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Forging Sustainable Change at Tata Steel
Article

Forging Sustainable Change at Tata Steel

T.V. Narendran and Amit Ganeriwalla
Boston Consulting Group, 2020
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Editorial Rating

9

Qualities

  • Innovative
  • Applicable
  • Inspiring

Recommendation

You may think of steel production as an old industry that doesn’t make room for innovation, but Tata Steel’s experience, outlined in this special report from the Boston Consulting Group, proves otherwise. Tata Steel saw a precipitous drop in profits in 2014, but a new change initiative implemented the following year saw the company soar to new heights. CEO T.V. Narendran and Boston Consulting Group managing director Amit Ganeriwalla tell the company’s story. It turns out that listening to the little guy can lead to massive value creation in big business.

Summary

Tata Steel’s profits declined by 25% between 2014 and 2015. 

With prices for raw materials soaring, and product prices falling, 2014 was a rough year for steel. India’s Tata Steel was doubly obstructed when new regulations cut off its iron ore and coal suppliers. Tata responded with a change initiative that not only helped them recover from the precipitous dip, but sent the company into a successful rebound that surpassed even their most ambitious targets.

Tata Steel created ongoing systems for cutting costs, enhancing the quality of their product, and building sustainable changes, all without overburdening their 6,000 managers and 36,000 workers.

Executives at Tata Steel implemented the “Shikhar25 initiative” – and added $1.2 billion to their bottom line in only three years.

Tata Steel is no stranger to improving processes and cutting costs. The company has applied “total quality management (TQM), total preventative maintenance (TPM), and theory of constraints (TOC) programs” since the 1990s. ...

About the Authors

T.V. Narendran is the CEO & managing director at Tata Steel. Amit Ganeriwalla is managing director and senior partner at the Boston Consulting Group’s Mumbai office, and a global leader in the materials and process industries.

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