Sundaram Clayton: Winning the Deming Prize

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Case Details:

Case Code : OPER010
Case Length : 11 Pages
Period : 1998 - 2002
Organization : Sundaram Clayton
Pub Date : 2002
Teaching Note : Available
Countries : India
Industry : Automobile Components

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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.

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Background Note Contd...

SCL has a full-fledged R&D center that enables design, development, simulation and testing processes of products. By focusing on R&D, the company was able to substitute its imports by its indigenously developed components. SCL was also able to indigenously manufacture some components for the export markets. These initiatives were expected to help the company achieve its goal of becoming the leader in the automotive air braking business in Asia.

In spite of the slump in the automobile sector during the late 1990s, SCL registered improved revenues year after year between 1998 and 2000 (Refer Exhibit I for the company's financial performance summary). Industry analysts largely attributed the company's success to its focus on quality.

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According to TVS sources, the group as a whole had always aimed at competitiveness without compromising on quality. This belief was proved when the company adopted Total Quality Management (TQM)2 in all its manufacturing companies, including SCL. SCL followed the core principles of the TVS group - Quality, Reliability and Service. Quality measures at SCL were not only applicable to the product but also to systems, operations and processes at all levels of manufacturing.

As a result of its company-wide quality control over the years, the company won the Deming Prize for CWQC (Company Wide Quality Control) in 1998. SCL was the first Indian company and the fourth non-Japanese company to receive the prize in the 50-year history of the award.

About The Deming Prize

One of the three highly recognized and coveted quality awards in the world,3 the Deming Prize was established in Japan, in 1951, by the Union of Japanese Scientists and Engineers (JUSE)...

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2] TQM can be defined as a structured system for satisfying internal and external customers and suppliers by integrating, business environment, continuous improvement, and breakthroughs with development, improvement, and maintenance cycles, while changing the organizational culture.

3] The other two awards are the Malcolm Balridge National Quality Award (mostly a US-focused prize) and the European Foundation for Quality Management (EFQM) Award (not as difficult to qualify for as the Deming Prize).


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