Sail Rewrites Goal

To harness actual production potential and contain cheap steel imports hampering domestic steel industry of India, SAIL has re-written its goals for successive financial years


With an aim to meet its actual production potential, Steel Authority of India (SAIL) — India’s largest steel producer — had to rewrite its goals for FY 2017 and 2018. The company is targeting steel production at 17 million tonnes for FY17 and 20 million tonnes for FY18. The company also plans to target 70 percent sales in the northern and eastern regions and increase its presence in the Make in India sectors like defence, aerospace and nuclear power. Apart from this, the company intends to sell idle assets, and reduce inventories of steel. They aim to reach coal production target of 2 million tonnes for FY17 and open new mines allotted by the government. All this would help them bring down the manpower costs per tonne. However, it remains to be seen how international prices and the financials of the company help them achieve these targets.

This is not the first time when the Maharatna PSU is trying to evolve. The company has more than once evolved itself as and when the time demanded. At the time of inception, the practices adopted by the then management gradually faded with the passage of time giving room to more evolved theories, technologies and practices. Businesses changed the way they were conducted in terms of technology, human resource management, exposure to challenges of globalization, cutting down on carbon footprints, increasing cost efficiencies, managing more with leaner man power, adapting to the stringent requirements of various ISO and OHSAS certifications to becoming IT savvy and ERP enabled and so on and so forth. The shape, size and market value of the organization underwent changes more than once as we grew from a steel maker to a Maharatna PSU. The organization required being sensitive, insightful and quick to such changes and at that same time we focused on researching, formulating and building new practices and policies than trying to fight or tear down the older ones.

The Maharatna Company emphasizes on pushing its boundaries during challenging times and stresses on thinking out of the box during trying times when making difficult choices remain as the only option. It is gearing itself to face the competitive world through 3Cs i.e. Customer, Competition and Change. In this regard, the company is making its employees fully aware of what the company is expecting from them and the criteria that makes possible of the possibilities available for the company in global merchandize. The company is fully aware that cheap quality imports are hampering domestic steel industry and looks completely focused to handle this discrepancy caused by enhancing its production in a calibrated manner. Apart from the external factors affecting its performance, they have their own set of internal factors acting as challenges in this regard. It’s worthwhile here to mention that the major facilities under expansion of Salem, Rourkela, IISCO, Durgapur and Bokaro Steel Plants have been completed and are under operation.

To achieve its production targets for the FY 2017 and 2018, concerned ministry and the chairman of the PSU has been continually reminding its employees that to be the leader, a business fundamentally needs to do two things. Firstly it requires to win the marketplace which simply put is that, it needs to own and win more businesses than its rivals do. Secondly, it needs to be accountable for its action which is constructing a sustainable business model is the social imperative. When both these are done simultaneously and in harmony then emerges a true business leader. And the business leader must understand that it is critical for success of the business to synchronize its goals with those of it s employees and al so to communicate and prepare them to fully understand the need of the hour. After all, the employees are the actual execution level to achieve the targets.

Another challenge in the current and fiercely competitive environment is creating a sustainable business model; one which is build to retain its position and consolidate it further has become harder than ever. Today, the competitive landscape has become more volatile than ever where the trade-trend predictions have become uncertain and not so reliable for formulating the future strategies. Rather, an analytical and well researched approach is dependable for creating sustainable models.

Manpower management is another very important aspect while SAIL strategizes for the future. One of core strength of SAIL lies in its 88,000 plus work force which is highly devoted and skilled. SAIL Chairman has repeatedly put his faith in the team by saying that every SAIL employee is a world class employee. This talent pool can become more efficient when the manpower cost/tonne is brought down. Also, there has to be a structured training and succession planning to develop future leaders. The need and role of lateral communication is generated at this point, which can possibly be the best solution to address the SAIL workforce in a synchronized fashion at one go. Every team has to communicate with each other and at every level including intra-department, intra-unit, intra-Plant people need to communicate with each other so that there is no lapse in chasing the targets.