Continuous improvement as a business strategy
A Corus case study

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Page 1: Introduction

The steel manufacturing company Corus focuses on meeting the needs of its worldwide customers and providing innovative solutions. It manufactures, processes and distributes steel and aluminium products worldwide.

Corus is a subsidiary of Tata Steel, part of the giant Indian conglomerate. Tata Group includes businesses in many industries - for example, chemicals, automotive, telecommunications, leisure and consumer goods (such as Tetley Tea). Tata Steel acquired Corus in 2007 as part of a strategy of international expansion.

Steel is everywhere in our homes and all around us. Corus Construction & Industrial (CCI), a business unit of Corus, has steel manufacturing facilities in Scunthorpe, Teesside, Scotland and France.

The key markets for CCI include construction, energy and renewables, engineering and machinery, mining and earthmoving equipment, shipbuilding, fastenings and rail. The principle manufacturing site at Scunthorpe covers 2,000 acres and employs 5,500 people. The site consumes 6.5 million tonnes of iron ore and 2 million tonnes of coal each year to produce 4.3 million tonnes of steel products.   CCI products go into a range of leading edge developments.

The production process

Modern steel production is a large scale operation dealing in huge quantities of materials and products. The process of steel plate production has several stages:

  • Receipt of pre-cut steel slabs from the steel plant
  • Reheating of slabs
  • Rolling to achieve required dimension and mechanical properties
  • Initial inspection for surface or quality defects
  • Cutting to order size
  • Marking with unique identities
  • Cold levelling to agreed flatness standard
  • Final inspection
  • Loading and despatch to customer

Producing large volumes helps to drive down the costs of running huge and expensive steel plant. Overall, this results in steel being a relatively inexpensive product, typically around 50 pence per kilogram, about the same as a kilogram of potatoes.

In a major building project, such as a shopping complex, the cost of the steel can be as little as 5% of the overall cost of the project. Because of these issues, CCI needs to differentiate its business from its competitors in order to continue to grow.

CCI's business strategy is to produce quality steel to satisfy customer requirements, focusing on delivering products at the right time in order to secure profitable business. A key challenge is to meet the increasing demands for more steel, at increasing levels of quality and to comply with more demanding delivery requirements.

It would be straightforward to meet these challenges using brand-new facilities. However, a new 'greenfield site' steel mill could cost more than £300 million to build. CCI therefore needs to make process efficiencies and quality and delivery improvements with its existing manufacturing plant. This presents challenges when older facilities are not well structured to use modern manufacturing techniques and processes.

This case study focuses on the process of Continuous Improvement (CI) at the CCI steel plate manufacturing mill at Scunthorpe. It will show how Corus is finding new ways of achieving its objectives from existing resources.

Corus | Continuous improvement as a business strategy