Interestingly, three Indian companies figure in the 2005 Deming medal list out of four in the world and two of them belong to the Chennai-based auto component group Rane.
The Rs11.83-billion turnover group had introduced the Deming process in December 1999. While Rane Brake Linings Limited literally made a dash to the medal, which it won in 2003, (See The Deming dash) for Rane TRW and Rane Engine Valves it was a saga of steady progress.
Says S Krishnakumar, president of the Rs360-crore Rane TRW, "We started our total quality management (TQM) journey under the guidance of Prof.Y Washio of JUSE. He is an individual Deming Prize winner and an acknowledged authority in Japan in 'statistical process control' and 'new product development'. He held the first workshop in December 1999 and subsequently, visits us once in three months to provide guidance."
A University of Madras graduate, Krishnakumar did his post graduate engineering from the Indian Institute of Science, Bangalore and post-graduate diploma in marketing management from the Indian Institute of Management-Ahmedabad. Prior to joining the Rane group, he worked with automobile and auto component manufacturers like Tata Motors Limited and the Anand Group of Industries and moulded luggage manufacturer Blow Plast Limited.
Established in 1987 (equity base: Rs8.7-crore) Rane TRW is a 50:50 joint venture between the Rane group and TRW. The company has three divisions - fully integral gears division, which has the Deming; hydraulic pumps; and power rack and pinion. Fully integral gears are fitted on multi-utility vehicles and commercial vehicles while power rack and pinion is fitted on passenger cars.
Krishnakumar talks about the company's Deming journey. Excerpts.
How did the Deming process start and how did it progress?
It was a workshop for the top management conducted by Prof. Washio in December 1999 that initiated the Deming process inside the company. The process was formally initiated in the company in April 2000. As the group comprises multiple companies with multiple plants, we set up a three-tiered promotion structure.
At the tier 1 group level we had the TQM Apex Council comprising of the group chairman, vice chairman, presidents and the total quality (TQ) coordinators of group companies and group TQM coordinator. Tier 2, which is at the company level, is called TQM Promotion Committee. This consisted of the president, senior management group of the company and plant and head office TQM coordinators.
Tier 3 is at the plant level and is known as TQM Promotion Team. This team consisted of plant and head office functional heads, plant functional heads, head office department heads and TQ coordinators for the plants and the head office.
The company had a TQ Coordinator to monitor implementation and provide necessary alerts to senior management. Each plant of the company had a plant TQ coordinator who was responsible for facilitating TQ practices in the plant. The company and plant TQ coordinators worked closely to ensure practices were spread uniformly across plants. TQ coordinators were also responsible for coordinating the visits of counsellors from JUSE and ensuring homework given by them is carried out to their satisfaction.
What roadblocks did you encounter?
We had to change the mind set of the employees to help them appreciate the TQM philosophy. Training programmes that emotionally charged our employees were organised and enhanced their motivation to embrace TQM. Initially, there was a feeling that TQM was only for the shop floor and not for non-manufacturing functions. Slowly, we realised that standard operating procedures (SOP) and Kaizen were as much applicable to processes in functions like finance, marketing, materials as they were for manufacturing process. We realised the need for writing SOPs for these processes to insulate them from human error.
Did you have to make any additional investments?
We did not make any additional investments save the consultancy charges of Japanese Sensei. We recovered these costs many times over from the suggestion schemes and quality control (QC) circles, which gave us significant cost reduction due to improvements.
What cost reduction or other benefits did the company derive after the TQM practice started?
This data table is self explanatory.
| 2000 - 2001 (pre TQM) | 2004 - 2005 (post TQM) |
| Actual | Plan | Actual | Plan | Actual |
| Sales | Rs94.6 crore | Rs97.9 crore | Rs277.3 crore | Rs310.2 crore |
| New Product Sales | Rs5.5 crore | Rs4.9 crore | Rs69.6 crore | Rs88.6 crore |
| Customer Line Rejection | Data Not Tracked | Data Not Tracked | 100 PPM | 404 PPM |
| Energy Cost / Net Sales (in percentage) | 2.71 | 2.61 | 2.35 | 1.86 |
The intangible benefits include the company having become more customer focused with improvements in business processes, system orientation and cross functional working. The diagram shows the quality, cost and delivery (Q, C and D) expectations of global majors from us vis-à-vis, prior to Deming.
What ratings did the company obtain for the major criteria required for the award of the Deming?
The points awarded by the examiners are confidential and not shared with the companies. The qualifying mark for Deming would be 70 out of 100 on the criteria indicated.
When did you start implementing concepts like TQM, total productivity maintenance (TPM), lean manufacturing, etc, in your plants?
The Deming Award is only a milestone in our TQM journey. We were extremely careful not to bring in new initiatives as we believed they would only confuse our employees. TPM was introduced on a need basis selectively under the umbrella of TQM. Similarly, lean manufacturing was taken up in companies only after achieving Deming.
It takes some years for a company even to get the confidence of applying for the award. So when did you get that confidence?
It took us three to four years to understand the various principles and tools of TQM and practice it in an effective manner. The award process is a two-step process - diagnosis in 'year 1' (October to December) and on-site examination in 'year 2' (August). Formal applications for these have to be made three months before the events. In April 2004, we began to feel confident about going through the diagnosis by the year end. Our TQM diagnosis took place in December 2004.
Normally Juse makes suggestions for further improvement while awarding the Deming medal. What did it suggest for your company?
We were advised to use extensively the 'design of experiments' (DOE - a systematic approach to assess a system or process) to improve our problem solving capability and also enhance our capability for reliability analysis so that our validation test results could be better correlated with that of field performance of our products. JUSE also advised us to attempt the task achieving 'QC story methodology'.
We have incorporated initiatives to implement Juse's suggestion in our strategic business plans. We would like to implement these suggestions and showcase the results in a three year period, when we would need to undergo a surveillance audit. It would also stand us in good stead when we plan to challenge the Japan Quality Medal.
How has the TQM / Deming medal helped the company with post sales customer or market information? What was it before Deming and what is it now?
Using TQM learnings, we carried out systematic segment-wise customer surveys to understand customers' perceptions on our products and companies. These were used to put in very focused action plans with clear accountabilities that enabled us to improve our performance in the eyes of the customers. The use of 'quality function deployment' or QFD (a structured mathematical tool used to spot customers' requirements and translating them to key critical parameters) also enjoined us as to get customer voice in developing new products. Here we converted customers' basic perception of our product performance into engineering specifications; besides we benchmarked the performance of our products with those of competitors to develop superior quality.
How did you involve your suppliers in the TQM activity?
We have put in place a structured supplier development programme with extensive supplier training on TQM and quality concepts. Early involvement of suppliers is a key feature in the development of new products.
What does the new tag, 'A Deming Company' mean to your domestic as well as overseas markets?
Deming is essentially a Japanese award and it does not have a great recognition either in the US or Europe. We pursued Deming not for increasing sales but for improving our operational efficiencies, which would stand us in good stead in bagging new and challenging business. In fact, the Deming tag would increases customer expectations from us and we would have to strive to meet these expectations.
Chennai: Chennai, the Detroit of India, could well be termed as the country's Deming City. This year two Rane group companies - Rane TRW Steering Systems Limited and Rane Engine Valves Limited - figure in the prestigious Deming medal list awarded by the Union of Japanese Scientists and Engineers (Juse). In fact the Deming medal has become the flavour of the season in this part of India.