Presented to Prof Siddesh PaiBy

D.Abhishek Tiwari( G06144)Sasikiran Lingampalli( G06146)

M Vikas Reddy( G06148)

SUNDARAM CLAYTON –TOTAL QUALITY MANAGEMENT

About the Company

Sundaram-Clayton Limited is a member of the TVS group, one of the largest automotive components manufacturing groups in India, with total sales revenue of more than US$ 2.5 billion.

The group has been able to achieve this pre-eminence through its commitment to the cherished values of promoting trust, value and customer service.

Sundaram-Clayton Limited has two divisions, namely, Brakes division and Die casting division. What follows, pertains to the practice of TQM at the Brakes division

Case Summary

SCL’s journey for using TQM started with realization of its incompetency in delivering world class quality product.

SCL managers were introduced to the concept of Total Quality Control (TQC). The managers were also trained in modern manufacturing techniques.

By the mid-1980s, the TQC culture was well established at SCL.

Famous Japanese quality control experts like Yoshio Kondo and Washio trained managers and employees extensively in TQC.

Deming prize was the ultimate goal of Srinivasan.

Contd..

Team of workers was responsible for a complete product and not just a specific component or process.

The product development team of SCL comprised members from different functional areas such as engineering, production, marketing, purchase and R&D.

What made Sundaram Clayton use the TQM

philosophy?

SCL started its TQM journey under very difficult and strained circumstances in the late eighties.

The business of commercial vehicles manufacture was stagnant and as a supplier of air braking systems, the company was solely dependent on the fortunes of that industry.

Both sales and profits had seen sharp declines

What was the approach chosen by Sundaram Clayton to come out of the strained

circumstances?

A series of steps, beginning with

diagnosis leading to a resolution of the strategic directions,

followed by sustained communication

education were undertaken

How did they go for it.

1

• Team collected information from customers regarding their requirements, product-related problems, suggestions etc.

2

• Examined various factors such as the life-expectation of the product, target-cost, production volume, and growth and availability of in-house expertise to meet the requirements.

3

• Team sanctioned a design and developed a prototype, which was tested rigorously before being finally approved for manufacture.

Discuss the TQM journey of Sundaram Clayton

Introduction phase (1987-1990)

As a first step, “change seminars” were conducted for all employees, stressing the need for change.

The visible barriers were broken with a common uniform and canteen for all employees, no cabins for managers and open offices to enable easy accessibility of employees to the heads of the departments.

This contributed to a change in the mindset of employees, which began viewing the management as part of the same team.

Process layout was changed to product based layouts.Manufacturing units (factories within factory) were formed,

based on product groups. Workmen were trained to become multi-skilled, whereby they worked on many machines.

The production managers were empowered and held accountable for quality, cost and delivery

Promotion phase (1990 to 1994)

Policy management process, which commenced at SCL in 1990-91, helped create a company-wide goal congruence.

The annual targets of the company were deployed to various departments and individuals.

Guidelines were provided, towards achieving company objectives, highlighting broad strategies that needed to be followed by all.

Each department aligned its objectives and action plans towards achieving the company objectives.

As a part of TQM implementation, the company-wide quality assurance system was executed.

The culture of quality by inspection was gradually changed to quality control and quality assurance (QA).

Deployment phase (1994 to 1998)

During this phase daily work management, which are

defining and monitoring key processes, ensuring that they met set targets, detecting abnormalities and preventing

their recurrence, were strengthened.Continuous improvement in all aspects

of work, using total employee involvement, became the norm.

What was SCL’s Understanding of TQM?

The company’s understanding of TQM ensured Policy Deployment, Employee Involvement, Kaizen, Standardization and Training apart from promoting employer-employee relations.

They believed customer satisfaction will be obtained by supplying products of the right quality, at the right time, and at the right place.

The company emphasized on factors such as reliability, serviceability and durability of products.

Training

On-the-job and off-the-job training to its employees for various statistical tools related to quality control.

SCL spent 45 hours per year on classroom training, which was very high compared to the industry average of 4 hours.

Employees were also trained on various aspects such as housekeeping, 5 Ss – Seiri (clearing up), Seiton (organizing), Seiso (Cleaning), Seiketsu (Standardizing) and Shitsuke (Training).

Training included training in TQC tools such as control charts, cause-and-effect diagram, check-sheet, the Pareto chart, scatter diagram, histograms and other graphs and charts, which helped operators identify, analyze and solve day-to-day problems on their own

Problem Solving

For problem solving and system failure analysis, SCL employed Kaizen and Taguchi techniques. Every machine had a daily-work management system, following which the operator met the quality and hourly production targets. Any deviations from this daily schedule were analyzed and rectified immediately at the problem-stage itself.

It enabled the operator to trace the problem to its root and eliminate it.

What was the impact of TQM on the company?

The defect rate in the manufacturing process at SCL decreased substantially and customer returns came down as a result of these quality control initiatives.

New-product development time was reduced from 24-to-30 months to12-to-14 months.

The turnover per employee increased by an estimated 18% annually while the gross value addition by every employee increased by 12% per annum.

Sales grew at an annual rate of 35% while its net profits grew at an annual rate of 83%

SCL’s quality initiatives motivated many Indian companies to adopt quality control practices. Eg: Maruti Udyog

The Chennai-based Sundaram-Clayton has won acclaim and international recognition for setting global quality standards.

From the swamp of unreliable quality that the traditional India Incorporation was known for, Sundaram-Clayton has emerged the flag bearer of global class.

Despite its disdain for TQM, Sundaram-Clayton, the manufacturer of air-brake systems and castings has emerged as Asia's -- first-ever winner of the Deming Prize for Overseas Companies.

Every rupee of its Rs 139.37 crore turnover now carries the mark of quality that is world-class.

Recently

Sundaram-Clayton Limited (SCl),announced the appointment of Dr. Lakshmi Venu, daughter of  Venu Srinivasan, Managing Director of SCl and Chairman of TVS Motor Company Limited (TVSM), as an Additional Director, with immediate effect.