Barely a year after American quality guru W. Edwards Deming landed in Japan in 1950 to teach the war-ravaged country how to use statistical control techniques to make quantum leaps in quality, the Union of Japanese Scientists and Engineers (JUSE) instituted an award in his honour. Over the years, the Deming Application Prize (or simply the Deming Prize) has come to be regarded as the Nobel Prize for quality. For good reason. It takes years for a company to bring its quality systems to a level where it will stand JUSE's scrutiny. It took Sundaram-Clayton, India's first Deming winner, 10 years of relentless improvements to win the recognition in 1998. That's one reason why since then, India has produced only a dozen Deming winners. Says Sarita Nagpal, a quality counsellor with CII, which first roped in JUSE to help Indian companies achieve total quality management (TQM): "Quality is not a hardware issue, but about changing mindsets." The CEOs who do succeed in changing the organisational mindset are invariably rewarded by Deming's instant recognition around the world. Indeed, for India Inc., which must make the Made in India label globally acceptable, the Deming Prize is nothing short of a passport to key markets. Yet, winning Deming is not the end of the road. Rather, it's the beginning of a journey that never really ends. But, how does one get started on it and then stay the course? For answers, let's take a look at 2005's Deming winners: Seating systems manufacturer Krishna Maruti, and Chennai-based Rane Engine Valves and Rane TRW Steering Systems.

Krishna Maruti team: Ashok Kapur's (front) company is the only seat manufacturer in the world to bag Deming

Receiving the deming Prize is always a proud moment, but on November 8, 2005, when Ashok Kapur made his way to the podium at Tokyo's Keidanren Kaikan (home to Japan's business federation) auditorium, there was extra spring in his step. His company, Krishna Maruti, was not just the first car seating company in the world to win the Deming Prize for Total Quality Management (TQM), but-at 10 years old-also the youngest company in the world to do so. So, how did the 59-year-old pull it off? "I didn't. Every brain in the company contributes to improvements. This includes even gardeners and sweepers," says Kapur. To make his point, he made sure that his first worker Ram Pal was part of the team that went to Tokyo to receive the award.

Set up in 1994, Krishna Maruti embarked on the TQM journey in 1999 as part of Maruti Udyog's (and CII's) second "cluster" of vendors chosen for quality improvement. That was also the time when a lot of multinational car companies and their suppliers had either just come in or were setting up shop. Kapur realised that to compete with international players, his own company would need to manufacture to global standards. Soon after Krishna Maruti joined the cluster initiative, Kapur decided that it would make a bid for the Deming Prize. "The main reason behind setting this goal was that I didn't want my people to get complacent," says Kapur, alluding to the fact that his company was already the largest seat manufacturer into its third year.

Kapur knew that TQM would become a company-wide culture only if he could get his employees to believe in it and feel responsible for it. Therefore, he focussed on two broad areas: Changing mindsets, and discipline. "Quality improvement, productivity, control over wastage...all this can be done, but discipline is something you need to embed," says Kapur. Guess who his first victim was? His own son Sunandan, who was the first to have his salary cut for arriving late to work. "He probably thought I was joking," reckons Kapur. The fact that Kapur was willing to discipline his own son sent a powerful message across the organisation, and not the least about the seriousness of the TQM initiative.

To start with, a team of eight senior executives, headed by executive director of manufacturing Ajay K. Bedi, was put in place to drive TQM implementation across the seat division. The eight executives under Bedi were actually heads of various departments such as finance & accounts, quality, production & MX (supply chain, etc), maintenance, personnel & administration, production engineering & R&D, purchase and marketing.

While TQM is a fairly standardised improvement system and all the eight cluster companies had the advantage of being advised by a Japanese Sensei from JUSE, Prof. Yoshikasu Tsuda, the challenge for a Deming aspirant like Krishna Maruti was to come up with a TQM system that was unique to its own goals and business realities. To quote from JUSE's Deming FAQ, "For any company, the shortest way to win the Deming Application Prize is to manage its business in the most appropriate manner to the company."

RANE GROUP Steering Ahead

L. Ganesh: Not just inspection of products, but quality organisation-wide For the Chennai-based Rane Group, it's a Deming hat trick of sorts. Two years after Rane Brake Linings won the prize, two other group companies-Rane Engine Valves and Rane trw Steering Systems (its steering gear division in specific)-have bagged the honour. So, was it easier for Rane than Krishna Maruti? Yes and no. While having done it once is a definite advantage, every company-and every unit within a company-poses unique challenges to the TQM team. But what helped was the top management's realisation that to compete in a global marketplace, the group companies would have to significantly improve their performance. "The workers lacked involvement, the middle managers were busy fire-fighting rather than identifying problems and the senior management lived in isolation," recalls L. Ganesh, Vice Chairman of the Rane Group. Just like Krishna Maruti, Rane began its TQM journey in 1999 amidst concerns that global competition would make the going tough for the group. Until then, Rane was top-driven. The CEO would formulate the strategic plan and the whole group would only implement it. "But quite often, the CEO would be wrong, but our functioning style did not encourage questioning," says Ganesh. Today, the management is decentralised. One of the first things that Rane did to get started on its TQM initiative was to enlist the help of Japanese Senseis. Yasutoshi Washio, himself a winner of the Deming Prize for individuals, was asked to conduct a workshop on TQM for the top management. Washio helped clarify what the basic elements of TQM would be. Among them were customer focus, standardisation of processes, fact-based decision making, policy deployment to align corporate goals with employee responsibilities, and total employee involvement. An apex team was set up comprising all the company presidents and total quality (TQ) coordinators, besides group-wide TQ coordinators. This team would go to a Rane location every month and spend the day auditing the work done and charting out future progress. Soon, improvements began to take place across the two companies. For instance, a shopfloor worker at Rane Engine Valves suggested a modification to a Rs 1.8 crore machine that resulted in productivity going up by 80 per cent. All that the company had to invest by way of capital in the modification was a meagre Rs 1.5 lakh. When Vice Chairman Ganesh asked the worker why he had not suggested the improvement before although he had been working there for 18 years, the worker simply said, "Nobody asked me for ideas before". Quality@Work: At Rane, it shows It was a powerful wake-up call for the top management, which speeded up activities in quality circles and discussion groups. "The discussions may take more time than expected, but the spin-off in terms of employee ownership is well worth it," says S. Krishna Kumar, President, Rane TRW. Consider the distance TQM has allowed Rane TRW to travel in a matter of three years. In 2000-01, customer line rejections were at 1,766 parts per million (PPM), but in 2004-05, the figure was down to 171. Ditto, Rane Engine Valves, where the customer rejects dropped from 1524 PPM to 139 PPM in the same time. Says Ganesh: "Quality no longer means inspection of products, but applies to the entire organisation, including the canteen." Having won the Deming, Rane isn't about to sit back and relax. Both Rane TRW and Engine Valves plan to improve their lean manufacturing systems using the Toyota Production System, which focusses on eliminating all kinds of wastage (including men, materials and machines). They also plan to push export sales. Says S. Srinivasan, President, Rane Engine Valves: "Whatever we do must eventually translate into money." He needn't worry on that front. Revenues are clipping at both the companies. Over the three years, topline at Rane TRW has soared from Rs 98 crore to Rs 310 crore, and at Engine Valves, from Rs 106 crore to Rs 165 crore. "We now have improved team work, energetic and motivated employees and improved organisation alignment," points out Ganesh. That, in fact, is the real pay-off for all Deming winners. -Reported by Nitya Varadarajan

Thanks to its small and young team, Krishna Maruti was able to make dramatic improvements in quality and productivity. For instance, customer rejection (in parts per million), which was at 2,250 when the company started on its TPM journey, dropped to 80 in 2001-02 and further to 3.6 two years later, and now stands at zero. Similarly, manufacturing cost, which stood at a high 10 per cent of sales in 2000-01, is at just 5 per cent today. What's remarkable is that the quality and cost improvements came on the back of higher productivity and reducing manpower. While one worker made a little more than 10 seat sets a day in 1999-2000, today the number has jumped to 15. In fact, Krishna Maruti boasts of a worker nicknamed the Human Robot, who rolls out a staggering 1,300 seat frames in one shift. Earlier, that would take two shifts.

Thrilled as Kapur is at winning the Deming, he says it would be a mistake to pursue TQM just to win a prize. He would rather do it because that's what he owes his customers. "When visitors come to our plant, they must say that it is one of the best plants they have seen, even if they don't know that we are Deming company," says Kapur. But he is already beginning to get attention from international buyers because of his Deming feat. For instance, when Kapur got the news about Deming (on October 12), he was in Germany as part of a CII delegation, and whichever company it visited thereafter wanted to meet the Deming winner separately.

Kapur says his next target is the Japan Quality Medal, which is open only to Deming winners. But don't think he is pitching for bragging rights. It's actually a smart business move. In order to win the JQM, Krishna Maruti will need to show quality improvements every year for the next three, when JUSE auditors will pay another visit. Don't be surprised if the tenacious Kapur ends up impressing them as well.

-reported by Alokesh Bhattacharyya