Dr Surinder Kapur, the chairman of Sona Koyo Steering Systems Limited, the passenger car and utility vehicle
Question:
Dr Surinder Kapur, the chairman of Sona Koyo Steering Systems Limited, the passenger car and utility vehicle steering systems and columns manufacturer, looked worried as he pored over the production data.
It was only in November 2003 that Sona Koyo had won the prestigious Deming Prize, awarded by the Union of Japanese Scientists and Engineers (JUSE), widely considered the equivalent of the Nobel for manufacturing companies.
What bothered him was a minuscule increase in plant level rejects. Dr Kapur didn’t want the smooth workflow to be disturbed because Sona Koyo was targeting export revenues of Rs 1 billion through global automobile manufacturers who were looking at India as thei base for sourcing components.
According to Dr Kapur, “After we received the medal, the organization slackened a bit.
This will be true of all companies and each one will find its own ways of tackling the issue.”
The slackening was the signal that the systems and procedures had yet to be assimilated fully within the organization, necessitating a back-to-basics programme even after being awarded the prestigious prize.
The Company
Sona Koyo Steering Systems Limited is located in Gurgaon in the outskirts of Delhi and their factory manufactures steering systems. In June 2004, the owner of this company, Dr Surinder Kapur stepped on to a glittering stage in Tokyo to receive an award from the Chairman of Toyota Corporation. Sona Koyo Systems was awarded the Deming Prize in 2003.
Sona Steering Systems (SSS) limited was established in 1987 in partnership with Maruti Udyog Limited (MUL) and technical collaboration with M/s Koyo Seiko Company, Japan. It started with a team of 25 employees with a business model that invited the customer to become an equity partner with the company. In 1988, the company with 27 employees achieved a turnover of Rs 70 million. Today, the company employs over 1,000 people and has a turnover of Rs 8,273 million.
The company initially was in the business of manufacturing steering systems for all passenger cars and medium utility vehicles made by MUL. Subsequently, M/s Koyo Seiko also participated financially in the company and today it has an equity of 21.5% in Sona. Due to this, the name SSS Limited was changed to Sona Koya Steering Systems Limited (SKSLL).
The company started with a portfolio of three products in 1988. Presently, it has expanded its business of steering manufacturing to include drive line products and components for off-road vehicles. It has a portfolio of 57 products as well as the skills to re-engineer existing products to save costs. It also has a strong clientele base. Sona Koyo’s customers include major vehicle manufactures in India such as Maruti Suzuki, Toyota, Hyundai, Tata Motors, Mahindra & Mahindra, General Motors and Mahindra-Renault. Independently, as well as through its network of overseas joint-venture partners, it exports high-quality precision products to the US, Europe and Japan.
The achievements of Sona Koyo are significant. SKSSL, the flagship company of the Sona Group is currently the largest manufacturer of steering systems for the passenger car and utility vehicle market in India.
It took five years of hard work and a single-minded focus to create quality systems that won it the Deming Prize. Second, Sona Koyo is the first steering system manufacturer in the world to win this award. Most importantly, the prize which was awarded by the Union of Japanese Scientists and Engineers established the company’s bona fide among international automotive majors.
Performance of the Deming Prize Winners
Firms in the auto component sector have made significant advances in quality since 1990.
This would not have been visible but for the ten Deming awards that were given to firms in this sector from 1998 to 2004 (see Exhibit 5.1). This is the highest number of firms from any country across all industries outside Japan to win this award.
Question For Discussion
1. Does winning a quality award lead to competitive advantages for a firm?
2. What were the preparations made by SKSSL for challenging the Deming Prize?
3. Comment on the performance of the winners of the Deming Prize with reference to Exhibit 5.1.
Step by Step Answer:
1 Winning a quality award can lead to competitive advantages for a firm It enhances the firms reputa...View the full answer
