ANAND HOUSE OF QUALITY CULTURE

A JOURNEY TOWARDS EXCELLENCE

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External Factors

• Ever-growing demand for stringent Quality norms fromour key customers.

• Strong competitive environment – Multiple playerswith demonstrated quality.

• Fast changing regulatory requirements - Recalls

• Extended Warranty Period requirements.

• Application of advanced technology – 4th IndustrialRevolution, IIOT, Connected factories.

Internal Factors

• Multiple Initiatives in the past with temporary success -Could not hold onto the gains.

• Export opportunities with equally daunting risks.

• Over-dependence on inspection to ensure desired qualitylevels.

• Cost of Quality, be it failure costs or appraisal cost – startingto hurt.

• Challenge in retaining and upgrading skill levels in an everchanging workforce environment.

• White Collar Productivity – Office Efficiency

Need for a Cultural Transformation

ANAND HOUSE OF QUALITY CULTURE

GENESIS OF ANAND HOUSE QUALITY CULTURE

LEADERS’ SPEAK

QUALITY MISSION AND VALUES

Mission & ValuesOur Mission

Our Values to stand by

Personal Commitment Transparency

with Customer

Delighting Customers:

Internal & External

By All No matter the cost A passion we share

To be the first choice of customers through sustained quality performance

QUALITY

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FIRST TIME RIGHT EVERY TIME RIGHT

LAUNCHED IN MARCH 2017

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HOW DO WE SEE QUALITY ?

QUALITY (Q) EFFICIENCY (ƞ)

WHAT HAVE BEEN FOCUSSING ON TILL NOW ?

SHOP FLOOR QUALITY PRODUCT AND PROCESS QUALITY

▪ We have made consistent and significant improvements on the shop floor and the journey is continuing.

▪ Need to sustain the gains – there lies the biggest challenge as it calls for a totally new thinking.

FIRST TIME RIGHT (FTR)

EVERY TIME RIGHT (ETR)

REDEFINING QUALITY

In everything we do

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MINDSET CHANGE – OFFICE QUALITY ?

OFFICE EFFICIENCY (ƞ)

HOW DO WE ACHIEVE OFFICE EFFICIENY ?

▪ KNOW THE CUSTOMER : DEFINE WHO THE CUSTOMER IS.

▪ KNOW THE PURPOSE : UNDERSTAND EXACTLY WHAT THE CUSTOMER WANTS.

▪ SKILL : GET OR DEVELOP THE REQUISITE SKILLS TO MEET THE CUSTOMER REQUIREMENTS.

▪ PROCESS (SOPs) : DESIGN OR STRENGTHEN THE PROCESS TO SERVE OUR CUSTOMERS.

▪ MEASURE : MEASURE EFFICIENCY AND EFFECTIVENESS OF THE PROCESS.

DO WE HAVE A PROCESS ?

DO WE HAVE A MEASURE ?

REDEFINING QUALITY

DO WE KNOW OUR CUSTOMERS AND WHAT THEY WANT ?

OFFICE QUALITY

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1. Final Quality → Transaction Level Quality

2. Responsible to the Boss → Accountable to the Customer

3. Boss–Subordinate Relation → Customer–Supplier Relation

4. Quality of Output → Quality of Behaviour in the Transaction

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TO SUMMARIZE: OFFICE QUALITY

Essence of Office Quality

1. Respect

2. Discipline3. Learning

a) Own Time

c) Others’ timeb) Company time

a) Humility

c) Deliver high quality work

b) Set high Expectations

a) Create standards

c) Improve Standards by incorporating learning

b) Adhere to & Enforce standards

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WHAT ARE THE CHANGE AND RESULT DIMENSIONS?

S. No. Customer Behaviours Supplier Behaviours

1 Humility - A customer doesn't need to be arrogant

1. Don't pull your rank or status2. Respect for human values3. Treat a supplier as a fellow human being

Respect the Customer - Be humble

1. Don't pull your rank or status2. Respect for human values3. Treat the Customer as a real Customer

2 Set high expectations Don't spring a nasty surprise on the customer ever

3 Set very clear requirements Provide periodic updates to customer on the progress of work

4 Obligation to provide meaningful feedback Self inspect work before turning it to the Customer

5 1 - 1 relationship with supplier Treat a commitment made, equivalent to a promise

6 Don't micromanage Owning up accountability for contracted requirement

7 Don't change a contract unilaterally 1 - 1 relationship with the Customer

8 Don't settle for "seconds quality" Don't expect any reminder from customer

9 Raise the bar continually Reflect after feedback from customer

10 Hold supplier accountable for the contract Closing the loop is your responsibility

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OFFICE QUALITY BEHAVIOURS

The Atom of Work

1. Declaration of

Request

• Clarity of request

• Assert status of a customer in negotiating requirements

• Confirm supplier acceptance

2.Declaration of

Promise

• Translate requirement into acceptance / Quality criteria

• Promise Q / D / Service level

3.Declaration of

Completion

• Deliver on requirement

• Self-assess quality

• Declare completion of work to customer

4.Declaration of

Satisfaction

• Provide feedback to supplier respectfully

• Provide coaching / learning moments

The Monozukuri spiral: Craftsmanship – Perfection and Pride

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OFFICE QUALITY MODEL

ANAND Automotive – Office Quality5 Behavioural Assertions

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5 BEHAVIOURAL ASSERTIONS

Every transaction shall beconducted with the mindset andrigor of a Customer-Supplierrelationship - A commitment isequivalent to a promise andreminders are no longer necessary

We aspire to be a world class organisation

Every transaction shall begrounded on human values -Expressing gratitude,apologizing, seeking and givingfeedback will be the norm

We build trust and empower people

It is rightful to speak up andbe heard – It is also OK tocomplain.

We value integrity

It is obligatory to respond to e-mails and return missed calls in atimely manner.

We foster a culture of Quality

Meetings and appointmentsshall begin and end in time

Business is 90% people

▪ AHQC Strategic Initiatives

▪ AHQC Governance

▪ Highlights of few initiatives undertaken• APQP Skilling

• Six Sigma Approach

• Office Quality

• COPQ 2.0

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AHQC PHILOSOPHY AND DEPLOYMENT

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▪ Sustainable future growth ▪ Major Risks identified : Quality and Supplier risk

▪ Fast changing regulatory requirements - Recalls

AHQC – A JOURNEY TOWARDS FUTURE READINESS

LSIP

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WEDGE – EXPLAINED

▪ Create an Organization as per the AHQC guidelines.

▪ Train people as per the identified skill gap.

▪ Convert knowledge to skill through project practice. (as per guideline)

▪ Connect skills to Performance and growth.

▪ Have IT systems to track all this.

Deskill the Shop Floor and Skill the Staff

▪ Review each Standard, Rules and Policies applying the FMEA tool and design controls accordingly.

▪ Periodically upgrade standards from past learnings.

▪ Define robust alarm systems to flag out abnormal situations.

▪ Failsafe processes.- Poka Yokes

Design Robust Processes and Controls.

▪ Map all AHPS and AHQC requirements into IT systems (ERP or MES or IOT).

▪ Build system gate controls to ensure compliance.

▪ Link Shop floor to IT systems (MES or IOT)

Automate Process Execution - Digitization

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APPROACH• Organization Structure

• Skill Development

• Q-Culture in Hiring & Onboarding

• Q-Culture in Leadership Development

Learning Organization

• AHQC

• AHPS

• EHS

• Supplier ERM

• VSME

• Office Quality

• COPQ

Controls

• Six Sigma Approach

• Zero Defect Projects

Problem Solving

• COPQ 2.0

• Mechatronics

• Industry 4.0 readiness

• ERP enhancement

• Web portals for AHQC,

Zero Defects, VSME

Continuous Improvement

AHQC DEPLOYMENT STRATEGY

Cost of Preventive Quality –COPQ 2.0

Measure Prevention Quality Costs

Quality Organizatio

n

APQP Skilling

People Skilling and White Collar

Productivity

Office Quality

Six Sigma Skilling

Problem Solving and Automation

Mechatronics –Future Ready

VSME & MBF

Improve Suppliers and

mitigate Supplier Risks

Supplier ERM

AHPSFlow and Heijunka

Sustainability

Work Initiated

• Problem Solving Leader:

➢ Speed and FTR in problem resolution through enhanced skill

➢ Guides and coaches problem solving teams to eliminate product and process issues/defects by employing

structured problem solving approach.

• Design Quality :

➢ Proactive approach to New Product Development and Change Management.

➢ Ensure adherence of all processes and sub-processes involved in New Product Development (NPD) to ensure

“First Time Right Design” and “Defect Free Launch”.

Addition of 2 new roles for realization of AHQC

QUALITY ORGANIZATION - AHQC

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Systematically eliminate chronic problems Freedom from Perpetual fire fighting Focus on systems and continuous improvements

Prevent generation of defects due to product or process design

Trouble free launch and only focus on control for sustenance

Reduced warranty, Opportunity of resource optimization

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Skill Development – Top Down Approach

▪ Role based skill mapping

• 33 Skills identified

• 4 Competency level per skill

• Skill gaps - self assessment of leadership

• Project practice

• Certification rules

• Skill mapping to career growth.

Problem Solving – Zero Defect Approach

• Creating an Ecosystem to support a Six Sigma Culture. – Leadership Commitment, Six Sigma Database with workflow approvals.

• Rigorous reviews

• Multiple projects for certification.

• Career Path for Black Belts.

Cost of Preventive Quality – Measure of Cultural

Change

▪ Transition from REACTIVE To PROACTIVE

• Focus on prevention

• Focus on automation and de-skilling

• Driving informed and faster decision making

• Ensuring sustainability of improvements

SOME KEY DIMENSIONS OF AHQC

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AHQC DEPLOYMENT, REVIEW AND CONTROL

Approval of proposals by Anand Executive Committee and Resource allocation

Reviewer Forum Frequency

Anand Supervisory Board ASB OC Quarterly

Anand Executive Committee AHQC Symposium Quarterly

Corporate Review by EIM AHQC Review Monthly

Company Level review MOR, BRM Monthly

Plant Level Review AHQC War Room Weekly/ Daily

CONTROLS

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Annual Target Setting

Gap Analysis

Improvement Plans and Execution

Quarterly Self Assessments

Annual AHQC assessment by EIM

AHQC PROGRESS AND MEASUREMENT

COPQ

Reduction by 7% at Group level.

Customer Quality Awards

Increased by 1.7 times over the last 2 years.

New Business

Increased 2 folds in last 2 years.

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Thank You