Sundram Fasteners Limited (SFL), part of the $7.2bn TVS group, has recently won the Deming Prize for all its 17 plants in India. This highly acclaimed quality award is presented by the Union of Japanese Scientists and Engineers (JUSE) to companies that achieve breakthrough results by the application of Total Quality Management (TQM). At SFL, this initiative was driven by the company’s Managing Director, Arathi Krishna. She is the first woman Managing Director ever to receive this award. T Murrali of AutoParts Asia talked to Ms Krishna on her return from Tokyo after receiving the award. She said, “The cooperation of our people and their singular focus to succeed helped SFL make quick and successful strides to reach this goal. We started by thinking in a structured manner and passed every milestone along the way. Now, it appears unbelievable. TQM has changed the organisation, unified us, raised our standards and made us believe in our capabilities. It has changed our mindset, our way of thinking.” The edited excerpts:
Q: Hearty Congratulations. What made you go for the Deming Prize for all your 17 plants together?
A: In the regular course of our work, we realised that one or two defects on our products kept coming up from the field. This used to surprise us, as it meant that they had passed our internal quality control system, and made us think why and how? With TPM we had excellent productivity numbers, and exceptional control over machine breakdowns. Yet, the niggling problem of one or two defects continued. One of our customers, an Indian OEM, had pointed out that his company benefited immensely from TQM. Our sister companies too had attained TQM; everyone told us that it’s an excellent journey but it takes time. We had recently set up our new 100 percent export-oriented unit in Maraimalainagar SEZ in 2011. That was the trigger.
I requested Harish Lakshman of Rane Group to introduce me to Washio San, the TQM Guru; Washio San agreed to meet me and in fact said he was waiting for a call from SFL. He said my father (Suresh Krishna, Chairman of Sundram Fasteners) is the father of the Quality movement in India as all the first quality moves in the country started in SFL. He told us to start with one plant. We did so with the Maraimalainagar unit that had just been set up and also with the Autolec division, an assembly plant that we had acquired. We began our journey at both the plants in 2012. Within six months we saw dramatic results and I felt we must share this with the other plants as I wanted everyone to benefit from this knowledge. Washio San used to spend five days every three months with us. I thought we all could meet under one roof, put together a TQM secretariat and see how it goes. We felt nobody should be left behind and all should be on this journey, and within a year of starting, decided that all plants of SFL should get on board.
Q: When was the process for Deming Prize initiated and how long did it take to convince the head of each plant to take up the challenge?
nitiated the process for all plants. At SFL, all the teams are always looking to better themselves; I had no trouble convincing them. The big hurdle however in the demanding TQM journey was consistency in action, no step could be omitted. Washio San being a brilliant and a tough taskmaster wanted things to be done as he visualised them. We put all our faith in him and that has been our biggest benefit. My father used to say “go in for the learning and as you learn you will find yourself becoming more and more confident, believing you can make it.” We experienced that.
TPM was a shopfloor-driven exercise. Office and staff functions were not involved. TQM, on the other hand, includes the entire landscape: corporate finance, HR, marketing, quality, buying, maintenance and all the other functions. Everybody started speaking the same language, everyone was able to share their knowledge. We published these stories, ideas and new learnings in our newsletter, ‘SunFast Quality,’ where all in the Company could read them and make comments. People were very keen to learn; they wanted to excel and experience the change. My B-school education had taught me that ‘small wins make a huge difference.’ I saw this constantly coming true at Sundram Fasteners.
Q: SFL has been practising TQM for long but the company challenged the Deming only in 2018. Do you think it was delayed or was the timing right?
A: We started Quality Circles (QCs) in the Company as a process for quality improvement and to give our employees the platform to showcase their ideas. It was a tool that made everyone feel empowered as well as involved and everybody started to join and learn from it. We found that the small but important problems especially in process and heat treatment departments started disappearing, as people found the keys to solve them. We decided to implement this in all our plants. It made complete business sense to go through with this with the entire ecosystem. The whole process of implementation was very natural and organic. The to and fro flow of the marketing decisions was an issue we wanted to tackle.. We needed to learn the customers’ views and get them into the plant, control inventory accordingly, manage raw material buying, and the budget for the plan and corporate finances before going back to the customer. This whole process took some time for us to start working together. I used to sit in all the meetings with all the senior executives down to the zone or module coordinator.
So to answer the question, we needed the time to be ready to challenge the Deming. And we believe our timing was right.
Q: How did this message percolate down to those on the shopfloor?
A: Our ultimate aim was not the award but implementing TQM in the company. Right after the exam we had a meeting to thank Washio San for his immense help. There he stood up and emphasised, “Harmony and leadership is what makes a Company successful on this journey.” He said he had never seen such a harmonious organisation where people believe and work together without asking questions. It was wonderful to hear that. This has been infused into our culture and we are proud of it. Every month we have divisional executive committee meetings using TQM methodology. We have to make others know that if we don’t commit ourselves to it we are not going to succeed. There’s already huge pride in the organisation for being the first Company to get the ISO certification and TPM. I said we will be the first company to do so many plants together. I could not let the Pondicherry plant lag when the Padi plant wins. It had to be all or nothing; we have to help one another. There should be harmonious competition among us. We used the carrot and stick approach to bring all the plants onto the same page, nobody wanted to be left behind. The small wins kept happening as we all believed in it. Today, in terms of internal rejections, we range between 0.15 and 0.45 in all plants; some are even at zero. It has been unbelievably dramatic.
Q: You have slotted everything into the working day. Did you dislodge something to bring in this initiative?
A: No, we didn’t dislodge anything but no one was allowed to miss those five days when Washio San was here. About seven to eight years ago I decided to make training not just important but mandatory in the organisation; everybody had to have a minimum of five days of training. I also decided to include TQM as part of functional training so it would work both ways. Three days had to be TQM while the remaining two could be personality building, leadership skills, and others. This was before we decided to go in for the Deming; it was the prelude. I think it turned out to be a blessing in disguise. If a team missed those five days with Washio San they would lose out and the others would be ahead. We created competition among them without their realising it. Everything came together and finally worked well.
Q: You got the TPM award two decades ago. Why the delay for Deming?
A: When my father went in for TPM he had looked at TQM also. At that time we were just a ‘metal bashing’ company where we took the raw material and made fasteners. It was not an assembly company. Capacity hikes and utilisation were the major concerns then. Machine breakdowns were common. Many of the machines were obsolete and had to be upgraded or replaced for higher productivity as fasteners were nearly 65 percent of the company’s production. We had to ensure we could push output. It was then that we went for TPM, a tool, we felt, then, much better than TQM. TPM was a 10-15 year exercise. When we moved to other products we realised that we had to ensure not only uninterrupted production, but also confirm that they were defect-free.
Two of our large customers moved to ‘incidence per billion’ from per million. Incidence doesn’t mean a defect; if you put a wrong sticker on the product it becomes an incident. When this sort of stringency came up we knew we had to look at it very differently as requirements had completely changed. That’s why we went in for TQM.
Q: So it is not stand-alone but has been harmonised with the company’s growth?
A: Yes, it has been. It also reflects our need to be always aware of what the customer wants. The customer is changing; he is demanding different things. The stringency of the Motor Vehicle Act and that of the export customer was changing. Even the global customer who was putting up with many things earlier was experiencing many implications, so he started changing his incoming quality control process. We realised we had no other choice; it was the only tool that was going to help us. It has overwhelmingly made a complete difference in our lives as well as that of our OEM customers.
Q: Deming Prize is all related to Japan and gels well with the Japanese customer. But in the US they have something else. What was the feedback from them?
A: The customers around the world may not know exactly what the Deming is, the rigour of doing the exam and its benefits. The benefits are clear, the customers do not get a defective product and for us that has reduced cost. I think the rigour for me starts now; maintaining standards after getting the award. That will be a tough job.
Q: You cater to different segments within the auto industry as also other segments like windmills. Each plant would have a different requirement in terms of raw material, marketing, etc; but TQM is holistic. How did you drill down every plant to the same level?
A: The unit of measurement being the same across all organisations was very helpful. For example, we buy the castings from the foundry, machine them and supply to the truck industry; foundry is a different technology; forging (cold and hot) is a different one; buying in-house is different from buying outside; but across the board we have the same measurements of success. We would look at the scrap, all the supplier and customer returns. For any reason of rejection, we would target the entire spectrum. The minute it comes in, it’s our problem; the minute it goes out, it’s our responsibility. In that sense every plant was looked at from 0 to 100, the denominator was the same for all. That was very helpful for us.
We knew that certain technologies, parts and customers were more complex and needed specific areas of attention. To reduce rejections we would start with the industry benchmark and work backwards to get the same percentage across all plants. Some needed more handholding but at the end of the exercise it was one percent for everyone. In each of the plants while the methodology and result was the same, the start would have been different. Some plants could have had a longer gestation period. Six years worked for everybody though some were ready for the exam in three years. Since the entire ecosystem had to go together, all the pieces had to fit into the jigsaw to get the full picture. That’s how we looked at it.
Q: Are there pain points to be addressed today?
A: There were many pain points over the six-year journey but today I am preparing myself to maintain and continuously improve. Today the Deming Prize is very different from three years ago. Now 100 points are given for strategy which was not done earlier. The curriculum has changed as also the mechanism to award points; 300 points have changed completely. Earlier it was all about the plant and the market; now it is about long-term vision: where do you fit in the industry; how do you improve your industry benchmarks; and what is the strategy of the organisation. CSR has been included and the impact on the community and upliftment of society also have points.
Q: Does JUSE have any learning from SFL?
A: We present ‘SFL as one big family.’ We ask everybody to do a day’s voluntary service and we give them a day off for it. We began this about three years ago. ‘Cheque book’ philanthropy is one thing, but it is personal service that matters; people want you to do something. The happiness it gives is above everything else.
We want the people to realise that giving their time is very important. This has been a big thing for us. We never knew the exam had this for which we would get points; CSR is a big item for JUSE now. The three new features in it are: Strategic Direction, CSR, and Environment Consciousness; all our factories now have started getting Green awards.
Q: What do you see as a challenge?
A: The challenge would be to keep this up, sustain it and ensure that our new plants are immediately inculcated into this vision. Our China plant is going to start the TQM journey now.
Q: How many plants do you have now?
A: SFL has 17 plants in India. Upasana, Cramlington, and China operations are subsidiaries. Outside India we have plants in China (we have a foundry too there) and Cramlington, Newcastle, UK. All these plants also will go in for TQM. China is starting now and the other two will begin in a year or so.
Q: After getting the award, the scope for improvement would be much less; you would literally need a magnifying glass to discover points for development. What is still keeping you on tenterhooks?
A: We have to look at the whole eco-system. We had to show one supplier to JUSE that we have adopted and brought up to the TQM level. They came and audited that supplier to make sure that we are spreading TQM. We had identified three for each plant and showcased one. We need to develop all our suppliers. Uplifting the entire sub-contractor supplier ecosystem becomes the most important thing for us because, our product tomorrow will be as good as their product today. We are looking at bringing more products from our suppliers to assemble them here. For this we have to ensure that they are at the same level as us. For the next two years we have mapped our total supplier ecosystem. Bringing in the Tier-2 suppliers is a huge exercise. Beyond that Tier-3 is very negligible. Those who do not follow TQM will no longer be our suppliers; we have already made this known to everyone. We have told them that we will do everything for them but they have to come up to the level of TQM with defect-free parts. We should be able to audit them to find that they are following all processes and controls.
Q: What has been their response?
A: Excellent; they are willing to learn. They do need help and hand-holding. Without enough staff, paperwork is a problem for them. We have offered to automate all, put it online, digitise everything, and show them how to collect and process data for their own use. Once they begin to experience the benefit, no one would say no; they want to know what comes next.
What we have to do is, keep up the levels in the organisation. There should be consistent discipline to keep it going. I think it has been an amazing journey; anyone who goes through TQM will tell the same because every day there is something new.
Our market share changed for the better because of the many things we did in TQM like hit ratio, coverage ratio, lose-win analysis, etc. One of the great things about TQM is that it is focused more on the actual than the target.
Q: Will this help you get new business, or more orders from the present clientele?
A: Definitely; our dealing with the customers has completely changed. It is no longer about products and prices but more about how we can visualise the whole industry differently; the outlook or the strategy of looking at it has changed. The way TQM has changed the organisation, unified all of us, raised our foundation and made us believe in our capabilities has been phenomenal. We think in a very structured and standardised format, experience every milestone along the way and realise that we have achieved something extraordinary. It has changed the mindset and our way of thinking.
Q: This means the inherent capabilities have been honed further?
A: Yes, it has become visible and enjoyable; we don’t feel the strain. The likely rewards at the end kept us going, though the journey itself was hard. HR was measuring how the employees were changing every single step on the way. It was clearly transforming the skill and will of the people. It is now difficult not to keep at it as the rewards are immediate and enjoyable. I am very happy that we have done it in all our 17 plants here. After three years we can compete for the Deming Grand Prize; we are in its pursuit.