Six Sigma Lean ManagementDeming award winner Lucas-TVS

Presented by Group 912056 VENKATA SAI KRISHNA M

12059 VINCENT BOSCO MENDONCA12132 BHARATH KUMAR M

12182 SARTHAK ROHATGI12045 SHASHANK SHEKHAR GOSWAMI

Presented toDr R.Jagadeesh

History of the award

• Named after Dr. William Edward Deming, expert in quality control in United States of America

• He gave a eight day lecture on Quality control to Japan’s executives, managers, engineers and researchers

• He also donated all his royalties to JUSE• In his honor Kenichi Koyanagi, managing director

of JUSE, proposed an award to the top performing companies

Criteria for performance excellence

• Top Management Leadership, Vision, Strategies• TQM Frameworks• Quality Assurance Systems• Management Systems for Business Elements• Human Resource Development• Effective Utilisation of Information• TQM Concepts and Values• Scientific Methods• Organisational Powers (Core Technology, Speed, Vitality)• Contribution to Realisation of Corporate Objectives

Successful companies should score

• 70 points or higher in the Executive Session• 70 points or higher as the company average,• excluding the Executive Session• 50 points or higher for any examined unit of

the company

Some past winners

• 1970 Toyota Motor Co., Ltd. • 1973 Nippon Electric Co., Ltd. • 1975 Nippon Steel Corporation • 1980 Toyota Auto Body Co., Ltd• 1990 Aisin Seiki Co., Ltd. • 1991 Aisin AW Co., Ltd. • 1997 Philips Taiwan Ltd. (Taiwan) • 2007 Mahindra & Mahindra Limited, Farm Equipment Sector

(India) • 2011 Rane TRW Steering Systems Limited, Steering Gear

Division (India)

Measure of Awards

• applicant's performance against certain criteria.

• result of quality activities • consistency of output and others assess

conformity of output to customer requirements

People responsible to give awards

International awards include:• The EFQM Excellence Award, established in

1992 and offered by the EFQM• Asia-Pacific Area Golden Quality Award• The Deming Prize, established 1951

(International from 1984) and offered by the Japanese Union of Scientists and Engineers

National awards are:• The UK Excellence Award, established in 1994 and run by

the British Quality Foundation• The Malcolm Baldrige Award, established in 1987 and

offered by the National Institute of Standards and Technology in the USA

• The Wales Quality Award, established in 1994 and offered by the Wales Quality Centre

• The Irish Quality Award, offered by Excellence Ireland• Singapore's National Quality Award, established in 1994

and offered by the Singapore Productivity Board

The Benefits of Applying

• Accelerate your improvement efforts.• Energize your employees• Gain an outside perspective.• Learn from the feedback process• Focus on results

What are the disadvantages of entering/winning an award?

• The effort: Most awards call for a considerable amount of effort, which can be both expensive and a serious distraction of resources.

• The conflict: Political infighting within a company can be increased when it is suggested that the company embarks on the award journey

• Popularity: Some award winners, such as companies which have won The Malcolm Baldrige Award, report an unsuspected problem.

When should an organization apply for a Quality Award?

There must be critically 8 factors:1. Continuous improvement of all operations on periodic basis2. Accurate measurement of improvements and system sensitivity3. Comparison of strategic plans with the world’s best and rate4. Forward integration and backward integration impacting the

operation structure5. Quality in conversion of ideas and customers’ needs in to a

product6. Include sales, service, and ease of maintenance that maintains

long lasting relations with the customer7. Doing it right for the first time because prevention is better

than cure/repair8. The level and commitment and dedication from each member

from the organization

How should an organization apply for a quality award?START

Receive Deming Prize Guide

Pre Application consultation

TQM DiagnosisSubmission of

application and payment of fee

Submission of DTQMP

Document Examination

Notification and exam

results

Meeting with the lead

Examiner

Pass

Failed

On Site Examination

Failed

Announcements of Successful Applicants

Award Ceremony

STOP

After winning the award - What next?

1. Need to adapt and transform its quality assurance system to meet new challenges

2. To change the scope and practice of its business

3. They can to apply for the Japan Quality Medal five years after winning the prize including the winning year

4. But as of January 2000, the period was shortened to three years

ABOUT LUCAS-TVS

About the Award Winning Company: - Lucas – TVS

• Estd. 1961 – JV between Lucas UK and TVS India

• Lucas-TVS is the Leader in Auto Electricals in India today with 48 years’ experience in design and manufacturing

• Lucas - TVS is a TS16949 and OSHAS 18001 certified company

• Lucas-TVS, believes that quality begins and ends with the customer

• For the company, quality is not just conformance to drawings or specifications but ensuring customer satisfaction

Products and Services offered by the company

Manufacturing of:-• Power Window Motors• Starter for light truck gear reduction starter• Other products and services like

1. Alternators2. Direct drive starter3. Engine colling4. Wiper Motots5. Blower fan motors6. Electronic Ignition Coil With Ignitor7. Compressor Motor Air Suspension8. Electronic Spark Advance Distributor

9. Strick Ignition Coil

Awards Won – Year and CategorySl No Award Won Year Category

01 National Energy Conversation 2008 Auto-Motive Sector

02 Outstanding supplier and Excellence by Cummins India Limited

2007 Auto-Motive

03 Maruti VA – VE Award by Maruti Udyog

2000&2006 Vendor Category

04 Outstanding overall Performance 2004 Manufacturing

05 Superior Kaizen 2004 Manufacturing

06 ACMA Technology 2004-05 Manufacturing

07 ACMA Technology 2001-02 Productivity

08 ACMA Technology 1998-99 Technology

09 FROST & SULLIVAN 2005 Manufacturing

10 MMA 2004-05 Manufacturing

11 AU – TVS 2002 House Keeping (5S)

Manufacturing system

• Manufacturing system is competently backed up by an advanced Tool Room and an in house SPM/ Process Plant manufacturing facility

• Entire organisation is firmly entrenched in the change process and committed to CIP (Continuous Improvement Programme)

TQM

• Quality Assurance methods like Advanced Product Quality Planning, Statistical Process Control Techniques, Effective Tool Management System, Process Capability Improvements, Preventive Maintenance, Producer Control and Small Group Activities form the backbone of the system approach adopted

• Driven by the five pillars of TQM-rests on the foundation of Total Employee Involvement, daily management and Kaizen

• The Total Employee Involvement-program ensures that responsibility for the company's performance is the shared responsibility of all levels of employees

• Daily Work Management-defining and monitoring key processes, ensuring that they meet set targets, detecting abnormalities and preventing their recurrence

Pre-Award Scenarios

• Guidance from Japanese counsellors and Indian counsellors for training, assessment and guidance in TQM implementation

• Counsellors were Mr. Bunteru Kurahara followed by Prof Y. Washio and Prof. Tsuda. Mr. Janak Mehta introduced all these measures and were involved in the initial stages in 1990 to 92 in Daily Management and Policy Management

Consultation and Training were provided on various aspects:-

• Understanding TQM• Understanding of Deming criteria• 5S• Daily Management• Policy Management• Cross-functional Management• Quality Assurance• Quality Cost• New Product Development

• QC Story / Problem Solving• Basic QC Tools• Advanced Statistical tools• Methods and tools for Total Employee Involvement like Suggestion scheme, QC Circles,

Post –Award Scenarios

(1) Quality Stabilization and Improvement(2) Productivity Improvement / Cost Reduction(3) Higher Sales and higher profits(4) Customer delight & enhanced market share/margins(5) Realization of Top Management's Dreams including Business Plans(6) TQM by Total Participation and Improvement of the Organizational Culture.

Current Status and Sustainability of Award

• Recently been selected for Deming Grand Prize for the year 2012 by the Union of Japanese Scientists and Engineers (JUSE)

• Deming Grand Prize is the next higher level of Award and the Company now has joined the elite group of 25 organisations worldwide

• The examination for the Deming Grand Prize conducted by the Deming Prize Examination Committee and the decision of award is made by the Deming Prize Committee

Lessons and Takeaway from Analysis

• Even if an organization has established a sound quality assurance system and has won the Deming Prize, it cannot stand still

• it will surely need to adapt and transform its quality assurance system to meet new challenges and change the scope and practice of its business

• it may need to diversify its products, develop new products or initiate new business altogether

• To do this, the organization must continue educating and training employees and developing new employees who have joined the organization since receiving the Deming Prize

• There is a beginning to total quality management (TQM), but there is no end

• To meet the challenges organizations are realizing that they need to transform the way they do business through implementing TQM

• To respond to internal and external changes, and to implement TQM more effectively in managing the business, it is extremely effective for organizations that have received the Deming Prize to challenge for higher awards such as the Deming Grand Prize

RESEARCH PAPERS

Indian Auto-Component Supply Chain at the Crossroads

What is this about?

• The evolution of the auto-component supply chain in India

• combination of data on firm and sector performance

• Customer satisfaction surveys• Interviews with experts• 10 firms in this industry that have won the

coveted Deming prize during the past six years

What was done?• Financial performance of the firms shows no

much difference from the performance in the rest of the industry

• Then it analyses the productivity growth across two five-year intervals

• Result that productivity improved much more during the second period

• Then analyses the impact of winning the award on profitability

(contd.,)

• Suggest that new firms were able to grow faster in the improving business environment

• Compares the auto sector in India with that in China

• The auto sector in India seems to be competitive with that sector in China on all firm specific factors

Findings• Firms competitive in the areas of cost and

quality they have several choices to leverage into a profitable, global supply chain strategy

• Most firms have adopted TQM practices, with resulting quality and delivery improvements

• These changes have occurred in the 1998–2003 period result in productivity improvements

• one of shift wherein firms encourages inflow of new capital or technology

Country of Assembly (COA) effect on perceived automobile quality: a consumers’

perspective

What is this about?

• Lucas TVS Ltd is an automobile spare parts manufacturing company

• the parts manufactured here can be used in different types of automobiles

• 6 hypotheses that explain the main objective

Hypothesis

I

• Evaluation• According to the assembling at highly industrialized

country to low industrialized country.

Hypothesis

II

• Relationship• Brand image and perception of automobile quality

assembled

Hypothesis

III

• Strong and consistent automobile brand image • lessen the perceived quality of evaluating

automobiles

Hypothesis

IV

• Ethnocentric consumers • Evaluating the perceived quality of domestic assembler’s

automobiles

Hypothesis

V

• Ethnocentric consumers • Tend to have a lower income and education level, live in

larger households

HypothesisVI

• People who have not visited the abroad • Less ethnocentric than others

Findings• Consumers rate : quality of products

manufactured in higher developed country of brand origin as higher

• No significant difference in perceptions of Brand Quality and Brand Economy

• Hyundai cars to be of higher brand status when manufactured in a Korea than in India

• In a less developed countries: brand status decreases when the country of manufacturing occurs outside the country of origin

Findings (Contd.,)• Country of manufacture: the negative effects of

country of manufacture may eliminate the brand name

• Importance of country of assembly: prefer the products that assemble only in the highly industrialized country

• Consumers’ perceived domestically assembled automobiles to be of better quality

• Quality and brand image: very high in term of validity and reliability

Conclusion

• Since there is a huge variation in the perception of the customer with respect to the country of origin and country of manufacture. A standard bench mark is needed for the company to show the quality standard that explains to the customer. The option is “QUALITY AWARDS”

PART B

Issues covered by six sigma in National City Bank

Six Sigma applications in Finance

• Reducing Financial Risk• Simulation for financial decisions• New product design of financial instruments• Improving portfolio strategy

On operational level• Reducing documentation errors• Improving the reconciliation processes.• Reducing response delays.• Reducing or eliminating invoicing errors• Eliminating the possibility of erroneous data

entry• Control spending over time• Reducing complaints.• Improving customer feedback and response

processes

Increase customer satisfaction:Reduce waiting time for services and provide

better and faster servicesIncrease Profitability and Decrease Costs:

Eliminating process inefficiencies, and errors and enhance customer satisfaction while offering quality services Monitor performance:

The customer waiting time, the services offered, the satisfaction level of customers are measured.

Eliminate processing delays:Applications to offer better customer services

to enjoy better retention rate and increase inflow of regular customersAnalyze performance and avoid banking errors:

customer satisfaction level can be measured before implementing lean sigma approach and after taking corrective measures

Implementation of the six sigma resulting:• Faster customer response time• More delegation to frontline• Improved accuracy