Hi there,
Recently i am completed my thesis on Lean Manufacturing In Indian Automotive Industry. This dissertation only not fullfilled my academic purposes but also i gained so much knowledge about Indian automotive Industry. I thought of sharing my analysis with Team BHP members.
Lean Manufacturing
The use of the term "Lean" in a business or the manufacturing enviornment describes a philosophy that incorporates a collection of tools and tecniques used into the business or in a an organisation to optimiza human resouce, assets and productivity simultaneously improving the quality level of products and services to their customer (1).
There is sort of conflict for taking the credit of introducing lean manufacturing. Some say it was Henry Ford who introduced it and some other believe that it was Toyota.
Techiques of Lean Manufacturing - Just in Time
- Six Sigma
- Kanban
Kaizen
5's
Cellular Manufacturing
[left]I won't go on detail about Lean manufacturing or implementing its tecniques as it would result in re-writing my whole thesis.
Lean Manufacturing In Indian Automotive Industry
Personally the figures which reveals that Indian Automotive Industry is booming is statistical nonsense to me. The Indian Automotive Industry is relatively labour intensive by global standards and is in transition stage as low cost base for exporting labour intensive products. The important question arises "Is Indian Automotive Industry moving up the value chain"?The answer might be
temporarily "yes", the Indian automotive industry is booming with high growth in the domestic as well in the export market. Till date all the grwoth has been possible because of Foreign automotive manufacturers and there valuable experience. To safegurard the interest of these manufactures in the long run in the Indian economy, the manufacturers need to be competitive simultaneously maintaining the quality standards which could be possible with implementing lean techniques in their system.
The basics of implementing lean begin with having a proper infrastructure of the economy, to which Indian economy is no where near. According to MUL during FY1994-95, a total of 724 vehicles were damaged in transportation (2). Even if we take the average cost vehicle would have been Rs 3 lac, then MUL nearly lost Rs 217,200,000 because of poor transportation system in India. This money should have been well spent somewhere else.
The government of India needs to realize the threat to Indian automotive Industry from China. If the Indian government continous with rigid automotive policies (high import duty, taxes, FDI), then the foreign investors will simply loose their interest in India and could move to other countries like Poland, China etc.
Japanese are known to be Pandits of Lean manufacturing techniques. Indian automotive market is not new to Japanese manufacturers, they have been here for good number of years. But till today they have not been able to implement even 20% of their work lean techniques. Reasons behind it corruption, poor infracstructure, social excursion within Indian economy.
There is hardly evidence of R&D in Indian Automotive Industry. The government of Australia provides companies 125% rebate on their R&D taxation if the company set up its R&D base. Maruti which has been in India for more than 20 years, most of technology is imported from Japan. Just for the sake of name Maruti has set up a small R&D in its factory which apparently does nothing apart from trying new colors on bumper.
In my point of view Indian automotive Industry has long way to go before the world could trust "Made In India" brand.
Ref:
1) Zoe J Radnor, Ruth Boaden (2004), Developing an understanding of corporate anorexia, internal jounral of operation and production management, vol24, Issue no4, pp 424-440
2)Sumila Gulyani (2001), effects of poor tranportation of lean production and industrial clustering evidence from the Indian Auto Industry, Vol 9, No 7, pp 1157-1177.