This Paper was amongst top-10 winning entries in "Opsyrus 2005", the CoolAvenues.com - OIG (IIM Lucknow) Paper Writing Competition held in October 2005.

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1. Executive Summary

Lean manufacturing, a concept popularized by Toyota, is based on principles of waste reduction, increased productivity and quality through employee empowerment. Implementing lean manufacturing entails an integrated approach of developing supplier networks; "pull-Kanban" production, mistake
proofing systems, etc. This explains why in spite of obvious advantages like lower cost, higher responsiveness of the manufacturing system, and higher process capabilities that lean manufacturing results into, it has not been adapted by a lot of manufacturing organizations. It is often argued that the ability to implement Lean is a mindset issue.

In this paper, we have attempted to examine the Indian "lean manufacturing" story. The Indian manufacturing industry, faced with the business imperatives of cost competitiveness, international quality conformance norms and need for high variety, embraced on the "Lean" initiative post liberalization. As in the West and Japan, the initiative has been led by auto-component manufacturers like Rane Brakes, TVS Sundaram, etc., who have established benchmarks and won the prestigious Deming Awards.A lean manufacturing system calls for smooth material and process flows across the entire value chain. We believe, that implementing concepts like Lean, Just-in-Time in India poses unique challenges in the form of bottlenecks in infrastructure, transportation, bureaucracy, a complex tax structure, an under-developed supplier network and inflexible labor laws. It warrants a cultural change led by high management conviction while facing strong unions and political pressures as existing power centers get diluted. In Japan, for Toyota, even a day's disruption of supplies would lead to a complete chaos. In India, such supply disruptions are not uncommon. Yet, there have been Indian firms who have been very successful at implementing lean manufacturing. The successful companies have been able to innovate and develop an "Indianized" form of Lean.

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* Contributed by -
Amandeep S. Bedi & Namit Puri,
Indian School of Business (ISB),
Hyderabad.