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    Final Report - Issues With Benchmarks

    Uploaded by

    Binod Kumar Padhi
    1) SAIL's labor productivity and manpower costs are higher than its global peers like JSW and POSCO, with SAIL spending 21% of total costs on manpower compared to 3% for JSW. SAIL has been working to increase productivity by 25% over the last 5 years but still lags behind peers. 2) Surveys of SAIL employees found challenges in feeling their work is challenging, receiving fair recognition, and being encouraged to develop more efficient work processes. Employees suggested priorities were improving performance-linked culture and reducing manpower over outsourcing. 3) SAIL produces 45% value-added steel products but lags JSW and POSCO in new product development and

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    Final Report - Issues With Benchmarks

    Uploaded by

    Binod Kumar Padhi
    23 views11 pages
    1) SAIL's labor productivity and manpower costs are higher than its global peers like JSW and POSCO, with SAIL spending 21% of total costs on manpower compared to 3% for JSW. SAIL has been working to increase productivity by 25% over the last 5 years but still lags behind peers. 2) Surveys of SAIL employees found challenges in feeling their work is challenging, receiving fair recognition, and being encouraged to develop more efficient work processes. Employees suggested priorities were improving performance-linked culture and reducing manpower over outsourcing. 3) SAIL produces 45% value-added steel products but lags JSW and POSCO in new product development and

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    1) SAIL's labor productivity and manpower costs are higher than its global peers like JSW and POSCO, with SAIL spending 21% of total costs on manpower compared to 3% for JSW. SAIL has been working to increase productivity by 25% over the last 5 years but still lags behind peers. 2) Surveys of SAIL employees found challenges in feeling their work is challenging, receiving fair recognition, and being encouraged to develop more efficient work processes. Employees suggested priorities were improving performance-linked culture and reducing manpower over outsourcing. 3) SAIL produces 45% value-added steel products but lags JSW and POSCO in new product development and

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    23 views11 pages

    Final Report - Issues With Benchmarks

    Uploaded by

    Binod Kumar Padhi
    1) SAIL's labor productivity and manpower costs are higher than its global peers like JSW and POSCO, with SAIL spending 21% of total costs on manpower compared to 3% for JSW. SAIL has been working to increase productivity by 25% over the last 5 years but still lags behind peers. 2) Surveys of SAIL employees found challenges in feeling their work is challenging, receiving fair recognition, and being encouraged to develop more efficient work processes. Employees suggested priorities were improving performance-linked culture and reducing manpower over outsourcing. 3) SAIL produces 45% value-added steel products but lags JSW and POSCO in new product development and

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    © All Rights Reserved
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    of 11

    High Manpower & Relatively Low manpower productivity

    When Apple came up with Mac,IBM was spending ore than 100 times on R &D. it is not about
    money. Its about the people you have, how your ‘re led, how much you get it (steve jobs)
    Labour productivity in addition of indicating the efficiency of a comapany, it reflects the
    performance of the company , its Automation level, Salary to work quality ration , Skill of
    employees etc. The best method of understanding the labour productivity efficiency is by
    benchmarking with our global peers.

    Bench Marking Analysis 1

    COMPANY SAIL JSW POSCO


    LABOUR ? ?
    PRODUCTIVITY ( 315
    MAN POWER
    COST (Per tcs in $) 120 12 38
    MAN POWER 21 3 ?
    COST (% of total
    cost in $)
    WSD SCORE(2016)
    LABOUR COST 7 10 7
    WSD SCORE(2016)
    (SKILL & 6 8 10
    PRODUCTIVE
    WORKERS
    This has been SAIL ‘s journey w.r.t labour productivity and Production. SAIL is increasing its
    productivity at an average of 25% for for last 5 years. An increment of 25 % is still keep SAIL
    far behind its global peers.
    Field Survey Analysis

    Field Survey Questions V.poor Poor Average Good V.Good Wt.Avg


    Score
    My job is challenging and exciting
    32 74 29 34 23 54
    Employee recognition is fairly
    followed 54 42 61 27 8 49

    I am encouraged to do develop new


    and more efficient ways to do my 31 9 64 57 31 65
    work

    Online Survey -Improvement of Labour


    Productivity
    Others(Motivat Reduction of
    ion) manpower
    2% 3%
    Outsourcing
    33%

    Enhancement Performance
    of employee linked
    competitivenes corporate
    s culture
    15% 47%
    Productivity is a vital component in every organization and its people are the effective means for
    improving productivity. Without a dedicated, committed and enthusiastic workforce, the
    objective of optimum level of productivity cannot be achieved. But these traits cannot be bought
    from the market. They have to be developed in the people comprising the organization.
    Therefore, the enlightened and progressive management has to create conductive work
    environment where people are continuously motivated to realize their potentialities. But How??

    a. Better HR policies to Enable ,Enhance ,Engage & Empower the employees


    Emloyees are the ARM’ s of the organization , so

    A – Attract then

    R- Retain them

    M – Motivate them

    Attrition rate in SAIL has increased from 379 to 615 in last 5 years

    b. Labour Enhancement Equation

    (Confidence, Skill , Training) + (Responsibility + Accountability) = Better Productivity


    24% of employee’s education is below matriculate and our employee cost is 21% of total
    cost compared to 3% of JSW

    c. Paradigm Shift

    A paradigm change in the mentality of Employees that from PSU as a Employment provider
    to PSU as a Business Excellence
    Tenure based promotions to be changed to performance based promotions and performance
    based variable pay’s

    Labour
    Paradigm
    ARM Enhancement
    Shift
    Equation
    INNOVATIONS & VALUE ADDED PODUCTS
    “You can’t ask customers what they want and then try to give that to them. By the time you get it
    built, they’ll want something new.” [Steve Jobs]
    SAIL has embarked on a journey charted out by a vision for technology and product enrichment
    to ensure that it not only catches up with the domestic and global competition but also
    strengthens its way into market dominance. But still we are lacking in many areas. Improvement
    in the Innovations is very much required for the success and moreover the survival of the any
    Organization.
    Bench Marking Analysis 2

    KEY FACTORS SAIL JSW POSCO


    % of Valued added
    Products (2015) 45 38 39
    (…….) *(29-33-38) *(31-34-39)
    New Products
    developed(Avg 3 24 109 49
    years)
    Patents Filled (2015)
    check
    8 21
    2
    % of Expenditure on
    R &D on 0.3 0.18 0.9
    turnover(2015)
    WSD SCORE(2016)
    Harnessing 6 8 10
    Techmology
    Revolution
    WSD SCORE(2016)
    Skill & Productive 6 8 10
    workers

    35% of the survey population (Online Survey) feels that lack of product mix and value added
    products are the main reasons for losing the market share (Annexure –
    Others Tie up with
    (Motivation Improvement on R&D (Online Survey) global
    ,Investment players &
    ,Focus on Premier
    lacking areas) Institutes
    26% 19%

    Focus on
    customer
    oriented
    products High
    performance
    13% employees in
    Training to be shop floor to be
    provided for involved in R &
    employees D
    4% 38%

    Innovation in SAIL (Online Survey)


    It is clear,
    The desire for compelling, and
    innovation is well
    expressed well, communicated
    but not a 4%
    compelling
    reason
    19%
    .Innovation
    does not seem
    A general sense to be a high
    of the priority
    importance of
    innovation is
    43%
    communicated
    34%

     Survey results reflect the need for having a Clear, Compelling and well communicated
    Innovation in the Organization.
     The lack of Involvement of the Shop Floor employees.
     Lack of Job profile design for proper utilization of talents.
    The proportion of Value added steel for SAIL is at an average of 45% which is better than the
    Peers. But an continuous improvement is seen across JSW, POSCO for the last three years
    whereas proportion of SAIL literally remained flat and it clearly reflects in the New product
    development areas with JSW at 109 products and where as SAIL is at 24% and it points towards
    as one of the main reasons for the loss of market share (Domestic w.r.t JSW) and also the
    profitability of the Organization.
    Case Study1: Trend of Innovation projects registered under Innovation Scheme -DSP

    100 Primary
    Mills
    80 Others
    60

    40

    20

    0
    12-13 13-14 14-15

     A platform is to be provided for the talented shop floor employees for their contributions
    towards R & D
     Innovations to be made as a significant part in KPA (Key Performance Areas)

    Online R& D portal for developing budding ideas

    An online portal for the employees to represent the ideas which will be further recommended by
    HOD and vetted by GM. The ideas/topic will be further scrutinized by a plant level committee
    and the best two ideas/topic will be forwarded to RDCIS.
    After further analysis of the ideas, RDCIS will form a group mentored by an executive above E-
    6 and above, Employee who generated the idea, and 2-3 top performing employees from E-3 to
    E-5 from the topic relevant departments from across the other plants of SAIL.
    MARKET SHARE & PROJECT IMPLEMENTATION

    Domestic Market Share


    Apr-Oct: 2016-17 (%)
    SAIL, 11.6

    TATA, 10.3
    RINL, 2.9
    Others, 52.6
    JSW, 15.3

    JSPL, 2.5
    ESSAR, 4.8

    Bench Marking Analysis 3

    KEY FACTORS SAIL JSW POSCO


    % of Valued added
    Products (2015) 45 check 38 39
    (…….) *(29-33-38) *(31-34-39)
    New Products
    developed(Avg 3 24 109 49
    years)
    % of Semi Finished
    Steel 26 2 ????????
    Average CS capacity
    addition in last 5 0.18 1.1 0.5
    years(MT)
    WSD SCORE(2016)
    Expanding Capacity 7 9 10
    WSD SCORE(2016)
    M&A ,Alliance & 6 8 10
    JV
    SAFETY & HEALTH

    JSW Bhusan NINL, 9,


    , Steel, 3%
    25, 27, 9% SAIL,
    9%
    155,
    RINL, 47,
    16% 53%

    ESSAR,
    Tata
    13, 4%17,
    Steel,
    6%

    Bench Marking Analysis 4

    COMPANY SAIL JSW POSCO


    ?
    LTFR 0.55 0.11
    *LTFR steel industry average is 1.39
    ENERGY EFFICIENCY & WASTE UTILLIZATION

    Bench Marking Analysis 5

    KEY FACTORS SAIL JSW POSCO


    CO2 Emmisions(t- ?
    co2/tcs) 2.61 1.8
    Solid waste 95 98 98
    Utillization(%)

    Water Usage 3.51 4.5 3.6


    Specific Energy ? ?
    Consumption 6.61GJ/TCS

    FINANCE & CAPITAL

    Bench Marking Analysis 6

    KEY FACTORS SAIL JSW POSCO


    Avg profit per tonne
    of CS(5 Years)
    D/E Ratio 0.85

    ?
    RAW MATERIAL COMPETITIVENESS
    Bench Marking Analysis 6

    KEY FACTORS SAIL JSW POSCO


    Raw material cost ?
    (US$ per tonne) 37 55
    Coke rate (kg/thm) 489 411

    CDI(kg/thm) 45 128

    WSD SCORE 10 6 6
    Iron ore mines

    Bench marking done on

    Labour productivity\ - almost done-


    Innovations and value added products – kind off done
    Market share and capacity expansion- kind off done
    Safety – kindoff ok
    Energy efficiency & Waste Utiilization – kind off ok
    Finance & Capital - Not ok
    Raw material competitiveness – Not ok

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