Sundaram Clayton: Winning the Deming Prize

SCL had decided to apply for the Deming Prize in the early 1990s itself. This decision was the result of management's belief in the total quality control efforts that had started in 1979, after Venu Srinivasan (Srinivasan) became the CEO (1977). A SWOT analysis conducted by Srinivasan in 1997 revealed that though the company had a 90% share of the air-brake systems market in India, it was not competent enough to deliver world-class quality products. This analysis prompted the company to seek excellence through total quality control/management. As a part of this initiative, SCL managers were introduced to the concept of Total Quality Control (TQC) and exposed to the quality control practices of world's leading companies.

The defect rate in the manufacturing process at SCL decreased substantially and customer returns came down as a result of these quality control initiatives. New-product development time was reduced from 24-to-30 months to12-to-14 months. The turnover per employee increased by an estimated 18% annually while the gross value addition by every employee increased by 12% per annum. The quality practices in the company also reflected in its financial performance. Between 1992 and 1997, sales grew at an annual rate of 35% while its net profits grew at an annual rate of 83%...