implementation of lean manufacturing

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Implementation of Lean ManufacturingPrinciples 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.

* Received July 31, 2006, Revised August 17, 2006. The authors would like to thank an anonymousreviewer for making useful suggestions for improvement of the paper.

1. Chair Professor, Adviser & Dean, Institute for Technology and Management Group of Institutions,Navi Mumbai, e-mail: [email protected]

2. Assistant Professor, Industrial and Manufacturing Engineering, North Dakota State University,Fargo, ND 58105, e-mail: [email protected]

3. Research Assistant, Department of Business and Information, Liverpool John Moores University,Liverpool, UK, e-mail: [email protected]

1 .0 INT RO DUCT IO N

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

better quality cars with fewer defects

resulting in better customer satisfactionand thereby creating an image ofexcellence across the globe. Toyota Motor

Company, which despite 1973 oil crisisincreased its earnings, was able to


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2 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 researchershave 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 ofpioneers 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 (Womacket al

., 1990). Leanmanufacturing 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 oflean 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 initialgains 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 incompleteunderstanding and, as a result, could not

be able to gain all the benefits as Toyota

enjoys. Frustrated by their inability to

replicate Toyotas performance, thesecompanies assume that secret of Toyotas

success lies in its cultural roots. But Toyota

has successfully introduced its production


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system all around the world, including in

USA, and New United Motor

Manufacturing Inc. (NUMMI) is a well-

known 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 yetto 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

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

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 commitmentswhile 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-and-

motion 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,

Mohanty et al , Implementation of lean ...


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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: howpeople 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 theirmanufacturing prime time. Toyota relies

on highly formalised rules and standards,

and puts limits on the use of cross-

functional 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 ofToyotas 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, Toyotaimported these ideas from US only and

put them into practice (Ohno, 1988).


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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 generatedthrough 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 principlesof Industr ial 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 researchersover 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 l iterature

review in order to collect information onfundamental lean principles. After a

comprehensive literature review, a



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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 bothoriginal 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 cross-

section 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 dec ided 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 respectivemanagers. The aim of the in-depth

investigation process was to explore in

more detai l 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 thatal l questions were interpreted

correctly. It allows the validity of the

answers to be assessed and minimisesperceptual bias.

In this particular study, four core areas ofauto manufacturing such as; production

system, product development process,supply-chain management, and

management style were identified toinvestigate the lean implementation

process. Further, we captured thefundamental (or actionable) principles oflean manufacturing (or TPS), based on the

literature survey and the authorsindustrial working experience. These

fundamental principles are mentioned inTable-1.


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4.0 PRELIMINARY SURVEY RESULTS

Having established the understandingthat it is imperative to focus on both

practices and principles in an integrativeway to match Toyotas performance, theemphasis was placed on actionable lean

principles in this study. The leanprinciples identified by researchers(Spear & Bowen, 1999; Sobek et al., 1998;

Adler, 1993; Kamath & Liker, 1994;Womack et al., 1990; and Ohno, 1988) areused to direct and summarise the

collection of publicly availableinformation on auto industrys leanprinciple implementation. In the case of

the actual implementation of theseprinciples, the information was latercrosschecked with the views of key

senior managers and engineers. This wasimportant, as it shows the context intowhich the basic actionable and

fundamental principles of leanmanufacturing were implemented.

The first step of our research was to collect

information on implementation status ofthese identified fundamental leanprinciples. It was more of exploratory in

nature, as companies were asked torespond whether they are familiar withthese fundamental principles and if so, do

they follow them in their organisation?While respondent did not always respondwith simple yes or no for any category,

but for classification purpose, it wasnecessary to record either positive ornegative answer. At this stage, we did not

investigate the inner working based onthese actionable principles. The Table-1gives the results of this exploratory

survey. The advantage of this step is thatit provided us a logical and coherentpicture of understanding lean


Fundamental lean principles Level of implementation

High Medium Low None

Standardisation 0.80 0.12 0.08 0.00

Teaching and learning 0.60 0.20 0.04 0.16

Socialisation 0.72 0.24 0.04 0.00

Supplier-customer relationship 0.80 0.16 0.04 0.00

Simple and specified pathways 0.76 0.12 0.12 0.00

Continuous improvement 0.84 0.12 0.04 0.00

Pursuit of perfection 0.64 0.20 0.04 0.12

Coordination through 0.84 0.12 0.04 0.00

rich communication

Functional expertise and stability 0.60 0.20 0.04 0.16

Cultivating organisational knowledge 0.72 0.16 0.08 0.04

Table 1: Implementation of fundamental lean principles


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implementation status, which furtherhelped developing detail investigation

strategy.

Our preliminary survey indicates that

over 75 per cent of the companies

surveyed claimed to have implementedlean manufacturing or similar approaches

and around 15 per cent are activelyengaged in implementation process. This

outcome of the survey has somewhat

stunned us as, in reality, mostmanufactures are still a long way to go to

attain Toyotas level of performance, andliterature survey also shows that there are

very few companies who have

successfully imitated Toyotas leanapproach. Another interesting

observation from this study is that fourimportant lean principles, i.e., teaching

and learning, pursuit of perfection,

functional expertise and stability, andcultivating organisational knowledge,

which are generally considered as

building blocks for organisationaltransformation are not on the high

priority and only 60 per cent organisationshave recognised their importance. This

observation strengthened our skepticismon the claim of lean implementation and

further encouraged us to undertake the

detailed study on inner working of thesecompanies to bring clarity on the issue.

Prior to our survey results, based on the

literature review, we expected that a

substantial percentage of these companieswould not be well versed with adaptation

of these fundamental principles of leanconcept. However, in the light of actual

results this proved to be too simple toassume. The unexpectedly positive

response surprised us and, therefore,motivated us to look into inner-workingof these companies in terms of their

understanding and implementation ofthese fundamental principles and hence,to validate their response.

The next step was an in-depthinvestigation to capture the level of

understanding and extent of adaptationof identified lean principles by

manufacturing companies who eitherclaimed to have implemented leanconcept or companies that are activelyengaged in implementation process. In

our detailed investigation, we did notinclude the companies that did not claimto 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 wasnormally achieved by a combination ofobserving in company paper work,

observing practices during visits to plant,both in offices and shop floors, witnessing

some of review and problem-solvingmeetings, and discussions with managers

and engineers.

5.0 INVESTIGATION ON LEAN PRINCIPLES

IMPLEMENTATION

While much has been written on the

subject of lean manufacturing, thestrategies advocated to implement the


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lean concept are somewhat different. Thekey aspect of lean implementation is the

marriage between lean practices andprinciples with the strong commitment inpursuit of perfection through perpetual

learning. Many companies tried to imitateToyotas tools as opposed to its principles;as a result, many have ended up with

rigid, inflexible production system thatworked well in the short term but didntstand the test of time. Mere

implementation of tools, without having

established integrative system that acts asprecursor to lean implementation, is not

sufficient and it does not helptransformation into learning organization(Senge, 1990). However, to be

implemented successfully, these tools andpractices have to be preceded or at leastaccompanied by organisational

transformation: by new integrativethinking, strategies, and actionableprinciples in the organisation (Smeds,

1994). Moreover, all the principles

identified by researchers over a period oftime cannot be implemented

independently. They are basicallycomplementary to each other and requireintegrative approach, broad-ranging and

system-wide changes in order to improveorganisations performance. Above all,intellectual stimulation, inspirational

motivation, and idealised influenceswithin the interfunctional teams are verymuch essential to reap the benefits of lean

practices in the long run.

The following sections discuss the

underlying principles of leanmanufacturing and detailed analysis of

implementation status of these principlesby automotive companies in USA, UK,

and India.

5.1 Standardisation

Standardisation is one the building blocks

of lean thinking in TPS. Toyota managersrecognize that the lack of details andexplicit description of work content,

sequence, timing, and outcome allowsoperators or employees to perform tasks

differently, which results in more

variation in outcome. Further, it hinderslearning and improvement in theorganisation because the variation masks

the link between how the work is doneand the outcomes (Spear and Bowen,1999). Therefore, routine and repetitive

tasks require standardised workprocedures to improve efficiency and

quality. The requirement that everyactivity be specified is the first unstated

rule of the TPS, and thats why Toyotaensures that all work is highly specified

as to content, sequence, timing, andoutcome.

At Toyota, the ultimate purpose of

standardisation is to reduce cost relatingto production by eliminating production

inefficiencies such as unnecessaryinventories, and workers. Through

standard operations, it achieves multiplegoals such as high productivity; linebalancing among all processes, minimum

quantity of work-in-process, and finally

helps reduce variability in operations(Monden, 1997). In addition, Toyota trainsnew employees to work independently in

three days. This approach increases



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learning efficiency because workers keepreferring to the standard operating charts

until they get familiar with the techniques(Shingo, 1989). At the same time, Toyotastrongly believes that standard should not

be forced down from above but rather setby production workers themselves.

Spears and Bowen (1999) reported that atToyota, because operators (new and old,

junior and supervisory) follow a well-

defined sequence of steps for a particularjob, it is instantly clear when they deviate

from the specifications. To make problemdetection even simpler, Toyota relies onvisual system that allows deviation

immediately apparent, worker andsupervisor can move to correct the

problem right away and then determinehow to change the specifications or retain

the worker to prevent a recurrence.

Adler (1993) credits success of NUMMIto its intense focus on standardisation. At

NUMMI, in contrast to other US

manufacturers, the work procedures aredesigned by workers themselves incontinuous and successful efforts toimprove quality and productivity. Team

members themselves hold thestopwatches, and learn the method

analysis, description, and improvement.This change in the design and

implementation of standardised work hasfar reaching implications for worker

motivation, self-esteem, and worker-management relationship.

Toyota has successfully standardised

much of its product development processas 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 writtencommunication in the form of report

format in Toyota product developmentprocess. The reports all follow the sameformat so that everyone knows where to

find the definition of the problem, theresponsible engineer and department, theresults of analysis, and the

recommendations. The standard format

also helps engineers make sure they havecovered the important angles. Writing

these reports is a difficult but useful skill,so the company gives its engineers formaltraining in how to boil down to what they

want to communicate? Sobeks findingsalso support other researchers argumentsthat standardisation is a key to Toyotas

performance and continuousimprovement.

In contrast, in most organizations westudied the prevailing belief thatstandardisation destroys creativity. They

advocate that detailed standards willinevitably alienate employees, poisonlabour relations, hobble initiative and

innovation, and diminish anorganizations capacity to change andlearn (Adler, 1993). Ohno (1988) clearly

describes in his book the encouragingFord thinking about standardisation.However, Fords successors did not carry

that thinking of standardisation.

However, authors have observed throughtheir study that this prevailing belief

towards standardisation among labourunions is largely attributed to:


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W or k s ta nd ar ds deve lo ped b yindustrial engineers or consultants

who dont have direct workexperience at the shop floor and

imposed on workers to follow them,which is contrary to Toyotas

thinking. Further, the standardsdeveloped by industrial engineers or

consultants are not as detailed andfull of exactness as Toyota does.

M anager s gener al ly us e these

standards as performance metrics as

wellignoring other factorstoevaluate workers performance and

hence to punish them, if they wish todo so. They use these standards to

force workers to work harder andharder. The so-called misuse or

abuses of standards have forced laborunions to be more suspicious about

standardisation.

The majority of managers themselvesdoesnt believe in standardisation

and always use their own convenientways to perform their tasks. One of

the engineers from a US automakershared his frustration with us that

report format changes with changein leadership (chief engineer) and hehad to redo everything again to the

satisfaction of a new chief engineer.Every time new leadership takes the

responsibility, the reportingprocedures and working style

changes. In the absence of standardreport format, there is alwayspossibility of missing importantangles in the report and it is difficult

for engineers to figure out therequired information quickly.

Managers, we believe, still dont get

the complete meaning andimportance of standardisation andended up with more reliance on

technology, toolbox techniques andalgorithms for performanceimprovement.

5.2 Simple and specified pathways

The work must flow to the right machine

(or person) in the right form at the righttime at the lowest cost with the highestquality possible. By setting up a flow

connecting not only final assembly line

but also all the processesproduction aswell as non-production processesone

reduces production lead time. In Toyotasystem, there are no forks and loops to

complicate the flow of good, service, or

information in any of Toyotas supplychains. 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 productiongenerated 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 earlierprocess to withdraw parts needed just in

time. It ensures that all pathways are set

up so that every product or informationflows along a simple and specified path.

However, the stipulation that every



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product follows a simple, pre-specifiedpath doesnt mean that each path is

dedicated to only one particular product.At Toyota plants, each production linetypically accommodates many more types

of products than its counterparts do atother companies specifically USautomakers.

By requiring that every pathway bespecified, the rule ensures that an

experiment will occur each time the pathis used. If for some reasons a workstation

or worker is not available and engineerfound himself looking for help to divertproduction to another machine, Toyotawill see it as a problem that might require

the l ine to be redesigned. Toyotaengineers consistent motto is to simplifyand specify the paths to be followed by

the product. The driving forces behindTPS follow the general direction of self-organisation: towards the simplicity of

original structure (Sahal 1982).

Contrary to this, majority ofmanufacturers, we believe, still have thehangover of larger the lot size, the

better, as a key to cost reduction. Theyhave been improving and refiningproduction processes in their own way

and have not attempted, however, theproduction leveling the way Toyota hasbeen working. Except few companies,

majority of them have been heavilyrelying on technology and algorithms tosolve 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 havealways been conflicts between functional

groups over the goals, objectives, andachievements. Mistrust, communicationgap, and lack of coordination play

important role to enhance that conflict.Western manufacturers havemisinterpreted the workflow system and

literally forcing work to flow. Authorshave identified an automotive suppliercompany claiming to have implemented

Kanban system but still using it as

traditional push system. We still have thatmindset of producing items and pushing

them to next work station. In mostorganisations that claim to haveimplemented JIT, what is missing is the

autonomation-automation with humantouch, which corresponds to the skill andtalent 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 thecore element of the sociotechnicalapproach, 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 ofoperational 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 tappeoples commitment and capacity to

learn at all levels in an organisation. Itseems Toyota has realised that necessitylong before. At Toyota, teaching and

learning evolves through uniquerelationships between managers,supervisors, and workers. They

constantly work together to solveproblems where managers andsupervisors act as enablers rather than

giving directions or orders. Managers

position themselves as a teacher andcoach, not as an administrator. They put

workers through experiences withoutexplicitly stating what or how they haveto learn. The result of this unusual

manager-worker relationship is a higherdegree of sophisticated problem solving

and leaning at all levels of theorganisation. This approach allows

workers to discover the rules as a

consequence of solving problems.Standardisation and specified pathways

further strengthen this approach ofproblem solving and learning. In product

development also, Toyota has not

forgotten the value of instructivesupervision within functions. Supervisors

and higher-level managers are deeplyinvolved in the details of engineering

design (Sobek et al.1999). It has been

reported in both areas, productdevelopment and production system, that

Toyotas managers avoid makingdecisions for their subordinates. They

rarely tell their subordinates what to do

and instead answer questions withquestions. They force engineers to think

about and understand the problem beforepursuing an alternative, even if the

managers already know the correctanswer. Supervisors normally come to thework site and ask series of question (Spear

and Bowen 1999) such as; how do you dothis work, how do you know you aredoing this work correctly, how do you

know that outcome is free of defects, whatdo you do when you have a problem? Theiterative questioning and problem-

solving approach leads to effective

learning and builds knowledge that isimplicit.

Further, Toyota uses hierarchy (called aslearning 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 expectedto be able to do the jobs of everyone they

supervise and also to teach their workershow 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 theprevailing notion in all the auto

companies that hierarchicalorganisational structure is inefficient,ineffective, and suffocates learning.

Though majority of big companies showtheir commitment towards teaching andlearning and even claim that it is their oneof 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. Inmanufacturing environment, the intensesupervision would seem to be kind of

meddling that stifles the creativity andlearning of new engineers and otherspecialists. These companies preach

empowerment through self-learning. Infew cases, we have observed thatmanagers and supervisors too lack the

skills to act as mentor and coach. Not only

that, they heavily rely on theirsubordinates (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 topmanagement 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 majorconcerns 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 alsoeliminates 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 isperformed is one of the important aspectsof the TPS. In terms of social context,


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15

Toyota seeks to build an atmosphere oftrust and common purpose. It carefully

builds consensus around important

decisions, and has programmes ensuringadequate communication of results and

other essential information. Under normalcircumstances every human being has

desire for excellence, a mature sense of

realism, and finally the positive responseto respect and trust. Toyota uses

socialisation to ensure adequatecommunication of results and goals and

create an environment of trust andrespect. Encouraging participativedecision making and team bonding

through small production teams furtherstrengthens the socialisation process.

Toyota leadership wants workers to

understand that the company is not theproperty of the management but of

everyone together. Toyota managementalso believes that team culture and job

security eliminate fear and build a strong

commitment that in turn improveefficiency and productivity.

Sobek et al. (1998) highlights that Toyota

with its intensive mentoring trains and

socialises engineers in ways that foster in-depth technical expertise and efficient

communication. Managers orsupervisors expertise as well mentoring

and coaching roles act as stimulus to

socialisation process. Toyotas ability tosustain profits, quality, and improvement

record certainly depends on workers

motivation that rests, in turn, on equitabletreatment, clarity in communication, and

responsive management. Therefore,

effective socialisation among Toyotasemployees and management plays a

crucial role to maintain Toyotas ability.

In reality, the exceptional consistency inactions, consensus around important

decisions and effective communicationmechanisms create a fertile ground to

accelerate socialisation process at Toyota.

This principle is highly underplayed inthe most organisations. In contrast, the

prevailing notion about socialisation isgoing out for drink and lunch, scheduling

off-site meetings, and arranging gamesand sports activities during work time.

There is a tremendous amount of mistrustand disrespect among subordinates as

well as between supervisors and workers.

Few of the reasons, we believe, forsuspicion 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 ofwestern companies, especially in USA, are

hiring contract employees (which India is

following) as a means to cost reductionwithout realizing its long-term

ramifications. This approach, however,fails to gain workers commitment

towards organisation and job, spoils team

culture environment, and increasesworkers fear of job and hence, affect the

socialisation process in a big way. Rather

than integrating themselves withorganisational 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:

N ur tu re i nter na l and exter na lrelationship

Fac il itate co op er at io n andpartnership with clarity in

communication

Value individual differences anddiversity

Demonstrate self-awareness anddisplay resilience

5.5 Continuous improvement

Standardisation, learning, socialisation,

and path simplification are the essential

building blocks for improvement andprovide a specific base to carry out

continuous improvement. In deed, theseprinciples are not only vehicles and

preconditions for improvement but also

direct precursors. Continual reiterationsof these principles create an intensely

structured system for continuousimprovement. The basic Toyota

philosophy is that any operating system

can be improved if enough people atevery level are looking and experimenting

closely to improve their own worksystem. Toyota explicitly teaches people

how to improve, not expecting them to

learn from personal experience. That iswhere the principle of continuous

improvement comes in. The distinctivefeature of Toyotas continuous

improvement effort is that any

improvement must be made inaccordance with a scientific method,

under the guidance of a teacher, and atthe lowest possible organisational level.At Toyota, engineers and managers are

facilitators, mentors, and coaches to act asa support system rather than an authority

system.

Toyota teaches its employees to improvetheir problem-solving skills by

redesigning their own work. To makechanges, people are expected to present

the explicit logic of the hypothesis, whichrequires that employees fully explore all

their improvement opportunities. Alsotheir improvement activity should be

carried out as a bona fide experiment. Byinculcating the scientific method at all

levels of the workforce, Toyota ensuresthat people will clearly state theexpectations they will be testing when

they implement the changes they haveplanned. Frontline workers make the

improvement to their own jobs, and theirsupervisors provide direction and

assistant as teachers. The totalinvolvement of workers, supervisors, and

managers in problem-solving exerciseensures that leaning takes place at all

levels of the company in the mostconducive social context.

A large number of companies across the

world claim to have heavily invested incontinuous improvement efforts.

However, the failure to fully understandand implement these first four principlesof lean philosophy, i.e., standardisation,

path simplification, teaching and learning,


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17

and socialisation, makes their claim weak.Authors do believe that these

organisations are struggling hard to createan environment of continuousimprovement but, it seems, their

approach lacks a focus. What is lackingin their efforts is total commitment frommanagement and employees, consensus

on the approach, scientific methodology,and confidence. The various approaches

or philosophies of continuousimprovement, such as Total Quality

Management (TQM), Six Sigma, Lean SixSigma, Just-In-Time, etc., are beingimplemented without fully committing to

any one of these. It looks as if they aregaming with these approaches. Except

few large companies, there is no explicitway to teach people how to improve the

process. People, generally, use theircommon sense in improvement efforts

rather than presenting the explicit logicof the hypothesis and following scientific

experiments. It seems that there is a

competition among lower levelemployees to change the process for thesake of impressing managers and

supervisors rather than bringing realimprovement. These efforts are not basedon the observed problems with existing

methods/processes and hence, dontreally improve the process. We have

noticed in one automotive company thata 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 six-sigma projects addressing the same

problems and coming out with three

different solutions claiming huge savingsto the company.

Most disturbing trend we have observedin our study is that majority of managers

in companies look towards newtechnologies, toolboxes, and algorithms tofind solution rather than understanding

the problem and simplifying the process.It has already been highlighted in theliterature that tools and techniques will

not help improve the system unless basicoperating principles are inculcated.

According to us these are:

Any improvement effort must be

made at the lowest possibleorganisational level in accordancewith a scientific method based on

logical reasoning.

Any improvement initiative must be

guided by systems engineeringthinking. It is important to avoid thetendency of becoming prisoners of

their own position where people

dont see how their actions affect theother performance indicators or

overall process performance andresulting into learning disabilities.

Make continuous improvementprocess a team effort and ensure that

everyone involved has theopportunity to take ownership of theprocess. 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



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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 peoplerespond 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 shareinformation with supplier, and both

companies strategic requirement. Finally,


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19

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, andsupplier responds to meet demands

Contractual : supplier is used as anextension 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 tomanage 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 whomiss 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 clearlydefined rules to connect people with oneanother. 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 thesupplier via several committees and

hierarchy of managers and supervisors.

The lack of clarity of how people connect

to one another creates an ambiguity andfinally disrupts the smooth process flow.

There is always delay when request for

urgent goods or service delivery is madeat 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 oneof 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 ofdisconnects 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 theirrequirements and suppliers capabilities.

Lately, there have been some efforts toinvolve 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 onsuppliers behavior. Authors have noticed

during their study that suppliers do

respond differently to US automakers and

Toyota. The same supplier would have



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different quality of the same product for

US automakers and Toyota. Upon furtherenquiry, we found that Toyota gives fixed

(and better) rates and defines very clear

requirements and expectations, where as

with US automakers they always strugglefor price, never get clear requirements and

expectations, and always there is

possibility of last minute changes, whichdisrupts suppliers whole production

system. There is no standardised and

direct mechanism to communicate all

expectations and requirements tosuppliers. In couple of US automakers and

suppliers meetings, we have noticed the

sudden emergence of requirements,

which were never specified to suppliersby the customer or design engineers. This

resulted due to the communication gap

between design engineer and reliability

engineer of the US automaker itselfbecause there is no standardised and

direct connection between people within

the company.

Additionally, there are few nuances of

supplier-customer relationship, whichhave 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 withsuppliers. 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 andstudied, have not been able to develop

strong relationship based on above

factors.

Commitment Structural bonds

Trust Comparison level of alternatives

Cooperation Adaptation

Mutual goals Non- retrievable investments Interdependence and power Shared technology

Performance satisfaction Social bonds

According to us, the following success variables may define the value dimensions of

supplier-customer relationship in lean approach:


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21

5.7 Coordination through communica-

tion

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 inknowledge and rich information content.

The amount of complexity and number

of parts involved in car design makes

coordination through richcommunication an essential element to

succeed. One of the most critical and

powerful principles of Toyota as well as

other Japanese manufactures is simplecoordination and communication

mechanism. The common wisdom is that

best mode of communication and

coordination in product development isface-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 therichness of information or interactive

qualities needed for problem solving.

This belief supports direct meetingbetween the members of different

functional groups and encourages face-

to-face interaction to sort out issues and

concerns. Meetings, however, are costlyin 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 ofproblems, concerns, and solutions,

appears to increase the richness ofcommunication while decreasing thelength and frequency of meetings. When

an issue surfaces that requires cross-functional coordination, the protocol is tofirst write a report that presents the

diagnosis of the problem, keyinformation, and recommendations, andthen to distribute this document to the

concerned parties. The recipient is

expected to read and study the documentand offer the feedback, sometimes in the

form of separate written report. One ortwo iterations communicate a great dealof information, and participants typically

arrive at an agreement on most, if not all,issues. If there are outstandingagreements, then its time to hold a

meeting to hammer out a decision face-to-face.

Likers (1998) data show that Toyotameets with its suppliers less often forshorter periods of time than do other

major auto companies in the USA, eventhough Toyota suppliers appear to havegreater design responsibilities and fewer

communication problems. Tocommunicate and coordinate withsuppliers, Toyota sets clear,

understandable goal and communicatethem consistently to suppliers, and usestargets and prototypes to enforce and

coordinate these goals (Kamath and Liker,

1994). In fact, Toyota uses targets as amajor supplier coordinating mechanism

and prototype as a way to structure thedesign process-in effect, as an



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organisational lever to measure the

performance of suppliers and ensure theymeet 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 shareinformation, and both companies strategic

requirements. Kamath and Liker (1994)

gives a range of postures (or roles) that

customers and suppliers can adopt withina long-term cooperative relationship, i.e.,

partnership, mature, child, and

contractual. Lean principles require both

suppliers high engineering capability anda 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 coordinationproblems both internally as well as with

external suppliers. The lack of effectiveinternal coordination results into the

poor communication with external

suppliers. Failure to communicate rich

information to external suppliershampers the suppliers capability to do

their best meeting customer

requirements innovatively. This internal

coordination problem is attributed tolack 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 tocommunicate to the suppliers timely.

Authors have realised that most

automakers are still fond of face-to-facemeetings, which, of course, are time

consuming, costly, prone to lose focus,and drag on longer than necessary. In US

auto industry, whenever problems orconcerns appear, rather than

communicating it through written reportto present diagnosis of the problem,

relevant information, and

recommendations, the immediateresponse will be lets call meeting and

discuss it. Even, in India if the writtenreport is circulated before the meeting,

very few people take pain to read thatreport before joining the meeting.

Majority of attendees often arrive atmeeting having done little or no

preparation. This allows the meeting todrag on beyond the scheduled time and

force them to schedule next meeting to

discuss the recommendations andnecessary solutions, if possible. One of thereasons for re-scheduling next meeting is

that participants didnt go throughwritten report, were not aware of thenature of the problem, and hence, did not

collect the relevant information contentbefore coming to the meeting. Engineers

in companies we have visited often sharetheir frustration of not having enough

time to get their engineering work donebecause of all the meetings they need to

attend.The lack of effective coordination amongthe people within organisation further


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23

impedes communication with externalsuppliers in meeting targets and

milestone dates. It doesnt facilitate theconsideration of total information contentbefore setting targets and milestone dates,

and as and when additional informationis received, the requirements and targetsget changed accordingly. In UK and in

India, so many times the amendments aremade put additional burden on suppliersin meeting milestone dates and affecting

quality of the items.

According to us, lean approach needsrelational coordination between variousparties through:

Frequency of communication

Timeliness of communication

Problem solving communication

Helpfulness

Shared goals

Mutual respect

5.8 Functional expertise and stability

Every company depends on highly skilled

engineers, designers, and technicians tobring 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. Inorder 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 unusualfor the first ten to twenty years of an

engineers career. Since most engineers

rotate primarily within their engineeringfunction, they gain the experience that

encourages standard work, makingcommunication with other functional

groups easier because engineers knoweach other very well for a long time and

develop good understanding with eachother. Also the stability over time means

that the companys engineers in onefunctional division need to spend less

time and energy communicating andcoordinating with their counterparts in

other functional areas because they knoweach others requirements andexpectations.

There is common belief that rotating

locally and building functional expertisewould result into rigid functional

boundaries in which engineers work onlyto 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 20years experience typically rotate widelyacross the company to areas outside their

expertise. Such moves force senior peopleto rely heavily on the experts in their newarea, building broad networks of mutual

obligation. At the same time, these seniorengineers bring their own expertise,

experience, and network of contact thatthey can use to facilitate integration.

In contrast, we could find in our study,

there are frequent job rotations andtransfers moving people from onefunctional area to another. The averagestay of each person in one functional area



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is around two years, hardly sufficient toget functional expertise, to develop good

understanding of the system, and to get

to know other people well. During ourinteraction with engineers and

supervisors, we came to know about fewinstances where both supervisor and

engineer recently moved from different

functional areas and now strugglingtogether to get familiarised with new job

requirements as well as system. Thesekinds of unplanned rotation of people

result in great loss of productivity anddisrupt smooth functioning of thedepartment. Authors have confronted

with situations in Indian organisationswhere engineers were sent for advance

training programs in order to build

functional expertise. However, after 3-6months, those same people were either

moved to different functional areas orthey had opted for different job

responsibility. These instances clearly

show that development of functionalexpertise and stability is not well takencare of. Further, most of the companiesthat we studied rely heavily on

universities or training consultants to

provide their people with the skillsneeded to do their job, where as Toyota

relies primarily on training within thecompany.

5.9 Striving for ideal goal

People at Toyota have a unified

inspirational vision. They have a commonsense of what the ideal system would be,

and that shared goal motivates them tomake improvements beyond what would

be necessary merely to meet the current

needs of their customers. Their ideal goalis not something philosophically abstract

but has a concrete and consistent

definition. Toyotas ideal state shares

many features of the popular notion ofmass customisationthe ability to create

virtually infinite variations of a defect free

product as efficiently as possible and atthe 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 asource 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 tostay 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 industryreveals that imitating Toyotas

performance is becoming their ideal goalbut not by fundamentally adhering to TPS

and internally struggling to keep their

operations in good shape to stay in

business. Interestingly, people in thesecompanies 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


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25

long-term shared inspirational vision.

According to us, the ideal goal helps in:

Creating a compelling future

Letting the customer drive theorganisation

Involving collective minds.

5.10Cultivating organisational knowl-

edge

Toyota documents current capabilities of

its products and processes in the form of

an engineering checklist. When a productengineer 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 changesare 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 documentingalternative, trade-offs, and technicaldesign 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 andknowledge. 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 aswell 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 strategicframework 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. Ourin-depth research shows that among

western organisations, especially US



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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 belooking 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, ifunderstood 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 withoutmuch 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 implementingprinciples 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


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output and hinders the possibility of

finding real causes or any deficienciesexisting in the process for further

improvement.

Managers and supervisors need to

play role of facilitators (teachers and

coaches), get involved in problem-

solving 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 makingchanges 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 ofmanagers 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 toexcel 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, bypushing 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 pol it ics between various

functional departments



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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

However, some well established auto-

manufacturing 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

E ff ec ti ve s up pl ie r and deal er

networking

Multi-skilled workforce

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

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.

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

Instilla sense of ownership

A tolerance for risk and failure

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


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STANDARDISATION

TEACHING & LEARNING

SUPPLIER CUSTOMERRELATIONSHIP

SOCIALISATION

SIMPLE & SPECIFIED

PATHWAYS

PURSUIT OF PERFECTION

COORDINATION

STRIVING FOR IDEAL GOAL

FUNCTIONAL EXPERTISE &STABILITY

CULTIVATINGORGANISATIONAL

KNOWLEDGE

CONTINUOUS IMPROVEMENT

PRODUCTS, PROCESSES, METHODS, TOOLS,

SYSTEMS

COMMITMENT TO HUMAN CAPITAL

RELATIONSHIP MANAGEMENT, DIVERSITY

MANAGEMENT

MUTUAL RESPECT, SHARED TECHNOLOGY,STRUCTURAL BONDS

COHERENT WORK TEAMS, PULL SYSTEMS

SYSTEMS THINKING, PROCESS OWNERSHIP

TOTAL QUALITY MANAGEMENT, GOAL SETTING,INSPIRATIONAL LEADERSHIP

COMMUNICATION SYSTEMS, INFORMATION

TECHNOLOGY AND SYSTEMS

MANAGEMENT BY IDEOLOGY

HUMAN CAPITAL MANAGEMENT

KNOWLEDGE MANAGEMENT, EMPOWERMENTAND INCLUSIVENESS

CRITICAL SUCCESS FACTORSFUNDAMENTAL PRINCIPLES

Fig.1: Linking Lean Principles to Critical Success Factors



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7 PILLARS OF LEAN MANUFACTURING P RACTICES

AR

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PR

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P

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MO

B

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LEAN ENTERPRISE

Fig.2: Seven Pillars of Lean Manufacturing Practices

integration, process integration, and

external integration.

8.0 CONCLUSION AND USEFULNESS FOR

THE PROFESSION

All the mass production and efficiencymodels typified by Taylor, Ford, and

Sloan, placing high value on rationality,have traditionally stressed strong divisionof labour and prescribed rigid

bureaucratic forms. These organisationalforms became increasingly incompatible

with the new business environments ofthe late twentieth century, which forcedmore flexible means of production andimproved service delivery performance

(TPS). The high value placed on leansystem thinking has emerged in the

management practices. Those companieswho have focused on competency and

readiness for continuously deepening andstrengthening their technical capabilities,scientific bases and then reacting

systematically to invest resources indeveloping and articulating a strategicintent for lean enterprise have succeeded

in the long term. To strengthen the leansystem movement, and its robustness asan approach to coping with future

economic and market conditions, we have

to enrich the professional practice. Thisresearch is a step in that dir

implementation of lean manufacturing

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