- TRF (earlier Tata-Robins-Fraser) promoted along with the

Associated Cement Companies, in collaboration with Hewitt
Robins Incorporated, USA, and the General Electric Company,
UK.

1968:- Tayo Rolls (formerly Tata-Yodogawa) promoted in

collaboration with Yodogawa Steel Works and Nissho Iwai
Corporation, Japan.

1986:- IPITATA Sponge Iron became Tata Sponge Iron. In 1994,

it ceased to be a subsidiary of Tata Steel.

1990:- Tata Incorporated, established in 1945, became a wholly

owned subsidiary

1994:- Tata Metaliks promoted with assistance from WBIDC.

1997:- Tata Ryerson, 50:50 joint ventures with Ryerson
International of the US, launched.
1998:- Jamipol (formerly known as Jamshedpur Injection
Powder), joint venture promoted along with SKW Metallchemie
GmbH, Germany, and Tai Industries, Bhutan.

2001:- Mjunction Services, largest e-commerce venture in India,

launched.

2002:- TM International Logistics, a wholly owned subsidiary,

launched.

2003:-The Indian Steel and Wire Products acquired.

2004 :-( 1.)Jamshedpur Utilities and Services Company

(JUSCO) established as a wholly owned subsidiary.
(2.) Lanka Special Steel launched as a wholly owned subsidiary
in Sri Lanka.
(3.) Sila Eastern promoted along with Unistretch, Thailand.

2005 :-( 1.) NatSteel Asia, Singapore, acquired.

(2.) Hooghly Met Coke and Power Company, a joint venture with
WBIDC, incorporated.
(3.) BlueScope Steel of Australia, a joint venture, launched.
(4.) Millennium Steel, Thailand, acquired.

2006:- Set up by Tata Africa Holdings in 2004, Tata Steel KZN

(Pty) became a part of Tata Steel's South African operations.

2007:- Corus, an Anglo-Dutch steel company, acquired.

.
WITH RESPECT TO TATA STEEL VARIOUS OTHER
PLAYERS ARE COMPARED ACCORDING TO GROWTH
IN STEEL INDUSTRY.

INDIA HAS A POTENTIAL FOR EXPONENTIAL

GROWTH IN STEEL CONSUMPTION

Peak Point
Point of
Saturation
Singapore J apa
n
EU
USA
Point of
Japan
Inflection
20 hina
6

EU 15
-0

Trigger
00
C

Australia
Point Singapore

USA

China

India India

0 100 200 300 400 500 600 700 800

Per capita in KG

India will be a part of The new Steel world … 9

 CONSTRUCTION & AUTOMOTIVE ARE THE KEY
SEGMENTS TO WATCH

Othrs: 4.0
Galv
Cons Dur : 1.0 6%
Packaging : 1.7
Auto : 2.7 CR
12%
Cap Goods : 3.7
HR
26%
Bars & Rods
43%

Construction : 21

Rails
3%
Structurals
10%

FY06: 34.1 million tonnes 10

All fig in million tonnes; Tata Steel Estimates

THE OVERALL GROWTH IN DEMAND OF STEEL IS

THEREFORE HEALTHY

ADC : INDIA (till FY-12) CAGR in %

12

70 9 65.0
6.7 56.9
60 51.1
30.0

50
26.2

36.9
34.1
23.5

40 31.2
26.7 28.8
30
16.5
15.0
13.2
11.9
10.9

20
35.0
30.7
27.6
20.4
19.2

10
18.0
16.9
15.8

0
FY03 FY04 FY05 FY06 FY07 Pess. Most Opt.
Likely
FY-12
LONG FLAT

All fig in million tonnes 14

Source : Tata Steel Estimates
 STEEL PRODUCTION HAS JUMPED SINCE THE
ECONOMIC LIBERALIZATION
42
YEAR CAGR (%) 38.4
1950-’93 6.5
1993-’05 8.8 30.6
29.7
All fig in million tonnes
23.8
21.4

15.2
13.0

7.5
5.1
2.4
1.1

1950 1960 1970 1980 1990 1993 1995 1998 2000 2001 2004 2005
16
CRUDE STEEL PRODUCTION IN INDIA (million tonnes)

CAPACITY UTILIZATION ARE STRETCHED..

No. of Total Working

SECTOR
Units Capacity Capacity
BF/BOF
Steel
10 21 21

CRUDE EAF 38 13 7
STEEL
Indn. Fce 750 16 12.4
Corex 1 1.6 1.6

TOTAL 42.0

All fig in million tonnes 18

Source : JPC, Tata Steel est.
INDIA WOULD EMERGE AS A GLOBAL HUB

India to play the Key role in

Steel Market dynamics
22

Global Steel Demand Is Expected To Grow At ~3% Till 2015

Global steel demand

Million tons

Decade of
Decade of 1980’s Decade of 2000 Future outlook
1990’s

CAGR = 2.8%

1,231
CAGR = 4.2% 1,113

CAGR =
CAGR =
2% 887
10% 834
785 789
644 658
582 582

1980 1985 1990 1995 2000 2001 2002 2003 2010E 2015E

Source: IISI Factbook; McKinsey analysis

32
Raw Material demand in India to increase by 13% to meet
the rise in steel demand
Sectoral Share % in 2004 - GDP Sectoral Share % in 2010 - GDP
growth 6% growth 8%

14
24.6 24.4
34
Agriculture Agriculture
Services Services
Industry Industry

52
51

Imperatives for 8% GDP Growth

 Manufacturing must grow at 11%
 This means a growth of 13% for Mining Industry if it has to contribute 5% to
GDP by 2010 instead of 2.5% at present.
 13% growth in mining has to be driven by few lead minerals such as coal, iron
ore, supported by other minerals. 36

Robust growth in infrastructure, power, construction

and steel sectors will drive the Steel Demand
Investment in construction sector (Rs m)

2500

Construction sector will grow

2000
at CAGR of 15%.
1500

1000

500

0
FY'03 FY'04 FY'05 FY'06 E FY'07 E FY'08 E FY'09 E FY'10 E
Source: SSKISept’05 issue

Incremental Steel demand for Expenditure on Infrastructure

Power Sector
1200
Consumption in '000

1000
Incremental

800
tons

600

400

200

0
'04 '06E '08E '10E '12E

In addition there will be investment for additional 25 mt capacity in steel itself37by

2010. Potential for steel - 25-30% of the investment cost.
 Ranking of World Class Steel

Rankin 2001 2002 2003 2004 2005 2006

g

1 TATA POSCO POSCO POSCO TATA STEEL TATA STEEL

STEEL

2 USINOR NUCOR BAO SEVERSTAL POSCO POSCO

STEEL

3 POSCO TATA TATA BAO STEEL SEVERSTAL BAO STEEL

STEEL STEEL

4 GERADU GERADU NUCOR TATA STEEL BAO STEEL SEVERSTAL

5 NUCOR BAO GERADU Blue MITTAL MITTAL

STEEL
Scope
• Internet facility was not so good speed was very low as well
as most of the sites are restricted by the System
Administrator.

• Information was good enough so it was difficult to decide

upon what to write and what to not.

• Topic was very vast itself. So covering all the aspects of topic
was quite difficult for me.
• Tata Steel has been conferred the first CII - ITC
Sustainability Award for the year 2006.By this Tata Steel is
maintaining benchmarks for other Steel players.
• Tata Steel's excellent environment, social and economic
performance & growth in the world steel market has led to
follow other steel manufacturers as benchmark.
• Tata Steel: Knowledge Management = people + culture +
technology.
• Indian steel industry exudes optimism. So there is a great
opportunity for the growth of steel industry.
• Tata Steel has increased its steel capacity from 5mtpa to
6.8mtpa by setting up a new H-Blast furnace at Jamshedpur,
which was commissioned in June 2008.

• Strong steel prices in the global markets helped Tata achieve

almost 30.4% growth inblended realizations

• Tata Steel’s consolidated Revenues increased by a significant

36% mainly due to strong
• Steel prices during 1HFY2009, which helped it achieve better
realizations.
BOOKS:-

ICFAI University Press study material on “Marketing”.

“Benchmarking Concepts & Cases” By Lata Chakravarty.

INTERNET:-

www.wikipedia.com

www.Scribd.com

www.Tatasteel.html