Outside of Toyota City, the best manufacturing operation is in Chennai, says James P Womack, the founder-chairman of Lean Enterprise Institute, a non-profit educational and research organisation. That is evidence that Indian companies can implement and sustain “lean” systems. Unfortunately, he says, not many Indian managers know this. Shuchi Bansal engaged with Womack to try and correct this anomaly. Edited excerpts:
What is Lean Management Institute’s scope in India?
The institute has been operational from January 15, 2008 and has so far conducted Lean Value Stream Manager Development programme for manufacturing industries. This was attended by 35 senior managers from companies such as — AMD, TVS Logistics, L&T, Visteon, WABCO-TVS, ECS Limited, TI Diamond Chain, Mando Brakes, Shriram Pistons, and so on. We are following up with the managers who attended as all of them are implementing Lean in their companies. It also did In-house Lean & Value Stream Mapping training for TESCO Hindustan Service Centre, a BPO serving TESCO’s back-end processes world-wide.
The implementation is in progress here in at least two major value streams. The gains are initially coming in reduced cycle time for processing, higher productivity and improved quality. The management summit, meanwhile, brought home the fact that Lean Management has moved beyond Lean Production, into the domain of Lean Solutions where the objective is to make the process of consumption hassle-free for end consumers. Lean Solutions are about delivering to customers exactly what they want, when they want, where they want and doing it profitably and in a sustained manner.
Several companies — including the big US car companies — have tried to emulate the Toyota Business Systems model. But have they been successful in organising their value chains efficiently?
No, but many companies have done very well copying parts of the five-part Toyota/lean business system which consists of product and process development, fulfillment (from customer order back to raw materials and through manufacturing to delivery), supplier management, customer support, and enterprise management. For example, Danaher, the most successful American manufacturing company of the past 35 years (far more successful than GE), has copied Toyota’s strategy deployment system.
And the American car companies have now created very competitive factories after such a long lag that they are drowning in high costs due to pension obligations and low prices due to a generation of designing and building truly awful products. And Tesco in the UK has done a truly brilliant job of copying Toyota’s fulfillment system from its suppliers through its stores to its customers.
One of the major issues with the Toyota Way is that it depends on an optimum infrastructure delivery environment, like in Japan, Europe or the US and, therefore, has less relevance for India. Do you agree? I always find this argument very curious. I can’t help but suspect that some Indian managers are hoping it is true so they can say, “Thank goodness! Now we don’t have to change the way we manage!” All I would ask any Indian manager to do is to think through the Toyota/lean principle of supplying small amounts frequently to customers at every point along a value stream.
This is the sequence of value creating activities running from raw materials into the hands of the end customer. Does the fact that roads are clogged and often undependable mean that Indian firms should instead make enormous batches of items, build up enormous inventories of goods at every step, and ship infrequently in the largest possible vehicles?
Toyota/lean practitioners instead determine a “standard inventory” of items at every point along a value stream, designed to guard against upstream disruptions in supply and downstream surges in demand, and then ship small amounts frequently using multi-stop milk runs with smaller vehicles. The result is that the total lead time and inventory costs fall dramatically while the quality goes up, even though the value streams are not as ‘lean’ as they would be in Toyota City.
India has been innovating with variations of lean manufacturing for some years now — how do you assess these efforts?
On my last trip to India, I witnessed the best manufacturing operation I’ve seen in the world outside of Toyota City. It was at one of the TVS Group plants in the Chennai area. After talking with the management and the workforce I had to reject the hypothesis that Indian firms cannot implement and sustain “lean” systems. I only wish that every Indian manager knew this fact — there are no excuses due to special Indian conditions — and then decided to act on it in their own operations.
What impressed you at the TVS plant?
The team at WABCO-TVS (manufacturer of vehicle control systems) has done a brilliant job of scanning for lean knowledge, bringing a few experts for a short period and learning everything they knew, and then incorporating it into their business system, from policy deployment to factory operations to supplier development — an extremely impressive achievement.
The benefits of lean management are well documented, but what are the pitfalls when companies implement them?
The problems are never with the workforce. They are always with the management. And the greatest management barrier in India is simply that most managers don’t know what is possible. Indian managers could be changing their own working lives, the lives of their workforce, the prospects for their companies, and the standard of living for the whole country if they only understood the basic lean principles.
Some Indian managers seem to like theory in the conference room more than practice on the “gemba”, the place where value — in engineering, sales, production, purchasing or any other activity — is actually created. What was striking about the WABCO-TVS case was the amount of time the managers spent looking first hand at their core processes and engaging the workforce in taking action.
