8th May 2012 Release

Business Leaders inspired by the Lean thinking process in Volkswagen,John Deere, SKF, Apollo Tyres and VIP Bags to provide an outsider's perspective came together to share their views on 23rd of April 2012, at BMGI'sinvite only event of "Lean as a Strategic Driver for Business Ecosystem" held at Radisson in Pune.

The event sought to explore how the Lean principles can be used strategically to drive the business ecosystem. This central idea was articulated over four themes by means of sharing of experience and through a panel discussion.

The first theme revolved around understanding how lean could enable business growth where organizations adopt Lean to create capacity for growth or where organizations align to the customer need and create larger pull for the products/services.The second theme showcased how Lean could enable a cultural transformation within organizations. The third theme probed how Lean could be used for designing the organizational DNA while the fourth explored how Lean could be taken beyond the shop floor.

The first speaker, Mr Kiran Bhojraj, Corporate Quality Head from John Deere, presented how his organization strategically adopted Lean for growth and how it augmented John Deere'scapacity by 15% with a savings of INR 5 Crores within 6 months at zero cost.

Mr Bhojraj shared John Deere was confronted with an increase in the demand by over 50% having them to tackleincreased customer expectations and product complexity to meet varying applications within its existing capacity. John Deerewas said to have decided to adopt the Lean methodology as this included all the other alternatives that includedexpansion of its facility, outsourcing, adding more resources and balancing its production line.

Kiran informed that avisionary roadmap for implementing Lean was designed with cross functional teams formed to execute the blueprint. A senior level leadership steering committee was said to have been setup to review and ensure achievement of the established roadmap.BMGI's SCORETM methodology was adopted to work on the opportunities identified for improvement.

The areas that needed improvement to increase its capacity as identified by John Deereincluded reduction of cycle time in the Paint Shop, reduction of cycle time in Engine Machine shop, reducing stuffing time per container in logistics, improve line balancing in the transmission assembly area and reduce lead time for vehicle audit.

In a presentation packed with knowledge and passion Mr Shree Phadnis, Country Deployment Champion, Business Excellence, SKF India, the second speaker sharedhow SKFenabled aligned with the customer using lean and innovationto enable business growth.Mr Phadnis emphasized Innovation as a method to meet the customer need.

The delegates were takenthrough a transformation story where a drying operation cost less, saved energy and provided higher productivity on implementing the improvement.

Mr Phadnis recounted the initial situation where a specific drying process consumed high energy and was low on productivity. With thegoal to reduce energy consumption and increase productivity, the team mapped the functional significance of each operation against its cost. He established that the high cost operations with low functional significance formedthe candidates for elimination while those with high functional significance providedopportunities for improvement through cost reduction. The team selected the specific operations to be "trimmed" leading to the desired solution.

The second theme - Lean enabling cultural transformation was showcased byMr S N Dilip, Head - Manufacturing, Apollo Tyres who took the delegates through the journey undertaken by Apollo Tyres to build a culture of lean and a mind-set of continual improvement within its employees.

Mr Dilip was proud as he recounted the awards his plant had won - which included three consecutive (to date) inter-plant process excellence awards. The Lean journey at Apollo links one of the pursuits of lean "eliminating waste from the process" and the management behaviour with the business model.

Mr Dilip stressed that one of the key points contributing to a change in culture is by creating a fear-free environment where the focus is on "what is wrong" and not "who is wrong". He shared this would enable the work force to understand that developing solution as a key rather than critical judgment and result in a higher employee involvement.Mr Dilip lay emphasis on the fact that a culture change cannot be done overnight and it is a continuous effort from the management's part.

The third theme: Lean for designing organizational DNA was explored through a panel discussion. The panellists comprised of Dr Christoph Graumann, Director of Manufacturing, Volkswagen India, Mr Shailendra Jagtap, Director of Manufacturing, John Deere and Mr Suhas Kshirsagar, Corporate Quality Head, VIP Bags with the panel being moderated by Mr Naresh Raisinghani, CEO & Executive Director, BMGIndia.

Mr Raisinghani opened the panel discussion with the first question:If Toyota is credited to have introduced Toyota Production System and hence contributed to Lean principles,why is it in the shape that it is today?

Dr Graumann felt that it is not about the short termfailure but when you look at Toyota, one has to look at the entire journey of how it was able to transform from a loss making organisation to at one time become one of the leading car selling manufacturer. Mr Jagtapconstrued that it may not be about Toyota alone but it could be a story of any other organization as well which may face quality issues and / or over capacity at certain points in time. The panel agreed that given all of this Lean was still a worthy philosophy to follow for any organisation for improving profitability and having flexible processes to service the customer needs.

The second question, Mr Raisinghani had for the panel was in line with something that was brewing earlier as well: Lean or Innovation? Which is a better strategy for an organization?

There was convergence amongst the panel members where each panellist felt there needs to be a synergy between Lean and Innovation. To start with, it was argued that while innovation could create a great product or a business model, in order to put it into action, one has to have lean methodology to support bringing the Levitra product to the market in a profitable manner. It was insisted if value is not specified, a value stream with zero wastes would only create a product that is not useful to the customer. The panel correlated the definition of innovation (which is, to make a product that meets the need of the user) to the first principle of lean (define value). It was also felt that Innovation is successful only if there is a foundation which could be built using the principles of Lean. For the practice of innovation to be nurtured, the basis is built through Lean, the panel concluded Mr Raisinghani's third question was a bit direct to the panellists: How is Lean related to their respective organizational strategy?

It was put forth by Dr Graumann that Lean helps in continuous improvement and any activitythat is done in the panellists' organization would be based on Value Stream Mapping. Lean was said to be embedded in their strategy quite well in the manner that identification of the opportunities for improvement would be through identifying wasteful activities. Mr Jagtap stated that Lean was embedded at John Deere in the organizational strategy by constantly listening to the customer needs. This was illustrated by an example: a vehicle meant for ploughing is used in a country like Indiafor more than just ploughing - like drawing water, moving people, etc., - and hence the strategy of building products that augur well with the intended use. Mr Kshirsagar from VIP Bags pointed that while hisorganisation used basic tools and concepts which may be concepts under Leanbut, they are being used nevertheless. Additionally he elaborated that they have been attempting to apply Lean involving the entire supply chain.

The final question was: "What are the top 4 or 5 things that are absolute must an organization should keep in mind when going Lean?"

All the panellists stated two important things an organization should keep in mind and collectively came up with about 5 things. The first point, Dr Graumann reflected, is to have an open culture and an open environment where people should be able to go to their bosses and report problems. The second, it was recounted, was to make the problem obvious as problems are nothing but opportunities for improvement and take the buffers out of the value stream. Mr Kshirsagar opined that integrating lean into the operating culture with the top management commitment and by keepingit simple so that the workforce not only understands how the principle translates to the organizational context but also how it is applied, would make the Lean journey sustainable. Mr Jagtap added that creating a strong structure of deployment where the do's and don'ts for lean deployment are clearly communicated forms a critical reinforcement of the lean deployment journey.

The panel discussion was further enhanced by a few interesting questions from the participants. One of the questions posed was: As suppliers to major OEMs, the organizations have to embrace each customer's operating systems (Toyota Production System, Volkswagen Production System, etc.,). How should they manage this - The response from the panel was that while the names of the operating systems were different, it was the principles and the concept that mattered. The panel emphasized that the focus needs to be on the principles of lean, which would be common.

The fourth and the concluding theme was that of taking Lean beyond the shop floor. Dr Graumann and his team from Volkswagen presented their unique work of implementing lean principles in designing their central kitchen which reduced 63% of the time taken to cook, 25% of the built up areaand 70% of the raw material storage.

Dr Graumann explained, the existing kitchen was built to cater to about 2500 meals per day against a projected requirement of 7000 meals per day. He further stated that there was no scope for capacity enhancement in the current haphazard setting. He recounted that the manner of work was not up to the worldwide standards of Volkswagen.

Dr Graumann and his team went about applying the lean principles and explained how they mapped the value stream for the food items (rice, breakfast, tea), etc., which included drawing a spaghetti diagram, calculated the takt time for the meal, classified the food items into product families and the current utilization of the kitchen equipment.

One of the key findings the team found was that the rice was stored for 40% of its lead time and in 22 locations along its journey to be cooked!

Dr Graumann pointed out the conceptual changes that were brought about were dedicating "cooking lines" for cooking Rice, Vegetable and other food items. The concept of "flow" and "pull" were incorporated in the design stage. The entire focus of the team was to improve the "value creating ratio" of the process which and reducing wastes.

About BMGI

Breakthrough Management Group International (BMGI), a global consulting firm with a strong focus on delivering results, partners with organizations in various stages of their business life cycle to transform their business performance. BMGI is recognized as the world leader in harnessing the power of cutting edge techniques in the area of Innovation, Strategy, ProblemSolving and BusinessTransformation for achieving tangible business results. BMGI enables businesses drive growth and improve profitability. Headquartered in the US, BMGI has offices in 13 countries around the globe.

BMGI has delivered cumulative benefits to its clients worth several billion dollars with an ROI of 5:1 to 20:1.

In India, BMGI is located in Mumbai. Our clients are leading Fortune 1000 Global companies and leading Indian companies from diverse industries such as financial services, IT/ITES, airlines, chemicals, FMCG, discrete manufacturing, telecommunications, petrochemical, textiles, biotechnology, healthcare & energy. Some of our global clients include Hitachi, Siemens, Philips, Unilever, DeBeers, Avis Budget Group, TNT Express, and General Dynamics. Indian clients amongst others include Asian Paints, Apollo Tyres, Glaxo, HUL, Kraft, ITC, Reliance, L&T, Volkswagen, SKF, Sudarshan Chemicals, Diamler Benz and Yes Bank.

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