The New Operating Model started to come into being from November 2010. A single sales and marketing function drives the activities of a single supply chain function, which is fed by three operational hubs.

The creation of the single sales and marketing function is designed to better enable us to make a difference to our customers. One of the function’s early jobs has been an audit of our customers and how we serve them in order to better establish how to deliver them the right steels and how to solve their problems. The function has sectorised the markets the Company serves and is establishing a series of market sector teams to manage individual customer groupings. Customer-oriented sectors such as Automotive, Construction, Energy and Power and Lifting and Excavating have already started work and more will come into being during the course of 2011. In addition to the markets sectors, the sales and marketing function oversees certain market channels such as Distribution and Tata Steel International.

The single supply chain function simplifies management of the Company’s routes to market. The objective is to improve management of stock levels, from raw materials to finished products. This is especially important given today’s high raw materials costs. The function’s management will be able to strengthen its customer relationships by improving delivery performance. The function will guide where products need to be made and is responsible for ensuring deliveries are on time and in full.

The three hubs are Strip Products Mainland Europe based at IJmuiden, Strip Products UK based at Port Talbot, and Long Products Europe based at Scunthorpe. They include the Company’s production, engineering and technical operations. The creation of the supply chain and sales and marketing functions has the benefit of allowing management of the three hubs to focus exclusively on improving production stability, efficiency and costs.

The new structure is completed by a group of other businesses, which operate mainly downstream of the hubs. Some of these, known collectively as Integrated Businesses, continue to manage both their operating assets and their sales and marketing activities. These include Speciality Steels, one of whose main focuses is on special steels for aerospace, and Cogent Power, with its focus on grain oriented electrical steels. Other businesses’ sales and marketing activities, such as those of Tata Steel Colors, Tubes and Building Systems, are handled by the market sectors and channels.

Finally, the New Operating Model comprises integrated support functions to support the business including finance, procurement and communications.

This new organisational structure will underpin the reinvigorated business strategy of the European business. With Customer First now the guiding principle for the European operations, the new strategy has been founded on the objective of strengthening customer relationships. Four building blocks have been established to support the new strategy. These are Market Differentiation, Technical Innovation, Cost Leadership and Operational Excellence.