Document7

IJESS Volume2, Issue3 ISSN: 2249- 9482

International Journal of Engineering and Social Science www.gjmr.org 92

TQM WITH SPECIAL REFERENCE TO INDIAN WORLD CLASS

CORPORATIONS: RELIANCE AND TATA MOTORS

Anju Bala*

ABSTRACT

Every nation has its own independent historical and cultural background. The quality

scenario, therefore, differs from some national setting to the other. The nations are orienting

their quality management strategies and systems to meet the requirements of the operating

environment though the primary focus remains the same, that is, Total Customer Satisfaction.

Many of the present techniques of quality management were developed in Japan. However,

U.S.A., European nations and developing nations have also contributed significantly to this

development.

Purpose: The main objective of the present study is to examine and appraise TQM

programmers of Reliance and Tata Motors. These enterprises are ideal private sector

enterprises.

Design/methodology/approach – A questionnaire survey was developed and distributed to a

sample of firms selected from the motor vehicle parts and accessories industry.

Keywords: TQM (Total Quality Management), Performance Evaluation. Organizational

Characteristics, RIL, Tata Motor.



INTRODUCTION

In today’s global competition and economic liberalization, quality has become one of the

important factors for achieving competitive advantage. A good quality product or service

enables an organization to add and retain customers. Poor quality leads to discontented

customers, so the costs of poor quality are not just those of immediate waste or rectification

but also the loss of future sales. Technological innovations have diffused geographical

boundaries resulting in more informed customers. The business environment has become

increasingly complex and the marketplace has changed from local to global. Constant

pressure is applied on the management to improve competitiveness by lowering operating

cost and improving logistic. Customers are becoming increasingly aware of rising standards,

having access to wide range of products and services to choose from. There is an ever-

increasing demand for quality product and/or services and this global revolution had forced

organizations to invest substantial resources in adopting.

In the globalised economy there is great emphasis on quality both for product and services.

This emphasis has generated a new concept known as TOTAL QUALITY MANAGEMENT.

The concept of total quality management which originated in Japan, has spread throughout

the world and has attracted the attention of Indian corporate sector only recently because of

globalization of economy, increased competition and greater expectation of discerning

customers.

Fiegenbaum has defined TQM as:

“Total composite of product and services characteristics of marketing, engineering,

manufacturing and maintenance through which the product and service in use will meet the

expectation of the customer.”

Indian Statistical Institute has defined TQM as follow:

“TQM is an integrated organizational approach in delighting customer (both internal and

external) by meeting their expectations on continuous basis through everyone involved with

the organization working on continuous improvement in all products, services, and processes

along with proper problem-solving methodology.”

Confederation of Indian Industry (CII) has defined TQM as:

“Meeting the requirement of internal and external customers consistently by continuous

improvement in the quality of work of all the employees.”

In addition, the American Federal Office of Management (cited in Morgan & Migratory,

1997) defines TQM as …a total organizational approach for meeting customer needs and



expectations that involves all managers and employees in using quantitative methods to

improve continuously the organization’s processes, products, and services. (p. 7)

According to the latter definition TQM is not merely a technical system. In fact, TQM is

associated with the organization itself, which is also a social system. Pike and Barnes (1996)

argue that organizations are not only technical systems, but also human systems. In addition,

Oakland (1993) states that TQM is an attempt to improve the whole organization’s

competitiveness, effectiveness, and structure For Dale (1999),

From the above definitions, we can identify two important aspects that comprise TQM:

management tools and techniques as well as management concepts and principles. The

Techniques refer to what has been referred to as the “hard” aspects of TQM, while the

principles refer to the “soft” side.

The “Hard” Side of TQM

Deming (1986) has stated that “in God we trust - all others must use data.” This statement

emphasizes the importance of management techniques, tools, and systems that compose the

“hard” side of TQM. Using the definition given by Goetsch and Davis (1994) management

tools are means of “collecting and displaying information in ways to help the human brain

grasp thoughts and ideas that, when applied to physical processes, cause the processes to

yield better results” (p. 382). The quality management literature provides a wide range of

quality management tools, techniques, and systems. Some of them are quite simple, while

others are more complex. Table 1 shows the “hard” aspects of TQM most commonly found in

Quality Management Literature. 43 The Qualitative Report March 2007

CONCEPT OF TQM GURU:-

A TQM Guru is an expert thinker who communicates his thought through verbal and written

expression and thus contributes to the field of TQM. Starting just after World War-II a

number of philosophers and thinkers have made their contribution to the movement of “Total

Quality Management”. In this summer of 1985, the name “Total Quality Management was

first suggested by Nancy Warren, a behavioral Scientist in US Navy according to Marry

Walton (1990). Therefore after a number of TQM Guru’s have made their significant

contributions.

Many TQM Guru’s are Americans and very few of them have their origin in Japan.

There are some junior TQM gurus of Indian origin who have also done some laudable work

on TQM. They are: - S.M.Sundara Raju, M.K.Raju, S.V.S Raghavan, M.R.Naidu,

Dr.D.D.Sharma, P.N.Arumugham, H.B.Linganna and S.Ahuja and also D.V.Kapur.



Quality Gurus

To fully understand the TQM movement, we need to look at the philosophies of notable

Individuals who have shaped the evolution of TQM. Their philosophies and

Teachings have contributed to our knowledge and understanding of quality today. Their

individual contribution is as:-

Walter A. Shewhart –Contributed to understanding of process variab

–Developed concept of statistical control charts.

W. Edwards Deming –Stressed management’s responsibility for quality.

–Developed “14 Points” to guide company’s quality

Improvement.

Joseph M. Juran –Defined quality as “fitness for use.”

–Developed concept of cost of quality.

Armand V. Feigenbaum –Introduced concept of total quality control.

Philip B. Crosby _ Coined phrase “quality is free.”

–Introduced concept of zero defects.

Kaoru Ishikawa –Developed cause-and-effect diagrams.

–Identified concept of “internal customer.”

Genichi Taguchi –Focused on product design quality.

–Developed Taguchi loss function.

Research Objective and Methodology:-

The main objective of the present study is to examine and appraise TQM programmes of

Reliance and Tata Motors. The organizations selected Reliance and Tata Motors pertain to

private sector but they are major business units with myriad activities.

Hence case study of these two Indian Private Sector companies would act like beacon light

for other private sector enterprises endeavoring to go global. The major thrust area of the

study will be the role and work done by world class TQM gurus and TQM and management

relationship, QCs, JIT, Teamwork for quality, TEI, Bench-marking, Quality system standard.

Some of the other objectives of the present study are:

o To study the organizational, managerial and product profile of Reliance and Tata

Motors and also the performance of these organizations in different areas.

o To study basics of total quality, TQM, TQM thinkers and thoughts and cost of

qualities and Kaizen continuous improvement.

Methodology:



The study is both descriptive as well as applied. The researcher would make intensive and

extensive study of standard current literature on TQM for conceptual and philosophical part

of the study. The hypothesis would be tested with the help of qualitative statement and

quantitative techniques. Statistical tool would also form part of the testing of the hypotheses.

The primary data would be collected with the help of questionnaires, interview and

discussion techniques. The secondary data are collected from company‘s record, annual

report, news-letters, websites and newspapers editorial comments.

1.1 UNDERSTANDING TOTAL QUALITY MANAGEMENT (TQM)

Total Quality Management has many definitions. Gurus of the total quality management

discipline like Deming, Juran, Crosby, Ishikawa and Feigenbaum defined the concept in

different ways but still the essence and spirit remained the same. According to Deming,

quality is a continuous quality improvement process towards predictable degree of uniformity

and dependability. Deming also identified 14 principles of quality management to improve

productivity and performance of the organization. Juran defined quality as “fitness for use.”

According to him, every person in the organization must be involved in the effort to make

products or services that are fit for use. Crosby defines quality as conformance to

requirements. His focus has been on zero defects and doing it right the first time. Ishikawa

also emphasized importance of total quality control to improve organizational performance.

According to him quality does not only mean the quality of product, but also of after sales

service, quality of management, the company itself and the human life. Feigenbaum defined

total quality as a continuous work processes, starting with customer requirements and ending

with customer’s satisfaction.

Definitions of quality have changed with the passage of time with changing customer’s needs

and requirements. But the essence has more or less been to develop an approach to problem

solving, conformation to standards for customer satisfaction. With management functions

getting complex, approaches to managing quality in functional areas are becoming difficult.

Organizations, which have successfully use TQM principles, have customer and quality

embedded in their corporate strategy.

ISO defines TQM as: “TQM is a management

Approach of an organization, centered on quality, based on the participation of all its

members and aiming at long-term success through customer satisfaction, and benefits to all

members of the organization and to society.” Total Quality Management (TQM) is a

management strategy aimed at embedding awareness of quality in all organizational



processes. TQM has been widely used in manufacturing, education, government, and service

industries, as well as NASA space and science programs.

The Four Pillars of TQM

The role of top management in implementation of total quality is crucial and its input on

people far-reaching. TQM, therefore, should be understood as management of the system

through systems thinking, which means understanding all the elements in the company and

putting them to work together towards the common goal. The TQMEX Model advocates an

integrated approach in order to support the transition to systems management which is an

ongoing Process of continuous improvement that begins when the company commits itself to

managing by quality. The Model illuminates the elements that form a base to the

understanding of TQM philosophy and implementation of the process company-wide.

The Structure of TQMEX:



ELEMENTS OF A TOTAL QUALITY MANAGEMENT PROGRAM

The following elements are essential in any successful quality management program:

1. Management commitment to total quality management.

2. Training in simple statistical techniques, the nature of samples, collecting data, variation

and the program to be implemented.

3. Organization structure emphasizing work group authority and accountability for results.

4. Statistical process Control (SPC) system to monitor and control process variable

variation.

5. Formal performance reports based on output from the SPC system.

6. Systemized team approach to problem solving.

7. Continuing emphasis on reducing variation in the product process.

REVIEW OF LITERATURE

Certain Research Studies on TQM in India and abroad have been undertaken by various

scholars J.M.Juran, Chairman Emeritus, Juran Institute is the pioneer quality guru and has

contributed a lot to the management of TQM. His Quality Control Handbook (1951) gave 14

points quality mantras. Philip B. Crosby (1972) did lot of research work on TQM. Armand

V. Feigenbaum (1991) contributed much toward total Quality control. Kaoru Ishikawa of

Japan (1975) contributed toward development of QCs. Genichi Taquchi worked as Director

of Japanese Academy Of Quality between 1978-82. Shigeo Shingo (1985) pioneered the area

of Zero Quality Control. W G Ouchi gave “Theory Z” and researched the impact of Japanese

management philosophy on American Businesses.

Certain Quality gurus like-S.M. Sundara Raju (1995), UNIDO Expert and Advisor Quality

Technology and Management, contributed toward TQM improvement programmes.Dr.



D.D.Sharma (2000) wrote a master- piece work “TQM-Principles, Implementation and

cases”. The result drawn would be beneficial for adaptation of TQM programmes.

BACKDROP OF ORGANISATIONS SELECTED

Profile of Tata Motor:-

Tata Motors Limited is India’s largest automobile company, with consolidated revenues of

Rs.1,23,133 crores (USD 27 billion) in 2010-11. It is the leader in commercial vehicles in

each segment, and among the top three in passenger vehicles with winning products in the

compact, midsize car and utility vehicle segments. The Company is the world's fourth largest

truck manufacturer, and the world's third largest bus manufacturer. The Company's over

25,000 employees are guided by the vision to be "best in the manner in which we operate,

best in the products we deliver, and best in our value system and ethics."

Established in 1945, Tata Motors' presence indeed cuts across the length and breadth of India.

Over 5.9 million Tata vehicles ply on Indian roads, since the first rolled out in 1954. The

Company's manufacturing base in India is spread across Jamshedpur (Jharkhand), Pune

(Maharashtra), Luck now (Uttar Pradesh), Pantnagar (Uttarakhand), Sanand (Gujarat) and

Dharwad (Karnataka). Following a strategic alliance with Fiat in 2005, it has set up an

industrial joint venture with Fiat Group Automobiles at Ranjangaon (Maharashtra) to produce

both Fiat and Tata cars and Fiat powertrains. The Company's dealership, sales, services and

spare parts network comprises over 3500 touch points; Tata Motors also distributes and

markets Fiat branded cars in India.

Tata Motors, the first Company from India's engineering sector to be listed in the New York

Stock Exchange (September 2004), has also emerged as an international automobile

company. Through subsidiaries and associate companies, Tata Motors has operations in the

UK, South Korea, Thailand and Spain. Among them is Jaguar Land Rover, a business

comprising the two iconic British brands that was acquired in 2008. In 2004, it acquired the

Daewoo Commercial Vehicles Company, South Korea's second largest truck maker. The

rechristened Tata Daewoo Commercial Vehicles Company has launched several new

products in the Korean market, while also exporting these products to several international

markets. Today two-thirds of heavy commercial vehicle exports out of South Korea are from

Tata Daewoo. In 2005, Tata Motors acquired a 21% stake in Hispano Carrocera, a reputed

Spanish bus and coach manufacturer, and subsequently the remaining stake in 2009.

Hispano's presence is being expanded in other markets. In 2006, Tata Motors formed a joint

venture with the Brazil-based Marco polo, a global leader in body-building for buses and

coaches to manufacture fully-built buses and coaches for India and select international



markets. In 2006, Tata Motors entered into joint venture with Thonburi Automotive

Assembly Plant Company of Thailand to manufacture and market the Company's pickup

vehicles in Thailand. The new plant of Tata Motors (Thailand) has begun production of the

Xenon pickup truck, with the Xenon having been launched in Thailand in 2008.

Tata Motors is also expanding its international footprint, established through exports since

1961. The Company's commercial and passenger vehicles are already being marketed in

several countries in Europe, Africa, the Middle East, South East Asia, South Asia and South

America. It has franchisee/joint venture assembly operations in Kenya, Bangladesh, Ukraine,

Russia, Senegal and South Africa.

The foundation of the Company's growth over the last 50 years is a deep understanding of

economic stimuli and customer needs, and the ability to translate them into customer-desired

offerings through leading edge R&D. With over 4,500 engineers and scientists, the

Company's Engineering Research Centre, established in 1966, has enabled pioneering

technologies and products. The Company today has R&D centers in Pune, Jamshedpur, Luck

now, Dharwad in India, and in South Korea, Spain, and the UK. It was Tata Motors, which

developed the first indigenously developed Light Commercial Vehicle, India's first Sports

Utility Vehicle and, in 1998, the Tata Indica, India's first fully indigenous passenger car.

Within two years of launch, Tata Indica became India's largest selling car in its segment. In

2005, Tata Motors created a new segment by launching the Tata Ace, India's first

indigenously developed mini-truck.

In January 2008, Tata Motors unveiled its People's Car, the Tata Nano, which India and the

world have been looking forward to. The Tata Nano has been subsequently launched, as

planned, in India in March 2009. A development, which signifies a first for the global

automobile industry, the Nano brings the comfort and safety of a car within the reach of

thousands of families. The standard version has been priced at Rs.100,000 (excluding VAT

and transportation cost).

Designed with a family in mind, it has a roomy passenger compartment with generous leg

space and head room. It can comfortably seat four persons. Its mono-volume design will set a

new benchmark among small cars. Its safety performance exceeds regulatory requirements in

India. Its tailpipe emission performance too exceeds regulatory requirements. In terms of

overall pollutants, it has a lower pollution level than two-wheelers being manufactured in

India today. The lean design strategy has helped minimize weight, which helps maximize

performance per unit of energy consumed and delivers high fuel efficiency. The high fuel



efficiency also ensures that the car has low carbon dioxide emissions, thereby providing the

twin benefits of an affordable transportation solution with a low carbon footprint.

In May 2009, Tata Motors introduced ushered in a new era in the Indian automobile industry,

in keeping with its pioneering tradition, by unveiling its new range of world standard trucks

called Prima. In their power, speed, carrying capacity, operating economy and trims, they will

introduce new benchmarks in India and match the best in the world in performance at a lower

life-cycle cost.

Tata Motors is equally focused on environment-friendly technologies in emissions and

alternative fuels. It has developed electric and hybrid vehicles both for personal and public

transportation. It has also been implementing several environment-friendly technologies in

manufacturing processes, significantly enhancing resource conservation.

Through its subsidiaries, the Company is engaged in engineering and automotive solutions,

construction equipment manufacturing, automotive vehicle components manufacturing and

supply chain activities, machine tools and factory automation solutions, high-precision

tooling and plastic and electronic components for automotive and computer applications, and

automotive retailing and service operations.

Tata Motors is committed to improving the quality of life of communities by working on four

thrust areas – employability, education, health and environment. The activities touch the lives

of more than a million citizens. The Company's support on education and employability is

focused on youth and women. They range from schools to technical education institutes to

actual facilitation of income generation. In health, our intervention is in both preventive and

curative healthcare. The goal of environment protection is achieved through tree plantation,

conserving water and creating new water bodies and, last but not the least, by introducing

appropriate technologies in our vehicles and operations for constantly enhancing environment

care.

With the foundation of its rich heritage, Tata Motors today is etching a refulgent future.

Reliance Industries Limited (RIL)

(BSE: 500325, NSE: RELIANCE, LSE: RIGD) is the largest private sector conglomerate

company headquartered at Mumbai, India. The company is largest by annual turnover of

US$58.5 billion and market capitalization of US$78.2 billion for the fiscal year ending in

March 2011 making it one of the largest India's private sector companies, being ranked at

264th position in the Fortune Global 500 (2009) and at the 126th position in the Forbes

Global 2000 list (2010).



Reliance was founded by the Indian industrialist Dhirubhai Ambani in 1966. Ambani has

been a pioneer in introducing financial instruments like fully convertible debentures to the

Indian stock markets. Ambani was one of the first entrepreneurs to draw retail investors to the

stock markets. Critics allege that the rise of Reliance Industries to the top slot in terms of

market capitalization is largely due to Dhirubhai's ability to manipulate the levers of a

controlled economy to his advantage.

Though the company's petrochemicals, refining, and oil and gas-related operations form the

core of its business, however, other segment of the company includes textile, retail business,

telecommunications and special economic zone (SEZ) development. After severe differences

between the founder's two sons, Mukesh Ambani and Anil Ambani, the group was divided

between them in 2006. In September 2008, Reliance Industries was the only Indian firm

featured in the Forbes's list of "world's 100 most respected companies. In 2010, it stood at

13th position in the Platts Top 250 Global Energy Company Rankings

According to the company website "1 out of every 4 investors in India is a Reliance

shareholder." Reliance has more than 3 million shareholders, making it one of the world's

most widely held stocks. Reliance Industries Ltd, subsequent to its split in January 2006 has

continued to grow. Reliance companies have been among the best performing in the Indian

stock market.

On the 1st of July, 2011, Reliance Industries Ltd. fell 4% after the Press Trust of India

reported that a federal probe agency (CBI had registered a case against V.K. Sibal, a former

Director General of Hydrocarbons, for allegedly favoring "leading private players and

foreign consultants involved in oil and gas explorations." Although the agency didn't name

any private-sector companies, dealers said that Reliance dropped sharply because of concerns

that the company could be one of those allegedly involved.

PRODUCT:

Reliance Industries Limited has a wide range of products from petroleum products,

petrochemicals, to garments (under the brand name of Vimal), Reliance Retail has entered

into the fresh foods market as Reliance Fresh and launched a non-veg chain called Delight

Reliance Retail and NOVA Chemicals have signed a letter of intent to make energy-efficient

structures.

Major subsidiaries and associate

Reliance Life Science is a research-driven, biotechnology-led, life sciences organization that

participates in medical, plant and industrial biotechnology opportunities. Specifically, these

relate to Biopharmaceuticals, Pharmaceuticals, Clinical Research Services, Regenerative

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review corporate governess benchmarking organizational Re-engineering, quality circles,

continuous improvement PDCA cycle etc. Indian organizations facing a challenge from the

inflow of MNCs since the Government f India has implemented the polices liberalization,

privatization and globalization. In the light of this, they are in the dire need of new ideas,

approaches and techniques for attaining a competitive edge. Many Indian organizations have

started realizing the importance of Total quality management and new quality system

improvement standards. More and more organizations in Indian Corporate world are striving

to obtain ISO 9000 accreditation and several of them have already got these. They have

realized that continuous improvement is the key to excellence. Taking into consideration all

the above facts, the researcher has selected major private sector companies per excellence in

TQM movement. The researcher hopes that Indian companies both in private and public

sector would learn lesson from these companies and would make full attempts. To realize the

benefits of TQM in the changing industrial and economic scenario of India.

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(14) Raju Sundara, S.M.: Total Quality Management, Tata McGraw Hill

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Websites:

www.hindustaneconomy.com

www.ril.com

www.tatamotors.com

Journals

Paradigm-IMT Journal Quarterly

Vikalpa-Journal of IIM, Ahmadabad

Faculty of Management Journals, D.U.

Documents

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