BMGI Automotive Industry Event - Executive Summary

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Executive Summary of the event 'Lean as a Strategic Driver for Business Ecosystem' held by BMGI India on 23rd April 2012 at the Radisson, Pune. Speakers & Panelists Included:

1. Mr Kiran Bhojraj, Corporate Quality
Head from John Deere

2. Mr Shree Phadnis, Country Deployment Champion, Business Excellence, SKF
India

3. Mr S N Dilip, Head - Manufacturing, Apollo Tyres

4. Dr Christoph Graumann,
Director of Manufacturing, Volkswagen India

5. Mr Shailendra Jagtap, Director of Manufacturing, John Deere

6. Mr Suhas Kshirsagar, Corporate Quality
Head, VIP Bags

and the panel discussion on 'Lean for designing organizational DNA' was moderated by Mr. Naresh T. Raisinghani, Executive Director & CEO, BMGI India

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BMGI Automotive Industry Event - Executive Summary

  1. 1. Lean as a Strategic Driver for Business between expansion of its facility, outsourcing, adding Ecosystem more resources or even balancing its existing production line.Summary of the event conducted on 23rd April 2012 at Radisson, Pune John Deere decided to adoptIf Toyota is credited to have introduced Toyota the LeanProduction System and hence contributed to Lean methodology asmanufacturing principles, why is it in the shape that this not onlyit is today? Lean thinkers from the senior leadership in encompassed allVolkswagen, John Deere and VIP Bags discuss this the options listed Mr Kiran Bhojraj, Corporateamongst the key questions an organization faces in its above but also Quality Head, John DeereLean journey in an insightful panel discussion in BMGI’s aligned with itsevent “Lean as a Strategic Driver for Business operating system.Ecosystem” It was stated that a roadmap for implementing Lean wasOn the evening of 23rd of April 2012, more than 40 designed with a vision and steering committee withdelegates from the Automotive & Auto ancillary cross functional teams was formed. BMGI’s SCORETMorganizations came together in Pune for the event which methodology was adopted to work on the opportunitiesfeatured representation of over 25 different identified for improvement.organizations. More than 50% of the participants werefrom the senior leadership and were decision makers. The areas that needed improvement as identified byApart from the panel discussion, the event showcased John Deere included reduction of cycle time in the Paintfour themes where Lean was applied beyond the shop- Shop, reduction of cycle time in Engine Machine shop,floor. reducing stuffing time per container in logistics, improve line balancing in the transmission assembly area and reduce lead time for vehicle audit.The first theme for the evening – Lean enabling Mr Shree Phadnis, CountryBusiness Growth was showcased in two ways – one Deployment Champion,where the organization decides to adopt Lean Business Excellence, SKFmethodology and the other by aligning the organization India, the second speaker shared the second way ofto the customer need. Lean enabling business growth by aligning with the customer using lean and innovation. It was recountedThe first speaker, Mr Kiran Bhojraj, Corporate Quality that aligning with the customer is the first principle ofHead from John Deere, presented how his organization lean. Mr Phadnis emphasized Innovation is a method tostrategically chose Lean for growth and how it meet the customer need and the context was set.augmented John Deere’s capacity by 15% with asavings of close to INR 5 Crores within 6 months – The delegates were taken through a transformation storyall this at zero cost. at SKF where a drying operation cost less, saved energy and provided higher productivity.It was reported that the key reasons for over 50%increase in demand for tractors in a span of 5 years In a presentation packed with knowledge and passion,were: scarcity of farm labour, increasing non-agricultural Mr Phadnis recounted the initial situation where theapplication of tractors amongst others. elastomer drying process consumed high energy and was low on productivity. It was informed that, with theMr Bhojraj shared that this meant John Deere had to goal to reduce the energy consumption and thecater to higher demand, face increased customer increasing the productivity, the team at SKF carried outexpectations and product complexity to meet varying a functional analysis of the drying process and mappedapplications within its existing capacity and decideLEAN AS A STRATEGIC DRIVER FOR BUSINESS - EVENT SUMMARY
  2. 2. LEAN AS A STRATEGIC DRIVER FOR BUSINESS - EVENT SUMMARYthe functional significance of each stage of the operation and not “who is wrong”. He further shared this wouldagainst the cost of that stage. enable the work force to understand that developing solution as a key rather than critical judgment and result Mr Shree Phadnis, Country Deployment Champion, Business Excellence, SKF 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, JohnMr Phadnis established that the operations with low Deere and Mr Suhas Kshirsagar, Corporate Qualityfunctional significance but cost high are the candidates Head, VIP Bags with the panel being moderated by Mrfor elimination while the operations with high functional Naresh Raisinghani, CEO & Executive Director,significance but cost high cost are the opportunities for BMGI.improvement by reducing cost. Mr Raisinghani posed the first question: If Toyota isThe outcome of the analysis is that specific operations credited to have introduced Toyota Productionare selected to be “trimmed” which led the team to the System and hence contributed to Lean principles,desired solution. why is it in the shape that it is today? The second theme - Lean enabling It was felt by the panel that Toyota could be getting cultural transformation was ahead of itself in its journey of process excellence - the showcased by Mr S N Dilip, Head - typical improvement cycle would be: Improve – Stabilize Manufacturing, Apollo Tyres who – Improve, but, it could be possible that in Toyota’s took us through the journey pursuit for improvement, they could be going too fast. Itundertaken by Apollo Tyres to build a culture of lean and was felt that it is not about the short term failure buta mind-set of continual improvement within its when you look at Toyota, one has to look at the entireemployees. journey and the culture it has been able to inculcate and spread. Also, the panel construed that it may not beMr Dilip was proud as he recounted the awards his plant about Toyota alone but it could be a story of any otherhad won – which included three consecutive (to date) organization as well – this is being spoken aboutinter-plant process excellence awards. The Lean journey because the organization is Toyota which hasat Apollo links one of the pursuits of lean “eliminating contributed so much to Lean principles.waste from the process” and the management behaviourwith the business model. The second question, Mr Raisinghani had for the panel was in line with something that was brewing earlier asMr Dilip well: Lean or Innovation? Which is a better strategystressed for an organization?that one ofthe key There was convergence amongst the panel memberspoints where each panellist felt there needs to be a synergycontributing between Lean and Innovation. To start with, it wasto a change argued that while innovation could create a greatin culture is Mr S N Dilip, Head – product or a business model, in order to put it intoby creating Manufacturing, Apollo Tyres action, one has to have lean methodology to supporta fear-free bringing the product to the market in a profitableenvironment where the focus is on “what is wrong” rdEvent Date: 23 April 2012, Radisson, Pune Page 2 of 4
  3. 3. LEAN AS A STRATEGIC DRIVER FOR BUSINESS - EVENT SUMMARYmanner. It was insisted if value is not specified, a value The final question was: “What are the top 4 or 5 thingsstream with zero wastes would only create a product that are absolute must an organization should keepthat is not useful to the customer. The panel correlated in mind when going Lean?”the definition of innovation (which is, to make a productthat meets the need of the user) to the first principle of All the panellists stated two important things anlean (define value). It was also felt that Innovation is organization should keep in mind and collectively camesuccessful only if there is a foundation which could be up with about 5 things. The first point to keep in mind, itbuilt using the principles of Lean. For the practice of was stated, is to have an open culture and an openinnovation to be nurtured, the basis is built through environment where people should be able to go to theirLean, the panel concluded 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. The third was to integrate lean into the operating culture with the top management commitment. The fourth was to keep it simple so that the workforce not only understands how the principle translates to the organizational context but also how it is applied. The fifth, the panel concluded, was to create a strong structure of deployment where the do’s and don’ts for deployment are clearly Dr Christoph Graumann, Mr Shailendra Jagtap, communicated. and Mr Suhas Kshirsagar in conversation There were a few interesting questions from the participants. One of them were: As suppliers to majorMr Raisinghani’s third question was a bit direct to the OEMs, the organizations have to embrace eachpanellists: How is Lean related to their respective customer’s operating systems (Toyota Productionorganizational strategy? System, Volkswagen Production System, etc.,). How should they manage this? The response from theIt was put forth by one of the panellists that Lean helps panel was that while the names of the operating systemsin Continuous improvement and everything that is done were different, it was the principles and the concept thatin the panellists’ organization would be based on Value mattered. The panel emphasized that the focus needs toStream Mapping. Lean was said to be embedded in their be on the principle and the concept alone.strategy quite well in the manner that identification of theopportunities for improvement would be through The fourth and the concluding theme wasidentifying wasteful activities. Another panellist stated that of taking Lean beyond the shopthat Lean is embedded into his organization strategy by floor. The panellist Dr Graumann andconstantly listening to the customer needs. This was his team from Volkswagen presentedillustrated by an example: a vehicle meant for ploughing their unique work of implementing leanis used in a country like India for more than just principles in designing their central kitchen whichploughing – like drawing water, moving people, etc., - reduced 63% of the time taken to cook, 25% of theand hence the strategy of building products that augur built up area and 70% of the raw material storage.well with the intended use. The third panellist pointedthat while his own organizational strategy uses basic Dr Graumann explained, the existing kitchen was built totools and concepts which may be concepts under Lean; cater to about 2500 meals per day against a projectedthey don’t term the methodology as “Lean”. He requirement of 7000 meals per day. He further statedelaborated that execution happens with the concepts that there was no scope for capacity enhancement in thethat are Lean which seeks to involve the entire supply current haphazard setting. He recounted that thechain. manner of work was not up to the worldwide standards of Volkswagen. rdEvent Date: 23 April 2012, Radisson, Pune Page 3 of 4
  4. 4. LEAN AS A STRATEGIC DRIVER FOR BUSINESS - EVENT SUMMARYDr Graumannand his teamwent aboutapplying thelean principlesand explainedhow they Dr Christoph Graumann, Dir ofmapped the Manufacturing, Volkswagen Indiavalue streamfor the food items (rice, breakfast, tea), etc., whichincluded drawing a spaghetti diagram, calculated thetakt time for the meal, classified the food items intoproduct families and the current utilization of the kitchenequipment.One of the key findings the team was to have found wasthat the rice was stored for 40% of its lead time and in22 locations along its throughput.Dr Graumann pointed out the conceptual changes thatwere brought about were dedicating “cooking lines” forcooking Rice, Vegetable and other food items. Theconcept of “flow” and “pull” were incorporated in thedesign stage. The entire focus of the team was toimprove the “value creating ratio” of the process.About BMGIBreakthrough Management Group International (BMGI),a global consulting firm with a strong focus on deliveringresults, partners with organizations in various stages oftheir business life cycle to transform their businessperformance. BMGI enables businesses drive growthand improve profitability. Headquartered in the US,BMGI has developed a loyal clientele that today exceeds200 active clients. Engagements with our automotiveclientele have help them achieve breakthrough results.BMGI has delivered cumulative benefits to its clientsworth several billion dollars with an ROI of 5:1 to 20:1. rdEvent Date: 23 April 2012, Radisson, Pune Page 4 of 4

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