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The success stories have had one common thread - most of them were relatively young firms. A few cases where lean manufacturing has been implemented in legacy systems have been preceded by top management commitment and an organization level effort to induce change. This entailed painting
the competitive landscape / business imperatives to the employees. The process was painful, but was successful only because it had top management commitment. Often, the benefits have been linked to financial incentives, not a recommended approach.

4.2.5. Government Controls, Complex Tax Structures

The Indian economy was characterized by government controls and intervention in many areas of business until recently. As a result, firms developed capabilities to work with a short term perspective and to manage business in tune with government policies. Although the economy has started to open up, there is still a perceived lack of long term stability in government policies. Therefore, the mindset and management approaches towards implementing new manufacturing innovations tend to have an overdose of mechanisms that seem to have worked well in the era of controls.

The crux of lean lies in having minimal inventory in the pipelines. If it is not economically feasible to develop a local supplier network, manufacturers depend upon an efficient distribution system - which involves moving goods quickly across the state borders. One of the biggest obstacle to efficient distribution and inter-state movement of goods is complex indirect tax system coupled with routine bureaucracy. This would get resolved if and when VAT is implemented in India.

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