The mood is jubilant at Mahindra and Mahindra (M&M). The reasons are twofold. The first and the foremost is the company's tractor unit winning the prestigious Deming Award from the Union of Japanese Scientists and Engineers (JUSE).
The second reason is the award of Total Productive Maintenance (TPM) Excellence Award-First Category from the Japanese Institute of Plant Maintenance (JIPM) for the company's automotive division.
The fourth-largest tractor company in the world, M&M has four tractor plants in India (Mumbai, Nagpur, Rudrapur in Uttranchal and Jaipur). It has been maintaining its market leadership for the past two decades.
"Over 400 officers are engaged in research and development (R&D) and new product development," says P R Telang, general manager TQM (total quality management).
The tractor business was first established as a separate joint venture company under the name International Tractor Company of India (ITCIL) in 1963. It was a joint venture of M&M, the UK division of International Harvester Company of the US and Voltas. In 1978, this company merged with M&M and became its tractor division.
"In 1997 it was decided to become the world's largest tractor manufacturer by 2007," he says. After an in-house discussion chaired by the company president K J Davasia, the decision towards Deming was taken at M&M. From there on it has been a long and arduous plough for the company. However, the company has been richly harvesting since then. Telang talks about the tractor division's Deming journey. Excerpts:
When did the division start practising the quality process? What kind of quality processes did it have initially?
Due to the involvement of a partner like International Harvester, quality was given enough importance in the manufacturing processes from the beginning. From 1977 onwards quality became an important business variable with the entry of new players.
Could you trace the quality path followed since then?
In initial years, the efforts were typical shop-floor-oriented like increased inspection, increased cleaning operations, improved storage and handling methods, training for operators and shop-floor supervisors. After few years the focus was shifted to system orientation through more operational audits, layout improvements and periodic reviews. As a result of all these we became the market leader in India in 1983 — a position we still retain.
When did the TQM process start?
The above success inspired us to launch the quality circle movement in the organisation. Each quality circle had six people working in the same area and was led by the first line officer from the same area. At peak almost one-third of our workforce, both at Mumbai and Nagpur, was involved in this movement. Our circles solved many operational problems resulting in improvement in quality, safety and housekeeping and reducing costs, but improvement in the mindset and people development were the more important benefits. This success encouraged us to pursue the path of TQM to retain our market leadership and grow further.
The TQM journey was in three phases:
Introduction phase: 1990-94
Promotion phase: 1995-99
Development phase: from 2000 onwards
Could you elaborate on these phases?
The first phase objectives were
(a) improving manufacturing quality through process control,
(b) improving the quality of bought out components, and
(c) increasing productivity and reduce the cost of poor quality (COPQ) by solving chronic cross-functional quality problems.
The introduction of initiatives like Juran's process of quality improvement (JQI), statistical process control (SPC), supplier support activity and business process reengineering (BPR) in manufacturing, both at Mumbai and Nagpur, were the main features of this phase.
In the second phase the focus was not only the standardisation of all operations as per the international guidelines, but also to improve upon them. Accordingly certifications-ISO 9000 and then to the automotive sector specific standard QS 9000 (for both Mumbai and Nagpur locations) were obtained. Further, with the help of outside consultants, we upgraded the manufacturing facilities and initiated the Deming Prize guidelines.
The objective of the final phase was to get closer to the vision of becoming the world's largest tractor manufacturer by creating dominance in local market and building substantial presence in international market by aggressive use of the Deming Prize guidelines and also win the coveted medal before 2004. The major activities, therefore, consisted of further improvement in core processes like new product development, manufacturing, supplier management and sales and customer operations as per guidance of Dr. Yasutoshi Washio, the Japanese quality expert.
We also introduced the policy deployment/daily work management technique and certification to environment management system standard ISO 14001, both at Mumbai and Nagpur facilities. The continuous improvement activity was also stepped up considerably, to touch employee involvement of 100 per cent during this period.
Could you describe the company before you started practising the quality parameters?
Before the TQM journey in 1990, the tractor division was in sellers' market and hence the focus was more on quantity. There was no emphasis on development of new models and to give improved features (introduction of direct injection engine was an exception).
The manufacturing activity was more inspection oriented-detection rather prevention of defect. The interaction with suppliers was purely need based and the sales and service activity lacked standardisation and varied from dealer to dealer. The rework rejection percentages were high and the employee involvement in improvement activities was very limited.
The benefits derived due to TQM…
The benefits derived over the years can be summed up as follows:
(a) reduction in rework, rejections
(b) reduction in rejection at suppliers' end as well at receipt stage at our units
(c) improvement in field quality indicated by number of consumer complaints during the first 250/500/1000/2000 hours of tractor operation
(d) increased productivity, customer satisfaction, employee involvement in continuous improvement, and
(e) introduction of new models — 15 models in three years.
Did you form a separate team for TQM? If so details about the team and its mandate?
We had started a small department called TQM department under my charge (on part time basis) in 1990. In 1997 the department had three full time officers. To start with, this department shouldered the responsibility of steering the Deming activity. In year 2000, this was converted into a performance unit (PU) called Deming and Mahindra Quality Systems (MQS) PU. This consisted of six officers under my leadership on a full-time basis. This PU reported to vice-president (quality and systems) and the mandate was to achieve the Deming Prize before year 2004.
What were the roadblocks you faced — mindset, factory layout and the equipment used — and how were they sorted out?
The progress was initially slow due to resistance to change and increased work from the operating management and other employees. The implementation of standardisation in all processes was difficult as the size of the organisation — over 4,000 employees, 23 area offices, 471 dealers and 380 suppliers.
It takes some years for a company even to get the confidence of applying for the award. So when did you get that confidence to challenge the Deming?
As I said earlier the Deming journey started in 1997. Our consultant Dr Washio, used to initially visit us once in six months, but after 2000, the frequency of visits became quarterly. He used to audit all our operations on a random basis and rate them every six months. Based on this evaluation, in 2002 he and we felt that we can, probably, challenge the prize in 2003 and hence we applied to Juse (in June 2002) for TQM diagnosis in December 2002.
Tell us about your labour relations and the wage structure. Is it comparable with the industry standards or is it better than that?
Our relations with labour and the unions representing them are very positive and cordial. There was total involvement and support by all concerned. At Kandivli, there was an industrial relations problem in 1977 and after 23 years, in 2000. But the normalcy in relations was restored very quickly. This point was also appreciated by the Deming examiners.
How did you involve your component suppliers in this activity? US auto majors insist that their component suppliers should be Q1 certified?
The involvement of component suppliers in our TQM journey started in 1993, when a cell of nine engineers and nine inspectors was established under a deputy general manager to put all the suppliers under the self-certification status. This was achieved in five years.
What does the new tag, 'A Deming Company,' mean to your domestic as well as overseas markets? Will this result in increased sales?
The new tag 'Deming company' has already started helping us. All the employees have started feeling more responsible towards their customers. The energy and enthusiasm levels have gone up among all and this transformation is bound to help in improving performance. The Deming tag is also bound to be useful in the overseas markets.
Your future plans…
We are planning to improve our systems and processes further so that we can challenge the Japan Quality Medal in 2007.
The second reason is the award of Total Productive Maintenance (TPM) Excellence Award-First Category from the Japanese Institute of Plant Maintenance (JIPM) for the company's automotive division.
The fourth-largest tractor company in the world, M&M has four tractor plants in India (Mumbai, Nagpur, Rudrapur in Uttranchal and Jaipur). It has been maintaining its market leadership for the past two decades.
"Over 400 officers are engaged in research and development (R&D) and new product development," says P R Telang, general manager TQM (total quality management).
The tractor business was first established as a separate joint venture company under the name International Tractor Company of India (ITCIL) in 1963. It was a joint venture of M&M, the UK division of International Harvester Company of the US and Voltas. In 1978, this company merged with M&M and became its tractor division.
"In 1997 it was decided to become the world's largest tractor manufacturer by 2007," he says. After an in-house discussion chaired by the company president K J Davasia, the decision towards Deming was taken at M&M. From there on it has been a long and arduous plough for the company. However, the company has been richly harvesting since then. Telang talks about the tractor division's Deming journey. Excerpts:
When did the division start practising the quality process? What kind of quality processes did it have initially?
Due to the involvement of a partner like International Harvester, quality was given enough importance in the manufacturing processes from the beginning. From 1977 onwards quality became an important business variable with the entry of new players.
Could you trace the quality path followed since then?
In initial years, the efforts were typical shop-floor-oriented like increased inspection, increased cleaning operations, improved storage and handling methods, training for operators and shop-floor supervisors. After few years the focus was shifted to system orientation through more operational audits, layout improvements and periodic reviews. As a result of all these we became the market leader in India in 1983 — a position we still retain.
When did the TQM process start?
The above success inspired us to launch the quality circle movement in the organisation. Each quality circle had six people working in the same area and was led by the first line officer from the same area. At peak almost one-third of our workforce, both at Mumbai and Nagpur, was involved in this movement. Our circles solved many operational problems resulting in improvement in quality, safety and housekeeping and reducing costs, but improvement in the mindset and people development were the more important benefits. This success encouraged us to pursue the path of TQM to retain our market leadership and grow further.
The TQM journey was in three phases:
Introduction phase: 1990-94
Promotion phase: 1995-99
Development phase: from 2000 onwards
Could you elaborate on these phases?
The first phase objectives were
(a) improving manufacturing quality through process control,
(b) improving the quality of bought out components, and
(c) increasing productivity and reduce the cost of poor quality (COPQ) by solving chronic cross-functional quality problems.
The introduction of initiatives like Juran's process of quality improvement (JQI), statistical process control (SPC), supplier support activity and business process reengineering (BPR) in manufacturing, both at Mumbai and Nagpur, were the main features of this phase.
In the second phase the focus was not only the standardisation of all operations as per the international guidelines, but also to improve upon them. Accordingly certifications-ISO 9000 and then to the automotive sector specific standard QS 9000 (for both Mumbai and Nagpur locations) were obtained. Further, with the help of outside consultants, we upgraded the manufacturing facilities and initiated the Deming Prize guidelines.
The objective of the final phase was to get closer to the vision of becoming the world's largest tractor manufacturer by creating dominance in local market and building substantial presence in international market by aggressive use of the Deming Prize guidelines and also win the coveted medal before 2004. The major activities, therefore, consisted of further improvement in core processes like new product development, manufacturing, supplier management and sales and customer operations as per guidance of Dr. Yasutoshi Washio, the Japanese quality expert.
We also introduced the policy deployment/daily work management technique and certification to environment management system standard ISO 14001, both at Mumbai and Nagpur facilities. The continuous improvement activity was also stepped up considerably, to touch employee involvement of 100 per cent during this period.
Could you describe the company before you started practising the quality parameters?
Before the TQM journey in 1990, the tractor division was in sellers' market and hence the focus was more on quantity. There was no emphasis on development of new models and to give improved features (introduction of direct injection engine was an exception).
The manufacturing activity was more inspection oriented-detection rather prevention of defect. The interaction with suppliers was purely need based and the sales and service activity lacked standardisation and varied from dealer to dealer. The rework rejection percentages were high and the employee involvement in improvement activities was very limited.
The benefits derived due to TQM…
The benefits derived over the years can be summed up as follows:
(a) reduction in rework, rejections
(b) reduction in rejection at suppliers' end as well at receipt stage at our units
(c) improvement in field quality indicated by number of consumer complaints during the first 250/500/1000/2000 hours of tractor operation
(d) increased productivity, customer satisfaction, employee involvement in continuous improvement, and
(e) introduction of new models — 15 models in three years.
Did you form a separate team for TQM? If so details about the team and its mandate?
We had started a small department called TQM department under my charge (on part time basis) in 1990. In 1997 the department had three full time officers. To start with, this department shouldered the responsibility of steering the Deming activity. In year 2000, this was converted into a performance unit (PU) called Deming and Mahindra Quality Systems (MQS) PU. This consisted of six officers under my leadership on a full-time basis. This PU reported to vice-president (quality and systems) and the mandate was to achieve the Deming Prize before year 2004.
What were the roadblocks you faced — mindset, factory layout and the equipment used — and how were they sorted out?
The progress was initially slow due to resistance to change and increased work from the operating management and other employees. The implementation of standardisation in all processes was difficult as the size of the organisation — over 4,000 employees, 23 area offices, 471 dealers and 380 suppliers.
It takes some years for a company even to get the confidence of applying for the award. So when did you get that confidence to challenge the Deming?
As I said earlier the Deming journey started in 1997. Our consultant Dr Washio, used to initially visit us once in six months, but after 2000, the frequency of visits became quarterly. He used to audit all our operations on a random basis and rate them every six months. Based on this evaluation, in 2002 he and we felt that we can, probably, challenge the prize in 2003 and hence we applied to Juse (in June 2002) for TQM diagnosis in December 2002.
Tell us about your labour relations and the wage structure. Is it comparable with the industry standards or is it better than that?
Our relations with labour and the unions representing them are very positive and cordial. There was total involvement and support by all concerned. At Kandivli, there was an industrial relations problem in 1977 and after 23 years, in 2000. But the normalcy in relations was restored very quickly. This point was also appreciated by the Deming examiners.
How did you involve your component suppliers in this activity? US auto majors insist that their component suppliers should be Q1 certified?
The involvement of component suppliers in our TQM journey started in 1993, when a cell of nine engineers and nine inspectors was established under a deputy general manager to put all the suppliers under the self-certification status. This was achieved in five years.
What does the new tag, 'A Deming Company,' mean to your domestic as well as overseas markets? Will this result in increased sales?
The new tag 'Deming company' has already started helping us. All the employees have started feeling more responsible towards their customers. The energy and enthusiasm levels have gone up among all and this transformation is bound to help in improving performance. The Deming tag is also bound to be useful in the overseas markets.
Your future plans…
We are planning to improve our systems and processes further so that we can challenge the Japan Quality Medal in 2007.