Sundaram Clayton Limited (SCL) is part of the $4 billion TVS group, one of the

largest auto components manufacturing and distribution group in India. SCL is a

leading supplier of aluminium die castings to automotive and non-automotive sector.

Since commencing operation in 1962, SCL has achieved many milestones and
emerged as one of the preferred solution provider in machined and sub-assembled
aluminium castings.

Our contribution commences from early design stage to development and supply of
finished product. Over the years, we have built strategic partnership with global OE /
Tier one.

With the robust manufacturing driven by TQM, TPM, Lean practices and investments
in state of the art technologies, SCL is poised to serve the future needs of the industry
in light metal castings.

:
INTERVIEW VENU SRINIVASAN, CEO, SUNDARAM-CLAYTON

"Excellence is a moving target"

When you have just won the business equivalent
of the Nobel, the Booker, the Oscar, and the
Olympics rolled into one, you could justifiably feel
proud. But 45-year-old Venu Srinivasan, the CEO
of the Rs 140-crore Sundaram-Clayton-India's and
non-Japan Asia's first-ever winner of the Deming
Application Prize For Overseas Companies-still
view the summit as a destination to be reached,
not a peak already conquered. His company may
have won the globe's benchmark award for total
quality, but Srinivasan remains fixated on being the best in the world-and not
just the best on quality parameters.

Although it is team-driven, Sundaram-Clayton's total quality odyssey gets its

fuel from Srinivasan's relentless and compulsive obsession with excellence.
Exuding tenacity, the engineering graduate from Madras (Class Of '74) is
uncompromising once he is convinced about the need for doing something
his way. Says the man who cannot tolerate a scrap of dirt on his factory floor,
and will clear it away himself: "I am not a great manager. I only know how to
give orders, and get things don." If these orders do not often materialise, it is
because he has delegated the running of the company to Sundaram-
Clayton's President, C. Narasimha, and gets involved only when policy-
decisions have to be taken-or workers have to be hired.

When it comes to quality, though, Srinivasan's hands-off approach is

shouldered aside by a manic zeal that will accept nothing but perfection.
Managers making presentations with slides where the text wasn't readable
recall ruefully how Srinivasan turned the session into an interactive one to
deplore the lack of attention to detail. His principle is simple: quality must be
omnipresent. And being the CEO of not one, but two companies-the other
being the Rs 1,039.50-crore TVS-Suzuki, which will soon make its own bid
for the Deming Prize-had doubled his attention to quality. Exactly 7 days
before jetting off to Tokyo to receive the Deming Prize, Srinivasan revealed
to BT's R. Sridharan the inside story his company's journey to the award-and the
road ahead. The view from the top of the world:

Mr Srinivasan, our congratulations on Sundaram-Clayton's remarkable

achievement of winning the Deming Prize. We are thrilled by the fact
that an Indian company has shown that it too can be world-class. How
do you feel now that your processes have received the top-most
recognition for total quality in the world?

Afraid. Because the expectations--from your customers, and from everybody

in the industry--go up. Everybody thinks you are a superman whereas you
are just a hard-working, diligent, good-value company. Everybody thinks that
you are a Deming Prize-winner, and so you must be capable of miracles. But
we are no miracle-men. Even Deming said that only the processes in your
company can take you to world-class levels. But winning the Deming Prize
does not mean that your present benchmarks are world-class--either in terms
of productivity or quality

But you must be proud of being a TQM pioneer. After all, you started
working on total quality in the mid-1980s, well before the first
companies in the country did. How were you able to identify the need
for total quality, and push ahead to achieve it?

When you have worked in a family like the one that runs the TVS Group,
when you have worked with a set of extraordinary uncles, when you have
grown up with stories of excellence, you just try and match those standards.
Even when I was doing my MBA at Purdue University (US), I tried to link
whatever I was learning with the value systems of excellence, and to figure
out how it could be linked to our businesses to achieve excellence. If it is not
excellence, it is not TVS. I have been brought up with so much of this that
there is just one way of doing things. In TVS, the system is even more sacred
than the owners. The organisation is sacred, and its values are sacred.

This is the question your peers must be waiting for an answer to. What
exactly is Sundaram-Clayton's definition of total quality?

Quality is a multi-faceted body and, in some ways, is like the story of the blind
men and the elephant. It means different things to different people, and there
is no one definition. However, in the context of total quality control (TQC),
what total quality means is trying to achieve excellence in everything you do.
To me, that's the ultimate definition of quality. Because quality is difficult to
define, people find it difficult to implement. It has to be supported by an
excellent human resources package for communication, motivation, and the
development of people who, then, take ownership of quality and everything
that is done and, only then do you try to implement quality in all activities.

The Japanese gave total quality, as we know it today, to the world. Is

that what made you opt for the Japanese model of TQM?

India's industrial history in a competitive environment is just 10 years old. For

30 years--from 1960 to 1990--we had a system where you totalled your costs,
and added your margins to determine your selling-price to the consumer. For
30 years, people did not have to manage costs or quality. There were no
imports, and no competition thanks to licensing. So, how did you build your
own system of excellence? How could you build a framework to hold your
own processes of excellence? For that, we needed a structure. And we found
that structure in Japan.

We found that TQC had a structure which, in many ways, resembled the way
TVS was run in the 1940s and the 1950s. For instance, we had zero-
breakdowns of TVS buses in the 1950s. Every TVS bus was on time, to the
minute; there was complete ownership by the employees. So, you can
imagine the kind of values that the management had inculcated in its people;
everybody worried everything. Now, all that I have seen in TVS is excellence,
right from the time I used to work as an assistant mechanic during my
summer holidays when I was in college. The only other place where I could
see excellence organised the way it was in TVS was in Japan.

Secondly, Asian values have a certain commonality across countries in the

way respect is accorded to elders and to authority. The American system is
more of a fraternal quality system. And, in many ways, the Asian way of
looking at people is also different. That's why I thought we could adopt the
Japanese way more easily because of these cultural factors. And because of
the fact that codified rules were available in Japanese TQC. Whereas, in the
US, each company had its own code, and nobody would be willing to share
them. So, we would have had to go around getting it in bits and pieces. It
would take longer than we could afford if we had chosen the American
approach. As it is, even Japanese TQC has taken us 10 years to get to where
we are today.

That brings us to the central issue: how is Japanese TQC different from
other forms of quality management?

The biggest misconception that people have about TQC is that it is about
product quality. It is not. It is about the quality of all the business processes--
and not just about the quality of the product. That's why I prefer to call it
TQC--and not TQM--because TQC is the old Japanese way of involving
everybody in quality. From the moment you step into the plant, everything
must be right: the grass must be cut properly, the canteen floor must be
cleaned properly TQC is an all-round excellence effort, and is not about one
aspect of the company.

One person who has been closely associated with your quality journey
is Yoshikasu Tsuda. In fact, you refer to him as Sundaram-Clayton's
guru. What exactly has he done for your company?

As soon as I met Professors Tsuda, and Y. Washio--who is no more--I told

them: "You are our gurus. You are not our teachers, you are not our
consultants. We will deal with you in the traditional Indian, or Asian, way of
doing what the guru says. Even if we don't like or agree with what you are
saying, we will go ahead and do it." Rather than argue with our gurus, we did
just as they said. And, if there was a problem, we went back and told them:
"Look, we did what you told us to do, but there is a problem." I think that's the
reason why the Japanese like working with us. Usually, Indians love to get
into intellectual arguments--why this will work, why that won't. But we never
let that happen at Sundaram-Clayton. If Professor Tsuda said something, we
just did it.

Initially, there was a lot of unhappiness about it. But when the professors saw
that we were committed and doing what they told us, they also started giving
us the leeway to do it our way. Others helped us too. For example, when it
came to technology, product technology, business strategies, and human
resources, we took help from the University of Warwick's S.K. Bhattacharya,
S. Ramachander of the Academy for Management Excellence helped us with
marketing. But full credit goes to Professors Tsuda and Washio. They worked
with us directly.

Did you find TQC a little alien to the Indian context? Should an Indian
company build its own set of quality practices around the concepts of
TQC?

That's another thing Professor Tsuda asked me some time ago. He said: "It is
fine that you have adopted TQC. But, ultimately, you must have a Sundaram-
Clayton Way the TVS Way. You can always incorporate the elements and
principles of TQC, but your company has a history, a culture, values You
have to ensure that your system incorporates those. It cannot be the Toyota
Way. Toyota is a different company, it is a different way You may start with
Japanese TQC but, at the end of the day, there has to be an Indian-ness, a
Sundaram-Clayton-ness, and, most important, a TVS-ness in it for it to
succeed, and for your people to own it internally"

What, then, is the Sundaram-Clayton Way of total quality that you went
on to craft?

I don't think I'm the only one who can answer that question. You have to ask
the people who work on the shopfloor, because they will give you a better
answer than I can. But I can relate one incident that brings out the TVS Way.
I happened to meet a retired chairman of Cochin Refineries on board a flight
recently. Apparently, as a young boy, this gentleman used to take the TVS
bus to go to school. One day, the bus was late by 5 minutes because the
conductor overslept. Enraged, one of the passengers slapped the conductor.
When a few other passengers chided the angry person for having hit the
conductor, they were surprised to find the conductor himself intervening,
saying that he deserved the slap he got. For, he had brought disrepute to the
TVS name. Now, what is this if not ownership of quality?

Now that you have won the Deming Prize, does Sundaram-Clayton
consider itself world-class?

Everybody will now have high expectations of Sundaram-Clayton, and we

have to be very careful in meeting those expectations. We know that what we
have on our head is not a crown, but a big boulder called the Deming Prize.
But there's a long, long way to go before we can attain the international
benchmarks of quality. For instance, we have to reach a defects standard of
60 parts per million (PPM) at the customer-end, which is the Japanese
average. How do you get there? Today, we are doing 5,000 PPM at our end.
That figure has to come down to 150 if I have to deliver 60 to my customer.
So, there are a lot of gaps. In terms of productivity per employee, we are,
probably, half the world average. Many of our business processes, like after-
sales service and customer-satisfaction management, are not strictly world-
class. But we have put in practices, we are working on it, and we'll get there

Winning the Deming Prize actually creates expectations which are beyond
your present abilities. Internally, we are very pleased. It's like giving birth to a
child. No matter how great the labour-pain, once the child is born, it is pure
joy. But everybody equally realises that there is a long way to go. Excellence
is a moving target. Somebody defines excellence and, within 2 years,
somebody else has redefined it by moving its horizon. Excellence is
something you have to strive for every day. The moment you stand still, you
have lost it.

What are the essential characteristics of the world-class company that

Sundaram-Clayton would like to be?

There are 3 things that I would look for. One is customer satisfaction. If you
are not customer-focused, you cannot be world-class. I don't know any
company which ignores its customers and is still world-class. You have to
think of the customer as God. The second factor is people. Without people,
you cannot achieve anything. If your customers have to be happy, it is your
people who have to make them feel that way. The third element is
technology. Fundamental to any world-class company, of course, are
management vision, goals, and values. It is these that ultimately drive TQC.
Customer satisfaction, people development, technology development all
these are driven because there is a top management that has vision, that has
goals--including intermediate goals--and has values.

Any company which does not have values will not live long or make a mark in
history. Companies without values are like footprints in the sand; they get
washed away with the next wave. One of the reasons why we succeeded is
that we are a values-driven company. We deeply believe in our values, and it
is this conviction which gives you the strength to fight adversity. In 1991,
when we had the labour conflict at TVS-Suzuki, there was a lot of vandalism.
There was a lock-out in the company, and we were on the verge of ending up
at the Board For Industrial & Finance Reconstruction. People said that we
should open up and make peace with the trouble-makers. I said that I don't
mind if there is no capital left in the company, but I am not going to
compromise with the way TVS manages its business, which is through good
values and good industrial relations. And if there was going to be a group of
vandals who wanted to wreck the company, we would rather close down than
make peace. You cannot compromise on values and still attain long-term
success.

How have you been able to create this sense of ownership? Is it your
company's people-orientation that is responsible for this ownership?

The elephant succeeds because it has a long trunk, right? If only one facet of
quality could achieve business success, many more people would be
successful. The real reason it is difficult to compete with TQC companies is
that they have many facets where they are very good. And there are a few
key areas where they are excellent. So, you have to achieve that all-round
level, and that is what quality and ownership is all about. It is true that we are
people-oriented and that we spend a lot of time training our people, but that's
only one aspect. The technology, the manufacturing processes, the
customer-orientation all are equally important.

Looking after people is fundamental because your suppliers are people, your
employees are people, and your customers are people. If you don't have a
people-orientation, you'd better get out of business and do something else.
There has been a tremendous amount of commitment from the top--starting
from my grandfather, through my uncles, who had a single-minded vision of
quality--which was driven and handed down the generations that you stand
for quality, that TVS stands for quality. It is this that has driven us to do this
kind of thing.

How does it help to have a target like winning the Deming Prize when
you are trying to galvanise an entire organisation?

In fact, that's one of the questions that Professor Tsuda asked me. He
wanted to know what value I thought the Deming Prize would add to
Sundaram-Clayton. I told him that I thought that the Prize would tell our
people that they have achieved something. And that sense of achievement is
important because I know that while the company is continuously moving in
the right direction, people need to know that; they need to take home that
message. The Deming Prize has brought kudos to each employee who has
put in 10 years of hard work. He can go back and tell his family: "You've been
wondering why I've been away day and night working for the company, but
now you know. We are a company of a different quality. We are up there. We
are the elite."

Is that why you are taking the president and general secretary, as well
as the past three presidents of the Sundaram-Clayton workers' union,
along with you to Tokyo to receive the Deming Prize?

My father used to tell me: "You take care of your workers, and your workers
will take care of you." For the past 10 years, everybody has put in a lot of
hard work. Without them, this wouldn't have been possible. It's a company-
wide effort; it's not just a management effort.

Deming Prize-winners often gun for the Japan Quality Award. Is

Sundaram-Clayton going to aim for that next?

We may. But let me tell you something: winning awards is not our objective.
The Deming Prize was not an objective, the Japan Quality Award is not an
objective. I do not know whether we will apply for it nor am I saying that we
will not apply. But the point is, the medals are not the goal. The Japan Quality
Award does not improve your profits; it is the processes that you put in place
in the course of applying for it that make your company's profitability,
capability, marketshare, and volumes grow. So, we must never lose sight of
the real objective.

But in terms of recharging the organisation to catch the moving target

of excellence that you spoke of, isn't it important to set fresh goals?

Yes, a new goal like the Japan Quality Award is important. But once an
organisation reaches a certain level of quality commitment, it then becomes
an internally-fired thing. And Sundaram-Clayton, even without the Japan
Quality Award target, will continue to move on the TQC front. It's like the
starter on a car: you need it to start the car, but you don't need it once the
engine is running. Similarly, the Deming Prize is a starter-mechanism--the
ignition for the jet-plane.

Do you expect Sundaram-Clayton's remarkable achievement to trigger

off a new total quality revolution in corporate India?

I honestly don't know. You can only deal with your microcosm. I am not a
preacher, I am not a person who is going to create a quality wave in India. I
have no such delusions. If everybody tried to improve the microcosm in which
they operate, the country would be a better place

But, obviously, you will spread the movement within your group

Definitely. TVS-Suzuki has been practising it for the last 6 years, TVS
Electronics has also been practising it for the same duration. We'll all get
there. Whether we get the Deming Prize today or tomorrow--or don't get it at
all--is not the issue. They will all practice TQC in the same TVS Way; at least,
the part of TVS that I manage. This is the way we have defined it.

How did Sundaram-Clayton manage to stay focused on TQC and the

Deming Prize for as long as 10 years while companies around you
chose other routes to quality?

That's one of the reasons why we got out of the TQM movement of the
Confederation of Indian Industry (CII) although we were one of its early
members. They started going to the American Malcolm Baldridge Award and
the European Federation of Quality Award--and they lost their way. For about
5 years, they did not know where they were going. Now, they have settled on
the European Federation of Quality Model, and on Professor Tsuda as the
counsellor for the Japanese model. It is only in the past year that we have
started getting back to the CII movement since Professor Tsuda is also
working with them. We have only one way. We have always stood for that. In
fact, we have been faulted for being inward-looking, and not being part of the
greater macrocosm of industrial society. But we are like that. If we believe in
something, we continue to do that.

Mr Srinivasan, thank you very much for your time. We sincerely hope
that, despite your modesty, your success in winning the Deming Prize
this year does trigger off a much-needed total quality revolution in
corporate India.

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