Sundram Fasteners' Arathi Krishna: ‘There will still be demand for IC engines till 2040’

Arathi Krishna, Managing Director of Sundram Fasteners is the first woman to receive the Deming Prize. She talks about the steps taken in this TQM journey, the structure of the 17 plants and the road ahead.

Congratulations! You are the first woman to receive the coveted Deming Prize. How do you feel about this recognition?
It is extremely gratifying and exciting to be the first woman to receive this award. The jury has also acknowledged that I am the first woman from India to achieve this. It is always exciting when the recognisation comes from your peers. The audience at the Deming awards comprises people representing the who’s who of quality in the world. For them to compliment us on our achievement was really a proud moment. They have also said that some of the efforts that we are able to put out have been the best seen in any organisation in a shortest period of time, that too for so many plants at one go and inclusive of many technologies.

Once you decided to embark on this TQM journey, what was the first step?
In November 2012, we had decided to start with two of our plants alone. After adopting TQM, the results that we were able to achieve were dramatic.

By March 2013, our team was surprised to see that the rate of defects and scrap had begun to crash and quality standards had gone up considerably. The results were really remarkable, so much so that in only three months I believed the entire organisation must benefit from such best practices. Also, if only two of our plants were working at TQM, the others would take a long time to catch up. I didn’t want to do it sequentially but wanted all our plants to speak the same language and enjoy the same success. By June 2013, we decided the other 15 plants were going to join this journey.

What is the structure at all the 17 plants?
Each plant has profit centre heads and they all have different technologies. We have three divisions: fasteners (4 plants), a metal form division which is cold extrusion and powder metal (4 plants), and the Autolec division’s cold forgings (6 plants). All of them have almost similar customers, which are mostly automotive. This has helped each division to be able to understand the demands of the customer and also helped them to unify.

Having bagged such a prestigious award, what is the road ahead?
I think these TQM practices are in our blood now and there is healthy competition built in the organisation. I think the difficult journey will start now and we are prepared for it. It is not that we have reached the pinnacle; we are working hard for the next five years and more as to what the company needs to do.

Of late, a number of Indian companies, especially in the automotive sector,  have bagged the Deming Prize. How do you view this from the industry's perspective?
I believe everyone should adopt TQM because this is one of the best things to have happened to SFL. TQM has made us extremely disciplined and the impact of these practices has been astonishing. Our total defects — our own, suppliers and of customers — have reduced drastically. Our market share and profits are going up, and warranty costs crashing. The benefits all around have been exceptional and are helping us to come up with first-time-right products. Also, we have ensured human capabilities are enhanced. We have now mandated training for every employee across functions.

I believe the entire Indian industry should embark on this exercise, not for the prize or final result, but for the huge learning and how transformative it is for organisations. I have talked to other winners from India and from other countries and they have shared the same experience.  

What were the challenges you faced when you were facing the Deming test?
There were challenges at a couple of SFL plants where people were overcome with their daily difficulties. Training people was also a challenge and we continue to upgrade the skills of our people. If some of our plants or divisions were unable to execute the plan or were lagging behind, we often sent them to TQM companies in India to understand the processes and methods.

What is your assessment of the domestic automotive market at present?
As you know, the domestic market has slowed down in terms of growth over the past couple of months, especially during the festival season. I think the market will pick up in the last quarter. I remain optimistic about the growth potential of the Indian automotive market over the longer term.

What do you think will be the impact of electric vehicles on suppliers like SFL?
Electric vehicles are certainly happening, there is no doubt about this reality. The question really is how much and how fast? Do we continue to invest in IC-engined technology? Yes, because we feel there will still be demand taking us forward all the way up to 2040.

While it will keep changing slowly, the cost of EVs remains high today and will have to be managed. Perhaps, there could be hydrogen cells which could come and wipe out EVs? I don’t really know but in the world of technology, anything is possible. As regards EVs, industry has yet to find a sustainable solution to dispose the batteries or they could become an even bigger environmental problem. Nonetheless, overall, EV potential is huge. SFL always been quick to respond to market shifts. We always been frontrunners and are constantly working to keep that up and stay ahead of the curve. Our capex has been high over the past three years and we are continuing towards the journey.

Also read: Magnificent 17: All Sundram Fasteners plants bag Deming Prize

(This interview was first published in the December 15, 2018 Anniversary issue of Autocar Professional)