Lean Transformation and Indian Industry

R Jayaraman

Author: R Jayaraman

Date: Wed, 2016-09-21 19:07

If the words lean and transformation are put together to form “Lean Transformation”, the result is an intimidating scenario. While anorexia nervosa was in fashion many years back, and transformation is still being talked about and in use, lean transformation, LT for short, is neither intimidating nor about slimming. It is all about eliminating waste – and if that leads to a narrower waist, so be it.

When the term was used by Toyota to get out of the vicious “low quality” (some spoke of Japanese quality of those days colourfully as “ yellow quality”, sadly the Indian media was not present in those days to see it as another form of racism and rightly so) many people like Shoji Toyoda, Eichi Toyoda, Taichi Ohno (apocryphally speaking, it was said of Taichi that he was one of the toughest engineers to deal with, and people on the shop floors graced by him swear that, on seeing him near their machines, a collective “Oh no, not him again” would go up) were the founding fathers of the movement, one that would be the forerunner to Toyota becoming an exemplar of quality and lifetime joy for car owners.

This was way back in 1950. Since then, a lot of tsunamis have come and gone in Japan, but the power of LT has not subsided. If anything, it has become stronger and assumed titanic proportions in the early 1990s, when Womack and Jones came out with two books – Lean Thinking and The Machine that Changed the World. Together with the film “If Japan can, why can’t we”, shown and seen by a million American managers in the early 1980s, these books created a sense of tension in the American industry.

After the books, American industry relentlessly worked to adopt Japanese methods, including LT. The fear was that if they didn’t, then they would have to report to Japanese bosses and learn Japanese as well to survive. There can be few things more motivating to a country brought up on the Flag and Apple Pie.

Within a few years, the US industry leapfrogged and the Japanese were left behind. You may already be wondering, what was happening in India? As you might expect, as in all other things, based on the theme “unity in diversity”, a few Indian industry captains took interest in some aspects of lean but not the whole LT. Very few Indian industrialists were willing to go the whole hog. In fact, just getting into TQM itself was quite enervating and, huffing and puffing, a few industry giants and some pygmies as well (in the SSIs and MSMEs) got into the act and crossed the first few milestones.

No doubt even this effort paid rich dividends as many Indian companies shot into fame by getting into supply agreements with international giants – GM, Ford, BMW, Suzuki, to name but a few. Some of the more diligent ones got to winning the Deming Prize – Lucas TVS, Rane Madras, Sona Koyo Steering and lately Tata Steel - a coveted trophy of the highest honour in the world of quality manufacturing.

Over the years, LT has become the norm in many companies all over the world. Like a rolling stone, since NO ONE could copy what Toyota has accomplished, despite the fact that Toyota invites everyone to come to its plants and see for themselves whatever they want to (no confidentiality, full transparency), LT has come to include many factors – TQM, customer intimacy, integrated industrial development, elimination of waste – so much so that many American companies got together to start and run successfully the Lean Advancement Initiative at the MIT (in 2000) which led to further embedment of LT in large corporates as well smaller ones.

More companion initiatives like LESAT, Lean Enterprise Institutes and LT consultants have supported a broad based movement to initiate LT. The latest developments in the world – climate change, environment conservation, elimination of toxic wastes, conservation, sustainability, CSR – have all worked in favour of the core concept of Lean – eliminate wastes in any form.

In Japanese, they call waste as “muda” . In view of the many pressures (as in Kyoto, Beijing, Dubai) many more companies are getting into the “mooda” to eliminate waste and we should soon see the effects in India too.

 

Share

Comments

A very insightful read into lean transformation Jayaraman sir. Implementing lean transformation in Indian industries is a challenge most leaders in the industry face. A few challenges in implementation based on my experience in the Indian manufacturing industry- Accept the unlearning, perhaps the first step to embrace lean is for us to start the process of unlearning. A lot of the Indian way of execution needs unlearning, in order for lean to take root and grow. Take for example, the Indian “Jugaad”, long been praised across the Indian sub-continent for its ingenuity or out-of-the-box thinking. Though it has its positives, in the long run it prevents industries from introducing concepts such as lean, 5S, Kanban, etc. Jugaad or short term hacks by Indian innovators have long stalled progression towards establishing structured systems. Our thirst for these short term goals prevents us from letting lean transformation take root. This brings us to the next challenge, discipline. Lean and other Japanese concepts are built on the essence of discipline, without which, lean transformation cannot be implemented or sustained. The success of Japanese systems such as the ones implemented by Toyota, lies in the heart of discipline. An attribute that we Indians face a challenge with. Discipline is vital when a system needs to be implemented and most of all to sustain the system in any organization. Unlearning and discipline are the first few challenges one faces in the journey of lean transformation in today’s Indian industry. Unless we embrace these challenges, lean transformation will not have the soil to grow from.

Being a Toyota team member before coming to SPJIMR, this was a very interesting read for me. It gave me an insight about the acceptance of Toyota way concepts in industries of various parts of the world. One sentence which caught my eye was “NO ONE could copy what Toyota has accomplished, despite the fact that Toyota invites everyone to come to its plants and see for themselves whatever they want to (no confidentiality, full transparency)”. It got me thinking the reasons behind it. Below are my two cents for the reason behind it. The underlying philosophy of TPS (Toyota Production System) and TBP (Toyota Business Practices) comes from Toyota Way. And this is where most of the organizations stop adopting. They want to enjoy fruits but do not want to know the depth of roots beneath the ground. Toyota Way is set of guiding principles which define one’s thinking way and are based on two pillars of “Continuous Improvement” and “Respect for People”. “Continuous Improvement” constitutes of Challenge, Kaizen (change for better) and Genchi Genbutsu (go to the source and find out). Now, we have a tendency to stick to methodologies which work and stick to them for a long time (Chalta Hai attitude). We seldom challenge ourselves to improve further with a long-term perceptive. Questions like “What is better than Deming award-winning quality control measures?” are rarely heard. We fail to understand the elimination of Muda, Muri and Mura, concepts of JIT and Jidoka are results of Kaizen. We like to follow a chain of command for receiving facts. This is where facts get distorted and solutions are not optimized. I had our MD san coming to shop floor daily for project updates directly from the working group rather than managers making effective consensus building (Nemawashi) at all levels of the organization. “Respect for People” comprises of “Respect” and “Teamwork”. Here the most important aspect is to realize organization constitutes of suppliers and parent company working in sync to serve the customer. Taiichi Ohno said, “The achievement of business performance by the parent company through bullying suppliers is totally alien to the spirit of the Toyota Production System.” But the practice of terrorizing suppliers or taking drawings and giving orders to lowest bidders is common practice and is against the concept of respect for people. It has long term impacts like prolonged periods to innovate, design and commercialize a new product. The other aspect of this pillar is being accountable for our actions and activities. Blame games are very common in industry and impact deeply on working efficiency. Concluding all, it’s not the system you want to achieve, it’s the thinking way behind it you want to absorb. Companies visiting Toyota plant (gemba) should visit without preconceptions and blank mind and focus on root cause rather than source because root cause lies hidden beyond the source.

Thank you for your views and comments Raghav. TPS is embedded in Japanese culture, and the core values - respect for people, continuous improvement, eliminating waste - are all intrinsic to Japanese society. Value of thrift, utilising resources to the maximum possible extent ( I used the same bicycle in IITB which my father had used when he was in college!) are also values in Indian life. However, the ways in which these are woven into the corporate fabric in the two societies are quite different. AS you have rightly said, Nemawashi is the consensus method to decision making. In one sense, this practice is the expression of 'respect for people' philosophy. It is a ritual, which needs to be gone through to make the philosophy happen in real life. Gemba is another, linked to root cause identificaTION. WE need to inculcate such 'rituals' in our corporate lives too. Toyota has developed many such rituals over the years to embed and institutionalise its philosophy into daily management. For those of use who wish only to see the philosophy, the same cannot be actioned, if we do not practice the rituals. This is where I think most Indian companies could be 'missing the Toyota bus'. The TVS Group has successfully implemented TQM, a part fo the Toyota way, because it has implemented gemba, team work, consensus decision making to a great extent. I have seen this same happen in Tata Steel. Hope the same will happen in many other Indian companies too.

Add new comment

SPJIMR
Bhavan's Campus
Munshi Nagar | Dadabhai Road,
Andheri West | Mumbai - 400 058, India
Tel:+91-22-2623-0396/ 2401
      +91-22-2623-7454
Fax:+91-22-26237042
 

Delhi Centre
Bharatiya Vidya Bhavan Campus, 3rd Floor
Gate No. 4, Copernicus Lane
Kasturba Gandhi Marg, New Delhi-110001
Tel: 8383059670, 011-23006871, ext-871 

Locate SPJIMR