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Lean Through Operational Excellence

Experiences of Tata Chemicals

Ashok Muthuswamy

Nov 2014

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Tata Chemicals Limited (TCL)

• World’s second largest producer of soda ash

• Contributes 12% of India’s private sector’s urea production

• Carved a niche in India as a crop nutrients provider

• TATA SWACH: Water purifier providing affordable, safe drinking water to masses using innovative nano technology

• Pioneer & market leader in India’s branded Iodized salt segment

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TCL’s Global Footprint

Tata Chemicals Limited

Rallis India Limited

Tata Chemicals North America

EPM Potash Mines, USA Tata Chemicals Europe

British Salt, UK

Tata Chemicals Magadi, Kenya

IMACID,

Morroco JOIL,

Singapore

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Improve Control Cost Reduction

Action 500

1999

Operational

Excellence

2007

2010

Cash

Generation

2009

Manthan

2002

Total Operational

Performance & Cost Focus

Common Business

Language & people

Development

Improvement Journey at Tata Chemicals

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Operational Excellence at Tata Chemicals

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Lean Journey facilitated by OE

• Ensuring effectiveness and efficiencies throughout the value chain is what we perceive as Lean

• This presentation focuses on how we developed and deployed operational excellence process to boost our Lean pursuits

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Operational Excellence – Lean Boosted

• Lean Manufacturing is a well-understood system driving waste from current operations

• In our OE program, we embraced traditional Lean tools, and then went further to engage people to seek innovations and breakthroughs

It is a system that says there is no limit to people's creativity. People don't go to

Toyota to 'work' they go there to 'think‘.

Taiichi Ohno

The father of the Toyota

Production System

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Operational Excellence – Lean Boosted

• OE goes beyond the event-based model of improvement (eg: lean drive, Kaizen event, LSS Wave, etc.), and serves as an execution platform to continuously pursue Lean journey

• Therefore, OE is a systematic framework that helps increase effectiveness and efficiencies on a sustainable basis

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Conceptualization of OE Process

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We have implemented an earlier version of OE process named Udaan with great success, first at our main plant and subsequently at other plants; Udaan was our starting point

Our Road Map to Define OE

We spoke with people at all levels across Tata Chemicals facilities in India UK, UK, Kenya to gather what they understood by OE; What we found is some commonality in the understanding, but variances in articulation and deployment across as well as within plants

We visited and studied the processes of Tata Steel (lowest cost steel maker in the world, and thus most lean steel company), to understand how they achieved such excellence

These internal and external inputs were further processed to define our operational excellence model; {details in upcoming slides)

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Planning the Development OE Process

• We identified best in class areas within & outside our company

• We studied them in detail to collect best practice nuggets

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Development of OE Process

• The nuggets we collected from our exhaustive study were grouped into 13 different elements, bucketed into three categories

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Workshop Outcome: Definition of OE

• OE is a set of 13 elements that defines our Operational Excellence and asses its maturity

• These 13 elements help us to strive towards excellence in operational performance by – Developing a robust improvement system

– Having a process for management of the system

– Enabling and motivating people to manage the system

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“Improvement

Systems” “Improvement

Management”

“Improvement

Enablers”

1. Analytics

2. Standardization

3. Strategy

Deployment

4. Technology led

Simplification

5. SHE and Asset

Management

6. Measurement and

tracking

7. Improvement

Initiatives

8. Strategic

Investments &

Strategic

Outsourcing

9. Certifications,

Audits,

Assessments

10. Communicating purpose and

direction

11. Collaborative Culture

12. Rewards & Recognition

13. Capability Building

OE – The Tata Chemicals Way

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OE Assessment Criteria

• We developed assessment criteria for these 13 elements

• This criteria was used to assess departments, functions and plants

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Enterprise Support Functions (Finance, HR, Legal, Admn)

Where do we apply OE?

• OE Process is domain agnostic:

– It helps us assess excellence across the value chain

Suppliers

Distribu-tion

Sales & Mktg

Mfg Ops

Customers

Value Chain

Source & Procure

Engg R&D

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Positioning OE Among Other Initiatives

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• OE process supports better execution of all corporate initiatives

• It doesn’t compete with those initiatives

OE Process

Sreshto

How OE Supports Other Initiatives

LSS

TBEM

Safety

Cu

stom

er C

entricity

Emp

loyee

Eng

ag

emen

t

IMPA

CT

X Y

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How OE Supports Other Initiatives – (An Example)

• OE supports robust execution of any corporate initiative – For example, customer centricity initiative requires mapping out current

environment, benchmarking that with world class practices, capturing key customer data, analyzing it for customer behavior, developing actions based on the analysis, etc.

– While the strategic aspects of the program remain with the customer centricity initiative, OE process provides a deployment mechanism for the initiative

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How OE Relates to TBEM

• OE doesn’t compete with Tata’s Business Excellence Model (or Baldrige framework), but is a subset of it

• Such clear mapping helps us understand how various models dovetail among themselves, instead of competing

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ISO/EPM Audits 5S/GHK

RCA

CSI/SSI ICSI ESI

Business Results SDM LSS B

E In

dex

Outcome

Measures

Process Excellence

Customer Centricity

CIP

Even Explain How OE Metrics Don’t Compete with Other Indices

Leve

l of

Ass

essm

ent

Width of Assessment

OE Scorecard

Improvement Systems

1. Analytics 2. Standardization 3. Strategy

Deploy. 4. Tech led

Simplification 5. SHE/Asset

Mgmt

Improvement Management

6. Measurement and tracking

7. Improvement Initiatives

8. Strategic Investments

9. Certs, Audits, Assessments

Improvement Enablers

10. Communicate

purpose and direction

11. Collaborative Culture

12. R & R 13. Capability

Building

Process

Measures

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Deploying OE

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Develop a Deployment Plan

Activity

Communicate the initiative to leadership

Create initial communication package

Shoot videos of sr. leadership, advocating OE

Develop Collaterals (physical/soft posters, screensavers, etc.)

Identify assessors

Train assessors

Conduct site/functional assessments and generate improvement themes

Develop action plan to implement improvement themes

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Name the Champions

Function Name

Program Chair/Sponsor

Program Lead

Human Resources

Finance & Accounting

Plant A

Plant B

Plant C

Division A

Division B

Subsidiary

Marketing

Supply Chain Management

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OE Score Sheets

• These handy score sheets were used in assessments of multiple plants, units and enabling functions

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Assessment Score: 3.53

Assessment Scores

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Element Improvement Opportunities

Analytics Quality tools usage is limited to LSS projects, Such quality tools usage to be expanded and leveraged to identify /define wide ranging problems and develop solutions

Strategic Investments & Strategic Outsourcing

Risk assessment and mitigation plan to be done for all projects

Structured process for strategic outsourcing like LTSP is required

SHE and Asset Care Pace of structure repair and replacement doesn’t match deterioration rate

Communication Communication across work level needs to be improved (management staff, workmen, contract workmen)

Improvement Initiatives Involvement & participation of workmen in improvement initiatives to be strengthened

Strategy Deployment Detailing of activities and weightages in Project Planning Sheet [PPS] need to be improved

Improvement Opportunities Coming Out of Assessment

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Results

• Without OE framework, we wouldn’t have known the existence of several opportunities for improvements

The best approach is to dig out and eliminate problems where they are assumed not to

exist. Shigeo Shingo

The leading expert on the

Toyota Production System

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Thank You