Business Excellence

Spicer Driveshaft, part of the Dana Corporation, is North America's largest independent manufacturer of automotive driveshafts and related components, supplying customers in the United States and around the world. Headquartered in Toledo, Ohio, Spicer Driveshaft has 17 plants and offices in the US. More than two-thirds of its 3300 employees work in five manufacturing and sub-assembly plants.

The company's quality policy- "Dedicated to total quality and continuous improvement"-guides the entire business. Its quality council sits at the pinnacle of Spicer Driveshaft's pyramid-like leadership system, where it is positioned to commit quality policy to organizational practice. Balancing present and future is a top concern of management, as reflected in the company's philosophy that "to have a future we must perform today, but to build a better future we must plan it for today". All of Spicer Driveshaft's senior leaders are involved in a two-phase strategic planning process that sets the company's five-year strategic business goals along with its annual business and performance objectives. Expectations for the coming year are set during the annual Hellweek, a Dana corporation process that results in measurable performance objectives, detailed plans for resource allocation and capital investment, customer-focus strategies and other key elements. As a result of this systematic process, detailed 12-month plans-along with long-range performance goals and resource needs-are developed for each Spicer Driveshaft facility and department.

The organization's business excellence control plan is its chief vehicle for aligning key business drivers, long-term strategies, annual plans and specific performance objectives. At the heart of this plan are 17 measurable business excellence indicators that provide a common focus on quality and convey the relationship between today's performance and the company's target for improvement. For example, indicators for customer satisfaction-one of five key business drivers-are on-time delivery, customer performance ratings, aftermarket order fill and results of the company's comprehensive annual customer survey.

The vertically-integrated measurement system enables data to be aggregated and consolidated for analysis of trends or to be broken out for a fine-grained analysis of operational performance. Considerable effort is devoted to ensuring that Spicer Driveshaft's measurement system corresponds with the company's strategic directions and that the data collected and analyzed are casually connected to performance. A cross-functional team holds quarterly measurement summits to evaluate the system, make adjustments and decide what improvements are needed to respond to current and future business needs.

Aided by an information technology system that supports real-time communication and data exchanges with customers, dedicated teams of sales, engineering, quality and warranty personnel and assigned to each Spicer Driveshaft customer. These customer platform teams are charged with building and maintaining long-term relationships. They are responsible for capturing current customer requirements, anticipating new ones, meeting with customer personnel that install Spicer Driveshaft products, ensuring quick and effective access to key points of contact in the company and tracking complaints and concerns. Most teams hold monthly meetings with their customers to review designs, resolve pending issues and plan future programs.

Employees are encouraged to suggest and implement changes. On average, each employee submits three suggestions for improvement each month. In 1999, almost 80% of these ideas were implemented. Many ideas are advanced during continuous improvement "blitzes" that management encourages at all facilities-for both production and support operations. During blitzes, teams gather to brainstorm, identify opportunities for improvement and then proceed immediately to implement their ideas. At some facilities, blitzes are held as often as every three or four weeks.

Results of the annual, 57-question Quality culture survey and other indicators of employee well-being indicate consistently high levels of employee morale. For example, Spicer Driveshaft's employee turnover rate is below 1%, which is better than the best competitor and the attendance rate has topped 98% for the last six years.

The company's return on net assets has improved to more than 25% in 2000, as compared with less than 20% in 1997.Internal defect rates have decreased over 75% from 1996 to 2000 and are approaching best-in-class levels, while defect rates for key suppliers have decreased to less than one-fifth the level for the best known competitor. From 1998 to 2000, overall customer satisfaction, as measured in a third-party survey, has averaged 80% or better, topping all competitors. Customer complaints have dropped steadily, from 6.8 per million units shipped in 1995 to about 2.8 per million units shipped in 2000 and since 1996 Spicer Driveshaft has not lost a single customer.

Process Excellence

Cummins India ltd(CIL) is a company that designs, develops and manufactures diesel and dual fuel engines and generating sets.CIL is a unit of Cummins Inc.(USA).In the 1980s, Cummins formulated a comprehensive set of procedures with help from Dr Armand Feigenbaum. This was called Total Quality System(TQS).TQS has procedures right from new product development to customer complaint handling. Based on the extent of deployment and results, plants were rated as A,AA,AAA and Total Quality excellence(TQE). Later during the early 90s, Cummins globally initiated the business excellence approach which was internally called "Common Approach for Continuous Improvement(CACI).This was a seven step approach, which started with customers and included comprehensive set of tools and techniques for structured problem solving. A set of performance metrics and measurement system was an integrated part of CACI. It was additionally supported by functional excellence programs in leadership, product development, quality, shop operations, manufacturing, engineering and finance. These programs were focused to improve functional capabilities and performance.

In 1991-92,CIL became the first company to receive the Best among the winners of Rajiv Gandhi National Quality Award for business excellence in India.CIL was one of the first few companies from India, which received ISO9001 certification in 1991.In the year 1998,its service wing won the Rajiv Gandhi National Quality Award for service excellence.

In 2000, Tim Solso, CEO of Cummins Inc. announced launching of Six Sigma Initiative worldwide. Benchmarking GE and Allied Signal. Tim along with his leadership team attended the Six Sigma training. In 2009,with a strong team of 12 master black belts(MBB),34 black belts and 1500 green belts, CIL had completed 248 projects with an annual savings of INR760 million. Apart from the financial savings,35 out of 248 projects were customer led and were being actually led by CIL customers employees. Cummins call these as "Customer Focused Six Sigma"(CFSS). Also, more than 50 projects were "Supplier Focused Six Sigma" projects (SFSS).Six Sigma is considered as a strategic tool with the objectives of reducing defects, developing leadership skills and making a cultural change. The change is from "biases and opinions" to "analysis and data-based decisions".

Customer Satisfaction

Merrill Lynch Credit Corporation(MLCC) offers real estate and securities-based consumer credit products-including home financing, personal credit, investment financing and commercial real-estate financing-to primarily affluent individuals. About 90% of its approximately 830 employees, known as partners are located in MLCCs Jacksonville, FL headquarters.

As part of the business planning process, each July senior managers translate the strategic imperatives into the company's critical few objectives, key performance measures for their CFOs, and specific targets for the next one and three years. For example, a CFO to increase process productivity with an aim of increasing share-holder value is measured by the number of days to approve applications, with specific, ambitious and measurable goals. In turn, these CFOs provide the basis for determining partner performance management plans. By involving all of the firm's partners in providing information for the business planning process and in regular refinements and progress reviews, MLCC ensures that its plans are fact based and linked to individual goals and objectives.

MLCC segments its market into several categories of current and potential customers, stratified by their asset levels and age. Working with its parent company, MLCC uses in-depth research to target and deliver appropriate products and services. Its "Voice of the client" process sates customer satisfaction drivers for each client segment and for each of its credit categories. These priority requirements provide the basis for aligning the company's processes and work groups and for identifying indicators and key performance measures for each of its eight core processes. In turn, each of those indicators are tracked and used to identify and put in place improvements in areas having the greatest impact on customer needs and satisfaction.

Information about the customer is truly paramount for MLCC. To ensure that its market research is always current, MLCC continuously evaluates and improves its data on what its clients need what they might want in the future.

The client data come from an array of sources, ranging from surveys of clients and financial consultants in the field to written or telephone feedback, internal audits, syndicated research and benchmarking studies. Satisfaction level of competitors clients also are used in analyzing client needs. Customer complaints are analyzed in depth, reviewed monthly and reported back to MLCC regions to identify any sudden changes and to share lessons learned. Negative trends and recurring problems trigger process improvement teams to develop countermeasures and to prevent recurrences. Clients receive acknowledgement of any complaint within two business days and resolution is received in no more than five business days.

MLCC has impressive results to show that its focus on quality management and performance excellence is a wise investment.Net income rose 100% from 1994 to 1996 and exceeds the industry's average. Return on equity increased approximately 74% and its return on assets improved 36% in that same period. Key indicators for loan delinquency rates and write-offs compare favorably with the rest of the industry and are clearly improving-as are the firm's loan originations, market share in originations, wholesale volume as a percentage of first mortgages and size of servicing portfolio.

Employee Involvement

Infosys Technologies Ltd was started in 1981 by 7 people. Today, Infosys is the biggest IT venture in India. It is a leader in the "next generation" of IT and consulting services with revenue of over US$4billion.The services provided include business and technology consulting, application services, systems integration, product engineering, custom software development, maintenance, re-engineering, independent testing and validation services, IT infrastructure services and business process outsourcing.

Infosys pioneered the Global Delivery Model(GDM), which emerged as a disruptive force in the industry leading to the rise of offshore outsourcing. The GDM is based on the principle of taking work to the location where the best talent is available making the best economic sense with the least amount of acceptable risk.

Infosys had a global presence with over 50 offices and development centers in India, China, Australia, the Czech republic, Poland, the UK, Canada and Japan. Infosys and its subsidiaries have over 10 lakh employees.

In recent years, Infosys has been noted as the best employer in the country by many HR surveys. The company is well known for its employee-friendly HR practices. Though, Infosys grew to become a US$2billion company by the year 2006, it still retained the culture of a small company. Infosys attracted the best talent from across the world and recruited candidates by conducting one of the toughest selection process. All the selected candidates were required undergo an intensive 14 week training program. All the employees were also required to undergo training every year and some of the chosen employees were trained at the Infosys Leadership Institute to take on higher responsibilities in the company. Infosys was one of the first companies to offer Employee Stock Ownership Plans(ESOPs) to its employees. According to Mr Narayan Murthy, non-executive Chairman of Infosys Technologies Ltd, "We always felt that the leader cannot operate in a vacuum. For a leader to succeed you have to have thousands of people who will work with him/her. Those people are adding value towards creating a wonderful company and its only fair that we share our wealth with these people too".

The company followed variable compensation structure where the compensation of the employees depended on the performance of the individual, the team and the company.