When Tata Chemicals reviewed its internal systems, it found that its
marketing processes were not in line with the market’s requirements. So
it drew a multi-pronged customer focus strategy. It began by
restructuring the marketing department, from the regional or
geographical approach to the customer approach...
Until a few years ago, Tata Chemicals was content with its role in
servicing the Indian market. The commodity mindset was so deeply
ingrained in everybody’s mind that the emphasis was on price and
production, rather than customer satisfaction.
All that is a thing of the past. More than ANSAC’s dumping threat, it
was the deadline for complying with the new global trade norms of the
World Trade Organisation (WTO) that made Tata Chemicals take note
of the new business dynamics. While many chemical manufacturers
viewed WTO and the China factor as a threat, the company saw it as an
opportunity to pursue its global dreams.
In the post-WTO era, it was obvious that the markets would widen.
So the first thing that Tata Chemicals could do was to benchmark its
cost and customer interface processes with global best practices. Tata
Chemicals is one of the largest manufacturers of fertilizers and soda
ash in the country. The immediate threat came from cheap imports. But
Jehangir M. Engineer, assistant economic advisor of the Tata Group,
says, "Fertilizer is not under the bound rate so WTO provisions don’t
apply. But we are under pressure in the case of soda ash. Our tariff is
already at 20 per cent and is well below the bound rate of 40 per cent."
When Tata Chemicals reviewed its internal systems, it found that its
marketing processes were not in line with the market’s requirements. So
it drew a multi-pronged customer focus strategy. It began by
restructuring the marketing department, from the regional or
geographical approach to the customer approach — key accounts and
channel accounts. This new approach has given the company the
opportunity to assess and segregate profitable and unprofitable
customers and focus the key account efforts on the former. Tata
Chemicals followed up this process with customer satisfaction surveys
to improve product and service levels.
Over the last year, key account managers have initiated numerous
joint improvement initiatives with key customers. "In the post-WTO
period, the choice available to customers has widened. So it is
important to manage customer relationships better and improve the
interface," says Mr Mehan. For instance, when Tata Chemicals’ biggest
customer, Nirma, became a competitor, the company plugged the gap
immediately through long-term contracts with new and other existing
clients. The lesson it learnt in the process was that marketing is not the
function of the marketing department alone; it is the responsibility of
everyone in the company. Today even a shop-floor employee finds a
place in joint cross-functional teams that work with customers. However,
the full impact of this restructuring will be evident only in the years to
come.
Says Mr Mehan, "We have stated our intent to be the lowest cost
soda ash producer in the world. We have achieved Rs 500 a tonne
reduction in soda ash cost. We are also close to achieving our target
price per tonne." The initiative was the starting point of Project Manthan,
launched by Tata Chemicals. This project is similar to Tata Steel’s TOP
project.