Read full document

TATA history

Page 1 of 3
Tata Steel: A Legacy and Competitive Edge
The foundation of steel production in India was set by Jamestji Nusserwanji Tata when India’s first steel plant was registered as The Tata Iron and Steel Company Limited in 1907.[1] Soon the company diversified from rails and embarked on a journey, capitalizing on the unmet need of steel in India in an industry monopolized by it. Post-independence Tata steel completed its expansion of capacity to produce 2 Mn tonnes of ingot steel every year, making it largest steel producer in India by 1958 .[2] Because of its long presence Tata got opportunity to own mines which proves to be its biggest competitive edge today, when the cost of raw material constitute about 70% of the total cost incurred by the company.

Despite all the advantages and growth strategies Tata steel had a shunted growth post-independence because of extra protectionism and government regulated environment which lead to a lowered standard for Tata in terms of operational efficiency and quality with respect to global standards.

LIBERALIZATION: Rise of Tata to World Class Institution
As Indian economy was liberalized, Tata realised it is lagging behind its highly efficient and competent global competitors[3] facing multitude of issues like increased competition, comparatively poor standards & quality of products, a highly under-developed and overstaffed workforce, complacent management, zero focus and primitive technologies.

Realizing the need of urgent major change there was a change in leadership in 1993 with the stage being led by visionary Ratan Tata.

IMPROVEMENTS IN TATA STEEL: [4]
COST: Primary focus of changes in Tata was to reduce its cost. The cost was brought down by focussing on efficient utilization of its captive mines to bring down raw material cost. Additionally innovation in processes, up-gradation of its technology and efficient energy reutilization contributed to lowered cost. For example use of blue dust as raw material which...
Tata Steel: A Legacy and Competitive Edge
The foundation of steel production in India was set by Jamestji Nusserwanji Tata when
India’s first steel plant was registered as The Tata Iron and Steel Company Limited in 1907.[1]
Soon the company diversified from rails and embarked on a journey, capitalizing on the
unmet need of steel in India in an industry monopolized by it. Post-independence Tata steel
completed its expansion of capacity to produce 2 Mn tonnes of ingot steel every year, making
it largest steel producer in India by 1958 .[2] Because of its long presence Tata got opportunity
to own mines which proves to be its biggest competitive edge today, when the cost of raw
material constitute about 70% of the total cost incurred by the company.
Despite all the advantages and growth strategies Tata steel had a shunted growth
post-independence because of extra protectionism and government regulated environment
which lead to a lowered standard for Tata in terms of operational efficiency and quality with
respect to global standards.
LIBERALIZATION: Rise of Tata to World Class Institution
As Indian economy was liberalized, Tata realised it is lagging behind its highly efficient and
competent global competitors[3] facing multitude of issues like increased competition,
comparatively poor standards & quality of products, a highly under-developed and
overstaffed workforce, complacent management, zero focus and primitive technologies.
Realizing the need of urgent major change there was a change in leadership in 1993
with the stage being led by visionary Ratan Tata.
IMPROVEMENTS IN TATA STEEL: [4]
COST: Primary focus of changes in Tata was to reduce its cost. The cost was brought down
by focussing on efficient utilization of its captive mines to bring down raw material cost.
Additionally innovation in processes, up-gradation of its technology and efficient energy
reutilization contributed to lowered cost. For example use of blue dust as raw material which
lead to uniform mining and lowered wastage. All this factor resulted to very low cost of steel
produced, and enabled Tata steel to emerge as the lowest cost steel producer in the world.