July 2015 | Philip Chacko

Bonds made of steel

Tata Steel has transformed the nature of its relationship with customers, to the long-lasting benefit of the company

There is a ‘before and after’ to Tata Steel’s relationship with its customers that can be neatly demarcated. The ‘after’ pertains to the period following the economic reforms that were forced on India in the early 1990s, when the climate for business in the country began getting transformed with dramatic effect. As for the ‘before’, it was in many ways a world apart.

The construction industry has become a critical consumer segment for Tata Steel

“Up until 1991 we were living in the ‘licence raj’ world, where we did not really have to do anything active on sales and marketing,” says Peeyush Gupta, vice president, marketing and sales, Tata Steel. All that changed when the industry was de-licensed and imports and competition were allowed to come in. Almost overnight it became a different world for Tata Steel.”

The phase from 1991 to 2000 was when Tata Steel forged a “transaction relationship” with its customers. Further changes in the sales equation would unfold at the turn of the millennium following the commissioning of the company’s new plant, equipped to make high-end products for the automotive and appliances industries.

Watch the video to see the production process of Serica, Tata Steel’s premium product for automobile customers
After the transaction phase came the ‘preferred supplier’ stage for Tata Steel, but the changes did not stop there. Between 2000 and 2007, with mood and intent completely transformed, the company morphed into a strategic partner of its most important customers. By about 2005 the company was forging collaborative partnerships with its customers to craft solutions for particular requirements.

The unending endeavour at Tata Steel is to further enhance the connection it has established with its customers. “These relationships are not person or people dependent; they are part of an institutionalised process,” says Debashish Choudhury, chief, business excellence and new projects, marketing and sales. “We want to, where possible, do more than delight our customers; we want to surprise them.”

Customer view
Tata Steel is the first supplier we have dealt with to have a ‘vendor managed inventory’. Endeavours of this sort have led, down the years, to the development of a strong bond between us and Tata Steel; it reflects the company’s customer-centric approach.

Vice president of a leading electrodes manufacturing company

This is a shortened version of the main article, which is part of the cover story about the customer-centricity culture of the Tata group featured in the July 2015 issue of Tata Review. Read the complete article here >>
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