Surinder Kapur : The Karmyogi that built Sona Group : A Punjabi-Japanese Hybrid Enterprise : On Devotion and Perfection

Author : Sunny Narang

Source : From LinkedIn Archives

Date first published : August 12th , 2016

“Every 2nd Car in India has a Sona product in it”

This line stays in one’s head after the Sona Supplier Conference on Friday 5th August , 2016 at the Westin in Gurgaon.

Sona is Gold in Hindi .

The story of the rise and rise of Delhi National Capital Region as one of the biggest automotive and auto-components hubs is yet to be told . It is the newest story that begins in the mid-80’s .

Calcutta with Hindustan Motors , Pune with Tata and Mahindra , Chennai with Standard , Bombay with Fiat were the old regions . Of course there are the two-wheelers that rule the volumes , but that is another story , of Bajaj and Hero .

And along with Maruti-Suzuki and Hero-Honda the story of how refugee Punjabis and the Japanese created a new culture of manufacturing and engineering , that has companies like Sona Koyo , which has applied for 15 patents in steering-systems and Baleno is being exported to the Mother-Country , Japan .

Between Maruti-Suzuki , Hero and Honda the NCR has almost 50% production of all cars and two-wheelers in India . And Hero Motors is the largest producer of two-wheelers on the planet .

How the supply chains and training , the logistics and technology transfer was done in less than 30 years is an incredible story of many outstanding individuals .

Companies like Sona and Anand Group and their founders are among them . Dr.Surinder Kapur , Deep C Anand are not so well known as Brij Mohan Munjal the founder of Hero Motors , but have created institutions of excellence , with cultures that go way beyond the desire for profit .

Both Kapur and Anand were engineer technocrats before becoming entrepreneurs .
But today the story is on Sona and Surinder Kapur .

Dr.Surinder Kapur comes from a famed Delhi jeweler family , that has a 100 plus year tradition business in Gold Jewelry .

Dr.Surinder Kapur, 70 , died on June 30 , 2015 , in Munich after being ill for about a fortnight.

He had sizeable business interests in Germany and had set up home in Munich. 
In the last few years, he would spend more and more of his time there.

I had attended his last supplier conference and felt his wisdom , humour , intelligence , vision and positive buoyant energy .

I realised yesterday, his understanding of Prayer .
Dr.Surinder Kapur said that he found his grounding in religion. 
Every morning, his wife Rani and he would walk half an hour in the sylvan acres around their house and follow it with 30 minutes in prayer, before he did a 10-hour workday.

The Sona Group had launched Sona Devotional Music Awards 2008.
 It is a talent hunt to recognize and reward the best singers in the genre of devotional music.

Dr Surinder Kapur, Chairman, The Sona Group had said, “I believe that devotional music is the soul of all genres of music. It is calming, soothing and takes you to a higher level- it;s spiritually healing and an epitome of India;s spiritual heritage. Devotional music has been the source of inspiration for our family and by popularizing this music I hope to reach out to people so that the benefits of devotional music can be felt by one and all. The youth today is slowly and gradually losing touch with spirituality. In today’s competitive and stressful lives devotional music provides a balance and peace of mind, something that is the need of the hour. Also, there have been a plethora of contests in dance, Bollywood music, pop songs where there is a lot of influence of western culture”

Kapur Di Hatti was established in 1890, Kapur Di Hatti travelled from Lahore to New Delhi bringing with it the skills of crafting exquisite and handcrafted Diamonds and Precious Stones Jewellery.

Dr.Surinder Kapur would have probably sat in his father’s jewellery store in Connaught Place, Kapur di Hatti, had it not been for the fact that his father sired six sons.

One day, the father took all his sons out for lunch where he told each one of them what he wanted him to do.

Kapur was given the responsibility of becoming an engineer. This took Kapur to the United States, where he did his PhD from University of Michigan. Douglas Aircraft sponsored his doctoral study in aerospace and fluid dynamics.

The first engineer among six siblings — two brothers continue the family jewellery business, a third runs a car-seats company, one sister lives with her family in Mauritius and another is in Delhi — Kapur spent 11 years at Michigan State University (chosen over Stanford for financial reasons). For the first two of his doctoral years (1965 to 1972), Kapur worked on a paisley-shaped heart valve design to replace cylindrical valves in vogue then with an aim to reduce cholesterol deposits. “When I was finished with the theoretical proof and ready to test it at California, I was told that a similar valve had already been patented by someone called Christiaan Barnard,” he chuckles. Kapur still treasures a letter Barnard, the first surgeon to transplant a human heart in 1967, wrote to him congratulating him for his design.

On his return to India, Kapur had resigned to the idea of working for state-owned Hindustan Aeronautics till fate intervened: he married the daughter of Raunaq Singh of Apollo Tyres.

Singh, who was famous as much for his political connections as his business acumen, was in the process of setting up a new company called Bharat Gears and wanted Kapur to run it — from Bombay.

That is where Kapur learnt his first lessons in management, especially in industrial relations. Dana Corporation of the United States was ready to place a large order with the company but was worried about the labour strife in the country.

Datta Samant’s name invoked fear outside India too. Kapur managed to strike a deal with Samant, and this encouraged Dana to ink the order.

Kapur was a product of the Japanese wave of the 1980s. The then government, under Rajiv Gandhi, had taken the first tentative steps towards liberalisation by allowing in Japanese automobile makers.

These companies decided to source components locally in order to keep their price tags low.

Sensing an opportunity, Kapur met the bosses of Maruti Udyog, in which Suzuki of Japan had taken a stake, V Krishnamurthy and R C Bhargava, who told him he could choose whatever he wanted to make so long as he would let Suzuki buy 26 per cent in his venture.

That done, the missing piece in Kapur’s jigsaw was the technology to make steering systems, his chosen area of business. His search for technology took him to the Osaka offices of Koyo Steering Systems, a leader of steering assembly technologies. It didn’t help Kapur’s pitch that Koyo’s experience with India was not encouraging: Little came out of a minority stake it had picked up in a public sector venture in Andhra Pradesh, and the technology royalty promised by the Indian partner never came in.Kapur persisted, and two trips later, Koyo relented: “In Japanese, tatamai means an agreement with an outsider and hone (pronounced ‘honi’) represents the kinship between friends and family where nothing is written down, yet is very generous. The strength of our relationship was such that, over the years, Koyo gave us a lot more than we had signed on for.” Sona Koyo, up from a small Koyo stake it picked up in 1991, and has stood alongside Kapur at “the lowest point in my life, when Maruti had to recall 30,000 cars over potentially faulty steering columns in 1994”. The company’s image was hit, but in hindsight, it emerged stronger from the incident, Kapur says.

The entry of the Japanese automobile companies revolutionised manufacturing in the country. Earlier, Indian quality was poor, deliveries were shoddy and costs were high.

This was unacceptable to the Japanese. To give credit to Indian businessmen, instead of complaining about it, they took it as a challenge and, in a few short years, they were churning out stuff that was almost as good as what was made anywhere else.

Several of them, in due course of time, became global players. Kapur was one of them — at the time of his death, he had manufacturing operations in India, Germany and the United States. Fuji Autotec, in which he had taken a strategic stake, has subsidiaries in Brazil, France, Sweden and the Czech Republic.

Kapur was the biggest proponent of Japanese manufacturing practices in India. He worked with quality gurus like Yoshikazu Tsuda and consultants like Shoji Shiba.

Sona’s association with Japanese companies — others in its stable are Sona Okegawa, Sona Somic Lemforder, Sona Cold Forgings and some smaller entities — has had a telling effect on Kapur’s management philosophy. He swears by management practices such as kaizen which emphasizes small, continuous improvements; lean manufacturing techniques such as TPS, short for Toyota Production System; ‘breakthrough management’, which advocates rapid change of gears to create a business based on unmet consumer demand; and, the more popular Total Quality Management or TQM. Each of these techniques is being implemented at Sona Group companies with telling results.

His relentless pursuit of quality made Kapur a highly efficient manufacturer of automobile components. He pursued global quality certifications with missionary zeal.

His team had no choice but to go through the drill. Kapur’s vision was to “create a company that India is proud of”.

He took to the Japanese way like fish to water. Apart from manufacturing best practices like Kaizen and JIT, he did not ignore the softer aspects of the Japanese work culture.

In later years, Kapur became an ardent fan of German engineering excellence as well. Sona had the heart of a true multinational corporation.

The Indian automobile short history :

Hindustan Motors Limited (HM), India’s pioneering automobile manufacturing company and flagship company of the C.K. Birla Group, was established just before Indian independence, in 1942 by B.M. Birla. They began operations in a small assembly plant in Port Okha near Gujarat by assembling the then Morris 10 as the Hindustan 10. The Morris MO Series models (the earlier one and its next model with a new front grille) were by 1949 introduced, as the Hindustan 14. The production continued till 1954, after which the Landmaster based on the Morris Oxford Series II was introduced, with the same 1476 cc side valve engine, drawn from the earlier Hindustan 14.The same engine was used for the older Ambassadors Mark I from 1958 till 1960.

In 1948, Hindustan Motors shifted its assembly plant from Port Okha in Gujarat to Uttarpara in West Bengal’s Hooghly district and strengthened its manufacturing capacity in the automobile segment.

In the mid 60’s model again had minor changes to the tail lamp with integrated lens for indicator and danger lamp and the tall ornamented bumper stopper from the Mark-I was redesigned with a smaller chrome metal stopper keep with the times. This model was sold until mid-1975 and eventually replaced by the Mark-III model. Being one of the ubiquitous early models of Ambassador numerous older versions can be found in restoration, garages and in numerous Indian movies of that era. In its final years in 1975 it had no competition other than the Premier Padmini and its smaller rival Standard Motors.

In 1979 the Ambassadors front went through a major facelift departing from a flatter design of the 50’s which was retained till its end in 2014.

Premier Padmini is an automobile that was manufactured in India from 1964 to 2000 by Premier Automobiles Limited, a division of the Walchand Group, under license from Fiat and marketed initially as the Fiat 1100 Delight — and beginning in 1973 as thePremier Padmini.

Premier manufactured the Padmini at their Kurla plant in Bombay (now Mumbai) until they sold a majority stake to Fiat SpA in September 1997.

The Standard is an Indian brand of automobile which was produced by Standard Motor Products in Madras from 1949 to 1988. Indian Standards were variations of vehicles made in the U.K. by Standard-Triumph. Standard Motor Products of India Ltd. (SMPI) was incorporated in 1948, and their first product was the Vanguard, which began to be assembled in 1949. The company was dissolved in 2006 and the old plant torn down.

Mahindra & Mahindra was set up as a steel trading company in 1945 in Ludhiana as Mahindra & Mohammed by brothers K.C. Mahindra and J.C. Mahindra and Malik Ghulam Mohammed.After India gained independence and Pakistan was formed, Mohammed emigrated to Pakistan. The company changed its name to Mahindra & Mahindra in 1948.

It eventually saw a business opportunity in expanding into manufacturing and selling larger MUVs, starting with the assembly under licence of the Willys Jeep in India.

Soon established as the Jeep manufacturers of India, the company later commenced manufacturing light commercial vehicles (LCVs) and agricultural tractors. Today, Mahindra & Mahindra is a key player in the utility vehicle manufacturing and branding sectors in the Indian automobile industry with its flagship Mahindra XUV500 and uses India’s growing global market presence in both the automotive and farming industries to push its products in other countries.

Over the past few years, the company has taken interest in new industries and in foreign markets. They entered the two-wheeler industry by taking over Kinetic Motors in India. M&M also has a controlling stake in the REVA Electric Car Company and acquired South Korea’s SsangYong Motor Company in 2011.

It is one of the largest vehicle manufacturers by production in India and the largest manufacturer of tractors across the world.

Tata Motors Limited (formerly TELCO, short for Tata Engineering and Locomotive Company) was founded in 1945 as a manufacturer of locomotives, the company manufactured its first commercial vehicle in 1954 in a collaboration with Daimler-Benz AG, which ended in 1969. Tata Motors entered the passenger vehicle market in 1991 with the launch of the Tata Sierra, becoming the first Indian manufacturer to achieve the capability of developing a competitive indigenous automobile.

In 1998, Tata launched the first fully indigenous Indian passenger car, the Indica, and in 2008 launched the Tata Nano, the world’s cheapest car. Tata Motors acquired the South Korean truck manufacturer Daewoo Commercial Vehicles Company in 2004 and purchased Jaguar Land Rover from Ford in 2008.

How Maruti 800 transformed Indian engineering and manufacturing :

Maruti 800 served the nation and impacted the lives of its people well. At the time of its launch on December 14,1983,there was skepticism within the industry on whether the economy could absorb another 100,000 over and above the 40,000 cars selling at that time in the stagnant market.

The Maruti project was marred by controversies involving Indira Gandhis son,Sanjay,and was largely seen as a political project.A public sector company getting into the business,when cars were the last thing on the priority list of most Indians,was being questioned. The then director (Marketing ) of Maurti Udyog, RC Bhargava, was,however, bullish.

People didn’t have the remotest idea about how the car would ultimately impact not just the auto industry in the country,but also the entire manufacturing ecosystem, he recalls.Maruti 800 did that in more ways than one. Its entry marked the next generation of motoring in India and freedom for the Indian customer from the rickety gas guzzlers Ambassador and Fiat. Maruti 800 took to the roads amidst skepticism,but remained the darling of the Indian people for close to three decades.

It did more than revolutionise the car industry. Marutis advent created a whole new manufacturing culture that swore by quality and productivity, says Bhargava. Prior to that,India was looked upon as unsuitable for manufacturing exports. There was no auto component industry to speak of at the time. So, Maruti’s founders, in addition to setting up a car facility,helped set up scores of units from scratch to manufacture car components.

One of the big contributions of Maruti was to encourage entrepreneurs to participate in joint venture with the company, says Surinder Kapur, Chairman, Sona Koyo (then Sona Steering).

Today,many auto component makers are names to reckon with,be it Asahi Glass, Amtek Auto, Sona Koyo, Subros or Jay Bharat Maruti. Maruti Suzuki has a base of 225 vendors and business associates spread across the country,who grew along with the company over the years,and eventually became suppliers to other global auto manufacturers.

At the same time, Japanese manufacturing practices that MUL brought in with the launch of Maruti 800 have had a huge impact on the manufacturing industry in the country,says Kapur. For one, it institutionalised quality. CII adopted the company’s Total Quality Management clusters.

Today,India boasts of over 135 Total Productive Maintenance awardees, instituted by Japan Institute of Plant Maintenance,and over 30 Deming awardees,both the highest in the world after Japan. In 1992,when the economy was liberalised and foreign investment allowed into India,auto component companies set up and nurtured by Maruti Suzuki became the foundation for global car companies.They found an accomplished and experienced auto component industry,encouraging them to invest in India.

The Auto and Auto-Component Industrial Complex :

To even begin to understand the auto sector you have to understand that there is now no car that is made in one country .

There are thousands of components , machined , casted , forged , in many alloys and steels , electronics , plastics , carry hundreds of patents , produced across the planet . It is a complex world of sub-assemblies and assemblies .

The wheel , the engine , the gear-box , the steering system , the electronics , the paints and finishes , the nuts and bolts that can hold the wheel to the axle at 200 kmph year after year , the tyres et al.

Now with the autonomous , hybrids , batteries , zero emission , new materials , a revolution is on again .

It is called Industrial Revolution 4.0 .

Cyberphysical or Cybermechanical.

Just Maruti-Suzuki has 400 vendors or Tier- I suppliers , and these 400 have 2000 Tier — 2 , then there are the Tier -3 who could be sub-components , alloy steels , chemicals that make the paints etc .

Your assembly line can stop if any of these 2000 Tier-2 make an error or has a strike or gets hit by a natural disaster .

So there need to be De-Risking , by having alternative sources .

This is supply chain management . It is a deep science .

When the Fukushima Disaster happened , one of the plants that were affected supplied a chemical for the paint that was used in the Maruti-Suzuki paint-shop in Haryana .

That affected production in India .

This is how deeply the world of automobiles connected .

So Nature Risks , Political Risks , Labour Risks , Currency Risks (as sudden fluctuations will raise costs of imports ) are there besides competition , price pressures and future innovation that may make you obsolescent .

That anyone does technology and engineering is a wonder .

So one needs to have complex teams and to build them you need vision , intelligence , coalition building abilities , strategy and funds .

The concentration on occupational safety , quality , plant safety is now paramount .

Till Tier I the Car Company can keep a look , but majority of failures , that leads to recalls happen in Tier 2 .

So now thousands of companies are being audited and tested annually for discipline , preparedness , foresight , planning .

And the Delhi-NCR region has the Japanese to thank for being the part-funders and coaches .

Just Sona-Koyo has 205 suppliers for its steering columns , 174 domestic , 31 foreign .

That steering-wheel you don’t even notice , is a critical part , as it is only ONE .

Sona Koyo has initiated what they call is a QG system , that has 20 Quality Gates , at every part of the process .

Sona Koyo started as a Manufacture to Print Company , ie making on others design , to Design to Specifications Company , ie designing to what others want , to an Innovation Company, inventing new products ie they are patenting their own products .

Their USP is more and more a Knowledge Company to Mass Manufacturing .

They have created and are creating the most complex testing and simulation labs in India for components .

From Manual to Hydraulic to Electronic Steerings Sona Koyo has 35–67% market share in India .

OHV Off Highway Vehicles , FE Farming Equipment , DE Defense equipment , RV Recreational vehicle , are the many parts of the auto-mobility industry .

They all have their specific needs , and now there are many more vehicle launches than ever before .

So diversity has become the norm.

Lower volumes . And frequent changing of manufacturing settings .

Between Chennai , Pune and NCR Delhi are the 3 biggest hubs of auto manufacturing in India .

Gujarat with the new Maruti-Suzuki plant along with Hyundai and already Tata , Ford and GM will be the new centre .

And Sona-Koyo is everywhere .

When ever the history of the rise of the auto and auto-component sector will be written , people like Dr. Surinder Kapur , will be there in the arclights .

Some Japanese terms that derive from its craftsmanship and Shinto traditions that are much in use in the NCR Delhi auto-sector .

Monozukuri is one of those words that is impossible to translate. It is written entirely in Japanese hiragana syllables, making it a “native’ Japanese word, or “yamato kotoba.” Some writers have said that only people who speak Japanese can fully understand its nuances. While monozukuri is used to describe technology and processes integrating development, production and procurement, it also includes intangible qualities such as craftsmanship and dedication to continuous improvement. Its ambiguity allows it to mean different things to different people. The hiragana syllables give it a familiar hometown feeling. It has become an affirmation of the Japanese industrial strength that made it an economic powerhouse in the 1970s and 1980s.

The word monozukuri can be compared to the English word craftsmanship. However, in craftsmanship, the emphasis is on the man and his skills. Monozukuri emphasizes “mono,” the thing that is made, and “zukuri,” the act of making. The person doing the making is de-emphasized, and skills are only implied. I think this reflects Japanese sense of responsibility for making things, as in material substantive things. Japanese Shinto religion celebrates an appreciation and reverence for things animate and inanimate. Japanese businesses show this appreciation as well. For example, Japanese multinational pharmaceutical companies perform ceremonies every year to thank their experimental animals for sacrificing their lives to make medicines safe for humans. Japanese electronics companies have annual ceremonies thanking prototyping materials for their service in the development of products. Recognition of prototyping materials’ sacrifice is particularly interesting because they never got to fulfill their destiny of being made into products sold on the market and enjoyed by customers.

Taking care of things and making efforts not to be wasteful is very much part of traditional Japanese craftsmanship. We should all thank our experimental animals, prototypes and broken tools.

The kaizen system of incremental improvement owes much to traditional Japanese craftsmen. No one sits down and teaches an apprentice all the techniques he needs to become a master. He starts out as a minarai, and learns by watching. First, he is given menial jobs around the workshop. After a time, if someone calls in sick, he may get the chance to do a trivial part of the process. Later he may purchase his own tools and try things out in his spare time. He gradually gains more responsibility. At no time does the master specifically “teach” him anything. It is up to the apprentice to “steal the art,” to figure out for himself what the master is doing to get the right results. Over time, the apprentice develops a technique like the masters but also all his own. For example, National Living Treasure Yoshida Minosuke IV is the top Bunraku puppeteer of his time. Photographs of his master, Yoshida Bungoro V show his thick calluses on the fingers that manipulated the puppet’s head from the inside. Minosuke’s hands are completely smooth. Since his master’s hand was always hidden inside the puppet’s head, Minosuke has no idea how exactly Bungoro manipulated the head or how he got the calluses. Each person sees the process with a fresh eye, observing the master but learning for himself how to make the process work.

Traditional Japanese craftsmanship creates excellence by trimming away the “3 Mus.” Muri is activity that is not reasonable or overly burdensome in relation to the task. Learning to apply just the right amount of force with a wrench is an example of weeding out muri. Muda is an activity that is wasteful and doesn’t add value. The master’s movements show an economy of motion that preserve his stamina so that he can be more productive than his young apprentices, who still showmuda, wasted effort. Mura is inconsistency of process leading to uneven results. There is a right and wrong way to do every task. Those of you who went to school in Japan and had the job of cleaning the floors will know that there is one right way to fold, wipe, rinse, wring and store cleaning rags.

Genchi Genbutsu (現地現物?) means “go and see” and it is a key principle of the Toyota Production System. It suggests that in order to truly understand a situation one needs to go to genba (現場) or, the ‘real place’ — where work is done.

Taiichi Ohno, creator of the Toyota Production System is credited, perhaps apocryphally, with taking new graduates to the shopfloor and drawing a chalk circle on the floor. The graduate would be told to stand in the circle, observe and note what he saw. When Ohno returned he would check; if the graduate had not seen enough he would be asked to keep observing. Ohno was trying to imprint upon his future engineers that the only way to truly understand what happens on the shop floor was to go there. It was where value was added and waste could be observed.

Genchi Genbutsu is therefore a key approach in problem solving. If the problem exists on the shop floor then it needs to be understood and solved at the shop floor.

Genchi Genbutsu is also called Genba attitude. Genba is the Japanese term for “the place” in this case ‘the place where it actually happens’. Since real value is created at the shop floor in manufacturing, this is where managers need to spend their time.

Genchi Genbutsu is sometimes referred to as “Getcha boots on” (and go out and see what is happening) due to its similar cadence and meaning. It has been compared to Peters and Waterman’s idea of “Management By Wandering Around”.This concept quickly became so universal that new managers instinctively knew that they had to “walk around” to achieve high effectiveness levels. Whilst these ideas, with their associated lists of how-tos, are probably good ideas they may miss the essential nature of Genchi Genbutsu which is less to ‘visit’ and more to ‘know’ by being there. Toyota has high levels of management presence on the production line whose role is to ‘know’ and to constantly improve.