Chairman s. desk. Inside Standards and Conformity Assessment the cutting edge of competitiveness CLICK FOR INSIDE PAGES. from the

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1 PROGRAMMES CONDUCTED uality News N E W S L E T T E R FEBRUARY We are also happy to announce the winners of the 2011 JIPM TPM Award Winners in this newsletter. It is a great privilege and honour for the n Industry to cross the milestone of 201 awards and being the leading country outside Japan. While the first 201 awards took 21 years, we are sure that with TPM picking up in the last few years, the next milestone of 500 Awards should be crossed in much lesser time. For the first time, CII Institute of Quality, designed and organized the Lean Conclave which was a great success. Many leading companies such as Toyota Kirloskar Auto Parts Ltd, Bajaj Auto Ltd, DELL (P) Ltd, Ford Ltd, Mahindra & Mahindra (FES division), Tata Motors Ltd came together on one platform to share their success through the lean journey. With this initiation, CII-IQ is going to go firm on providing consulting and training services on Lean Management thereby supporting companies in their journey of competitiveness building through the Lean management methodology. Road Safety Initiative is CII-IQs new baby. The expert team from CII- IQ has been working with companies to make Road Safety Initiative a Management System rather than just an awareness drive. This is an initiative which we urge all companies to consider seriously to make our roads a safer place. The continuing market instabilities and the interdependencies in a networked world have once again brought the practice of Risk Management to the foreground. The recently published ISO Standard and the British Standards Institute s BS are aimed to encourage organizations to adopt a risk based approach as underlying to their various business processes. The criticality of the subject prompted CII-IQ and British Standards Institution () to jointly organize a 4 Seminar series The Imperative of Risk Management in Turbulent Times which would greatly assist n managers to master the challenge of Risk Management and help them incubate resilience to anticipate the unexpected, prepare to deal with uncertainties and convert adversities into opportunities. While the first two Seminars in New Delhi and Mumbai were well received by industry, Bangalore and Kolkata are to follow. The advent of technical regulation to world trade has given rise to the emergence of accreditation systems and voluntary conformity assessment standards with the need for reliable test and calibration results. Though has over 2000 accredited laboratories, the expectations are increasing, presenting new challenges. Chairman s from the desk CII has a group of counsellors who are passionate about Quality and Excellence. IQ strives to address people and organizations about continuous improvement through Business Excellence, TPM, Lean, Six Sigma, Road Safety, Quality Management System, Metrology, Laboratory, Risk Management and Education Excellence. CII-IQ TRAINING CALENDAR CII-IQ and National Accreditation Board for Testing and Calibration Laboratories (NABL) have joined hands in organizing the First National Conclave for Laboratories in. It will help create a common platform to share, discuss and evolve policy on issues relating to testing, calibration and laboratory management practices. It is expected to open constructive dialogue between Accreditation Bodies, Regulators, Certifiers and Laboratories to evolve a road map for testing and calibration services to discover new business opportunities for n laboratories. Top leadership from the Scientific community, Regulatory bodies, Conformity assessment bodies, laboratories will speak at the conclave. The recent reports indicate that the Business Confidence Index of CEOs in has improved Q-o-Q, suggesting optimism among Inc. While business confidence has improved, still there are challenges for the businesses in view of global economic uncertainties. Hence, there is a crying need for businesses to develop processes and practices to deal with such situations for sustainable performance. The Excellence Model is a robust, comprehensive and nonprescriptive business management tool. The year has begun with an invitation for participating in the CII-EXIM Bank Award for Business Excellence. Participating in this rigorous assessment process, based on EFQM Excellence Framework, helps Organisations to get a holistic external perspective by comparing with Best-in-Class organisations. We encourage Organisations to adopt this framework and participate in the Award process to receive a feedback on the maturity of its processes and performance and use the outcome to develop improvement strategies. New categories under the BE Award will be Healthcare,Infrastructure, IT, Retail and FMCG. Sectors which will be given enhanced focus under the CII-EXIM Bank Award for Business Excellence include Infrastructure, Retail and FMCG. The BE Club is being launched shortly and the details of the same are available with the secretariat. Education Vertical continued with its training programmes for schools at Chandigarh and In-house programme for BR Ambedkar Institute of Technology at Port Blair. A Compendium of Education excellence Initiatives will be released by end April. CII-IQ has been identified partner to improve the Quality of School Education in Andaman Nicobar Islands and the MoU will be signed shortly. CII-IQ SERVICES Regards N KUMAR FORTHCOMING PROGRAMMES Inside Standards and Conformity Assessment the cutting edge of competitiveness CII-IQ helps CEIL in getting ISO accreditation Lean Conclave, Chennai CII-IQ supported companies winners of JIPM TPM Award, th Kaizen Conference cum Competition 1st National Conclave for Laboratories CII-EXIM Bank Awards for Business Excellence- CII - BCG Report: At a Glance The Data Crunch Report Executive Summary CII-IQ Training Calender Activities & Programmes Conducted during January Forthcoming Programmes Contact Details IQ Headquartered in Bangalore for the last 11 years supports the large membership of CII in and also in other countries. The CII Institute of Quality has seen a stepup of activities across its various verticals in its Consulting & Training services: Business Excellence, Standards & Conformity Assessment, TPM, Lean, Road Safety and Education. Going forward, this year CII-IQ will also have Business Excellence & TPM Best Practices Missions to Germany and Japan during May and August. We will also undertake a Customer Satisfaction Survey in March where we will reach out to several of our customers to evaluate our services and do a market research on the needs of Industry. The eleventh CII-IQ Anniversary Day will be celebrated along with the National Business Excellence Conclave-Accelerating Organizational Improvement through Business Excellence Approaches on 9th May at Bangalore. Members may contact me or C N Sinha, Head, Corporate Communications, CII-IQ for any assistance. We have showcased the latest CII-BCG Report on The Tiger Roars: an in-depth analysis on how a billion plus people consume predicting the consumption patterns in which may be of interest to our readers. We will soon be bringing more reports and research papers for our readership in the months to come. Companies who wish to share their success stories in the area of quality and excellence, may please send the same to C N Sinha, Head, Corporate Communications, CII-IQ or me. For more information on CII-IQ and what we do, please see our website Greeta Varughese Senior Director & Head - Institute of Quality CLICK FOR INSIDE PAGES

2 uality News NEWS LETTER FEBRUARY Standards and Conformity Assessment the cutting edge of competitiveness by Anupam Kaul, Principal Counsellor, CII-IQ Standardization plays an important role in upgrading products and services, sustenance of quality and technological advancement in manufacturing and service sectors. Standards are an integral part of the complex network of knowledge flow that furthers technology development and setting of international benchmarks. Standards are a form of embodied technical knowledge accessible to all types of business that enables more effective product and process development. They promote and enable the diffusion of technology in a form that is readily assimilated by organizations with the complementary capabilities to take up and use the new methods. Standards therefore constitute one of the important foundations for technological inputs in manufacturing as well as services, and also reflect what is state-of-the-art, reasons why they are accorded high importance by the policy planners in the developed world. Increasingly standards are being pushed higher up the technology ladder, with a clear strategy to give market advantage to technology leaders (companies, economies). Standardization contributes not only to international trade and market access but also to the basic infrastructure that underpins society, including health and environment. Standards are either enforced by law (technical regulations) or driven by market demand (voluntary standards). The former is the domain of the government and as per TBT Agreement; member nations are free to impose technical regulations on grounds of national security, deceptive trade practices, health, safety and environment. The last two decades have seen the emergence of standards from traditional product specifications, technical codes and classifications, to management aspects creating datums for organizational behaviour in areas as diverse as quality, environment, employee s health and safety, social accountability, risk, supply chain management and security, information management and security, financial management and economics, and several others. The modern imperatives drive organizations to apportion interest and effort in meeting these sociological expectations (quickly transforming into obligations) juxtaposing them with the technical aspects of business. Standards create the references for each of the above and to prove adherence, extensive networks have emerged comprising conformity assessment bodies like the certification bodies, inspection bodies, and laboratories, that go on to evaluate organizations on the products and services that they produce as well as the systems they adopt and based on evaluation, certify them. Further, accreditation bodies and their international governing bodies close the loop of the global supply chain in the assurance business by accreditation of the conformity assessment bodies on one hand and setting up mutual acceptance systems at a higher level to enable movement of products, services and people across markets. CII Role For more than two decades has been on the forefront of standardization through regular and active participation in international as well as domestic standards making activities. The TQM division of CII played a stellar role in helping n industry adopt and absorb world class quality management standards, that formed the backbone of the spectacular growth of the auto component, engineering and IT sectors. Both CII members and Counsellors of CII Institute of Quality work together in taking industry and national positions on the Standards under development, a fact recognized by the International Organization for Standardization (ISO), when it invited CII to host a session on industry standardization during the recently held ISO General Meeting in New Delhi. CII has constantly engaged with the leading Standards bodies the world over ISO, ANSI, BSI and at the national level BIS, in creating platforms for sharing information and encourage debate on leveraging them for competitive advantage. CII-IQ organises Seminars on The Imperative of Risk Management in Turbulent Times based on ISO Though Risk management has been in practice for long, its need is being felt even more due to market instabilities and the inter-dependencies in a networked world. The twin downturn of the global economy in quick succession, the incredible downgrading of the US, monetary deficits of several European nations hovering on brinks of bankruptcy, the uncertainty around the fate of Kyoto Protocol, spurt in dollar demand, the wild swings in oil and gold prices, and natural turbulences such as the Iceland ash and Japanese Tsunami disrupting businesses world-wide, all in a span of 3-4 years, have driven unprecedented volatility and turbulences. Hence, formal models to deal with risks on an organized basis have become necessary. The old order of gradual change is giving way to dealing with sudden shocks heralding the possible decimation of long term forecasting and the acceptance of living on the edge as the new corporate mantra for survival where flexibility and agility would be survival attributes. The recently published ISO Standard captures all elements that constitute a holistic framework for identifying and managing enterprise wide risks, encouraging organizations to adopt a risk based approach in everything they do. The British Standards Institute s BS which is a code of practice, compliments ISO and also gives additional guidance. To create further national awareness on this critical subject, CII Institute of Quality and British Standards Institution () are jointly organizing a 4 Seminar series which would greatly assist n managers to master these twin challenges, which operate both at strategic and operational level under volatile and turbulent times and help them incubate resilience to anticipate the unexpected, prepare to deal with uncertainties and convert adversities into opportunities. The first two Seminars took place in New Delhi (31 Jan) and Mumbai (13 Feb). The next two are slated on 24 Feb at Bangalore & 15 March at Kolkata. With a view to bring sharper focus on the increasing role being played by Standards and conformity assessment practices in overcoming and facilitating trade barriers, the CII IQ has set up the Task Force for Standards and ConformityAssessment in Trade (SCAT) with the vision of developing of a mature economic culture where national standardization and conformity assessment policies and activities leverage s emergence as the world s preferred supplier of products and services. Under the purview of SCAT, CII IQ shall take up standardization work as well as determine policy for influencing technical regulations. Beginning last year, a campaign to promote awareness on Standards and technical regulations in the Chemicals sector was launched. CII brought in ECHA (European Chemical Agency) to talk about the European REACH regulations that have started to impact virtually all exports to Europe. Parallely, a background policy paper for a REACH like Regulation in has been prepared and submitted to Union Ministry of Chemicals and Fertilizers. To cover the interest of the IT sector, a CII nominee became the convenor for the Development of ISO Standard on Outsourcing which will impact IT and ITES off-shoring businesses in times to come. As a further measure to consolidate the standardization effort, CII IQ will shortly sign a MOU with QCI for development of industry lead standards and their certification. 0 2

3 uality News Standards on Conformity Assessment While standards constitute the technical reference for the quality of manufactured products and services, their implementation ensures the actual quality of products reaching domestic and overseas buyers and consumers. Almost all international trade relies on some form of certification or conformity assessment. Of late even national Regulators / government agencies have started relying on third party conformity assessment to supplement regulatory enforcement. Thus there is going to be an expansion of conformity assessment business in all developing countries to support regulation as well as voluntary initiatives. CII institute of Quality has taken the lead in aiding responsible expansion and development of conformity assessment practices in. Joining hands with the Quality Council of and the National Accreditation Board for laboratories, which together oversee majority of the conformity assessment work in through accreditation schemes, CII has emerged as the only body in that provides high quality training and counselling services to certification, inspection bodies and laboratories. This role has been further enlarged by active participation in the development of International and national Standards on accreditation and conformity assessment. This author Official is member of the National Mirror Committee for Conformity Assessment Standards and also its convenor for the revision of ISO Accreditation Standard for Inspection Bodies. Services of the Standards group CII IQ organizes training programmes for the industry on quality management. These include Lead Auditors course, Lead Assessors Course on Quality Management, Programme for Strengthening MR NEWS LETTER FEBRUARY Skills, Trainings on Public Service delivery, Internal Auditors programme, programmes on Laboratory Quality Management, Uncertainty of Measurement etc. Each of these is backed by counseling services to industry as well as government organizations. CII IQ has re-launched its laboratory and metrology portfolio by developing an understanding with the National Accreditation Board for Laboratories under which CII IQ will organize wide awareness programmes on the benefits of accreditation to laboratories of the CII member companies. The entire campaign will be supported by NABL. CII IQ has launched training services in the field of medical laboratories and will shortly be launching programmes on Proficiency Testing. CII IQ provides training on the Accreditation Standards in close cooperation with the Quality Council of. Following up on the training, CII IQ is engaged in a number of counselling assignments to prepare n conformity assessment bodies gain accreditation on International Standards, both to the private as well as Government Sector. Some of the notable clients of the Standards Group in the recent past are the CBEC, RBI, FSSAI,CEIL, Export Inspection Council, SAIL, BHEL, Siemens, Reliance Power. The current impetus is on promoting the ISO Standards on Risk Management and Business Continuity Management, to enable organizations develop resilience, flexibility and agility, the current imperatives for successful business models. ( For more details please contact : or anupam.kaul@cii.in ) CII Institute of Quality helps CEIL in getting ISO accreditation Interview with Mr MVK Kumar, CEO, CEIL Q. a) What is the significance of accreditation as per ISO Standards to conformity assessment bodies in? Ans : Accreditation of conformity assessment bodies as per ISO Standards builds confidence in the market place. It is important for services / products tested in to be accepted internationally without the need for additional testing. Increasingly, accreditation is the means of achieving this. Certification Engineers International Ltd, a wholly owned subsidiary of Engineers Ltd was recently conferred with ISO accreditation for its Inspection Services. CII Institute of Quality provided counseling support for this prestigious accreditation award from the National Accreditation Board for Certification Bodies. CEIL is one of the highly rated inspection bodies in the country and is engaged in a vast variety of technical scopes of operations including oil and gas and offshore installations. CII IQ support ensured that the accreditation was granted for the entire scope, one of the largest in the country. Accreditation as an inspection body entails a complete re-haul of the management systems, with stringent requirements for impartial operations and competency of the inspection staff, besides a deep understanding of the incumbent liabilities that accrue from certification of the inspected material. ISO accreditation means, any product inspected and certified by CEIL gets acceptance in global markets. CII Institute of Quality is the only body in the country offering training and counseling support to certification and inspection bodies, whose role has emerged strongly in enhancing competitive edge of n industry through reliable product certifications for domestic and international markets. Q. b) How much will the accreditation help CEIL in its business promotion and image / credibility? Ans : Achieving accreditation to ISO has not only enabled CEIL to become an accredited Inspection Body in but has leveraged it to become at par with accredited Inspection Bodies internationally. This accreditation is already helping CEIL in enhancing domestic business in identified sectors. It shall also enable us to tap international projects where accreditation is often a prerequisite for eligibility. Q. c) How will the accreditation benefit CEIL in terms of internal capability? Ans : The key verticals of this accreditation viz. Independence, Impartiality & Competence is helping CEIL to develop and sustain high standards of performance. It also infuses a sense of pride in CEIL personnel. Q. d) What will be your message to other inspection bodies, considering the sensitivity of the inspection activity to give credible results? Ans : Taking in n context, I strongly feel that Inspection Bodies play a key role in ensuring that end products are safe, maintain high quality standards and comply to statutory requirements. Hence fundamentals of ISO should be adhered to not only in words but spirit. Q. e) How would you rate the counseling support provided by CII in achieving accreditation to ISO 17020? Ans : CEIL had a wonderful experience in being associated with CII as it could utilize its domain expertise in right conceptualization and efficient implementation of ISO CLICK FOR NEXT PAGES

4 uality News NEWS LETTER FEBRUARY Lean Conclave January, Chennai Speakers from JMAC, Wabco Ltd, Ford, Tafe Ltd, Brakes, Toyota Kirloskar Auto Parts Ltd., Sona Koyo Steering Systems, Hyundai Motors, Mahindra & Mahindra FES, Nokia, Dell, Bajaj Auto, Tata Motors, IIT Chennai and CII-IQ addressed over 86 delegates from 43 organisations Lean Conclave-, with the theme Shaping The Future Towards Becoming Lean was a two day event designed for mid to upper level managers to help them understand, how to create management systems and an infrastructure that make problems visible and engage team members in a rigorous problem solving and continuous improvement process. Mr Kaniappan, Whole Time Director - Wabco Ltd., delivering keynote address The Conclave through its technical sessions focused and deliberated on key issues of sustaining the lean journey by implementing right tools at the right time and insights into innovative ways to enhance lean journey towards becoming Lean and Agile. The Lean Conclave, besides increasing consciousness, generated enthusiasm among all the participants as they assimilated learnings from leading Lean practitioners and experts who have faced the same challenges and problems and the Lean way of countermeasures. Mr Kumaradevan, AVP-Operations, TAFE and Mr P Senthil, VP-Vehicle Operations, Ford addressing Q&A session For more details please contact : Mr. N Yogesh, ; n.yogesh@cii.in & Ms. Mamta Rai, ; mamta.rai@cii.in Mr Atsushi Terada sharing his thoughts on safeguarding against recession during panel discussion Presentation on Hoshin Kanri by Mr Rajdeepak Chatterjee of Mahindra & Mahindra (FES) 0 4

5 uality News NEWS LETTER FEBRUARY CII-IQ supported companies winners of JIPM TPM Award, 2011 by Rajesh Parim, Principal Counsellor, CII-IQ The 2011 TPM Award Winners, which was announced on 6th February, in Japan, featured 24 companies which were supported by CII-IQ as an Assessment Agency. Since 1995, there have been 201 TPM Awards won by n companies by challenging the TPM Award process of Japan Institute of Plant Maintenance, Japan. No. of Awards s 150 rd a w A f. o o N 100 TPM Awards in (Cumulative) North : 32 West : 58 East : 34 TPM Awards Regional distribution South : List of companies supported by CII for TPM Award Winners Sl No. Company Name Plant Name Country Category 1 Arcelik A.S. Electrical Motor Plant Turkey Special Award for TPM Achievement 2 Arcelik A.S. Cooking Appliances Plant Turkey 3 Chennai Petroleum Corporation Limited Cauvery Basin Refinery 4 Hi-Tech Gears Limited (Group) Hi-Tech Gears Ltd (Bhiwadi and Manesar) and Getrag Hi-Tech Gears () Pvt Ltd (Bhiwadi) 5 n Oil Corporation Limited Barauni Refinery 6 Apcotex Industries Limited Taloja Plant 7 Bajaj Auto Limited Pantnagar Plant 8 Endurance Technologies Pvt. Suspension Division, Limited Aurangabad 9 Endurance Technologies Pvt. Casting Division, Limited Aurangabad 10 Exide Industries Limited SF Division, Taloja Plant 11 Hero MotoCorp Limited Hero MotoCorp Limited, Dharuhera Plant 12 n Oil Corporation Limited (Assam Oil Division) Digboi Refinery 13 Minda Industries Limited Minda Industries Ltd Switch Division, Pune 14 MRF Limited Kottayam Unit 15 PepsiCo Holdings Private Limited Pune Foods Plant 16 QH Talbros Limited, IMT QH Talbros Limited Manesar, 17 International Business Raychem RPG (P) Ltd Division, Vasai 18 Royal FrieslandCampina FrieslandCampina DMV bv, Veghel The Netherlands 19 Sona Okegawa Precision Forgings Limited Gurgaon Plant 20 Sona Somic Lemforder Components Limited Gurgaon Plant 21 The Supreme Industries Limited Pondicherry Plant 22 Tractors and Farm Equipment Manufacturing Unit - Limited Sembiam, Chennai 23 Turbo Energy Limited Pulivalam, Tamil Nadu 24 Unilever Manufacturing (US) Inc Unilever - Owensboro USA Award for Excellence in Consistent TPM Commitment Award for TPM Excellence, Category A This is the list of companies supported by CII as an Assessment Agency For complete list of winners for 2011, kindly visit the the website ( ( For more details please contact: ; joby.john@cii.in ) 0 5 CLICK FOR NEXT PAGES

6 18th Kaizen Conference cum Competition 1-2 March, : Hotel Le Meridien, New Delhi TPM Club announces its 18th Kaizen Conference Cum Competition, a National level competition, where selected Kaizen case studies will be showcased by the n companies to compete for 7 trophies for the coveted Best Kaizen Award. Three categories of presentation for Kaizen Competition are : Operator level shop floor kaizens Supervisor and Manager level kaizens and Senior Manager level kaizens Operator Level TAKEAWAYS Presentations in this category would cover the operator s area of work, about their machine, problem faced, understanding the root cause of the problem through analysis, action taken and results achieved along with other benefits that had been achieved. Supervisor and Manager Level Kaizens in this category are expected to give good benefits to the company. The resul ts can be seen clearly through the parameters of PQCDSM. The kaizens implemented under this category are focused on specific losses which are bothering the company in terms of less OEE, man efficiencyas well as high cost. Senior Manager Level Kaizens implemented to achieve quantum jump have to be highly focused and would be presented in this category. Generally the theme is one; whereas the number of kaizens done to achieve the theme would be many. Usage of ap propriate analytical tools to arrive at the cause, cost benefit analysis, quality of improvement, impact to the company in the short term and long term, results achieved along with other benefits with clear focus on companies top line & bottom line requirements would be the focus. For more information contact: Mr Alok Rawat TPM Club,, 249 F, Sector 18,Udyog Vihar, Phase IV, Gurgaon (Haryana) T : / ; E : alok.rawat@cii.in W: ; 0 6

7 1 st National Conclave for Laboratories Theme: Credible Laboratory practices building confidence nationwide April, Stein Auditorium, Habitat Centre, New Delhi Measuring systems and laboratory practices have undergone significant transformation in the last 2 decades. Global developments such as the emergence of accreditation systems, technical regulations, and enhanced use and reliance on voluntary conformity assessments have pitched the need to have reliable test and calibration results center-stage. has kept pace with these developments by setting up one of the earliest accreditation frame-works that covers more than 2000 laboratories today. However the increased expectations and the sheer volumes present new challenges in sustaining credibilities nationwide. With a view to generate a mutli-stakeholder review and discussion forum, CII Institute of Quality, and National Accreditation Board for Laboratories (NABL) have joined hands in organizing the First National Conclave for Laboratories in and South Asian Region. The National Conclave, proposed to be an annual feature, will be the one common platform to share, discuss and evolve policy on all critical and emerging issues relating to testing, calibration and laboratory management practices. Conclave Objectives Updating on recent developments in laboratory practices Discovering new business opportunities for n laboratories Interactive forum for dialogue between Accreditation Body, Regulators, Certifiers and laboratories expectations and issues Evolving policy for future growth path for testing and calibration services Sharing of successful approaches adopted in. Certificate of Participation shall be given to all delegates What the Conclave would deliberate Policy developments at the International level in laboratory practices and Metrology New emerging business areas for laboratories Importance of Laboratory results in Trade How to engage and derive benefits from the National Accreditation programme (for non-accredited laboratories) Cross learning through experience sharing and success stories Knowledge sharing on new technologies and scope / capacity expansion Knowledge sharing on meeting regulatory requirements Bridging the gap between accreditation requirements and practices Who should participate? Industries Laboratories (accredited and non-accredited) R&D institutions Equipment manufacturers Regulators Government organizations NGOs Early Bird Discount Register before 29 February to avail Rs 1000 off CII Members : Rs 5,000* NABL Accredited Labs : Rs 5,000* Others : Rs 6,000* (* Exclusive of service tax) For Registrations Reply Form to labconclave@cii.in Mr N Venkateswaran CII Mr Mohanish Kapur CII NABL Contact person Mrs Anuja Anand anuja@nabl-india.org (Sponsored by ABB Limited) For Sponsorship details : n.venkateswaran@cii.in CLICK FOR NEXT 0 7 PAGES

8 B Muthuraman President, CII & Vice-Chairman, Tata Steel We, at Tata Steel believe that Pursuit of Excellence is an imperative for achieving long-term sustainability and delivering value to all stakeholders. Challenging the CII-EXIM Bank Award for Business Excellence enabled us to obtain a comprehensive external perspective on our business practices and performance and also an opportunity to compare ourselves with World-Class Organisations. I strongly recommend that all the Organisations aiming to deliver sustainable and superior levels of performance, to whole heartedly adopt the Fundamental Concepts of Excellence and challenge the CII EXIM Bank Award for Business Excellence to understand the maturity of their business practices and performance. 0 8

9 uality News NEWS LETTER FEBRUARY CII - BCG Report The Tiger Roars An In Depth Analysis of How a Billion Plus People Consume At a Glance is a large and growing consumer market, but the expanse and diversity of the country make the shape of future growth difficult to predict. Companies can begin to capture this market only by understanding it. The Many Faces of has a billion plus consumers spanning all income segments. The income pyramid is real but does only a partial job of explaining consumer attitude and behaviour. This report provides the definitive view of the income segmentation and more importantly uses other parameters of location, education and occupation to define the seven segments of. ProfessionalAffluent (Two percent of households): With an annual household income above US$ 18,500, these consumers are well educated and work as executives, managers or are self employed professionals. TraditionalAffluent (Four percent of households): With annual household income levels similar to the Professional Affluent, these consumers are less educated and typically self employed. They are more value conscious and less comfortable with credit than the Professional Affluent. UrbanAspirers (Eight percent of households): With an annual household income between US$ 7,400 and US$ 18,500, these consumers are educated and have mid sized businesses or stable jobs. They live in urban cities and have high aspirations for their lifestyle. RuralAspirers (Six percent of households): With income levels, education and occupation similar to Urban Aspirers, these consumers live in rural. They consume less than their urban counterparts and are comparatively less aspirational. Large Town Next Billion (Six percent of households): With incomes between US$ 3,300 and US$ 7,400, these consumers typically have basic education levels and have small businesses or low paying jobs. Their income levels allow them to sustain a basic lifestyle. They live in towns and cities with a population greater than 500,000. Small Town and Rural Next Billion (Twenty Four percent of households): These consumers are similar to the Large Town Next Billion segment, but live in smaller cities & towns and in rural. Strugglers (Fifty percent of households): With an annual income less than US$ 3,300, typically illiterate with limited education, these consumers have jobs that are manual labour based with very low income, generally daily wage. Shopping Behaviour It is important to understand not only the way consumers think or state their preferences, but also how they actually consume and shop. This report examines in detail the shopping behaviour of consumers across segments - based on an extensive on-the-ground consumer research with over 12,500 respondents. Key themes which have far reaching implications for companies looking to capture the large consumption opportunity are different across categories. Food and Groceries Trading up tendency increases with rising income levels, especially in food Purchase frequency drives format preference, not product freshness Shopping is often a group activity, not limited to only the housewife Brands are critical till the consideration stage, but reduce in importance for actual purchase The last three feet at the store is the moment of truth: Key purchase decisions are taken at the store Consumer Durables Desire to keep pace with changing lifestyles is the key trigger for purchase decision Brand pre decision varies across product categories Purchase is a highly planned and researched decision, the primary objective of the store visit is to execute the purchase Organized retail is preferred for more expensive product categories Online shopping still at a nascent stage - lack of awareness is the key barrier Apparel Apparel shopping is driven by occasion, rather than functional need Fabric quality and brand image are key criteria in driving consumer choice Large opportunity for private / store labels. Stores need to tailor value proposition to focus on specific consumer segments The Shape and Size of Consumption in The n consumer market is poised to grow 3.6 times between 2010 and 2020, faster than most other emerging markets. Rising household income, urbanization, the decline in the traditional joint family structure, and the coming of age of Gen I are key contributors to the growth. Estimated at US$ 991 billion in 2010, total consumption expenditure is expected to grow to nearly US$ 3.6 trillion in Food, housing & consumer durables and transport & communication are expected to be the Top 3 categories, accounting for 65 percent of consumption in The Professional Affluent are expected to dominate consumption in 2020, accounting for 26 percent of total consumption expenditure, up from 16 percent in By contrast, spending by struggler households will decline from 26 percent in 2010 to 11 percent in CLICK FOR NEXT 0 9 PAGES

10 uality News NEWS LETTER FEBRUARY The Data Crunch Report Executive Summary Organised retailing in needs addressing several issues/challenges related to infrastructure, logistics, taxation etc. Many of these require intervention by policy making bodies for their satisfactory resolution. There are however areas which can be expeditiously addressed through collaboration between trading partners by adoption of Information Technology (IT) enabled applications and global standards. It can significantly and positively impact operational efficiency / productivity, administrative costs resulting in increased sales, lower logistics costs, enhanced consumer satisfaction and a win-win opportunity for all trading partners. Success in retailing is contingent on effective management of product master data through maintenance of a single, trusted, accurate, fully updated and complete product item master which can be relied upon by retailers and their suppliers. Good quality data ensures that all master data in the Supply Chain is complete, consistent, accurate, time-stamped and industry standards-based and also allows effective collaboration among trading partners. It is not only vital to reducing errors but fundamental to increasing efficiency, reducing costs and positively impacting customer satisfaction. Due to the persistent exchange of inaccurate product data among Rs 40 to 50 billion - Estimated loss over next trading partners, 5 years due to poor data. benefits cannot be realized and optimized from the use of IT tools, applications and technologies such as Enterprise Resource Management (ERP), Customer Relationship Management (CRM). This in turn impacts significantly the returns which can be realised on investment in IT by an organisation. To study and evaluate its impact on business operations and provide recommendations to the n Retail and CPG 70% - Average level of product data Industry for addressing inconsistency across the same, a detailed Retail sector. survey was undertaken in by the CII National Retail Committee. One such area which is at the core of mission critical retail operations relates to accuracy of master data of traded SKU s. This is extensively used in facilitating several applications related to ordering, despatch, inspection, invoicing, stock management, replenishment, category management, planogram planning, demand forecasting, reverse logistics, consumer billing, warehouse management etc. GS1 led the study with project execution leadership by IBM. The study was modelled on a similar study undertaken by IBM in the U.K. [1]. Four major n retailers and four leading CPG brand owners participated by sharing details on the status of their respective product master data as requested through the study questionnaire. 1 0 The Data Crunch Report

11 The data supplied by each participant was collated, compiled and analyzed for correctness and completeness with respect to GS1 Standards. The level of data inconsistency was determined by comparing the retailer and supplier data on a common set of parameters / data attributes. The impact on business operations was then tabulated to demonstrate the linkage between data quality and business results. The impact on organisational performance was tabulated under three broad categories covering loss of revenue, additional costs incurred and opportunity costs. This included fill rate loss, deductions, administrative shrinkage, loss of man-hours on duplication of work and time / efforts spent in resolution of errors etc. Study recommends adoption of global data quality and product data synchronisation standards by retailers and their suppliers. The study revealed startling results on the extent of inconsistency in product master data between retailers and suppliers which exceeded70%. Estimated losses on account of the same which could get sustained by the n Retail and CPG sector over a five year period pointed to losses of between Rs billion due to data inconsistency and subsequent errors. In a sector like retailing with relatively small net profit margins, such losses could significantly impact overall profitability of trading partners if not addressed through collaborative efforts. In its recommendation, the report urges n retailers and suppliers to adopt and implement global standards for data structure, data validation, its communication and updation following global best practices and standards. The report also recommends adoption and implementation of Global Data Synchronization Network (GDSN) through subscription to a certified GDSN datapool service provider. The standards for the same, called GDSN Standards, have been developed by GS1 through active participation of various stakeholders representing retailers, CPG companies etc. has the opportunity to benefit from the maturity level that GDSN has attained over the last few years and can speed up its adoption without having to expend efforts and delays in starting from scratch. The Data Crunch Report 2011 CLICK FOR NEXT PAGES

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16 uality News NEWS LETTER FEBRUARY ACTIVITIES & PROGRAMMES CONDUCTED DURING JANUARY Laboratory Management System & Internal Audit as per ISO / IEC 17025: January, Kolkata Lean Conclave January, Chennai Workshop on Internal Auditors based on ISO January, New Delhi Workshop on Accreditation Criteria for Inspection Bodies based on ISO January, New Delhi How to improve the Business Competitiveness through KK Methodology January, CII-IQ, Bangalore Awareness program on NABL accreditation for Laboratories 24 January, Vishakapatnam Laboratory Management System & Internal Audit as per ISO 15189:2007 for Medical/Clinical Laboratories 30 January to 2nd February, Mumbai Workshop on Assessment For Business Excellence For Large Business Organisations January, Mysore Workshop on Developing Equipment Competent Operator Step 4 Jishu Hozen January, Pune The Imperative of Risk Management in Turbulent Times 31 January, New Delhi FORTHCOMING PROGRAMMES March 28 Feb - 3 Mar BANGALORE QMS Lead Assessors Course 1-2 March Kaizen Conference NEW DELHI 6-7 March BANGALORE 2-Day programme on Customer Relatationship Management (CRM) 9 March BANGALORE Appreciation programme on TPS March NEW DELHI Accreditation Criteria for Inspection Bodies, ISO March CHENNAI Internal Quality Audit for Laboratory Management Systems based on ISO March NEW DELHI Workshop on Assessment for Business Excellence-, for Large Business Organizations 15 March KOLKATA Seminar on Risk Management The Imperative of Risk Management in Turbulent Times March BANGALORE Business Competitiveness through Skill and Knowledge Improvement March MUMBAI Understanding Laboratory Management Systems based on ISO March CHENNAI Workshop on Assessment for Business Excellence-2011, for Small and Medium Businesses (SMB) March Strengthening MR skills MUMBAI CONTACT DETAILS For further details, please contact: jayashree.das@cii.in CII Institute of Quality Bharat Nagara 2nd Stage Magadi Road, Vishwaneedam Post, Bangalore T : / 7690/9391 F : Chennai Southern Region 98/1,Velacherry main road Guindy. Chennai T : F : Gurgaon Plot No. 249 F, Sector - 18 Phase IV, Udyog Vihar Gurgaon T : F : / 80 Pune Pune Zonal Office 10th Floor, Office D, Godrej Eternia-C, 'B' Wing, 3, Off Pune Mumbai Highway Wakdewadi, Shivajinagar, Pune T : / 01 F : Kolkata 6, N.S. Road Kolkata T : / 28 / 1434 F : , CII Headquarters : Mantosh Sondhi Centre, 23 Institutional Area, Lodi Road, New Delhi Phone : Fax : /