CEAT s TQM Journey. Date: 8 th Dec, Making Mobility Safer & Smarter. Everyday. Presenter: Anant Goenka No. of Slides: 27 Time: 30 minutes

Transcription

1 CEAT s TQM Journey Date: 8 th Dec, 2017 Presenter: Anant Goenka No. of Slides: 27 Time: 30 minutes Making Mobility Safer & Smarter. Everyday

2 Introduction India s leading tyre company with over 50 yrs of presence Distribution Network : dealers, 300+ exclusive CEAT franchisees 6 Manufacturing facilities - Bhandup, Nasik & Halol, Nagpur, Ambernath and Srilanka 100+ countries where products are sold with strong brand recall Breakup by Market (FY17) 13% 23% 64% #No 1 player in Sri Lanka in terms of market share Replacement OE Exports 2 November 8, 2017

3 Situation before FY11 Making Mobility Safer & Smarter. Everyday

4 Poor Plant condition and Market position Old plants with low reliability Adverse IR relationship 4

5 Leading to poor financial condition 1. Volatile Profits 2. High Debt to Equity Ratio PBT in Rs Crore FY07 FY08 FY09 FY10 FY11 5

6 Lowest growth in Market Cap 6

7 CEAT s TQM Journey Making Mobility Safer & Smarter. Everyday

8 Why TQM? We were in a near crisis situation There was no CEAT s way: flavour of the month initiative Fire Fighting culture Limited pride in working with CEAT 8 November 8, 2017

9 Why TQM? In , 4 members of CEAT top management: In 2008, TQM awareness workshop was conducted by Indian TQM expert. Indian automobile and component businesses were following TQM model a) Attended JUSE s TQM seminar b) Also made visits to Deming prize winning companies Could this be adopted by CEAT? We decided to take a leap of faith and adopted TQM! 9 November 8, 2017

10 CEAT s definition of TQM TQM in CEAT is called QBM (Quality Based Management) Management centered on the primacy of quality through customer focus at apex Process and People focus form the base QBM has adopted principles from Total Quality Management (TQM) Toyota Production System (TPS) Total Productive Maintenance (TPM) 10 November 8, 2017

11 QBM Initiatives QBM Piloted in Old Plants Muri Elimination Improving Trust levels with Workmen QBM Early Success provided confidence for Company wide roll-out ~1000 Muri eliminated in plants Accidents in plants reduced by 20% Delivery metric improved from 59% to 72% Workmen trust level with management went up Initiated Cross-Functional Management Delivery Control Quality Assurance Workmen Training Overcoming boundaries Recognition to Worker with his family 11 November 8, 2017

12 Doubts in our mind Argumentative Indian All lights green Is this flavor of the month? Too long term Different levels of belief, capability and alignment across functions 12

13 But we did 4 things 1. Top management belief- went All- in 2. Sensei to guide us 3. Set up Academies to learn and train 4. Bottom up buy in through small successes 13

14 QBM Initiatives Deployed company vision and strategy through Policy Management Initiated Customer Centric practices in all functions Strengthened adoption of PDCA and SDCA cycles through Daily Management Encouraged total employee involvement in improvement activities 14 November 8, 2017

15 Transformation of Relations with Workmen Challenges Effects Frequent work stoppages Infrastructure Development High level of Muri, accidents and absenteeism Poor Infrastructure Low worker involvement and lack of trust Initiatives Before After Before After Muri reduction & elimination of unsafe condition program Improving basic infrastructure of the plant Proactive collection of employee voices / irritants and resolving them Celebrations with employees and their families 11 November 8, 2017 Festival Celebration with Workmen Unique Quarterly Workmen Happiness Survey

16 No s GOOD Transformation in Neighbourhood Relationship Challenges Initiatives Effects Festival Celebration with Neighbourhood Dedicated welfare center Replaced fossil fuels with green fuels Number of Complaints on Environmental Issues FY 12 FY 13 FY 14 FY 15 FY 16 FY 17 FY 18 YTD 2 0 High dissatisfaction in neighbourhood due to air and noise pollution Old plant buildings unwelcoming Improved plant appearance and infrastructure Community participation in plant celebrations 16 November 8, 2017

17 Need for Development of Purpose Need a bigger aim than just the financials Gives us core reason to exist Motivates everyone towards the single goal at an organization level 17 November 8, 2017

18 Purpose MAKING MOBILITY SAFER AND SMARTER. EVERYDAY. Meaning of CEAT s Purpose Safer 2 deaths per minute in India due to road accidents Safety identified as core consumer need Smarter Reduce cost and time of travel and improve convenience through innovation in products and services Everyday Continuous Improvement in our way of working 18 November 8, 2017

19 Overall Effects Making Mobility Safer & Smarter. Everyday

20 GOOD GOOD GOOD GOOD Overall Effects: Quality, Delivery, Safety and Morale 1. Quality 2. Delivery Claim % before usage FY08 FY11 FY15 FY17 Breakdown hours FY08 FY11 FY15 FY17 96% Reduction in product claims (before first use) 85% Reduction in plant breakdown hours 3. Safety 4. Morale FY08 FY11 FY15 FY16 November 8, 2017 No. of accidents Unpaid absence FY08 FY11 FY15 FY17 95% Reduction in Accidents 66% Reduction in Unpaid Absence

21 Overall Effects: Customer No. 1 in J. D. Power Survey (2017) in Passenger car segment No. 1 across all parameters Appearance Durability Ride Traction Handling 21 November 8, 2017

22 Nos. Per Year Overall Effects: People No. of Improvement Projects Closed (Per Year) GOOD No. of QIPs QIPs scoring more than FY12 FY13 FY14 FY15 FY16 FY17 0 Happier people and higher people involvement in improvement activities 22 November 8, 2017

23 Overall Effects: Financial PBT (Rs. Bn) 16.4% CAGR Industry wide profit reduction Share price movement versus competition 23 November 8, 2017

24 Key Intangible Effects Strong relations with OEMs and Suppliers Improved problem solving capability Higher Brand Recall Happy and proud employees Better team work and collaboration Long term orientation in Capacity Planning, Technology & Product roadmap 24 November 8, 2017

25 Recipient of Deming Prize in st Tyre company outside Japan to win Deming Prize 25 November 8, 2017

26 What we learnt 1. Take a leap of faith 2. Pilot and customize 3. Constancy of purpose 4. Primary focus of business is quality and not quantity 5. Focus on means and not end 6. Do the right things (strategy). And do them in the right way (TQM). 7. Develop a culture of Gemba 26 November 8, 2017

27 THANK YOU SCHEDULE A Making Mobility Safer & Smarter. Everyday