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    Chapter 7 Total Quality Management at Sundaram

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    Hy Cao
    Sundaram-Clayton Ltd implemented a Total Quality Management (TQM) approach in the late 1980s to address declining sales and profits during an industry downturn. The implementation occurred in three phases: introduction (1987-1990) to gain employee buy-in, promotion (1990-1994) of goals and quality processes, and deployment (1994-1998) of daily management and continuous improvement. TQM helped improve Sundaram-Clayton's market share, profits, productivity and employee suggestions by 1995-1996 by changing culture, empowering employees, and focusing on quality, cost and delivery.

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    Chapter 7 Total Quality Management at Sundaram

    Uploaded by

    Hy Cao
    184 views2 pages
    Sundaram-Clayton Ltd implemented a Total Quality Management (TQM) approach in the late 1980s to address declining sales and profits during an industry downturn. The implementation occurred in three phases: introduction (1987-1990) to gain employee buy-in, promotion (1990-1994) of goals and quality processes, and deployment (1994-1998) of daily management and continuous improvement. TQM helped improve Sundaram-Clayton's market share, profits, productivity and employee suggestions by 1995-1996 by changing culture, empowering employees, and focusing on quality, cost and delivery.

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    Sundaram-Clayton Ltd implemented a Total Quality Management (TQM) approach in the late 1980s to address declining sales and profits during an industry downturn. The implementation occurred in three phases: introduction (1987-1990) to gain employee buy-in, promotion (1990-1994) of goals and quality processes, and deployment (1994-1998) of daily management and continuous improvement. TQM helped improve Sundaram-Clayton's market share, profits, productivity and employee suggestions by 1995-1996 by changing culture, empowering employees, and focusing on quality, cost and delivery.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    184 views2 pages

    Chapter 7 Total Quality Management at Sundaram

    Uploaded by

    Hy Cao
    Sundaram-Clayton Ltd implemented a Total Quality Management (TQM) approach in the late 1980s to address declining sales and profits during an industry downturn. The implementation occurred in three phases: introduction (1987-1990) to gain employee buy-in, promotion (1990-1994) of goals and quality processes, and deployment (1994-1998) of daily management and continuous improvement. TQM helped improve Sundaram-Clayton's market share, profits, productivity and employee suggestions by 1995-1996 by changing culture, empowering employees, and focusing on quality, cost and delivery.

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    © All Rights Reserved
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    of 2

    Total quality management at Sundaram-Clayton Ltd

    Sundaram-Clayton Ltd is a member of the TVS group, one of the largest automotive components
    manufacturing groups in India, with total sales revenue of more than USD 2.5 billion. The group has
    been able to achieve success through its commitment to the cherished values of promoting trust,
    value and customer service.
    The Company
    Sundaram-Clayton has two divisions, namely Brakes Division and Die Casting Division. SCL-
    Brakes Division commenced its operations in 1962 at Chennai in collaboration with Clayton
    Dewandre Holdings Limited, UK (now part of WABCO Automotive group). SCL’s Brakes Division
    pioneered the manufacture of air and air-assisted braking actuation system products. A market leader
    since inception, SCL’s Brakes division develops and manufactures products for a wide range of
    commercial and off-highway vehicles.
    SCL’s Understanding of TQM
    TQM is a company-wide effort aimed at continuous quality improvement of all processes, products
    and services through total employee involvement that results in increasing customer satisfaction,
    loyalty and improved business results. It is an approach focusing on breakthrough improvements in
    selected areas identified strategically and continuous improvement in other critical areas.
    Appropriate training, discipline and ordering of things—the mantra of Japanese quality covering the
    breadth and depth of processes, enable the building of a system of excellence. Such a process doesn’t
    give birth to extraordinary people but brings out extraordinary results from ordinary people.
    TQM at Sundaram-Clayton
    A TQM journey at Sundaram-Clayton involves the identification of critical problems, finding their
    solutions, standardization and passing it on for control and further improvement. Such a model is
    applicable to all cultures and countries. Leadership builds culture in an organization and culture
    builds the next generation of leaders. This ensures that there are quality leaders in the pipeline, which
    is the concept of sustainable leadership. During the days when the Indian commercial vehicle
    industry was stagnant, Sundaram Clayton’s fortunes depended entirely on the air braking systems it
    supplied to commercial vehicle manufacturers. The company was solely dependent on the fortunes
    of that industry. Both sales and profits had seen sharp declines. The man to machine ratio was 3:1—
    each machine required three workers, one to load and unload the component, another to switch-on
    the machine and the third to inspect the part’s quality. Similarly, the plant layout was process-
    oriented, which resulted in the accumulation of inventories. Peer-to-peer communication was poor.
    And, as is usual, middle level managers along with the workers resisted change.
    The company started its total quality management (TQM) processes under very difficult and strained
    circumstances in the late 80s. Prior to introducing TQM, Sundaram-Clayton had a traditional
    manufacturing layout and a hierarchical organizational structure leading to inefficiencies and waste.
    A series of steps, beginning with diagnosis, leading to a resolution of the strategic directions and
    followed by sustained communication and intensive staff “education” on the change methodology
    were undertaken in three phases:
    • Introduction phase (1987–1990)
    • Promotion phase (1990–1994)
    • Deployment phase (1994–1998)
    Introduction Phase (1987–1990)
    The process of change was started with the aim of getting a “buy-in” from the employees. 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 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. Another major initiative was related to the restructuring of the manufacturing
    system. The process layout gave way to product-based layouts. Manufacturing units (factories within
    factory) were formed, based on product groups. Workmen were trained to become multiskilled,
    whereby they worked on many machines. The production managers were empowered and held
    accountable for quality, cost and delivery.
    Promotion Phase (1990–1994)
    The policy management process, which commenced at SCL between 1990 and 1991, helped create
    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). Focus was
    placed on ownership of quality by the manufacturing units, supplier quality improvements and the
    gemba audit concept.
    Deployment Phase (1994–1998)
    During this phase, management of daily work, i.e. defining and monitoring key processes, ensuring
    that they met set targets, detecting abnormalities and preventing their recurrencewere strengthened.
    Continuous improvement in all aspects of work, using total employee involvement, became the
    norm.
    According to Venu Srinivasan, CEO of Sundaram-Clayton, it was in between 1995 and 1996 that
    the Brakes Division began experiencing the positive effects of TQM in terms of its market share,
    profit and sales index, sales per employee, value added per employee. Even suggestions from
    employees for improvements went up from two per employee per annum between 1997 and 1998 to
    38 in the last fiscal.
    For Discussion
    1. What made Sundaram-Clayton use the TQM philosophy?
    2. What was the approach chosen by Sundaram-Clayton to come out of the strained
    circumstances?
    3. Discuss the TQM journey of Sundaram-Clayton.
    4. What was SCL’s understanding of TQM?
    5. What was the impact of TQM on the company?

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