20.Gloom to Glory

CASE STUDIESCase 1State Bank of India, 19981 5

Case 2Corporate Planning at SAIL, 1989—93 12

Case 3Gloom to Glory: The Successful Turnaround of theSingareni Colleries Company Limited 21

Case 4HR Initiatives for Turnaround ofVisakhapatnam Steel Plant 43

6Block

Indira GandhiNational Open UniversitySchool of Management Studies

MS-92Management of

Public Enterprises

State Bank of India

Case prepared by Prof. Ajit Prasad, International Management Institute,New Delhi

Corporate Planning at SAIL

Case prepared by Prof. Ajit Prasad, International Management Institute,New Delhi

Gloom to Glory– The Successful Turnaround of the SingareniColleriesCompany Limited

Case prepared by Dr. B. Rathan Reddy, Institute of Public Enterprise,Hyderabad.

HR Initiatives for Turnaround of Visakhapatnam Steel Plant

Case prepared by Dr. B.Rathan Reddy, Institute of Public Enterprise,Hyderabad.

Case material has been prepared to serve as a basis for class discussion. Casesare not designed to present illustrations of either correct or incorrect handling ofmanagerial problems.

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July, 2004

ã Indira Gandhi National Open University, 2004

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BLOCK 5 : PRIVATISATION AND DISINVESTMENT

Dear Learner,

This block introduces you to the concept of privatisation and investment in the presentcontext and takes a four of different aspects of privatisation and disinvestment.

The first part i.e. Unit 18: dige concepts, Policy and Dimention discusses themeaning of privatisation and its policy objectives adopted by different countries.Further it fives to take a look at the difference between non-divestment addisinvestment options followed by the different methods of disinvestment.

Unit 19: Privatisation: International Experienced as the same suggests dealswith the methods of disinvestments as adopted by different countries all over.

Unit 20: Disinvestment : Experience and Strategies deals with crucial strategies,which are to the adopted for successful disinvestments. This unit gives a fair viewof what is to be disinvestment and how to disinvestment should take place.

Unit 21: Implications of disinvestment discusses different strategie issues arisingout of disinvestment. This unit also gives an insight into the concept of soical safetyand different methods of tackting with the problems of redundancy in public enterprises.

In all the block tries to equip you with the understand of concept privatisation anddisinvestment as a process.

4

Case Studies

5

HR Initiatives forTurnaround of

VisakhapatnamSteel Plant

CASE 1 : STATE BANK OF INDIA, 19981

Mishra was perturbed. As an AGM of the prestigious State Bank of India StaffCollege at Hyderabad, he was scheduled to take a session with the youngprobationers on the benefits of the restructuring as suggested in the McKinseyReport. He was perturbed, not only because the report was something that was noteasy to understand, but the portions of the report that he had read and understood, hewas not convinced about.

Much had changed since the time when he himself had started his career as aprobationer in 1976. Branch expansion had been phenomenal, turnover had increasedsubstantially, the very nature of competition itself had changed. Nevertheless, thenature of decision making had remained the same : banking after all was a serioussubject !

Surprisingly, the SBI was not a nationalized bank. It had been created by an Act ofParliament in 1955, a logical successor to the Imperial Bank of India, which in turnhad been created merging the four Presidency Banks in the 1930s. Its immediateobjective in 1955 was that within the next ten years to create a network of over 500branches within the length and breadth of the country !. As the only large statesponsored bank in those days, it was given the privileged status of being the treasurybank, and in the places where the RBI did not have any branches, SBI would step infor carrying on the functions, like “presiding over the clearing”. Mishra wistfullyrecalled the stories of yore when in the absence of the Collector in the District, thenext officer that could give the order for firing, was none other than the Agent of theState Bank of India. By the time the 1969 nationalization had come around, allpretensions towards these grandiose existence had fallen by the wayside.

In 1971, SBI was the un-crowned market leader, but the top management hadrealized that in the increasingly competitive environment, the position that had beenassumed as given, was no longer something that could be taken for granted. Othercommercial banks, now nationalized since 1969, were asking for their share forgovernment business as also questioning the exclusive subordinate status to the RBIthat was bestowed on the State Bank. The banks management also realized that theoperating environment had changed totally. With increasing amounts of bank fundsbeing earmarked for the statutory SLR and CRR, operating margins were beingreduced. Bank profitability was increasingly dependent on reducing operationallogistics time. There was also the danger of expanding beyond a size that couldsupplement the growth efforts of the organization. Thus in 1971, SBI commissionedIIM-Ahmedabad to suggest a new structure for the organization.

The IIM Team had done a wonderful job of organizing the 3000 odd branches in1971. The basic unit of the structure continued to be the branch. Some thirty oddbranches made up a region, and some 4-5 regions made up a circle, enshrined in theLocal Head Office. The LHO was more or less contiguous with states of the IndianUnion. Thus the Patna Circle would represent Bihar, Bhopal Circle would representMP and so on. This was however not a hard and fast rule. Delhi circle would consistof part of UP, Rajasthan, and Punjab.

Case prepared by Prof. Ajit Prasad, Faculty, International Management Institute, New Delhi.

Case material has been prepared to serve as a basis for class discussion. Cases are not designed to

present illustrations, of either correct or incorrect handling of managerial problems.1This case has been prepared based purely on press reports and an article in Business India, March

2000

6

Case Studies Each circle was headed by a Chief General Manager supported by two GeneralManagers, looking after Operations and Planning respectively. Under the GM’swould be the Regional Managers and the Branch Managers. Decisions regardingloans would be cleared at the BM, RM or CMC level depending on the amount. [The CMC was the Circle Management Committee consisting of the CGM, GMO andGMP ]. Each Circle was also authorized to have a local board, consisting of localrepresentatives of Bureaucrats, eminent personalities etc. Only major decisions wouldneed to be referred to the Central Office in Bombay.

The LHO was the nerve center of the operations. Housing the all powerful CMC,meant that decision were taken fast enough, keeping the local imperatives intoaccount. Posts of Development Managers for the different functional areas like P,Agl, IB, SIB, C&I were created, reporting to the GMP, to develop market intelligenceand to perform the planning functions. In the early years, the monopoly positions ofthe SBI relegated these posts to professional obscurity !

The CGMs reported to Central Office, to their respective Deputy ManagingDirectors, which were designated on functional basis. Thus for international bankingdecisions, the DMD, IB would be consulted and so on. The DMDs in turn reported tothe Managing Director and the Chairman [ Two separate posts ]. The board at thecentral level comprised of representatives from the Ministry of Finance, RBI, industryetc. For administrative purposes the CGM would report to the DMD, Personnel,while his ACR would be written by the MD in consultation with the DMDs.

This structure introduced in the early seventies, fitted the organization like a glove.The primary purpose of reducing logistics time, and therefore the cost of transactionswas achieved. Also with increased devolution of financial powers, loan applicationsprocessing time came down sharply from an average of 6 months to an average of 2months. However, this was not without a cost. There was a feeling that the cost ofthis reduction in logistics time was being felt increasingly on the NPA [ non-performing assets] figures, which were steadily increasing. Profits were thus furtherstrained.

There was another reason for this. With the changes in the political ideology, whichreplaced structural reforms with cheap capital intensive techniques of production,loan melas became the order of the day. This was further compounded with the newrole of the Lead Development Banker being assigned to the SBI. This meant thatprofits from the other operations were increasingly under pressure. Nevertheless, thedemarcation of circles, on the basis of States helped in within-the-state co-ordination.And the SBI could take full advantage of this. Its recovery of loans granted under the“social” schemes [ Mishra shuddered to recall the DIR loans at 4% interest, withoutany guarantee that were issued to the poorest of the poor ] was probably the bestamong all the commercial banks.

The IIM team had assured that this structure could stand branch expansion till 6000branches, after which a new structure would have to be introduced. This was provedtrue, and it was only as late as the early eighties, that minor modifications were feltnecessary. This modification came in terms of introducing a new tier of ChiefRegional Manager between the RM’s and the GMO, with the further devolution offinancial power. Thus 3-4 RM’s would report to the CRM, who in turn would reportto the GMO. This was roughly akin to the Commissioner system of Districtadministration in most of the states, which served as a buffer between the DM andthe Home Secretary. The LHO structure was followed at the CRM level, with theplanning functions too being replicated in the form of Development Officers, for thedifferent segments. There was also the enlargement of the CMC, with theintroduction of a new post called GM, Commercial, looking after specific highvolume-high value commercial account branches.

7



Towards the end of the seventies, there was a major turbulence in the form of therecommendations of the Pillai Committee report. Among its various recommendationswas one that was destined to have a major impact on the recruitment policy of theSBI. This was the recommendation to merger the erstwhile OGII [ Officer Grade II ]with OGI into a new scale called JMGS-1, [ Junior Management Grade Scale 1 ]which would have benefited over 15,000 officers, a substantially large chunk of the25,000 officers in the SBI. But this merger meant that Probationary Officers, whojoined as OG-I’s, would now be joining at the JMGS-1 scale, making them junior to allOGII officers.

The start of the nineties saw further changes in the operating environment. Theliberalization policy that swept the county saw the coming of a large number ofprivate banks, with state-of-the-art communication technology, with highly specializedsegments. This was in response to the fact that the financial services market wasgetting highly focused, and highly segmented. Specialization had became the order ofthe day. Competing banks were getting learner and thinner and fighting over marginsthat were getting reduced further.

The SBI here was at an inherent disadvantage. As an organization that was a logicaland moral extension of the state, it could not flout any of the rules that the FinanceMinistry introduced. Not only did it have to strictly adhere to the CRR/SLR norms, italso had to strictly follow the rues that 40% of all advances be made to “prioritysectors”, 25 % be made to the weaker sections etc. This left little money to goaround for advances to the Corporate World, which was fast emerging a highlyprofitable and discerning segment.

Profitability was further affected by the provisioning for the NPA’s as suggested bythe stringent norms of the Choksey and Narasimhan Committee reports.Computerization which could have helped in reducing costs significantly, was a majorissue with the SBI unions. The other banks however were able to leverage this insetting new standards for operational logistics. The HDFC Bank touted that it couldprocess a loan application within 36 hours. The customer too was getting wiser, andsmarter, and more choosy. For the SBI this was a major shock. Mishra had wrylycommented once that for an organization that never had any problems getting itscustomers, the very face of the customer was now getting blurred !

Towards the end of the eighties, the very strengths of the SBI seemed to be turninginto its weaknesses. The massive branch network, now some 8500 odd branches,was introducing a heavy liability on the profits. Their contribution too in mobilizingdeposits was being questioned. In Patna Circle, with over 500 branches it wasestimated that 3 branches, Patna Main, Dhanbad, and Jamshedpur, accounted for allthe net profits. Some 40 branches supported the losses of the remaining 450. TheNPAs, which nevertheless were still above the other commercial banks, were alsoincreasing. There was also a flight of very qualified officers at the middlemanagement level to more lucrative jobs with the burgeoning private sector banks.Thankfully, the basic strength of the SBI, it dominant position in the retail banking[personal] segment had not waned, and its ability to raise large amounts of depositsfrom the average householder, no doubt leveraging its “government” image continued.This infact provided the very backbone to support the large volume advances thatwere being sought after by industrial houses. [ RBI rules prohibited lending more thana specified percentage of deposits to one borrower. This immediately put a lot ofsmaller banks out of the reckoning. Alternatively they had to recourse to consortiumfinancing. ]

8

Case Studies Efforts were made to correct the situation and gear up to the market requirement. Toget closer to the customer, specialized branches were opened. Thus branchescatering specifically to Industrial Finance, Corporate Accounts, International Banking,and Personal Segments were set up. This did help somewhat, but the topmanagement realized that more needed to be done. The IIM structure had outlived itspurpose, and in 1996, McKinsey and Co. were brought in to look at the situationafresh and recommend a new structure.

Table : Positioning of Different levels of Officers in State Bank of India

pre IIM report post IIM & Pillai reports pre McKinsey

Level-10 MD & Chairman MD & Chairman MD & Chairman

Level-9 DMD DMD DMD

Level-8 Secretary & Registrar CGM CGM

Level-7 Dy. Secretary GMs GM

Level-6 District Officer SMGS-6 [ CRM ] DGM

Level-5 Staff Officer -1 SMGS-5 [ RM ] AGM

Level-4 SO2 SMGS-4 Chief Manager

Level-3 SO3 MMGS-3 Manager

Level-2 OGI* MMGS-2 Deputy Manager

Officer OGII JMGS-1* Asst. Manager*Level-1

Clerical Levels

* indicates direct entry level as Probationary Officer.

As Mishra read again the brief circulated from Central Office regarding therecommendations of the McKinsey Report that wure being implemented, he was stillperturbed. Not entirely convinced that this new structure would fit the existingorganization in the same way that the IIM structure had done, he also saw severalconflicts in the implementation process, including those with the organizationalculture. Not entirely convinced himself, he wondered what sort of job he would do inconvincing the young probationers at the lecture.

Issues for Discussion:

1. Discuss the need for organizational change in the SBI in the seventies to thenineties. Why had the IIM structure outlived its purpose ?

2. What are the conflicts that Mishra is worried about ?

3. What are the success and failure factors that you see in the McKinsey report?

9



Annexure

BRIEF CONTAINING THE PRINCIPLE RECOMMENDATIONSOF THE MCKINSEY REPORT

The Background : The banking industry in India is facing tremendous pressureswith respect to profitability. This is not only on account of increased competitionbut also on account of more stringent banking regulations. With the process ofglobalization process, banking customers are also looking for products and serviceswhich are available internationally. There will thus be a need to create new productsto meet the changing customer requirements.

The Diagnostics : The consultants, McKinsey and Co. have observed that the bankenters the era of deregulation with a strong capital base and an expense-to-incomeratio, with is comparable with world class banks. However, with an ROA of0.22% in 1993-94, the SBI is behind private sector banks [1.3%] and the foreignbanks operating in India [3.2%]. Market share has slipped from 25% five yearsago to 20% now.

The consultants, while devising strategies for the Bank have kept in view thefollowing significant areas for business development. [1] to retain and nurture highvalue corporate clients who contribute substantially to Banks income and profit, [2]to avail of new opportunities that have opened up for the Bank for undertakingLeasing and project Finance, [3] to develop mid market business, by financing largenumber of mid sized corporates, [4] to focus on opportunities for mortgage lendingas well as consumer durable finance, and [5] to fully utilize the large networkof branches, especially in rural areas for mobilizing deposits.

The Strategy Statements:

Vision : To be a premier Indian Financial Services Group with global perspective,world class standards of efficiency and professionalism and core institutionalvalues. To retain its position in the country as a pioneer in Development Banking.To maximize shareholder value through high sustained earnings per share, and tobuild an institution with a culture of mutual care and commitment, a satisfying andexciting work environment and continuous learning opportunities.

Mission : “To retain the Bank’s position as the premier Indian financialservices group, with world class standards and significant global business,committed to excellence in customer, shareholder and employee satisfaction, and toplay a leading role in the expanding and diversifying financial services sector, whilecontinuing emphasis on its development banking role.”

Values : Excellence in customer service ; profit orientation ; belonging andcommitment to the bank ; fairness in all dealings and relations ; risk taking andinnovation ; team playing, learning and renewal ; integrity and transparency; anddiscipline in policies and systems.

Strategies and Systems : the existing market segmentation was given a re-look inthe light of the emerging environmental changes. While in the highly regulatedenvironment, there was limited scope for competitive strategies such as costleadership, produce differentiation, focusing on customer groups etc., in acompetitive situation, focused attention assumes a lot of significance.

10

Case Studies The broad strategy has been to create SBUs to deal with specific customer groups/business activities requiring focused attention. These customer groups arerequired to be handled in an integrated manner, i.e. both in respect of planningand operational areas.

The Business Groups and the SBUs under them have been identified as:

1. Corporate Banking Group : SBUs include the Corporate Accounts Group,Leasing Group, and Project Finance Group

2. National Banking Group : the 13 LHOs constitute the SBUs under theNBG, each LHO having two network of branches to give the business focus :Development and Personal Banking [ also referred to as the “retail network”]and Commercial Banking

3. International Banking : Foreign offices constitute one SBU and the otherSBU being global Merchant Banking and the Link Office

4. Associates and Subsidiaries : The SBU’s identified under this group areAssociate Banks and other Subsidiaries.

A fifth business group has also been identified, viz. Personal Banking Group,with three SBU’s namely Consumer Finance, Mortgage Finance and Credit Cardsunder it. For the present, this group has been put under the charge of NBG.

Value Propositions : In deriving the strategy, Value Propositions have beenidentified for each Group. Broadly speaking, value proposition is that attributewhich the Bank is striving to add to the products/services being offered to thecustomers so as to make the offering competitive in the market place andattractive to the customers.

Organizational Structure : The organizing principles are as follows :

1. A lean and integrative corporate center, focusing on long term planning andpolicy formulation, with no active role in daily operations : center to add valuein areas requiring cross business unit perspectives or expertise

2. Targeted business units, each with a distinct profit and loss responsibility for adistinct definable set of customers

3. A senior management team, with common performance aspirations and clearaccountability organized on the basis of a simple structure

4. The key processes identified for streamlining are : credit and risk management,improved balance sheet and performance management, progressive anddifferentiated human resources process an technology management. Theinspection and audit systems would need to be realigned with the variouschanges taking place in the strategies, systems and structures.

11



The Apex Management Structure will have:

1. The Chairman as the CEO

2. Four staff functionaries under the corporate center, viz. DMDs with thedual designation of Corporate Development Officer, Chief Financial Officer,Chief Credit Officer, and DMD in charge of Inspection and Audit.

3. The four business groups will be headed by:

(a) MD and Group Executive : Corporate Banking Group

(b) MD and Group Executive : National Banking Group

(c) DMD : Associates and Subsidiaries

(d) DMD : International Banking

4. All the above eight functionaries report directly to Chairman and areindependently responsible for matters relating to their group/ staff area.

Revised Structure at the Circles : Salient features of the restructuring are

1. Circle Structure will consist of [a] the LHO, [b] the Network Headquarters,[c] Zonal/ Regional Offices, and [d] Branches

2. Circles are to be divided into two focused networks [a] commercial, and [b]Development and Personal Banking

3. Planning to be integrated with operations. Planning support to be provided by[a] business planners, for network GMs and [b] Sales Planners for AGMs

4. Special re-emphasis on loan recoveries and NPA management by providingsupport at the various levels in the LHO.

LHO and Network Headquarters : The LHO will be headed by a CGM andsupported by three staff functionaries of the rank of DGMs to oversee policy andstrategy formulation and policy implementation in the areas of Financial Management,Credit Management and Personnel and Services. The three functionaries aredesignated as Circle Financial Officer, Circle Credit Officer and Circle DevelopmentOfficer. Two network headquarters each under a GM have been created tomanage the Commercial Banking and Development and Personal Banking networkBranches.

Branch Structure : The structure at the branches would be reviewed after thenetwork configuration stabilizes.

12

Case StudiesCASE 2 : CORPORATE PLANNING AT SAIL,

1989—93

It was the February of 1993 and Dr Sengupta had mixed feelings. As the SeniorDeputy Director with the Steel Authority of India Ltd., a public sector undertaking, hewas in charge of the corporate planning activity in the organization. On one hand hewas elated because after two and a half years of hard work by his team, theCorporate Plan 2005 document had been finalized [a brilliant document he thoughtpersonally], had been accepted formally by the Board, but on the other hand he wasdepressed because of the impending revision of the numbers : was this to mean thatall the work had gone to waste ?

In 1993, SAIL was a mammoth public sector undertaking. [ It still is !] Turnover12000 Crores, Output close to 10 million tones of crude steel, 2,00,000 employees,nine plants, 14 departments and in 1996 would be classified as one of the“navaratnas” of the Government. While it had formally be set up in 1972 , it couldtrace its roots back to 1954, when Hindustan Steel Limited was set up with the taskof constructing and operating three steel plants in Rourkela, Bhilai and Durgapur.Bokaro was added later on. As were, MEL and VISL. The sheer diversity of theproduct mix and the volume of production [ in any given year, SAIL would be movingclose of 50 million tones of raw materials ], was mind boggling. As his ChiefEconomist had one remarked, “you have to see the rolling mills of Bokaro, toreally understand the sheer dimensions of operations”

In 1980s, the steel industry was in midst of transition. Still predominately influencedand controlled by the Public Sector, of which naturally SAIL was a powerful player,the private sector had a dismal and residual presence. Legislation restricted the entryof the private sector into the capital intensive but profitable blast furnace route [ BF-BOF ] of steel making. The private sector was free of course to enter into thealternate route [ the DR-EAF ], which was quite energy intensive and had all theassociated problems of energy shortages. The result was an industrial structure thatwas highly skewed. SAIL and TISCO, were the major dominant players accountingfor over 65% of the total market. The rest of the market was fragmented. Evenwithin this market, the major producers were subject to administered price control,where the Joint Plant Committee of the Ministry of Steel would determine the pricesof steel in consultation with the main producers, taking costs of production intoaccount. [ a possibly apocryphal story recounts once of a jocular remark of RussiModi, CMD of TISCO, “Thank God for SAIL !” ]. Distribution too was tightlycontrolled, with most of the distribution powers being held by the DevelopmentCommissioner of Iron and Steel, a post usually held by an IAS officer of the rank ofJoint Secretary. Thus controlled production, prices, distribution and investments werethe market characteristics that Krishnamurthy was functioning against1.

Within this framework, thinking about profits was something that did not comenaturally to SAIL employees. Planning again was not part of the culture of theorganization. And before Krishnamurthy, planning meant the annual production plan.Planning was basically supply side determined, most of the industry worked under acorruption of Say’s Law that “Supply will create its own Demand” : “what can beproduced can be sold”. Planning was also in volume terms, prices and profitabilityhaving little inputs in the determination of the strategic choice.

Case prepared by Prof. Ajit Prasad, Faculty, International Management Institute, New Delhi.

Case material has been prepared to serve as a basis for class discussion. Cases are not designed topresent illustrations, of either correct or incorrect handling of managerial problems.

13



Before 1985, the fortunes of SAIL had been mixed. Productivity was low and outputhad stagnated. Capacity utilization was low [ in the range of 60-80% ]. Morale waslow, and the company, despite the presence of administered prices, had madecontinuous losses. In 1985, Krishnamurthy was asked to take over this giant monolith.With months of taking over, two priorities were clear. First if SAIL was toturnaround, it would have to grow, and this growth would have to come fromadditions to capacity, and second, for adding to this capacity, substantial investmentswould have to be made. Resources and investments were going to be very important.

Corporate planning in SAIL laid its genesis to this. In 1986, Krishnamurthy createdthe Corporate Planning Directorate, separating the planning functions fromOperations. The subsequent task was more difficult : finding someone to head thefunction. Krishnamurthy’s choice eventually fell on Arvind Pande, [IAS, 66MP], thenJoint Secretary with the Prime Ministers Office. The offer was also convenient toArvind Pande, it came at a very opportune time : he was due to be repatriated to hishome cadre, and his wife, a professional in her own right was loth to do so.

Paradoxically, one of the first tasks of the Corporate Planning Directorate was to findsuitable office. In 1986, SAIL had offices spread all over the city, the HT house atCurzon Road, Express Building in B S Z Marg, etc. After much debate anddeliberation, and direct intervention ant the Chairman’s level, it was decided tosurrender part of the second floor, albeit cramped, to the freshly inducted recruits ofCorporate Planning Directorate.

Said A J Malhotra, Dy Manager [who was pulled out of the Central MarketingOrganization], in the initial days, it was difficult even to get a peon, let alone anofficer to do the work !. Ravi Garg, who followed Arun from Finance, was equallyupset at the loss in the facilities that his new assignment presented. Neverthelessover the months, things settled down.

The First Corporate Plan was prepared, and presented. Corporate Plan 2000 was arepetition of history. The National First Five Year Plan had been an agglomeration ofprojects : an accounting plan. SAIL’s endeavor was none more. It was a collection ofnumbers, but nevertheless a good collection of numbers. it gave Krishnamurthy theteeth to fight the Project Appraisal Division of the Planning Commission, for moneyso badly needed for investment [ in the 1980s all investments in the Public Sector hadto be cleared by the Public Investment Board, of which the PAD in the PlanningCommission was the first step] and with the much needed money, things were on thego in SAIL.

Corporate Planning was not the only job that was entrusted to the Directorate.External interfaces was an important task. Parliament questions, ministerial repliesetc consumed much of the time of the officers, inasmuch as Pande felt the need tostrengthen the Directorate. Additions came in the form of an Economics cell, startedby Anita George, a bright MBA from Boston. Sanjay Sinha, from the Policy Groupwas tempted to move over, as was Anoop Sharma. Prasad came in as the SeniorEconomist from the Planning Commission and S C Sharma, from the Ministry ofIndustries joined as the Economic Advisor. Corporate Planning would now functionas a “think tank” for the company.

1 From 1991 onwards the structure of the industry changed drastically. Free licensing, even of the BF-BOF route, withdrawal of FEF, and the APM led to the setting up of large capacities, in excess ofdemand, especially in the profitable HR Coil segment. On the external front the collapse of the SovietUnion, and the resulting economic crisis thereof, led to international prices being depressed and therewas evidence of large scale dumping. These events however took place after the Plan had beenpublished.

14

Case Studies With personnel firmly in place, things started to happen in the CP Directorate.Business environment scanning started in a serious manner, with a bulletin beingpublished for top management. Diversification started being looked at afresh : therewere projects of Caprolactum and Carbon Black at Bokaro, Almora Magnesite atNainital, and other joint ventures. Fresh approaches were made to improvingproductivity through the direct intervention of the Organizational Systems group, asmall cell in the Directorate created to look at ways in which enhancements could bemade in productivity levels.

The activities of the Planning Units having stabilized, it was decided undertake theambitious target of revising the Corporate Plan 2000. In 1988, work on the SecondCorporate Plan started. The Directorate decided to go about the process in a morescientific manner, making this a strategic plan rather than an accounting plan. In theapproach note to the Plan, Prasad, the Chief Economist, wrote “the planningprocess must rest on scenarios and be able to generate multiple options. One ofthe weaknesses that we have had do far is that we have never been able tosuggest prioritization of projects : let alone the specification of a Plan B”

In 1988, it was decided that it was decided that given the changes that had takenplace in the environment, there was need to revise and update the plan. ThusCorporate Plan 2005 was initiated, with the objective of providing both a productionand investment plan to the company. The second plan exercise was a mammoth one.It was to be a participatory exercise, using a bottoms up approach to the planningprocess rather than the traditional top down approach.

Some highlights of the planning process were :

1. In 1989, an approach paper was prepared and circulated listing the approachand the priorities that the new plan would have. This was debated at a number oftop management workshops, and a final theme developed.

2. Given the crystallized approach, planning cells of the nine units were called forconsultations at Corporate Office, and given instructions that each unit shouldprepare a Corporate Plan for itself under the assumption that it was a standalone unit. This plan was to be termed as the Unit Perspective Plan, UPP.Each plan should specify the vision, the resources required and the plan that itshas to reach that vision. This was to be an unbounded exercise and units weretold to do a lot of deliberate day dreaming. Each plan should also be broken downinto functional plans, covering areas like operations, finance, raw materials,personnel etc.

3. At the corporate office “expert groups” were formed to look at each functionalarea across the whole organization. Thus the “expert group” on productionswould be required to look at the production plan of the whole company withoutany plant biases. Ditto for finance and other functional areas. There were a totalof nine functional groups.

4. In 1990 a series of workshops were held at the management Training Institute atRanchi were consistency was looked at among both the unit level plans and the“expert groups”. There rounds of consolidation exercises were done. In 1991December, Dr S R Jain led the board of Directors through the presentations andfinally approved the Corporate Plan numbers. The final plan over its entireperiod had an outlay of over Rs 42,000 Crores.

5. The levels of investment had run into some rough weather. To some it seemedrather ambitious. Unfortunately some of the “some” were decision makers.Naturally, Director Finance was very hesitant to accept the targets. Dr S R Jain,the Chairman also had his own reservations, about whether it would be possibleto push this target through the PIB.

15



6. In a series of workshops held at Ranchi, the Corporate Planning group had towork hard, to push the consolidation figures through. The task had beenlaborious, it was never easy bringing to convergence fundamentally divergentviews. The Final plan had investment allocations of 20,000 Crores for the 8th

Plan, 16,000 Crores for the 9th Plan and 7,000 Crores for the first three years ofthe Tenth plan.

7. The consolidation exercises had not been easy. Naturally, Bhilai and Bokaro hadobjected to toning down of their investment plans. In some cases there wereradical differences in the technology that should be adopted. PBCC Vs StampCharging was one. There were also variances in the external competitionscenario that were presented.

8. In 1992, while preparing the final plan document, the economic environmentchanged. Delicencing of the industry had started : operations wanted to reworkthe numbers. Import tariff rates had gone down : marketing wanted to reworkthe numbers. Exchange rates had changed : finance wanted to rework thenumbers. Nucor had come out with a new technology : projects and R&Dwanted time too to rework the numbers. Individual units too started to clamorabout wanting to change the Plans.

9. The Corporate Plan was accepted wholeheartedly by the board in 1992.Corporate Communications films were made and circulated. Groups fromCorporate Office went to the plants for making presentations and clarifying anydoubts.

10. Late 1992, the exercise finished. Dr S R Jain, had retired, and M R R Nair tookover. Mr. Nair had been Director Personnel when the planning exercise started.When the numbers were approved, he had been MD, Bokaro.

11. The Corporate Planning Group at the Corporate Officer was given the BestGroup Award at a simple but impressive ceremony on SAIL day. Heads ofPlanning Cells at the units were given promotions as and when they fell due.

12. In May1993, following the change in the Government, fresh estimates were to bemade for the 8th five year plan. The Finance Directorate gave a five yearinvestment proposal of Rs 13,000 Crores. Things were more or less the same,but IISCO had been dropped.

The writing of the document itself had also been a substantial exercise. Two sets ofthe document were released. Set A, which contained the investment chapter and wasreleased to a select few, and Set B, without the investment chapter, which were forgeneral circulation. It was Prasad, who led the writing team, who insisted on separatechapters for assessing the operating environment, the strategy statements, thefunctional activity plans, and giving credence to the then imperatives, specificchapters on Value Addition in SAIL, and Environment Management. The lastchapter The Constraints to Growth, listed some major factors why the plan targetsmay not be met. To drive home the point it was decided that the subtitle : “Growthwith Profitability” would be mentioned on each page of the document.

The forward by the Chairman, S R Jain, recorded: “.. This Cooperate Plan[perspective 2005] specifies a blue print to take the company into a further highgrowth path. Distinct from the earlier Plan, the document identifies not only thetargets, but more important the “strategies” that need to be adopted…”

16

Case Studies Again

“Change is the hall mark of any growth process. Managed change will be one ofthe strengths that SAIL will exploit to retain the spirited growth..”

In all, over 12 executives had worked continuously for 2 years on the preparation ofthe Corporate Plan at Corporate Office alone. The numbers that must have workedin the units were probably more to the tune of 50-60. As Sinha, the economistremarked, the sheer volume of data and paperwork generated, succeeded in bring outa lot of ideas about the organization. An important spin-off was the bringing theplanning functions across units closer.

As Dr Sengupta looked at the glossy cover of the new Corporate Plan, he could butstop the gushing feeling of pride. It had been a tough job, but worth it. The finaldocument, when presented to the visiting World Bank team had drawn muchappreciation. The Directorate had grown from strength to strength over the years.Apart from the core planning functions, more power had been added in the form ofthe Computer Services Division being asked to report to it. The Quality functionbecame an important part of the Directorate as did the MOU function which involvedsubstantial interaction witrh the Ministry of Steel.

The recent communication by the Finance Directorate was however a source ofworry to him. Following a recent meeting with the Working Group of the 8th FiveYear Plan, the resources available had been pruned down. The Investment outlay forthe perspective plan would have to be curtailed from 20,000 Crores to 13,000 Croresfor the 8th Plan Period.

As Dr Sengupta made his way to the scheduled meeting with the Chairman, he couldnot help wondering on the futility of the whole exercise. The ink had not yet dried onthe Corporate Plan Document, and there was already talk of revising the figures. DrSengupta shook his head regretfully at the inevitability of events.

17



THE KEY PLAYERS IN THE SAIL STORY

Dr V Krishnamurthy : Formerly with BHEL, and MUL, also Secretary, HeavyIndustries, was brought in by Rajiv Gandhi , to turnaround the perennial loss makingcompany. A charismatic leader, he used all techniques to motivate employees, anddelivered profits. Started Corporate Planning in SAIL by bringing in Arvind Pande asDirector Corporate Planning. Left SAIL in 1989 to become Member PlanningCommission. Vision : “SAIL to become the third largest steel producer in theworld..”

Dr S R Jain : An internal man, joined as management Trainee Technical and grewwith the organization. In between, was also CMD of HEC and CIL. Came back asVice Chairman SAIL under V Krishnamurthy and then succeeded him to Chairman.A technologist at heart, Famous Quote : I wear to hats, one as Chairman, the other asa technologist. You can come and see me any time if you want me to wear thetechnologist hat.” Was content to make profit of one crore per day. Vision :“ SAIL to become the technology leader in the industry..”

Mr. M R R Nair : An internal man. Joined as Management Trainee Personnel.Was also the youngest Director on the Board. Was also MD Bokaro. Succession toChairman was not automatic. Reportedly had to face stiff competition from thecurrent Chairman, Arvind Pande. During his tenure, profits went into the four figures.Vision : “ … focus on Customer satisfaction…..“.

Mr. Arvind Pande, [ IAS, 66MP ] in 1993 the Vice Chairman and Director of theBoard. Joined SAIL in 1986, having resigned from the IAS. Last positing, JointSecretary Prime Minister’s office. In SAIL started off as Director CorporatePlanning and then assumed charge as Director [Personnel and Corporate Planning].In between also held concurrent positions MD Rourkela, IISCO and Director inCharge Raw Materials. Succeeds Nair as Chairman in 1997.

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Case Studies A BRIEF ON SAIL AND ITS UNITS

SAIL : SAIL was originally set up as a holding company, with HSL and BSL. Lateron the Holding Company concept was dropped. It is now a vertically integratedcompany, which was recently awarded the status of a “navaratna” company.

BSP : [1959] Bhilai is the original “Russian” plant. At 4.0 mt capacity it produceslong products and plates. Long products are wire rods, bars, structurals, etc. and areused primarily in construction. Plates are used in ship building and flooring. Profitmaking

DSP : [1960] Durgapur is a long product plant [ 1.5 mt ] as well a s producingrailway materials : It was set up with British aid and technology. It has recently gonein for substantial investment for completely revamping the iron and steel makingprocess. Loss making, but with this new investment, costs have come down. Skepticssay however that capitalization of this investment will see that this unit never makesprofit.

RSP : [1961] Rourkela was set up with German assistance, It has a capacity of 1.6mt, and is probably the most versatile plant in the SAIL fold, producing a large varietyof flat products, as well as CRGO sheets and also space application steel. There isalso a fertilizer plant attached to the steel plant. Breaks even. Substantial investmentsrequired to upgrade technology.

BSL : [1973] Bokaro was originally planned to be set up as a separate company, withUSAID help. At the last minute, this project was aborted and the Government turnedto USSR. It is now a 4.00 mt plant, producing primarily flat products , such as HRcold, CR Sheets etc which are primarily used in the white goods industry, consumerdurables etc. Profit making, but of late has started only breaking even. Howeverthere is substantial excess capacity in the HR market. Capital investment undertakenin terms of introducing concast.

IISCO : The Indian Iron and Steel Company [ est. 1918 ] located at Burnpur in WestBengal was originally funded by the British and nationalized in 1972. It was brought inas a subsidiary in 1978 within SAIL. Loss making. SAIL has been trying for sometime to hive this unit off. JICA, Swaraj Paul, Mittals, etc all have turned down thisoffer. Located in W Bengal, this unit has strategic importance in terms of politics.Requires lost and lost of investment.

MEL : Maharashtra Electrsmelt, located in Chandrapur, near Nagpur. ManufacturingFerro alloys, a vital input in the steel making process. Perennially loss making. But ofstrategic importance to prevent cartellization of the other players in the market. Lossmaking.

VISL : Vishvisweriya Iron and Steel Limited. Located at Bhadrawati, Karnataka.State owned, SAIL acquired initially 40% of the share, now holds 100%. Perenniallysick, mainly due to high tariffs and consumption of power. May break even, after theintroduction of a new blast furnace.

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ASP : [1965] Alloy Steels Plant, Durgapur. Uses small electric arc furnaces toproduce special and alloy steels. Losing market share to domestic production andimports. High cost producer and thus loss making unit. Requires massive capital andtechnology injection.

SSP : [1980] Salem steel plan was set up using French technology. Gets slabs fromASP and abroad, rolls them into stainless sheets. Only brand that is consumer friendlyin India.. Requires technology injection. Some talk of going in for backwardintegration to meet demand in the south Indian market. Initially profit making, but dueto high costs, loss making now.

HIGHLIGHTS OF THE CORPORATE PLAN 2005

In light of the new policy environment of an “open” regime, the strategic long termmission of SAIL has been recognized as growth with profitability

The emphasis is on maximization of internal generation of resources throughincreased production, sustained enhancement of quality of products and services andharnessing the market potential in a competitive environment.

The growth strategy identified in the planning horizon upto 2005 is aimed at exploitingthe latent potential of SAIL plants through further modernization and technologicalupgradation. No greenfield capacity will be created.

The production of crude steel from the five integrated steel plants will grow to a levelof 18.9 mt in 2004-05 from 9.87 in 1991-92. The corresponding saleable steel targetsis 17.5 mt from 7.48 mt. The share of flat products in saleable steel will be 73.4% in2004-05 compared to 56.5% in 1991-92.

100% of the crude steel production in the ISPs will be through the BOF route, and97% of the crude steel will be processed through continuos casting. Obsolete andenergy intensive open hearth furnaces will be phased out.

The plan aims at a 30% reduction in specific energy consumption and a doubling ofworks manpower productivity by 2004-05.

Increased production will mean an increased demand for raw materials. Therequirement of iron ore will increase to 32.3 mt, while that of coking coal andlimestone to 20 mt and 9 mt. Coal imports will continue.

The targets for exports will grow to 3.5 mt, equivalent to 20% of the saleable steelproduction, making SAIL a net foreign exchange earner.

The capital investments for new schemes meant for modernization and expansion ofSAIL steel plants and the captive mines during the period 1992-2005 is envisaged ataround Rs 23,200 crores, and for the service units like RDCIS, CMO etc, at aroundRs 1950 crores. In addition the subsidiary units like IISCO, VISL, and MEL wouldrequire approximately Rs 10,000 crores for their modernization. The total internalgeneration in the planning period in SAIL, excluding subsidiaries is expected tobe Rs 36,000 crores.

The gross margin to capital employed ratio is projected to improve from the currentlevel of 17% to 32% by the terminal year. ..

The plan envisages the payment of dividend of 30% [on equity] by the terminal yearof the Plan.

20

Case Studies ISSUES FOR DISCUSSION

1. Examine the efficacy of the elaborate planning process in SAIL .

2. Evaluate on a scale of 1-10, the success of the Corporate Plan.

3. If Dr Sengupta were to repeat the exercise all over again, what should he do ?

4. What is the importance of the Vision exercise in the detailing of the Planningprocess?

5. Are numbers sacrosanct in the planning exercise. What is the differencebetween planning and strategic planning?

6. How can planning be used to create sustainable competitive advantage? Is thisbeing created in SAIL.

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CASE 3 : GLOOM TO GLORY:THE SUCCESSFUL TURNAROUNDOF THE SINGARENI COLLIERIESCOMPANY LIMITED

Prologue

‘Gloom to Glory” is the story of one of the most amazing and unbelievablecomebacks in the plan of government economics and the roles played by a visionarypolitical leadership, professional management and a newly awakened labour force.

It was in the year 1996 that Singareni Collieries Company Ltd (SCCL), the 107 yearold state public enterprise, was experiencing stormy weather. Its financial perform-ance hit rock bottom with accumulated losses of over Rs.1200 crore. It maladiesincluded an excessive baggage of over 100 confrontational trade unions giving onestrike call a day, low quality of coal, no customer focus, old and obsolete technology.To add to its woes were administered coal prices and adverse geo-mining conditionswhich pushed the only coal-mining company in South India to the brink of sicknessand uncertainty. A period that had in store a gloomy and doubtful future for all itsstakeholders – the government, customers and about one lakh workforce.

Against this gloomy scenario, the Government of Andhra Pradesh, under the vision-ary leadership, stood up to the challenge and took some bold decisions and firmactions – the result of which was a miraculous and remarkable turnaround.By 2002-03, the company wiped out all its losses and entered the year 2003-2004with net profits. It was a glorious year – a year of complete satisfaction, happiness,success and achievement. It’s a story to be shared and learnt from the experiences.This case is a sincere attempt to highlight the ups and downs of Singareni Collieriesand the remedial actions in the form of reforms that contributed to the turnaround ofthe company.

The case study on the spectacular turnaround of this company explains the variousforces that lead to sickness of public sector entities. It also explains how newparadigms, the state and the SCCL management in reforming a sick public sector unithave drawn.

Introduction

Coal: Mother Nature’s Dark Child: Man is blessed with abundance of naturalresources, including mineral wealth, that play vital role in the development of acountry and promote the economic growth when explored and made best use ofthem.

Coal, which is one of the important minerals, is known to man since ages and thisnatural wealth has been put to diverse use in the modern world. Regarded as thefuel for growth, coal is an important input for power generation, a vital infrastructurefor economic development. The mineral provides around 23% of global primaryenergy needs and accounts for a share of over 38% among various sources of total

Case prepared by Dr. B. Rathan Reddy, Faculty, Institute of Public Enterprise, Hyderabad.


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Case Studies power generation in the world. The world coal consumption is projected to go upfrom 4.7 billion tonnes in 1999 to 6.4 billion tonnes by 2020 primarily in China andIndia, which are expected to account for 75% of the increased consumption.

Energy Consumption: Commercial energy consumption in India has grown fromover 26% to 68% in the last four and half decades. Coal accounts for 63% of thecountry’s energy needs. The current per capita primary energy consumption in Indiais about 243 kgoe/year, which is well below that of developed countries. Driven bythe rising population, expanding economy and a quest for improved quality of life,energy usage in India is expected to rise to around 450 kgoe/year in 2010. Consider-ing the limited reserve potentiality of petroleum and natural gas, eco-conservationrestriction on hydel projects and geo-political perception of nuclear power, coal willcontinue to occupy center-stage of India’s energy scenario.

Coal Mining in India commenced in 1774 and the production level increased from6.19 million tonnes in 1900 to around 340 million tonnes in 2002-03. In India, coalproduction is still significantly under the government control and ownership, withCoal India Limited (CIL) along with its subsidiaries being the number one producer.Coal India, which is a Central Public Sector Undertaking, contributes to 87% of thecountry’s total coal production. Singareni Collieries Company Limited, owned jointlyby the Central Government and the Government of Andhra Pradesh, accounts for10% of the national production with only 7% of national coal reserves.

Challenges: A majority of PSUs continued to operate in post-liberalisation erafacing the new dynamics of market and taking on the challenges of competition fromlocal, national and international private players.

The PSUs also had to work under the threat of privatisation, and move towardsnewer paradigms of accountability, economic viability and transforming to be morecompetitive. Several PSUs became sick and were either closed or privatised.

Liberalisation and economic reforms had also impacted the coal industry in asignificant way. The coal industry as subjected to greater regulatory changes,competition, rapidly changing technology and consumer preference.

Policy Reform

Marketsopened

Reduced fund allocations

Labour reforms

Privatisation

Sickness

Changed Scenario

Protected markets turnedcompetitive

Funds inflow stopped,losses

Immune labour madeaccountable

New competition fromprivate/foreign players

PSUs losses no longer fullyabsorbed by government

Impact on PSUs

Monopoly lost

Resource crunch

Employee insecurity

Customers Reign,quality-cost imperative

Loss-making PSUsfaced with sickness/closure

Change Needed

Become market-oriented

Turn profitable

Employee attitude

More customer and qualityfocused

Workout a completeturnaround

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The structural adjustment and the liberalisation programme announced by theGovernment of India offered both) opportunities and threats in the form of:

· Free pricing and distribution of coal;

· Pressure on demand from domestic coal companies andimported coal due to lowering of import duties;

· De-Licensing of coal industry;

· Stoppage of budgetary support from the government .

Against this backdrop, Singareni Collieries, which was on the brink of sickness andclosure, is among the few Indian public sector units to have redefined, re-evolved andre-engineered itself and made significant strides towards profitability and viability in aliberalised market era.

History (1871-2003):

1871: Dr. William Kind confirmed coal deposits in Godavari Valley.

1886: Hyderabad Deccan Company Pvt. Ltd., was incorporated in England.

1889: First commercial operation commenced at Yellandu, Khammam Dist., AP(then a part of Warangal Dist).

1920: Hyderabad Deccan Company Pvt. Ltd was re-christened us the SingareniCollieries Company Limited (SCCL), and its script listed in the London StockExchange.

1945: The Nizam of Hyderabad purchased the shares of the company

1948: Machine mining started at No.5 Incline in Kothagudem

1949: SCCL came under State control

1975: Opencast mining started at Godavarikhani (RG OC-1)

1983: Longwall mining started at Godavarikhani (GDK-7 Inc.)

1986: Introduction of Walking Dragline (RG OC-1) and commencement ofcomputerisation

1989: Introduction of Blasiting Gallery method at Godavarikhani (GDK-10 Inc.)

1994: Introduction of Input Crusher and Conveyor technology in an Opencast minefor the first time in the country.

2001: KK-2 Incline (an underground hand section coal mine of Mandamarri Area)crossed 1.0 OMS (Output per manshift).

2002: Introduction of Surface Miner Technology at Yellandu (Koyagudem OC).

2003: The company achieved a stunning turnaround. All accumulated losses wipedout. Entered net profit regime.

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Case Studies Promoting Industrial Development

The giant State enterprise, SCCL is an important engine of economic growth inAndhra Pradesh. It contributes around Rs 400 crore as royalty and sales taxto the State’s exchequer.

Sector-Wise Offtake 2002-03

With a base of about 6,000 vendors, the company has spurred the growth of ancillaryindustries in the State. The economic prosperity of the entire coal belt in AndhraPradesh is dependent on SCCL. In consonance with the national policy, SCCLfacilitates the development of small scale industries and local industries. Developmentof roads, water supply and other social infrastructure in and around the colliery areas,in partnership with a proactive state government, has helped in improving the qualityof life all around.

Singareni Collieries has several strategic advantages ranging from huge coal reservesto client proximity being the only coal-producing company in South India. Thecompany harnesses its locational advantage to service a large market in and aroundits areas of operations. About 3,500 major, medium and small-scale industries form itscustomer list which includes diverse industries such as thermal power plants, cement,steel, paper, textile, tobacco, ceramics, pharmaceuticals, distilleries etc.

Singareni supplies coal to several thermal power plants, including NTPC(Ramagundam), APGENCO power stations and power stations in Karnataka,Maharashtra and Gujarat. The power sector consumes 78% of SCCL’s coalproduction. Thirty seven cement plants situated in the states of A.P, Karnataka andTamil Nadu consumes 13% of its coal production. The balance 9% is supplied toabout 3400 small and medium scale industries.

With spurt in industrial growth in the southern states and huge increase in demand forelectricity, Singareni will have to play a key role in empowering the economies downsouth of the country. With the new Electricity Act providing opportunities forindependent power production and distribution, the demand for SCCL coal is poisedto increase further.

Others 9%

Cement13%

Power78%

Cement

Others

Power

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Role of Swot Analysis for Turnaround of SCCL

Introduction

The SCCL embarked on a variety of strategies to improve the performance. Themeans adopted were use of:

1. Better communication system

2. Multi departmental teams

3. Structural changes in IR systems

4. Various I.E techniques etc.

Swot Analysis in SCCL

The SWOT analysis as to five years ago is described below, listing out only moreimportant parameters to portray the then situation.

Strengths

1. The organization is more than hundred years old.

2. It has a pool of well trained human resources.

3. The human resources have high and proven level of technology absorptioncapabilities and are “second to none”.

Weaknesses

1. High accumulated loss.

2. Became potentially sick to be re-referred to BIFR.

3. Employees have been displaying low level of commitment/light attitude towardsimprovement in performance, importance of productivity, work culture, changesand reforms, job satisfaction, wage levels, work norms, concern for aspirations ofother sections of public, need for thrift etc.

4. Employees have been exhibiting minimum level of awareness on companyparameters, problems in nearby organizations, management processes, role ofcoal sector on the economy of the down stream organizations, importance ofquality, importance of work norms, ownership particulars of the company,reforms process of the company etc.

5. Difficult IR situations with multiple unions and frequent strikes.

6. Reduced production and wage earned due to IR situation.

7. Assumption of guaranteed employment, irrespective of change in number ofmines and firm views about the system of employment of dependents.

8. Drudgery in some of the jobs like manual filling of coal into tubsand such other underground operations.

9. Communication process not upto the mark and needed overhaul.

10. The coal sector is deregulated.

11. Disturbed social fabric-role of extremism in organizational aspect.

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Case Studies Opportunities

1. High scope for expansion

Threats

1. Closure of non-performing organizations in the vicinity and elsewhere.

2. Phasing out of subsidies from Government.

3. Insistence by Government on a minimum I.R.R. (16%)for opening of new mines.

4. Erstwhile cost driven pricing structure and its tendency to build up inertia in theorganizations.

Swot Analysis and Further Course of Action

The management had critically analyzed the SWOT situation as described above.The follow up action plan was multi pronged. In simple, this consisted of utilizing thestrengths, opportunities and evolving methods of counter threats. Detailed and higheremphasis was laid on eliminating/minimizing the “weaknesses” the I.R. situation andthe resultant effects in terms of reduced production, increased losses hurting theorganization, wages lost by employees on account of unfavourable I.R situations etc.

The various methods followed by management are with emphasis on:

1. Communication to all employees about organizational status.

2. I.R. scenario

3. Motivational needs

4. Improvement of working conditions

5. Strengthening of welfare measures and social development

6. HRD methods

7. Frequent reviews

8. Education of family members

9. Other strategies

These are discussed as follows:

Communication

a) Communication system is thoroughly over hauled and well handled. Written(letters, pamphlets) form, oral (public address systems, Audio, Radio, TV)communication, group form (on the occasion of public functions), Establishmentof communication cell & interaction with media strengthened.

b) A mammoth exercise is done to communicate facts and figures to all the employ-ees at mines and depths. (of over 1 lakh). A number of committees are consti-tuted for this. The members are from Mining/IED/E&M/Finance/Personnel/Bestworkers. The scope of communication is vast. This communication to the rankand file is done 11 times. I.E.D. helped design of the informations template. Thishas helped in creating awareness among the employees and their role in im-provement of organization.

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Motivation Plans

With the help of I.E.D the employees were explained work norms and the need toimprove work turnout. The concept of fair day work was explained. Improvedproductivity linked wage incentive plans were made use of. A system of payment of10% of the company’s profit to the employees was initiated. There was good im-provement in productivity performance.

Reforms for Turnaround of SCCL

The closed business environment before the economic reforms of 1991 had left littleplace for performance, provided little incentive for innovation and entrepreneurship.When the windows of liberalisation were opened, much like the spencer mousewondering where the cheese went, the company was caught unawares.

The half-a-decade period from 1992 to 1997 was when the strife between the needto change and the reluctance to it became apparent. Globally, the psychological strifebetween change and inertia has always taken a huge toll on business, large and small.Large organizations love their model of success, and they become possessive abouttheir model more than their success. Honeywell is an interesting parallel. The USgiant, after nearly a century of brilliant performance, starting with a small chancediscovery to control heat in coal furnaces, had run excuses by 1995. Ironically its riseand slope was being able to adapt or resist change and position itself to the techno-logical requirements of the 19th century.

But Singareni had more than surface resistance to change .It had a trade unionproblem that was hell bent on walking down a suicidal path of confrontation with themanagement. The turbulent phase in the company’s history saw the accumulation ofhuge losses and inability to keep up its financial commitments. Poor Industrial Rela-tions characterized by a number of illegal and catcall strikes, militant trade unions,indiscipline and deterioration in work norms set the foundation for the downwardslide.

Several other factors also catalyzed the downward path, viz. administered coalpricing by the government which did not allow increase in sales prices despite peri-odic wage hikes and a groaning interest burden had all added to its losses. Badpractices like huge stores inventory and power pilferage from its colonies burgeonedpower and other costs.

The prescription for Singareni was obvious: Rx Reforms

SCCL Pre-reform period

The Dark Days, Bad Dream

As Singareni Collieries Company Ltd is the largest coal producer in South India, theGovernment of India initially provided sufficient budgetary support to the company toaugment its production capacity by opening new mines or introducing mechanisationin the existing mines. In view of the growing energy requirements and in pursuanceof the socialistic policies of the government, the emphasis was more on enhancingcoal production rather than project viability.

Frequent strikes, law and order problems, low productivity, apart from un-remunerative coal price vis-a-vis cost of production during the period 1989-90 to1991-92 affected the financial health of the company.

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Case Studies Referral to BIFR

Apart from Industrial Relations (IR) problems and regulated pricing, other adversefactors like skewed debt-equity ratio and huge interest burden resulted in heavylosses for the company during 1989-90 to 1992-93. SCCL became a sick industrialcompany and was referred to the Board for Industrial & Financial Reconstruction(BIFR) during May 1992. However, due to a liberal financial package extended bythe Government of India in consultation with the State Government of AndhraPradesh and sustained efforts by the management and unions, a modest financialturnaround was achieved. The company earned profits of Rs 17.76 crore andRs 26.64 crore in 1993-94 and 1994-95 respectively. By March 1994, SCCL cameout of the BIFR purview.

Poor Industrial Relations

The IR scenario in SCCL has been characterised by a number of illegal and cat callstrikes. The number of strikes reached a peak of 475 nos. in 1991-92. There weremultiple trade unions. The management had no details of actual patronage ofworkers.

There was also a spurt in activities of militant trade unions especially during theperiod 1989 to 1993. The average number of strikes during these four years was 446with a production loss of 1.83 million tonnes per year. This had contributed to grossindiscipline and deterioration in work norms in the company in general and inBellampalli region in particular.

Low Equipment Utilisation & Man Productivity

The frequent IR problems in the pre-1997 period also adversely affected machineutilisation. Singareni made substantial investment for procurement of Heavy EarthMoving Machinery (HEMM) in opencast mines and mechanised longwall units inunderground mines

The availability and utilisation of HEMM in opencast mines and longwall units inunderground mines were lower than the norms on account of poor work cultureprevailing in the company at that time. The performance of conventional hand section(manual mining) underground mines also suffered on account of poor IR scenario andlaw & order problems. The productivity in terms of overall output per manshift(OMS) in these underground mines was stagnant at around 0.60 tonnes from 1992-93to 1996-97. The low productivity levels in the mines coupled with the periodic wageincrease of workmen through National Coal Wage Agreements resulted in steepincrease in the cost of production from underground mines as the wage componentaccounts for almost 55-60% of the total cost of production in underground mines.

In spite of being uneconomical, the mining operations in the underground mines werecontinued to accommodate the huge workforce of about 1.14lakhs. The huge lossesincurred in these mines on account of low productivity affected the financial health ofthe company.

Non-adherence to Quality Commitments

About 85-90% of coal output of the company is supplied to thermal power andcement plants. Marketing of coal with emphasis on coal quality did not gain theimportance in view of huge demand-supply gap.

Selective mining and segregation of shale/stone/clay bands present in coal seamswas not given due attention. This resulted in numerous complaints from dissatisfiedcustomers and prolonged disputes with them. Customers’ confidence in gettingassured coal supplies was also greatly undermined due to IR problems resulting inloss of production.

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Inefficiency in Operations

All the operations in the mines and departments were undertaken with departmentalequipment and manpower. The low operational efficiency of departmental manpoweraffected the performance of mines and financial health of Singareni. Despite risingcosts, the management could not make the workforce or unions to accept the bringingin of private players as partners to cut costs and increase efficiency. There was nooutsourcing of activities during the early 1990s.

Administered Pricing

Coal prices were fixed by the Government of India upto 1996 and in view of thelikely impact of such price increase on power, railways, cement and steel sectors, theadministered prices were invariably pegged down, leaving SCCL with little or nomargin. Hike in input costs like wages due to periodic wage revisions under NationalCoal Wage Agreements (NCWA), interest costs, stores etc., were also not fullycompensated in the annual/bi-annual price revisions by the Central Government. TheYearly average cost of production was Rs 731 /ton during 1996-97 but the averagesale price was fixed at Rs. 529/ton. This impacted the company’s bottom line.

Burgeoning Power Cost

During the period 1980 to 1990, there was an increase in the number of privatecolonies in mining areas. Some of the residents of these private colonies began to tappower illegally from SCCL powerlines. SCCL was incurring huge expendituretowards the power bills due to such illegal drawal of power. The power consumptionreached an all time high of 630 million KWH in 1996-97.

Increase in Inventory

The company procured mining machinery from various countries/companies keepingin view the specific requirements of the projects. Joint protocols were entered withcountries like U.K., France, China and Germany for introduction of modem technolo-gies like Longwall, BG and In-pit crusher- conveyor technology. The stock of variousequipment components/spares in the stores increased from Rs 238 crore in 1993-94to Rs 379 crore in 1996-97.

Adverse Capital Structure

The company took up several mining projects in the 1970s and 1980s with the help ofliberal infusion of equity and loans by the Government of India. This was made tostep up coal production for meeting the escalating energy requirements of the coun-try. The increasing loan component and interest costs resulted in skewed debt-equityratio which increased from 1.87:1 in 1973-74 to reach a peak of 3.68:1 in 1991-92.

The company was unable to service its debt and defaulted on the payment of interestand loan instalments during the eighth plan period.

SCCL’S IR Problems (pre-reform period)

· There were nearly 100 Trade Unions each vying for supremacy and Catcall/Illegal strikes were a common feature.

· Competition and one-upmanship among multiple trade unions was the mainreason for the large number of strikes.

· There was a spurt in activities of militant trade unions like SIKASA (A bannedoutfit of Peoples’ War Group) especially during the period from 1989-90 to 1992-93. The average number of strikes during these four years was 446 Nos. with aproduction loss of 1.83 million tonnes/year. The number of strikes reached a peakof 475 in 1991-92.

· Frequent strikes, law and order problems and high cost of production during theperiod from 1989-90 to 1991-92 affected the financial health of the Company.Manpower reached a peak of 1,16,918 in 1990-91.

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Case Studies · Low literacy levels, extreme hardships in working conditions, strong opposition toinnovation and change further worsened Workforce-Management relationship.

SCCL Reforms for Resurgence

Troubles for companies, much like for individuals and countries, come not as a spy ortwo but in battalions. Successful and resilient companies, like great individuals andnations of character, emerge stronger from testing times. Singareni CollieriesCompany Ltd., emerged stronger and victorious. The reforms story of SCCL hasmany marvellous facets, but most significantly reforms were humane, logical,transparent, beyond ISMs, performance-oriented and incentive-based. The traditionalperceptions of the role of the Government, Management, Labour, Technology andMarket were redefined and made allies in the building and growth of the company.

SCCL Post-reform Period

Under effective management, with full political backing and dynamic leadership,Singareni Collieries initiated a series of result-oriented reforms that were aimed atrevamping its operations in order to put the company back on the growth track.

The need for urgent remedial action was realised as the company’s accumulatedlosses rose to Rs 1,219 crore and the performance by 1997 had hit rock-bottom-theworst ever in its history of over 100 years. The management identified the areas forintroducing the reforms, articulated the needed change and brought about aphenomenal turnaround. The company decided to take on the problems headon.Introspection and open brain-storming made the problems clear and a lateralapproach to finding solutions strengthened the plan of comeback.

New Approach

Unifying trade unions throughpath breaking elections

A high pitch communicationdrive harnessing media,launching literacy programmes

Focussed multi-facetedworkers’ welfare programme

Establishing outsourcing ofnon-core and ancillaryactivities through public-private partnerships

Innovative programmeslaunched like Dial-your-GM,field visits, interactions,follow-ups

Used innovative financialinstruments like debt swaps

Fuel Supply Agreements.Technology infusion forquality testing, workforcevisits to client sites

Focus on safety, environmentprotection, labour welfare.

Historic Errors

Succumbing or reacting towild catcalls/strikes

Neglecting the issue

Lip service or ignore issue

Persisting with status quo

Oblivious to issue,maintaining distantmanagement style

Accumulating losses,banked on Government’swrite-offs or support

Oblivious to issue. Bankon regulatory industrystatus.

Sporadic moves

Problems Identified

Industrial unrest throughmultiplicity of trade unions

Low literacy and awarenessamong workforce

Poor quality of life forworkers

Inefficient and high cost ofoverburden removaloperations

Management inaccessible tolabour force at large

Huge interest payments

Little Customer Care orQuality Consciousness

Lack of clear Corporate Blueprint for growth

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Strategy for Turnaround

Some of the key elements of the reform strategy included:

Trade Union Elections

A 21-day strike in June 1998 by workmen was resolved under the guidance of theState Chief Minister. Hon’ble Chief Minister directed the management to conductlabour union elections. Trade union elections were held in September 1998 inSCCL for the first time in the history of the coal industry in India. Elections wereheld under Secret Ballot system to elect one recognized union at the company leveland one representative union at the area level. This put in place a mechanism thatenabled Mine Managers to concentrate more on production and productivity matters.The company successfully conducted trade union elections in 1998, 2001 and 2003.

Election Benefits

· Wild catcall strikes ceased.

· Management IR focus time reduced with only one union at the company leveland representative union at each area to negotiate with.

· Trade union leaders became more responsible.

· The move provided foundation for the greater shift in thrust from a protectedenviron to a fiercely competitive market condition and from employee-manage-ment confrontation state to one of partnership.

· The management harnessed the first step towards consolidating industrialrelations through the trade union reforms with several positive measures includ-ing building good communication strategies transparent management systems,innovative and effective welfare measures to integrate the workforce into amotivated and significant force to achieve its goals.

Financial Restructuring Package

The Government of India approved a financial restructuring package in 1999 forSCCL, which included:

· Infusion of fresh equity of Rs. 268 crore by the Government of Andhra Pradeshand Rs. 257 crore by the Government of India during the ninth plan period from1997-98 to 2000-01.

· Ten year interest-free moratorium on Rs. 663 crore of overdue interest on theGovernment of Indian loans.

· Waiver of penal interest on interest of Rs. 66 crore.

· Rescheduling of the Central loans of Rs. 157 crore by two years.

Financial Re-Engineering

· Liquidating receivables in the form of tradable bonds :Rs. 1,164 crore in 3 year – interest @ 15 to 12.5 per annum.

· Higher interest bearing Central loans (17 & 16%) discharged by pledging 13%bonds for 11.75% interest loans. Through such carefully planned debt-swaps, thecompany saved Rs. 61 crore in a four-year period.

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Case Studies Cost-Cutting Measures

· Rationalization / Right sizing of manpower was undertaken by the Singarenithrough the introduction of voluntary retirement scheme for certain categories ofworkmen. Over 6,265 employees opted and retired under this scheme.

· Reduction of play-day and overtime allowance(savings of Rs. 33 crore per year).

· Stoppage of employment to land ousters.

· Regulation of dependent employment against vacancies.

· Dismissal of chronic absentees.

· Energy conservation in mines/townships and reducing power pilferage incolonies.

· Inventory reduction by adopting rate contracts for spares & fast moving items.

Particulars Inventory Inventory Level in Number(Rs. in crores) of Months Consumption

1997-98 243.36 8.13

1998-99 218.82 6.62

1999-00 206.90 6.58

2000-01 210.13 5.80

2001-02 185.44 4.74

2002-03 190.90 3.80

Public-Private Partnerships / Outsourcing

The company employed outsourcing of over burden removal (OB)as a strategic initiative to:

· Improve business focus on core competency.

· Reduce total cost of operations.

· Overcome limited internal resources.

· At present 50% work of OB removal is outsourced and the balance is donedepartmentally. The company saved about Rs. 1,610 crore by partly outsourcingOB removal in opencast mines since 1997.

Outsourcing of Ancillary Activities

Learning lessons from the success in outsourcing of OB removal operations, thecompany started off-loading of ancillary services. Some of the services outsourcedinclude:

· Catering & maintenance of guesthouses

· Ambulances and light motor vehicles like cars, jeeps, etc

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· Sanitation in workmen colonies

· Loading, unloading and stacking of materials in the stores.

· Distribution of material from stores to various mines and departments.

· Security services in Hyderabad Corporate office, Guest house etc.,

· Savings on account of these measures is about Rs. 4.36 crore per annum.Off-loading of these activities not only improved the quality of service, but alsoallowed the management to concentrate on core activities.

Communication Strategies

The management grasped the potential risk of lack of strong internal communicationand workforce reach-out programmes. There has also been a growing perceptionamong the workforce that the management is isolated, distant and insensitive to theneeds of workmen. The management therefore realized that an effective two-waycommunication at all the levels is necessary.

Most of the difficulties in the communication process in SCCL were due to its labourintensive nature of the industry with majority of the workforce being illiterate andunaware of conventional rules and procedures and the direction in which the com-pany should be moving.

Apart from these barriers, some of the conditions like geographical distance betweenemployees of the organization in terms of location of the mines spread over 350 Kmsin 4 districts was also an important barrier. The indulgence and interference ofextremist activists in coal belt areas was another major factor hindering the processof communication.

With a view to bring out awareness among the workmen, maintain transparency inadministration and to bridge the communication gap, various communication methodsto interact with the groups, individuals and their families, etc, have been taken up bythe management. Some of the steps taken in this direction are:

Communication Cells

· The company opened communication cells for creating a stable platform forcontinuous interaction with workmen and their families.

· The cell uses the television as a medium for bringing home the key issues facingthe company. Every week an exclusive programme titled “Singareni Tarangalu” istelecast in local TV Channels.

· The company also disseminates information to its employees through in-housemagazine “Singareni Vaarthalu”.

· Pro-active press meets, posters & pamphlets on various issues are used toeducate workmen.

Visits by Multi Departmental Teams

Multi-departmental teams comprising of members drawn from various disciplines visitmines and departments to highlight the performance of the company and the issuesconcerning production safety, welfare etc.

· The teams use local language and dialect and visual aids to communicate effec-tively.

· They also visit workmen colonies and townships in the evenings to maximizecoverage.

· Subjects of topical interests are also discussed with the workmen, suggestionsare invited and implemented wherever feasible.

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Case Studies Results of Effective and Continuous Communication with EmployeesThrough Multi-Departmental Teams

· There is better appreciation by employees of the challenges faced by SCCL inthe liberalized environment.

· Workmen have realized the need to improve production, productivity, reducecosts, extract good quality coal and satisfy the customer’s needs. They aremotivated to realize their responsibilities.

· Multi-Departmental Teams have cultivated the minds of workmen to listen to theviews of Management and appreciate the realities. Earlier they were onlylistening to unions and responding to their wishes. Workmen were not aware ofthe Management’s views and the company’s interests, the other side of the coin,before forming their own ideas on various issues. Now management is in aposition to explain its views to workmen on issues like dependent employment,re-deployment of surplus workmen, privatization etc.

· The press was also reporting the union’s views and views/actions ofManagement were coloured as harmful to the interest of the workmen. But nowthere is a significant change in the attitude of the press and their role issupportive for harmonious industrial relations.

· There is good improvement in Industrial relations due to this effective communi-cation channel with workmen, union leaders, press and officers. The previoustrend of workmen to go on strike on slight pretext is arrested and now they aredebating and seeking reason/facts in strike calls. Cat-call strikes are reducedsignificantly.

· Thus Multi-Departmental Teams have proved to be effective for communicationwith workmen, officers, trade unions and press. They are contribution toimprovement in industrial relations, productions, productivity, and profitability ofSCCL. They have become the main channel to take contentious issues toworkmen, explain to them in detail and elicit their views on all important matters.

The improved performance of SCCL from 1997-98 to 2000-01 compared to that in1996-97 due to implementation of various corrective measures, cost reductionprograms, better communication with workmen leading to their effective participationetc, is summarized below.

Customer-Centric Measures

· To improve coal quality, selective mining has been introduced for separation ofclay bands.

· Customer meets have been arranged for getting first hand details of their griev-ances.

· Automatic samplers and electronic weighbridges installed to avoid quality andquantity disputes.

· Fuel supply agreements entered into with major customers with penalties,bonuses and commitments to keep up customer satisfaction and ensure assureddemand.

Use of IT

· In-house software development group (SDG) comprising of trained personnelfrom various disciplines constituted to develop department-wise applications.

· INTRANET established between. Kothagudem, Ramagundam and Hyderabadoffices.

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· Underground Mine Management System (UGMMS) introduced for the first timein the Indian coal industry at No. 5B incline at Kothagudem.

· Opencast Mine Management System (OCMMS) introduced at Manuguruopencast-II mine.

· SCCL website www.sccl.mines.com launched.

· Video conferencing facilities are on the anvil.

· SCCL proposes to introduce satellite-based communication systems for HeavyEarth Moving Machinery.

HR and Welfare Strategy

Human Resource development through training and continuous upgradation of skills isan important thrust area of the Management. The company has a well-establishedHuman Resource (HR) department with 10 vocational training centers and a fullfledged Training Institute (Nargundkar Institute of Management) to impart in-housetraining.

Leading HR Consultant, Dr. B. Ratan Reddy, Institute of Public Enterprise hasimparted training for the executives and Trade Union Leaders together for overa period of two years from 2002-04. This intensive training helped theemployees to change the mind set of the employees and helped them to visualiseabout the company's vision, mission, competitor analysis, competitive strategies,global strategies and its impact on productivity, production, quality,Interpersonal Relationship, Negotiation skills, Team Building and effectivecommunication skills.

SCCL recognises workmen as stakeholders in the company’s progress andwelfare of workmen continues to be an important corporate philosophy of thecompany. The average expenditure per employee on welfare which wasRs. 14,402/- for the year 1996-97 has increased to Rs. 30,195 in 2002-03(increase of 110% over last 6 years). In 2002-03, the welfare expenditure onworkmen was Rs. 293 crores.

Welfare Measures

· Literacy Drive: To achieve total literacy among employees, a scheme called‘Telugu in 7 Days’ was launched with the help of Professor Goteti BalakrishnaMurthy of USA. Many employees and their families are participating in thiscampaign. The aim of the literacy missions is to enable the miner to read thenotices and newspapers and understand their pay particulars.

· Housing: Over 47,250 quarters were provided to employees and the housingsatisfaction is around 50%.

· Education: SCCL has established ‘The Singareni Collieries Educational Society’(SCES) which manages two colleges and 22 schools in the four districts of AP.These institutions provide education to 13,386 students. Apart from the schoolsrun by SCES the company has provided land / infrastructure to 17 privateschools on a nominal rent basis. Rs. 8.31 crore was spent on running theeducational institutions during the year 2002-03.

· Amenities: Thirty-three employee recreation clubs, 11 stadia and 10 communityhalls have been provided in the mining areas. SCCL spends more thanRs. 50 lakh per year for maintenance of these facilities.

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Case Studies · Water Supply: The company spends around Rs. 30 crore per year for supplyingabout 22 million gallons of drinking water per day to its colonies and surroundinghabitat.

As an important welfare measure, SCCL commissioned Godavari Water SupplySchemes in the Bellampalli region (7.50 MGD), Ramagundam region (7 MGD)and Manuguru area (4 MGD) benefiting around 4.37 lakh residents in companyquarters and 2.83 lakh residents in nearby private colonies and hutment areas.

· Swap: SCCL launched a unique scheme under the title Special WelfareAmenities Programme (SWAP) in 1997-98. In SWAP, both colonyrepresentatives (workmen) and management decide on the works to be carriedout in their respective areas. Separate budgetary provisions are made underSWAP, which has cut down delays in execution of works. It has also enabled thecompany to undertake improvements as per the felt needs of workmen.

· Drainage & Sanitation: SCCL spent Rs. 28.26 crore on Special WelfareAmenities Programme (SWAP) from 1997-98 onwards for improving civicamenities like drains, sanitary lines, etc in workmen colonies.

· Medical & Health: The company administers seven hospitals with 1006 bedsand 43 dispensaries in its mining areas. Around Rs. 50 crore was spent formedical care in 2002-03, including Rs. 1.84 crore for referral of 3,465 employeesand their dependents to speciality hospitals. Construction of a 50-bed hospital atBhoopalpalli in Warangal district is under progress

· Community Development: ‘Singareni Seva Samithi” is a social serviceorganization formed within the company to undertake community developmentactivities for the benefit of unemployed children of employees and bringhousehold transformation in coalfield areas. The activities undertaken by thesamithi include providing vocational training on various trades like sewing, sari-rolling, welding, etc., and assistance to eligible employee’s children for attendingrecruitment camps of Indian Army, State Police, CISF, etc.

· To inculcate the habit of savings amongst the employees, SCCL took theinitiative of disbursing the wages through banks. All the employees haveopened bank accounts and the habit of savings is reflected by way of increasedbank deposits in the coal belt areas by above 50%. All workmen receive theirwages through banks and ATM counters.

· SCCL firmly believes in involving employees as ‘Partners in Progress’.It is the only PSU in the entire country sharing its profits with itsemployees from 1999-2000 onwards. Around 10% of the company’s profitwas paid to workmen as special incentive during the last three years(Rs. 67.94 crore). SCCL has enhanced the special incentive to 11% of its profitfor the year 2002-03.

Landmark in SCCL History (2002-03)

The year 2002–03 was a watershed in the history of Singareni Collieries as hasnotched up the highest ever production, profitability and productivity.

· Production of 33.24 million tones of coal during 2002-03 was the best everproduction in the history of SCCL.

· Coal dispatches of 33.37 MT are the best ever dispatches.

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· The increase in coal dispatches has been 2.32 MT over the year 2001-02 andwas the highest increase ever in the history of SCCL in a single year.

· Despite 22 days strike during 2002-03, 25.9 million tones of coal were dispatchedto power sector the highest ever in the history of SCCL. Power sector dispatchesconstituted 78% of total dispatches during 2002-03.

· Gross turnover of Rs. 3689 Crore achieved during 2002-03 is the highest everturnover in the history of the company.

· Due to series of innovative productivity improvement measures cost of productionreduced by a record 6.4% in 2002-03. As against Rs. 861 per tonne cost ofproduction during 2001-02, the cost of production during 2002-03 was Rs. 806 pertonne.

· The company attained the highest ever profitability of Rs. 417 crore as profitsafter tax.

· It entered the net profits regime for the first time after 27 years (since 1975-76).

· SCCL paid dividend to the shareholders for the first time after 37 years (since1965-66).

Other Achievements

· In 32 years history of All India Resource Competitions, the SCCL team for thefirst time bagged the overall first place for the year 2002-03 in the national levelcompetitions. The company also got following other prizes.

· Best Rescue Team

· Best Rescue Team Member

· Best Team In Rescue & Recovery

· The company bagged 3 of the 14 National Safety Awards (Mines) in 2002.

· SCCL participated for the first time in “International Trade Fair on Mines,Minerals & Metallurgy” held at Pragati Maidan, New Delhi, in September 2002.The company stall bagged the first prize for ‘Design and Concept’ out of about74 exhibitors in the trade fair from India and abroad.

· SCCL bagged the coveted FAPCCI (Federation of Andhra Pradesh Chamber ofCommerce and Industry) Award for best “outstanding performance” amongindustries of Andhra Pradesh for 2002-2003.

· SCCL has also bagged the prestigious Coal India Productivity OrganizationalAward for the year 2002-2003, for outstanding improvement in productivitythrough application of industrial engineering techniques.

· SCCL participated for the first time in 19th World Mining Congress and Expo –2003 held at New Delhi from 1 – 5th November 2003. The company’s stall wonthe first prize for “Design and Concept” in National Category.

· During 2002-2003, Coal production commenced from KTK-3A Incline inBhoopalpalli and Koyagudem opencast project in Yellandu area with a projectedcoal production capacity of 1 million tonne per year.

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Case Studies Outsourcing / Public Private Partnerships

It is a common practice across the globe and also in India that private corporatescarry out outsourcing of certain activities as a strategic business initiative.

Outsourcing is adopted for the following reasons:

· To improve business focus on core competency.

· To gain access to world-class capabilities and technology

· To reduce total cost of operations.

· To achieve performance guarantees.

· To overcome limited internal resources (capital and skilled manpower).

· To free up capital for core business.

· To transfer operating risk to the service provider.

· To off-load functions difficult to manage or control.

Originally outsourcing to private agencies in SCCL was done for surface coaltransport from mine to Coal Handling Plants and for driving of tunnels / Shaft sinkingfrom surface to reach underground coal seams.

Introduction of outsourcing for overburden (OB) removal in a new mine throughprivate contractual operations in SCCL was launched in a small way atGouthamkhani open-cast mine, Koyagudem, in September 1993.

Subsequently, contractual operations for OB removal was introduced in other newmines – Medapalli OC in Ramagundam and IC – “D” Block in Yellandu area wherethe company could not afford to invest in machinery.

Later, this concept was extended to other mines where a huge backlog in OBremoval had built up over the years and where the stripping ratio was very high.

Some of the reasons that compelled SCCL to undertake outsourcing of OB removalwere:

· Gradual Decline in Underground Hand-Section Production: Undergroundhand section production reduced from 12.73 Mt in 1988-89 to 11.07 Mt in1992-93 with corresponding fall in productivity levels from 0.72 tonnes permanshift to 0.61 tonnes. Further, growth in machine-mining was not to theexpected levels. Hence, production from opencast mines had to be augmented tomeet the ever increasing demand.

Crisis Management

Consequent to the trade union elections, there has been a significant improvement inthe industrial relations scenario as the number of strikes have come down by 90%during 1997-2002. However, the success of the turnaround was severely tested bythe strike notice of all recognized trade unions in January-February 2003. Followingthe management’s decision to introduce Surface Miner technology at Koyagudemopen-cast mine, trade unions gave a call for strike. A deliberate disinformationcampaign was launched with the introduction of this technology being equated withprivatization and loss of jobs.

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Corporate Communication Policy

In continuation of the various communication activities initiated in 1997, the companyin 2003 brought out a comprehensive corporate communication policy. The policy – aunique experiment in public sector – aims at reaching out to about 1 lakh workforcespread over 67 mines to develop the spirit of bondage among workmen and execu-tives. Some of the objectives of the policy are:

· ‘Singareni Day’ will be celebrated on December 23 every year to promote thespirit of Singarenism.

· Full-fledged corporate communication cells are established in each area andseparate budgetary allocations are made for communication and PR activities.

· ‘Mine Sadassu’ were started at each mine and departments. They are alsoconducted in hospitals, workshops, powerhouses, etc. The Mine Manager andthe executives enlighten the workmen on the current issues concerning the coalindustry and educate them on various policies communicated by the corporateoffice.

· Padayatra was a new initiative launched by the company as ‘Workers VaddakuManagement’ (Management at the door steps of workmen). Under this pro-gramme, a group of executives headed by the Area GM conducts Padayatrateam consist of executives from all major disciplines including medical & healthand members of Singareni Seva Samithi (SSS). The members hold placards andbanners containing appropriate the catchy slogans to raise awareness level onissues like water conservation, anti – AIDS, etc. In the Padyatras the localmedia are also involved and this is hailed as one of the best transparent initiativeswhich has brought the administration to the doorsteps of the workforce.

Wages Through Banks

Among the various initiatives to promote the well-being of employees, payment ofwages through bank is perhaps the best innovation carried out. This has not onlybrought the PSU and the banking community together for mutual benefit, but also ledto the empowerment of company’s employees. Before this practice was introduced,wages were paid to workmen at mines in the form of cash. A World Bank study inthe coal belt regions concluded that payment of cash has contributed to increase inconspicuous consumption and rise in alcoholism.

Speeding up of Settlements (Area Terminal Benefit cells)

In line with the policy of welfare-oriented management, the company launched anovel activity for the benefit of the retired workmen. It has set up ‘Area TerminalBenefit Cell’ at each area to speed up settlement of benefits due to workmen onsuperannuation, death, etc.

Group Gratuity Scheme

In SCCL Gratuity paid out of working capital funds as and when the claim isadmitted. In other words the amount provided is not being invested specifically. Intune with the changing times and to protect workers interest fully and plan for healthyfinances for the company in the long run, the company launched Group GratuityScheme in Obtober 2003. State PSUs like APSRTC, APDDC and Central PSUs likeWestern Coal Fields have been successfully operating such Group Gratuity Schemes.

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Case Studies Under the Group Gratuity Scheme, the company would set up a trust fund in collabo-ration with LIC and will earmark Rs. 200 crores initially. The job of investment andactuarial valuation would be taken over by the LIC free of charge and interest will bepaid by LIC on the accumulated funds. The employer has to pay an initial contributionat the inception of the scheme to secure past service gratuity.

Energy Conservation Measures

In SCCL, burgeoning power will was one of the major areas of concern. The govern-ment audit, during the review of the company’s performance, has observed thatSCCKL incurred an avoidable expenditure of Rs. 218 crore during five years (endingMarch 2001) on power consumption. Not only power wastage, but also illegal tap-pings of power and power pilferages have become rampant.

Eco-Friendly Mining

· Easing pressure on natural resources.

· Reducing air pollution.

· Environment monitoring.

· Clean environment

· Green environment

Change in temperature pattern has been observed where good green coverage hasbeen developed. One such area is Ramagunam wherein temperature reduction wasnoticed to the extent of 2o Celsuis. Literacy campus and workshops are organizedregularly to bring environmental awareness.

· Training young minds.

· Development of parks & green space.

· Training and exposure to frontline staff.

· Waste recycling and reuse.

· Water Harvesting.

· Vermicompost pits.

Safety Measures

The company has taken a pro-active role to improve the safety record in its mines.The policy is “Safety First. Safety Always. Safety Forever.”

SHAPE

Involving communities and local bodies as stakeholders in the development process isa key mission area in the state government’s resolve towards a “People-friendlystate”. In this direction, SCCL has launched an innovative programme called‘Surrounding Habitat Assistance Programme (SHAPE)’. Some of the objectives ofthe SHAPE include:

· Involving the local villagers where mining activities are planned as stakeholders.The slogan of SHAPE is “PARTNERS IN PROGRESS”. Instead of SCCLdeciding on welfare measures for its workers and local villagers, theSHAPE aims at fulfilling the felt-needs of the local community based ontheir assessment.

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· The basic emphasis will be on providing infrastructure in respect of housing,drinking water, sanitation and drainage, medical facilities, roads and street lighting.

· All activities which will be undertaken by the company for providing basicinfrastructure, will be on the ‘USER PAYS PRINCIPLE”. The concerned localbody (gram panchayat / municipality) will compulsorily enter into a memorandumof understanding (MOU) with the management. The MoU will specify therespective responsibilities of the local body and the management. While thecompany will partially meet the cost of capital expenditure, the respective localbody will be entirely responsible for maintenance of the asset including all recur-ring expenditure.

· The company proposes to spend around Rs. 193 crore for welfare activities insurrounding habitat in creation of drinking water facilities, road improvements,sanitation, etc.

Customer Focussed Services

In the area of liberalization where customer is the king, coal companies have to besensitive to the quality and transparency in coal supplies.

Singareni has about 3,500 major, medium and small-scale industries on its customerlist, which include diverse industries such as thermal power plants, cement, paper,textile, tobacco, ceramics, pharmaceuticals and brick kilns. About 94% of coalsupplies are to power houses, cement units and captive power plants under the coresector linkage.

Challenges Ahead

Singareni Collieries completed the turnaround from a loss making PSU into a profit-able one during the year 2002-2003. With the highest ever production and profits, thecompany has transformed into an organization with sound fundamentals.

With huge coal deposits and growing demand from the energy sector in particular, thecompany is gearing up for higher production challenges. With a transformed manage-ment and motivated workforce, it is looking forward for more successful yearsahead.

The Challenges for the Company in the Near Future Include:

· Possible reduction in import duty of coal.

· Rationalization of railway freight rates.

· Tightening environmental stipulations regarding ash content, stricter implementa-tion of Kyoto protocol to discourage use of coal to reduce emission of green-house gases.

· Discovery of gas reserves in the Krishna-Godavari Basin in Andhra Pradesh,and consequent impact on SCCL market share in South India.

· The imperative need to improve performance of underground mines as thereserves in

· Open-cast mines are limited.

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Case Studies Issues for Discussion

1. Discuss the effect of effective and continuous communication with employees. Inyour opinion what other measures can be taken to communicate with employees?

2. What do you understand by customer focussed services? How does this conceptapplies to the coal companies? Discuss.

3. The case discusses the strategy for turnaround. Discuss its advantages anddisadvantages.

References

Reddy, B Ratan. (1999), Turnaround Strategies , Reading Material, IPE.

Reddy, B Ratan. (2000), Turnaround Strategies, Printed Case Study, IPE.

SCCL. (2004). Glory to Bloom.

Website, SCCL.

National Seminar on Industrial Engineering in Mining in India of SCCL (2003).

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CASE 4 : H.R. INITIATIVES FOR TURNA-ROUND OF VISAKHAPATNAMSTEEL PLANT

Introduction

Visakhapatnam Steel Plant is the largest PSU in the entire South India in terms ofinvestment, which is Rs. 8500 Crores. The study of Turnaround of VSP and its HRInitiatives for the same is an eye opener for any HR professional. A Company whichwas written off and informed to BIFR of its cumulative losses over Rs. 5000 croreshas made a remarkable come back with Rs. 1521 crores net profit during 2003-04.The Company was turned around with all time record turnover of 6174 crores duringthe year 2003-04. One has to make an in-depth study to note reasons for such aTurnaround.

Vision, Mission and Core Values

The vision, Mission, and Core Values have been revised from time to time.As they stand today are as follows:

Vision: To be a continuously growing World Class company

We Shall:

· Harness our growth, potential and sustain profitable growth;

· Deliver High Quality and Cost Competitive Products and be the first choiceof customers;

· Create an inspiring work environment to unleash the creative energy ofpeople;

· Achieve excellence in Enterprise Management;

· Be a respected Corporate Citizen, ensure clean and green environment anddevelop vibrant communities around us.

Mission: To attain 10 million ton Liquid Steel capacity through technological up-gradation operational efficiency and expansion to produce steel at InternationalStandards of cost and quality; and to meet the aspirations of the stakeholders.

Core Values:

· Commitment

· Customer Satisfaction

·· Continuous Improvement

· Concern for Environment

· Creativity & Innovation

· Outsourcing of non-core activities

Case prepared by Dr. B. Rathan Reddy, Faculty, Institute of Public Enterprise, Hyderabad.


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Case Studies Objectives

The objectives that have been arrived through a series of Brain Storming Sessions ofSr. Executives are as follows:

1. Expand plant capacity of 5 Mt by 2007-08 with the mission to attain 10.0 Mtcapacity in two subsequent phases.

2. Wipe out accumulated losses by 2006-07.

3. Be amongst top five lowest cost liquid steel producers in the world by 2006-07.

4. Achieve customer satisfaction levels on par with world class organization by2006-07.

5. Make RINL the employer of choice by caring for employees. Develop people asknowledge workers by 2005-06 and achieve an improvement of 5 percentagepoints in employee’s satisfaction levels every alternate year.

6. Be ranked as an excellent business organization by 2006-07

Ensure zero effluent discharge by 2005-06 and contribution to improving quality of life(health, literacy and water) in at least one village every year.

The Setting

The plaque in front of the control room of Blast Furnace – 1 reads “Blowing in ofGodavari on 28th March, 1990 at 09-31 hrs opened by Shri Bonda Kannayya, seniormost employee of Blast Furnace”. This clearly amplifies people’s power and partici-pation in public sector units the temples of modern India as referred by our late primeminister Pandit Jawaharlal Nehru. PSUs have come off age with a determination toexcel against the sea of limitations both in terms of socio-economic conditions andalso the technological advancements. After independence the successive govern-ments always placed greater emphasis on development of Indian steel industry. Thesix integrated steel plants (major plants) of which 5 are in the public sector were setup during the 50s and early 60s. Though India has abundance of iron ore and otherraw materials for iron making besides the advantage of cheap and skilled labour, itwas not able to cope up with technological changes successfully in the field of ironand steel making. Thus for years, Indian steel industry was not able to grow at theexpected growth rates and was never in competition in the global perspective.

In this back drop, the idea of setting up of an integrated steel plant, the first shorebased plant at Vizag took a definite shape during the 5th Five Year Plan. ErstwhileSoviet Union agreed to help in setting up of Visakhapatnam Steel Plant (VSP)popularly known as Vizag Steel. Visakhapatnam Steel Plant is the only shore basedintegrated steel plant with the available technology of 1980s.

The plant is located amidst nature’s bounty, in a city fast emerging as the face of thefuture and also bestowed with the picturesque Ghats on one side and the mighty Bayof Bengal on the other. Locate 16 Kms to the South West of the Visakhapatnam Port,it lies between the Northern boundary of the National Highway No. 5 from Chennaito Calcutta and 7 kms to South West of Howrah – Chennai Railway line.

45



VSP Earlier

The salient features of VSP earlier are as follows:

· Largest PSU, Only shore based integrated Steel Plant.

· Escalation of cost due to delay

· Rationalization and Restructuring

· Cumulative loses of over Rs. 5,000 Crores

· Intimation to B.I.F.R.

· Un-skilled employees

· Sporadic I R Problems

· Highest cost

· 1st Generation of Employees

· High Interest Rates & Debts

· 1/4th of Capacity Utilization

VSP Today

VSP stands today with the features given below:

· Investment over Rs. 8,500 Crores

· 3.0 MT Liquid Steel Capacity

· 115-120% Capacity Utilization of all Production Units

Year Gross Sales Profit Labour(Rs. in crores) (Rs. in crores) Productivity

(t/m/yr)

2002-03 5,059 521 253

2003-04 6,174 1521 262

· Lower Manpower among Steel Majors

· Literacy Rate of Employees 95%

· Absenteeism Rate 0.68% lowest

· Savings thru’ SRS, QC, etc, in 2002-03: Rs. 21.5 Cr.

· A Debt Free Company from October 2003

· Plantation of Trees – 3.586 m – one tree for every ton capacity

· Many Techno-Economic indices crossed Indian Frontiers

· Lowest Sp. Energy Consumption per ton of Liquid Steel (6.32 G cal) in India.

· Rs. 208.5 Cr. Savings thru’ cost reduction measures

· LD Gas recovery of 98% in 2002-03 Best in India

· Lowest Production Cost per ton of Liquid Steel (in Rs.):

RINL — 6882

POSCO — 7904

TISCO — 8265

NIPPON — 9858

46

Case Studies · First Steel Plant in India Certified for all 3 Quality Systems under QMS(ISO 9001), EMS (ISO 14001 & OHSAS 18001)

· Necessary SOPs & SMPs in place

· Funds for AMR Schemes, Batter #4 & Working Capital met throughinternal resources.

The Evolution

Visakhapatnam Steel Plant was initially conceived as a unit of SAIL to augment itslong product capacity and also to service its southern markets. During early 70s,three steel plants were conceived for South India one each at Visakhapatnam inAndhra Pradesh, Vijayanagar in Karnataka and Salem in Tamilnadu. Ultimatelybecause of massive civil agitation “Visakha Ukku – Andhrula Hakku” in AndhraPradesh, announcement was made in parliament in April 1970 for VisakhapatnamSteel Plant and foundation stone was lain on 20th January, 1971 by Late Mrs. IndiraGandhi, the then prime minister of India. Feasibility report was made in October,1973, Indo-Soviet agreement signed in June, 1979 and comprehensive revised DPRmade in November, 1980. Finally the project was sanctioned by the Government inJuly, 1982 and a separate company Rashtriya Ispat Nigam Limited (RINL) for VSPwas formed on 18th February, 1982.

As per original schedule the plant was to be commissioned by 1986. However,because of seven cash crunch and lack of Government funding, the expectedprogress did not take place and the project became unviable. Therefore in 1986,a rationalized concept was adopted in which some of the envisaged facilities weredropped to lower the capital cost and the name place capacities of steel making androlling mills were uprated to make the revenue generation more attractive. The finallytrimmed plant facilities were fully commissioned and dedicated to Nation on 1st

August, 1992 by Shri. P. V. Narasimha Rao the then Prime Minister.

In the rationalized concept Liquid Steel capacity was uprated to 3.0 Mt from installedcapacity of 2.2 Mt and one Universal Beam will was deleted completely and the totalcapacity of finished steel from the three mills was uprated to 2.41 Mt from installedcapacity of 1.93 Mt. This has put a tremendous pressure on production front toperform beyond the installed capacities.

The Restructuring

This long gestation period of almost 22 years from concept to commissioning, let toescalation of capital cost of the plant. Original estimate in the year 1979 wasRs. 2,256 crores which increased to Rs. 3,897 crores by 1982 and further increasedto Rs. 6,849 crores in 1986. Under the rationalized concept after dropping certainfacilities, the total capital cost finally stood at Rs. 8,594 crores, when it was declaredfully commissioned in August 1992. Out of the total cost of Rs. 2,674 crores.Borrowings were resorted to with the interest rate ranging from 13 to 21% to meetpart of the project cost due to inadequate budgetary support and release of funds byGOI. As a result this company has to bear high interest and depreciation burdenresulting in continuous losses year after year. In fact the company even beforecommencing its operations had incurred a loss of over Rs. 2,000 crores.

In this scenario, Government of India came to the rescue of the plant through twostages of capital restructuring in 1993 and 1998 converting all its loans into equity andpreferences shares. By this Government of India (GOI) converted Rs. 3,330 croresof its loan and Rs. 791 crores of interest on GOI loans into equity / preference sharesthereby bringing the total investment of GOI in the form of share capital with zeroGOI Loans. This resulted in lowering the interest burden on VSP by Rs. 521 croresannually.

47



The Global Scene

World’s crude steel picked up at a significant rate only after the 2nd world war. With ameager production level of 28 million tones (Mt) in 1900, the production crossed 100Mt mark in 1927. The production in 1943 was 159 Mt which sharply fell to 111 Mt in1946. Only then the growth was faster, reaching a level of 211 Mt in 1951, 305 Mt in1959, 433 Mt in 1964, 529 Mt in 1968, 630 Mt in 1972, 703 Mt in 1974 and 746 Mt in1979. The seventies witnessed one of the most severe economic crises on account ofpetroleum oil. This had a pronounced impact on the overall economy of the world andparticularly steel industry. The world production of steel started declining to 644 Mt in1982. The production improved to 683 Mt in 1983. 710 Mt in 1984, 719 Mt in 1985,714 Mt in 1986. During 90’s’crude steel production increased from 728 Mt in 1991 to842 Mt in 2000. There has been continuous increase in production during ninetiesexcept for the years 1992 and 1997. Finally world steel production touched an all timehigh of 965 Mt during the year 2003 and poised to cross 1 billion tonne mark in theyear 2004.

Major steel producing countries of the World till 50’s are only five, viz., USSR, USA,UK, France and Germany. During 60s and 70s, steel production started picking up inJapan and only after 1975 steel capacity started coming up largely in Easternhemisphere. China, Japan and Korea emerged as leading steel producers during thelast 25 years. The growth in China has been spectacular from 57 Mt in 1991 to over200 Mt in 2003. In contrast, Indian steel industry had inconsistent growth producingaround 30 Mt during the year 2003, a meager growth compared to world standards.

This is mainly due to low per capita steel consumption in India. At present, per capitaconsumption of steel of the world is about 150 kg while some of the developedcountries over 400 kg. Chinese consumption level of steel had improved tremendouslyduring last few years to around 140 kg. Against this, consumption in India hasincreased to present level of around 30 kg from consumption in India and all effortsshould be made in this direction.

QUO – VADIS

In tune with our vision to become a world class organization, we need to first find outwho is really world class and bench mark with them. Firstly our aim should be tobecome world class in steel making which is our core business before endeavoring toour ultimate goal of becoming a world class organization. With the big boost receivedfrom turnaround, Vizag Steel has earnestly started its journey towards this vision.

World Steel Dynamics, a leading publication from United States, every year publisheda list of top World Class Steel makers. The list includes the elite steel companies likePOSCO of South Korea, Severstal Steel of Russia, Shagang, Anshan Steel and BaoSteel of China, Tata Steel of India, BHP Steel of Australia, CST and Gerdau ofBrazil, China Steel of Taiwan and Nippon of Japan.

There are about 20 key attributes on which World Steel Dynamics judges world classsteel makers. They are: (1) cash operating costs (2) profitability (3) balance sheet(4) dominance in country / region (5) domestic market growth (6) harnessingtechnological revolution (7) access to outside funds (8) cost cutting efforts(9) downstream business (10) environment and safety (11) expanding capacity(12) iron ore and coking coal mines (13) liabilities for retired workers (14) location toprocure raw materials (15) alliances, merges and acquisition (16) pricing power withlarge buyers (17) product quality (18) skilled and productive work force (19) stockmarket performance and (20) threat from nearby competitors.

48

Case Studies The first 3 attributes which are basically finance related contribute to 26 points out of100 and the balance 74 points are almost equally divided among the remaining17 attributes. As financial position is once again linked to other performance factors,it is imperative that we also should concentrate on these factors. Again with VSP’sGovt. owned status, attributes (9), (15) and (19) are not relevant at present. Theattributes (12) and (14) speaks of ownership of iron ore and coking coal mines forwhich VSP has started its efforts already. Of the remaining twelve attributes, weshould concentrate mainly on five attributes namely technological up gradation, costreduction, environment and safety, expanding capacity and quality of product as VSPis already bestowed with skilled and productive work force.

After careful consideration, through consensus across the organization,five key areas of focus have been identified as:

i) Technological up gradation and Re-engineering

ii) Cost reduction

iii) Environment and Safety

iv) Expansion

v) Quality

On self assessment from the reports of CRU International which publishes cost data,Vizag Steel is almost close to becoming the lowest cost steel producer. Also, workingon similar lines to assess our own ranking on the lines of world steel dynamics, VizagSteel stands some where around 15th position among the top 20 world class steelmakers. This gives us a lot of self satisfaction. The need of the hour is to benchmarkourselves with these world class steel making companies and continuously improveourselves integrating the various initiatives till we achieve our goal. Working in thisdirection, a Centre for Business Systems (CBS) which was formed recently, hasorganized a number of workshops involving a cross section of employees. Throughconsensus the earlier vision, mission and objectives were revisited for revision andnew business strategies have been identified for a time bound implementation.A concise document has been brought out and distributed to various process owners.The results are showing up. The horizon is full with hope and with the steely resolveto bring in continual improvements through innovation and people involvement, theday is not very far when Vizag Steel ultimately becomes a world class organization.And our journey towards excellence continues.

49



HUMAN RESOURCE MANAGEMENT AT VISAKHAPATNAMSTEEL PLANT

Introduction

One of the primary objectives to the Company is to develop a well-knit personalpolicy and a comprehensive personnel programme that will be result-oriented and todevelop an organizational culture, which motivates employees to contribute their besttowards achievement of organizational objectives. In accordance with this objective,VSP has given considerable emphasis on development of human resources, as wellas formulation and implementation of progressive personnel policies, systems, rules,and procedures to synchronize organizational needs with individual aspirations. Sinceinception, VSP has laid emphasis on effective man management as it subscribes tothe belief that effectiveness and success of the organization depend largely on theskills and commitment of the people.

Brief History

The Personnel & Administration Development was established along withestablishment of the Company in the year 1982. Initially, the department wasoperated from RTC Complex at city which was later shifted to CISF Barracks andAuxiliary Shops premises respectively located in the plant premises. Since then thedepartment has professionally spread in the entire plant keeping in view of therequirements of the personnel working in the Company to give personnel services atthe door step of the internal customers.

Transformation and Metamorphoses of the Function

Emphasis on Personnel and Industrial Relations functions have been graduallyconverted into HR functions linking with HR strategies and plans for attainment ofthe organizational goals and objectives. Human resources have been put abovemachines, as after all the machine is made by man. Year after year, the HRMfunction has been enriching itself through renewed vigor to meet the challenges andrequirements during project, commissioning and operation stages. The department hasmet successfully the requirements at each stage and nurtured itself as a functionwhich can turn around the Company. Although the HR professionals have seenturbulent period in the initial stages of project and commissioning one the systemshave set into operation, the fruits of seeds that have been sown by personnelprofessionals have started yielding results. Apart from highest Labour Productivity inthe integrated steel plants of India Human Resources at Visakhapatnam Steel Plantare breaking records after records day after day achieving peaks of production andall round development and Turnaround of the company.

Human Resource Management

Human Resources are treated as the most important of all resources in the Company;its development and welfare have therefore been given the utmost emphasis in theoverall policy of Human Resources Management of the Company. It is believed thatpeople are the key to success and the performance of the Company depends on themto a great extent. Hence special attention is given towards people management. Forthis, the organization has developed the Human Resources Policy to achieve the plansand target of the Company. It enables individuals to work efficiency and take pride intheir work besides feeling important. It make people feel safe, secure and trusted.People in the organization are encouraged for their efforts through a system ofrewards and recognition. Its environment encourages team working, creativity andinnovativeness. In the organization, the people’s ownership for the work and responsi-bility is obtained through empowerment. Employees are one of the main components.

50

Case Studies HR Mission

Creating a highly motivated, innovative, competent and compact employees, workingin a climate of relations where human dignity is respected, opportunity exists forcreativity in an environment of trust, friendliness, co-operation and collaboration forCorporate Leadership to make RINL a Global Player and World Class Company.

The driving force of Human Resources at VSP is its HR Mission which is directedtowards making RINL a global player and a world class Company. HR Mission ofVSP though not documented is as given below:

“Creating a highly motivated, innovative, competent and compact employees, workingin a climate of relations where human dignity is respected, opportunity exists forcreativity in an environment of trust, friendliness, co-operation and collaboration forCorporate Leadership to make RINL a Global Player and World Class Company.”

HRD Policy

The HR Policy is one of the core policies of the Company in harnessing the mostprecious resources of the Company. The approved HR Policy of the Companyis as follows:

To realize the full potential of employees, the Company is committed to;

····· Provide work environment that makes the employees committed andmotivated for maximizing productivity.

····· Establish systems for maintaining transparency, fairness and equality indealing with employees.

····· Empower employees for enhancing commitment, responsibility andaccountability.

····· Encourage team-work, creativity, innovativeness and high achievementorientation.

····· Provide growth and opportunities for developing skill and knowledge.

····· Ensure functioning of effective communication channels with employees.

The Company has well laid out HRD Policy and HR Policy. The HRD Policy of theCompany is as follows:

Focus

····· Identification of Competence needs

····· Providing Training inputs

····· Monitoring the effectiveness of Training

····· Creating Learning Environment

····· Facilitating Self-development, Innovativeness and self-expressions

····· Enabling Employees to assume higher responsibility

The Training and HRD is clearly demarcated at VSP. Separate Departments existsfor Training as well as HRD, which have the requisite infrastructure facilities anddemarcation of the functions of the Training and HRD are as follows:

51



TRAINING HRD

Skill Development Management Development

Technological Courses Behavioral Development

Computer Training External Nominations

Safety & Health O D Initiatives

TQM & ISO Surveys

Refresher Courses Performance Appraisal

CMC for JOs HRIS

Library & Information Service Expert Talks

Apprentice Training Professional Development

Fresher’s Training Project based Training

Industrial Training & Visits

SkillAnalysis

Training Needs SurveyPerformance

Appraisal JobRotation

Nomination to ExternalProgrammes

Training NeedAnalysis

TAC CommitteeMeetings

CurriculumDevelopment

Feedback/Evaluation

Monitoring ofTraining

Performance

Annual Training Plan

Circulation of Training Plan

On-line Nominations

Delivery of Training

52

Case Studies Design and Delivery of Training

The Training and Delivery of Training plays a pivotal role in importing requisitedevelopment to the Human Resources. A chart depicting the Design and Delivery ofTraining that is being imparted at VSP is as under:

VSP Where Innovation Never Ends

All New Concepts have been attempted for implementation at VSP.Some of such innovative practices are as given below:

· Six sigma

· S B G

· Profit Centre Concept

· MOU Concept

· 5-S

· Value Engineering

· 360 degree appraisal

· Business Process

· Re-engineering

· TQA

· TQM

· Balance Score Card

· MBO

· Process Management

· Corporate Business Systems

· ISO Certification

· Knowledge Management

· Competency Mapping, etc

Competency Mapping

The Competency Mapping has been identified as one of the core activity at VSP.The Competency Mapping includes the following:

· Concept of Role and Competencies are understood by all. En:- G.M.

· Steps taken in Identifying Role Competencies Eg:- Total Roles

· Structure and List of Roles

· Define Various Roles – E.g. Supervisor

· Job Description – E.g. Duties & Responsibilities

· Identification of Required Competencies

E.g. Communication

· Competency Assessment.

· Competency Development

· Implementation of Competency Mapping at VSP.

53



Knowledge Management

KM News is the focal point for dissemination of knowledge and knowledge sharingat VSP. Knowledge Management definition and plan at VSP is given below:

KM is about being able to identify, capture, share, retrieve, disseminate & evaluateorganization’s intellectual assets, which can be to the Company’s advantage to savecost and time.

· Provides opportunity to all to contribute

· Leverages employees tacit knowledge

· Help in:

— Sharing best practices

— Mistakes not repeated

— Faster decisions

— Creating a learning organization

— Establishing a culture of Excellence

· Implemented in S.M.S for Executives through KM Cell

· Publishing Monthly KM News

· Planned for implementation in entire Company through C.B.S. Group.

Performance Appraisal

Performance Appraisal in respect of Executives gives a 360 degrees emphasis atVSP. Major components of Appraisal of Executives are as follows:

· Target Setting

· Self Appraisal

· Mid Year Review & Feed Back

· Performance and Potential Assessment

· Plant for Future Development

· Final Grading Through Performance Review Committees

· Training Needs

Productive Work Culture

Establishing and sustaining a productive work culture has been considered of crucialimportance in VSP. Several initiatives have been taken towards this end. VSP hadadopted a multi-skill and multi-trade pattern of working with emphasis on flexibility injob deployment for ensuring optimum utilization of its human resources. Productivework culture has been ensured by well-planned and timely stress on attitudinalchanges and positive work ethics through tailor-made human resources developmentprogrammes.

Industrial Relations

VSP, by following a strategy of education and persuasion of the employees and withthe firm handling of indiscipline has been able to establish by and large a cordialindustrial relations climate. This has seen concerted efforts for a fuller utilization ofmanpower, stabilization of multi-discipline approach to work, elimination of restrictive

54

Case Studies and wasteful work practices and inculcation of strict discipline in the organization. Aconstructive industrial relations climate has been evolved through a conscious policyof combining ‘firmness’ with ‘fairness’.

The overall Industrial Relations scenario in RINL/VSP is peaceful, cordial andhealthy. A host of proactive IR measures which inter-alia include Confidence Build-ing Measures between Union-Management, extensive communication, continuousinteraction with Unions were taken for building Harmonious Industrial Relations.

Participative Management

To sustain the spirit of the participative culture, a total of 66 Participative Committeesare being functioning with participation both from the Management and the workers.Approximately 15% employees are given an opportunity of participation in theseforms at VSP including the Quality Circles and Suggestion Schemes, etc. These havehelped the organization in accomplishing the organizational goals through the activeemployee’s involvement.

Participative culture exists at various levels in VSP to bring out real democracy at theplace of work. The process of participative form is given below:

· Functioning of 66 Committees:

· Participation of 15% Employees including QC’s Suggestion Schemes

Central SafetyCommittee

Canteen ManagingCommittee

Board of Trusteesof IPE Trust

SportsCouncil

Shop Floor SafetyCommittee

ShopfloorCo-operationCommittee Management Union

Interaction with theRecognized Union

and Two MajorUnions

Joint Participative /Consultative

Fora-managementRepresentatives

Recognized UnionMembers

Board of Trusteesof SBF Trust

Community WelfareCentre Committees

Town DevelopmentCommittee

55



HRM Sailent Feature

HRM and VSP has certain salient features with which it attempts to distinguish fromTraditional Personnel Management, they are:

· Contained Manpower

· Knowledge Workers (Young, educated & highly skilled)

· Focus on ASK (Attitude, Skill & Knowledge)

· Integrated HRM

· HRM & Services at the Door Step of the Employees

HRM Major Components

The major components of HRM is by and large are same as that of any profession-ally run company. They can be seen at an askance as given here under:

· Employee Relations

· Education, Training and Development

· Communication

· Performance Appraisal

· Shop-floor Discipline-Overlapping shift, Uniform working hours, DARS

· Welfare

· Human Resource Information Systems (HRIS)

· Recognition and Rewards

· Social Concerns

· Recruitment

· Employees Services

Out Work Culture

The culture of Steel Plant is the main factor that distinguishes itself from others. It isa living, achieving and performing culture. Some of the aspects of the Work Cultureare as under:

· High Levels of Motivation

· Total Employee Involvement

· Team Spirit

· Productive Work Culture

· Multi Skilling and Multi-Trade

· Flexible and Rotatable Deployment

· Elimination of Restrictive Practices

· Attitudinal Changes and Work Ethics

Grievances

Today’s Grievance is tomorrow’s IR Problem. VSP has carved out a unique way ofdealing the grievances. The Grievance Redressal procedure at a glance is given inthe diagram with grievances received and redressed during the last four years to givean idea of Grievance Management at VSP.

56

Case Studies Grievance Redressal: The Informal Way

Grievances Received and Redressed

Quality of Work Life

Quality of Work Life decides the quality, product and the quality of people.The components of Quality of Work Life of at VSP are indicated below:

· Neat, clean & pollution free environment

· Occupational Health Care

· Canteens and Canteen extension points

Grievance of theEmployee

Registration of Grievancesin the Register at Shop Floor

Personnel Office(Throu’ Telephone, Personal,

Recording, Informal Interactions)

Segregation andcommunication to the

concerned agencies

TownAdmn

ManagementServices

Finance

Personnel

Medical

ActionTaken

To the Employee-Thro’ SFCC

2000-01 2001-02 2002-03 2003-04

Received

Redressed

57



· Hygienic Rest rooms

· Baby Creche

· Extension counters of Banks inside the Works

Labour Productivity

Labour productivity at VSP is highest in the Indian Steel Industry. The LabourProductivity achieved during last 3 years are given below to have an idea:

Labour Productivity

(t/man/year)

Measures Taken to Control Absenteeism

Absenteeism is a menace every where. The Integrated Absenteeism Control Meas-ures are implemented at VSP are worth emulating. They are:

· Schemes with in-built to Attendance

· Production Awareness on evils of Absenteeism

· Shop-floor Counseling

· Social Counseling

· Discussion in Participative for a (SFCC)

· Display in Notice Board, Names of persons who do not earn EL and writtencommunication to such employees

· Disciplinary Measures

· Notifying Regular Employees’ names in House Journals

Employees Welfare

With a view to develop an attitude in the minds of employees that the ‘Companycares to its employees’ various Statutory and Non-Statutory welfare and Socialsecurity measures have been provided by the Company for the benefit of employeesand their families.

2001-02 2002-03 2003-04 2003-04

3-D Column 1

58

Case Studies Welfare Facilities

Unique Welfare Facilities and Social Security Schemes are implemented at VSP. Theimportant features of welfare have been indicated below to give an idea that VSPcares for people through welfare plus policy:

· All Statutory Welfare Facilities

· Unique non-Statutory Benefits & Social Security:

· Educational Institutions

· Work Dress

· Community Welfare Centres (8 Nos.)

· Superannuating Benefit Fund Scheme

· Employees Family Benefit Scheme

· Settlement of Benefits on the day of Retirement

· Accidental Death Package

Employee Relations

The Employee Relations is yet another area where VSP stands apart from otherorganizations and achieved excellence. The components Employee Relations havebeen indicated hereunder to have an idea:

· Managing 19 Unions of Regular Employees, 17 Unions of Contract Labourand 9 Mines Unions

· Managing Steel Executives Association 5 SC/ST Associations 100 oddWelfare Associations, Crafts Unions and Interest Groups and Social Organi-zations.

· Managing Leadership

· Development of Second Line Leadership

· Firmness with Fairness

· Firm handling of indiscipline

· Promoting Positive Discipline

· No Man-hours lost due to IR Problems

· No Work Stoppages and Sporadic Actions

· No disputes

· 3 Union Approach

· Majority Union Recognition

Recognising People

Recognizing people at Departmental Level, Team Level and Individual Level hasbeen a way of life at VSP and the various schemes of recognition are as listed below:

i) Departmental Awards

· Safety & Housekeeping awards

· Environment Preservation awards

· Ispat Udyan Puraskar

· Productivity awards

59



· Energy Conservation awards

· Oil Conservation

· Fire Awareness awards

· Best Training orientation

· Raj Bhasha awards

· Best Branch award

ii) Team Awards

· Quiz, skit related safety, environment & energy

· Quality Circle awards

· Special performance awards

· Sports related awards

iii) Individual Awards

· Special performance award

· Jawaharlal Nehru award

· Safety, Environment, Productivity and Fire Service Awards (Essay,Debate, Slogan & Poster Competitions)

· Training awards – Presentation Skills, essay & Slogan

· Sports related awards

· Suggestion awards

· Instantaneous Recognition

Continual Improvements Through Total Involvement

Continual Improvement is possible only through total involvement. VSP not onlybelieves in implementing the scheme but also improves the same in true letter andspirit.

· Quality Circles

· Suggestion Schemes

· Quality Improvement Projects

· Task Force for Special Assignments

· Internal Customer Orientation

Innovative Human Resources Practices

Lot of innovative path breaking Human Resources initiatives and achievements,which are responsible for the “Turnaround of the Company”.Notable among them are as follows:

· Three Union approach of Industrial Relations

· Unique Employee Involvement Practices(Quality Circles, Suggestion Schemes, Target Setting etc).

· Informal Grievance Redressal System

· Multi-skilling and Multi-trade Concept

· Contained Manpower & Gate Monitoring System

60

Case Studies · Special Social Security Schemes

· Net Work Culture

· Integrated Human Resource Management

· Focus on ASK (Attitude, Skill and Knowledge)

· Outsourcing of non-core activities

· Knowledge Management

· Informal collaborative approach in dealing with Unions

· Incentive Scheme designed to improve attendance, technological discipline,reduce accidents and produce beyond capacity.

· Policy intervention for elimination group sporadic action

· Non-executive career growth without loss of working hands.

· Social counseling and changing employee mind set.

· Reduction in Non-Executive manpower and increasing the Executivemanpower as a strategy which has been followed to reduce the non-executive manpower and to increase the executive manpower. For in-stance, 15,202 non-executive manpower in the year 1994 has been reducedto 12,222. Similarly, executive’s strength which was at 2,281 in 1994 hasbeen increased to 4,533 by the year 2004.

Major Achievements of the Department

The major achievements of HR Department are as follows:

· Mandays lost due to Industrial Relations problem have been brought tominimum level

· Labour Productivity has been highest in the Steel Industry in India

· Lowest absenteeism levels in the industry

· Commitment of employees to the Core Values and converting threats intoopportunities

· Introduction of Non-Unionized supervisory Cadre and strengthening ofsupervisory base

· Empowerment of Human Resources through delegation of powers

· Job Rotation and Redeployment for optimum utilization of manpower

· Right sizing through non-recruitment

· Leadership in Innovative Human Resources functions

· Total Computerization of Human Resources functions.

HR Strategies

In the present day world if HR has to play pivotal role, it needs to have its ownstrategies. VSP is no exception to this and the HR Strategies that are being followedare indicated below:

· Collaborative Approach in dealing with Major Unions

· Informality in Interactions with Unions/Associations

· Incentive Scheme with Focus on:

· Needs of the Organization

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· Producing beyond capacity

· Generating Savings

· Producing Market Oriented Products

· Adhering to Technological and Personal Discipline

· Improving Attendance

· Periodic Review to meet changed requirements

· Policy Interventions for Eliminating Group Sporadic Action:

· Excreta

· Insurance of Contract Labour

· Unique Family Benefit Scheme

· Revision pf Medical Benefits

· Non-Executive Career Growth without loss of working hands

· Strengthening Supervisory Base

· Converting Threats into Opportunities

· Changing Employee Mind-set

· Empowerment through Delegation of Powers

· Job Rotation, Multiskilling and change of Work Culture

· Out sourcing of non-core activities.

Awards

Awarded Rs. 1.00 Crore as Prime Minister’s Trophy for the year 2002-03 adjudgingas Best Integrated Steel Plant in India. Besides, some of the prestigious awardsbagged by the Company in the areas of the Safety, Quality Environment, Productionand Productivity, Management, etc, are as follows:

a) Safety

· Ispat Suraksha Purashkar for highest percentage reduction in accidentrate for 14 times.

· Greentech Safety Silver Award for 2002-03 by Greentech Foundation

· Best Safety Award from Government of A.P.

· Steel Minister’s Trophy for 6 times for Best Safety Performance

b) Environment

· Rolling Shield on Environment Protection for 2002.

· Indira Priya Darshini, Vriksha Mitra Award – 1992-93 from Ministry ofEnvironment.

· Nehru Memorial National Award for Pollution Control – 1992 – 93 &1993 – 94 by IIM.

· Award from AP Pollution Control Board for best efforts in rain waterharvesting.

· Environment Excellence Award – Green tech Silver Award for 2002 byGreentech Foundation.

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Case Studies c) Government

· Award from Ministry of Heavy Industries for achieving MOU Targetsfor 2002-01.

· Rated Excellence among all PSUs in 2002-03 for fulfilling MOU targets byMinistry of Steel.

· Winner of SCOPE Award for best Turn around effort by a PSUin 2001-02 & 2002-03.

· CII – Energy Conservation Award – 1995-96.

· First Prize for Energy Conservation in 2002 & 2003 by Ministry of Power.

· Best Labour Management Award from Government of A.P.

· Best Tax Payer Award from Government of A.P.

· 1st Prize by Government of India “Indira Gandhi Rajbhasha Shield” forpropagation of Official Language.

· Rolling Shield for “Ecological Protection” instituted by the Ministry ofInformation & Broadcasting for 2002.

· Udyog Excellence Gold Medal Award for excellence in Steel Industry byMinistry of Steel.

d) Quality & Productivity

· Golden peacock (1st Prize) National Quality Award-96 from IIM.

· Gold Star Award for Excellent Performance in Productivity.

· Selected for World Quality Commitment Award – 1997.

· Excellence Award for outstanding performance in Productivity Manage-ment, Quality and Innovation.

· Quality Circles & Suggestion related Awards by INSAAN.

e) Others

· EEPC Expert Excellence Award-1994-95.

· Best Enterprise Award from SCOPE, WIPS in 2001-02.

· Best HRD Practices Award by ISTD for 2002-03.

· 2nd Prize for RINL’s Stall at the International Trade Fair.

· Vizag Steel’s Global rating has gone up to 67th position in 2002 amongstWorld’s Largest Steel Producing Companies.

The Testimony

The efforts of VSP have been recognized in various forums and some of the majorawards received by VSP are:

····· Indira Priya Darshini, Vriksha Mitra Award: 1992-93.

····· Nehru Memorial National Award for Pollution Control: 1992-93 and 1993-94.

····· EEPC Expert Excellence Award: 1994-95.

····· CII (Southern Region) Energy Conservation Award: 1995-96.

····· Golden Peacock (1st Prize) “National Quality Award-96” IIM in the NationalQuality Competition 1996.

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····· Steel Minister’s Trophy for “Best Safety Performance” for 6 times in the years:1990, 1993, 1996, 1997, 1998 and 2002.

····· Selected for “World Quality Commitment Award - 1997”.

····· Gold Star Award for Excellent Performance in productivity.

····· Udyog Excellence Gold Medal Award for excellence in Steel Industry.

····· Excellence Award for outstanding performance in productivity management,Quality & Innovation.

····· Ispat Suraksha Puraskar for highest percentage reduction in accident ratefor 14 times from 1991 onwards.

····· Best Labour Management Award from the Government of Andhra Pradesh.

····· SCOPE Award for best turnaround for 2001.

····· First Prize for Energy Conservation in 2002 and 2003.

····· Best Enterprise Award from SCOPE, WIPS in 2001-02.

····· “Greentech Safety Silver Award” for the year 2002-03.

····· Best HRD Practices Award by ISTD for the year 2002-03.

This is the story of turnaround of a plant which took birth in a controlled regime,grown and spent its formative years in the era of globalization and tasted its successin the world competitive village. This path has to be treaded very carefully to achievea status where it can leave its competitors way behind. To chalk out a growth path itis also necessary for us to understand the world steel market since the level of steelconsumption in a country has long been regarded as an index of industrialization andeconomic maturity attained in a country.

Technological Revolution

Technological advancements in the recent past, especially in the field of informationfeature technology and communication, have changed the face of business. Theindustrial revolution heralded a new chapter in civilization by putting new forces in thehands of man in adapting nature to fulfill his needs. This revolution sustained anddrove human society for the last three centuries or more.

Today we are privileged to witness another revolution within the industrial revolutioncalled “Information Technology”. The future of human society is interlinked with thisemerging force. Soon, no aspect of our life can remain untouched by this omnipotentforce. IT brings with it tremendous force of improving efficiency, productivity and theconvenience of having the world at our finger tips. Just as the industrial revolutionbrought a quantum improvement in productivity through mechanization of manualactivities, the IT revolution is taking productivity to new heights through automation ofthe industrial activity. IT is contributing towards improving human productivity as wellas machine productivity.

The speed at which decisions are made makes computers thousands of times moreefficient than manual operations. Hence, the high precision manufacturing becomespossible. Planning, implementation and monitoring by crunching massive amounts ofdata are again possible through computers which if done manually would take monthsto complete and ultimately render the information useless. The increase incompetition makes it all the more necessary for industry to adopt IT as an initiativefor surviving in today’s market place.

This perception of a corporation as an organic being is helpful in understanding thatthe people, systems and technology are strongly interlinked to produce the wholewhich is greater than the sum of the parts.

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Case Studies Use of IT in HRM

That IT HRM interaction can only survive us in today’s Liberalised and Globalizedworld. Keeping this in view, extensive Use of IT has been made in HR areas at VSP.Some of the areas of usage are given below:

····· Training Information System.

····· On line Human Resource information System.

····· Library Information System.

······ Performance Appraisal System.

····· MIS Report on Safety & Occupational Health.

····· DARS.

····· On Line Indent.

····· Establishment function.

What Brought the Turnaround?

Really what has brought the Turnaround? People wonder how a Company which wasestablished with an investment of Rs. 100/- from each citizen of India has lostapproximately Rs. 50/- from every citizen could make a come back and reclaimapprox. Rs. 20/- on behalf of each citizen hardly in a period of 2 years.Let us look at what has brought the Turnaround.

Machines — Same

Money — Same

Market — Same

Materials — Same

Methods — Same

Environment— Same

Technology — Same

Conclusion

Success of Human Resources functions of Visakhapatnam Steel Plant from therelentless efforts of the VSP work force. This valuable asset of about 16775 steelemployees have been contributing to positive cultural changes, increased productivityand excellence in organization. Undoubtedly employees are the driving force behindthe success of VSP and will continue to play a key role in shaping the future of VSP.The HRM at VSP is the major contributor for the “TURNAROUND OF THECOMPANY”. The Innovative HR Practices will no doubt make VSP a “WORLDCLASS COMPANY” in the days to come.

Issues for Discussion

1. Discuss the vision, mission and core values of Visakhapatnam Steel Plant.

2. Do you really think that vision, mission and core values should be revised fromtime to time. If yes, then why? Discuss.

3. ‘Financial position is linked to other performance factors’. Discuss.

4. Discuss the HR Policy of VSP.

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References

All Published Material of VSP

Annual Reports of the Company

Magazine of Training & Development – Vikas Dhara

Personnel Manual

Souvenier of Turn Around

Newsletter of Suggestions

Quality Circles – QC Quest

KM News

Maintenance News

Sugandh – Hindi Journal

Journal of Man Management

MOU between RINL & Ministry

UKKU Vani – In Company News Letter

PM Trophy Booklet, etc

Documents

20.Gloom to Glory