First of all, congratulations on winning the 2019 Deming Prize for excellence in Total Quality Management (TQM). When did the TQM journey at ELGi start and what inspired you to undertake the same?ELGi has an ambitious aspiration; and to achieve this, we recognized that the company needed to adopt a management philosophy that builds vertical excellence in each operating function and customer-centric horizontal excellence across the business, operations and support functions. We strongly believe in endeavoring to accomplish ordinary tasks in an extraordinary manner, and turning extraordinary ambitions into ordinary tasks; TQM has significantly enabled this vision. Our TQM journey began in 2008 and gained momentum in 2014 with the implementation of ELGi’s TQM system – the EBS (ELGi Business System), as a means to achieve ELGi’s goal of becoming the world’s second largest air compressor manufacturer by 2027. It also helped establish a strong emphasis on customer-centricity and human resource development initiatives. Today, we’re proud to be the first global, industrial air compressor manufacturer, to win the prestigious Deming award in over 60 years. And while the Deming prize is a milestone in our journey, I commend our employees for their continual support and focus on building excellence in TQM, across the organisation.
Winning an award of such stature cannot be possible without the active involvement of all employees. Tell us how they have contributed to this success?
Yes, it’s been an exciting journey for all our employees and a challenging one as well. Taking a step back, the key foundations of the ELGi Business System are business processes, measurement based management and alignment of individual goals with company goals. The objective of our business processes is to bring reliable, repeatable, effective and efficient outcomes, while measurement based management, ensures that the performance of each individual in the organisation is defined in the form of objectives and control points, which are then measured and reviewed. The third dimension of EBS is to help the alignment of individual goals with the company’s goals and aspirations. This helps every individual employee to understand the importance of their roles and responsibilities in addressing the customer’s requirements and other stakeholders’ expectations.
A key factor in taking ‘Make in India’ to its desired results would be a strong focus on quality and manufacturing excellence while being cost competitive. Tell us about ELGi’s focus on these aspects.
Manufacturing at ELGi is a persistent and creative undertaking to achieve best-in-class performance, reliability and sustainability standards. And we strongly believe that a self-managed lean workforce, built on solid culture of continuous improvement (Kaizen) will produce best-in-class compressors. Across the world, customers incur significant ownership costs, considerable maintenance requirements and relatively poor reliability. At ELGi we’ve questioned this, connected the dots and developed technology specifically applied to solving an existing need in a new way. And our 400+ product range bears testament to this; for example, the lubricated screw (ELGi Global (EG) series and Encapsulated (EN) Series) and oil free screw air compressors are highly reliable, energy efficient and operate at low energy costs. Our Oil free (OF) series and ‘Always Better’ (AB) series of oil free screw compressors are class zero certified by TUV in accordance with the ISO 8573 standards and the (HRS) heat recovery systems help companies recover approximately 96 percent of the waste heat generated during the compression process which can then be re-utilized for heating of air and water.
We’ve also innovated to address the compressed air needs of companies who have historically suffered the constraints of high cost, poor reliability, and low efficiency in order to have oil free air. The ELGi AB ‘Always Better’ series, a disruption in oil free compressed air technology, offers every customer across the globe, a no-compromise, oil free solution at approximately 8 – 10 percent reduced lifecycle cost when compared with prevailing oil free technology. Finally, our compressed air experts across the world offer specialized services to help customers identify potential areas of energy savings and provide them with solutions guaranteeing the optimum use of compressed air.
Do you see the Deming Prize impacting business directly?
Yes. While the Deming Prize is testament to our focus on quality and building excellence in TQM – our commitment to TQM has, over the years, had re-enforced our commitment to customer centricity. Every ELGi product bears testament to our hallmarks of reliability and performance, while meeting or exceeding industry-specific demands such as energy-efficiency, cost-efficiency, ruggedness, zero oil tolerance or air delivery precision.
And how do you achieve this?
Every ELGi screw air compressor is built with a proprietary high precision airend; our in-house built, rotor grinding machines are best-in-class and ensure rotor finishing with very close tolerances.
Our vertically integrated processes have greatly enhanced our manufacturing capabilities, helping maintain high-quality standards and provide scope for design innovation and flexibility, while our foundry facilitates design flexibility and high quality castings.
With our in-house developed FEA, CFD, NVH & Industrial design capability, we ensure continuous innovation. Furthermore, our in-house machine building expertise helps in meeting exacting standards of precision manufacturing including our proprietary airends.
We’re investing in training and equipping our air experts with the skills required to ensure 48-hour turnaround times for air restoration, across the globe. Over 600+ service technicians in India alone have undergone extensive training resulting in 96 percent accuracy in grievance resolution and 9/10 satisfied customers the world over.
Our sophisticated planning algorithms enable us to produce and deliver globally without seeking market forecasts, while our IT Enabled procurement and planning system ensures minimal lead time. Together with the delivery management system and flow line, implementation of TQM principles, the Warehouse Management system and e-kanban, we ensure high availability of our air compressors and shortened lead times.
Tell us about your R&D activities. How much do you spend on R&D in terms of percentage of your sales?
Air compressor technology has evolved over the years, from air billows to advanced compressor product innovation, to reach breakthrough levels of performance and efficiency. Since its inception, ELGi has adopted innovation as a key differentiator, keeping pace with global compressor technology trends and evolving customer needs. Global climate change, as an example, is an alarming reality and we are striving to make a difference by ensuring organisations reduce both energy dependence and emissions, resulting in minimal impact to the environment.
Today, our global technology center, focuses on building compressed air solutions that help organisations lower energy consumption and operating costs, while achieving their productivity goals. With a strong team comprising of about 200 employees, our technology breakthroughs aim to transform the conventional boundaries of compressor technology with a relentless focus on increasing performance and energy efficiency. Our investment in R&D in India is about 2-3 percent of our global sales revenue.