ES4C9 Supply Chain Management Globalisation – Tata Steel – Daniel Booker [1]

Contents History Global Span of Tata Steel Group & Tata Steel Europe Tata Steel Organisational Structure Definitions of Globalisation (Anti-globalisation) Drivers of Globalisation Local Cultural Needs Logistics and Inventory Strategy Implication of International Competition Future

History Tata Steel Group subsidiary of Tata Group 12 th largest steel producing company in the world Indian multi-national steel producer headquartered in Mumbai Largest steel plant located in Jamshedpur, Jharkland $ millions% change from 2010 Revenues27, Profits1, Assets28,904.6 EBITDA2, Tata Steel Europe was formally Corus TSE EBITDA (FY11) = $349 million Contributed 13.12% in 2011 [2], [3]

Global Breadth [4], [5]

Organisation Structure Tata Steel Group Tata Steel Europe National Steel Holdings Tata Steel Thailand Tinplate Company of India Tayo Rolls Tata Ryerson Tata Refractories Tata Sponge Iron Tata Metaliks Tata Pigments Jamshedpur Injection Powder TM International Logistics Tata Steel International mjunction Services TRF Jamshedpur Utility and Service Company Indian Steel and Wire Products Tata Blue Scope Steel Dhrama Part Company Hooghly Met Coke & Power Company Lanke Special Steel Sila Eastern Company Tata Steel KZN Tata NYK [6]

Implication of international competition Trading Industries Sheltered Industries Global Industries Multinational Industries International Investment (foreign owned assets) International Trade (world export) [2]

Definitions of Globalisation The growing integration of economies and societies around the world. Is the convergence of trends in markets, products, consumer behaviour and society. Anti-globalisation groups argue that these practices replace domestic economic life with an economy that is…controlled from overseas…seen as a surrender of power to the corporations, or a means of keeping the poorer nations in their place. [7], [8]

Drivers of Tata Steel Globalisation Overcapacity in many industries Lower labour costs Global transport infrastructure Information technology improvements Regionalisation of trade Liberalisation of world trade Growth in world trade greater than growth in GNP/GDP Search for better product [2], [9]

Why Has Tata Steel Become Global? Search for better product Increased quality and decreased price of raw materials e.g. coking coal ─ GLOBAL SOURCING The acquisition of more advanced manufacturing techniques e.g. TSE ─ GLOBAL ACQUISITION / JOINT VENTURES Regionalisation of trade Many competitors are monopolising markets e.g. ArcelorMittal Increase customer base e.g. Europe Information technology improvements Recent deployment of SAP (2009) Use of RFID to track high value assets Global transport infrastructure Move towards vertically integrating logistics, shipping and distribution firms

Tata Steel Globalisation Strategies Purchase existing manufacturing and distribution facilities Purchase technical innovations and advanced manufacturing knowledge Move up the value stream Vertically integrate supply chain for automotive steels (JLR) Tata NYK Shipping 50:50 venture – 12 chartered and 2 owned vessels Dhamra Port Company Ltd 50:50 venture – deep water port, fully mechanised berths TM International Logistics partnership with Tata Steel [4], [10]

Tata Steel’s Consideration of Local Cultural Needs Labour costs Energy prices Environmental legislation Health and safety legislation Unions Cycle to work scheme in NL [4], [11] Currency th’$

Tata Steel Europe Supply Chain Transformation How is Tata Steel Europe attempting to reduce supply chain costs to increase EBITDA profit? PHASE 1 Evaluation Awareness PHASE 2 SAP Supplier negotiations PHASE 3 Centralisation and restructure of administration functions 21 st Century Stores [10]

Tata Steel Europe Logistics Strategy Iron Ore Coking Coal Lime BF coal Fero minerals Steel Works Hot Rolling Mill Cold Rolling Mill Tube Mill Section Mill Rod Mill CAPL Additional Finishing Raw Material Supplier Primary Manufacture Secondary Manufac. Inventory Distribution Centre “Stage 4 – Postponed manufacturing” [9] [10]

The Effects of Supply Chain Transformation Program Significant change and associated strategic advantage post supply chain transformation project. [12]

The Future? [13]

References [1] Tata Steel Europe, Tata Steel European Operations. [Online] Available at: Brochure-English.pdf [Accessed 21 November 2012]. [2] CNN Money, Fortune Global 500 (401. Tata Steel). [Online] Available at: [Accessed 22 November 2012]. [3] Tata Steel, Tata Steel Reports Consolidated Financial Results for the Financial Year Ending, March 31st 2012, Mumbai: Tata Steel Europe. [4] Tata Steel Limited. (2012). Investor Presentation. Mumbai: Tata Steel Group [5] SAP Co-ordinator., An Introduction to SAP. Port Talbot, Tata Steel Strip Products UK. [6] Tata Group, Tata Group Companies. [Online] Available at: [Accessed 21 November 2012]. [7] Sharpe, D., ES4C9 Supply Chain Management Lecture 5 "Globalisation". Coventry: The University of Warwick. [8] Sharpe, D., ES4C9 Supply Chain Management Lecture 5 "Globalisation". Coventry: The University of Warwick.(See Slide 12 Notes) [9] Clker, Clker Clipart. [Online] [10] Europe, P. R. E. T. S., The globalisation of Tata Steel Europe [Interview] (19 November 2012). [11] Oak, R. (2011, December 28). The Economic Populist. Retrieved November 21, 2012, from China and India really are cheap labour in manufacturing: really-are-cheap-labor-manufacturinghttp:// really-are-cheap-labor-manufacturing [12] Amadeus, The University of Warwick Library [Accessed 19 November 2012] [13] BBC News. (2012, November 23). Tata Steel: 600 Welsh jobs cut, mainly at Port Talbot. Retrieved November 23, 2012, from BBC News UK:

QUESTIONS?

Organisation Structure [4]