Implementation of Lean Manufacturing

Implementation of Lean Manufacturing Principles in Auto Industry*
R. P. Mohanty1, O. P. Yadav 2 & R. Jain3

Abstract The lean manufacturing as a set of principles is now fairly rooted in the literature. The principles behind lean manufacturing are not in themselves new; many of them can be traced back to the work of pioneers such as (Deming, 1986;Taylor, 1911; Skinner, 1969). Although the concept of lean as now understood could have modeled from this literature, it was not until the Japanese auto industry was studied, that the total concept became clear. Indeed lean manufacture has been extended to encompass the whole spectrum of activities in the business such that world-class companies, in particular the automotive and electronic sectors are seeking to become lean enterprises. While there are some voices of discontent (Gordon, 1995;Berggren, 1992) to the adoption and ultimate effectiveness of lean production, nonetheless many case examples exist to demonstrate how companies are changing their production methods and management practices to become leaner. This paper describes some learning from the literature and actual practices in USA, UK, and India. Attempts are made to present the gaps between the principles and practices. Some pertinent propositions are put forth to enrich the knowledge base of professionals to make the implementation process more pragmatic and robust in the long run and for furtherance of empirical research by academia.
1.0 INTRODUCTION
In the mid-1980s, U.S. auto industry was in crisis. It was rapidly losing market share to Japanese competitors. The Japanese automakers were able to make
* 1. 2. 3.
better quality cars with fewer defects resulting in better customer satisfaction and thereby creating an image of excellence across the globe. Toyota Motor Company, which despite 1973 oil crisis increased its earnings, was able to
Received July 31, 2006, Revised August 17, 2006. The authors would like to thank an anonymous reviewer for making useful suggestions for improvement of the paper. Chair Professor, Adviser & Dean, Institute for Technology and Management Group of Institutions, Navi Mumbai, e-mail: rpmohanty@gmail.com Assistant Professor, Industrial and Manufacturing Engineering, North Dakota State University, Fargo, ND 58105, e-mail: om.yadav@ndsu.edu Research Assistant, Department of Business and Information, Liverpool John Moores University, Liverpool, UK, e-mail: r-jain1965@hotmail.com
Vilakshan, XIMB Journal of Management
continue increase its market share. Even today, Toyota is one of the worlds most successful automakers that have perpetually outperformed their competitors in terms of quality, reliability, cost, delivery, after sales service etc. Japanese manufacturing systems have been rigorously researched by global academia. The famous book The Machine That Changed the World written by Womack, Jones, and Ross (1990) awoke the US manufacturers. Over the last two decades, many researchers have studied Toyota Production System (TPS) and have documented various principles and practices used by Toyota (Womack and Jones, 1994; Liker, 1998; Adler, 1993, Spear and Bowen, 1999; Sobek et al . 1998). Researchers, who studied and documented TPS in the 1980s, termed the total approach as lean manufacturing although the principles behind lean are not in themselves new; which can be traced back to the work of pioneers such as (Deming, 1986; Taylor, 1911; Skinner, 1969); because of its ability to attain and realise so much more in terms of final outcomes with the deployment of fewer resources. The ideas were adopted because the Japanese companies developed, produced, and distributed products with less human effort, capital investment, floor space, tools, materials, time, and overall expenses (Womack et al., 1990). Lean manufacturing was accepted as an innovative paradigm-that eliminates waste in any form, anywhere and at any
time, relentlessly strives to maintain harmony in the flow of materials and information, and continually attempts to attain perfection. Ohno (1988), Shingo (1989), Womack et al. (1990), Monden (1997) and many other researchers made wide ranging contributions to popularise the lean approach. Stunned by the Japanese growth, many companies in the US and developed countries pursued ways to develop and make products more quickly and efficiently, tried very hard to imitate or implement TPS. These manufactures started using various tools and shop-floor practices identified as key elements of lean approach such as Just-in-time, Kanban, setup time reduction, production leveling, production cells, quality circles etc. Strangely, despite their power and ability to greatly improve operational performance, these tools have not been very effective in lean implementation. Many of the companies that report initial gains from lean implementation often find that improvements remain localised, and the companies are unable to have continuous improvements going on. One of the reasons, we believe, is that many companies or individual managers who adopted lean approach have incomplete understanding and, as a result, could not be able to gain all the benefits as Toyota enjoys. Frustrated by their inability to replicate Toyotas performance, these companies assume that secret of Toyotas success lies in its cultural roots. But Toyota has successfully introduced its production
Mohanty et al , Implementation of lean ...
system all around the world, including in USA, and New United Motor Manufacturing Inc. (NUMMI) is a wellknown example to narrate the success story (Adler 1993). The objective of this paper is to report some learning by way of understanding and evaluating the lean implementation practices in some major companies in India, USA, and UK. Stemming from the view of lean manufacturing, as an area of professional practice, there is a need yet to define lean approach: the content or subject matter of implementation. This consists chiefly of the models, methods and techniques, tools, skills and other forms of knowledge that go into making up any practice.
2.0 LEARNING FROM LITERATURE
is development by cross-functional product development teams; integration of all ideas in the early design stages, thus reducing time and cost, and optimising the overall manufacturing process. Adler (1993) argues the prevailing notion that quality, productivity, and learning depend on managements ability to free workers from the coercive constraints of bureaucracy is not true. He claimed that bureaucracy can be reformed to encourage innovation and commitments while standardisation, if properly understood and practised, help continuous learning and motivation. His two-year study of the NUMMI shows that Toyota succeeded in employing an innovative form of Toyotas time-andmotion regimentation on the factory floor not only to create world-class productivity and quality standards but also to enhance workers motivation and satisfaction. It also provides a unique example of employee empowerment, where workers themselves design their procedures and involved in continuous improvement and leading to better employee-employer relationship. Spear and Bowen (1999) imply a possible reason for the inability to implement TPS, that is, majority of western manufactures confuse the tools and practices of lean manufacturing with the system itself. They claim that this over emphasis on tools and techniques makes it impossible to understand an apparent paradox of the system, namely, those activities,
The inability of US manufacturers to imitate lean manufacturing approach and failure to match Toyotas performance, prompted new generation of researchers to do in-depth study of TPS in order to decode and uncover the secrets of success. Some researchers (Adler, 1993; Kamath & Liker, 1994; Spear, 1999; Sobek et al., 1999) made attempts studying various aspects of TPS in order to identify and uncover basic truths of lean manufacturing. It can be inferred that the innovative aspects of TPS are not merely the use of kanban, JIT, inventory reduction, setup reduction, or any other individual tool. Rather, the backbone of TPS is the processes by which Toyota designs its production system-that
connections, and production flows in a Toyota factory are rigidly scripted, yet at the same time Toyotas operations are enormously flexible and adaptable. According to them, the tacit knowledge that underlies the TPS can be captured in four basic rules, which together ensure that regular work is tightly coupled with learning how to do work better. These rules guide the design, operation, and improvement of every activity, connection, and pathway for every product and service. These rules are: how people work (activities); how people connect (connections); how the production line is constructed (pathways); and how to move forward (continuous improvement). All the rules require that activities, connections, and pathways have built-in tests to signal problems automatically. It is the continual response to problems that makes this seemingly rigid system so flexible and adaptable to changing circumstances. Sobek et al . (1998) studied Toyotas product development process and mentioned that in many ways Toyota does not resemble what is often considered the model of Japanese automakers. It has maintained a functionally based organisation while achieving its impressive degree of integration, and many of its tools and techniques are actually similar to those U.S. companies employed during their manufacturing prime time. Toyota relies on highly formalised rules and standards,
and puts limits on the use of crossfunctional teams. Such rigid policies can have enormous drawbacks. However, to avoid these drawbacks and have smooth integration, Toyota has been relying on number of mechanisms (Sobek et al., 1998) to ensure that each project has the flexibility it needs and still benefits from learning from other projects. The result is a deftly managed process that rivals the companys famous TPS in effectiveness. Set-based concurrent engineering (Sobek et al ., 1999) is a unique example of Toyotas exceptional product development capability. Kamath and Liker (1994) carried out an in-depth study of best practices used by Toyota and other Japanese manufactures in supplier management and product development. They claim that Japanese structure their development programs tightly and use targets and prototype to keep suppliers in line. Japanese set clear, and understandable goals and communicate them consistently to suppliers, and use schedules and targets as major coordinating mechanism. Toyota and others treat suppliers based on their capability and mutual alignment, not blind trust, is what binds important suppliers to customers. Interestingly, many of lean tools and practices are actually similar to those that US companies employed during their manufacturing prime and, in fact, Toyota imported these ideas from US only and put them into practice (Ohno, 1988).
However, the insight that Toyota applies underlying principles rather than specific tools and processes explains why the company continues to outperform its competitors. Womack and Jones (1994) developed the lean concept further. They envisaged it as: a group of individuals, functions, and legally separate but operationally synchronised companies. The idea is to link breakthroughs of individual companies, in terms of lean techniques, up and down the value chain to form a continuous value stream. Karlsson (1992) summarizes the concept in three principles: being global, operating in networks, and building knowledge structures together with other actors. Perhaps most important is the organisation and building of hierarchies of technological knowledge for the development and production of products. Regardless of author, there is one common denominator in the studies cited above: their ideas were generated through research in large companies, most commonly the global automobile industry (Karlsson, 1992; Womack et al., 1990). To our knowledge, very few manufacturers have managed to imitate Toyota successfully, even though the company has been extraordinarily open to its practices. It is to be understood that the secret to Toyotas success lies in adherence to fundamental principles of Industrial Engineering (simplification, standardisation,
systematisation) supported by actionable rules, and combined with operational innovations to achieve unprecedented levels of waste reduction, while simultaneously increasing total productivity and quality. Therefore, to analyse the implementation of lean approach; it is essential to study the inner working of companies following the fundamental principles of TPS identified by various researchers over a period of time. In this study, we examined the lean principles implementation and inner workings of more than 50 companies in automotive sector in USA, UK and India. We studied production system, product development processes, supply chain management, and management style to see how these companies are following lean principles as documented by various researchers. We interviewed engineers, senior managers, workers, and involved ourselves in attending their review and problem-solving meetings to understand the coordination mechanisms, the process of interaction and cooperation between supplier and customer.
3.0 RESEARCH METHODOLOGY
The first step of our research was to conduct comprehensive literature review in order to collect information on fundamental lean principles. After a comprehensive literature review, a
questionnaire survey combined with interviews were considered to be the most appropriate method for investigating implementation status of fundamental lean concepts in the USA, UK and Indian automotive companies. We, therefore, decided to carry out a postal survey in view of its efficiency for this kind of research with regard to the resources needed. The study was mainly restricted to automotive industry. The target population for this study was large auto manufacturing companies including both original equipment manufacturers (OEMs) and tier one (and few tier two) suppliers. The survey questionnaire was mailed to 120 randomly selected major auto companies in August 2004. These companies represented a broad crosssection of the auto industry in USA, UK, and India. The survey covering letter promised anonymity and clearly described the objectives of the study. Further, companies were promised to provide summarised results of the study in order to enhance the number of replies. Initial response, however, was exceedingly poor. Companies who did not respond after six weeks were sent a follow-up letter along with the questionnaire. Finally, the number of valid responses that we used for analysis was 56 amounted to a response rate of around 50 per cent. Later, it was decided to undertake an in-depth investigation in order to
capture the level of understanding and extent of adaptation of lean principles and tools. In our detail investigation, we decided to interview a few managers of each major automotive company, observing company paper work, observing practices to get more clear understanding, attending review and problem-solving meetings, and having unstructured discussion with managers and engineers. A detailed report was prepared after each interaction and sent to the respective managers. The aim of the in-depth investigation process was to explore in more detail the issues that were covered in the survey. In particular it provided the researchers with the opportunity to probe issues such as prob lems and impediments in adoption of lean principles. It also ensured that all questions were interpreted correctly. It allows the validity of the answers to be assessed and minimises perceptual bias. In this particular study, four core areas of auto manufacturing such as; production system, product development process, supply-chain management, and management style were identified to investigate the lean implementation process. Further, we captured the fundamental (or actionable) principles of lean manufacturing (or TPS), based on the literature survey and the authors industrial working experience. These fundamental principles are mentioned in Table-1.
Table 1: Implementation of fundamental lean principles

Fundamental lean principles High Standardisation Teaching and learning Socialisation Supplier-customer relationship Simple and specified pathways Continuous improvement Pursuit of perfection Coordination through rich communication Functional expertise and stability Cultivating organisational knowledge 0.80 0.60 0.72 0.80 0.76 0.84 0.64 0.84 0.60 0.72 Level of implementation Medium 0.12 0.20 0.24 0.16 0.12 0.12 0.20 0.12 0.20 0.16 Low 0.08 0.04 0.04 0.04 0.12 0.04 0.04 0.04 0.04 0.08 None 0.00 0.16 0.00 0.00 0.00 0.00 0.12 0.00 0.16 0.04
4.0 PRELIMINARY SURVEY RESULTS
Having established the understanding that it is imperative to focus on both practices and principles in an integrative way to match Toyotas performance, the emphasis was placed on actionable lean principles in this study. The lean principles identified by researchers (Spear & Bowen, 1999; Sobek et al., 1998; Adler, 1993; Kamath & Liker, 1994; Womack et al., 1990; and Ohno, 1988) are used to direct and summarise the collection of publicly available information on auto industrys lean principle implementation. In the case of the actual implementation of these principles, the information was later crosschecked with the views of key senior managers and engineers. This was important, as it shows the context into which the basic actionable and
fundamental principles of lean manufacturing were implemented. The first step of our research was to collect information on implementation status of these identified fundamental lean principles. It was more of exploratory in nature, as companies were asked to respond whether they are familiar with these fundamental principles and if so, do they follow them in their organisation? While respondent did not always respond with simple yes or no for any category, but for classification purpose, it was necessary to record either positive or negative answer. At this stage, we did not investigate the inner working based on these actionable principles. The Table-1 gives the results of this exploratory survey. The advantage of this step is that it provided us a logical and coherent picture of understanding lean
implementation status, which further helped developing detail investigation strategy. Our preliminary survey indicates that over 75 per cent of the companies surveyed claimed to have implemented lean manufacturing or similar approaches and around 15 per cent are actively engaged in implementation process. This outcome of the survey has somewhat stunned us as, in reality, most manufactures are still a long way to go to attain Toyotas level of performance, and literature survey also shows that there are very few companies who have successfully imitated Toyotas lean approach. Another interesting observation from this study is that four important lean principles, i.e., teaching and learning, pursuit of perfection, functional expertise and stability, and cultivating organisational knowledge, which are generally considered as building blocks for organisational transformation are not on the high priority and only 60 per cent organisations have recognised their importance. This observation strengthened our skepticism on the claim of lean implementation and further encouraged us to undertake the detailed study on inner working of these companies to bring clarity on the issue. Prior to our survey results, based on the literature review, we expected that a substantial percentage of these companies would not be well versed with adaptation of these fundamental principles of lean concept. However, in the light of actual
results this proved to be too simple to assume. The unexpectedly positive response surprised us and, therefore, motivated us to look into inner-working of these companies in terms of their understanding and implementation of these fundamental principles and hence, to validate their response. The next step was an in-depth investigation to capture the level of understanding and extent of adaptation of identified lean principles by manufacturing companies who either claimed to have implemented lean concept or companies that are actively engaged in implementation process. In our detailed investigation, we did not include the companies that did not claim to either have implemented or actively engaged in lean implementation process. To extract true nature of implementation status and to validate the responses, unstructured discussions were held with many employees at different levels, which further added richness and context to the information collected. This was normally achieved by a combination of observing in company paper work, observing practices during visits to plant, both in offices and shop floors, witnessing some of review and problem-solving meetings, and discussions with managers and engineers.
5.0 INVESTIGATION ON LEAN PRINCIPLES IMPLEMENTATION
While much has been written on the subject of lean manufacturing, the strategies advocated to implement the
lean concept are somewhat different. The key aspect of lean implementation is the marriage between lean practices and principles with the strong commitment in pursuit of perfection through perpetual learning. Many companies tried to imitate Toyotas tools as opposed to its principles; as a result, many have ended up with rigid, inflexible production system that worked well in the short term but didnt stand the test of time. Mere implementation of tools, without having established integrative system that acts as precursor to lean implementation, is not sufficient and it does not help transformation into learning organization (Senge, 1990). However, to be implemented successfully, these tools and practices have to be preceded or at least accompanied by organisational transformation: by new integrative thinking, strategies, and actionable principles in the organisation (Smeds, 1994). Moreover, all the principles identified by researchers over a period of time cannot be implemented independently. They are basically complementary to each other and require integrative approach, broad-ranging and system-wide changes in order to improve organisations performance. Above all, intellectual stimulation, inspirational motivation, and idealised influences within the interfunctional teams are very much essential to reap the benefits of lean practices in the long run. The following sections discuss the underlying principles of lean manufacturing and detailed analysis of
implementation status of these principles by automotive companies in USA, UK, and India.
5.1 Standardisation
Standardisation is one the building blocks of lean thinking in TPS. Toyota managers recognize that the lack of details and explicit description of work content, sequence, timing, and outcome allows operators or employees to perform tasks differently, which results in more variation in outcome. Further, it hinders learning and improvement in the organisation because the variation masks the link between how the work is done and the outcomes (Spear and Bowen, 1999). Therefore, routine and repetitive tasks require standardised work procedures to improve efficiency and quality. The requirement that every activity be specified is the first unstated rule of the TPS, and thats why Toyota ensures that all work is highly specified as to content, sequence, timing, and outcome. At Toyota, the ultimate purpose of standardisation is to reduce cost relating to production by eliminating production inefficiencies such as unnecessary inventories, and workers. Through standard operations, it achieves multiple goals such as high productivity; line balancing among all processes, minimum quantity of work-in-process, and finally helps reduce variability in operations (Monden, 1997). In addition, Toyota trains new employees to work independently in three days. This approach increases
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learning efficiency because workers keep referring to the standard operating charts until they get familiar with the techniques (Shingo, 1989). At the same time, Toyota strongly believes that standard should not be forced down from above but rather set by production workers themselves. Spears and Bowen (1999) reported that at Toyota, because operators (new and old, junior and supervisory) follow a welldefined sequence of steps for a particular job, it is instantly clear when they deviate from the specifications. To make problem detection even simpler, Toyota relies on visual system that allows deviation immediately apparent, worker and supervisor can move to correct the problem right away and then determine how to change the specifications or retain the worker to prevent a recurrence. Adler (1993) credits success of NUMMI to its intense focus on standardisation. At NUMMI, in contrast to other US manufacturers, the work procedures are designed by workers themselves in continuous and successful efforts to improve quality and productivity. Team members themselves hold the stopwatches, and learn the method analysis, description, and improvement. This change in the design and implementation of standardised work has far reaching implications for worker motivation, self-esteem, and workermanagement relationship. Toyota has successfully standardised much of its product development process as well. Routine work procedures-such
as design blueprints, production reports, and feedbacks for design reviews-are also highly standardised. Sobek et al. (1998) reports standardisation of written communication in the form of report format in Toyota product development process. The reports all follow the same format so that everyone knows where to find the definition of the problem, the responsible engineer and department, the results of analysis, and the recommendations. The standard format also helps engineers make sure they have covered the important angles. Writing these reports is a difficult but useful skill, so the company gives its engineers formal training in how to boil down to what they want to communicate? Sobeks findings also support other researchers arguments that standardisation is a key to Toyotas performance and continuous improvement. In contrast, in most organizations we studied the prevailing belief that standardisation destroys creativity. They advocate that detailed standards will inevitably alienate employees, poison labour relations, hobble initiative and innovation, and diminish an organizations capacity to change and learn (Adler, 1993). Ohno (1988) clearly describes in his book the encouraging Ford thinking about standardisation. However, Fords successors did not carry that thinking of standardisation. However, authors have observed through their study that this prevailing belief towards standardisation among labour unions is largely attributed to:
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Work standards developed by industrial engineers or consultants who dont have direct work experience at the shop floor and imposed on workers to follow them, which is contrary to Toyotas thinking. Further, the standards developed by industrial engineers or consultants are not as detailed and full of exactness as Toyota does. Managers generally use these standards as performance metrics as wellignoring other factorsto evaluate workers performance and hence to punish them, if they wish to do so. They use these standards to force workers to work harder and harder. The so-called misuse or abuses of standards have forced labor unions to be more suspicious about standardisation. The majority of managers themselves doesnt believe in standardisation and always use their own convenient ways to perform their tasks. One of the engineers from a US automaker shared his frustration with us that report format changes with change in leadership (chief engineer) and he had to redo everything again to the satisfaction of a new chief engineer. Every time new leadership takes the responsibility, the reporting procedures and working style changes. In the absence of standard report format, there is always possibility of missing important angles in the report and it is difficult
for engineers to figure out the required information quickly. Managers, we believe, still dont get the complete meaning and importance of standardisation and ended up with more reliance on technology, toolbox techniques and algorithms for performance improvement.
5.2 Simple and specified pathways
The work must flow to the right machine (or person) in the right form at the right time at the lowest cost with the highest quality possible. By setting up a flow connecting not only final assembly line but also all the processesproduction as well as non-production processesone reduces production lead time. In Toyota system, there are no forks and loops to complicate the flow of good, service, or information in any of Toyotas supply chains. This principle addresses the third rule formulated by Spear and Bowen (1999), i.e., how the production line is connected? Toyota system works on the premise of totally eliminating the over production generated by inventory and costs related to workers, space, and facilities needed for managing inventory. To achieve this, Toyota practises the Kanban system in which a later process goes to an earlier process to withdraw parts needed just in time. It ensures that all pathways are set up so that every product or information flows along a simple and specified path. However, the stipula tion that every
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product follows a simple, pre-specified path doesnt mean that each path is dedicated to only one particular product. At Toyota plants, each production line typically accommodates many more types of products than its counterparts do at other companies specifically US automakers. By requiring that every pathway be specified, the rule ensures that an experiment will occur each time the path is used. If for some reasons a workstation or worker is not available and engineer found himself looking for help to divert production to another machine, Toyota will see it as a problem that might require the line to be redesigned. Toyota engineers consistent motto is to simplify and specify the paths to be followed by the product. The driving forces behind TPS follow the general direction of selforganisation: towards the simplicity of original structure (Sahal 1982). Contrary to this, majority of manufacturers, we believe, still have the hangover of larger the lot size, the better, as a key to cost reduction. They have been improving and refining production processes in their own way and have not attempted, however, the production leveling the way Toyota has been working. Except few companies, majority of them have been heavily relying on technology and algorithms to solve their problems without simplifying the process flow. A large number of companies have not been able to achieve effective integration
of various functional areas. There have always been conflicts between functional groups over the goals, objectives, and achievements. Mistrust, communication gap, and lack of coordination play important role to enhance that conflict. Western manufacturers have misinterpreted the workflow system and literally forcing work to flow. Authors have identified an automotive supplier company claiming to have implemented Kanban system but still using it as traditional push system. We still have that mindset of producing items and pushing them to next work station. In most organisations that claim to have implemented JIT, what is missing is the autonomation-automation with human touch, which corresponds to the skill and talent of individual employees to support and make JIT implementation a success. According to us: Group work is one of the main features of lean production. It is the core element of the sociotechnical approach, which is instrumental to what is sometimes referred to as reflective production(Ellegrd, K. et al. 1992). Clearly delineated, coherent, work groups, as capable performers of operational processes in line with the requirements of the organisation will make lean implementation a success.
5.3 Teaching and Learning
Senge (1990) says, the organisations that will truly excel in the future will be the
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organisations that discover how to tap peoples commitment and capacity to learn at all levels in an organisation. It seems Toyota has realised that necessity long before. At Toyota, teaching and learning evolves through unique relationships between managers, supervisors, and workers. They constantly work together to solve problems where managers and supervisors act as enablers rather than giving directions or orders. Managers position themselves as a teacher and coach, not as an administrator. They put workers through experiences without explicitly stating what or how they have to learn. The result of this unusual manager-worker relationship is a higher degree of sophisticated problem solving and leaning at all levels of the organisation. This approach allows workers to discover the rules as a consequence of solving problems. Standardisation and specified pathways further strengthen this approach of problem solving and learning. In product development also, Toyota has not forgotten the value of instructive supervision within functions. Supervisors and higher-level managers are deeply involved in the details of engineering design (Sobek et al.1999). It has been reported in both areas, product development and production system, that Toyotas managers avoid making decisions for their subordinates. They rarely tell their subordinates what to do and instead answer questions with questions. They force engineers to think
about and understand the problem before pursuing an alternative, even if the managers already know the correct answer. Supervisors normally come to the work site and ask series of question (Spear and Bowen 1999) such as; how do you do this work, how do you know you are doing this work correctly, how do you know that outcome is free of defects, what do you do when you have a problem? The iterative questioning and problemsolving approach leads to effective learning and builds knowledge that is implicit. Further, Toyota uses hierarchy (called as learning bureaucracy) to spread teaching and learning while encouraging innovation and commitment. The learning bureaucracy can provide support and expertise instead of a mere command structure (Adler 1993). That is why at Toyota plants all managers are expected to be able to do the jobs of everyone they supervise and also to teach their workers how to solve problems according to the scientific methods. This teaching and learning principle motivates workers and taps their potential contribution to facilitate continuous improvement and organisational learning. It dispels the prevailing notion in all the auto companies that hierarchical organisational structure is inefficient, ineffective, and suffocates learning. Though majority of big companies show their commitment towards teaching and learning and even claim that it is their one of the missions, the inside culture never
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supports this claim. Manager, supervisor, and workers relation are full of suspicion and disrespect towards each other. In manufacturing environment, the intense supervision would seem to be kind of meddling that stifles the creativity and learning of new engineers and other specialists. These companies preach empowerment through self-learning. In few cases, we have observed that managers and supervisors too lack the skills to act as mentor and coach. Not only that, they heavily rely on their subordinates (engineers or workers) to get their work done rather than acting as an enabler to train and coach their subordinates. We have found few cases where a supervisor coming from totally different functional background does not have complete understanding of the kind of work and people he is going to supervise and therefore, not able to do the justice to his job. Few engineers from US automotive companies shared their frustration by the experience of working under someone less skilled than they are. Therefore, this existing practice of frequent rotation of people across functions has hindered the western organisations teaching and learning capability. There have been few instances where manager or supervisor took the undue credit of work, which he does not even know how to do it. This tendency in any organisation demotivates the workers and creates an environment of mistrust and disrespect. In a so called hierarchical
structure, western managers and supervisors play the role of commander and pass on the work requirements to their subordinates and final output to top management and to other functional departments. It seems that their only role is to pass down the orders to their subordinates and vice versa. This authority system is having strong negative impact on participative culture and team bonding, and workers are always under fear of losing jobs if they dont keep them happy. One of the major concerns authors have realised through their study and close interaction with workers and engineers is frequent transfer from one job to another. This not only hinders the learning process by experience and problem solving but also eliminates the possibility of strengthening teaching and learning process. However, it must be understood that implementing lean approach is a continuous journey, which needs a learning organisation, where managers have to engage in: Guiding, mentoring, and developing employees Building organisational capabilities and responsiveness Marshalling professional expertise Showing judgment, common sense, and intelligence
5.4 Socialisation
The social context in which work is performed is one of the important aspects of the TPS. In terms of social context,
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Toyota seeks to build an atmosphere of trust and common purpose. It carefully builds consensus around important decisions, and has programmes ensuring adequate communication of results and other essential information. Under normal circumstances every human being has desire for excellence, a mature sense of realism, and finally the positive response to respect and trust. Toyota uses socialisation to ensure adequate communication of results and goals and create an environment of trust and respect. Encouraging participative decision making and team bonding through small production teams further strengthens the socialisation process. Toyota leadership wants workers to understand that the company is not the property of the management but of everyone together. Toyota management also believes that team culture and job security eliminate fear and build a strong commitment that in turn improve efficiency and productivity. Sobek et al. (1998) highlights that Toyota with its intensive mentoring trains and socialises engineers in ways that foster indepth technical expertise and efficient communication. Managers or supervisors expertise as well mentoring and coaching roles act as stimulus to socialisation process. Toyotas ability to sustain profits, quality, and improvement record certainly depends on workers motivation that rests, in turn, on equitable treatment, clarity in communication, and responsive management. Therefore,
effective socialisation among Toyotas employees and management plays a crucial role to maintain Toyotas ability. In reality, the exceptional consistency in actions, consensus around important decisions and effective communication mechanisms create a fertile ground to accelerate socialisation process at Toyota. This principle is highly underplayed in the most organisations. In contrast, the prevailing notion about socialisation is going out for drink and lunch, scheduling off-site meetings, and arranging games and sports activities during work time. There is a tremendous amount of mistrust and disrespect among subordinates as well as between supervisors and workers. Few of the reasons, we believe, for suspicion and disrespect are lack of technical and managerial competence, and arrogance towards subordinates. The lack of clear purpose and communication gap between managers and workers further intensifies the prevailing mistrust. Authors have found that majority of western companies, especially in USA, are hiring contract employees (which India is following) as a means to cost reduction without realizing its long-term ramifications. This approach, however, fails to gain workers commitment towards organisation and job, spoils team culture environment, and increases workers fear of job and hence, affect the socialisation process in a big way. Rather than integrating themselves with organisational culture these contract employees are always on look out for new
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and better opportunities to move. According to our understanding, top management needs to recognise socialisation as a process to: Nurture internal and external relationship Facilitate cooperation and partnership with clarity in communication Value individual differences and diversity Demonstrate self-awareness and display resilience
improvement must be made in accordance with a scientific method, under the guidance of a teacher, and at the lowest possible organisational level. At Toyota, engineers and managers are facilitators, mentors, and coaches to act as a support system rather than an authority system. Toyota teaches its employees to improve their problem-solving skills by redesigning their own work. To make changes, people are expected to present the explicit logic of the hypothesis, which requires that employees fully explore all their improvement opportunities. Also their improvement activity should be carried out as a bona fide experiment. By inculcating the scientific method at all levels of the workforce, Toyota ensures that people will clearly state the expectations they will be testing when they implement the changes they have planned. Frontline workers make the improvement to their own jobs, and their supervisors provide direction and assistant as teachers. The total involvement of workers, supervisors, and managers in problem-solving exercise ensures that leaning takes place at all levels of the company in the most conducive social context. A large number of companies across the world claim to have heavily invested in continuous improvement efforts. However, the failure to fully understand and implement these first four principles of lean philosophy, i.e., standardisation, path simplification, teaching and learning,
5.5 Continuous improvement
Standardisation, learning, socialisation, and path simplification are the essential building blocks for improvement and provide a specific base to carry out continuous improvement. In deed, these principles are not only vehicles and preconditions for improvement but also direct precursors. Continual reiterations of these principles create an intensely structured system for continuous improvement. The basic Toyota philosophy is that any operating system can be improved if enough people at every level are looking and experimenting closely to improve their own work system. Toyota explicitly teaches people how to improve, not expecting them to learn from personal experience. That is where the principle of continuous improvement comes in. The distinctive feature of Toyotas continuous improvement effort is that any
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and socialisation, makes their claim weak. Authors do believe that these organisations are struggling hard to create an environment of continuous improvement but, it seems, their approach lacks a focus. What is lacking in their efforts is total commitment from management and employees, consensus on the approach, scientific methodology, and confidence. The various approaches or philosophies of continuous improvement, such as Total Quality Management (TQM), Six Sigma, Lean Six Sigma, Just-In-Time, etc., are being implemented without fully committing to any one of these. It looks as if they are gaming with these approaches. Except few large companies, there is no explicit way to teach people how to improve the process. People, generally, use their common sense in improvement efforts rather than presenting the explicit logic of the hypothesis and following scientific experiments. It seems that there is a competition among lower level employees to change the process for the sake of impressing managers and supervisors rather than bringing real improvement. These efforts are not based on the observed problems with existing methods/processes and hence, dont really improve the process. We have noticed in one automotive company that a reporting process changed thrice in last 18 months by three different individuals. Another interesting case we noticed in one car company where there were three sixsigma projects addressing the same problems and coming out with three
different solutions claiming huge savings to the company. Most disturbing trend we have observed in our study is that majority of managers in companies look towards new technologies, toolboxes, and algorithms to find solution rather than understanding the problem and simplifying the process. It has already been highlighted in the literature that tools and techniques will not help improve the system unless basic operating principles are inculcated. According to us these are: Any improvement effort must be made at the lowest possible organisational level in accordance with a scientific method based on logical reasoning. Any improvement initiative must be guided by systems engineering thinking. It is important to avoid the tendency of becoming prisoners of their own position where people dont see how their actions affect the other performance indicators or overall process performance and resulting into learning disabilities. Make continuous improvement process a team effort and ensure that everyone involved has the opportunity to take ownership of the process. It is critical to build partnerships with key customers, suppliers and stakeholders for effective and better results. Instead of focusing attention on too many issues, set priorities and focus
18
on vital few issues. Make sure to provide the relevant information and resources to every one who needs them for continuous improvement Strive for some small tangible early successes and make the most of these through recognition and publicity.
5.6 Supplier-customer relationship
Toyota ensures that every connection between people is standardised, direct, and unambiguous. It specifies the form and quantity of the goods and services to be provided, the way requests are made by each customer, and the expected time in which the request will be met. The rule creates a supplier-customer relationship between each person and the individual who is responsible for providing that person with each specific good or service. This clarity of how people connect with one another leaves no gray zones in deciding who provides what to whom and when. The requirement that people respond to supply request within a specific time frame further reduces the possibility of variation. Tasks are preprogrammed so that one group knows what to expect from another and when to expect it, with little or no communication required (Sobek et al. 1998). For outside suppliers, Toyota manages supplier relationship very tightly. They set clear, understandable goals and communicate consistently to suppliers, and subsequently use targets and prototypes to enforce these goals. Toyota
maintains its relationship with suppliers clearly based on its requirements and suppliers capability. Toyota lays down clear targets, and the supplier has to figure out how to meet them. Milestone events usually represent delivery deadlines and meeting these deadlines is crucial. Toyota suppliers also know exactly where they fit within clearly determined boundariesto be creative without being destructive. Suppliers are expected to work hard and meet targets on time. Toyota managers generally understand if, despite its best efforts, a supplier cannot meet a target. In general, Toyota gives marching orders to suppliers through carefully considered targets for price, delivery date, performance, and space. In short, Toyota uses targets as coordinating mechanism and targets play different roles in different supplier relationship and in determining the nature of relationship. Very few, elite corps of about a dozen first-tier suppliers, enjoy full-blown relationship with Toyota. The Japanese tier structure simplifies communication between Toyota and its suppliers; first-tier suppliers coordinate activities of the second-tier and so on down the hierarchy, allowing Toyota to focus scarce communication resources on top tier. Toyota develops different types of relationships with different suppliers depending on their technological capabilities and its willingness to share information with supplier, and both companies strategic requirement. Finally,
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mutual entanglementnot blind trust is what binds important suppliers Toyota and vice versa. Kamath and Liker (1994) identified a range of postures that Toyota and suppliers can adopt within long-term cooperative relationship as: Partner: relationship between equals, supplier has technology, size, and global reach. Mature: customer has superior position; supplier takes major responsibility with close customer guidance. Child: customer calls the shots, and supplier responds to meet demands Contractual : supplier is used as an extension of customers manufacturing capability. Toyota uses prototypes as an organisational lever to measure the performance of suppliers and ensure that they meet delivery deadlines. Prototype testing and evaluation provide a way to manage the relationship because each prototype stage is an opportunity to appraise the suppliers performance. Suppliers performance evaluation is based on the car data, not the data provided by the supplier. Suppliers who miss prototype delivery deadlines face severe penalties, such as a reduction in the size of subsequent orders. In contrast, most of the manufacturing companies we studied do not have clearly defined rules to connect people with one another. In most of the companies, the connections arent so direct and simple.
The request for material, information, or help often takes a complicated route to the supplier via several committees and hierarchy of managers and supervisors. The lack of clarity of how people connect to one another creates an ambiguity and finally disrupts the smooth process flow. There is always delay when request for urgent goods or service delivery is made at the last moment when milestone date is close, which is popularly known as fire fighting tendency. The second author, during his two years working with one of the US automakers, has noticed that sometimes people are not even aware of the source to contact for a particular information or service. There are lots of disconnects in the system, which creates chaos and affects the overall quality of the output. To manage outside suppliers, US automakers are also trying their best to have very tight relationship. They do try to develop relationship based on their requirements and suppliers capabilities. Lately, there have been some efforts to involve suppliers early on in the product development process. However, despite all their right efforts, when it comes to make final decision on supplier selection, once again cost plays more important role than quality, delivery performance, suppliers capability, etc. The impact of this decision can be clearly seen on suppliers behavior. Authors have noticed during their study that suppliers do respond differently to US automakers and Toyota. The same supplier would have
20
different quality of the same product for US automakers and Toyota. Upon further enquiry, we found that Toyota gives fixed (and better) rates and defines very clear requirements and expectations, where as with US automakers they always struggle for price, never get clear requirements and expectations, and always there is possibility of last minute changes, which disrupts suppliers whole production system. There is no standardised and direct mechanism to communicate all expectations and requirements to suppliers. In couple of US automakers and suppliers meetings, we have noticed the sudden emergence of requirements, which were never specified to suppliers by the customer or design engineers. This resulted due to the communication gap between design engineer and reliability engineer of the US automaker itself because there is no standardised and direct connection between people within the company. Additionally, there are few nuances of supplier-customer relationship, which have not been fully understood by
managers of US and other western manufacturing companies but attempted to implement those. For example, it is widely believed that Toyota treats virtually all its primary or first-tier suppliers as close partners. However, the reality is that Toyota typically regards only handful of them as close partners and assign more limited roles to others. This instance illustrates that existing tendency among western managers or US to imitate Toyota system without fully understanding how Toyota works with suppliers. This tendency has the potential of doing more harm to the company rather than building strong relationship with suppliers. The successful partnership depends on the right balance among suppliers technological capabilities, customers willingness to share information, both companies strategic requirements, and of course honesty and mutual trust between them. Majority of companies, those we have visited and studied, have not been able to develop strong relationship based on above factors.
According to us, the following success variables may define the value dimensions of supplier-customer relationship in lean approach:
Commitment Trust Cooperation Mutual goals Interdependence and power Performance satisfaction Structural bonds Comparison level of alternatives Adaptation Non- retrievable investments Shared technology Social bonds
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5.7 Coordination through communication
To develop the idea into an innovation, a hologram structure is needed: the designing of the whole into the parts. This is possible by having effective coordination among groups and individuals with requisite variety in knowledge and rich information content. The amount of complexity and number of parts involved in car design makes coordination through rich communication an essential element to succeed. One of the most critical and powerful principles of Toyota as well as other Japanese manufactures is simple coordination and communication mechanism. The common wisdom is that best mode of communication and coordination in product development is face-to-face talk with people from other functional areas and suppliers. Written forms of communication in the form of written report and memos dont have the richness of information or interactive qualities needed for problem solving. This belief supports direct meeting between the members of different functional groups and encourages faceto-face interaction to sort out issues and concerns. Meetings, however, are costly in terms of time and efficiency, and usually involve limited value-added work per person and they easily lose focus and drag on longer than necessary. Therefore, in lieu of regularly scheduled meetings, Toyota emphasises written communication (Sobek et al. 1998).
At Toyota, communicating about set of problems, concerns, and solutions, appears to increase the richness of communication while decreasing the length and frequency of meetings. When an issue surfaces that requires crossfunctional coordination, the protocol is to first write a report that presents the diagnosis of the problem, key information, and recommendations, and then to distribute this document to the concerned parties. The recipient is expected to read and study the document and offer the feedback, sometimes in the form of separate written report. One or two iterations communicate a great deal of information, and participants typically arrive at an agreement on most, if not all, issues. If there are outstanding agreements, then its time to hold a meeting to hammer out a decision faceto-face. Likers (1998) data show that Toyota meets with its suppliers less often for shorter periods of time than do other major auto companies in the USA, even though Toyota suppliers appear to have greater design responsibilities and fewer communication problems. To communicate and coordinate with suppliers, Toyota sets clear, understandable goal and communicate them consistently to suppliers, and uses targets and prototypes to enforce and coordinate these goals (Kamath and Liker, 1994). In fact, Toyota uses targets as a major supplier coordinating mechanism and prototype as a way to structure the design process-in effect, as an
22
organisational lever to measure the performance of suppliers and ensure they meet delivery deadlines. The nature and degree of coordination with suppliers depends on the suppliers technological capability, sophisticated management, global reach, and right balance among a suppliers technological capabilities, a customers willingness to share information, and both companies strategic requirements. Kamath and Liker (1994) gives a range of postures (or roles) that customers and suppliers can adopt within a long-term cooperative relationship, i.e., partnership, mature, child, and contractual. Lean principles require both suppliers high engineering capability and a close but demanding relationship between the customer company and the suppliers. In contrast, the auto companies, we studied are still struggling to develop a smooth and effective coordination mechanism. They do have coordination problems both internally as well as with external suppliers. The lack of effective internal coordination results into the poor communication with external suppliers. Failure to communicate rich information to external suppliers hampers the suppliers capability to do their best meeting customer requirements innovatively. This internal coordination problem is attributed to lack of clarity of how people connect to one another. This disconnect in the system disrupts smooth flow of information and people fail to gather
relevant information in order to communicate to the suppliers timely. Authors have realised that most automakers are still fond of face-to-face meetings, which, of course, are time consuming, costly, prone to lose focus, and drag on longer than necessary. In US auto industry, whenever problems or concerns appear, rather than communicating it through written report to present diagnosis of the problem, relevant information, and recommendations, the immediate response will be lets call meeting and discuss it. Even, in India if the written report is circulated before the meeting, very few people take pain to read that report before joining the meeting. Majority of attendees often arrive at meeting having done little or no preparation. This allows the meeting to drag on beyond the scheduled time and force them to schedule next meeting to discuss the recommendations and necessary solutions, if possible. One of the reasons for re-scheduling next meeting is that participants didnt go through written report, were not aware of the nature of the problem, and hence, did not collect the relevant information content before coming to the meeting. Engineers in companies we have visited often share their frustration of not having enough time to get their engineering work done because of all the meetings they need to attend. The lack of effective coordination among the people within organisation further
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impedes communication with external suppliers in meeting targets and milestone dates. It doesnt facilitate the consideration of total information content before setting targets and milestone dates, and as and when additional information is received, the requirements and targets get changed accordingly. In UK and in India, so many times the amendments are made put additional burden on suppliers in meeting milestone dates and affecting quality of the items. According to us, lean approach needs relational coordination between various parties through: Frequency of communication Timeliness of communication Problem solving communication Helpfulness Shared goals Mutual respect
rotate primarily within their engineering function, they gain the experience that encourages standard work, making communication with other functional groups easier because engineers know each other very well for a long time and develop good understanding with each other. Also the stability over time means that the companys engineers in one functional division need to spend less time and energy communicating and coordinating with their counterparts in other functional areas because they know each others requirements and expectations. There is common belief that rotating locally and building functional expertise would result into rigid functional boundaries in which engineers work only to be best in their function and fail to visualise the whole picture of the system. Toyota, however, takes care to rotate most of its senior people broadly (Sobek et al. 1998). Senior engineers with at least 20 years experience typically rotate widely across the company to areas outside their expertise. Such moves force senior people to rely heavily on the experts in their new area, building broad networks of mutual obligation. At the same time, these senior engineers bring their own expertise, experience, and network of contact that they can use to facilitate integration. In contrast, we could find in our study, there are frequent job rotations and transfers moving people from one functional area to another. The average stay of each person in one functional area
5.8 Functional expertise and stability
Every company depends on highly skilled engineers, designers, and technicians to bring a product to markets. Organisation can develop standard skills by giving each person within a specialty the same set of skills to accomplish his or her tasks. In order to achieve that Toyota rotates most of its engineers within one function, unlike U.S. companies, which tend to rotate their people among functions. Cross-functional job rotation is unusual for the first ten to twenty years of an engineers career. Since most engineers
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is around two years, hardly sufficient to get functional expertise, to develop good understanding of the system, and to get to know other people well. During our interaction with engineers and supervisors, we came to know about few instances where both supervisor and engineer recently moved from different functional areas and now struggling together to get familiarised with new job requirements as well as system. These kinds of unplanned rotation of people result in great loss of productivity and disrupt smooth functioning of the department. Authors have confronted with situations in Indian organisations where engineers were sent for advance training programs in order to build functional expertise. However, after 3-6 months, those same people were either moved to different functional areas or they had opted for different job responsibility. These instances clearly show that development of functional expertise and stability is not well taken care of. Further, most of the companies that we studied rely heavily on universities or training consultants to provide their people with the skills needed to do their job, where as Toyota relies primarily on training within the company.
5.9 Striving for ideal goal
be necessary merely to meet the current needs of their customers. Their ideal goal is not something philosophically abstract but has a concrete and consistent definition. Toyotas ideal state shares many features of the popular notion of mass customisationthe ability to create virtually infinite variations of a defect free product as efficiently as possible and at the lowest possible cost in a safe work environment. To the extent that a Toyota plant or a Toyota workers activity falls short of this ideal, that shortcoming is a source of creative tension for further improvement efforts. Our in-depth study reveals that very few organisations claim to have ideal goal set for achieving excellence in world market. Majority of organisation are struggling to stay in business by adopting drastic cost cutting measures and frequently changing their business focus rather than setting ideal goals to achieve. Our interaction with people from US auto industry reveals that imitating Toyotas performance is becoming their ideal goal but not by fundamentally adhering to TPS and internally struggling to keep their operations in good shape to stay in business. Interestingly, people in these companies dont share common goal. We found majority of people in India and UK giving more importance to their personal goals over common shared goal of the company. We believe that it reflects the lack of employees commitment towards organisation and their job, and major failure of industry leaders in developing
People at Toyota have a unified inspirational vision. They have a common sense of what the ideal system would be, and that shared goal motivates them to make improvements beyond what would
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long-term shared inspirational vision. According to us, the ideal goal helps in: Creating a compelling future Letting the customer drive the organisation Involving collective minds.
5.10Cultivating organisational knowledge
Toyota documents current capabilities of its products and processes in the form of an engineering checklist. When a product engineer begins a design, the production engineer sends the latest checklist so that the product engineer knows the current constraints on the solution space. Whenever the design or process changes are made, the engineer responsible for those changes updates the checklist also. Toyota engineers capture what they have learned from each project, problem solving exercise, and lessons learned from different efforts by documenting alternative, trade-offs, and technical design and process standards. Toyota has high regard for the learning acquired in the work on multiple ideas as pointed out by Sobek et al. (1999). It seems to have faith that the skills and knowledge generated will pay off later; either directly through incorporation into next project or indirectly through expanded skill sets and knowledge. In case of western organisations, few automotive companies have been building organisational knowledge base. For example, Ford Motor Company documents the
knowledge generated from successful projects and problem-solving exercises, known as Engineering Knowledge Base (EKB). However, Ford engineers fail to capture all the lessons learned from unsuccessful projects and alternative ideas/concepts, which were not selected as final product. Few organisations, as authors have observed, maintain multiple knowledge bases separately within each division or platform. These multiple knowledge bases dont communicate with each other resulting in redundancies as well as duplicating the efforts in solving same problem again and again in different divisions. It seems western organisations are far behind in documenting the knowledge generated within company and are yet to cultivate organisational knowledge fully. However, Indian companies fail to understand the importance of human capital and people have unequal access to knowledge management tools and a strategic framework for knowledge management is missing.
6.0 CRITICAL OBSERVATIONS
Our initial results showed positive response from majority of companies we have surveyed. However, subsequent follow-up study of inner working of these companies presented different scenarios and therefore, helped us to understand the real problems thriving and disconcerting these companies. Our in-depth research shows that among western organisations, especially US
26
automotive industry, there has been tremendous amount of interest to understand the inner working of TPS. These organisations are striving hard to imitate Toyota system with little success. Their initial efforts show reasonable improvement in organisations performance. However, they have not been able to maintain similar performance consistently and achieve further improvement. Many companies in UK seem to be looking for improvement process cookbook, a step-by-step method that, if properly executed, improves organisational performance many folds. The lean principles are not steps, prescriptions, or recipes. Rather, these principles are building blocks essential elements of any system, which need to be seamlessly integrated into whole system and culture of the organisation. The lean principles identified by various researchers, if understood and implemented with dedication along with other tools and techniques, will enable any company to replicate Toyotas performance and even challenge Toyota. Further, our study indicates the keen interest on the part of Indian manufacturing companies to adapt or learn new approaches and techniques in order to improve their performance; but it is only the beginning of the journey. The main focus of this study was to understand and highlight major concerns
and issues preventing these companies to replicate Toyotas performance. The following remarks are worth noting: It is important to emphasise here that efforts to implement any one lean principle alone would accomplish little, but every principle has its own role and at the same time reinforces others. Many automotive companies in USA and UK have attempted to implement few of these lean principles independently without much success. Our study discovers that most of the organisations have been very successful in implementing techniques like JIT, Kanban, production leveling, team building, quality circle, and others. But it did not bring them kind of success they have been striving for. On the other hand, Toyota has been very successful in continuously improving its performance because of coherence in implementing principles with models, tools and techniques. The ingrained responses of many western managers and engineers, derived from their education and their cultural roots, work against the foundations of lean approach. For example, western companies approach team empowerment by allowing team considerable autonomy. However, this empowerment introduces tremendous amount of variations in
27
output and hinders the possibility of finding real causes or any deficiencies existing in the process for further improvement. Managers and supervisors need to play role of facilitators (teachers and coaches), get involved in problemsolving projects, and work along with subordinates to enhance the learning of whole team rather than demonstrating her/his authority. Managers and supervisors need to demonstrate exemplary technical expertise and fluency in synthesizing technical knowledge into innovative solutions to wield respect from subordinates and also to get promotions. However, majority of companies do not have such stringent technical competency requirements to get promoted. Most companies seriously need to curtail the tendency of making changes for the sake of changing the existing procedures. To make changes, people should present the explicit logic of the hypothesis, fully explore all improvement opportunities, and conduct scientific based experiment to test the hypothesis and expectations. Companies seriously need to rein in this tendency and inculcate the scientific methods at all levels of the workforce by involvement of managers and supervisors in problem-solving projects.
The prevailing tendency in most organisations is to attempt to resolve the problem to address specific issue, treat it as a final solution and move on to next one. That tentative solution becomes permanent remedy to the problem and no body looks back to it unless it props up again with same issue and different one. This attitude doesnt support the continuous improvement principle. Finally, we believe that in order to excel in world market, any organisation needs to transform itself into a learning organisation. The answer is in the professional practice, which requires pragmatic acculturation and corporate discipline by making people capable of and responsible for learning by doing and improving their own work, by standardising connections between individual customers and suppliers, by pushing the resolution of connection and flow problems to the lowest possible level, striving for ideal goal, and cultivating organisational knowledge.
7.0 LEARNING FOR INDIAN COMPANIES
In Indian companies, we could observe the following factors as the major impediments in promoting lean practices: Power politics between various functional departments
28
Low investment in human resource development Short term interests of business leaders Quick-fix expectations and shallow thinking of most managers Emphasis over administration over learning and knowledge transfer
take prudent risks to seek out, create and introduce lean projects. Process: the business processes and practices that enable people to operate effectively and collaborate towards a common purpose- as well as a robust set of lean tools. Structure: organisational structures and supporting technologies that enable collaboration across the company.
However, some well established automanufacturing companies have achieved the following: Reducing cycle time and customer lead-time Reducing inventory Improving productivity Reducing material cost Improving performance of the supply chain Effective supplier and dealer networking Multi-skilled workforce
From our study, we will put forth the following guidelines for Indian managers: Establish a clear sense of direction for lean manufacturing Open communication and continuing education Reduce bureaucracy Instill a sense of ownership A tolerance for risk and failure
For most companies that we studied in India are striving to learn lean practices and the ability to deliver lean practices on a sustainable basis require them to look within and renew the fabric of the organisation itself. There are three aspects of this internally focused lean approach: Culture: the mind set that allow individuals and teams to think imaginatively and competitively to
Sustained practices come from developing a collective sense of purpose; from unleashing the creativity of people throughout organisation and from teaching them how to recognise unconventional opportunities. As lean practice takes its roots, a clear sense of mission empowers front-line employees to act on new ideas that further companys purpose. Lean practices require optimism. Its about an attitude of continually reaching for higher performance. Summarily, Indian companies have to learn more and more about structural
29
FUNDAMENTAL PRINCIPLES
CRITICAL SUCCESS FACTORS
STANDARDISATION
PRODUCTS, PROCESSES, METHODS, TOOLS, SYSTEMS
TEACHING & LEARNING
COMMITMENT TO HUMAN CAPITAL
SOCIALISATION
RELATIONSHIP MANAGEMENT, DIVERSITY MANAGEMENT
SUPPLIER CUSTOMER RELATIONSHIP
MUTUAL RESPECT, SHARED TECHNOLOGY, STRUCTURAL BONDS
COHERENT WORK TEAMS, PULL SYSTEMS SIMPLE & SPECIFIED PATHWAYS
SYSTEMS THINKING, PROCESS OWNERSHIP CONTINUOUS IMPROVEMENT
PURSUIT OF PERFECTION
TOTAL QUALITY MANAGEMENT, GOAL SETTING, INSPIRATIONAL LEADERSHIP
COORDINATION
COMMUNICATION SYSTEMS, INFORMATION TECHNOLOGY AND SYSTEMS
STRIVING FOR IDEAL GOAL
MANAGEMENT BY IDEOLOGY
FUNCTIONAL EXPERTISE & STABILITY
HUMAN CAPITAL MANAGEMENT
CULTIVATING ORGANISATIONAL KNOWLEDGE
KNOWLEDGE MANAGEMENT, EMPOWERMENT AND INCLUSIVENESS
Fig.1: Linking Lean Principles to Critical Success Factors
30
integration, process integration, and external integration.

8.0 CONCLUSION AND USEFULNESS FOR THE PROFESSION
All the mass production and efficiency models typified by Taylor, Ford, and Sloan, placing high value on rationality, have traditionally stressed strong division of labour and prescribed rigid bureaucratic forms. These organisational forms became increasingly incompatible with the new business environments of the late twentieth century, which forced more flexible means of production and improved service delivery performance (TPS). The high value placed on lean system thinking has emerged in the
management practices. Those companies who have focused on competency and readiness for continuously deepening and strengthening their technical capabilities, scientific bases and then reacting systematically to invest resources in developing and articulating a strategic intent for lean enterprise have succeeded in the long term. To strengthen the lean system movement, and its robustness as an approach to coping with future economic and market conditions, we have to enrich the professional practice. This research is a step in that direction. We present Fig.1 and Fig.2 as the significant learning for professionals and academia for furtherance of research and applications.
LEAN ENTERPRISE
A R T I C U L A T I O N
M O T I V A T I O N
F A C I L I T A T I O N
P R E P A R A T I O N
M O B I L I Z A T I O N
I N N O V A T I O N
D E T E R M I N A T I O N
7 PILLARS OF LEAN MANUFACTURING PRACTICES
Fig.2: Seven Pillars of Lean Manufacturing Practices
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REFERENCES
Adler, P.S. (1993), Time-and-Motion Regained, Harvard Business Review, January-February 1993. Berggren C. (1992), Alternatives to Lean Production, ILR Press, Ithaca, NY, 1992. Deming, W.E. (1986), Out of the Crisis, Quality, Productivity and the Competitive Position, Cambridge University Press, Cambridge, 1986. Ellegrd, K., Engstrm, T., Johansson, B., Johansson, M., Jonsson, D. and Medbo, L. (1992), Reflective production in the final assembly of motor vehicles an emerging Swedish challenge, International Journal of Operations & Production Management, Vol. 12 No. 7/8. Gordon, T. (1995), The underlying fallacies of lean and mean, The Ironbridge group, USA, BPICS CONTROL, August 1995. Kamath, R.R. and Liker, J.K. (1994), A Second Look at Japanese Product Development, Harvard Business Review , Nov-Dec., pp.154-170. Karlsson, C. (1992), Knowledge and material flow in future industrial networks, International Journal of Operations & Production Management, Vol. 12 No. 7/8, pp. 10-23. Liker, Jeffrey K., Ed. (1998), Becoming Lean: Inside Stories of U.S. manufacturers, Productivity Press, Portland, OR. Monden, Y. (1997), The Toyota Production System, Institute of Industrial Engineers, Atlanta. Ohno, Taiichi (1988), The Toyota Production System: Beyond Large-Scale Production , Productivity Press, Portland, OR. Sahal, D. (1982), Alternative conceptions of technology, Research Policy 10, 2-24. Senge, P.M. (1990), The Fifth Discipline: the Art &
Practice of the Learning Organization , Doubleday/Currency, New York. Shingo, Shigeo (1989), A Study of the Toyota Production System from an Industrial Engineering Viewpoint, Productivity Press, Portland, OR. Skinner, W. (1969), Manufacturing missing link in corporate strategy, Harvard Business Review, May-June. Smeds, R. (1994), Computerization and Strategystructural development in an industrial organization, In:J.H.ErikAndriessen and Robert Roe (Eds.) Telematics and Work, Lawrence Erlbaum Associates Ltd, Hove, East Sussex, UK, 313-349. Sobek, II, D.K., Liker, J.K. and Ward, A.C. (1998), Another Look at How Toyota Integrates Product Development, Harvard Business Review, Jul-Aug., pp. 36-49. Sobek, II, D.K., Liker, J.K. and Ward, A.C. (1999), Toyotas Principles of Set-Based Concurrent Engineering, Sloan management Review, winter 1999. Spear, S. and Bowen, H.K. (1999), Decoding the DNA of the Toyota Production System, Harvard Business Review, Sept-Oct., pp. 97-106. Spear, Steven (1999), The Toyota Production System: An example of Managing Complex Social/ Technical Systems , Ph.D. dissertation, Harvard Business School, Boston, MA. Taylor F.W. (1911), The Principles of Scientific Management, Harper Bros, New York, NY.1911. Womack, J. P., Jones, D.T., and Ross, D. (1990), The Machine That Changed the World, New York: Rawson Associates. Womack, J.P., and Jones, D.T. (1994), From Lean Production to the Lean Enterprise, Harvard Business Review, March-April, pp. 93-103.
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Implementation of Lean Manufacturing Principles in Auto Industry*

R. P. Mohanty1, O. P. Yadav 2 & R. Jain3

Vilakshan, XIMB Journal of Management

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Table 1: Implementation of fundamental lean principles

4.0 PRELIMINARY SURVEY RESULTS

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5.2 Simple and specified pathways

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5.3 Teaching and Learning

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5.5 Continuous improvement

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5.6 Supplier-customer relationship

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5.7 Coordination through communication

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5.8 Functional expertise and stability

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5.10Cultivating organisational knowledge

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7.0 LEARNING FOR INDIAN COMPANIES

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CRITICAL SUCCESS FACTORS

PRODUCTS, PROCESSES, METHODS, TOOLS, SYSTEMS

TEACHING & LEARNING

COMMITMENT TO HUMAN CAPITAL

RELATIONSHIP MANAGEMENT, DIVERSITY MANAGEMENT

SUPPLIER CUSTOMER RELATIONSHIP

MUTUAL RESPECT, SHARED TECHNOLOGY, STRUCTURAL BONDS

COHERENT WORK TEAMS, PULL SYSTEMS SIMPLE & SPECIFIED PATHWAYS

SYSTEMS THINKING, PROCESS OWNERSHIP CONTINUOUS IMPROVEMENT

TOTAL QUALITY MANAGEMENT, GOAL SETTING, INSPIRATIONAL LEADERSHIP

COMMUNICATION SYSTEMS, INFORMATION TECHNOLOGY AND SYSTEMS

STRIVING FOR IDEAL GOAL

FUNCTIONAL EXPERTISE & STABILITY

HUMAN CAPITAL MANAGEMENT

CULTIVATING ORGANISATIONAL KNOWLEDGE

KNOWLEDGE MANAGEMENT, EMPOWERMENT AND INCLUSIVENESS

Fig.1: Linking Lean Principles to Critical Success Factors

Vilakshan, XIMB Journal of Management

integration, process integration, and external integration.

7 PILLARS OF LEAN MANUFACTURING PRACTICES

Fig.2: Seven Pillars of Lean Manufacturing Practices

Mohanty et al , Implementation of lean ...

Vilakshan, XIMB Journal of Management