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

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 adopt
If Toyota is credited to have introduced Toyota the Lean
Production System and hence contributed to Lean methodology as
manufacturing principles, why is it in the shape that this not only
it is today? Lean thinkers from the senior leadership in encompassed all
Volkswagen, John Deere and VIP Bags discuss this the options listed Mr Kiran Bhojraj, Corporate
amongst the key questions an organization faces in its above but also Quality Head, John Deere
Lean journey in an insightful panel discussion in BMGI’s aligned with its
event “Lean as a Strategic Driver for Business operating system.
Ecosystem”
It was stated that a roadmap for implementing Lean was
On the evening of 23rd of April 2012, more than 40 designed with a vision and steering committee with
delegates from the Automotive & Auto ancillary cross functional teams was formed. BMGI’s SCORETM
organizations came together in Pune for the event which methodology was adopted to work on the opportunities
featured representation of over 25 different identified for improvement.
organizations. More than 50% of the participants were
from the senior leadership and were decision makers. The areas that needed improvement as identified by
Apart from the panel discussion, the event showcased John Deere included reduction of cycle time in the Paint
four 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, Country
Business Growth was showcased in two ways – one Deployment Champion,
where the organization decides to adopt Lean Business Excellence, SKF
methodology and the other by aligning the organization India, the second speaker shared the second way of
to the customer need. Lean enabling business growth by aligning with the
customer using lean and innovation. It was recounted
The first speaker, Mr Kiran Bhojraj, Corporate Quality
that aligning with the customer is the first principle of
Head from John Deere, presented how his organization
lean. Mr Phadnis emphasized Innovation is a method to
strategically chose Lean for growth and how it
meet the customer need and the context was set.
augmented John Deere’s capacity by 15% with a
savings of close to INR 5 Crores within 6 months – The delegates were taken through a transformation story
all 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 the
application of tractors amongst others. elastomer drying process consumed high energy and
was low on productivity. It was informed that, with the
Mr Bhojraj shared that this meant John Deere had to
goal to reduce the energy consumption and the
cater to higher demand, face increased customer
increasing the productivity, the team at SKF carried out
expectations and product complexity to meet varying
a functional analysis of the drying process and mapped
applications within its existing capacity and decide
LEAN AS A STRATEGIC DRIVER FOR BUSINESS - EVENT SUMMARY

2. LEAN AS A STRATEGIC DRIVER FOR BUSINESS - EVENT SUMMARY
the functional significance of each stage of the operation and not “who is wrong”. He further shared this would
against 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, John
Mr Phadnis established that the operations with low Deere and Mr Suhas Kshirsagar, Corporate Quality
functional significance but cost high are the candidates Head, VIP Bags with the panel being moderated by Mr
for 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 is
The outcome of the analysis is that specific operations credited to have introduced Toyota Production
are 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. It
undertaken by Apollo Tyres to build a culture of lean and was felt that it is not about the short term failure but
a mind-set of continual improvement within its when you look at Toyota, one has to look at the entire
employees. journey and the culture it has been able to inculcate and
spread. Also, the panel construed that it may not be
Mr Dilip was proud as he recounted the awards his plant
about Toyota alone but it could be a story of any other
had won – which included three consecutive (to date)
organization as well – this is being spoken about
inter-plant process excellence awards. The Lean journey
because the organization is Toyota which has
at Apollo links one of the pursuits of lean “eliminating
contributed so much to Lean principles.
waste from the process” and the management behaviour
with the business model. The second question, Mr Raisinghani had for the panel
was in line with something that was brewing earlier as
Mr Dilip
well: Lean or Innovation? Which is a better strategy
stressed
for an organization?
that one of
the key There was convergence amongst the panel members
points where each panellist felt there needs to be a synergy
contributing between Lean and Innovation. To start with, it was
to a change argued that while innovation could create a great
in culture is Mr S N Dilip, Head – product or a business model, in order to put it into
by creating Manufacturing, Apollo Tyres
action, one has to have lean methodology to support
a fear-free bringing the product to the market in a profitable
environment where the focus is on “what is wrong”
rd
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3. LEAN AS A STRATEGIC DRIVER FOR BUSINESS - EVENT SUMMARY
manner. It was insisted if value is not specified, a value The final question was: “What are the top 4 or 5 things
stream with zero wastes would only create a product that are absolute must an organization should keep
that is not useful to the customer. The panel correlated in mind when going Lean?”
the definition of innovation (which is, to make a product
that meets the need of the user) to the first principle of All the panellists stated two important things an
lean (define value). It was also felt that Innovation is organization should keep in mind and collectively came
successful only if there is a foundation which could be up with about 5 things. The first point to keep in mind, it
built using the principles of Lean. For the practice of was stated, is to have an open culture and an open
innovation to be nurtured, the basis is built through environment where people should be able to go to their
Lean, 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 major
Mr Raisinghani’s third question was a bit direct to the OEMs, the organizations have to embrace each
panellists: How is Lean related to their respective customer’s operating systems (Toyota Production
organizational strategy? System, Volkswagen Production System, etc.,). How
should they manage this? The response from the
It was put forth by one of the panellists that Lean helps panel was that while the names of the operating systems
in Continuous improvement and everything that is done were different, it was the principles and the concept that
in the panellists’ organization would be based on Value mattered. The panel emphasized that the focus needs to
Stream 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 the
opportunities for improvement would be through The fourth and the concluding theme was
identifying wasteful activities. Another panellist stated that of taking Lean beyond the shop
that Lean is embedded into his organization strategy by floor. The panellist Dr Graumann and
constantly listening to the customer needs. This was his team from Volkswagen presented
illustrated by an example: a vehicle meant for ploughing their unique work of implementing lean
is used in a country like India for more than just principles in designing their central kitchen which
ploughing – like drawing water, moving people, etc., - reduced 63% of the time taken to cook, 25% of the
and 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 pointed
that while his own organizational strategy uses basic Dr Graumann explained, the existing kitchen was built to
tools and concepts which may be concepts under Lean; cater to about 2500 meals per day against a projected
they don’t term the methodology as “Lean”. He requirement of 7000 meals per day. He further stated
elaborated that execution happens with the concepts that there was no scope for capacity enhancement in the
that are Lean which seeks to involve the entire supply current haphazard setting. He recounted that the
chain. manner of work was not up to the worldwide standards
of Volkswagen.
rd
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4. LEAN AS A STRATEGIC DRIVER FOR BUSINESS - EVENT SUMMARY
Dr Graumann
and his team
went about
applying the
lean principles
and explained
how they
Dr Christoph Graumann, Dir of
mapped the
Manufacturing, Volkswagen India
value stream
for the food items (rice, breakfast, tea), etc., which
included drawing a spaghetti diagram, calculated the
takt time for the meal, classified the food items into
product families and the current utilization of the kitchen
equipment.
One of the key findings the team was to have found was
that the rice was stored for 40% of its lead time and in
22 locations along its throughput.
Dr Graumann pointed out the conceptual changes that
were brought about were dedicating “cooking lines” for
cooking Rice, Vegetable and other food items. The
concept of “flow” and “pull” were incorporated in the
design stage. The entire focus of the team was to
improve the “value creating ratio” of the process.
About BMGI
Breakthrough Management Group International (BMGI),
a global consulting firm with a strong focus on delivering
results, partners with organizations in various stages of
their business life cycle to transform their business
performance. BMGI enables businesses drive growth
and improve profitability. Headquartered in the US,
BMGI has developed a loyal clientele that today exceeds
200 active clients. Engagements with our automotive
clientele have help them achieve breakthrough results.
BMGI has delivered cumulative benefits to its clients
worth several billion dollars with an ROI of 5:1 to 20:1.
rd
Event Date: 23 April 2012, Radisson, Pune Page 4 of 4