Implementing Lean Techniques in India

- by Amandeep S. Bedi & Namit Puri *

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To achieve quality at source, the suppliers need to pursue process improvement through tools like TQM and TPM and invest in appropriate technology to achieve process capability desired by the end manufacturer. This quality often comes with appropriate scale. Post liberalization, Indian
manufacturers have had access to appropriate technology and have grown in scale and volume. As an example, the domestic auto component manufacturers have been able to achieve a 20 to 25% growth. With access to appropriate technology and increase in scale, the auto industry has been able to achieve higher process capability levels and lower defects. As more manufacturers (auto assemblers) have been able to push their suppliers to implement JIT, this has resulted in a network effect. The results, as an example, for auto-component industry - Ananth auto components are given below.⁴

Only after the vendors could achieve such high levels of process capability (low defects) were the auto assemblers able to implement JIT, even in the Indianized form. This resulted in a transformation of the processes as mentioned in the table below: -

Source: www.mgmt.purdue.edu/centers/ciber/publications
(Ananth Iyer: Indian Auto Supply Chains)

To achieve such high levels of capability requires significant investment both by the suppliers as well as the assembler. In most of the success stories, the manufacturers have mentored the suppliers in developing such processes.

⁴ Data from Ananth Auto Industry Review and Deming Award study

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

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