Aiming for gold

Manufacturing Today
April 2014

The Corporate Business Excellence Cell helps recognise and award best-in-class business practices across the Aditya Birla Group

With the complexities and dynamics of the world changing rapidly, it presents a major challenge to the management of organisations. While addressing concerns such as allocating limited resources, comparing performance with competitors and responding to customer needs, understanding conflicting priorities, etc. the management has a daunting task. A business excellence framework comes across as a valuable tool because it’s all about making an organisation perform better, generate better profits and achieve success.

The Corporate Business Excellence Cell of the Aditya Birla Group is designed to achieve these objectives. And it does not stop there. To encourage companies to pursue excellence, the programme recognises and awards them suitably. The Group recently held its World Class Manufacturing (WCM) awards in Goa. Explaining the concept, Mr. Jagdish Ramaswamy, President, Corporate Business Excellence, Aditya Birla Group, says, “The entire concept of WCM came about because we as a global company, wanted to bring world-renowned manufacturing practices to our operations and have consistent standards across our plants and processes. We want our customers to witness the Aditya Birla standards in all our plants — manufacturing and services — be it in India, Thailand, USA, Germany or China.”

Birla Carbon is committed to sustainable development. Its sustainability aspects include employee safety, environmental stewardship, efficient use of carbon black and a key focus on conducting operations in a responsible manner. Birla Carbon is an environmentally conscious supplier with concentrated effort on sustaining and improving the environment through optimisation of resources and reduction of emissions. All its locations comply with or go beyond all local as well as governmental environmental regulations. 'Green Technology' has been adopted in the organisation's operations. Its certifications include: SA -8000 (Social Accountability); ISO- 14001 (Environment Management); OHSAS 18001 (Safety and Health).

Companies usually take one big management initiative at the corporate level like Six Sigma in Motorola and GE, TPM and Lean in Toyota and many more for process improvements across the corporation. The Aditya Birla Group too looked at similar initiatives and decided to adopt the Total Productive Maintenance (TPM) methodology to start with from 1996 onwards. Around the year 2000, it wanted to enhance the practices to bring in focus on quality and management processes and focus on the service businesses of the Group, too, like finance, retail, apparel, etc. This gave rise to the Aditya Birla Business Excellence framework, a unifying initiative across the Group. Agreeing, Mr. Ramaswamy added, “There was a pressing need to bring about a rigour in the process management in the services business. On the manufacturing side, we were growing inorganically by acquisitions and the businesses were becoming bigger. With every business having its units spread across the world, it was necessary to c;reate a sense of uniformity. There was a need to bring in a broader framework standard, enough to look at every business with a common structure of process maturity that was flexible enough to give a specific business flavour to the journey of excellence.”

Though creating the need for uniform practices across a manufacturing business was necessary for the benefit of the customer, getting acceptance within the Aditya Birla Group internally was necessary too. It was imperative to motivate the businesses around the adoption of these practices within Group companies. Hence, to stimulate people, the Group instituted the Chairman's WCM award. Mr. Sanjib K. Dutta, Vice-President, Corporate Business Excellence asserted, “The Chairman's WCM awards was established not only to recognise excellent businesses through a robust assessment process but also to promote the business excellence journey in the Group businesses to achieve and sustain an outstanding level of performance. The award criteria used for assessing is based on Aditya Birla business excellence framework, which is dynamic and contains contemporary best global management practices.”

Over the last three years starting from 2011, the World-Class Manufacturing Award has graduated to add the Business Excellence Award, which encompasses the entire spectrum of business activities. While the focus of the WCM unit-level category is to recognise businesses for their operational excellence practices at a local level, the Business Excellence Awards recognise businesses for their holistic business process maturity. The entire spectrum of the business has to adopt this framework and compete for the Business Category award. While the whole framework has been designed to make the Group businesses move towards being the best in class, there is another caveat attached to this. “Though our aspiration is to become world class, the awards also make sure that businesses do not lose sight of what they have gained so far. Thus, with a view of making sure people sustain performance, we keep motivating them from time to time to become best in class,” asserts Mr. Ramaswamy.

At the unit level, there are four categories of WCM awards — Bronze, Silver, Gold and Platinum — and at the business level there are three - Bronze, Silver and Gold. The awards are based on the scores obtained in the assessment done and endorsement by the senior leadership of the Group. Typically a score of more than 50 on a scale of 100 makes units/businesses eligible for Bronze, more than 60 for Silver, more than 70 for Gold and more than 75 for Platinum. Ramaswamy adds, “Platinum indicates truly world class. If a company within the Group wins a 'Platinum award' then that company can be compared with the best in the world.” Thus, with the standards set, the choice is left to the businesses to apply for the awards.

Talking about the success of the awards, Mr. Naveen Goyal, Assistant Vice President, Corporate Business Excellence stressed, “Over the years WCM has provided that single unifying thread that binds all manufacturing plants of the Group right from unit heads to grassroot employees across the globe in different geographies. The awards have provided a platform where these plants can benchmark their processes and performance with the best in the Group and outside. It has c;reated a sense of healthy competition and has encouraged a lot of inter-business learning and sharing among units to advance their journey on overall excellence. The awards have c;reated a lot of buzz internally and have helped in institutionalising the excellence journey in the Group.”

Apart from the awards, there is also Group-Wide Team Competition (GWTC) where every business presents its top-10 projects that used structured problem-solving tools like Six Sigma, Lean, etc. This year the Group received around 300 entries from around the globe. This competition is basically to encourage units and understand how they have used tools like the ones mentioned above or have developed their own value-enhancing tool to bring about continuous improvement in their plants. “We want people to develop a structured problem-solving mechanism and learn to work in teams rather than individually. The competing units go through two rounds of evaluation by a panel of jury including an external one. This panel does not recognise just a good solution but a solution that has emerged using a systematic approach,” explains Ramaswamy.

Another interesting initiative run by the Group is to have companies share and implement best practices. This is known as Knowledge Acquisition Process (KAP). Out of all these assessments and through a structured KAP, the Group tries to constantly encourage businesses to share their best practices with others in the Group. “Our mechanism is to basically propagate the good work done by a Group company to everybody in the organisation. We do this by writing about their case study in our in-house magazine called Voice and it's also available on our internal portals. In fact, we not only make the case study available to all but we also tell them whom to contact in case they are interested,” affirms Mr. Ramaswamy. The Group has also c;reated a pool of Subject Matter Experts (SMEs) who evaluate whether a practice submitted by a company is a best practice or not.

The Group is currently running a contest to encourage adaptations of the best practices. The maximum best practices from manufacturing are received on topics like a;lternative fuel usage and reducing power consumption in factories. For services, the best practices are more in the area of customer satisfaction.

Another fascinating aspect was that though the Group has its own framework it does not impose it upon companies it has acquired. Seconding, Ramaswamy says, "When we acquire a company we try and learn from them as well. It is very easy to destroy good practices in haste. We observe what is good in them and if we do find something interesting we include that into our framework."

This is what a business excellence tool can be; a set of principles and criteria that can be used to improve any organisation. But as is the case with any tool, it can also be misused and its value diminished or lost. Therefore, it's imperative for companies to understand and study not only external market conditions but also cultivate an internal buy-in for change for them to stay competitive.