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Operations Research & Management

PROJECT REPORT ON TATA TUBES


ORGANIZATIONAL RESEARCH & MANAGEMENT Prof. TRISHIT BANDYOPADHYAY

ANKITA AGAWAL CHHAVI BINDAL PRADEEP SIDANA GROUP 3 B Business Management, 2010 12 XLRI School of Business & Human Resources, Jamshedpur. PRASHANT MAHESHWARI RAHUL AGARWAL VEMURI SRIKANTH

B10069 B10076 B10096 B10098 B10101 B10118

Operations Research & Management

TABLE OF CONTENTS

Acknowledgements Executive Summary Introduction Forecasting and Aggregate Planning Inventory Management Scheduling Enterprise Resource Planning (ERP) Maintenance Reliability and Replacement Total Quality Management Theory of Constraints Technology Management Operations Strategy Logistics and Supply Chain Management

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Operations Research & Management

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

Operations Research & Management

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 equipments, 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 equipments 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 equipments 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

Operations Research & Management

INTRODUCTION
HISTORY A new dimension in steel tube technology opened up in India in the early 50s 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 equipments, 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

Operations Research & Management

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.

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

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).

Operations Research & 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 Steels 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

Operations Research & Management

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.

Operations Research & Management

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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Operations Research & Management

i. ii. iii. iv. v.

Retail Sales by Distributor Consumption - VMI customer Customer Order - Reliability Customer Other Customer Orders on Stockyard 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:
Plant 055 - ST MILL (JSR) Material 0000232125-HF1-N-50.00-BV-H-PE-COM-WI-6.000 Thickness (All) 350

300

250 Data 200


Green Zone Yellow Zone Red Zone

150

Sales Inventory

100

50

20081012 20081013 20081014 20081015 20081016 20081017 20081018 20081019 20081020 20081021 20081022 20081023 20081024 20081025 20081026 20081027 20081028 20081029 20081030 20081031 20081101 20081102 20081103 20081104 20081105 20081106 20081107 20081108 20081109 20081110 20081111 20081112 20081113 20081114 20081115 20081116 20081117 20081120 20081119 20081118 20081121 20081122 20081123 20081124 20081125 20081126 20081127 20081128 20081129 20081130 20081201 20081202 20081203 20081204 20081205 20081206 20081207 20081208 20081209 20081210
Date

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Operations Research & Management

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. ii. iii. iv. Annual and Monthly Operating Sales Plan, Segment-wise Sales Plan Annual and Monthly supply plan Monthly sales and operating plan, profit plan 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.

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Operations Research & Management

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.

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Operations Research & Management

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

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Operations Research & Management

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 replenishers 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,

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Operations Research & Management

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 Nov1999. 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.

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Operations Research & Management

Business Planning Sales and Operation

Objectives

Demand/Resourc

Project Budgets/Project Contract Management

Resources

Master Scheduling
NO
Resources

Parts

MRP Full Level Pegging


Configuration Management Bills Of Material
NO

Capacity Planning

Hours

Inventory Status

Resourc

Shop floor control

Purchasing

Results

NO

Delivery
Part

Results
Accounting Serial Mngmnt

BUFFER MANAGEMENT

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Operations Research & Management

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:
Plant 055 - ST MILL (JSR) Material 0000232125-HF1-N-50.00-BV-H-PE-COM-WI-6.000 Thickness (All) 350

300

250 Data 200


Green Zone Yellow Zone Red Zone

150

Sales Inventory

100

50

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

20081012 20081013 20081014 20081015 20081016 20081017 20081018 20081019 20081020 20081021 20081022 20081023 20081024 20081025 20081026 20081027 20081028 20081029 20081030 20081031 20081101 20081102 20081103 20081104 20081105 20081106 20081107 20081108 20081109 20081110 20081111 20081112 20081113 20081114 20081115 20081116 20081117 20081120 20081119 20081118 20081121 20081122 20081123 20081124 20081125 20081126 20081127 20081128 20081129 20081130 20081201 20081202 20081203 20081204 20081205 20081206 20081207 20081208 20081209 20081210
Date

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Operations Research & Management

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 1950s 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

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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 equipments 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

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Operations Research & Management

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, terotechnology and performance audit on one platform to facilitate an integrated approach to improve maintenance engineering practices.

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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

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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 welldocumented Customer Complaint Handling procedures for settling complaints as required by ISO 9001:2000. The Precision Tubes mill has been TS 16949 certified,

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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 suppliers 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-

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Operations Research & Management

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 customers 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.

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Operations Research & Management

THEORY OF CONSTRAINTS
Tata Steel Tubes SBU makes active use of the Theory of Constraints, especially in its Sales and Operations Planning Process.
Collate / Summarize / Modify Trade Forecast) and Orders in pipeline Modify Statistical Forecast Finalize Demand Forecast And Operating Sales Plan

Generate Rough Cut Capacity Plan

Current Order Load

Raw Material Supply Plan

S S

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

Final Sales and Operation Plan Profitability Projections

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

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Operations Research & Management

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.

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Operations Research & Management

OPERATION STRATEGY
The Operations Strategy followed by the company can be broken down into time horizon-based and sourcebased 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-toAssembly and Made-to-Order Systems. The entire supply chains 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

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Operations Research & Management

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 Mrquez http://www.tatatubes.com/

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