Continuous Quality Improvement (CQI): The Indian Experience

Commencing 1992, CQI has established roots in major large companies in India.  However, the rate of improvement ranges between 20 and 100 completed cross-functional projects, per annum, at each client site.  The major shift is from cost, cost  to customer, customer. Also, apart from manufacturing processes, CQI is being used on non-manufacturing processes.

Introduction
Over the past five years, the Indian economic environment has experienced considerable change.  Most of the changes, introduced by the former Prime Minister, Narasimha Rao and his Finance Minister, Dr Manmohan Singh, are clearly irreversible.  The changes are consistent with the vision of Rajiv Gandhi in 1987.  In the process, several industry leaders have come to recognize some critical factors:

• Competition - The birth of competition has killed pent-up demands for shoddy offerings
• Cost reduction - A cost-push strategy is no longer practical
• Customer needs - Purchase decisions are now influenced by product features, field failure rates, delivery schedules and price
• Customer wants - Satellite television  has spiralled the "want" levels in both urban and rural India
• Culture shift - Traditional management assumptions are challenged.

In 1984, Dr Joseph M Juran found many factors common to larger manufacturing companies engaged in quality improvement at a revolutionary rate. Chief among these were:

• The improvement projects addressed chronic problems
• The projects yielded high returns on modest or no investments
• The returns resulted from training and investment in a systematic process analysis
• The initial projects simultaneously improved quality and reduced costs
• The subsequent projects addressed changing customer needs
• Currently, projects are based on identified benchmarks, to be positioned as best-in-class.

We at Qimpro, are guided by these conclusions.  With survival at stake, Indian companies have realized that cost reduction is a natural by-product of quality improvement.  However, they also realize that long term survival depends on market share, which is a by-product of customer satisfaction.

Role of Quality Council
Establishing a quality council is a logical first step when an organization launches a quality improvement initiative. The quality council meets monthly and is generally responsible for keeping the quality improvement process on track, evaluating progress and making mid-course corrections to improve the effectiveness of the entire process.  All our client quality councils initially focus on internalizing CQI.  A typical quality council structure at our client sites is as follows:

Chair: Chairman or Managing Director
Secretary: CQI Co-ordinator
Members: All functional heads
All profit-centre heads.

The size of a quality council is usually 10 to 12 members.  Culturally, our quality councils experience several teething problems.  Examples abound in regard to attendance, starting/ending at the right time, following the agenda, dominant/silent members, side conversations and so on.  There is marginal buy-in for the CQI strategy.  At Mukand, a steel manufacturer, the Managing Director, Rajesh Shah, who was chairperson for the quality council, made it a point to be present five minutes before the start of the meeting.  The other members believed his actions.  He also served as the time keeper.  At Punjab Tractors, the Vice Chairman and Managing Director, Chandra Mohan, took charge by training his council members on facilitation skills and the CQI methodology.  In fact, during a workers strike, he productively invested his time training all managers on the CQI methodology.  Both companies have a well accented CQI culture.

Some of the quality council’s key roles include:

• Setting quality goals - Top management identifies opportunities and needs to improve quality and sets strategic goals for the organization. While most companies adopt CQI as a business strategy owing to factors such as, cost pressures and customer dissatisfaction, few have identified world-class quality as the driver.  The quality goals set by the former are influenced by the costs of poor quality. Starting with Tata Steel and onto Jindal Strips, Nippon Denro, this can be confirmed for the steel industry.  The same holds for textiles, be it Bombay Dyeing, Mafatlal Industries or Morarjee Goculdas Mills. Those companies that have a vision to become world-class players in the next few years, establish quality goals around critical success factors such as: customer satisfaction, cycle time, on-time delivery, cost, employee retention and so on. The few examples in this category are Crompton Greaves, a manufacturer of electrical machinery and appliances, and the Taj group of hotels.
• Identifying projects  - The quality council selects those major quality improvement projects critical to meeting quality goals. The initial projects are invariably selected from a product manufacturing/operations environment.  Few have included others.  A noteworthy example is from Mahindra and Mahindra (Tractor Division), where a pilot project included "improving the quality of bought-out component drawings".  At Voltas, a manufacturer of engineering goods and appliances, a pilot project focused on "reducing energy consumed by technical services".
• Selecting teams  - Once a project has been identified, the quality council appoints a team to see the project through the remaining steps of the quality improvement process. In their initial enthusiasm, some champions volunteer for involvement in more than one project,  concurrently.  Only to discover that each project demands at least 10 per cent of the team members time, over 30 weeks or thereabout. A benchmark for the team selection process is the Prince Aly Khan Hospital in Mumbai.
• Supporting project teams  - New techniques and processes are generally required to make significant improvements.  It is up to the quality council to see that quality improvement teams are well-prepared and equipped to carry out their mission.  The quality council’s support may include: providing education and training in quality tools and techniques; providing a trained facilitator to help the team work efficiently and learn the quality improvement process; reviewing team progress; approving revision of the project mission; identifying/helping with any problems; co-ordinating related quality improvement projects; helping with logistics, such as meeting site; providing expertise in data analysis and/or survey design; furnishing resources for unusually demanding data collection; communicating project results.  The two main problems here are the availability of trained facilitators and the frequency of project reviews by the quality council.  On both these counts the packaging division of Indian Tobacco Company score very well.

Adventure in Improvement
In the interest of objectivity and confidentiality, we at Qimpro analyzed the relevant CQI papers presented at QualTechs and Qimpro Conventions organized by us since 1989.  QualTech is the national symposium on Continuous Quality Improvement and is held in April each year.  The target audience is facilitators, team leaders and team members.  Qimpro Convention is the national symposium on Total Quality Management and is held in October each year.  The target audience is CEOs, quality council members and quality activists.

Commonalities
When we analyzed the projects collectively, they exhibited the following common elements:

• The proof of the need was determined by guesstimates of cost of poor quality.  This was the key motivator for upper managers
• Each problem was long standing.  It was chronic, not of a fire-fighting nature.  However, most problems were initially elephant size
• Invariably, the project mission statement required fine tuning
• In all cases the amounts at stake were substantial, and the results went straight to the bottom line
• The optimal team size appears to be around seven
• Approximately five departments were represented in each team derived from internal suppliers, internal processor and internal customers
• Each team required a facilitator.  Their inputs were more active through the first few sessions; the subsequent sessions were usually on an on-call basis
• All project teams adopted a systematic process for making improvements
• All facilitators and project leaders were required to attend (in fact mandated) the education-cum-action course, Certified Facilitator for Quality Improvement, organized by Qimpro College
• The diagnostic journey was perceived as being long and laborious
• Remedies were generally simple.  Nevertheless, teams experienced a degree of resistance to change
• Return on investment was high, often measured in hundreds of per cent
• All project teams, sooner or later, met their goals.  In some cases, even exceeded their goals
• Where remedies were reversible, teams incorporated the new procedures into the ISO 9000 system
• A common by-product of working on project teams was improved cross-functional communications and human relations.

Experience based Observations
Our consultants audit the progress of project teams on a monthly basis, particularly during the pilot phase which extends between nine and fifteen months.  The following observations are based on these audits and do not necessarily correspond on a one-to-one basis with the projects analyzed in Exhibit 1.  However, they are a useful supplement for updating the "unreported" aspects of a convention paper.

• Conflicting priorities  -  KRAs for individuals do not sufficiently accent quality improvement.  Hence short-supply time and KRAs do the obvious to slow the progress of the project teams
• Overstretched facilitators  -  Few of the clients have full-time facilitators.  Since the choice of facilitators is usually from middle to upper management, they are seldom relieved of their existing managerial responsibilities.  As a result, the frequency of meetings and/or the duration of meetings get impaired
• Managerial resistance  - Upper managers tend to depend on delegation rather than leadership through action.  While in the past this was condoned, over the last year or so, we, through the quality councils, insist that each member work with at least one project team.  The pace of learning is dramatic.
• Meeting discipline diluted  - This is a combination of several factors: no strict control over attendance, study of prescribed material neglected; lack of adherance to meeting agenda
• Too much flow diagramming  - Project teams tend to flowchart beyond the boundaries of their problem. Also, they plunge straight into a detailed flow diagram without constructing a high-level flow diagram
• Unplanned data collection  -  Teams tend to command subordinates to "go fetch the data".  In the absence of planning the data collection exercise, the effort of subordinates could yield data surprises, insufficient to answer the questions one had in mind
• Cloning of remedies stage skipped  - The advantage of cloning is lost, as teams see this as an un-ending project.  Several clients now give each cloning effort the status of a project.  This has had a positive impact on the rate of improvement.

CONCLUSION
The experience in India may appear very tedious and lacking momentum.  But introducing change has its own majestic pace.  In the initial stages - introducing quality in a protected environment was a voluntary effort.  The steel and textile industries responded with enthusiasm.  Subsequently, with liberalization, the customer could differentiate quality and so it was a mandate from the market place.  The industries that were quick to respond were auto ancilliaries, readymade garments, private airlines, banks, hospitals and hotels.

The liability laws in India are not stringent enough to drive quality.  However, changes in this direction are in the air.  Besides, with the entry of multi-nationals and their demands for more features, lower defect-rates, perfect delivery schedules and competitive price, adoption of quality improvement will be the only means to survive - adoption at a revolutionary pace.

Reference List

1. Qimpro Convention Proceedings - 1989, 1990, 1991, 1992, 1993, 1994, 1995, 1996.
2. QualTech Proceedings - 1992, 1993, 1994, 1995, 1996.