TQM – The Deming Way (TVS Motors) About W. E. DEMING: William Edwards Deming was an American statistician, professor, author, lecturer and consultant. He is perhaps best known for his work in Japan. There, from 1950 onward, he taught top management how to improve design (and thus service), product quality, testing, and sales (the last through global markets) through various methods, including the application of statistical methods. THE DEMING PRIZE: The Deming Prize is Japan’s national quality award for industry.
It was established in 1951 by the Japanese Union of Scientists and engineers (JUSE) and it was named after W. Edwards Deming. He brought statistical quality control methodology to Japan after W. W. II. The Deming Prize is the world’s oldest and most prestigious of such awards. Its principles are a national competition to seek out and commend those organizations making the greatest strides each year in quality, or more specifically, TQC. The prize has three award categories.
They are Individual person, the Deming Application Prizes, and the Quality Control Award for factory. The Deming Prize for Individuals Annual award given to those who have made outstanding contributions to the study of TQM or statistical methods used for TQM, or those who have made outstanding contributions in the dissemination of TQM. The Deming Application Prize Annual award given to autonomously managed organizations or divisions of organizations that have achieved distinctive performance improvement through the application of TQM in a designated year.
The Quality Control Award for Operations Business Units Annual award given to operations business units of an organization that have achieved distinctive performance improvement through the application of quality control/management in the pursuit of TQM in a designated year. The Deming Application prizes are awarded to private or public organizations and are subdivided into small enterprises, divisions of large corporations, and overseas companies. There are 143 companies who won the prize. Some Facts:
Definition of Quality| “conformance to specifications” it views quality as defined by the producers| Primary Focus| statistical quality control| Overall Approach| management of quality| Purpose| promote quality assurance through statistical techniques| Types of Organization| essentially private or public manufacturing| Orientation| 60% process, 40% results| Scoring Weight| equal weight in 10 criteria| Consideration| concern in productivity, delivery, safety, and environment| Information Management| less concern| Continuous of the award| Japan Quality Control Medal| Winners| All firms meeting standard|
Scope| Firms for any country| Applications| 1000 pages and one year working with consultant from the union of Japanese Scientist & Engineers| Grading time| one year| Sponsor| Union of Japanese Scientists and Engineers| Checklist of Application for DEMING AWARD (Grading Criteria): Item| Particulars| Item| Particulars| 1. Policy| 1. Policies pursued for management quality, and quality control 2. Method of establishing policies 3. Justifiability and consistency of policies 4. Utilization of statistical methods 5. Transmission and diffusion of policies 6.
Review of policies and the results achieved 7. Relationship between policies and long- and short-term planning| 6. Standardization| 1. Systematization of standards 2. Method of establishing, revising, and abolishing standards 3. Outcome of the establishment, revision, or abolition of standards 4. Contents of the standards 5. Utilization of statistical methods 6. Accumulation of technology 7. Utilization of standards| 2. Organization and its Management| 1. Explicitness of the scopes of authority and responsibility 2. Appropriateness of delegations of authority 3.
Interdivisional cooperation 4. Committees and their activities 5. Utilization of staff 6. Utilization of QC Circle activities 7. Quality control diagnosis| 7. Control| 1. Systems for the control of quality and such related matters as cost and quantity 2. Control items and control points 3. Utilization of such statistical control methods as control charts and other statistical concepts 4. Contribution to performance of QC circle activities 5. Actual conditions of control activities 6. State of maters under control| 3. Education and Dissemination| 1. Education programs and results 2.
Quality- and control-consciousness, degrees of understanding of quality control 3. Teaching of statistical concepts and methods, and the extent of their dissemination 4. Grasp of the effectiveness of quality control 5. Education of related company (particularly those in the same group, sub-contractors, consigness, and distributers) 6. QC circle activities 7. System of suggesting ways of improvements and its actual conditions| 8. Quality Assurance| 1. Procedure for the development of new products and services (analysis and upgrading of quality, checking of design, reliability, and other properties) 2.
Safety and immunity from product liability 3. Customer satisfaction 4. Process design, process analysis, and process control and improvement 5. Process capability 6. Instrumentation, gauging, testing, and inspecting 7. Equipment maintenance, and control of subcontracting, purchasing, and services 8. Quality assurance system and its audit 9. Utilization of statistical methods 10. Evaluation and audit of quality 11. Actual state of quality assurance| 4. Collection, Dissemination and Use of Information of Quality| 1. Collection of external information 2.
Transmission of information between divisions 3. Speed of information transmission (use of computers) 4. 4. Data processing statistical analysis of information and utilization of the results| 9. Results| 1. Measurements of results 2. Substantive results in quality, services, delivery time, cost, profits, safety, environments, etc. 3. Intangible results 4. Measures for overcoming defects| 5. Analysis| 1. Selection of key problems and themes 2. Propriety of the analytical approach 3. Utilization of statistical methods 4. Linkage with proper technology 5.
Quality analysis, process analysis 6. Utilization of analytical results 7. Assertiveness of improvement suggestions| 10. Planning for the Future| 1. Grasp of the present state of affairs and the concreteness of the plan 2. Measures for overcoming defects 3. Plans for further advances 4. Linkage with the long-term plans| TVS MOTOR COMPANY LIMITED About the company: TVS Motor Company Limited (TVS-M) is a member of the TVS group, the largest automotive component manufacturing group in India with annual sales of more than US$ 2. 5 billion.
The group has been able to achieve this growth owing to its commitment to promoting trust, value and customer service. The company believes that market leadership and rewards of business follow naturally. TVS-M is one of the largest two-wheeler manufacturers in India, with an annual sales turnover of US$ 614. 28 million registered in 2003-2004. TVS Motor registered revenues of Rs. 4424 crores, growing 18. 4% in FY '09-'10 and by 36% in 2011. The company exported 2. 39 lakh units in 2010 - 2011 compared to 1. 65 lakh units in 2009-10, a growth of 45% over the previous year.
Sundaram-Clayton Limited (SCL), a TVS group company, began manufacturing mopeds in 1979 at its new Moped Division at Hosur in southern India. Ind-Suzuki Motorcycles Limited (ISML) was formed in 1982 as a joint venture between SCL and Suzuki Motor Corporation (SMC), Japan. The commercial production of motorcycles commenced in 1984. During 1987, SCL Moped Division was acquired by ISML. The new company after this merger was named as TVS-Suzuki Limited (TSL). During 2001, SMC and TVS decided to part ways and the company name was changed to TVS Motor Company Ltd. Awards: Exports - TVS Motor Company has been awarded 'Star Performer - Silver Shield' in two/three wheelers category, by EEPC India, for excellent export performance for year 2007-08. Leadership - * Star of Asia Award to Mr. Venu Srinivasan, CMD TVS Motor Company by Business Week International, in November 2003. * He was also honoured with Doctorate in Science by University of Warwick, United Kingdom. * Mr Venu Srinivasan was conferred with the prestigious JRD Tata Corporate Leadership Award for the year 2004. Engineering - * The Deming Prize - TVS Motor Company is the only two-wheeler company in he world to be awarded the world's most prestigious and coveted recognition in Total Quality Management on November 12, 2002 in Tokyo, Japan * Technology Award 2002 from Ministry of Science, Government of India for the successful commercialization of indigenous technology for TVS Victor * Asian Network for Quality Award 2004 - TVS Scooty Pep won the prestigious 'Outstanding Design Excellence Award' from Business World and National Institute of Design * Progressive Manufacturer 100 Award - TVS wins coveted 2009 Progressive Manufacturer 100 Award for end-to-end automation of the entire business process of its lubricant brand, TVS TRU4 * TPM Excellence Award 2008 - First category by Japan Institute of Plant Maintenance (JiPm) Management - Emerging Corporate Giant in the Private Sector awarded by The Economic Times and the Harvard Business School Association of India on November 14, 1996 * Best Managed Company award from Business Today, one of India's leading business magazines, in 2003 * Most Investor friendly company by Business Today, one of India's leading business * The 'Good Advertising' award by Auto India Best Brand Awards 2009 * SAP ACE AWARD 2007 - The company won the SAP ACE 2007 Award for Customer Excellence in the Most Innovative Netweaver Category * TEAM TECH 2007 Award - TVS Motor Company bags TEAM TECH 2007 Award of Excellence for Integrated use of Computer Aided Engineering Technologies
Success factors leading to recognition: Evolution of TQM TQM had always been an organisation-wide effort. Not merely about producing continuously, increasing standards of quality in goods and services, but about creating an institution with a concern for quality in all that it did. The company views TQM as a corporate way of life. TQM continuously improved quality of all processes, products, and services through employee involvement, enhanced customer satisfaction and shareholders loyalty, leading to improved business results. It is notable that both the process and end results received due emphasis. TVS-M, as a part of the TVS group, had an advantage of the rich TVS heritage.
The values of trust, discipline and customer service were imbibed as well as honed. TVS-M had commenced its TQM journey under very difficult circumstances in the early nineties. Though TVS-M was the first company to launch 100cc Indo-Japanese motorcycles in India, the entry of other players had reduced its market share and sales. The company had to focus on financial survival in the short term, and prepare for revival and growth in the long term. A series of steps, beginning with diagnosis, leading to establishment of strategic directions, followed by sustained communication and education were taken in three phases: - Planning phase (1990 to 1995) - Promotion phase (1995 to 1999) - Deployment phase (1999 to 2002)
The recognition that came through the Deming Prize had been possible only through team effort consistently practised over a long time span. The Deming Prize was a recognition of a decade long effort to build an organisation with an overall capability that was designed to be benchmarked against external and international standards. TVS-M had embarked on a journey of continuous improvement taking the incessant drive for quality further into the organisation, through the JIT and TPM initiatives. Through this method, targets were set for zero defects and zero breakdowns and “high quality, low cost products”. Leadership and employee participation TVS-M leadership strongly believed in TQM. The values of the founder of TVS Group were in consonance with the concept of TQM.
This became the driving force behind the sincere implementation of TQM activities. Employee participation and co-operation established the foundation for the success of TQM in TVS-M. In the policy management process, three breakthrough objectives of the company were achieved through taskforces, cross-functional teams and supervisory improvement teams. Additionally, quality control circles aligned with the departmental and sectional objectives and action plans. The employee suggestion system enabled continuous improvement at the workplace. The individual workmen could make suggestions for workplace improvements. In the TEIAN system, those making suggestions took esponsibility for implementation. The implemented suggestions were evaluated and awarded. Additionally, those making the best suggestions from each unit and department were rewarded by the President and Managing Director. The company was able to secure 100 per cent employee participation in TQM. The employees had completed more than 1,468 projects through Quality Control Circles (QCC) in 2003-04. The average number of suggestions implemented per employee increased to 44 from 41. Regular improvements in business processes * Order obtaining process The application of TQM principles resulted in effective planning and implementation of order obtaining processes.
Area sales and service organisation had been decentralised, to service customers directly at the points of purchase. Policy deployment and daily management were implemented across all area offices. In order to clearly communicate the product superiority of existing products and new products, training was regularly imparted to the sales, service and dealer staff. Customer satisfaction survey system was introduced to measure satisfaction of customers and improve product performance. Dealers being the first customer, a dealer management system was introduced through ERP to improve dealership processes. Sharing of best practices and horizontal deployment were undertaken through dealer conferences. * Order fulfillment
Quality and productivity improvement targets of plants were achieved through the lean manufacturing system and JIT projects. Significant improvements were achieved in productivity, quality and cost through Total Employee Involvement (TEI). Overall Equipment Effectiveness (OEE) was continuously improved through application of Total Productive Maintenance (TPM) concepts. Lean and TPM were two key initiatives undertaken under the TQM umbrella for rapid improvement in Quality, Productivity and Cost. The company had a rigorous system of cost deployment, which was monitored on a continuous basis and ownership developed across the organisation. The initiatives on “e-buying and global sourcing” resulted in substantial cost savings.
TQM practices of TVS-M were implemented among suppliers through a “cluster approach” by the TVS-M supplier cluster taskforce. * New Product Development Substantial ground was covered in improving internal efficiencies in New Product Development and Design through a better understanding of customer needs and product usage conditions. Structured customer visit programmes were conducted to capture customer response and expectations. Suppliers and machine tool builders were involved in the early stages of product development. Quality proving, done in-house and at suppliers-end, resulted in defect free products and fast ramp-up. Strength as an organisation to attract overseas attention
Continuous increase in export business was spearheaded by its strengths in good product development capability, world-class manufacturing facilities, good quality, reliable products and sales and service support. Technological Edge The design, development and testing facilities were of world-class standards and could develop products to suit customer requirements. The company worked with leading technological research laboratories and institutions across the globe as well as in India for development and testing of advanced technologies. The R;D team applied for over 60 patents and its engineers published 30 national and international papers. Business Excellence Model: Understanding of TQM
TQM was a systematic approach adopted throughout the company to achieve customer satisfaction with the involvement of all its people. TQM was logical in its approach that worked with a plan, implemented it, checked the result and further improved it based on the result. The learning derived from TQM was converted into standards to ensure that the functioning of the company was system-based. Total Employee Involvement (TEI) TEI was the foundation of TQM. All employees in the company participated in continuous improvement while the operating level employees participated in suggestion schemes and quality control circles, the supervisors and managers participated in Supervisory Improvement Taskforces and Cross Functional Taskforces.
Themes for improvement were aligned to the annual policies of the company. Daily Work Management Daily work management involved defining and monitoring key processes, ensuring that they met the set targets, detecting abnormalities and preventing their recurrence. Kaizen (continuous improvement) The company encouraged continuous improvements in all aspects of work using CFT, SITs, QCCs, and suggestion schemes involving all the employees. Policy Management Policy management processes were used to arrive at annual breakthrough objectives, formulated through detailed planning. The objectives were further deployed company-wide and reviewed periodically. Training
To build necessary knowledge skills and competency among all employees to achieve business objectives, training was planned and provided. Standardisation Key management activities of every department were documented to enable improvement in work practices and knowledge base of the company. New Product Development The focus was on new multi-product development with reduced lead-time, besides managing the target cost. TVS Brand TVS Motor continued its process of building the brand image in India, the focus being to build the TVS brand globally. Deming Prize Recognition: Specific comments from the auditors during evaluation and specific points mentioned during the investiture ceremony: Excellent factors TVS-M established an excellent leadership structure for the top management to practise TQM * Total employee involvement was seen as the driving force behind learning, absorption and incorporation into daily activities * Organisational competence for new product development had reached sufficient levels * Diverse management techniques were acquired in a positive manner and established firmly as organisational activities under the TQM umbrella By faithfully learning the fundamentals of the management techniques and promoting various activities, the man management indices showed considerable improvement. Points for improvement TVS-M needed an integrated approach with regard to brand recognition and strategy. TVS-M needed to pick up new tools in order to build capability on technology. Contribution to further growth/ business and international recognition: Deming Prize was a milestone in the journey towards continuous improvement in customer satisfaction. TVS-M now had a higher responsibility of maintaining and improving the high standards of quality and customer satisfaction.
By applying TQM principles, the company had improved its sales volume, turnover and profit. New Product Development was accelerated and more new products were getting launched with shorter lead-times. Exports business was continuously growing. Customer satisfaction on new products had been improved. Future Plans: The company's future plans aim at: * Building the TVS brand in India and other countries, especially in Asia. * Developing advanced technology and multi-project management capability to develop new products for the Indian and international markets. * Achieving global competitiveness levels in costs. * Improving supplier and dealer capabilities. * Training leaders for key positions for supporting business growth.