
TABLE OF CONTENTS

Acknowledgements 3

Executive Summary 4

Introduction 5

Forecasting and Aggregate Planning 9

Inventory Management 13

Scheduling 14

Enterprise Resource Planning (ERP) 15

Maintenance Reliability and Replacement 17

Total Quality Management 22

Theory of Constraints 25

Technology Management 26

Operations Strategy 27

Logistics and Supply Chain Management 27


ACKNOWLEDGMENTS

We wish to express our sincere thanks to Prof. T. Bandyopadhyay for giving us this opportunity to take this

project, and for extending his help. We would also like to extend our sincere gratitude to Mar. Shantanu

Verma, Head (Supply Chain Management), Tata Tubes, Mr. Vijit Kulkarni, Manager (Learning &

Development), Tata Tubes for sparing their valuable time to give us a deep insight into their operations

working and answering our numerous queries during the course of the project.

A special thanks to Mr. Sanjay Kumar, Chief (Civil Procurement), JUSCO for the guidance during our project

work.

Ankita Agarwal

Chhavi Bindal

Pradeep Sidana

Prashant Maheshwari

Rahul Agarwal

Vemuri Shrikanth


EXECUTIVE SUMMARY

This project is our endeavour to study and present acute insights into the working of the organisation TATA

TUBES from an operational perspective. TATA TUBES which came into being earlier as Indian Tube Company

(1954) as a joint venture between Tata Steel and Stelwarts & Loyalts of UK was taken as subsidiary of TATA

Steel in 1985 and has come a long way in its operations since its inception. It currently operates on state of

the art technology and has modernised equipment’s, machines and processes to ensure its maintenance of

world leader in welded pipes segment. It operates in several industries from Plumbing, Irrigation, Cold

Storage to Infrastructure projects like airports, stadiums, exhibition stalls, bus stands to precise industrial

equipment’s like Boilers, Auto etc. It serves both commercial as well as residential clients. It has been able to

achieve high degree of customisation to suit its clients and serve them in the best manner.

We were helped in our project by various delegates of TATA TUBES, headed by Mr Shantanu Verma (Head

Supply Chain Management) who helped us garner detailed directions into the functioning of the company.

We have explained in detail in the report the various processes: Starting with Forecasting which is a detailed

4 step process and encompasses the planning (specifying Sales and Operations Planning) process. We

enumerate the procedure for establishing the rough cut plans which further get evaluated and finalised. This

is followed by discussion on the Inventory Management procedure which also highlights the scheduling

methodology. The Material Requirement Planning procedure is also explained.

TATA TUBES through its evolution over the years has grown in several respects. Currently the organisation

lays great emphasis on computer platforms for operations. It has a very well established Enterprise Resource

Planning System in place and follows the SAP R3 system. The architecture of the ERP system has been

explained in the report. Post this thorough discussion on the Buffer Management policy is included. It also

lays a very strong emphasis on Maintenance and has evolved in its policies to currently follow a proactive

strategy. The various technologies used for maintenance like vibration analysis, LASER etc. are described

with appropriate figures and flowcharts. Quality is considered integral to operations at TATA TUBES. The

organisation with its standard certifications and winner of various quality awards follows an intensive Quality

check and maintenance procedure which we have made an attempt to capture.

In the final segment of the report we highlight the strategic planning of long term and short term operations

at TATA TUBES. We also highlight the technological analysis of its manufacturing front and supply chain

front. We observe that the focus of technology within the organisation is primarily at the manufacturing

front with latest and most well equipped equipment’s while supply chain is relatively more stable in

technology.

We have also done a study of management of operations in health care study through the medium of

studying few papers and present our findings about the same. We cover details of demand planning,

capacity planning, scheduling, process management and other few insights of the health care industry in

general


INTRODUCTION

HISTORY

A new dimension in steel tube technology opened up in India in the early 50’s – with the establishment of

the India Tube Company (ITC), on the 17th. December 1954. It was the outcome of a joint venture between

Tata Steel and Stewarts & Lloyds of UK. In 1985, the Indian Tube Company merged with Tata Steel to form

the Tata Steel-Tubes Division. The Tubes Strategic Business Unit (SBU) today is a leading manufacturer of

welded pipes and tubes in the country with an annual production capacity of around 4,00,000 tines, with

expansion plans on the anvil. The Tubes SBU manufactures commercial, structural and precision tubes at its

Jamshedpur plant. The SBU has a network of sales offices across the country with the marketing

headquarters in Kolkata to provide better customer service.

State of the art technology

The Tubes SBU has embraced the culture of business excellence reflected through a leading presence across

several lines of business. A high degree of customisation has been achieved through a comprehensive plant

modernization programme, involving up-gradation of the plant, technology and process control.

Lines of business

The three main lines of business are –

Commercial Tubes – for the conveyance segments, sold under the brand name of “Tata Pipes”.

Major areas of operation include plumbing, Irrigation, Cold Storage, HVAC, Idler Tubes

Structural Tubes – for the construction segment, sold under the brand name of “Tata Structura”.

With high torsional rigidity and compressive strength, these hollow sections are comparably more

efficient than conventional steel sections. The excellent distribution of material around the axis of

the square and rectangular steel hollow sections allows for remarkable strength qualities and thus

offers decisive advantages in its applications. The smooth and uniform profile of the sections

minimizes corrosion and facilitates easy, onsite fabrication to significantly enhance the aesthetics of

structures. A higher strength to weight ratio credits these sections with nearly 20% reduction in the

use of steel. The versatility of these sections allows for a wide range of applications as industrial

sheds and exhibition stalls to space frames and sign supporting structures. The sections can also be

utilized for large span portal frames, amusement parks and playground equipment’s, guard rails for

staircases, sports galleries, pedestrian walkovers, bridges and bus stands amongst other uses.

Precision Tubes – The Precision Tubes plant has added a new 4inch Mill from OTO Mills to its

existing 2inch and 3 inch mills, thereby extending the Precision Tubes range to 114.3 Outer Die and

6mm thickness with a combined capacity of 90,000 tonnes per annum. Major areas of operation are

Auto, Boiler, General Engineering segment

Corporate Goals for 2012:

Value Creation - Increase our ROIC to 30% from the current

16%.

Safety - Reduce LTIFR to 0.4 compared to the current 1.7

Environment - Reduce CO2 emissions to 1.5 Tons/ton of

Liquid Steel compared to the current 1.8 T/tls


Employer of Choice - Across all industries - top quartile

The aspirations of the Tubes SBU are:

1. Leadership in chosen markets

2. Growth with systems and processes

3. Continuously seize opportunities for value creation

4. Be a benchmark in Corporate Citizenship

ORGANISATIONAL CHART

Tubes SBU, a Profit Centre of Tata Steel Limited, is a leading steel tube producer in India, growing at a CAGR

of 8%. The SBU, promoted in 1954 as 'The Indian Tube Company' by Tata Steel in collaboration with M/s.

Stewarts and Lloyds of U.K., was merged with Tata Steel in 1985.

Subsequent to the Corus acquisition in 2007, Tata Steel Group's tube capacity has increased by 1.2 Million

MT making it the 7th largest manufacturer of welded tubes in the world.

MANUFACTURING

ST MILL

The Standard Tubes Plant for Tata Pipes and Tata Structura boasts of state-of-the-art facilities in tube

making, with technology from OTO Mills (Italy), Kusakabe (Japan) and MAIR Research (Italy).

Our Lead in the organization: Mr Shantanu Verma Head (Supply Chain Management)


HFIW

Manufacturing Process:

Tata Pipes and Tata Structura steel hollow sections are manufactured by the High Frequency Induction

Welding (HFIW) process. The process, also known as the Cold Process, uses HR strips, which are

manufactured at Tata Steel’s modern hot strip mill. In the HFIW process, the slit HR coil goes through the

MIG welder, while a steady flow is assured from the horizontal coil accumulator. Cold stamping is done at

this stage with the TATA seal of quality. The tubes then progressively form as the strip passes through

successive rolls and is followed by the high frequency induction welding at the edges to complete the weld.

External beads due to weld deposition on the outer surface of the tubes are then removed to ensure a

smooth surface finish. Following the welding process, an eddy current non-destructive testing machine

screens out the imperfectly welded tubes; Tubes that pass the test are cut into required lengths by cold saw

which gives a smooth burr-less square cutting edge. Tubes are then packed in hexagonal bundles by MAIR

auto-packing machine


PT MILL

The Precision Tubes plant has added a new 4” mill from OTO Mills (Italy) to its existing 2” and 3” mills,

thereby extending the Precision Tubes range to 114.3 Outer Dia and 6 mm thickness, with a combined

capacity of 90000 tonnes per annum. A range of applications for Automobile, Boiler, Air heater, and General

Engineering are met through these facilities.


FORECASTING AND AGGREGATE PLANNING

Tata Steel Tubes SBU uses Collaborative planning, forecasting and replenishment (CPFR) process to

determine the forecasting requirements.

The first step involves monitoring of data:


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Plant 055 - ST MILL (JSR) Material 0000232125-HF1-N-50.00-BV-H-PE-COM-WI-6.000 Thickness (All)

Date

Data

i. Retail Sales by Distributor

ii. Consumption - VMI customer

iii. Customer Order - Reliability Customer

iv. Other Customer Orders on Stockyard

v. Other Customer Orders on PWH and EPA

The data is transferred to organization using “Lotus Notes E-connect System”. The management of Distributor

Buffer takes place through SAP and TOC Dashboard System.

A view of TOC dashboard:

Indications available on the dash board in case of inventory is

a. TOO HIGH – Consistently in green zone

b. TOO LOW – Consistently in red zone

A real situation (relating to October 2008) is shown below:


The above figure also shows that the company uses a mix of Chase and Level strategy of production. The

above figure relates to the replenishments over a period of 60 days. Where the first two replenishments

took place after 12 and 11 days respectively, the final took place after 20 days. Thus resources are

rescheduled based on aggregate plans for high-volume tubes (made-to-stock) and customized customer

requirements (made-to-order).

The process used by the company is called DBM (dynamic buffer management)

Company defines DBM as a process to correct the inventory level on the basis of actual consumption &

supply performance (RRT) – Monitoring the buffer status.

The detailed Sales and Operations Plan (S&OP) is explained here:

S&OP is divided into 4 phases:

i. Annual and Monthly Operating Sales Plan, Segment-wise Sales Plan

ii. Annual and Monthly supply plan

iii. Monthly sales and operating plan, profit plan

iv. Daily production plan and transfers

1. Annual and Monthly Operating Sales Plan, Segment-wise Sales Plan:

All these act as inputs for the marketing department. The marketing department uses these inputs along

with its ABP, Trade Policy, Pricing, Marketing Initiative and New Product & Service Offerings to supplant

sales department with further information. The Sales department Collates, Summaries and Modifies Trade

Forecasts and Orders in the pipeline.

The statistical forecasts are supplied by the parent company TATA steel. All this information is used to

modify Statistical Forecast. Current order load information is further incorporated to Finalize Demand

Forecast and Operating Sales Plan.


2. Annual and Monthly supply plan

This is used to generate rough cut capacity plan, Raw Material Supply Plan and Rough cut supply plan.

The plant maintenance plan gives information regarding store and spares requirement. This is incorporated

into Rough cut supply plan. Review and finalization of supply plan takes place.

3. Monthly sales and operating plan, profit plan

The rough cut supply plan is put forward for discussion at Pre Sales and Operation Planning Meeting. Here

discussion takes place on Issues, Constraint and Plan vis-a-vis ABP. Consensus on Operating Sales and Supply

Plan is reached. Final Sales and Operation Plan is laid down. Profitability Projections are also done at this

stage.


4. Daily production plan and transfers

Date wise production schedule is generated. MRP requirement (which is explained under MRP heading) and

free inventory along with confirmed orders and commitment date to customers are used to evaluate and

modify the production schedule. These are then converted to production order and the final step is the

execution of production orders.

INVENTORY MANAGEMENT

The inventory management at Tata Tubes involves a few steps with problems associated with those. It is

based on probabilistic model. The various steps involved are discussed below:

1. Counting differences:

Foremost of the replenishers' problems is what are euphemistically called counting differences, in the firm's

jargon. A counting difference is a disparity between the inventories of a certain code number as

administrated in the material requirements planning system and as actually established (counted). More

than twenty possible causes of counting differences have been distinguished, most of which are part of the

aftermath of the introduction of the MRPS. For the purposes of this the MRPS was to be regarded. A sample

of counting differences was considered and the mean absolute counting difference was 19%, if counts were

made after three periods. Absolute differences 1ncrease (less than proportionally) with time between

counts, so that inventories may either increase indefinitely unnoticed, or decrease until a stock-out occurs

and finally a so-called zero report is signalled by the Central Parts Storage. The proposed solution was to

employ more counters to count stocks more regularly. Taking account of the inventory carrying costs of

positive counting differences and inventory stock-out costs caused by negative counting differences, the

"optimal" number of counters to be employed was estimated at eight.

.

2. Unplanned leakages

The main reason why actual use often differs from that planned for the current period is unplanned

leakages. The demand for service parts is part planned, and part unforeseen. Losses are usually unobserved

and a more or less taboo topic within Tata Tubes. The most important unplanned leakage is service parts


requested at short notice. Given the fact that profits made on service parts by far exceeds the contribution

to profits of the same parts assembled in new pipes, there will certainly always remain unplanned leakages.

3. Delivery times

One problem replenisher’s complained about was that the delivery times of parts suppliers were unreliable.

This problem was lesser than expected, although it brings in another stochastic element in material

requirements planning. Under overall contracts with suppliers, parts are to be delivered on call. Tata Tubes

passes on its MRP results to its suppliers. Between thirteen and three periods ahead demands are forecast

and "variable", up to three periods ahead demands are "fixed". Transition from “variable” to “fixed” (three

periods ahead) does not perform worse than average. Incidentally, parts added to the calls during the

"fixed" three planning periods have less prompt delivery times, but then, suppliers cannot be blamed.

4. Buffer policy

It is well-known that uncertain and stochastic elements Safety stocks are needed according to statistical

inventory control concepts, taking account of economic order quantities. The ABC-classification in use was

based on values of money turnover. The material requirements planning systems need to be supplemented

by statistical inventory control. At Tata Tubes automation sets the pace for inventory management and the

inventory management is affected by outside pressures from the business cycle, handed down by top

management, irrespective of efficiency or optimization studies from within.

SCHEDULING

• The MRP application reads data on Bills of Material, projected demand, manufacturing constraints,

and available plant capacity.

• It produces a Master Production Schedule, broken out by individual projected orders. This schedule

assumes that production to satisfy any order will not begin until 15 days before its due date.

• This value was derived by observing, for each order, the elapsed time between Entry into Inventory

and Release.

• A 15 day period is sufficient to produce the items to satisfy any of the orders, and prevents the

elapsed time between Entry into Inventory and Release from becoming too great.

• This heuristic schedule adjustment can be adjusted easily as conditions change.

ENTERPRISE RESOURCE PLANNING (ERP)

“ERP is an industry term for the broad set of activities supported by multi-module application software that

help a manufacturer or other business mange the important parts of its business, including product

planning, parts purchasing , maintaining inventories, interacting with suppliers, providing customer service,


and tracking orders. ERP cans also include application modules for the human resources aspects of a

business. Typically, an ERP system uses or is integrated with a relational database system.”

ERP at Tata Tubes

The tube majors’ prompt response to market change and shifting to customer orientation from product

coupled made it imperative for the company to implement ERP. The company is now able to reap benefits in

all aspects and make further progress in each and every operation of the enterprise.

The different subsystem of the ERP for Tata tubes are:

Store and purchase

Raw Materials

Payroll and HRD

Production

Planning and scheduling

Financial Accounting

Sales and dispatch

Marketing

Customer Relationship

Inter office communication

Event

Tracking

Inter office data synchronization

Engineering & Maintenance

The schematic diagram for the ERP implementation at Tata Tubes is given in following page.

Tata Tubes guided by Tata Steel implemented ERP on 1st Nov’1999. The company never got bogged down by

the reported failure rate of ERP implementations especially in bigger units and kept continuing their

endeavours with vigour to get the best and make the whole process learning cum experimental one. The net

result brought substantial increase in profits. The speed at which they worked (and without even the

minutes error) deserves great appreciation and is accorded as one of the main contributing factors for the

success. The company decided to implement SAPR3 System after careful consideration for they matched

best with their requirements. In addition the company also forecasted on what would happen to their

operations in the future while making this choice .This anticipation helped them to obtain the proper

solution at the right point of time. The implementation process took a long span of about a year owing to the

volume of operations and the major steps to be taken.

One of the major reasons to shifting to the ERP base was the adoption of the software by the parent

company, Tata Steel.


BUFFER MANAGEMENT

Business Planning

Sales and Operation

Project

Budgets/Project

Capacity Planning

Shop floor control Purchasing

Accounting

Serial Mngmnt

Resourc

Part

Master Scheduling

MRP

Resources

Resources

Full Level Pegging

Configuration Management

Bills Of Material

Inventory Status

Contract Management

Results

NO

NO

NO

Objectives

Demand/Resourc

Parts

Hours

Results

Delivery


Indications available on the dash board in case of inventory is

a. TOO HIGH – Consistently in green zone

b. TOO LOW – Consistently in red zone

A real situation (relating to October 2008) is shown below:

The above figure also shows that the company uses a mix of Chase and Level strategy of production. The

above figure relates to the replenishments over a period of 60 days. Where the first two replenishments

took place after 12 and 11 days respectively, the final took place after 20 days. Thus resources are

rescheduled based on aggregate plans for high-volume tubes (made-to-stock) and customized customer

requirements (made-to-order).

The process used by the company is called DBM (dynamic buffer management)

Company defines DBM as a process to correct the inventory level on the basis of actual consumption &

supply performance (RRT) – Monitoring the buffer status.

MAINTENANCE, RELIABILITY & REPLACEMENT

Maintenance of plant and equipment is carried out to increase the availability and reliability, so that it will

continue to operate satisfactorily for the entire life-cycle of the equipment with required cost effectiveness.

There are three main categories of maintenance strategies:

• Corrective or Breakdown Maintenance

• Preventive (Periodic or Fixed Time Based) Maintenance

• Condition Based Maintenance (CBM) or Proactive Maintenance

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Plant 055 - ST MILL (JSR) Material 0000232125-HF1-N-50.00-BV-H-PE-COM-WI-6.000 Thickness (All)

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Corrective maintenance can be defined as the maintenance which is required when an item has failed or

worn out, to bring it back to working order.

Preventive maintenance refers to maintenance, including tests, measurements, adjustments, and parts

replacement, performed specifically to prevent faults from occurring.

Proactive maintenance is a maintenance strategy for stabilizing the reliability of machines or equipment. Its

central theme involves directing corrective actions aimed at failure root causes, not active failure symptoms,

faults, or machine wear conditions.

A typical proactive maintenance regimen involves three steps:

1. Setting a quantifiable target or standard relating to a root cause of concern (e.g., a target fluid

cleanliness level for a lubricant)

2. Implementing a maintenance program to control the root cause property to within the target level

(e.g., routine exclusion or removal of contaminants)

3. Routine monitoring of the root cause property using a measurement technique (e.g., particle

counting) to verify the current level is within the target

In Condition Based Maintenance (CBM), Maintenance is carried out only when there is a need, as indicated

by the measurement and analysis, using some of the several available condition monitoring techniques.

These techniques include use of parameters like vibration and noise, temperature, lubricant condition,

wear debris analysis, corrosion, pressure, flow and other performance parameters.

The Steel Works at Jamshedpur has undergone several phases of up gradation and modernization with

respect to process technology and equipment system. During its long history, the maintenance of plant and

machinery has evolved to cope up with the technical as well as business needs. Maintenance in the Tubes

Division has evolved in different phases, namely, pre and post Modernisation and Expansion Programme

(MEP); post two million tonne programme (TMP) and the recently executed four phases of modernization.

These are important milestones in the process of changes in maintenance practices in the Works.

Revolutionary changes in maintenance practices were made during the first TMP period when a high profile

Systematic Maintenance Programme was launched to adopt preventive maintenance in an effective manner.

The phases of modernization necessitated computerization of maintenance management functions which

resulted in in-house development of Maintenance Information Management Systems (MIMS). The need for

further improvement in equipment reliability and plant availability necessitated actions in the area of

improving maintenance engineering functions. The Evolution is described as follows:

During the 1950s company executed its first Modernisation and Expansion Programme (MEP) to increase

capacity; semi mechanised plants were installed. The maintenance of these plants and equipment too was

primitive in nature which mostly deployed reactive mode with some degree of visual inspection in a

selective manner. All these plants have now been retired.

Around late 1950’s company further undertook the enhancement programme TMP (Two Million Project).

The plant and equipment were more modern in nature with some degree of process automation as available

during that time. The maintenance procedures of this equipment were suitably modified to meet the

reliability and availability requirements. During this period, maintenance started being viewed as a very

important function for sustaining a high level of production & started undergoing some revolutionary


changes to meet the challenges of the time. This period saw the advent of deployment of PERT (Programme

Evaluation and Review Technique) and what was then termed as Systematic Maintenance Programme

which included many new concepts of maintenance that were successfully practised elsewhere in the world.

A massive initiative was taken during the 1960s to adopt preventive maintenance in a big way. This was

launched as a Systematic Maintenance Programme throughout the Works. For ensuring uniform

understanding of the philosophy of systematic maintenance, a comprehensive manual was published for the

guidance to the maintenance managers and engineers. This document has withstood the test of time and,

even today it is fully relevant to performing good maintenance.

The 1970s for Tubes Division was the decade of aggressive initiatives which influenced maintenance in a very

substantial measure. For addressing emerging specialised needs, the following departments and

specialisation cells were created: Building Inspection and Maintenance Department, Standardisation

Department, Source Development Cell, Central Inspection Department, Job Oriented Training Centre etc.

The massive work of computerisation of maintenance management system began in 1986 with a thrust to

computerize the basic aspects. The issues like information needed to forecast short-term and long-term

maintenance tasks, proactive action plan, information to facilitate strategic decisions for maintenance and

synchronising maintenance task with production downtime management, etc. were addressed. The

maintenance requirement of the plant changed drastically as the equipment’s procured during

modernisation were of the latest generation. They were very complex, substantially automated with PLCs,

and had electronic, hydraulic and pneumatic interfaces. The requirement shifted to acquiring super

specialization in these areas. Also, condition monitoring of equipment became essential to keep track of the

health condition of very expensive equipment.

All these factors necessitated drastic

up gradation of both maintenance

management and maintenance

engineering. Both these aspects of

maintenance were systematically

computerised for improving

maintenance to the desired level. This

led to development of the

Maintenance Information

Management System (MIMS)

consisting of modules like equipment

codification, assigned and preventive maintenance, shop planning and control, materials control, history and

analysis, etc.

The improvement of maintenance engineering activities became necessary for addressing the complex

maintenance issues of the equipment commissioned during the four phases of modernisation. Initiatives like

condition based maintenance, tribology and tero-technology( the economic management of assets; It is the

combination of management, financial, engineering, and other practices applied to physical assets such as

plant, machinery, equipment, buildings and structures in pursuit of economic life cycle costs. It is concerned

with the reliability and maintainability of physical assets and also takes into account the processes of

installation, commissioning, operation, maintenance, modification and replacement) which had started


earlier in some measure, were now addressed in a more focused manner to derive significant benefits

expeditiously.

A new concept of performance audit of tribology system was introduced to find out the reasons for the gap

between the current and expected performance of a system by using analytical techniques in maintenance.

The condition monitoring activity was substantially increased by acquiring additional facilities like Vibration

metering and signature analysis, Shock pulse measurement, Thermography and remote temperature

sensing, Strain gauge technique, Crack depth measurement, Ultrasonic testing and evaluation, Contaminant

particle counting, Laser based techniques, Motor view for fault detection of electric motors.

In 1996, a comprehensive computerisation was undertaken to bring tribology, condition monitoring, tero-

technology and performance audit on one platform to facilitate an integrated approach to improve

maintenance engineering practices.


The maintenance organisation too has undergone changes to meet the requirements of time. From the

beginning, the organisation comprised mechanical and electrical streams for managing the maintenance

activities. In broad terms, the departmental mechanical set-up worked under the functional guidance of the

central agency and the administrative control of the department concerned. Thus, the concept of integrated

maintenance in the mechanical stream was implemented very early in the Works. The electrical stream was

centralised from the very beginning. The Works had commissioned a well-equipped Engineering Shops and

Foundry right in the beginning to cater to the needs of manufacturing maintenance spares. The facility at

Engineering Shops and Foundry was upgraded from time to time to meet the technical requirements of

various generations of equipment to be served. The Works Design Department together with Engineering

Shops and Foundry has very successfully catered to the diversified needs of maintenance spares and helped

contain cost of such spares. For the departments commissioned in the second Phase of modernisation and

thereafter, the concept of integrated maintenance organisation was implemented. From 1992 onwards,

the Works undertook an exercise of restructuring of different centralised maintenance departments to make

their functioning more effective. This resulted in the formation of departments like Maintenance

Engineering, Maintenance Services, Spares Planning and Spares Procurement, etc.

The restructuring resulted in right sizing of

manpower of these functions by reengineering

of function through merging of a group of

departments having similar activities. This also

removed duplication of work in many cases and

finally provided the benefit of synergy. The

restructuring of these departments were done

also to achieve the LTD (Lookers, Thinkers,

Doers) model for effective management of

maintenance.

In conclusion the maintenance is now viewed as a business function and a profit centre which must be

restructured to improve its effectiveness. To evaluate effectiveness of maintenance, new parametric


measures are defined. The world class maintenance compares these parametric measures with the

benchmarks to achieve excellence. For achieving breakthroughs suitable modern technologies like PDM,

PAM and RCM are adopted. The maintenance function is now amenable for optimisation to achieve the

desired level of plant reliability at the minimum cost. The RBM technique is used for optimising the

maintenance function in the plant.

TOTAL QUALITY MANAGEMENT

Total quality management (TQM) is a popular "quality management" concept and is much more than just

assuring product or service quality. TQM is a business philosophy - a way of doing business. It describes ways

to managing people and business processes to ensure complete customer satisfaction at every stage. TQM is

often associated with the phrase - "doing the right things right, first time"1.

TQM recognises that all businesses require "processes" that enable customer requirements to be met. TQM

focuses on the ways in which these processes can be managed - with two key objectives:

1. 100% Customer Satisfaction

2. Zero Defects

Quality Factor at Tata Tubes

Tata Tubes lays a great emphasis on quality and all

the tubes manufactured undergo various quality

assurance tests, to ensure customer delight. The

manufacturing process is governed by a

comprehensive quality plan. Each and every plant in

the tubes SBU today has been certified to ISO

9001:2000.

Significant quality control of the product happens

during the manufacturing process. It starts with

slitting the strip edges, continues with speed,

temperature control during the high frequency

induction welding and is followed by non-destructive

eddy current testing directly after welding. In-house

testing laboratory is equipped to carry out various

tests as per the specific requirements.

Tata tubes are manufactured in ISO certified

manufacturing facilities. The SBU also has well-

documented Customer Complaint Handling

procedures for settling complaints as required by ISO

9001:2000.

The Precision Tubes mill has been TS 16949 certified,


besides being recognized as self-certified Boiler Tube Manufacturer by the Central Boiler Board.

Importance of Quality Management System

For Tata Steel, across all its SBUs, pursuing high quality goals has been a passion and the very essence of its

existence. The company has recently won the Deming Application Prize for its excellence in total quality

management (TQM), the only steel company in the world outside Japan to bag the award. The company,

which in earlier years had been saving around Rs 200-300 crore annually, would, aided by Deming

Application target to save around Rs 600 crore.2 Each key performance indicator (KPI) is being tracked by the

company, like zinc consumption, coal rate, coke rate, etc, including whether any delays were taking place or

not.

Tata Steel – Tube Division is a three sigma company. It follows three sigma concepts. Tata tubes are

manufactured in ISO certified manufacturing facilities.

Quality Process

Tata Tube Division has a robust quality process. It starts

from the beginning of the process. Each tube

undergoes an extensive quality process so that there is

no chance of defect. Quality process starts at the

supplier’s end.

Sampling the steel: Checking the steel is obviously the

first and most important assignment of a quality

control service. For example, while making tubes from

steel, material is delivered, the carbon content of which

is guaranteed to always remain below a certain

threshold value. The production department thus takes

samples at very frequent intervals and checks for the

quality of input steel.

Quality during manufacturing process: The quality of

product is controlled during the manufacturing process.

During each process quality check is done to make sure

that product is of the best quality. Company does

basically two type of testing on product. First one is

Online Destructive Testing and the second one is

Offline Non-destructive Testing. In first one product

goes through a destructive testing. In this Tube

becomes “spoiled”. It happens to reduce the defects. It is done when production is in continuation. That is

why it is called online testing. This test is done to determine whether the pipe has holes.

Second type of testing is Offline Non-destructive Testing. This testing is done when the lot is manufactured.

Non-destructive testing is done with a certain objectives. Some non-destructive testing are-


Hydraulic Testing is done for irrigation purpose. It is done to check whether pipe can handle the pressure of

water.

Thrust Testing is done for automobile purpose. It is done for handling the jerks.

Eddy Current Testing In this testing current is flown through the pipe and it is checked whether pipe is crack

or defected somewhere.

Temperature is controlled during the high frequency induction.

Apart from all these testing company also does some specified testing according to customer’s

requirements. Thus company can satisfy the different customer by catering them different quality checked

products. In-house testing laboratory is equipped to carry out various tests as per specific requirements.

After completing all testing company does the final product sampling.

Quality checks on final delivery products: After completing all tests company does the final product sampling.

A steel tube has to be perfect, but unfortunately defects can never be entirely excluded. Hence, before the

material is delivered to the customer it again goes through a quality check process to establish its standard.

Also, from every lot tubes are selected randomly and stored in laboratory for two years. It facilitates

company to tackle future risks related to quality.

Monitoring the quality of environment and surroundings

Finally, the quality management department at Tata Tubes also makes sure that it respects all applicable

environmental standards. Therefore, the flue gases from various chimneys are tested and groundwater

samples are regularly taken. This allows them, for example, to determine for a fact that the canal water it

uses in its production process is not polluted and is under permissible limits.

Quality policy

Company considers the research part very important. Company spends sufficient amount of money on

research. Tube division does not have its own R&D department but research carries on at Tata Steel R&D

centre. There is special Tube section to focus on the pipes. Company follows BIS standard to cater the

domestic market. It produces the pipes according to Indian standard. There are different standards for

different variants of the products.

Company follows different standards for catering the other markets. Company is focusing in producing the

different products according to different weather and physical conditions. Company also maintains quality

by adopting the latest technology. It reduces the defects and improves the productivity. Currently company

is using the machinery from Italy and Taiwan. Company focuses on minimizing the scrap so that quality can

be improved. Scrap is reused by the company. So company has adopted good waste management system.

Competition is growing day by day so company always seeks for best technology available across the world.

Company procures that technology that can improve the quality and reduce the wastage. The technology

gives competitive edge to the company in this competitive corporate world.


THEORY OF CONSTRAINTS

Tata Steel Tubes SBU makes active use of the Theory of Constraints, especially in its Sales and Operations

Planning Process.

As can be seen from the above process, the company follows a step-by-step procedure to arrive at its

Constraint identification phase, at which point it applies the Theory of Constraints model to coordinate its

Sales and Production schedule.

First, it collates all its future orders and trade forecasts

Then the statistical forecasts are modified and used in conjunction with the current order load to

finalize the Demand Forecast And Operating Sales Plan

The above plan serves as the base for a Rough Cut Capacity Plan and a Raw material Supply Plan.

Able to deduce a Rough Cut Supply Plan at this stage, the company next has a Pre Sales and

Operation Planning Meeting, where, among other things, the Constraints are identified and

Generate Rough

Cut Capacity Plan

Collate / Summarize / Modify Trade Forecast) and

Orders in pipeline

Modify Statistical Forecast

Finalize Demand Forecast

And Operating

Sales Plan

Raw Material

Supply Plan

Rough-cut

Supply Plan

Pre Sales and Operation Planning Meeting Discussion on Issues, Constraint and Plan vis-a vis ABP

Consensus on Operating Sales and Supply Plan

Current Order

Load

Final Sales and Operation Plan Profitability Projections

Zinc and and other

Raw Material

Inventory

Store and Spare Parts

Inventory


addressed by taking the appropriate steps to elevate them to being supported by all other parts of

the system.

This is the stage where the required trade-offs are made to arrive at an optimum Operating Sales

and Supply Plan through consensus

TECHNOLOGY MANAGEMENT

This organization makes use of state-of-the-art technologies in its businesses. This being a manufacturing

organization, it primarily employs complex technology in its production processes, relying on simpler

systems when it comes to order management and review systems. A few instances of its heavy reliance on

technology in the production divisions:

The Standard Tubes Plant for Tata Pipes and Tata Structura boasts of high-class facilities in tube making, with

technology from OTO Mills (Italy), Kusakabe (Japan) and MAIR Research (Italy). The Division has also

stabilised its newest high-speed narrow tube mill and implemented a state-of-the-art air wiping system to

enable a finer coating control for its galvanised products. The Tata Steel Tubes Division uses HFIW (High

Frequency Induction Welding) mills to manufacture its tubes.

However, it does have an overarching ERP system in place to integrate the various functional units, including

those other than just the manufacturing processes. The use of Customer-centric Web pages for taking orders

and feedback is part of this system.


OPERATION STRATEGY

The Operations Strategy followed by the company can be broken down into time horizon-based and source-

based components as can be seen above.

Time Horizon-Based

o 5 year Rolling Plan – This part deals with identifying new opportunities

o Annual Business Plan – This stage is where decision making is made regarding various

operational parameters such as the selection of the Suppliers/Partners and their alignment with

the rest of the supply chain

o Monthly Sales & Operating Plan – This is where the need for development of further capabilities

is evaluated and acted upon

Source-Based

o Feedback from customers – The required capabilities are identified and developed accordingly

o Audit, Assessment & Feedback – The legal, commercial and technical aspects of the contract are

negotiated and finalized

o MoU with internal customers – The internal performance is evaluated against set targets and

continual improvement is effected

LOGISTIC & SUPPLY CHAIN MANAGEMENT

The company uses a mix of Chase and Level strategy

of production to adjust to its Supply Chain. Thus, the

company manages to cater to both the high-volume

volume tubes (made-to-stock) as well as customized

customer requirements (made-to-order).

The load on the existing capacity imposed by the

rules for Promising Delivery Due Dates and Made-to-

Assembly and Made-to-Order Systems. The entire

supply chain’s performance is affected by interaction

of the factors in the above diagram

This diagram indicates the short term performance

of the Supply Chain, starting with how the planned

orders shape up, going on to how this and the Raw

Material Inventory impact the Production Orders. All

this leads up to how the Mill Scheduling is done on a

day-to-day basis


REFERENCES

Company Archives http://tutor2u.net/business/production/quality_tqm.htm http://www.financialexpress.com/news/tata-steel-emphasises-on-quality-management/398782/ MAintenance Management Framework by Adolfo Crespo Márquez

http://www.tatatubes.com/

http://tutor2u.net/business/production/quality_tqm.htm

http://www.financialexpress.com/news/tata-steel-emphasises-on-quality-management/398782/

Tata Tubes

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