Professional Documents
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Digital Transformation in TQM
Digital Transformation in TQM
Business Excellence and sustainable development have become the part of the core strategy of
reputed companies in the world and India is no exception to this. In fact, these two core elements
have helped companies to build their brands. Two such companies which have been discussed
through this paper are Tata Steel and Asian Paints. The former with a history of more than a
century is a marvel with a DNA of business excellence and sustainability and has achieved
accolades all over the world for producing quality steel at the lowest cost with its cutting edge
technology and serving the communities and environment not for the sake of regulatory
compliance but by its core philosophy, intent and conscious choice. Asian Paints, a giant in the
acquisition of customers and owning their loyalty which in turn has given it a double digit
growth with huge profit for more than a decade and which has offered it to take initiatives in the
Introduction
Many changes some time disruptive are happening in the world at a fast pace touching upon
individuals, organizations, businesses and nations in a big way. The overall impact of these
changes has affected development and growth parameters positively as well as adversely in
different contexts. For instance growth of businesses and nations has impacted ecology and
environment adversely. Likewise, growth of businesses and nationals have also resulted into
widening of gaps between the rich and poor, generation X and generation Y. Eric Schmidt and
Jared Cohen in their book “The New Digital Age” have identified some key aspects of people,
organizations and the nations which will be highly influenced by the new digital age. The first
and foremost is the shift of power from the institutions to individuals. They remarked “On the
world stage, the most significant impact of the spread of communication technologies will be the
way they help re-allocate the concentration of power from states and institutions and transfer it to
individuals.” The second powerful impact of the digitalization will happen in terms of
information overload that the tech savvy generation will have access to. The authors believe that
“By 2025, the majority of the world’s population will, in one generation, have gone from having
virtually no access to unfiltered information to accessing all of the world’s information through a
device that fits in the palm of the hand.” They further argue “Identity will be the most valuable
commodity for citizens in the future, and it will exist primarily online.” Likewise loss of privacy,
customization and Internet is the largest experiment involving anarchy in history. Hundreds of
millions of people are, each minute, creating and consuming an untold amount of digital content
A major part of these changes is attributable to technology. It is widely believed that technology
is going to drive the lives of the people, businesses and nations across the globe in big way. It is
in this backdrop that the Lisbon post-2010 agenda clarified that growth and jobs need not only
While it is true that information and technology led disruptions in businesses have revolutionized
the entire gamut of managing businesses, it is also true that the impact of business is now being
seen in terms of profits, people and planet. These 3 Ps have become the core of brand building
exercise of the most remembered and respected companies of the world. In India, two such
companies, one which believes in Business Excellence through 3 Ps is none other than Tata Steel
and the other which has done exceedingly well mainly in terms of profit and its people by way of
digital transformation is Asian Paints. The paper has been divided into two parts: Part I deal with
the business excellence and 3Ps of Tata Steel whereas Part II deals with the digitalization of
Asian Paints.
Objectives:
To discuss the best business practices of Tata Steel in terms of business excellence
through total quality management (TQM) and its initiatives related to 3Ps.
Methodology
Entire paper illustrating the business practices of two leading companies of India with special
reference to 3 Ps and digitization has been mainly sourced from secondary sources such as
research papers from various journals, annual reports of the company, reports of consulting firms
and various websites. Hence, the paper does not deal with any research problem as such.
Part-I
In a welfare state like ours, business is not an indifferent identity today, it has certain normative
connotations and hence today business objectives are not merely confined to profit; but serving
the interests of the people and community associated with the business without adversely
affecting the planet are equally important objectives of the business. Hence, it is not only the
quantity or rate of growth, quality of growth is also important and hence we talk about trade off,
considerations of growth have led to define the business with normative and judgmental
Let us now define best business practices. A best practice is a method or technique that has
consistently shown results superior to those achieved with other means, and that is used as a
benchmark. In addition, a "best" practice can evolve to become better as improvements are
discovered. Best practice is considered by some as a business buzzword, used to describe the
process of developing and following a standard way of doing things that multiple organizations
can use.2
Based on the extensive documentation and research on the best business practices with a data
base of more than 10000 empirical studies from 3500 companies around the globe, the Hackett
Group have defined the best business practices; The studies addressed both qualitative
performance – such as functional alignment with business, hr, procurement, IT and finance
partner with customers and suppliers, supply chain process and organization design – and
traditional quantitative metrics, such as cost, cycle time, quality and productivity.
According to the Hackett Group a best practice is one which aligns with strategy and improves
and risk management, optimizes the skills and capabilities of the organization and
By and large these best practices have been defined in terms of business excellence from the
point of view of earning profit by maximizing total revenue and minimizing total cost by
taking recourse to various quality measures through Total Quality Management (TQM).
However, as discussed in the introduction itself business now is being seen much beyond
profit and incorporates people and planet. In this backdrop, here are some cases of best
business practices of some leading Indian companies which are immersed to the
"No success or achievement in material terms is worthwhile unless it serves the needs or
Established in 1907 as Asia's first integrated private sector steel company, Tata Steel Group is
among the top-ten global steel companies with an annual crude steel capacity of over 29 million
tonnes per annum (MnTPA). It is now the world's second-most geographically-diversified steel
producer, with operations in 26 countries and a commercial presence in over 50 countries. The
Tata Steel Group, with a turnover of US$ 24.82 billion in FY 13, has over 80,000 employees
across five continents and is a Fortune 500 company. The Group's vision is to be the world's steel
industry benchmark in "Value Creation" and "Corporate Citizenship" through the excellence of
its people, its innovative approach and overall conduct. Underpinning this vision is a
performance culture committed to aspiration targets, safety and social responsibility, continuous
improvement, openness and transparency. It adopted the J N Tata Quality Award Model based on
Malcolm Baldrige Model for its various divisions in the company in 1992. Later it adopted the
JRDQV Model for Business Excellence in 1994 for competing with other group companies.
Tools in this direction complimenting the TQM efforts at Tata Steel in terms of continuous
improvement in process and practices. Concept of Balanced Score Card was integrated with the
In 2008, Tata Steel India became the first integrated steel plant in the world, outside Japan, to be
awarded the Deming Application Prize 2008 for excellence in Total Quality Management (Refer
Diagram 1). In 2012, Tata Steel became the first integrated steel company in the world, outside
Japan, to win the Deming Grand Prize 2012 instituted by the Japanese Union of Scientists and
Engineers.4
Diagram 1
Nothing could sum up the culture of Tata Companies more succinctly the above quote by JRD
Tata. Tata Quality Management Services (TQMS) a division of Tata Sons) had been entrusted
with the task of institutionalizing the Tata Business Excellence Model (TBEM) (Diagram 2). The
TBEM provides each company with a wide outline to help it improve business performance and
attain higher levels of efficiency and productivity. It aims to facilitate the understanding of
business dynamics and organizational learning. TBEM model focuses on seven core aspects of
operations: leadership, strategic planning, customer and market focus, measurement, analysis and
knowledge management, human resource focus, process management and business results.
companies use the model to gain insights on their business strengths and opportunities for
improvement. This is managed through an annual process of assessment and assurance. The
model, through its regular and calibrated updates, is used by Tata companies to stay in step with
Diagram 2
The road map of TQM started with the strategic intent of the top management to be among
the best and biggest companies of the World by redefining its business priorities,
segment, human resource, input materials, plant location, etc. It started with ISO 9001
through Quality Improvement Projects (QIP’s), Value Engineering Projects and Statistical
Process Control projects and Operations Research Projects by managerial teams was
making great contributions in various departments and divisions of the company. Quality
Circles and 5S as strategic tool for employee involvement and improvement were adopted
(BPR) emerged as powerful Management Tools in this direction complimenting the TQM
Plans (AQUIP’s) of various departments were integrated with the TQM strategy.6
Tata group spends the highest among Indian companies on CSR. It spent Rs 1,000 crore on
CSR in 2013-14. A significant amount of the total CSR spend by the Tata Group has gone
into skill development, health and education, with Tata Steel emerging as the biggest
spender within the group. Tata Steel has adopted the Corporate Citizenship Index, Tata
Business Excellence Model and the Tata Index for Sustainable Development. Tata Steel
spends 5-7 per cent of its profit after tax on several CSR initiatives.
Tata Steel collaborates with Government bodies, NGOs and donor agencies to implement
(renewable energy) and women empowerment. The entire gamut of CSR activities are
department comprising Tata Steel Rural Development Society, Tata Steel Family
Initiatives Foundation, Tata Steel Tribal Cultural Society and Tata Steel Skill
Tata Steel Adventure Foundation, other societies (e.g. Blood Bank, Ardeshir Dalal
Memorial Hospital, Jamshedpur Eye Hospital), Tata Relief Committee and JUSCO also
Sustainability
Sustainability basically refers to the innovative processes that have been included in the
manufacturing process of steel in terms of saving the energy, improving the quality and
durability of steel, launching innovative products which are affordable and less time consuming
and use eco friendly raw material. Two examples of such processes and products have been
given below.
Automotive high strength steel grades manufactured by Tata Steel maintains the safety
standards of vehicles whilst improving fuel efficiency, through light weighting. Value Analysis &
Value Engineering (VAVE) service to the auto majors (Tata Motors) in which cross-functional
teams of both companies work on re-engineering of component design in order to reduce weight
Nest-in housing solution is an excellent building solution which does not pollute the
environment like cement & brick in the conventional RCC. The house is designed with an
optimum combination of Steel & non Steel material which gives the house an elegant and
attractive look and it can be built within just 9 days including its foundation. The light structured
construction method makes it relatively safer against seismic forces compared to other
conventional houses. The speed of construction may also help individual house builders as well
as Government bodies to complete their various housing projects in time – in disaster areas of
Odisha (cyclone hit), Uttarakhand (flash flood). The Nest-In Bio-toilet is an integrated solution,
commercialized in Financial Year 2012-13, made up of a Bio-toilet system and Nest-In super
structure. It can be installed at any place as it does not require a sewage-line connection for
disposal of waste from toilets. The bio-toilet system is developed under license from DRDO. The
Bio-digester disposes human waste in 100% eco-friendly manner and generates color less,
Part-II
In this fast changing global economy, businesses require agile, responsive, fast and flexible
processes to ensure outcomes to meet business objective. In this process, business faces
increasing pressure to retain customer base and achieve growth by gaining the competitive
advantage while being the low cost producer with improved quality of service to ensure
sustainable business practices. Business transformation involves integrated and collaborative
approach to leverage technology and drive innovation across different functions of the
Digitization as a means of business transformation of business has assumed very important place
in strategic management. In fact, it has become so powerful and sole source of transformation of
business that business transformation has become synonymous with Digital transformation.
Digital transformation (DT) basically refers to the use of technology to radically improve
performance or reach of enterprises. Executives in all industries are using digital advances such
as analytics, mobility, social media and smart embedded devices – and improving their use of
traditional technologies such as ERP– to change customer relationships, internal processes, and
Value propositions. Other executives, seeing how fast digital technology disrupted media
industries in the past decade, know they need to pay attention to changes in their industries now.8
According to N Chandrasekaran “When history looks back at this era, it will be remembered for
the huge technology and digital transformation we are now living through, not the economic
turbulence. The evolution and fast adoption of four powerful technologies such as cloud,
analytics, big data and mobility is transforming cloud computing forever. Every industry process
framework is being redefined and re-imagined by the impact of these technologies. Their use is
not limited to just the enterprise; they are impacting our personal and social lives as well as our
Today the digital disruptions are faster than the business leaders anticipated them to be. This is
particularly true in the case of the IT, telecommunication, media and entertainment, retail,
banking and life sciences sectors. In this volatile and dynamic environment, the question really is
this: are businesses prepared to handle such disruptions? Most of the mature economies are
already riding the digital transformation wave. Emerging economies such as India, on the other
hand, are yet to experience the scale of this transformation. The role of digital mobile
technologies is going to encompass many businesses particularly consumer products, health care
and financial services. Social media is another medium to influence entire spectrum of business
activity ranging from product development, and marketing and sales to customer support.
According to a Harvard Business Review survey, close to 80% of global companies already use
or are planning to use social media. Interestingly, the uptake of social media is higher among
Indian organizations than the global average and their counterparts in emerging economies. They
use social media for online monitoring, response management, customer service and lead
generation.10
Analytics is emerging very fast as a tool to improve operational efficiency of business enterprises
particularly the large companies in India as it can help businesses to have a more complete
picture of their customers, products, operations and competitors. According to NASSCOM, the
big data market in India will grow to US$1 billion by 2015. The BFSI, IT/ITeS, media and
entertainment, telecom and pharmaceutical sectors are expected to lead in big data-related
In India, cloud services are being used by both the Government (for large initiatives such as
Aadhar card and National Population Register) and businesses engagement and data sharing).
The growing demand for cloud is pushing the need to rethink business architecture; cloud
security and governance risks; licensing agreement with service providers, and the service
management of data. Education, health care, etc., stand to gain immensely by implementing such
services.12
Finally, the Digital India Programme launched by Modi Government, aims to transform India
into a digitally empowered society and knowledge economy by leveraging IT as a growth engine
of new India. The vision of Digital India aims to transform the country into a digitally
empowered society and knowledge economy. The programme will be implemented in phases
from the current year till 2018. The Digital India is transformational in nature and would ensure
that Government services are available to citizens electronically. It would also bring in public
and e-Pramaan based on authentic and standard based interoperable and integrated government
Asian Paints is India’s largest paint company and Asia’s third largest paint company, with a
facilities had a modest beginning in 1942. Besides Asian Paints, the group operates around the
world through its subsidiaries Berger International Limited, Apco Coatings, SCIB Paints and
Taubmans.
Asian Paints was included in Forbes Asia’s ‘Fab 50’ list of Companies in Asia Pacific in 2011,
2012 and 2013. Forbes Global magazine USA ranked Asian Paints among the ‘200 Best Small
Companies in the World’ for 2002 and 2003 and presented the 'Best under a Billion' award, to the
company. Asian Paints is the only paint company in the world to receive this recognition. Forbes
has also ranked Asian Paints among the ‘Best under a Billion companies in Asia’ in 2005, 2006
and 2007.
In Decorative paints, Asian Paints is present in all the four segments viz: Interior Wall Finishes,
Exterior Wall Finishes, Enamels and Wood Finishes. It also introduced many innovative concepts
in the Indian paint industry like Color Worlds (Dealer Tinting Systems), Home Solutions
(painting solutions Service), Kids World (painting solutions for kid’s room), Color Next
(Prediction of Color Trends through in-depth research) and Royale Play Special Effect Paints,
Digitalization process in Asian Paints, India’s leading manufacturer of coatings, goes back to
2000 since when it ushered in the process of digitalization in its operations in an incremental
basis. With the digitalization, it has been able to maintain a double digit growth of about 15% per
annum and globalize with increasing efficiency and reducing its impact on the environment. The
motif behind the journey was to reduce debt and increase internal efficiencies. As a part of this
initiative, Asian Paints implemented an enterprise-wide ERP and advanced Supply Chain
Management system. This helped create an enterprise-wide platform that was the basis for
further improvements in sales and customer processes. The change also released working capital
that helped fund acquisitions in emerging markets. Asian Paints gained further efficiencies by
linking subcontractors and suppliers on a B2B portal. In 2003, the firm invested in a CRM
system.
With customers in more than 65 countries and a 25,000+ dealer network, most of Asian Paints’
direct interactions took place with its dealers. Therefore, the company not only needed to
respond to evolving consumer demands and expectations for better service, responsiveness,
The only way to realistically achieve these goals was to focus on becoming a truly customer-
centric organization. To do that, Asian Paints needed a next-generation customer contact platform
capable of managing both customer and dealer communications, and optimizing agent
Manager, Systems, explained the company’s decision: While we were researching different
vendors and getting references, the best remarks and kudos were given from customers using
Aspect to organize its customer interactions. Since we wanted a cost-effective way to have
several solutions in our contact center, Aspect was the right choice for us. We needed a little bit
of everything, improved quality interactions, dealer interaction and high operational efficiency.
Working with Aspect to implement a next-generation customer response and dealer management
system, Asian Paints made it easy and convenient for both dealers and customers to do business
with the company from placing quick and convenient orders, to consulting with an expert on
40% drop in average call handle time, due to increased visibility into caller’s information
and history
reinstate customer confidence and build customer loyalty, particularly among customers who had
This change helped the company further improve operational efficiencies and sustain its growth.
In customer-facing processes, the move entailed much more than just creating the call center.
Retailers were encouraged to place orders through the call center, where they could receive a
more consistent service level than they could through the firm’s 100 local depots. Centralized
data also enabled delivery of products to large institutional customer job sites, giving the
company a capability that competitors could not provide. The biggest change resulting from
centralizing order taking was in the way sales people interacted with retailers. Liberated from
routine order collection, the sales team could focus on building stronger relationships. To enable
a more meaningful dialogue between the sales team and each retailer, the company provided
sales people with vital customer data in the field using mobile devices. A roll out of tablet
devices, which is currently underway, will further mobile-enable the sales staff.
Another innovation that took place in Asian Paint is he ‘Your Voice’ blog on their website where
people can interact with the company directly and give feedback. The ‘On line Color Lab’ is an
excellent interaction cum feedback forum which was started last year, where customers discuss
various aspects of the brand with us. This is the unique, first of its kind in India platform which
allows the brand to interact with the customer in the digital space other than the social media.
Technology has been the backbone of innovation at Asian Paints. The Endeavour at our Research
and Technology labs is to provide Technology to solve problems and offer innovative products to
customers. Last year, your Company launched a range of new products offering ‘new’ and
substrates under the ‘Smart Care’ range. Heralding new technology platforms for top end
premium products has been another foray for the Company and most of the top end new products
like ‘Royale Aspira’ and ‘Ultima Protek’ offer unique possibilities to the customers and clearly
Asian Paints’ digital transformation also extended to internal production processes. High growth
in paint demand creates the need to set up new manufacturing plants every three years. Given the
scale and size of these plants, the firm has begun to focus on creating highly automated plants.
Automation has led to greater capability, better quality and stronger safety and environmental
protections. The new plants are fully integrated from an information management perspective.
Data from shop floor control systems and automated warehouses are linked seamlessly to the
ERP. This has helped to further sustain the firm’s operational efficiencies.
In India, Asian Paints has begun to sell services (such as a painted wall) instead of products (a
can of paint). The services strategy has benefits beyond new revenues. Selling services helps to
ensure that high-end products are applied properly, hereby improving customer satisfaction.
Services also help the firm to get closer to the end-consumer, understand core consumer choices,
and launch high-end texture finishes. Additionally, having a contractor in a client’s house yields
information that marketing staff can use to understand both customer preferences and potential
demand. Gaining better knowledge of end-customer preferences is a high priority for the
company, since its business model – operating largely through retailers – means that customer
involvement has been traditionally very low. The relationship between IT and business
executives has traditionally been very strong. The IT team consists of business graduates with a
deep understanding of the underlying business processes. They act as internal process
executives suggest many digital investments, IT executives originate others such as the firm’s
new analytics initiative. Corporate growth and new technology demands have increased the
challenges of digital governance. The firm is in the first year of a new portfolio planning process.
“We have enjoyed great equity with the business because we have delivered solutions. But seeing
so many projects coming at us, we felt that now we need to establish processes to match
expectations and resources whilst taking on innovative projects,” says Mr. Manish Choksi, CIO
and Chief of Strategy. Asian Paints’ investment in strong IT capabilities, combined with
organizational and process changes intended to leverage those investments, will serve as a
foundation upon which the organization can continuously envision and implement new forms of
digital transformation.17
Corporate Citizenship
Asian Paints approaches the environment issue from the perspective of waste minimization and
conservation of resources. Determined to reuse, recycle and eliminate waste, Asian Paints'
material losses in manufacturing have reduced substantially over the last few years. All the paint
plants and chemical manufacturing plants of Asian Paints have ISO 14001 environmental
certification.
All its paint plants have achieved 'zero industrial discharge' capability. This has been achieved by
the installation of upgraded effluent treatment facilities and installation of reverse osmosis plants
in conjunction with appropriate recycling and reuses schemes. Its emulsion manufacturing
facility has also achieved 'zero waste' status under its "green productivity" practice. Some of
innovative schemes which enhance green productivity are dealer tinting systems which has
resulted in large batch sizes ; bulk storage facility for monomers which reduces wastage; Use of
natural gas which is a cleaner fuel; solvent recovery plants have been set up which has resulted
in zero reduction of solvent disposal; improved incinerating systems and reverse osmosis.
Water management
Fresh water is a limited and scarce resource that’s often taken for granted. Consider this,
according to an MMRDA report, Mumbai’s present water demand, 3026 MLD (Million Litres
Daily) is expected to rise to 7950 MLD by 2011, today the water supply being only 2500 MLD.
Asian Paints has built a Total Water Management (TWM) Centre, at its Bhandup manufacturing
facility, which is a first of its kind in the entire country. Till date Asian Paints has influenced
The TWM centre showcases live working models on water conservation and rainwater
harvesting. Asian Paints provides expertise to citizens free of charge to implement Rainwater
harvesting and total water management concepts. The water management schemes could be
designed in phases, so investments are not significant. Also a payback period can be determined
for investments.
Age Care is another focus area by Asian Paints in its CSR activities.
The company had conducted various health camps for the aged. In India, the focus of such health
camps has always been around the plants where the employees reside. Taking this into
consideration, Asian Paints has started MMU (Mobile Medicare Unit) in Kasna, Patancheru &
Ahmedabad. MMU has made it possible to reach the doorsteps of the needy and provide
treatment for various diseases like hypertension, arthritis, diabetes etc. Also, the company had
conducted camps on eye care, dental care, blood checkup among others. Under this project till
now over 100,000 needy senior citizens, providing them with medical care at their door steps
Other initiatives: Besides the area of water management and age care, the company also invests
continues to support the “Shree Gattu Vidyalaya” school, which is established along with the
The school today boasts of around 2,500 students in primary as well as secondary sections and
the plant has sustained its commitment of providing infrastructure support to this school, be it
through donations of computers, tables and chairs, or through assistance in other maintenance
In addition, the Ankleshwar plant has also taken up the cause of improving the health and
hygiene situation of schools in nearby villages. An eye camp was organized in association with
SEWA rural a renowned institution in eye treatment , during this camp 416 were examined , 72
patients were treated for cataract surgery , 13 for other eye ailments , 250 spectacles were
task of improving facilities in the neighborhood primary schools. It presented the Pondur primary
school with desks, tables & a PA system and even school bags for the students.
Conclusion:
Business Excellence and sustainable development have become the part of the core strategy of
reputed companies in the world and India is no exception to it. In fact, these two core concerns
have helped companies to build their brands. Two such companies which have been discussed
through this paper are Tata Steel and Asian Paints. The former with a history of more than a
century is a marvel with a DNA of business excellence and sustainability and have achieved
accolades all over the world for producing quality steel at a lowest cost with its cutting edge
technology and serving the communities and environment not for the sake of any regulatory
compliance but by intent and conscious choice has been unparallel. Its record on account of
friendly quality products has been praiseworthy. Asian Paints, a giant in the paint industry took
and owning their loyalty which in turn has given it double digit growth with huge profit for more
than a decade and which has offered it to take initiatives in the realm of community services and
eco-friendly processes. All in all, business excellence with an eye on 3 Ps, as demonstrated by
the cases of these two companies has been a win-win strategy for all the stakeholders and it is
expected that in the times to come, companies who believe in sustainable growth and long term
survival will take a leaf from the track record of these companies and will succeed in their
endeavour.
Note: These two cases have been majorly drawn from the secondary sources such as books,
annual reports of the companies, consulting firm’s reports, credit rating agencies, journals and
websites of the companies and press reports. Our contribution lies in the fact that we have
constructed a design and architecture to the paper with a clear cut perspective and has woven the
References
1. Schmidt Eric, Cohen Jared: “The New Digital Age-Reshaping the future of people, nations
and business” Brilliance Corp; MP3 Una edition (8 April 2014)
2. http://en.wikipedia.org/wiki/Best_practice
3. http://www.thehackettgroup.com/best-practices
4. (www.tatasteel.com/press releases
6. Dr. K.K.Garg, Pranav Mishra, Sumit Sehrawat:The Quest for Excellence: A Case Study
of TQM Practice in Tata Steel, Opinion: International Journal of Management , Vol. 3,
No. 1, June 2013
11. ibid
12. ibid
14. http://www.asianpaints.com/company-info/about-us/corporate-information.aspx
15. http://blogs.aspect.com/category/insideaspect/case-studies
16. (www.asianpints.com/Annul Report 2013-14)
18. www.karmayog.org/CSR/
19. ibid