I'm Your Venus: Moving Grading In-House

By Danielle Max

Indian manufacturer Venus jewel takes the burden of getting diamonds graded away from their clients with their In-house grading system. Idex Magazine Editor-in-Chief Danielle Max put some questions about the company’s system Anil D. Shah, a partner in Venus jewel.

Danielle Max: What is the Venus Grading System?
Anil D. Shah: VGS is a comprehensive and irreducibly detailed grading system developed in-house by Venus Jewel. The Venus Grading System (VGS) involves thorough scrutiny of polished diamonds considering a total of 16 grades and various sub-grades. Without a false sense of modesty, we state that unlike conventional insufficient system of grading, each of the 16 parameters (with various crucial sub-parameters) graded under VGS for each polished diamond are extremely critical and form the very basis to achieve required grading along with a rational price derivation of the polished diamonds.

After intense, thoughtful and careful research, Venus Jewel came to a convincing conclusion that insufficiencies and borderline gaps in the grading of diamonds with respect to various properties could be filled and complemented only by introducing various new grades, which were hitherto never graded, thus making diamond grading a comprehensive and complete exercise. All the same, research provided gaps to be filled in, in respect of various grades that were graded, by introducing various sub-grades to make existing grades precise and rational. For instance, in Clarity grades there was an identifiable grade that could be put on scale between say VVS2 and VS1, which VGS termed as VS1+ (better). On the same line, VGS also has, at more than one place, at least two grades between two normally identified Clarity grades to precisely evaluate a diamond. Another example of the same is the introduction of SI1- and SI2+ between SI1 and SI2. On the same lines, under VGS at least 6 grades are added after I3. To make terms understandable in common parlance, VGS has added (+) or (-) to the existing alphanumeric grading terms as suffixes, as may be required. In addition, under VGS, Clarity can be adjudged only by supplementing Clarity grading with Luster, ‘Milkness,’ Table inclusions, Black inclusions, Inclusion patterns and Open Inclusions. Also, the price difference with similar grades is easily and rationally justified by this system. Based on this invention, VGS developed Master stones that correctly and consistently measure such invented grades on a perennial basis. The depth and breadth of VGS is so extensive that it was a Herculean task for us to first reach and then maintain accuracy and integrity of each of the smallest components of VGS and establish its credibility. To rank more grades and sub-divisions of various grades and to make polished graders reach pinpoint accuracy in such detailed system, we considered integrating a system that precisely and consistently grades every stone by including all the newly introduced grading parameters and sub-parameters. Accordingly, we conceived and developed a one-of-its-kind grading system, which grades each stone with 16 grading parameters and various sub-parameters resulting in trillions of grading combinations, is Information Technology (IT) enabled, provides for accountability of every person evaluating the stone, has multiple levels of checks at each minute stage and component of grading, is assisted with various tools being a set of Master stones and has a judicious dispute- addressing mechanism that would resolve any differences of opinion to reach precision grading on perennial basis. The main objective behind conceiving the system was to provide refined and superior quality diamond grading, allowing complete transparency in evaluating each diamond and selling. This uniquely developed grading system has been conceived and evolved considering all probable inherent characteristics of a diamond. Therefore, this system has led to diamond being precisely and justly adjudged, considering all its possible parameters.

Danielle Max: Why did Venus feel it was necessary to set up its own grading system?
Anil D. Shah: In our quest for excellence and after years of extensive research, availability of feedback data and analysis, it was realized that firstly, it was necessary to extend the scope of grading to encompass all the grading attributes that were necessary, to grade a diamond to bring comprehensiveness; secondly, it was also inferred that existing grades were broad, and scaling or measurement did not portray a correct picture, which in turn required a necessity of grades in between and sub-grades, which were hitherto never thought of or developed, thirdly reliability was another issue with the grading where for the same stone, one would end up getting different grades from different laboratories; fourthly, and most importantly, consumer trust and confidence for accuracy in indicating quality and value justification is essential. This, in fact, prompted us to develop and refine our Venus business model of which one of the core ingredient is VGS. Today, VGS has matured to deliver irreducibly comprehensive details of grading of diamonds with pinpoint accuracy, consistency and therefore, reliability.

Danielle Max: How does the Venus system differs from other grading systems?
Anil D. Shah: 60,000+ ranging from 0.50 to 5.00 carats and above.

Danielle Max: How many diamonds are graded each year?
Anil D. Shah: We are the first manufacturers to have come out with their own proprietary grading system. Being a manufacturer, it is all the more important for us to be extremely cautious when we self-certify the stones. Again, at the cost of modesty, we state that we are different from other grading systems in many terms, providing, among other things: SI3 grade, + (better) and - (lower) grades introduced for color & clarity; spread ratio; color hue; level of Milkeness; luster; fluorescence color; table inclusion, including different levels of sub-grade like T0, T1, T2, T3, etc; black Inclusion (Natts); inclusion pattern; internal graining; open Inclusion and culet. We are distinct in terms of comprehensiveness and detailing. As stated earlier, we have invented, devised, developed with precision and eventually incorporated various unconventional but indispensable grades into VGS. Secondly, we are unique in terms of precision and reliability, which are achieved through the entire process involved in grading. Apt application and fusion of Information Technology, nurtured human skills, performance linked wage system, available tools, multiple levels of checking, judicious mechanism and, most of all, the commitment of the management of Venus Jewel, are mainly responsible for this.

Danielle Max: How is full objectivity (and customer confidence) ensured?
Anil D. Shah: Grading is generally subjective and invariably involves human intervention. To make it work for humans to grade a diamond with pinpoint accuracy on consistent basis requires a foolproof mechanism that has all the components for complete accountability and for objective evaluation of a diamond.

Successive levels of grading experts, for resolving differences of opinion in grading. As stated previously, the core ingredients of VGS have evolved and matured to deliver absolute objective analysis.

As far as customer confidence is concerned, we personally believe that grading and pricing is our moral and ethical responsibility and our objective always has been to satisfy the requirements of customers by providing only what a customer is looking for, and we have considerably succeeded in this. Our acclaimed and successful e-commerce, which contributes about 40 percent towards revenues, could not have been possible but for unfaltering customer confidence in us and our systems.

This client-oriented value addition and quality assurance has increased the transparency of each transaction and enabled the buying process to be an informed and confident decision.

Danielle Max: How was the system developed?
Anil D. Shah: To conceive and develop the system, we had clarity right from the very beginning. We structured and did immense detailing of each component of VGS to establish credibility. Our system has evolved over a period of time. Continual refinement towards identification of detailed parameters, understanding of human skills, apt application of technology, aiding graders with necessary tools, including the development of master stones and a multi-level checking system with a judicious mechanism has brought maturity to the VGS for accuracy and consistency. Aside from our vision, we acknowledge and are truly grateful to our customers and employees, who have given us critical feedback for understanding and continuous improvement.

Danielle Max: Do you have plans to issue certificates for diamonds lower than 1 carat in size? Are there plans to offer different types of certificates?
Anil D. Shah: We provide Venus Grading Report (VGR) for all our diamonds, including those which are lower than 1 carat in size (Attached is the image of VGR). Presently we give VGR for shapes like Round, Emerald, Square Emerald and Princess. We shall soon come out with VGR for other shapes.

Danielle Max: How has the introduction of the system affected your business?
Anil D. Shah: Initially, we had a negative response from the market; however with time, the acceptance and appreciation flew obviously and in abundance. We have witnessed considerable faith in VGS from our customers. This has resulted in them confidently buying solitaires from our selling office as well as over the website. Achieving 40 percent sales of diamonds aggregating to over $125 million through www.venusjewel.com and having 47 percent growth in sales in 2007-2008, is a reflection of the extent to which the introduction of VGS has affected our business. It has invariably helped us to drastically reduce our inventory and move our goods quicker (stock turnover ratio is just 37 days) without certification from third parties. This has saved time and money for our customers. Customers can source goods only in what they require. For instance, if a customer does not require diamonds with “Natts” or “Black Inclusion,” or of varied degree, he does not have to spend time finding what s/he needs when it comes to sourcing from us because everything is mentioned in detail and can easily be filtered as to match their requirement with pinpoint accuracy with logical pricing in virtually no time. Since our diamonds are manufactured exactly as per the customer’s choice, they are not only the quickest selling diamonds on the counter, but they are also easily and quickly sold downstream (i.e. to our customers’ customer).

Furthermore, this has helped in doing business with leaner inventories. VGS has also made demand more predictable. Since our manufacturing operations are entirely integrated, our production has also become demand-oriented.

Danielle Max: Would you encourage other manufacturers to take a similar step?
Anil D. Shah: Many manufacturers have unsuccessfully attempted to simulate our grading systems, as well as a host of other services provided by us. We believe that the success of any system would depend on credibility. Credibility depends upon reliability. Reliability comes from accuracy on consistent basis. Accuracy on consistent basis comes only after deep thinking, devising state-of-the-art control systems and processes and their refinement and maturity. Refinement and maturity cannot be achieved in one leap.

Therefore, we definitely encourage others to come forward with similar systems but only after meticulous detailing and on strong foundation of transparency, commitment, consistency and ethical business practices.