Page 30 - DMGT524_TOTAL_QUALITY_MANAGEMENT

Unit 2: Gurus of Quality Management

In quick succession, Sundaram-Clayton’s managers were exposed to the quality practices Notes
of global leaders, trained in modern manufacturing techniques, and taught about TQC,
first by Yoshio Kondo in a watershed workshop at the National Institute For Quality &
Reliability in 1986, and, from 1989 onwards, under the tutelage of Washio and Tsuda. And
to walk the talk, Srinivasan set up a core taskforce to baptise Sundaram-Clayton in the
new religion of TQC. Recalls quality consultant C.S. Nath, 62, the former general manager
(quality) at Sundaram-Clayton: “Srinivasan laid the foundation for TQC in just a few
years. When I look back, I am amazed at how focused he has been.”
That wasn’t all. To provide a big bang bull’s eye to aim for – a magnet for the quality
practices, as it were – he decided to set external targets, starting with the national quality
awards. Sweeping those was easy given Sundaram-Clayton’s head-start and commitment:
in 1989, for instance, it won the Confederation of Indian Industry’s (CII) Quality Circle
award, followed by the Quality Circle Federation of India awards in the following years.
Despite this raising of the bar, it was evident to Srinivasan that continuous quality
improvement had been hardwired into the organisation by the 1990s. And, as it often
happens even with the best of companies, the movement faced the threat of petering out
if not kept up relentlessly. Concurs S.D. Kulkarni, 64, the CEO of the ` 5,841 crore Larsen
& Toubro: “In the early years, quality goes through pockets of excellence, but it must be
translated into a culture that touches every employee. The vision and momentum must
not be lost.” So, in 1995, Srinivasan threw a huge challenge to his team: beat the world by
winning the Deming Prize. The organizational sub-conscious had been aware that its
objective was world-class quality – and the Deming Prize was whispered about in the
gangways of the shop floor – but it now became a focused goal. Points out Suresh Lulla, 54,
CEO, Qimpro Consultants: “Such goals help inculcate a sense of pride and purposefulness
in people.”

The results of Sundaram-Clayton’s total quality movement are written not just on the
medal that was put around Srinivasan’s neck, but also on the company’s books. Its financial
indicators in the 5 years between 1992-93 and 1997-98 tell a tale of top-level performances.
Being a vendor to the auto-makers, its top line, of course, is tied to those of its customers:
the ` 2,048-crore Ashok Leyland and the ` 7,450-crore Tata Engineering & Locomotives
Co. for air-brake systems, and the ` 7,842-crore Maruti Udyog and Hyundai Motors India
for castings. Thus, sales grew at an average rate of 35 per cent per annum between 1992-93
and 1996-97 although it shrank by 25 per cent in 1997-98 on account of the recession in the
automobile industry. Likewise, the average growth in net profits in those 4 years was a
stunning 83 per cent per annum – a glowing tribute to quality-led cost management –
although it fell back by 35 per cent in 1997-98. But, internally, its performance improved
consistently despite the recession, with turnover per employee rising by an average of
18 per cent a year, and gross value added climbing by an average of 12 per cent per annum.
Make no mistake, merely working towards an award – and developing the requisite
mindset of competitiveness – is not enough. What Sundaram-Clayton’s progress reveals
is the all-important alignment of the quality imperatives of the company with the parameters
used by an assessment framework, such as the one applied by the JUSE for the Deming
Prize. The Deming Prize Committee defines quality as “a system of activities to ensure the
quality of products and services, in which products and services of the quality required by
customers are produced and delivered economically.” Sundaram-Clayton’s quality coup:
integrating Deming’s 10 parameters into the four streams of its quality practices, which
flow around policies, people, processes and products, respectively. Its TQC model puts
employees at the base of the pyramid, daily management on top of it, and erects five
pillars resting on these two: Total Employee Involvement, Policy Deployment,
Standardisation, Kaizen, and Training. In short, everyone everywhere in the company is
Contd...

LOVELY PROFESSIONAL UNIVERSITY 25