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Friday | 23 January, 2009 | 7:13 am

Qualitative Analysis

By Andy Barks

January 2009 - Make no mistake about it, it's been a tough year for steel firms. Fluctuating commodity prices, general overstock and consistently weak demand have created a perfect storm, causing many companies to make output cuts or, in some cases, shutter plants entirely.

Tata Steel Ltd., Kolkata, India, has hardly been immune to the epidemic. Though its stature and savvy have allowed it to escape previous slowdowns relatively unscathed, this November saw Tata impose a 17-day shutdown at a Jamshedpur hot-strip mill, confirming that the economic crisis doesn't discriminate.

Still, in a second half that provided few highlights for most steel firms, Tata managed to earn recognition, receiving the 2008 Deming Application Prize in October for excellence in total quality management. It was a reminder that, despite the tumultuous times, the company's direction is correct.

Among the chosen three
The Deming prize was established in 1950 and named for W. Edwards Deming, an American consultant and statistician best known for his work in post-World War II Japan. Its three awards are presented to individuals or companies making significant advances in quality improvement. Tata, which formally received the award from the Deming Prize Committee and the Union of Japanese Scientists and Engineers (JUSE) November 12 in Tokyo, became the first integrated steel company outside Japan to take home the hardware.

"No other activity made us think so deeply about out business and relationships than the process of applying for the Deming Prize," said Mr. B. Muthuraman, Tata Steel's managing director, in a press release.

Upon reception, Muthuraman dedicated the award to Tata's employees, customers and business partners, championing the mantra of continuous improvement through teamwork and consistency. He referenced the company's growth, evidenced by its more than 80,000 employees spread across four continents, and its commitment to the quality management ideal, which officially began in 1988.

"Total quality management is a fundamental way of managing business," said Muthuraman, "and every organization can gain from institutionalizing the culture necessary to win this prize."

A commitment sustained
Indeed, Tata's plans for action seem to be paralleling Muthuraman's words, as a late-November surge allowed it to finish the month with a marked spike in hot metal and crude steel production. Blast furnaces and melting shops recorded their best production of the year, while wire-rod, merchant and new bar mills all made significant jumps as well--just weeks after the Jamshedpur mill's temporary closing caused consternation.

Looking further ahead, Tata will place much of its focus on the Mundra Project, a joint venture with Coastal Gujarat Power Ltd., Mundra, India, intended to redevelop a disjointed energy production system in the Gujurat state on India's western coast. In the works is a 4,000-megawatt plant designed to provide, among other things, adequate water to the people of the region.

It's an interesting investment of time and money during such a fragile economic period, but it's also indicative of Tata Steel's itinerary. With total quality management as its overarching theme, the company is aiming to become the leading supplier and developer of not only steel products, but broader solutions intended to help customers thrive, rather than simply exist and maintain. MM

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