Strategy and Resource Allocation

Strategy Planning and Deployment Process

We follow an Integrated Strategy Planning and Deployment process through which the planning and deployment is standardised across all our business processes and the value chain described under our Business Model.

It is a four - tiered approach which consists of the following two phases:

  • Development Phase:
    We set our Vision and Strategic Objectives and also the Long-term Strategies (LTS) to achieve them.
  • Deployment Phase:
    Strategies are converted into action plans through the process of Longterm Planning (LTP) and Annual Business Planning (ABP). Further, during this phase, requisite resources are allocated to achieve the stated objectives.

Integrated Strategy Planning Process

for Strategy Formulation and Resource Allocation

Planning and time horizons are defined for each, based on the lead time for action and urgency required to effectively respond to deviations in the external or internal environment. Strategic objectives are an outcome of the Strategic Planning Process.

The Company’s strategies are clearly linked to its Vision, Mission and Values. The planning process takes cognizance of both external and internal business environment and suitably factors the opportunities, challenges and past learnings. The overall strategies and plans are cascaded down to individual divisions/ departments with clearly defined responsibilities, connected to the last mile with employees’ Key Result Areas.

Strategy Governance process
The strategy governance process enables us to identify and test the robustness of our strategic initiatives against possible scenarios in the future. Strategic projects identified through this process are evaluated and approved by the Strategy Committee and then are included in the Long-term Planning Process for execution.

Resource allocation to implement strategy
We have a business planning framework that enables us to identify the resources (IT, HR, Finance) required for achieving our stated strategic objectives. Functional teams take suitable actions in ensuring the availability of resources and these resources are allocated through the process of LTP and ABP. We also have a five year capital expenditure plan which is aligned to our LTS and LTP.

Measuring achievements and target outcomes
We use the ‘4 Student Analysis’ tool to measure the effectiveness of the strategies deployed and action plans. Key Performance Indicators (KPI) are identified for all objectives, strategies and action plans. The ‘4 Student Analysis’ also helps us to evaluate the KPIs for actions and objectives at various levels in the organisation and to assess if relevant and sufficient interventions were deployed to achieve the objectives.

Tracking Strategies and Plans
To enable the Company to respond with agility to changes in the environment, the progress of the strategies and plans is tracked periodically through various MIS / dashboards and reviewed at defined intervals by the apex level review forums.

1. The Managing Director leads the following meetings / forums:

On a Monthly basis

  • a. Meeting to review the monthly production target versus the plan and discuss areas of operational issues, KPIs, and service delivery performance to the customer.
  • b. Meeting to review market trends, customer needs and expectations, business results and top priorities of ABP.

On a Bi-Monthly basis
Apex Environment Forum to review and discuss the Company’s Environmental Performance.

On a Quarterly basis
Meetings with the Quality Board, Apex R&D, Apex Safety Committee, Apex HRD, Apex CSR Steering Committee to review and address areas of Quality, R&D and Innovation, Safety Performance, Human Resources, CSR activities and policy respectively.

2. The Managing Director / President lead the following meetings / forums:

On a Monthly basis

  • a. Meeting to review the cost and operating KPIs, strategic cost management, benchmarking and competitors’ analysis, and top priorities of ABP.
  • b. Meeting to review improvement in savings for reaching the 25% EBITDA target without captive raw materials.

On a Quarterly basis
Meeting with apex forum to discuss strategic projects.

3. The Managing Director / President / Vice President lead the following meetings / forums:

On a Quarterly basis

  • a. Meeting to review the status of key projects and the enablers critical to the attainment of LTP.
  • b. Peer Review Group & Capital Expenditure Committee (CEC) meeting to review capital management and growth.

Challenges and opportunities arising from the Business Environment in FY16

During the year, we faced several challenges such as uncertainties in the external environment, excess supply of steel coupled with weak demand globally, increased imports of steel from China into India at unsustainable prices, steep decline in steel prices (in dollar terms) with international HRC prices plummeting to the 2003 levels, uncertainties around mining operations and higher costs owing to regulatory changes (such as contribution to District Mineral Foundation and National Mineral Exploration Trust).

In response to the challenges faced, greater priority was accorded to operational excellence through Shikhar-25, the accelerated improvement programme, maintaining cost leadership, focusing on product and service differentiation/ downstream business and safe, steady stabilisation and ramp-up of the Kalinganagar Plant.

Medium term strategic objectives/goals

In the medium term, our key focus areas will be:

Leadership position in profitability


Product & Service differentiation

Benchmark in Corporate Citizenship – Safety, Health and Environment

Impact based Corporate Social Responsibility

Strategic objectives (medium to long-term)
and key strategies pursued in FY16

Area Strategic Objectives (Medium to Long-Term) Strategy / Action Capitals Impacted
Maintain leadership position in chosen segments Build and maintain the leadership position in new and existing chosen segments Financial Social and
Relationship Manufactured
Improve product mix and service differentiation Timely commissioning and faster ramp up of Kalinganagar Plant Phase 1 Manufactured Financial
Maintain leadership position in profitability Achieve operating profit as per plan Financial Manufactured
Shikhar - 25 – double the pace of improvement Financial Manufactured
Increase employee productivity through structural improvements Human Manufactured Financial
Strive for raw material self-sufficiency and extract value from waste Ramp up of Khondbond mine (Iron Ore) and West Bokaro mine (Coal) Financial Manufactured Natural
Organic growth at 25% below baseline costs Ongoing projects related to savings from approved capex Financial Manufactured
Leverage digital across value chain Identify and prioritise digital opportunities Intellectual Manufactured
Zero injury to workforce – Committed to Zero Initiate safety leadership development, eliminate rail and road incidents, eliminate contractor induced risks Human Social and Relationship
Be the steel industry benchmark in India for environment performance Installation / augmentation of fugitive dust extraction/ suppression systems Natural Social and Relationship
Solutions for solid waste utilisation Natural Financial
Achieve a Zero Water Discharge regime Natural Social and Relationship
Deliver impact based CSR Improve access to health, education and livelihood opportunities for communities in the areas where we operate Social and Relationship
Employer of choice in the metal and mining industry in India Diversity and Inclusion, capability building through learning and development Human Social and Relationship

Focus Areas

As we move forward, we work towards:
1. The ramp up and stabilisation of Phase 1 of our Kalinganagar Plant.
2. Scale-up our differentiated services and solutions to customers.
3. Improve despatch cost by reaching benchmark performance in KPIs; reduction in procured raw material and services cost.
4. Seed digital initiatives via organisation-wide mobilisation, pilots and capability building.
5. Continue to be a benchmark in environmental performance by reducing CO2, Dust Emission and increase Solid Waste Utilisation.
6. Continue with the “Committed to Zero” principle to improve the safety performance.
7. Improving employee productivity through various capability building initiatives.
8. Engage on Policy Advocacy.
9. Touch the lives of people through strong focus on livelihood, education and health as part of our Corporate Social Responsibility activities.