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BEST PRACTICES TPM INC. For Vikram Cements--the winner of the 1999 IMC National Quality Award--Total Productive Maintenance is not just the path to Total Performance Management, it is also the crucial link between Operational Effectiveness and Strategy. By Nanda Majumdar
Their white-and-grey uniforms, with industrial yellow helmets, bind the 1,636 employees: from CEO C.P. Jajoo to the junior-most packer. And the visual face of TPM is scattered across the complex. From the huge strategically-located boards, displaying TPM-related information, to the charts, updated to the last half-hour, the obsession within the premises is glaringly obvious. This, after all, is India's original TPM Corporation. TPM kills. Its enemies are losses, mistakes, defects, and accidents--all of which it wants to annihilate from your corporation. And, in the hands of the waste-incompatible company, Japanese manufacturing guru Seiichi Nakajima's 20-year-old gospel--advocating proactive, autonomous maintenance by workers, and the leveraging of machines for the greatest possible output at the least possible cost--can unleash havoc on the enemies of productivity. Single-mindedly focused on eliminating everything--breakdowns, changeovers, delays--that prevents machinery from delivering the quality and speed that it was designed for, TPM is a short-cut through the shopfloor to enterprise-wide productivity and profitability (See TPM: The Philosophy Of The Zero, BT, August 7, 1998).
TPM transforms too. At Vikram Cements, it has not only attacked costs and lifted quality, it has unleashed change on an unprecedented scale. Sure, Jajoo--empowered by both Kumar Mangalam Birla, the CEO of the A.V. Birla Group, and his father, the late Aditya Vikram Birla--started his unit's TPM journey just as others have. Using the classic approach of identifying losses and linking them to costs, the plant's battalion of workers initially identified 44 sources of loss across processes. But, in the process, a dramatic cultural metamorphosis has smart-shaped a barely literate, unskilled, and laid-back workforce into a disciplined, motivated, and learning-driven army of performers. Its accomplishments are evident in the classic measures of TPM: Overall Equipment Efficiency (OEE) at the kiln has risen by 44 per cent; kiln breakdown hours have dropped by 90 per cent; quality complaints have been decimated to zero; accidents have been squashed by 99 per cent; and uplift in employee morale is reflected in the 8,500 suggestions implemented through Small Group Activities in 1997-98. The outcome from the CFO's perspective? In the first phase (1991-1995) of TPM, Vikram Cements saved Rs 56 crore, amounting to 12 per cent of the unit's annual turnover in those years. In the second phase, which will continue till 2001, the target is Rs 104 crore. Says Birla, 31: "We have made TPM mandatory for all our companies. To facilitate its adoption, a world-class manufacturing cell has been set up." Adds quality guru Suresh Lulla, 54, CEO, Qimpro Consultants: "Vikram Cements stands apart, driven by its will, vision, and openness to learning." The awards match the adulation:
BT presents a learner's tour of India's best-known TPM Corporation. WHY SHOULD YOUR COMPANY PICK In most cases, it is crisis--not far-sightedness--that breeds the quest for quality. So it was with Vikram Cements. In 1991, as corporate India was transiting to the age of competition, the unit was mired in the classic legacy of a non-competitive environment: excessive machine breakdowns; poor capacity utilisation; and high manufacturing costs. Unlike its rivals, it realised that they could tear apart its ability to compete; ironically, just when it had installed state-of-the-art technology.
In fact, poor usage was only lowering the returns on the investments that had been made in the machinery. And there seemed to be no answers to many of the problems the company faced. Says Jajoo: "We realised that world-class technology alone couldn't produce quality. World-class systems are required to supplement it." Thus began Vikram Cements' search for such a system. And TQM sounded just like what it needed--a customer-focused, waste-reducing, get-it-right-the-first-time approach to work. Only, realised Jajoo, TQM was too abstract a concept for his workforce, who--face it--were restricted in terms of education, skills, and management understanding. What Vikram Cements needed, therefore, was a technique that could draw in its workers by being applicable in their own environment. Jajoo formalised the search by using as the objective the classic six-edged model of PQCDSM: enhancing Productivity and Quality; reducing Costs; improving Delivery performance; improving Safety, hygiene, and environmental conditions; and enhancing employee skill-levels and Morale. And his hunt led him to TPM. Says R. Premkumar, 48, General Manager, Sundram Fasteners, a devout TPM practitioner: "TPM helps bind the workmen to the core of manufacturing." After an exploratory trip to Tokyo in 1991 to attend the World TPM Congress, and examining Japanese factories pursuing the concept, Jajoo persuaded the late Aditya Birla--then Grasim's CEO--and his top management team to roll out TPM. Says Jajoo: "We were keen on pursuing a more tangible, preferably hardware-oriented, route to evoke a cultural transformation. TPM is equipment-centred, which brings the worker centre-stage from the word go." HOW SHOULD YOU ALIGN YOUR COMPANY The prospect of a major change will always seem daunting. "But, once a leader is convinced of its merits, it is wiser to carry the whole organisation into the change-process instead of doing it tentatively in only some parts," says Sanjay Agarwal, 35, Deputy General Manager (Change Management), Vikram Cements.
As with any other company trying to introduce an initiative that was likely to be received inimically by the workforce, Vikram Cements too had to tread tactically. After all, workers were certain to interpret the technique as a subversive means to increase their workload, or downsize their ranks, or both. And that would be detrimental not just to the company's operations, but also to its change-management strategy. So, Jajoo and his TPM-tacticians set in place a process that would not only overcome potential resistance, but also compel the workers to personally champion the change they were trying to introduce. The solution, they determined, was not to pussyfoot with the new tool, surreptitiously installing it in watertight compartments. But to launch a broadside with it on the entire shopfloor, taking in everyone and everything. The logic: the sheer scale of the transformation would convince everyone that there were no hidden agendas at work. The first step: building conviction. To begin with, Jajoo set up a core team, comprising both top managers and worker-representatives. He despatched 2 senior managers to Japan to attend a course for TPM instructors there. Simultaneously, he looked for consultants who had worked with the JIPM, and hired them to train the members of the core team in teaching the tenets of TPM. Critically, his brief to the future trainers was to not just learn the intricacies of the technique, but to teach themselves how to conduct enterprise-wide promotions for the philosophy. Even as the theoretical and practical frameworks of TPM were absorbed by Vikram Cements' people, the core team unleashed a series of mass meetings and classroom lectures, and furiously circulated reading materials, and put up paintings, banners, and hoardings, thus converting the unit and its employees into a seething mass of believers.
At the same time, Vikram Cements drew up its master-plan for building a TPM organisation, setting itself a 3-year time-frame to complete the transition. The plan was configured around 8 pillars: Continuous improvement; Autonomous maintenance; Planned maintenance; Quality maintenance; Material planning design and initial equipment control; Education and training; Office TPM; and Safety, hygiene, and environmental control. Nor did the TPM team stop at preparing the organisation for change; it also took care to set up the superstructure to sustain the move. At the base, the employees in the 3 lines, as well as those in the support functions, were organised into small, self-directed, multi-functional, overlapping autonomous teams called Grassroot Circles. A second circle, at a higher level, comprised the leaders of each of the 37 Grassroots Circles. On the third rung was situated a TPM Promotion Committee, consisting of the functional heads of the organisation, whose responsibility it was to take strategic policy decisions. In a parallel configuration, 8 sub-committees--one for each of the 8 pillars--were created, with each having the responsibility for setting the goals that the Grassroot Circles would have to implement in that area. Explains S. Kumar, 50, Senior Vice-President (Technical), Vikram Cements: "A sub-committee acts as motivator, guide, and consultant on that particular pillar. It is instrumental in creating a well of knowledge and expertise, which then flows across the plant." Further up, a TPM Steering Committee, comprising the heads of these sub-committees, was created to ensure effective implementation of action-plans. And right at the top, the TPM Secretariat carried out daily site-inspections, audits, and training. Says Vikram Cements' Agarwal: "The preparations took us a year." WHERE SHOULD YOUR COMPANY START IMPLEMENTING TPM? It is never difficult to generate results through TPM. In fact, the worse the state of affairs--and the lower, as a result, the OEE--the more sharply do the improvements from TPM show. The problem, however, is in translating these results into figures that matter to the bottomline. A second reason for picking the correct targets for unleashing TPM, according to T.R. Natarajan, 46, Founding Partner, Win Management Consultants: "Improvement-oriented change-exercises often fail because companies get extreme, either trying to do everything at one go without systems and learning, or relegating the effort to a small department or team." Working on this principle, Jajoo decided to link the focus of his TPM roll-out to the unit's financial performance. So, Vikram Cements identified the areas where it was incurring heavy losses. Then, applying the analytical tools of quality that try to link problems to their root causes, the TPM team shortlisted 7 specific contributors: Breakdowns, Equipment failure, Process, Power, Plant maintenance, Electrical energy, and Heat energy. These were the targets of the TPM roll-out in Stage One, which began in 1991-92. Then, as they started delivering cost- and quality-improvements, Vikram Cements identified 7 new areas of attention for Stage 2: Company-wide loss and cost-reduction, Activity based costing, Focused energy conservation, Product and process innovation, TQM and its integration with TPM, Reliability-based maintenance, and Enhancing human resources value. Crucially, because the whole process was results-driven, clear numerical targets were set. Says S.K. Sinha, 55, Senior Vice-President (Engineering), Birla Copper: "The biggest advantage of TPM is that the targets can be quantified." For instance, when looking at machine performance, the difference between the average and peak outputs was identified as a loss. This enabled the company to work towards minimising downtime with the mindset of attacking losses. Nor are they limited to the shopfloor. A classic example: Vikram Cements has leveraged two pillars to ensure that every file in every office is neatly stacked, labelled, and placed in a pre-determined order. Applying the tenets of TPM, the workers argued that every minute spent hunting for a file amounted to a loss for the company, which could be avoided. Explains Samir Adhikari, 49, General Manager (Technical Cell), Vikram Cements: "Losses are, often, perceptional. We fix detailed benchmarks, look at our status, calculate our losses, and then, set out to manage them." HOW CAN YOUR COMPANY GET THE Top-class TPM-ers can leverage this productivity-maximiser to roll out change across the entire organisation. The logic is flawless: since TPM--don't forget, the T stands for Total--needs a mindset change anyway, its advent offers the perfect opportunity for reengineering everything else in the company too. For TPM to deliver this change, however, it is important for the tools to be wielded all over the organisation--not just on the shopfloor. Says management consultant T.V. Subramanian, 58: "If TPM is pursued to its logical end, which is to make substantive improvement in OEE, it proves to be a potent tool in transformation." Vikram Cements achieved this by using 2 of its 8 pillars--Kaizen and Jishu Hozen--to work up a cultural metamorphosis. Says Jajoo: "What we took was a top-down as well as bottom-up approach." While it generated continuous improvements in machinery maintenance in the hands of the senior management, Kaizen was used for strategic planning and innovation. For, they interpreted Kaizen as the need to create and deploy different plans and processes in a holistic sense--unlike the factory operator, to whom Kaizen is, say, colour-coding his wrenches with different tags to save time. As a result, the changes planned at the top cascaded into improvement-generating efforts down-the-line. At the bottom end, Jishu Hozen contributed to organisational
change through its philosophy of housekeeping, autonomous maintenance--marked by cleaning
and lubrication standards--process inspection checklists, and reduction of equipment
failure. The focus was on piecemeal gains, all of them adding up to larger savings. The
targets were micro-level ones too: for instance, a TPM grassroots circle used Jishu Hozen
as the means to achieve its target of halving the consumption of lubricants. The result:
from 77.25 gm per tonne of cement, Vikram Cements has brought it down to 34 gm per tonne.
Says Agarwal: "Because the changes needed by TPM came from both above and below, no
part of the organisation could stay unaffected." Even as it delivers results at micro-levels, TPM has become a handle for reworking entire processes across Vikram Cements. Since it expanded its capacity by 17 per cent at a time when the industry grew by only 9 per cent, the strategic imperative for lowering costs and maximising returns on existing investments has only deepened. So, no prizes for guessing, TPM is the launch-pad from which Jajoo and his people are blasting off towards these objectives. Says Birla: "For us, TPM is a structured approach to quality, which can be applied holistically to each and every aspect of business. Simply put, it is TQM on a higher plane." Other TPM-converts believe as much. Adds R. Seshashayee, 49, CEO, Ashok Leyland: "We expect considerable value-addition to our TQM program by migrating to TPM." Simultaneously, Vikram Cements is using TPM as the building-block for other management initiatives. Says Jajoo: "As greater learning comes your way, you must internalise it enough to move onto new areas of development. We see TPM as an umbrella-management system, from which we can easily fan out to new thrust areas." Such as corporate strategy. In a commodities business like cement, where strategic differentiation is frequently derived from cost-leadership, TPM can provide a powerful bridge between strategy and operations. Since many industries are built on commodity-manufacturing, TPM can well become corporate India's standard link between strategy and operations. In fact, the linkage with strategy may be essential. Argues G.V. Prabhat, 33, CEO, Satyam Renaissance Consulting: "TPM must be a part of organisational strategy because it has implications for profitability and performance. If it is taken out of context--for instance, if a company pumps up its production capability without redesigning its marketing processes to manage the extra output--it will fail. That's why, given the strategic depth and the operational breadth of the benefits that TPM is cementing, the proponents of TPM for Total Performance Management won't, probably, find a better benchmark than Vikram Cements. Additional reporting by R. Sridharan, Roshni Jayakar & Jaideep Lahiri |
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The time: 7.30 a.m.. As the massive grey, yellow, and biscuit-coloured
columns, frames, and chimneys spring into action at the 3 production lines of the
2.26-million tonnes per annum Vikram Cements plant--one of the three units belonging to
the Rs 20,000-crore A.V. Birla Group's Grasim--in Mandsaur (Madhya Pradesh), a daily
routine unfolds. Huddled in 56.30-metre-wide yellow circles, 8- to 12-member TPM (a.k.a.
Total Productive Maintenance) grassroot teams are busy planning their day. 
