Chennai: In the recent years, the Chennai-based auto ancillary companies have been bagging quality awards like the Indian beauty queens winning the world's top beauty pageant titles - it's becoming quite frequent.

The latest to join this elite club is the Rs 8-crore-turnover Cooper Tire & Rubber Company, which supplies brake, fuel and power steering assemblies to Ford Motor Company (FMC).

Recognising Cooper's contribution, the 100-year-old US auto giant has bestowed its highest honour, the Gold World Excellence Award, upon the Chennai firm. Cooper is fully controlled by its $3.3-billion US-based parent, one of the world's largest tyre manufacturers, which also makes components like sealing, fuel delivery and vibration control systems.

Agreed, it is the first time that an Indian company has won this award. But what makes the honour more unique is that this is the first time that a Cooper unit anywhere in the world has bagged it. Cooper supplies to FMC's Mexican, Chinese and South African markets and also fulfils the condition of selling to FMC's global markets, not just to its local arms.

The company won the award on parameters like cost, quality and delivery performance. For Cooper, which also doubles up as a design house auto ancillary (the company designed the power steering parts for Mahindra & Mahindra's Scorpio), the journey towards bagging the award was short - but an interesting one.

Grit and determination
Four years back, when managing director K K Tiwari and senior manager (operations) Dinesh Pawar landed at Chennai airport, they didn't realise the challenge that awaited them. Their mandate was to set up the plant and in three months' time deliver brake, fuel and power steering assemblies to Ford India.

What stood in their front at the Ford Supplier's Park, adjacent to Ford India's Chennai plant, was just a semi-finished structure to house Cooper's plant and office. The imported plant and the machinery were yet to arrive, and workers had to be recruited and trained to sort out the initial production glitches. V Jesu Durai, currently senior manager (business development), who was in charge of production then, soon joined the duo.

"It was fun, but full of challenges. We had to spend nights together in the factory to keep up with the deadlines," recalls Tiwari. Today, the 10,000-sq ft factory, leased from Ford India with a compact layout and housing 35 workers, is one of the 10 Ford India vendors sporting the stringent Q1 quality tag.

Growing doesn't come easy
Ford India expects all its 90 vendors to get Q1 certification in due course. According to Arvind Mathew, vice-president and executive director (programmes implementation and supply), all the vendors have to comply with the norms of Q1, failing which they will be out of Ford India's supply chain. In fact FMC had revised its Q1 standards in February 2003 stressing on continual improvement, manufacturing discipline, variability reduction and finally customer satisfaction.

Cooper initiated the Q1 qualifying process in July 2002, and got the certification in December 2002. In the process it also secured TS/ISO 16949 certification. For any Ford vendor, the first step towards Q1 is getting QS 9000 certification, which Cooper achieved as early as in September 1999, thanks to its parent company's inputs in setting up the plant.

Next came MS 9000 certification. A separate material manual was prepared and was audited by Ford India. The MS 9000 manual was put on probation for six months with certain conditions that had to be met.

After that an elaborate self-assessment questionnaire, which probes Cooper's entire business operations, production processes, quality procedures, control plans, employee readiness for training and review, was answered to the satisfaction of Ford India.

"Finally the facility was audited by Ford India officials who did some random checks," says Pawar. In the meantime, Cooper also obtained the ISO 14003 certificate - another stipulation of FMC.

While Q1 certification procedures are largely similar to QS 9000, the stringency comes in maintaining additional manuals. For instance, Cooper should have a manual called Advanced Product Quality Planning, documenting the original component design, alterations made in a product / tooling / shop-floor layout, changes in the sub-supplier's production process, and others.

The other manuals include Production Part Approval Process (PPAP) and Potential Failure Mode & Effect Analysis, or PFMEA, which is a document stating the potential failure causes and its effect and corrective measures.

According to Pawar, Cooper should continuously fit into the Ford India's qualifying standards to retain the Q1 tag. "Ford India monitors us on various parameters. We are given credits on good aspects and debits on bad standards," says Pawar.

Bulging bottomline
The quality initiatives have helped the company to cut waste, increase productivity and accelerate its break-even point. Declining to provide any numbers, Tiwari says the company is now making profits.

Says Tiwari: "The continuous improvement in the production process by value engineering and increased localisation of our requirements resulted in cost savings of 5 per cent." Aspects like overall equipment effectiveness standing at 92 per cent, reduction in raw material inventory and the work in progress contributed to Cooper making profits.

"Normally the work in progress at the shop floor is of four hours' duration and does not cross one day at the maximum. The inventory turnover is eight times," says Tiwari. "The figure could have been better but for stocking some imported materials that require some lead time."

For Ford India, the supplies are really just on time with eight deliveries a day based on its production schedule. "Ford India will hardly have our products for two-to-three hours in its production line," says Pawar.

Cooper enjoys an external rejection rate of zero parts per million (PPM), as against 27 PPM four months ago. Last year the internal rejection rate came down to 180 PPM from 5,341 PPM three years ago.

At the shop floor, where the average age of workers is around 25 years, Cooper religiously follows job rotation. All the workers are given a minimum of 40 hours training per year. The training includes teaching new skills like computer operation.

The workers are encouraged to throw up suggestions that would improve productivity and quality. The company has designated a person as suggestion coordinator to whom a worker sends his ideas. The suggestion coordinator keys in the idea and allots a serial number.

"The suggestion is then considered by a group of officials and if it doesn't involve any engineering or financial decision and found beneficial, the same is implemented pronto. Ninety-five per cent of the suggestions are workable as they are given by workers who are familiar with the machines," says an official. Wherever engineering or financial decisions are involved then the management deliberates and action is taken accordingly.

Patterning its quality manual with that of QS 9000, Cooper is spreading the quality message down the line by asking all its 25 vendors to embrace those standards. As a first step it has asked them to get ISO quality certifications. According to Tiwari three vendors have already started towards QS 9000 certification.

Portfolio expansion on the anvil
With volumes picking up from its clients - Telco (exporting the Indica to Rover, UK) and Ford India and General Motors (planning to launch new models) - Cooper is planning to set up two new facilities in Pune and New Delhi each at an outlay of Rs 4 crore.

And Cooper, in the meantime, is looking at expanding its product basket by adding new products like, dip sticks/press end-tube assemblies for exports to North America (with a potential of 2 lakh per annum) and oil-strainers.

"With our existing products and the current orders we will close this fiscal with a turnover of Rs 15 crore; next year the turnover will be Rs 30 crore," says Tiwari. According to him the current turnover mix is 20 per cent exports and 80 per cent domestic sales. "This ratio will change to 40:60 soon."

The company targets growth through organic and inorganic routes. It is keen on launching its vibration control and sealing products divisions here in India. "By end-2004 we will have the two divisions in India," says Tiwari.

In addition, Cooper is now looking out for component manufacturers to cater to the group's global markets. The group plans to source aluminium castings, manifold castings for exhaust gas re-circulation valves and finned tubes.

Here's one company the country can be proud of.