Deming is the new CMM

Chennai shows the way for India’s manufacturing sector

The Washington Post’s Sebastian Mallaby projects Chennai (together with China, Mexico and Thailand) as the next big threat for America’s car industry. Mallaby echoes Reuben Abraham’s point that despite shoddy infrastructure, the process of economic reform has led to the emergence of some globally competitive firms.

But the main force behind the next globalization wave comes from something different. Until the reforms of the 1990s, India had good engineers but lousy manufacturing because high tariff walls made its firms complacent. But the opening of India’s economy has forced its manufacturers to reinvent themselves.

Chennai’s auto-components firms have done this almost manically. Ten years ago, their brakes and valves were crummy enough to scare away the international car majors that considered manufacturing in India. Today, you can’t spend an hour with any of the components firms without hearing about the international quality certifications they’ve amassed; the Deming Prize, awarded for manufacturing excellence by a Japanese committee, has acquired talismanic status. Much as Chennai’s government leaders look to China, the city’s business leaders pepper their conversation with Japanese management lingo.

The results are dramatic. The TVS Group, the largest of India’s auto-components firms, now exports around a third of its output — proof that it meets international standards. The rival Rane Group reports that it has reduced defects from 10,000 parts per million to 250 and that 28 percent of its engine valves are now exported. One of the TVS companies, Sundram Fasteners, has won a General Motors “Supplier of the Year” award five times, and it supplies 100 percent of GM’s radiator caps. [WP]

Chief Minister Jayalalithaa’s leadership comes in for praise too.

Although her Bollywood career was based on eye-fluttering and dance, (Jayalalithaa) makes California’s governator look like, well, a girlie man. [WP]

9 thoughts on “Deming is the new CMM”

  1. Jayalalitha in Bollywood ?
    Isn’t it incorrect ?

    By the way she inspires much more confidence than Dharam Singh.
    But I don’t think that even if DMK comes to power things will be much different.


  2. While Chennai’s surly is becoming India’s Detriot, I think the export story is oversold. The components are small items and value is low. India auto components exporters have long way to go before making large and high value auto components for export. I do agree that one has to start somewhere.

  3. In the longer run, i think chennai will race well ahead of other urban centers in india, especially in areas of engineering services and manufacturing. in terms of law and order/peace, chennai has far better record compared to major indian cities thus providing a conducive atmosphere for business in general. recent bad weather – tsunami, rains – notwithstanding.

  4. Varun , yes…100% correct, in spite of a volatile [be it] political atmosphere or natural calamities, Chennai has come a long way. Today TVS and Rane are known names around the auto-world, and the info about certification is 100% true, Today Indian companies are more geared towards international standards, this is a good sign and the right path, it is matter of time, supplying something as small as a radiator cap to Honda, Hyundai, Toyota, BMW or GM has serious benefits in the long run. Another plus point we have is – Indian auto industry can survive by selling just in India. [China can do the same] Even US does not have this capacity. Chennai is also a role model to Indian software industry. This is never known or published. Even before IT boom companies like TCS, CITICrop were flourishing well from Chennai. [being a chennai native, I have the right to feel proud at least now right!:)]

  5. Varun and Sriks:
    Problem with Chennai as I see it is the overzealous moral police that’s clamped down on nightlife and innocuos entertainment. Chennai’s image in that sense, as a prudish, least-cosmopolitan metro needs a revamp. And we can surely do w/o the recent controversies like that Khushboo episode.
    On a different note, even Bombay couldn’t escaped these ill-advised attempts by govts to enforce morality. Esp in a country that’s soon to become the no.1 AIDs affected in the world, pushing the sex industry below the radar doesn’t help anybody.

    As for TN, Jaya runs the state almost as efficiently as does China’s communist party. At this stage of the state’s economic development, we need such iron leaders, I guess. Later on though, I’d rather go in for a more mellow DMK regime.

  6. Didn’t Jayalalithaa’s party get hammered during the 2004 elections because the electorate didn’t take kindly to some of her reforms? That would dovetail well with what happened in neighboring Karnataka, where a relatively competent technocrat got thrown out and was replaced by a couple of corrupt, self-serving populists (much to the dismay of Bangalore’s IT giants).

  7. How many of our CMs dream big. I mean BIG-BIG-BIG. Even now it isn’t clear if Jaya is doing all this for her vanity or also because of it.

  8. And Deming? He has never been anything more than a nitpicking tally sheet marker. Read Juran on Deming. Others did the work Deming got the name. Taguchi anyone?

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