18S Center for Management Research Sundaram Clayton — Winning the Deming Prize oer a hi cnt tn ec ah ‘aod tom ptm er aod ee ae far ‘thaw rete yeoman sen 0 BSc epee Tos cs ct. 28. ns Carr Men ea cA, EME Cans Dey, Sena Rat eth fa Pa tens open www.emrindia.orgorexoro ‘Sundaram Clayton - Winning the Deming Prize The Deming Prize is mo ast @ rection of prodvet quoi: Ii the recogition of te organization set. Cleary Sundaran-Cljtan mes te requrenents ofa worli-lss compan" ‘Thee ave 3 sings thax Sondaran-Clayton ists. One, ttl quali not a prerogative of Japanese companies. To, Idan workers and managers re capable of itertatonal standards ‘re hee tha nether se nor location mates achieving worl-cless tener. Suresh Krishna, CEO, Sundaram Fasteners Lt, in November 198. BACKGROUND NOTE ‘The leating manufacturer of ar braking ste In Ina, Sundaram Clayon Lid. SCL) is the ‘agship company ofthe USSL.6 hillon TVS Group. Named afi is fourdr,.V. Sunda ‘eng the TVS Group bega is joamey wit a small anspor isiness i Chennal (al) in 1911 Over the years. the group diversi int two-wheee, automotive components, automotive ‘pars, eompuer peripherals and nda sevice. The rep was pricy suecesflin is Abtometie componert ard twoarheslerDusieses, In 2001, te TVS froup Nad 29 globally reengized companies apd an employe bse of over 30,00 SCL was established 1962 [neollabration wih UK based Clayton Dewanke Holiings Pl (cenaned WABCO Autonoie), a division of American Standards inc. fr marufcng a assisted and alrbrake ster fo: commer vices i Ina Over the net few desde SCL. ‘wet onto became the ell sper of brake systems othe Bes and ight commeril Tehldlesegmens of ihe indlanawmoble sector. The conpiay wat te elghal eqpment ‘manfictuer (OEM for Ashok Leyand and Tata Engenring and Locomaive Company Tee). Other maj liens of te eampany inlied Minusten Motos, Marl Uljog and Bharat ar Movers OEM sales cotta 0% 1 the comparys al sls ile he elacemant matket counted fora estiinted 259%, SCL used 65% ofthe castings produced by its four division and supplied th remaining (35%) tothe group companies or omer compan The company’s vast nevork of ener 205 whale alr out stunted sco the county enabled itt become the lesen the aomative st Drake stems ark nT and garner aT0% marketshare. SCL basa fll edged R&D centr ‘ha enables design, developmen, sirulaton and txing processes of profs. By focusing on TRAD, he company was abet ssa is imports y is indigensly developed componet SCL was also able oindigencusy maruacture soe corpenens oth expr markets. These intnives were expected fo help the company aie ft goal of becoming th lear inthe ‘ufone ai braking basins in Asia In ple ofthe slump inthe automo sector during te late 19905, SCL registered Improved revenues year afer Joo Beecn 1998 apd 2000 (Refer Exhibit [fo te company’s fan francs summary ndtsty analy ageyatibted he compary's tees fs feu on (uney,Accuding TVS sources, te ru 86a woe hat always aimed at competiveness aks, che oad play nrg vies, st compres so phe wee ‘Sconmed with CamSeannerEe ‘Sundaram Cleyton— Wining the Deming Prize without compromising on guy. This belt was proved when the company adopted Tot ‘Quay Atnagerea (TOMY i ll its aauacung companies, ieuling SCL. SCL followed the coe princes ofthe TVS group ~ Qual, Reabitty and Serie. Quay rmeasures at SCL were act only applicable to the predat but aso co syste, operations and proceses at al level of maaulactrig. Asa rest of is company-wide qual conte ove the Jers, he company won the Dening Pz for CWQC (Company Wide Quay Conlin 198. SSL wa the ir ndlan company an the fourh non. Japanese company to receive he prt inthe Sear soy ofthe aad, AROUT THE DEMING PRIZE (eof tee high recognized an contd quay ava in he wa? te Deng ce ‘sealed in po, n 05, by th Unio of Joptee Slo and Esginees USE). Te {ral was Init esegie be W E Dem elon (Or Deming To speed gull Consluses Jones compan and t encourage corti elope: uly eae Sn Joan (Retr Exit or Be Deming Matin). The Deming Pie th ma cia ui for asians ogous secon pes nd incu satsial qty cont tls Set fom he ones woke The Deng Pi ad spent ifueee on he development of gy onlin Jpn Decame companies tha deed whe avid intel ne apse 0 gull Ianggenent ft serve he ognzatongregaenens. These companies inode efecie Panny nigenes Cahpes lerlged ovr nape neta a eeacnl ats once Sue gly ives ap \12, "ed In the orl evelopment of es conpes and ade then sucer. T thee companies ped any tet ona mpement uty contol te, tara ht he callege cnn fhe Dring Poor vied avec hme tut an aap eects uly cel ete agai nthe Ding ie nated — ‘+ The Deming Appliaton Piz: Given to companies o divisions of companies, wich achieved significa’ improvement inthe pefornance though TOM in a ven yet. The ‘membre ofthe Deming aplication Prize sb-comumite ine quay cone experts fom the goverment, unversie 2rd nen profit organizations Jean + The Deming Prize fo Ilva: Given 1a who made sigan eomoatons to ¢he ely oF propagation of TOD statiscalteclqus used for TQM. This awa Is open yo Japanese ania, ‘+The Qualty Conrol award for Operators Busnes Uns: Given tote opens dion: of companies tat acteved significant improvement In prfaance tog the splieaon Ct quay cont asa part of TQM nates ina given et Font cant eed ev sucesso for aetsyng tral an exer eases sd ples By iegatng toss enennen, exnians inprovene rd becktegis wh deve me {pms anf nacsner oye wie engi ie nein cle 2 Teer wo ares are Mako aie Naa Qty Ava nol US eed pi) ant ‘De copea ration far Quit Margen (EFQM) Ata its let aay ose ening ris. * Deng was he poner guy consol she US. Te JUSE te in faa 3850 1 ach Stal ult el cits ote opines opus ‘Sconmed with CamSeannerEe ‘Sundaram Clayton = Wining the Oeming Prize ‘Apr fom these mln eateries thee are two ober wards given by the Dering Commie for Bly aaa ~ pn Quay Me er conpanies an Guay Cont aera Pr x se th at rt yt Spee art rma eae ey eect ie tahon tek concn teva aeeaar rei hi ny he in “BER et cre ass ee ecm eae ae gl a rete Geis See re re ee ‘commiltees evaluate the applicant companies/divisions on 10 parameters that cover every activity sone Weamanenineemersrae iia Gaateascansee nara Bt ae Saag Tenaga pana rin Le mage ae ee ele Fe eee ee ‘ln neatonip wil’ Ober Margen faporne! Pega TQM Potion ast Option Quy Asurance syoms: Qt) Asus Spun, New Poti aad Nw olay Developme, Process Conta: Test, Quy Evasion and Qualiy Ais, cites Coeig th Wine Lie ye, Pcsng, Sontcig nd Dion agement. Manogeent Sytes fr Busnes Blnents: Cosco ands QuaiyDalivery Managemen, Cost Management, Environmental ‘anagem, Safety, Hen nd Work Eviennent Managemen. Hunan Resource Management: Posionng of ‘expels Mangsmes, Bdveton and "Traning, rect Unto of noma: ne we of ale ie Monge, Eitri Sony, Ser tr Aaj od Dect. Seat ad Gaiguetadimgaes J ine a aesQliy, Nomct poe Ree Scie Mads: Ussing sd atone Matos, Ung a Utes fe aig ea nnn omer Tel, Spe Vly Corton o Retin of Corprte Oj fog i dey Sie eon Shen eons ean = Expo stn Corsi SicenenanigeEl ‘Sundaram Clayton - Wining the Oeming Prize Howe. Deming he crn’ xan ross doe mae pia conan ops specie uly cna oso ul fore Deng re sea of ong sei Lepare sexed ntl Berens esl tir ove gaan betes, {donee CHQC pga. er the ening Pi, eprom: of ee sions incon gee py, lint Cr To auth gy cn oe andthe eleven, expe tol re lope’ of cpa, for be aera {erie avar Thesu connes ete ompuefsions on he bss oi ayo deep dle sesen quliy snc ecusto pda else nate ok Sees ht met esome eens ‘The Deming ae Comite conduct a camprnensieeation of the applicant compare, {Sing ue Grid factors ach i pen ste owas i splat of “TQ ie inpleneiaon str nd resting ater. Acai eas, te Deg ie Rha alte aplenty Bek penser neds ates set than specvng ius toe seed. This enables aplant o devlop sean the {uli eantl neal Aras dtin te Deming Pe a he st wd be won us Ts popu of th ‘Deming ie nde eis apd the crams hat wo he Derg ae ated many Compuesto implemen uly contol menue ret the ps Though the Den ‘twa a oe 160 compaieyompy sonnel sehr ere romps, Hands Power Sd ugh Usty (90, Plis Taian Divison {ish Cet Cad Dion and Fewer Syms Drs of ATR C280 und SCL C200, sucess quay preees tthe endo 199 'SCL'S DEMING PRIZE JOURNEY ‘SCL ad decided to apy for he Deming Pie Ln he ent 199s self Ths decison was he resi of managements ble inthe a ality cota ff hat al tat in 1979, after ‘Veru Srinivasan Gries) Beare the CEO (1977) A SWOT analysis conducted by Siniasan 1897 reve it hug the ompay had 0 ae oe ake ens rah India, vas rt competent ncugh to deer wol-lss quality praduets This analysis prompted ‘he company to seek exerllnce reg tl quality conteimanagement. [As par of his inv, SCL manages wee node othe cone of Tl Quality Control (ToC) a cri he ty cn! ace of wes COMBE. The RE ‘were ao tae in maton manufac echniqus. By the m1980s te TQC clue was well subi at SCL, Famous Jparese quality contol exper ie Yoshi Kondo and Weslo wened ‘managers and engloyes eaensively lt TC. Te capany als nuoture the concept of quay tices Toremain focset on qty onto andto ep te employees tree in quay onl proces extemal trate sucha ning national guy awards were st, ollng hich the ompany won he Quality Cie Award ofthe Conedeaton of ian Inusry* (CI a 1388 and ‘he Qual Chee Federaten of ta wads surcestey forthe nest ew yea. sng se eed i gi, Fe eames sane any ence xe groups o engoyr, wich met ea ecu eben or guy come a oie of ork nt suggest ys topo uly ‘Te Confetetion of Indn Intute (Il is tongovermen, nor pad uy et ant Inyngel oeatn ping ity aol pane ae ugh ty ‘Sconmed with CamSeannerBee El ‘Sundaram Clayton - Winning the Deming Prize {Asa prt is tay to wi the Dering Pra, SL appointed Yeehan Tsuda Ca at ‘ality ontl consi inthe early 1980s, Under Tsu’ isin, SCL inepited Deming’: {parameters to four sts of te quay practice - polices, processes. posts nd pope ‘The company's TOM model susie! Coley Deploysren, Enploye avalvesent, Rech Standardization ané Trang apa fom. promoung employe-smpaye Testor. Under is nde! every employee ote eompany wat sedan of quali SCI. began to prepare ise forthe Deming Pie by formalin cea company-wide quality stores expectations This custome atten wil be olraned by Supping products af he Fight quality, the right ine, ant height place. Tal employes vam Sd cotintous Improvement in every share of activity wl be he twin suport on wes Sundaram Clayton ‘ality wil sen.” The conor to the geidlnes ofthe Deming Prize that qtahty at snul-feted body. Tha to enamgsethe ene organ Thar te poly farcweck t SCL ws ener een zal ae coming posit ding ‘pears, maha. nance and percomel, The pole) framework Geary splot the cts or enployees tev, rom te CEO Cr tnx 5 eur) othe mete operate (lt ‘here 30min) SCL’ qi inatiestepn a he oct dsen sage il In he ne 1805 te copay Site the rit roe system fom post mae syste to erie tht quay sand And problem sing wee more produced rer an pocesise. Following 8 he onmpans pect nes sich a compressor actanors and vase bun to opt a spas Snel Tis mea tht ata of wrk vs taproot prot sed nts 3 ‘pele compet ar cess: rt eur ied ecley med estore hee The pay empanadas sch els, ceay en aby of prods tt te usar to parte the ds ad et fe te oes. ‘The prodos development team of SCL comried members fom feet ronal ares sch as ngteerng, production, masking, pzchte and RAD. The team collected fafematon from faomess eguding thelr cegureens, procclied problems, suggestions ee. It then ‘amined various factors suchas he lifeexpedaton ofthe roduc, argetco, production Yolune, and grok and avalaly of inoue exprtse to met the requvemeats. Based on hese the team ancien a design ae developed a protaype, whch was texted garouly Here beng Silly pproved fr anaes SCL wed concen engneringtedngus" whieh eonideby reduced ts cyeeine. Ths, lle oe pat of te produ-deveopme’ team designed te prod, the eter worked on seting tp the ecmpenets base. Ths wate supplies were als eady byte Une caster aperved ‘he desig d's protaype was made, Through fal-analyss nd vaisen checks decane the Tol s wel peter of Ryo Uns of fp, cue: ot JUSE nd mess of Dekag Fre Cones era oso othe teensy Fo uty Cosa Ts ‘aint sy oe ton op owe oi 0 ‘cg Tn SCL TOM kl am Sy mach fi te ase mele inpuneitin nies He Sine ha nay usp ener ee epee gu Gen nd Sp ees nur nie sens ech te ag, eacin eg fprois nd ‘Sted posse nti nabs sper pts kc fom af ou, com al ems of Foe ue hon conan on nding yo. eet ‘Sconmed with CamSeannerSwe ile Eel ‘Sundaram Clayton - Wining the Deming Pie prodc-dsgn and development cots signe. Fous on customer need, development of Brotaypes and qualy checks also reced the ned for produc replacements cr expensive ene Wa he help of Densna's Pas-Do-Check-Act (PDCA) cjle" SCL denied cranky issues hase ment Belov the begining of # Re’ fiscal yes, These lesee were choren thd $TQC tool o carol he cous of opens afer te opens had ben defined. The eoaegt tfmangement prints ard checking pois ean te urdersond ath the help ef he foloming Te jective of the company resent wll fs rsnaging point and ken fost the Manager imeditly blow rn, wil score the manager's cheking pos, Simi, marketing head's Sales age vl bes manoging pan hen sagt ews dove he Rn ve, a be Splint checking pot te sage sles an ery sles) SCL plotet thee managing an checking points on a cart and vray connected thes pois Ber formed le pelea rpeseneen fon ejaranon ile rpg ied oly ajc ora specie yar, mplemened company aly coal progr, {Brecord fe noes and ny devon) an ep tinite ermofchans. Repel Geviaans Frm beste objectives were immediately aed to nd care, ‘Acordagto Dering, nducting people no the quality cule ofthe oranzation ss imparant 48 the acl implemeatin of FQN tol, echaqus ond systems, SEL olf peal on thee an fhe adn fs employes. pi fom tang hem ine uta ten, the company aso aed employees ote uileaten of varius sti tals reset uly cael as epee ht ont vege eye SCL po $8 hos pret Shetstroom tale Which ss ey high compe heed age of Aho Employees were an tained on various aspects such as housekeeping 5 Ss Se (clean up Seo orang, Sle (Cletrng),Setkesu Sanden) sr klsuke Taig). Taig ‘eed ting t TOC tools sues ts enol cha, case anflec gay check she, Ne Pareto hart setes diagram, haga snd ober ap ahd eas. wilh helped operons ‘Sn tale st soe ny toy prblems onthe oom Refer Exit I), SCLeseouraged ‘arplajesto ik ate: mer accept ode. SCL emphasized on gua cles bad 67 Quality Cites, which improved operations in the onganiaton. On average 250 suggestions rangng fo spl ask che hg he place om pe complex ass fc as ago ong de, we mle, eh ually contol cle had six renbers and opaaed. on specie projec, made ment fresno he manserent ed competed (rena, The POCA cyl was wed rea Fel 1, nthe efiation of projec Pan, ealetan of inferaton (Do, ass (Check) ind inpleentaion ofthe sats (AC). TQM encompased al the process in the onanaation, Duta relied to every proces = pcecion, uly atten ‘ume‘elated isu, peaucivty, auks ard beans and Sinstge was cole and ansiaed continoaay to etabliss cose and effec retontips tnd eden Unages aeiween the proceses, The daclctted ayes (Gala nae) aso beled Geermine in necurt fers, the extent ofthe problem and the ing of the solitons, To Smplemer hs SCL usd Suse Quay Comal (SQO) acess aunts and foncns. Forbes see ae, SCL epi Kate nd Tah cig ery chine hod 2 daly. work management syste, folowing which the eperator me Ie Tyas PCA eye certs comin ete pt ope mangers ety ad change pre {fs poses tat eed inpavemems (an Desig evs hasnt proces omponen one ‘eke De Inplenen Be pao ena frmce, Che” Arse eee a repo erento cen hes et: Dee an charges ted row te acs). Tague ayn P ened gully engine Mat empans he elev apenin ‘gieg stg er ban aiveed Sail eg Hes bo we a shop Ber qulyexgoring ‘Sconmed with CamSeannerSundaram Cayton — Winning the Deng Prize SE ee ee te Sus its cue chet monacha! ee eee ee peer peer enema eu dts aie one fy La dee ae ae Sl ere gy la ea Soe moore al an ne ca A ca intra a tl Faun nec enh WSC aca ee ee gt ent AFTER WINNING THE PRIZE. “he defect fine mafic procs tS. dee staal nd coe res tae come aes hese qty conta nav, New joc evap Lie es reduced fem 2400 manihstol2s0-14 mants. The tumor per employee increase by an ‘slated 18 anny vl te grsr value son by every employee ceased by 12% pet “The quality practies inthe company alo reflected initial performance. Between 19528 {Bytes gow tan sana ae of 5 whe et poi a sn aml tof 3%, ven though ses decd By 25% b 1886 due orecsaon inthe aod Inst, comp sources and the aml commend that he compen’ lteal peroraace had proved ‘only which ns strate bye saved reusing 1994 200. SCL’ gaiy naive mooi many dian compet ap quay onal races. a {sam lr and Maa ajog took he hae wo enous tel gully contol sume ina eames. As 2p hs the decile spose rou a eg Ma vend the Deming Prise, Tost soma ned Suna Broke Lise 1, Brakes ln i Las TV Ls ina Pons Lede GKN live Tnsmbions Lal, Sona Sleng Stes Lid, Jay Bhar Marni dda Sey Gls UA hse compares were aad pacing {Rgnt Tes stain nd gle ths companies CWC In 200, Sundaram Brae Linings Lf. SBL-TVS Group copay) bagged he Dening Pris Hm tt ae tng py he wa and ei fee capa the ar. Oe companies he group were as eel pepnng ard wh he Dering Pra in fae Aaland ht te aber of he TVS Crop companies wis emhblehe i tes gas Ibert on gous hate domestic nasty wos eng esoyed SCL ard SS napoved tat nan eopanes wee expe enough of srviing Sn osg een Ans stfeompeion an ineraning glen, vem norman ste onl rofutn ques in erry proces. Ih sem, on the Redan card fat dof lt ed ow many rede wee writen a ent he Pepe (Ge pcedig pec on ade ce ‘Sconmed with CamSeannerSundaram Cayton — Winning the Deng Prize ‘These companies halo proved ha comps le openers such 2s TQM oh EE inter carn pets of gal nies EE Nake CEO, Congo ‘Geer, en “Congr wich alt sutin Get quliy commie conse ed ‘blame the concept. The truth is, quality is about continueusly rejecting the status quo, which is & Sah gt pigeon pene eu ne nga x Vf ‘ens TOM fa ‘Analysts ape twit te sucesof ee cops nace te Deni Pe, th pes wont ey yi ef a wos ruduce and serio (QUESTIONS FOR DISCUSSION: 1. Clea cus the Lavestken by Seinoasnt prove the unly sasdards at SCL. Ho ato you tink hese aes cone os hyng he tdaton tow i Dering ‘Wha ae he paraetrs preseibe forte Dering Pie? Discus he ses taken by SCL Thal procs dS ye Benn fe Connie to eae tate TOM sere ves ces inplemeted tales of company. Coe ratte ents SCL erie rem he impeenton of ompany wide TQM. Discus why TON tates a to ve expec Dees te companies Iyou were ‘eCEOIeanY manage what you do oerse sere TOM eeSundaram Clayton - Winn Exhibit SCL Profit & Loss Statements e398 | 0888 No.of months wl 2 ‘Grose Sales Netsales ‘Other income "Total income | Raw materia ‘Stock adjustment no Dee Purchase of fined gods ‘Coitofmaterial Employee cost Power & fal ‘Advertsing promotion public Freight & forwarding ‘Other expenses CCostofsales PBIDT Tors & nce charges PBT, Depreciation Par. Provision for taxation "Extraordinary Hemel Pror year adj ‘Adjusted PAT Disidend payout ‘Sowce:we aiytveconSl Sundaram Cayton ~Winsing the Deng Prize shit Dr. Deming's Maxims 1 Global competion race with oe apis eb gba tans Weal mist improve comity 2 fh eps a wll na elf cts nie pepo obng o8 ey sd eten i e relations. Alt eth espns fhe anagem. About 58 of robles sede to poor manageent. There roto Mane the ‘totes for this probins. Sterns mt temas wheter lhe ooh odin hve ben sti. io, he reson of he mange to ft before blaming the worker. : A. ood employes rhe wel of erga. py vet tne a elo in ham ‘for the futur. ee Sure 59 Fura a2. Exhibit ‘Various TQC Tools ‘Control Chart: A contol cart indicates the range of varality posible in paiedar proces. Using consol chat helps ienfy speci ens tht hide the normal ow ofthe ross abd ease ace varaons ine res. Check St: Check ses ew psn da fei a gap emt is sequential sting of functions or operatogs. a awe Part Char: A Pace har ue deine the far ht hve the ge conaline ecton he ors unge ch aor or of perce YE ner Be es {nfs on npr etn he pce ow Cart Aleit apt dpton ofc. Reset po ‘eps ths te teers torrie pt ‘sopra: sop is 2 gupta ofthe Gat hat shows te dspsion nd ‘ol ereneyof nti ich ee att nso ee Seater Diagram: ts graph ol aes eshte elon betwen van ete irs of ot ew on he A caste gam day ass ‘reening shred vaveooe etn hoa oe Cause and Ffect Diagram (Fish Bone Diagram): is wed to cnset mule posse ‘gah pee ine hoe cane perce ° ei and ge varus nse fesposble Tr that oa. hs ebshng re eases for that pa affect. a7 are eaSundaram Cayton ~Winsing the Deming Prize Exhibit Rescons Why TQM Fale Tai Geena rae Coyle a me Oe FSS enor ‘eco ud suron ie csr ee, guy bees a Meal dtd gn whew lero ait pc No ean Tray: ny epson ety esa ets ty whe etka ea gel hoe ke athe ely Salonga gas Tore ee cee ee eer rics wer eemtang compte conn ete, opoion ‘equfencn They apy bemde muna, wich retest etc oncone, ‘Lack of Communication In nany css. htop mnagenest fal to conmunie gol ‘eles pois ep ly of ang Ta se Employes an explain oes penton. Tmegraton: Congas ty emphasis ot emprien, vi aphaing Bet ata enljee te prs of age ssn Tis als tna Seto wlre xh cele bcos exper inhi seo perio ed fas o eset ius experts ome he pte ot dom etl of opanatow rales) et, ‘Sore: ns Toy, Novenber 1985,—— Sundaram Cayton ~Winsing the Deming Prize ‘Additonal Resdng & References: * ancien ene soa, A °C Quny Managemen Raman Manjari, Exploding TQM Myths, www.express-india.com, May 27, 1998, SGuling Sar of Sundaram Chyton row Showing ath t Others, wens feet Never, 988. anita A Ql Reson on, nanan Neer, 1988 Sundaram Caton Qi sale ise 25%, wor nresindcom, Ap 13,198. Kal Vi, The Qua For Quay, Des Wool Ma 24,20, Shaan Teta Quality Buses Toy 198 Sundaram Brake inns Gt Deming Aare Ln, Oba 3200. siya, Jory Mach 200. vnedeningos sw stndrenlyon com