IT could be a landmark achievement for the industry, if the Chennai-based Sundaram-Clayton Ltd wins the highly prestigious Japanese award for total quality management -- the Deming application prize for overseas companies -- in 1998.The highly-coveted prize is awarded to a select group of companies or divisions of companies that have achieved distinctive performance improvement through the application of company-wide quality control (CWQC), in a designated year.
Early this year, the Rs 220-crore Sundaram-Clayton filed its application with the Deming prize committee, which is chaired by a representative of the Union of Japanese Scientists and Engineers (JUSE), and comprises members from academia and the officer rank of companies, who are experts in the field of quality control.
Sundaram-Clayton, the first local company to apply for the prize, is awaiting the acceptance/rejection of its application.
If all goes well during the eight-month-long examination process -- which begins early February andculminates in the public announcement of successful applicants by mid-October -- Sundaram-Clayton could join the Deming Hall of Fame in October 1998.
Says Sarita Nagpal, senior counsellor (TQM), at the Confederation of Indian Industry (CII), "It will be a great milestone not just for Sundaram-Clayton, but Indian industry as a whole. It's one of the highest honours a company can achieve."
Quality pundits aver that Sundaram-Clayton's chances of winning the prize this year are quite high. As a precaution before applying, in December 1997, the company is believed to have commissioned a pre-application QC-Diagnosis by Deming prize committee members, where it benchmarked favourably against stringent criterion.
The Deming prize was instituted in 1951 in Japan to commemorate the contribution made by Dr WE Deming, the foremost promoter of quality control in the US, who brought statistical quality control techniques to post-War Japanese companies. The members of the Deming application prize subcommittee comprisequality control experts drawn from universities, government and other Japanese non-profit institutions.
The award was opened to overseas companies only in 1984. So far, only four companies outside Japan have qualified for the award. Of these, three are based in the US--the Florida Power and Light Utility, AT&T's credit card division, and AT&T power systems division--and one Asian business unit, Philips-Taiwan. Therefore, when and if Sundaram-Clayton's application is cleared for the prize, it will join a highly select and elite club of companies outside Japan to have managed to bag the award. In another heartening initiative, co-sponsored by the CII and Maruti Udyog Ltd, a cluster of eight Maruti vendors who have already embarked on the TQM trail, are preparing themselves to apply for the coveted prize, in the next three to five years.
Called Professor Tsuda's Study Circle, the companies will be provided guidance on their quality journey by professor Yoshikazu Tsuda, retired professor of Rikkyo University,Japan, and councillor JUSE and member of the Deming prize committee. Incidentally, Tsuda has been advising Sundaram-Clayton on its quest for world class quality, over the last four years.
The eight companies (comprising of nine manufacturing units in all) aiming for world class standards and hence, hopefully, the Deming Application Prize for Overseas Companies are, the Chennai-based Brakes India Ltd (which is preparing two units, factory at Padi and foundry at Sholinger for the prize), Chennai-based Lucas TVS Ltd, Maraimalai Nagar-based India Pistons Ltd, Padi-based Sundaram Brake Linings Ltd, Faridabad-based GKN Invel Transmissions Ltd, Gurgaon-based Sona Steering Systems Ltd, Gurgaon-based Jay Bharat Maruti Ltd, and Delhi-based Asahi India Safety Glass Ltd.Says Krishna Kumar, executive-director, engineering, MUL, "We expect the project to ensure that goods produced in these companies would be world class," says MUL executive-director (engineering) Krishan Kumar. Adds Dr Surinder Kapur, CMD, Sona SteeringSystems Ltd, "We have only started on the quality journey. But we are all working towards making the Deming application in the next three to four years."
But first, the companies will aim for world class TQM standards such as company-wide quality control, including in areas like marketing, design, customer service, finance and market research; zero defect production where rejections are in decimal parts per million; annual inventory turn rates of 30 to 40 times a year; zero machine down time; consistent delivery to the customer; and sustained reduction in costs of production.
Pertinently, at Sundaram-Clayton, the defect rate in the manufacturing process has been scaled down to just 5,000 parts per million, while customer returns are practically nil. By next year, the company hopes to bring down the defect rate to an even more minuscule 500 parts per million.
The company manufactures air and vacuum braking products for commercial and off-highway vehicles, as well as non-ferrous gravity and pressure diecastings and its parent company is TV Sundaram Iyengar & Sons Ltd. Last financial year, ending May 1997, Sundaram-Clayton posted a profit-after-tax of Rs 19.5 crore against a turnover of Rs 220 crore.A step in the right direction
While the quest for quality, by definition, is a continuous journey, Sundaram-Clayton has certainly come within sight of a remarkable milestone. Whether it wins the prize or not, the very fact that it was emboldened enough to challenge the award shows that its products and processes have already scaled world class standards.
Sundaram-Clayton's achievement is even more remarkable when juxtaposed against the self-doubt pitting the country's liberalisation trail: were we killing domestic industry by throwing open the country to globally competitive forces? One answer is clearly writ on Sundaram-Clayton's shop-floor where down-time is nil, defects are close to zero and a satisfied global customer awaits.
Sundaram-Clayton has proved that it is possible for an Indian companyto not just survive, but even thrive in an era of open competition. For companies already committed to total quality, Sundaram-Clayton will be an inspiration. For companies still to come to terms with global competition, the company is an admonition: those who can, do; those who can't, complain.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
