The “New Normal” in the Indian Steel

Industry: Achieving High Performance

in a Challenging Environment
Executive summary
Globally, steel players have been
operating in a challenging environment
with rising input costs and persistent
lower capacity utilization. This is driven by
low demand growth in developed markets,
accompanied by a structural shift in
the global steel industry to developing
countries like China and India.
Over the last decade, Indian steel
companies have consistently achieved
higher earnings before interest
depreciation taxes and amortization
(EBIDTA) margins as compared to their
global peers and have delivered steady
growth despite external challenges.
Having established quality assets, Indian
steel companies are now well poised to
take advantage of expansion and growth
opportunities in India. However, six
long-term challenges are confronting the
Indian steel industry’s growth aspirations
2 3
• Volatile domestic iron ore supply is
forcing Indian steel companies to pay
higher prices or import this key raw
material thereby exposing them to
global iron ore price volatility.
• Flat products supply will exceed
demand, leading to an overcapacity
situation. This coupled with the muted
demand growth will put significant
pressure on margins.
• Customers are maturing and
increasingly demanding value-added
products and services.
• Existing supply chains are stretched
in order to cope with the wide range of
customers and product specifications—
original equipment manufacturers
(OEM) at one end, to the rural retail
markets at the other—which impact
service levels.
• In the race to maintain market share,
incumbents have taken on greenfield
and brownfield expansion plans at a
pace and scale unprecedented in the
past. Skill gaps and other challenges
have led to cost and time over-runs on
these projects, putting further stress on
the already stretched balance sheets.
• Investments in management processes,
systems and people capabilities have
not kept pace with the investments in
assets and the changing market place.
This is increasingly becoming a
bottleneck for growth.
Indian steel companies will face an
increasingly competitive environment
which will put pressure on market share
and profitability. Accenture believes
that in order to survive and thrive in this
context, Indian steel companies will need
to sharpen their capabilities in five areas:
Investing in raw
material security
Raw material security varies widely
across the Indian steel companies and is
probably the largest differentiator among
the incumbents. As these companies look
to secure their raw materials supplies, the
capability to acquire, develop and operate
overseas raw material assets has become
a strategic imperative given the short
term challenges in securing such assets in
India. Even where the raw materials are
not shipped to India, the overseas asset
helps act as a natural hedge.
Capital project management
Indian steel companies are taking on
larger projects at an unprecedented
pace as they invest to keep up with
demand and enhance their market share.
Commensurate investments in internal
project execution capability have lagged
the asset side investments, which makes
project execution a complex task. Project
execution is further compounded by
challenges posed by external factors
such as regulatory delays, limited talent
pools, contractor and construction labor
constraints and stringent environmental
norms. All of this is reflected in the
execution challenges faced by Indian
steel companies. These companies need to
focus on project management as a core
capability integral to growth objectives.
They need to focus on selecting the right
projects and optimize the scare resources
available, ensure the projects identified
are managed in a robust manner and the
right enablers in terms of organization,
processes and information technology are
leveraged to deliver a successful outcome.
Becoming more
customer centric
As Indian steel companies expand,
the overlap in their respective market
and product footprint is increasing.
This coupled with a slowing demand
growth means that these companies are
increasingly competing with each other
for the same set of customers. In this
scenario, increased customer centricity
will differentiate the high performers.
Indian steel companies will need to
deepen their understanding of buyer
values and create innovative products
and service offerings targeted at different
customer segments. Capability to analyze
customer buying patterns will enable the
sales force to be more proactive in the
sales cycle. Additionally, as customers
become more demanding and product
portfolio becomes more complex, Indian
steel companies will need to embrace
leading sales and distribution practices
(e.g. tracking secondary & tertiary
sales, solution selling) from consumer-
focused industries such as fast-moving
consumer good and pharmaceuticals, to
differentiate from their peers. Finally, they
will need to adopt new pricing strategies
to capture a part of the economic value
created for customers.
Building differentiated
supply chains
Indian steel companies supply a wide
range of products to diverse customers
with very different buyer values, causing
huge strain on the supply chain. This
increase in product portfolio complexity is
a challenge to manage. Even large global
companies struggle to profitably manage
complex portfolio. Hence, Indian steel
companies will need to overcome this
challenge and reduce portfolio complexity.
Further, the new capacities being built
by Indian steel companies have the
capacity to manufacture similar product.
Hence Indian steel companies will need
to acquire capability to strengthen their
sales and operations planning across
multiple plants. In order to improve
their customer service while controlling
inventory, these companies will need
to adapt their made-to-order (MTO)
and made-to-stock (MTS) production
strategy by customer segments. Given the
dynamic market, India steel companies
will need to enhance flexibility by pushing
differentiation as far down in the supply
chain as possible (i.e., intermediate
stocks and finishing to order). Finally,
customizing channel management
capabilities for customer segments will
enable Indian steel companies to enhance
customer service and potentially extract
a premium.
Securing human capital
Over the last decade Indian steel
companies have more than doubled their
crude steel capacity and integrated into
mining by tapping skill pools from the
incumbent integrated steel plants (ISPs).
Indian steel companies are now faced
with the problem of an aging workforce.
This problem has forced a move toward
more automation and, consequently, a
highly skilled workforce. As the market
grows, skills in critical areas of the steel
value chain like mining, capital projects,
supply chain and sales and marketing are
in short supply and have become limiting
factors for growth. Further, as Indian steel
companies embark on aggressive growth
plans, securing a leadership pipeline to
fuel growth, programs to attract and
retain talent and a sharp focus on
skilling up current resource pools will
become imperative.
Proactive investment in capability
building across these areas will
differentiate the high performers from
the laggards.
 Challenging environment
for global steel players
For the last three to four years, global
steel players have been operating in a
challenging environment of reduced
demand, persistent lower capacity
utilization and margin pressure due to
volatility in raw material prices. This
is leading to a structural shift in
the industry.
Lower steel demand growth
in most of the large steel
consuming economies
The global macroeconomic crisis appears
to have accelerated the pre-existing trend
toward reducing the steel activity in
the OECD economies. Likewise, the steel
industry is staring at a flatter demand
trajectory globally. Steel demand in China,
the fastest growing large steel consumer,
is expected to be in the low single digits
in contrast to the historical double-digit
growth of the last decade.
Exhibit 1: World crude steel production, year-on-year change as of January 20131
4.6 3.8 2.7
China India
Exhibit 2: Finished steel and raw material price index2
110
100
90
80
70
60
Mar 2012 Apr 2012 May 2012 Jun 2012 Jul 2012 Aug 2012 Sep 2012 Oct 2012 Nov 2012 Dec 2012 Jan 2013 Feb 2013 Mar 2013
1 Source: World Steel Association
2 Source: Metal Bulletin
4 5
Structural shifts in China Bounce-back in iron ore
could fundamentally impact and coking coal prices
Asian players could re-ignite resource
China is experiencing significant
acquisition by Chinese
and Indian players
overcapacity as players have created
capacity ahead of demand. Overcapacity
Chinese and Indian steel companies
was approximately 200 metric tonnes
were on an acquisition spree for iron
in 2012 and is expected to increase as
the National Development and Reform
ore and coking coal assets around the
Commission (NDRC) expects only
globe to insulate themselves from price
volatility. But as raw material prices
4 percent growth in 2013. The Chinese
cooled between 2011 and 2012, the race
government is pushing consolidation,
for self-sufficiency took a backseat, albeit
integration and closure of inefficient
temporarily. The resource acquisition race
capacity. They are targeting a market
could reignite as iron ore prices have
share of 70 percent for the top three
bounced back from the 2012 lows of
players, up from 50 percent currently.
$100/MT to 2013/2011 highs of $150/MT.
This effort will enhance the scale of
In the context of flat finished steel prices,
Chinese steel companies, as well as the
this could lead to persistent margin
government control over the same. This
squeeze. These trends could
coupled with the persistent overcapacity
have far-reaching impact on Indian
could undermine the global, and
steel companies.
especially the Asian, steel markets.
U.S. Europe
Japan
-3
5.9
USA HRC
USA Rebar
Iron ore fines
(China import,
63.5%, cfr)
The new normal in the
Indian steel industry
Over the last decade, Indian steel
companies consistently have performed
better than their peers in OECD
economies by delivering higher EBIDTA
margins, and higher capacity and revenue
growth. They have expanded the crude
steel capacity 2.5 times by setting up
assets of global scale and capabilities
while maintaining low operating costs.
This was driven by a desire to take
advantage of the significant headroom
for steel demand growth in India, which
was poised to take off given the low
per capita steel consumption (55 kg
compared to 460 kg for China).
However, recently the Indian steel
industry has started witnessing signs
of a down-cycle, leading to margin
compression despite strong volume
growth. This trend is primarily due
to high input costs and a weak
macroeconomic environment, both
globally and domestically. Declining
margins, coupled with sluggish demand
growth, has made investors cautious
about steel companies, leading to a 30
percent decline in the enterprise value of
the Indian steel industry since fiscal
year 2010 (FY2010).
6 7
Now, the growth aspirations of the Indian
steel companies are confronted with five
key challenges. The ability to manage
these challenges will differentiate the
high performers.
Raw material
supply volatility
Supply volatility in domestic iron ore is
forcing Indian steel companies to pay
higher prices or consider imports,
thereby exposing them to global iron
ore price volatility.
The future landscape of domestic iron
ore supplies will be determined by the
outcome of the regulatory uncertainty
arising from environmental, resource
allocation challenges, as well as the
tussle between the iron ore miners and
steel companies. If iron ore exports
are discouraged, lower domestic iron
ore prices will result. Additionally,
environmental constraints imposed on
iron ore miners in states like Goa
and Karnataka could cause an iron
ore shortage.
Increased domestic
competition
Muted demand growth and persistent
overcapacity in the flats segment is
expected to make India an exporter of
flat steel even as it continues to import
long steel. Domestic steel demand is
expected to remain muted between
FY2013 and FY2017 due to a weak
macroeconomic environment. Demand
growth for longs is expected to outstrip
demand growth for flats due to relatively
weaker growth prospects of flats
end-user industries. This coupled with
the disproportionate expansion in flat
steel capacity addition (60:40) will lead
to persistent over capacity in flats and
transient overcapacity in longs.
India steel companies have announced
71 million tonnes per annum (MTPA)
of steel capacity addition between
FY2012 and FY20173. However, there is
considerable uncertainty on the actual
capacity addition as many projects are
yet to achieve financial closure due to
delays or lack of regulatory clearances.
Supply of flats could outpace demand
between FY2012 and FY2017, even
if only the financially closed projects
are commissioned. On the other hand,
the longs segment could see demand
outpacing capacity over the next five
years, except if the entire announced
capacity addition—21MTPA—is
completed.
As a result of the overcapacity, India
will reemerge as a net exporter by
FY2014-FY2015.
3 Source: Accenture Research
Changing customer profile
and expectations
Indian steel companies may need to
upgrade their product and service
offerings to target more sophisticated
customers, such as auto original
equipment manufacturers (OEM).
This includes establishing wider
conversion and coating lines (e.g.,
Galvalume) and forward integrating into
service centers to meet OEM demand
for value-added products (e.g., tailored
blanks, laser welded blanks). In addition
to value-added products, customers also
are expecting higher service components
like vendor-managed inventory and more
responsive supply chains with lower
order-to-delivery lead times.
As these customers expect tailored
value propositions that best suit their
requirements, Indian steel companies
would be forced to enhance the
value-added products in their portfolios
and focus on delivering desired service
levels to the end customers. For instance,
OEMs are demanding (and obtaining)
delivery lead times of less than 30 days
from new entrants.
More complex supply chains
Traditional supply chains were not
designed to provide customized service
levels to each customer segment—ranging
from OEMs at one end, to the rural retail
markets at the other. This may have
sufficed in the last decade as the industry
was a seller’s market, and customers were
forced to accept the service and quality
provided by the Indian steel companies
or import their requirements. However,
in the emerging overcapacity scenario,
customers will bargain for the desired
service levels, which in turn would
favorably position Indian steel companies
with a more responsive supply chain.
In addition, three other factors are
stretching the existing supply chains:
• Increased manufacturing complexity,
due to a move to a multi-plant/
multi-location model.
• Forward integration into service
centers to fulfill changing
customer expectations.
• Enhanced distribution network
to improve reach.
War for talent
Indian steel companies are faced
with the problem of an aging workforce
on the manufacturing shop floor. As
Indian steel companies look to modernize
and increase automation on the shop
floor, their ability to attract new
talent from sunrise industries such as
Information Technology will prove to
be a formidable challenge.
As the manufacturing capacity increases,
Indian steel companies will increasingly
poach skilled resources from each other.
Hence, the ability to attract and retain
talent will become a major focus area
going forward. Additionally, as business
complexity increases, skills in critical
areas of the steel value chain such as
mining, capital projects and supply
chain will become differentiators in
the marketplace.
As investments in processes and systems
are made, Indian steel companies
will need to invest in up skilling their
resources to ensure they stay relevant in
a changing marketplace.
In summary, Indian steel companies’
ability to effectively manage human
capital will be a key enabler for growth.
Key capabilities to
become game changers
As Indian steel companies prepare to
tackle the challenges and global trends
outlined in the previous sections,
they will need to strengthen five
capabilities—resource acquisition,
development and operations; efficient
capital project management Capability;
customer-centric sales and marketing;
differentiated supply chains; and superior
human capital management. We have
identified these five capabilities based
on our engagements with senior industry
executives over the last five years.

Exhibit 3: Five capabilities required for high performance

Resource
acquisition,
development and
operations

Efficient
Human capital capital project
management High management
Performance in
the Indian Steel
Industry

Customer-
Differentiated centric sales
supply chains and marketing

8 9
1. Resource acquisition,
development and operations
The pursuit of raw material security
has led Indian steel companies to seek
mining leases and assets globally. The
capability to acquire, develop and operate
these assets has become a key strategic
imperative. These assets provide a natural
hedge at the raw material portfolio level,
and are also important for overcoming
the short-term domestic challenges.
Indian steel companies need the
three capabilities to excel in this area
• Resource acquisition and due diligence.
• Resource development and
environment management.
• Mine operations and ore supply
chain management.
Case study:
Raw material acquisition,
exploration and development
by Indian steel companies
Several Indian steel companies have
acquired iron ore and coking coal assets
in countries such as Canada, Australia
and South Africa. One leading Indian
steel company acquired a majority stake
in a new iron ore reserve in Canada.
It had acquired a minority stake in an
Australian miner which was sold last year
to a leading global miner. Another Indian
steel company has acquired and operates
anthracite mines in South Africa. It has
also acquired a significant minority
stake in an Australian coal miner with
exploration rights for coking coal
in Queensland.
One of India’s leading metals and
mining majors wanted to expand its
global footprint. Accenture assisted
a leading Indian mining company to
screen potential acquisition targets on
attractiveness, strategic fit as well as its
ability execute the project. Acquisition
targets were identified across Africa,
Australia and Brazil. A detailed financial
assessment and a financial value model
were prepared to aid management
decision making.
10
2. Efficient capital
project management
Indian steel companies are increasingly
undertaking larger, more complex and
riskier projects to meet their capacity
goals. Their ability to successfully
execute these projects is hindered by
regulatory challenges, limited talent
pools, contractors and construction labor
constraints, increasing infrastructure
requirements, and expectations of
compliance with superior safety
and environmental norms. Capital
investments have not been accompanied
by a commensurate investment in
enhancing capability to plan and execute
these projects.
To address this gap, Indian steel
companies need to build four capabilities:
Portfolio and risk management
As Indian steel companies expand, their
ability to manage their portfolio of
projects and optimize scarce resources is
critical for success. They need to ensure
their portfolio strategies are aligned
with corporate strategy, and project
prioritization is aligned with financial
planning. This will enable a holistic
view of portfolio challenges, risks
and opportunities.
Usage of harmonized methodologies
for project selection and appraisal
and adequate tools and information
for portfolio planning, business case
development and front-end loading (FEL)
will deliver increased capital efficiency
and greater resilience against strategic,
operational and market risks. As an
example, formal project risk simulation
on critical path activities helped a
project team arrive at a ‘likely date
range’ for schedule achievement and
associated confidence intervals as
opposed to going with a gut-based
approach. This was used as a critical
input into management target setting
and for development of appropriate
mitigating strategies.
Project management
Indian steel companies need to have
clarity on their operating model for
executing projects—which encompasses
methodology, people, governance—and
have a clear view on what capabilities
will be built internally versus those that
will be outsourced.
Implementation and operation of robust
project management methodologies is
critical for delivering capital projects
programs. As an example, a critical
path analysis on the integrated project
schedule helped a leading Indian
steel player realize that utilities and
offsites were driving project completion
rather than the process units. This
finding helped refocus attention on the
important areas as opposed to the
urgent areas.
As projects move ahead, Indian
steel companies need to focus on
creating an integrated commissioning
schedule, including the preparation of
commissioning check sheet packs to
ensure seamless transition to operations.
Identification of operations team
capability gaps and development of
training programs for asset start up
is critical to ensuring a successfully
operating the asset.
Engineering data management Case Study: The company established a project
management office (PMO) for this
Capital project owners need to ensure Capital project management
that engineering data and documentation project with the help of Accenture, and
received from contractors and suppliers is
at large greenfield integrated implemented robust project controls
of high quality and meets the long-term steel plant to manage schedule and cost. The
operational and system requirements PMO built a comprehensive, integrated
A large Indian steel player was expanding schedule, defining critical activities,
of the business. The efficiency and
capacities significantly through timelines and execution targets. The PMO
productivity of operations is critically
greenfield and brownfield expansions. identified risks in meeting the schedule
dependent on the quality, accuracy and
As a result, the owner’s execution and quantified their impact through
integrity of information provided at the
capabilities were severely constrained. statistical simulation tools. The PMO
point of data handover. Poor quality
The complex contracting strategy also identified enablers for meeting the
data often has a major adverse impact
adopted for a major greenfield project led schedule and implemented a governance
on operations and maintenance, and in
to increased integration and interfacing mechanism to mitigate the risks. Detailed
some cases can delay startup of a plant.
requirements. The situation was further estimate-at-completion (EAC) was
Furthermore, the cost impact of poor
aggravated by land acquisition and developed and reasons for deviation from
quality data can be significant and
statutory approval delays, resulting in budget were analyzed.
post-handover data cleansing is
significant price escalations and contract
considerably more expensive than
extensions.
taking the proper steps during project
engineering and execution. Additionally,
Indian steel companies should ensure
the engineering data and documentation
received is compliant with its
requirements and standards.
Project support services
Indian steel companies need to ensure
various support functions such as
procurement, supply chain, IT, finance
and human resources are ready to
support start up and scaling of capital
programs. As an example, Accenture
established and operated a logistics
management office (LMO) at a large
non-ferrous greenfield project. The
LMO to managed global movement of
all project materials to the project site
in line with the changing site realities
and project requirements. The LMO
helped minimize demurrages, last minute
airlifting requirements and optimized
overall logistics investments.
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3. Customer-centric
sales and marketing
As Indian steel companies expand, they
are increasingly facing an overlap in
their market and product footprint. This
coupled with a lower demand growth
has led to increased price competition
and pressure on margins. In this scenario,
increased customer centricity will
differentiate the high performers. Indian
steel companies will need to:
Deepen their understanding of
buyer values and create differentiated
products and service offerings
Targeted at individual customer
segments. The understanding of the
end customer buyer values would need
to go beyond the basic knowledge of
grade and volume and into the realm
of product usage and identification of
critical attributes. Indian steel companies
could leverage this knowledge to create a
differentiated value proposition targeted
at the appropriate customer segment.
In some cases, they could bundle the
product with a value-added service to
create a differentiated offering.
Embrace leading sales and
distribution practices
Traditionally Indian steel companies have
been laggards when it comes to adapting
leading sales and distribution practices
from consumer-focused companies. As
the emphasis on selling their products
increases, Indian steel companies will
need to institutionalize leading practices
and become more customer-centric.
This would include adapting aspects
such as customer account management,
effective sales call processes,
structured market working across the
business-to-business, business-to-
consumer and business-to customers.
12
Case study:
Sales and marketing
transformation at a leading
Indian integrated steel player
A large Indian steel company with a
wide product portfolio operating through
a mix of direct and indirect channels
(retail, projects, and key accounts) was
facing challenges due to the changing
marketplace. It was embarking on a large
increase in capacity in the midst of an
increasingly competitive market with
diversifying customer base. Hence, there
was pressure on the sales and marketing
organization to reinvent itself to focus
on new customer sets and industries to
realize value.
The organization worked on a two year
sales and marketing transformation,
along with Accenture, to identify
and bridge capability gaps to achieve
its vision.
The organization identified several levers
to enable profitable customer acquisition,
enhance share of wallet with existing
customers, retain profitable customers
and improve process efficiency. These
capability levers included pricing, key
account management, opportunity
management, and influencer and
loyalty management. The Indian steel
company estimated an enhancement of
approximately 2 percent of sales resulting
from these levers.
The company strengthened the marketing
and sales capability across people,
process and technology dimensions. Each
process was evaluated using a process
capability model and re-engineered with
output including process benefits, process
maps, key performance indicators (KPI),
templates, triggers and IT implementation
requirements. This was followed by IT
enablement of business processes to
enable reporting and analytics on sales
and marketing processes.
Enhance pricing capabilities
Indian steel companies will need to align
their pricing strategy with the changing
market conditions and customer
segments. Organizations need to
incorporate leading practices to
maximize pocket margins and reduce
revenue leakage:
• Align pricing with customer value
Understand the value delivered to
customers or their customers’ end
customers, and capture a part of the
value-in-use for customers via pricing.
For instance, if a coil with customized
thickness or width results in a
five percent reduction in manufacturing
costs, steel players price the custom
SKU to share this benefit along with
additional cost incurred in rolling the
same. Executing this pricing decision
is challenging as it requires
understanding the criticality of product
attributes to the end customer and cost
elements across the value chain.
• Improve pricing discipline to
prevent margin leakage
Indian steel companies need to balance
price flexibility and monitoring to
control off-invoice leakages. Companies
can enhance pricing discipline by
adhering to standard price-setting
models mapped to the segmented
strategies and streamlining the
invoice-to-payment process.
This is typically done by using price
waterfall approach.
4. Differentiated
supply chains
As customers get more sophisticated
and demanding, Indian steel companies
will need to move away from the
‘one-size-fits-all’ approach and
customize their service levels and supply
chains by customer segments.
Historically, when the Indian steel
market was a seller’s market, Indian
steel companies would ration out the
production and deploy a make-to-order
(MTO) strategy across products and
customer segments. Going forward,
companies will need to reevaluate their
manufacturing strategies and adopt
a differentiated approach for specific
segments. At the same time, they
will need to build flexibility in their
supply chains; for instance, by pushing
differentiation further down the supply
chain and adopting finish-to-order
approaches in order to balance inventory
and customer responsiveness.
Indian steel companies also would Deploy improved demand forecasting
need to: and sales and operations planning
(S&OP) techniques
Segment customers and products by
Indian steel companies will need to
service levels and align manufacturing
improve their demand forecasting
strategy and supply chain to the
techniques as an over-supplied market
customer segments
will enable their customers to demand
Indian steel companies need to do this in
lower lead times. Further, the companies
three steps. In the first step, they need
will need to develop the ability to assign
to define customer segments based on
the right order to the right plant as
size and profitability, service levels and
several of the Indian steel companies
product specificity. Post this, they need
have already moved to a multi-plant
to define the manufacturing strategy and
and multi-location environment. As an
supply chain for each customer segment.
example, a leading Indian steel
Finally, they need to align their pricing to
company implemented an advanced
the value-in-use (for the customer) and
optimization solution that allows it
cost-to-serve (for the steel company) for
to block capacity in an optimal
their product and service offerings.
manner across plants based on demand
forecasts. The solution then confirms
Implement integrated
the same on the receipt of orders. This
order management
process allows the enterprise to maximize
To support order promising to large,
the overall contribution for a given
demanding and sophisticated customers
demand basket.
based on capable-to-promise (CTP)
and available-to-promise (ATP)
capabilities rather than on an ad hoc
basis. This will enable the companies
to balance responsiveness and inventory
carrying cost in lower margin,
over-supplied markets.
13

5. Human capital
management
India steel companies’ ability to manage
and leverage its human capital will
become a key differentiator and will
play a key role in enabling their growth
aspirations. We believe Indian steel
companies will need to address the 4 D’s
of managing talent.
Define talent required by identifying
and articulating the organization’s
critical talent needs for each area of
the business, in particular for the
mission-critical workforces. This entails
defining the specific technical and
behavioral competencies by workforce
and level that will be required to execute
on the organization’s chosen strategy.
Discover talent by sourcing and selecting
the best talent to propel the execution
of an organization’s chosen strategy.
Organizations will need to innovate to
find the best talent for their needs. For
example, as steel marketing organizations
become more customer centric–they
could benefit from sourcing talent from
more traditionally consumer focused
industries like consumer durables,
automotive and FMCG.
14
Develop talent by continuously
developing individual and collective skills,
knowledge, and behaviors to expand
the organization’s capabilities and its
strategic advantage. In fact, developing
the next generation of leadership, is one
of the foremost challenges facing Indian
steel companies today.
Deploy talent by building the capability
to put the right talent in the right
place at the right time to allow the
organization to execute its current
strategy and prepare for future
challenges or opportunities. For example,
organizations needs an active program of
performance and career management to
rotate high potential executives between
specific functions to build a cadre of
strong future business leaders.
In summary, in order to attract and
retain the best talent the steel companies
would require to:
• Develop a long-range human capital
plan in line with the growth objectives.
• Institute programs to attract fresh
talent and retain key talent.
• Up-skill existing resources in
order to stay relevant in the
changing marketplace.
• Strengthen the overall employee
value proposition.
• Build a HR workforce that focuses on
Strategic and Performance
Enhancement and less on Transactional
and Administrative activities.
Conclusion
Enhancing business capabilities to suit
market conditions will be critical for
the long-term success of Indian steel
companies. But, before embarking on
a transformation journey, they need to
determine their current position and
where they want to go in order to best
shape this transformation journey.
To stimulate thought on your company’s
transformation journey, here are six key
questions to consider
• Is the company I lead geared to address
industry challenges with our current set
of business capabilities?
• Does my company have a strong
mergers and acquisitions, technical
and regulatory due diligence, mine
development and operations team to
acquire, develop and operate resources
in other markets?
• Has my organization built strong
capital project management
capabilities to help me execute
expansion projects on time and within
cost budgets?
• Does my sales and marketing
organization have the right
customer centric capabilities and
mindset to succeed in a highly
competitive environment?
• Is my supply chain able to balance
customer responsiveness,
manufacturing efficiency and inventory
in an optimal manner across my
customer base?
• Do I have the right managerial and
leadership talent and pipeline to drive
and sustain my future growth?
15
Contact us
Authors
Deepak Malkani
Managing Partner–Resources Operating
Group, Accenture India
deepak.malkani@accenture.com
Rakesh Surana
Managing Director–Capital Projects
Practice, Accenture India
rakesh.surana@accenture.com
Samir Verma
Senior Manager–Resources Operating
Group, Accenture India
samir.verma@accenture.com
Contributors
John E. Lichtenstein, Sandeep Biswas,
Richard C. Oppelt, Javier Cortina,
Andrew Zoryk, Jon de Iturribarria,
Gregory L. Anderson, Pekka Mattila,
Mehul Jain, Alvaro Polo, Rakhi Chaturvedi,
Siddhesh Raote, Tracy Gawthorne,
Laura Kopec
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