Implementation of Lean Manufacturing

Principles in Auto Industry*

R. P. Mohanty1, O. P. Yadav 2 & R. Jain3

Abstract
The lean manufacturing as a set of principles is now fairly rooted in the literature. The principles behind
lean manufacturing are not in themselves new; many of them can be traced back to the work of pioneers
such as (Deming, 1986;Taylor, 1911; Skinner, 1969). Although the concept of lean as now understood
could have modeled from this literature, it was not until the Japanese auto industry was studied, that
the total concept became clear. Indeed lean manufacture has been extended to encompass the whole
spectrum of activities in the business such that world-class companies, in particular the automotive and
electronic sectors are seeking to become lean enterprises. While there are some voices of discontent
(Gordon, 1995;Berggren, 1992) to the adoption and ultimate effectiveness of lean production, nonetheless
many case examples exist to demonstrate how companies are changing their production methods and
management practices to become leaner. This paper describes some learning from the literature and
actual practices in USA, UK, and India. Attempts are made to present the gaps between the principles
and practices. Some pertinent propositions are put forth to enrich the knowledge base of professionals to
make the implementation process more pragmatic and robust in the long run and for furtherance of
empirical research by academia.

1.0 INTRODUCTION better quality cars with fewer defects

In the mid-1980’s, U.S. auto industry was
in crisis. It was rapidly losing market
share to Japanese competitors. The
Japanese automakers were able to make
resulting in better customer satisfaction
and thereby creating an image of
excellence across the globe. Toyota Motor
Company, which despite 1973 oil crisis
increased its earnings, was able to

* Received July 31, 2006, Revised August 17, 2006. The authors would like to thank an anonymous
reviewer for making useful suggestions for improvement of the paper.
1. Chair Professor, Adviser & Dean, Institute for Technology and Management Group of Institutions,
Navi Mumbai, e-mail: rpmohanty@gmail.com
2. Assistant Professor, Industrial and Manufacturing Engineering, North Dakota State University,
Fargo, ND 58105, e-mail: om.yadav@ndsu.edu
3. Research Assistant, Department of Business and Information, Liverpool John Moores University,
Liverpool, UK, e-mail: r-jain1965@hotmail.com
 2 Vilakshan, XIMB Journal of Management
continue increase its market share. Even
today, Toyota is one of the world’s most
successful automakers that have
perpetually outperformed their
competitors in terms of quality, reliability,
cost, delivery, after sales service etc.
Japanese manufacturing systems have
been rigorously researched by global
academia. The famous book “The
Machine That Changed the World”
written by Womack, Jones, and Ross
(1990) awoke the US manufacturers. Over
the last two decades, many researchers
have studied Toyota Production System
(TPS) and have documented various
principles and practices used by Toyota
(Womack and Jones, 1994; Liker, 1998;
Adler, 1993, Spear and Bowen, 1999;
Sobek et al. 1998). Researchers, who
studied and documented TPS in the
1980’s, termed the total approach as “lean
manufacturing” although the principles
behind lean are not in themselves new;
which can be traced back to the work of
pioneers such as (Deming, 1986; Taylor,
1911; Skinner, 1969); because of its ability
to attain and realise so much more in
terms of final outcomes with the
deployment of fewer resources. The ideas
were adopted because the Japanese
companies developed, produced, and
distributed products with less human
effort, capital investment, floor space,
tools, materials, time, and overall
expenses (Womack et al., 1990). Lean
manufacturing was accepted as an
innovative paradigm-that eliminates
waste in any form, anywhere and at any
time, relentlessly strives to maintain
harmony in the flow of materials and
information, and continually attempts to
attain perfection. Ohno (1988), Shingo
(1989), Womack et al. (1990), Monden
(1997) and many other researchers made
wide ranging contributions to popularise
the lean approach.
Stunned by the Japanese growth, many
companies in the US and developed
countries pursued ways to develop and
make products more quickly and
efficiently, tried very hard to imitate or
implement TPS. These manufactures
started using various tools and shop-floor
practices identified as key elements of
lean approach such as Just-in-time,
Kanban, setup time reduction, production
leveling, production cells, quality circles
etc. Strangely, despite their power and
ability to greatly improve operational
performance, these tools have not been
very effective in lean implementation.
Many of the companies that report initial
gains from lean implementation often find
that improvements remain localised, and
the companies are unable to have
continuous improvements going on. One
of the reasons, we believe, is that many
companies or individual managers who
adopted lean approach have incomplete
understanding and, as a result, could not
be able to gain all the benefits as Toyota
enjoys. Frustrated by their inability to
replicate Toyota’s performance, these
companies assume that secret of Toyota’s
success lies in its cultural roots. But Toyota
has successfully introduced its production

system all around the world, including in
USA, and New United Motor
Manufacturing Inc. (NUMMI) is a well-
known example to narrate the success
story (Adler 1993).
The objective of this paper is to report
some learning by way of understanding
and evaluating the lean implementation
practices in some major companies in
India, USA, and UK. Stemming from the
view of lean manufacturing, as an area of
professional practice, there is a need yet
to define lean approach: the content or
subject matter of implementation. This
consists chiefly of the models, methods
and techniques, tools, skills and other
forms of knowledge that go into making
up any practice.
2.0 LEARNING FROM LITERATURE
The inability of US manufacturers to
imitate lean manufacturing approach and
failure to match Toyota’s performance,
prompted new generation of researchers
to do in-depth study of TPS in order to
decode and uncover the secrets of success.
Some researchers (Adler, 1993; Kamath &
Liker, 1994; Spear, 1999; Sobek et al., 1999)
made attempts studying various aspects
of TPS in order to identify and uncover
basic truths of lean manufacturing. It can
be inferred that the innovative aspects of
TPS are not merely the use of kanban, JIT,
inventory reduction, setup reduction, or
any other individual tool. Rather, the
backbone of TPS is the processes by which
Toyota designs its production system-that
Mohanty et al , Implementation of lean ... 3
is development by cross-functional
product development teams; integration
of all ideas in the early design stages, thus
reducing time and cost, and optimising
the overall manufacturing process.
Adler (1993) argues the prevailing notion
that quality, productivity, and learning
depend on management’s ability to free
workers from the coercive constraints of
bureaucracy is not true. He claimed that
bureaucracy can be reformed to
encourage innovation and commitments
while standardisation, if properly
understood and practised, help
continuous learning and motivation. His
two-year study of the NUMMI shows that
Toyota succeeded in employing an
innovative form of Toyota’s time-and-
motion regimentation on the factory floor
not only to create world-class
productivity and quality standards but
also to enhance workers motivation and
satisfaction. It also provides a unique
example of employee empowerment,
where workers themselves design their
procedures and involved in continuous
improvement and leading to better
employee-employer relationship.
Spear and Bowen (1999) imply a possible
reason for the inability to implement TPS,
that is, majority of western manufactures
confuse the tools and practices of lean
manufacturing with the system itself.
They claim that this over emphasis on
tools and techniques makes it impossible
to understand an apparent paradox of the
system, namely, those activities,
 4 Vilakshan, XIMB Journal of Management
connections, and production flows in a
Toyota factory are rigidly scripted, yet at
the same time Toyota’s operations are
enormously flexible and adaptable.
According to them, the tacit knowledge
that underlies the TPS can be captured in
four basic rules, which together ensure
that regular work is tightly coupled with
learning how to do work better. These
rules guide the design, operation, and
improvement of every activity,
connection, and pathway for every
product and service. These rules are: how
people work (activities); how people
connect (connections); how the
production line is constructed (pathways);
and how to move forward (continuous
improvement). All the rules require that
activities, connections, and pathways
have built-in tests to signal problems
automatically. It is the continual response
to problems that makes this seemingly
rigid system so flexible and adaptable to
changing circumstances.
Sobek et al. (1998) studied Toyota’s
product development process and
mentioned that in many ways Toyota
does not resemble what is often
considered the model of Japanese
automakers. It has maintained a
functionally based organisation while
achieving its impressive degree of
integration, and many of its tools and
techniques are actually similar to those
U.S. companies employed during their
manufacturing prime time. Toyota relies
on highly formalised rules and standards,
and puts limits on the use of cross-
functional teams. Such rigid policies can
have enormous drawbacks. However, to
avoid these drawbacks and have smooth
integration, Toyota has been relying on
number of mechanisms (Sobek et al., 1998)
to ensure that each project has the
flexibility it needs and still benefits from
learning from other projects. The result is
a deftly managed process that rivals the
company’s famous TPS in effectiveness.
Set-based concurrent engineering (Sobek
et al., 1999) is a unique example of
Toyota’s exceptional product
development capability.
Kamath and Liker (1994) carried out an
in-depth study of best practices used by
Toyota and other Japanese manufactures
in supplier management and product
development. They claim that Japanese
structure their development programs
tightly and use targets and prototype to
keep suppliers in line. Japanese set clear,
and understandable goals and
communicate them consistently to
suppliers, and use schedules and targets
as major coordinating mechanism.
Toyota and others treat suppliers based
on their capability and mutual
alignment, not blind trust, is what binds
important suppliers to customers.
Interestingly, many of lean tools and
practices are actually similar to those that
US companies employed during their
manufacturing prime and, in fact, Toyota
imported these ideas from US only and
put them into practice (Ohno, 1988).

However, the insight that Toyota applies
underlying principles rather than specific
tools and processes explains why the
company continues to outperform its
competitors. Womack and Jones (1994)
developed the lean concept further. They
envisaged it as: “a group of individuals,
functions, and legally separate but
operationally synchronised companies”.
The idea is to link breakthroughs of
individual companies, in terms of lean
techniques, up and down the value chain
to form a continuous value stream.
Karlsson (1992) summarizes the concept
in three principles: being global,
operating in networks, and building
knowledge structures together with
other actors. Perhaps most important is
the organisation and building of
hierarchies of technological knowledge
for the development and production of
products. Regardless of author, there is
one common denominator in the studies
cited above: their ideas were generated
through research in large companies,
most commonly the global automobile
industry (Karlsson, 1992; Womack et al.,
1990).
To our knowledge, very few
manufacturers have managed to imitate
Toyota successfully, even though the
company has been extraordinarily open
to its practices. It is to be understood
that the secret to Toyota’s success lies
in adherence to fundamental principles
of Industrial Engineering
(simplification, standardisation,
Mohanty et al , Implementation of lean ... 5
systematisation) supported by
actionable rules, and combined with
operational innovations to achieve
unprecedented levels of waste
reduction, while simultaneously
increasing total productivity and
quality.
Therefore, to analyse the implementation
of lean approach; it is essential to study
the inner working of companies
following the fundamental principles of
TPS identified by various researchers
over a period of time. In this study, we
examined the lean principles
implementation and inner workings of
more than 50 companies in automotive
sector in USA, UK and India. We studied
production system, product
development processes, supply chain
management, and management style to
see how these companies are following
lean principles as documented by
various researchers. We interviewed
engineers, senior managers, workers,
and involved ourselves in attending their
review and problem-solving meetings to
understand the coordination
mechanisms, the process of interaction
and cooperation between supplier and
customer.
3.0 RESEARCH METHODOLOGY
The first step of our research was to
conduct comprehensive literature
review in order to collect information on
fundamental lean principles. After a
comprehensive literature review, a
 6 Vilakshan, XIMB Journal of Management
questionnaire survey combined with
interviews were considered to be the most
appropriate method for investigating
implementation status of fundamental
lean concepts in the USA, UK and Indian
automotive companies. We, therefore,
decided to carry out a postal survey in
view of its efficiency for this kind of
research with regard to the resources
needed. The study was mainly restricted
to automotive industry. The target
population for this study was large auto
manufacturing companies including both
original equipment manufacturers
(OEMs) and tier one (and few tier two)
suppliers. The survey questionnaire was
mailed to 120 randomly selected major
auto companies in August 2004. These
companies represented a broad cross-
section of the auto industry in USA, UK,
and India.
The survey covering letter promised
anonymity and clearly described the
objectives of the study. Further,
companies were promised to provide
summarised results of the study in order
to enhance the number of replies. Initial
response, however, was exceedingly
poor. Companies who did not respond
after six weeks were sent a follow-up
letter along with the questionnaire.
Finally, the number of valid responses
that we used for analysis was 56
amounted to a response rate of around
50 per cent.
Later, it was decided to undertake an
in-depth investigation in order to
capture the level of understanding and
extent of adaptation of lean principles
and tools. In our detail investigation,
we decided to interview a few
managers of each major automotive
company, observing company paper
work, observing practices to get more
clear understanding, attending review
and problem-solving meetings, and
having unstructured discussion with
managers and engineers. A detailed
report was prepared after each
interaction and sent to the respective
managers. The aim of the in-depth
investigation process was to explore in
more detail the issues that were
covered in the survey. In particular it
provided the researchers with the
opportunity to probe issues such as
prob lems and impediments in adoption
of lean principles. It also ensured that
all questions were interpreted
correctly. It allows the validity of the
answers to be assessed and minimises
perceptual bias.
In this particular study, four core areas of
auto manufacturing such as; production
system, product development process,
supply-chain management, and
management style were identified to
investigate the lean implementation
process. Further, we captured the
fundamental (or actionable) principles of
lean manufacturing (or TPS), based on the
literature survey and the authors’
industrial working experience. These
fundamental principles are mentioned in
Table-1.
 Mohanty et al , Implementation of lean ... 7

Table 1: Implementation of fundamental lean principles

Fundamental lean principles Level of implementation

High Medium Low None
Standardisation 0.80 0.12 0.08 0.00
Teaching and learning 0.60 0.20 0.04 0.16
Socialisation 0.72 0.24 0.04 0.00
Supplier-customer relationship 0.80 0.16 0.04 0.00
Simple and specified pathways 0.76 0.12 0.12 0.00
Continuous improvement 0.84 0.12 0.04 0.00
Pursuit of perfection 0.64 0.20 0.04 0.12
Coordination through 0.84 0.12 0.04 0.00
rich communication
Functional expertise and stability 0.60 0.20 0.04 0.16
Cultivating organisational knowledge 0.72 0.16 0.08 0.04

4.0 PRELIMINARY SURVEY RESULTS fundamental principles of lean

Having established the understanding
that it is imperative to focus on both
practices and principles in an integrative
way to match Toyota’s performance, the
emphasis was placed on actionable lean
principles in this study. The lean
principles identified by researchers
(Spear & Bowen, 1999; Sobek et al., 1998;
Adler, 1993; Kamath & Liker, 1994;
Womack et al., 1990; and Ohno, 1988) are
used to direct and summarise the
collection of publicly available
information on auto industry’s lean
principle implementation. In the case of
the actual implementation of these
principles, the information was later
crosschecked with the views of key
senior managers and engineers. This was
important, as it shows the context into
which the basic actionable and
manufacturing were implemented.
The first step of our research was to collect
information on implementation status of
these identified fundamental lean
principles. It was more of exploratory in
nature, as companies were asked to
respond whether they are familiar with
these fundamental principles and if so, do
they follow them in their organisation?
While respondent did not always respond
with simple yes or no for any category,
but for classification purpose, it was
necessary to record either positive or
negative answer. At this stage, we did not
investigate the inner working based on
these actionable principles. The Table-1
gives the results of this exploratory
survey. The advantage of this step is that
it provided us a logical and coherent
picture of understanding lean
 8 Vilakshan, XIMB Journal of Management
implementation status, which further
helped developing detail investigation
strategy.
Our preliminary survey indicates that
over 75 per cent of the companies
surveyed claimed to have implemented
lean manufacturing or similar approaches
and around 15 per cent are actively
engaged in implementation process. This
outcome of the survey has somewhat
stunned us as, in reality, most
manufactures are still a long way to go to
attain Toyota’s level of performance, and
literature survey also shows that there are
very few companies who have
successfully imitated Toyota’s lean
approach. Another interesting
observation from this study is that four
important lean principles, i.e., teaching
and learning, pursuit of perfection,
functional expertise and stability, and
cultivating organisational knowledge,
which are generally considered as
building blocks for organisational
transformation are not on the high
priority and only 60 per cent organisations
have recognised their importance. This
observation strengthened our skepticism
on the claim of lean implementation and
further encouraged us to undertake the
detailed study on inner working of these
companies to bring clarity on the issue.
Prior to our survey results, based on the
literature review, we expected that a
substantial percentage of these companies
would not be well versed with adaptation
of these fundamental principles of lean
concept. However, in the light of actual
results this proved to be too simple to
assume. The unexpectedly positive
response surprised us and, therefore,
motivated us to look into inner-working
of these companies in terms of their
understanding and implementation of
these fundamental principles and hence,
to validate their response.
The next step was an in-depth
investigation to capture the level of
understanding and extent of adaptation
of identified lean principles by
manufacturing companies who either
claimed to have implemented lean
concept or companies that are actively
engaged in implementation process. In
our detailed investigation, we did not
include the companies that did not claim
to either have implemented or actively
engaged in lean implementation process.
To extract true nature of implementation
status and to validate the responses,
unstructured discussions were held with
many employees at different levels,
which further added richness and context
to the information collected. This was
normally achieved by a combination of
observing in company paper work,
observing practices during visits to plant,
both in offices and shop floors, witnessing
some of review and problem-solving
meetings, and discussions with managers
and engineers.
5.0 INVESTIGATION ON LEAN PRINCIPLES
IMPLEMENTATION
While much has been written on the
subject of lean manufacturing, the
strategies advocated to implement the

lean concept are somewhat different. The
key aspect of lean implementation is the
marriage between lean practices and
principles with the strong commitment in
pursuit of perfection through perpetual
learning. Many companies tried to imitate
Toyota’s tools as opposed to its principles;
as a result, many have ended up with
rigid, inflexible production system that
worked well in the short term but didn’t
stand the test of time. Mere
implementation of tools, without having
established integrative system that acts as
precursor to lean implementation, is not
sufficient and it does not help
transformation into learning organization
(Senge, 1990). However, to be
implemented successfully, these tools and
practices have to be preceded or at least
accompanied by organisational
transformation: by new integrative
thinking, strategies, and actionable
principles in the organisation (Smeds,
1994). Moreover, all the principles
identified by researchers over a period of
time cannot be implemented
independently. They are basically
complementary to each other and require
integrative approach, broad-ranging and
system-wide changes in order to improve
organisation’s performance. Above all,
intellectual stimulation, inspirational
motivation, and idealised influences
within the interfunctional teams are very
much essential to reap the benefits of lean
practices in the long run.
The following sections discuss the
underlying principles of lean
manufacturing and detailed analysis of
Mohanty et al , Implementation of lean ... 9
implementation status of these principles
by automotive companies in USA, UK,
and India.
5.1 Standardisation
Standardisation is one the building blocks
of lean thinking in TPS. Toyota managers
recognize that the lack of details and
explicit description of work content,
sequence, timing, and outcome allows
operators or employees to perform tasks
differently, which results in more
variation in outcome. Further, it hinders
learning and improvement in the
organisation because the variation masks
the link between how the work is done
and the outcomes (Spear and Bowen,
1999). Therefore, routine and repetitive
tasks require standardised work
procedures to improve efficiency and
quality. The requirement that every
activity be specified is the first unstated
rule of the TPS, and that’s why Toyota
ensures that all work is highly specified
as to content, sequence, timing, and
outcome.
At Toyota, the ultimate purpose of
standardisation is to reduce cost relating
to production by eliminating production
inefficiencies such as unnecessary
inventories, and workers. Through
standard operations, it achieves multiple
goals such as high productivity; line
balancing among all processes, minimum
quantity of work-in-process, and finally
helps reduce variability in operations
(Monden, 1997). In addition, Toyota trains
new employees to work independently in
three days. This approach increases
10 Vilakshan, XIMB Journal of Management
learning efficiency because workers keep
referring to the standard operating charts
until they get familiar with the techniques
(Shingo, 1989). At the same time, Toyota
strongly believes that standard should not
be forced down from above but rather set
by production workers themselves.
Spears and Bowen (1999) reported that at
Toyota, because operators (new and old,
junior and supervisory) follow a well-
defined sequence of steps for a particular
job, it is instantly clear when they deviate
from the specifications. To make problem
detection even simpler, Toyota relies on
visual system that allows deviation
immediately apparent, worker and
supervisor can move to correct the
problem right away and then determine
how to change the specifications or retain
the worker to prevent a recurrence.
Adler (1993) credits success of NUMMI
to its intense focus on standardisation. At
NUMMI, in contrast to other US
manufacturers, the work procedures are
designed by workers themselves in
continuous and successful efforts to
improve quality and productivity. Team
members themselves hold the
stopwatches, and learn the method
analysis, description, and improvement.
This change in the design and
implementation of standardised work has
far reaching implications for worker
motivation, self-esteem, and worker-
management relationship.
Toyota has successfully standardised
much of its product development process
as well. Routine work procedures-such
as design blueprints, production reports,
and feedbacks for design reviews-are also
highly standardised. Sobek et al. (1998)
reports standardisation of written
communication in the form of report
format in Toyota product development
process. The reports all follow the same
format so that everyone knows where to
find the definition of the problem, the
responsible engineer and department, the
results of analysis, and the
recommendations. The standard format
also helps engineers make sure they have
covered the important angles. Writing
these reports is a difficult but useful skill,
so the company gives its engineers formal
training in how to boil down to what they
want to communicate? Sobek’s findings
also support other researchers’ arguments
that standardisation is a key to Toyota’s
performance and continuous
improvement.
In contrast, in most organizations we
studied the prevailing belief that
standardisation destroys creativity. They
advocate that detailed standards will
inevitably alienate employees, poison
labour relations, hobble initiative and
innovation, and diminish an
organization’s capacity to change and
learn (Adler, 1993). Ohno (1988) clearly
describes in his book the encouraging
Ford thinking about standardisation.
However, Ford’s successors did not carry
that thinking of standardisation.
However, authors have observed through
their study that this prevailing belief
towards standardisation among labour
unions is largely attributed to:

• Work standards developed by
industrial engineers or consultants
who don’t have direct work
experience at the shop floor and
imposed on workers to follow them,
which is contrary to Toyota’s
thinking. Further, the standards
developed by industrial engineers or
consultants are not as detailed and
full of exactness as Toyota does.
• Managers generally use these
standards as performance metrics as
well—ignoring other factors—to
evaluate workers performance and
hence to punish them, if they wish to
do so. They use these standards to
force workers to work harder and
harder. The so-called misuse or
abuses of standards have forced labor
unions to be more suspicious about
standardisation.
• The majority of managers themselves
doesn’t believe in standardisation
and always use their own convenient
ways to perform their tasks. One of
the engineers from a US automaker
shared his frustration with us that
“report format changes with change
in leadership (chief engineer) and he
had to redo everything again to the
satisfaction of a new chief engineer”.
Every time new leadership takes the
responsibility, the reporting
procedures and working style
changes. In the absence of standard
report format, there is always
possibility of missing important
angles in the report and it is difficult
Mohanty et al , Implementation of lean ... 11
for engineers to figure out the
required information quickly.
• Managers, we believe, still don’t get
the complete meaning and
importance of standardisation and
ended up with more reliance on
technology, toolbox techniques and
algorithms for performance
improvement.
5.2 Simple and specified pathways
“The work must flow to the right machine
(or person) in the right form at the right
time at the lowest cost with the highest
quality possible.” By setting up a flow
connecting not only final assembly line
but also all the processes—production as
well as non-production processes—one
reduces production lead time. In Toyota
system, there are no forks and loops to
complicate the flow of good, service, or
information in any of Toyota’s supply
chains. This principle addresses the third
rule formulated by Spear and Bowen
(1999), i.e., how the production line is
connected?
Toyota system works on the premise of
totally eliminating the over production
generated by inventory and costs related
to workers, space, and facilities needed for
managing inventory. To achieve this,
Toyota practises the Kanban system in
which a later process goes to an earlier
process to withdraw parts needed just in
time. It ensures that all pathways are set
up so that every product or information
flows along a simple and specified path.
However, the stipula tion that every
12 Vilakshan, XIMB Journal of Management
product follows a simple, pre-specified
path doesn’t mean that each path is
dedicated to only one particular product.
At Toyota plants, each production line
typically accommodates many more types
of products than its counterparts do at
other companies specifically US
automakers.
By requiring that every pathway be
specified, the rule ensures that an
experiment will occur each time the path
is used. If for some reasons a workstation
or worker is not available and engineer
found himself looking for help to divert
production to another machine, Toyota
will see it as a problem that might require
the line to be redesigned. Toyota
engineer’s consistent motto is to simplify
and specify the paths to be followed by
the product. The driving forces behind
TPS follow the general direction of self-
organisation: towards the “simplicity of
original structure” (Sahal 1982).
Contrary to this, majority of
manufacturers, we believe, still have the
hangover of “larger the lot size, the
better”, as a key to cost reduction. They
have been improving and refining
production processes in their own way
and have not attempted, however, the
production leveling the way Toyota has
been working. Except few companies,
majority of them have been heavily
relying on technology and algorithms to
solve their problems without simplifying
the process flow.
A large number of companies have not
been able to achieve effective integration
of various functional areas. There have
always been conflicts between functional
groups over the goals, objectives, and
achievements. Mistrust, communication
gap, and lack of coordination play
important role to enhance that conflict.
Western manufacturers have
misinterpreted the workflow system and
literally forcing work to flow. Authors
have identified an automotive supplier
company claiming to have implemented
Kanban system but still using it as
traditional push system. We still have that
mindset of producing items and pushing
them to next work station. In most
organisations that claim to have
implemented JIT, what is missing is the
autonomation-automation with human
touch, which corresponds to the skill and
talent of individual employees to support
and make JIT implementation a success.
According to us:
• Group work is one of the main
features of lean production. It is the
core element of the sociotechnical
approach, which is instrumental to
what is sometimes referred to as
“reflective production”(Ellegård, K.
et al. 1992).
• Clearly delineated, coherent, work
groups, as capable performers of
operational processes in line with the
requirements of the organisation will
make lean implementation a success.
5.3 Teaching and Learning
Senge (1990) says, “the organisations that
will truly excel in the future will be the

organisations that discover how to tap
people’s commitment and capacity to
learn at all levels in an organisation.” It
seems Toyota has realised that necessity
long before. At Toyota, teaching and
learning evolves through unique
relationships between managers,
supervisors, and workers. They
constantly work together to solve
problems where managers and
supervisors act as enablers rather than
giving directions or orders. Managers
position themselves as a teacher and
coach, not as an administrator. They put
workers through experiences without
explicitly stating what or how they have
to learn. The result of this unusual
manager-worker relationship is a higher
degree of sophisticated problem solving
and leaning at all levels of the
organisation. This approach allows
workers to discover the rules as a
consequence of solving problems.
Standardisation and specified pathways
further strengthen this approach of
problem solving and learning. In product
development also, Toyota has not
forgotten the value of instructive
supervision within functions. Supervisors
and higher-level managers are deeply
involved in the details of engineering
design (Sobek et al.1999). It has been
reported in both areas, product
development and production system, that
Toyota’s managers avoid making
decisions for their subordinates. They
rarely tell their subordinates what to do
and instead answer questions with
questions. They force engineers to think
Mohanty et al , Implementation of lean ... 13
about and understand the problem before
pursuing an alternative, even if the
managers already know the correct
answer. Supervisors normally come to the
work site and ask series of question (Spear
and Bowen 1999) such as; how do you do
this work, how do you know you are
doing this work correctly, how do you
know that outcome is free of defects, what
do you do when you have a problem? The
iterative questioning and problem-
solving approach leads to effective
learning and builds knowledge that is
implicit.
Further, Toyota uses hierarchy (called as
learning bureaucracy) to spread teaching
and learning while encouraging
innovation and commitment. The
learning bureaucracy can provide support
and expertise instead of a mere command
structure (Adler 1993). That is why at
Toyota plants all managers are expected
to be able to do the jobs of everyone they
supervise and also to teach their workers
how to solve problems according to the
scientific methods. This teaching and
learning principle motivates workers and
taps their potential contribution to
facilitate continuous improvement and
organisational learning. It dispels the
prevailing notion in all the auto
companies that hierarchical
organisational structure is inefficient,
ineffective, and suffocates learning.
Though majority of big companies show
their commitment towards teaching and
learning and even claim that it is their one
of the missions, the inside culture never
14 Vilakshan, XIMB Journal of Management
supports this claim. Manager, supervisor,
and workers relation are full of suspicion
and disrespect towards each other. In
manufacturing environment, the intense
supervision would seem to be kind of
meddling that stifles the creativity and
learning of new engineers and other
specialists. These companies preach
empowerment through self-learning. In
few cases, we have observed that
managers and supervisors too lack the
skills to act as mentor and coach. Not only
that, they heavily rely on their
subordinates (engineers or workers) to get
their work done rather than acting as an
enabler to train and coach their
subordinates. We have found few cases
where a supervisor coming from totally
different functional background does not
have complete understanding of the kind
of work and people he is going to
supervise and therefore, not able to do the
justice to his job. Few engineers from US
automotive companies shared their
frustration by the experience of working
under someone less skilled than they are.
Therefore, this existing practice of
frequent rotation of people across
functions has hindered the western
organisation’s teaching and learning
capability.
There have been few instances where
manager or supervisor took the undue
credit of work, which he does not even
know how to do it. This tendency in any
organisation demotivates the workers and
creates an environment of mistrust and
disrespect. In a so called hierarchical
structure, western managers and
supervisors play the role of commander
and pass on the work requirements to
their subordinates and final output to top
management and to other functional
departments. It seems that their only role
is to pass down the orders to their
subordinates and vice versa. This
authority system is having strong
negative impact on participative culture
and team bonding, and workers are
always under fear of losing jobs if they
don’t keep them happy. One of the major
concerns authors have realised through
their study and close interaction with
workers and engineers is frequent transfer
from one job to another. This not only
hinders the learning process by
experience and problem solving but also
eliminates the possibility of strengthening
teaching and learning process. However,
it must be understood that implementing
lean approach is a continuous journey,
which needs a learning organisation,
where managers have to engage in:
• Guiding, mentoring, and developing
employees
• Building organisational capabilities
and responsiveness
• Marshalling professional expertise
• Showing judgment, common sense,
and intelligence
5.4 Socialisation
The social context in which work is
performed is one of the important aspects
of the TPS. In terms of social context,

Toyota seeks to build an atmosphere of
trust and common purpose. It carefully
builds consensus around important
decisions, and has programmes ensuring
adequate communication of results and
other essential information. Under normal
circumstances every human being has
desire for excellence, a mature sense of
realism, and finally the positive response
to respect and trust. Toyota uses
socialisation to ensure adequate
communication of results and goals and
create an environment of trust and
respect. Encouraging participative
decision making and team bonding
through small production teams further
strengthens the socialisation process.
Toyota leadership wants workers to
understand that the company is not the
property of the management but of
everyone together. Toyota management
also believes that team culture and job
security eliminate fear and build a strong
commitment that in turn improve
efficiency and productivity.
Sobek et al. (1998) highlights that Toyota
with its intensive mentoring trains and
socialises engineers in ways that foster in-
depth technical expertise and efficient
communication. Manager’s or
supervisor’s expertise as well mentoring
and coaching roles act as stimulus to
socialisation process. Toyota’s ability to
sustain profits, quality, and improvement
record certainly depends on worker’s
motivation that rests, in turn, on equitable
treatment, clarity in communication, and
responsive management. Therefore,
Mohanty et al , Implementation of lean ... 15
effective socialisation among Toyota’s
employees and management plays a
crucial role to maintain Toyota’s ability.
In reality, the exceptional consistency in
actions, consensus around important
decisions and effective communication
mechanisms create a fertile ground to
accelerate socialisation process at Toyota.
This principle is highly underplayed in
the most organisations. In contrast, the
prevailing notion about socialisation is
going out for drink and lunch, scheduling
off-site meetings, and arranging games
and sports activities during work time.
There is a tremendous amount of mistrust
and disrespect among subordinates as
well as between supervisors and workers.
Few of the reasons, we believe, for
suspicion and disrespect are lack of
technical and managerial competence,
and arrogance towards subordinates. The
lack of clear purpose and communication
gap between managers and workers
further intensifies the prevailing mistrust.
Authors have found that majority of
western companies, especially in USA, are
hiring contract employees (which India is
following) as a means to cost reduction
without realizing its long-term
ramifications. This approach, however,
fails to gain workers commitment
towards organisation and job, spoils team
culture environment, and increases
workers fear of job and hence, affect the
socialisation process in a big way. Rather
than integrating themselves with
organisational culture these contract
employees are always on look out for new
16 Vilakshan, XIMB Journal of Management
and better opportunities to move.
According to our understanding, top
management needs to recognise
socialisation as a process to:
• Nurture internal and external
relationship
• Facilitate cooperation and
partnership with clarity in
communication
• Value individual differences and
diversity
• Demonstrate self-awareness and
display resilience
5.5 Continuous improvement
Standardisation, learning, socialisation,
and path simplification are the essential
building blocks for improvement and
provide a specific base to carry out
continuous improvement. In deed, these
principles are not only vehicles and
preconditions for improvement but also
direct precursors. Continual reiterations
of these principles create an intensely
structured system for continuous
improvement. The basic Toyota
philosophy is that any operating system
can be improved if enough people at
every level are looking and experimenting
closely to improve their own work
system. Toyota explicitly teaches people
how to improve, not expecting them to
learn from personal experience. That is
where the principle of continuous
improvement comes in. The distinctive
feature of Toyota’s continuous
improvement effort is that any
improvement must be made in
accordance with a scientific method,
under the guidance of a teacher, and at
the lowest possible organisational level.
At Toyota, engineers and managers are
facilitators, mentors, and coaches to act as
a support system rather than an authority
system.
Toyota teaches its employees to improve
their problem-solving skills by
redesigning their own work. To make
changes, people are expected to present
the explicit logic of the hypothesis, which
requires that employees fully explore all
their improvement opportunities. Also
their improvement activity should be
carried out as a bona fide experiment. By
inculcating the scientific method at all
levels of the workforce, Toyota ensures
that people will clearly state the
expectations they will be testing when
they implement the changes they have
planned. Frontline workers make the
improvement to their own jobs, and their
supervisors provide direction and
assistant as teachers. The total
involvement of workers, supervisors, and
managers in problem-solving exercise
ensures that leaning takes place at all
levels of the company in the most
conducive social context.
A large number of companies across the
world claim to have heavily invested in
continuous improvement efforts.
However, the failure to fully understand
and implement these first four principles
of lean philosophy, i.e., standardisation,
path simplification, teaching and learning,

and socialisation, makes their claim weak.
Authors do believe that these
organisations are struggling hard to create
an environment of continuous
improvement but, it seems, their
approach lacks a focus. What is lacking
in their efforts is total commitment from
management and employees, consensus
on the approach, scientific methodology,
and confidence. The various approaches
or philosophies of continuous
improvement, such as Total Quality
Management (TQM), Six Sigma, Lean Six
Sigma, Just-In-Time, etc., are being
implemented without fully committing to
any one of these. It looks as if they are
gaming with these approaches. Except
few large companies, there is no explicit
way to teach people how to improve the
process. People, generally, use their
common sense in improvement efforts
rather than presenting the explicit logic
of the hypothesis and following scientific
experiments. It seems that there is a
competition among lower level
employees to change the process for the
sake of impressing managers and
supervisors rather than bringing real
improvement. These efforts are not based
on the observed problems with existing
methods/processes and hence, don’t
really improve the process. We have
noticed in one automotive company that
a reporting process changed thrice in last
18 months by three different individuals.
Another interesting case we noticed in one
car company where there were three six-
sigma projects addressing the same
problems and coming out with three
Mohanty et al , Implementation of lean ... 17
different solutions claiming huge savings
to the company.
Most disturbing trend we have observed
in our study is that majority of managers
in companies look towards new
technologies, toolboxes, and algorithms to
find solution rather than understanding
the problem and simplifying the process.
It has already been highlighted in the
literature that tools and techniques will
not help improve the system unless basic
operating principles are inculcated.
According to us these are:
• Any improvement effort must be
made at the lowest possible
organisational level in accordance
with a scientific method based on
logical reasoning.
• Any improvement initiative must be
guided by systems engineering
thinking. It is important to avoid the
tendency of becoming “prisoners of
their own position” where people
don’t see how their actions affect the
other performance indicators or
overall process performance and
resulting into learning disabilities.
• Make continuous improvement
process a team effort and ensure that
everyone involved has the
opportunity to take ownership of the
process. It is critical to build
partnerships with key customers,
suppliers and stakeholders for
effective and better results.
• Instead of focusing attention on too
many issues, set priorities and focus
18 Vilakshan, XIMB Journal of Management
on vital few issues. Make sure to
provide the relevant information and
resources to every one who needs
them for continuous improvement
• Strive for some small tangible early
successes and make the most of these
through recognition and publicity.
5.6 Supplier-customer relationship
Toyota ensures that every connection
between people is standardised, direct,
and unambiguous. It specifies the form
and quantity of the goods and services to
be provided, the way requests are made
by each customer, and the expected time
in which the request will be met. The rule
creates a supplier-customer relationship
between each person and the individual
who is responsible for providing that
person with each specific good or service.
This clarity of how people connect with
one another leaves no gray zones in
deciding who provides what to whom
and when. The requirement that people
respond to supply request within a
specific time frame further reduces the
possibility of variation. Tasks are
preprogrammed so that one group knows
what to expect from another and when to
expect it, with little or no communication
required (Sobek et al. 1998).
For outside suppliers, Toyota manages
supplier relationship very tightly. They
set clear, understandable goals and
communicate consistently to suppliers,
and subsequently use targets and
prototypes to enforce these goals. Toyota
maintains its relationship with suppliers
clearly based on its requirements and
supplier’s capability. Toyota lays down
clear targets, and the supplier has to figure
out how to meet them. Milestone events
usually represent delivery deadlines and
meeting these deadlines is crucial. Toyota
suppliers also know exactly where they
fit within clearly determined
boundaries—to be creative without being
destructive. Suppliers are expected to
work hard and meet targets on time.
Toyota managers generally understand if,
despite its best efforts, a supplier cannot
meet a target. In general, Toyota gives
marching orders to suppliers through
carefully considered targets for price,
delivery date, performance, and space. In
short, Toyota uses targets as coordinating
mechanism and targets play different
roles in different supplier relationship and
in determining the nature of relationship.
Very few, elite corps of about a dozen
first-tier suppliers, enjoy full-blown
relationship with Toyota. The Japanese
tier structure simplifies communication
between Toyota and its suppliers; first-tier
suppliers coordinate activities of the
second-tier and so on down the hierarchy,
allowing Toyota to focus scarce
communication resources on top tier.
Toyota develops different types of
relationships with different suppliers
depending on their technological
capabilities and its willingness to share
information with supplier, and both
companies strategic requirement. Finally,

mutual entanglement—not blind trust—
is what binds important suppliers Toyota
and vice versa. Kamath and Liker (1994)
identified a range of postures that Toyota
and suppliers can adopt within long-term
cooperative relationship as:
Partner: relationship between equals,
supplier has technology, size, and global
reach.
Mature: customer has superior position;
supplier takes major responsibility with
close customer guidance.
Child: customer calls the shots, and
supplier responds to meet demands
Contractual : supplier is used as an
extension of customer’s manufacturing
capability.
Toyota uses prototypes as an
organisational lever to measure the
performance of suppliers and ensure that
they meet delivery deadlines. Prototype
testing and evaluation provide a way to
manage the relationship because each
prototype stage is an opportunity to
appraise the supplier’s performance.
Suppliers’ performance evaluation is
based on the car data, not the data
provided by the supplier. Suppliers who
miss prototype delivery deadlines face
severe penalties, such as a reduction in the
size of subsequent orders.
In contrast, most of the manufacturing
companies we studied do not have clearly
defined rules to connect people with one
another. In most of the companies, the
connections aren’t so direct and simple.
Mohanty et al , Implementation of lean ... 19
The request for material, information, or
help often takes a complicated route to the
supplier via several committees and
hierarchy of managers and supervisors.
The lack of clarity of how people connect
to one another creates an ambiguity and
finally disrupts the smooth process flow.
There is always delay when request for
urgent goods or service delivery is made
at the last moment when milestone date
is close, which is popularly known as fire
fighting tendency. The second author,
during his two years working with one
of the US automakers, has noticed that
sometimes people are not even aware of
the source to contact for a particular
information or service. There are lots of
disconnects in the system, which creates
chaos and affects the overall quality of the
output.
To manage outside suppliers, US
automakers are also trying their best to
have very tight relationship. They do try
to develop relationship based on their
requirements and supplier’s capabilities.
Lately, there have been some efforts to
involve suppliers early on in the product
development process. However, despite
all their right efforts, when it comes to
make final decision on supplier selection,
once again cost plays more important role
than quality, delivery performance,
supplier’s capability, etc. The impact of
this decision can be clearly seen on
supplier’s behavior. Authors have noticed
during their study that suppliers do
respond differently to US automakers and
Toyota. The same supplier would have
20 Vilakshan, XIMB Journal of Management
different quality of the same product for
US automakers and Toyota. Upon further
enquiry, we found that Toyota gives fixed
(and better) rates and defines very clear
requirements and expectations, where as
with US automakers they always struggle
for price, never get clear requirements and
expectations, and always there is
possibility of last minute changes, which
disrupts supplier’s whole production
system. There is no standardised and
direct mechanism to communicate all
expectations and requirements to
suppliers. In couple of US automakers and
suppliers meetings, we have noticed the
sudden emergence of requirements,
which were never specified to suppliers
by the customer or design engineers. This
resulted due to the communication gap
between design engineer and reliability
engineer of the US automaker itself
because there is no standardised and
direct connection between people within
the company.
Additionally, there are few nuances of
supplier-customer relationship, which
have not been fully understood by
According to us, the following success variables may define the value dimensions of
supplier-customer relationship in lean approach:
• Commitment
• Trust
• Cooperation
• Mutual goals
• Interdependence and power
• Performance satisfaction
managers of US and other western
manufacturing companies but attempted
to implement those. For example, it is
widely believed that Toyota treats
virtually all its primary or first-tier
suppliers as close partners. However, the
reality is that Toyota typically regards
only handful of them as close partners and
assign more limited roles to others. This
instance illustrates that existing tendency
among western managers or US to imitate
Toyota system without fully
understanding how Toyota works with
suppliers. This tendency has the potential
of doing more harm to the company
rather than building strong relationship
with suppliers. The successful partnership
depends on the right balance among
supplier’s technological capabilities,
customer’s willingness to share
information, both companies’ strategic
requirements, and of course honesty and
mutual trust between them. Majority of
companies, those we have visited and
studied, have not been able to develop
strong relationship based on above
factors.
• Structural bonds
• Comparison level of alternatives
• Adaptation
• Non- retrievable investments
• Shared technology
• Social bonds

5.7 Coordination through communica-
tion
To develop the idea into an innovation,
a hologram structure is needed: the
designing of the “whole into the parts”.
This is possible by having effective
coordination among groups and
individuals with requisite variety in
knowledge and rich information content.
The amount of complexity and number
of parts involved in car design makes
coordination through rich
communication an essential element to
succeed. One of the most critical and
powerful principles of Toyota as well as
other Japanese manufactures is simple
coordination and communication
mechanism. The common wisdom is that
best mode of communication and
coordination in product development is
face-to-face talk with people from other
functional areas and suppliers. Written
forms of communication in the form of
written report and memos don’t have the
richness of information or interactive
qualities needed for problem solving.
This belief supports direct meeting
between the members of different
functional groups and encourages face-
to-face interaction to sort out issues and
concerns. Meetings, however, are costly
in terms of time and efficiency, and
usually involve limited value-added
work per person and they easily lose
focus and drag on longer than necessary.
Therefore, in lieu of regularly scheduled
meetings, Toyota emphasises written
communication (Sobek et al. 1998).
Mohanty et al , Implementation of lean ... 21
At Toyota, communicating about set of
problems, concerns, and solutions,
appears to increase the richness of
communication while decreasing the
length and frequency of meetings. When
an issue surfaces that requires cross-
functional coordination, the protocol is to
first write a report that presents the
diagnosis of the problem, key
information, and recommendations, and
then to distribute this document to the
concerned parties. The recipient is
expected to read and study the document
and offer the feedback, sometimes in the
form of separate written report. One or
two iterations communicate a great deal
of information, and participants typically
arrive at an agreement on most, if not all,
issues. If there are outstanding
agreements, then it’s time to hold a
meeting to hammer out a decision face-
to-face.
Liker’s (1998) data show that Toyota
meets with its suppliers less often for
shorter periods of time than do other
major auto companies in the USA, even
though Toyota suppliers appear to have
greater design responsibilities and fewer
communication problems. To
communicate and coordinate with
suppliers, Toyota sets clear,
understandable goal and communicate
them consistently to suppliers, and uses
targets and prototypes to enforce and
coordinate these goals (Kamath and Liker,
1994). In fact, Toyota uses targets as a
major supplier coordinating mechanism
and prototype as a way to structure the
design process-in effect, as an
22 Vilakshan, XIMB Journal of Management
organisational lever to measure the
performance of suppliers and ensure they
meet delivery deadlines. The nature and
degree of coordination with suppliers
depends on the suppliers technological
capability, sophisticated management,
global reach, and right balance among a
supplier’s technological capabilities, a
customer’s willingness to share
information, and both companies strategic
requirements. Kamath and Liker (1994)
gives a range of postures (or roles) that
customers and suppliers can adopt within
a long-term cooperative relationship, i.e.,
partnership, mature, child, and
contractual. Lean principles require both
suppliers’ high engineering capability and
a close but demanding relationship
between the customer company and the
suppliers.
In contrast, the auto companies, we
studied are still struggling to develop a
smooth and effective coordination
mechanism. They do have coordination
problems both internally as well as with
external suppliers. The lack of effective
internal coordination results into the
poor communication with external
suppliers. Failure to communicate rich
information to external suppliers
hampers the supplier’s capability to do
their best meeting customer
requirements innovatively. This internal
coordination problem is attributed to
lack of clarity of how people connect to
one another. This disconnect in the
system disrupts smooth flow of
information and people fail to gather
relevant information in order to
communicate to the suppliers timely.
Authors have realised that most
automakers are still fond of face-to-face
meetings, which, of course, are time
consuming, costly, prone to lose focus,
and drag on longer than necessary. In US
auto industry, whenever problems or
concerns appear, rather than
communicating it through written report
to present diagnosis of the problem,
relevant information, and
recommendations, the immediate
response will be “let’s call meeting and
discuss it.” Even, in India if the written
report is circulated before the meeting,
very few people take pain to read that
report before joining the meeting.
Majority of attendees often arrive at
meeting having done little or no
preparation. This allows the meeting to
drag on beyond the scheduled time and
force them to schedule next meeting to
discuss the recommendations and
necessary solutions, if possible. One of the
reasons for re-scheduling next meeting is
that participants didn’t go through
written report, were not aware of the
nature of the problem, and hence, did not
collect the relevant information content
before coming to the meeting. Engineers
in companies we have visited often share
their frustration of not having enough
time to get their engineering work done
because of all the meetings they need to
attend.
The lack of effective coordination among
the people within organisation further

impedes communication with external
suppliers in meeting targets and
milestone dates. It doesn’t facilitate the
consideration of total information content
before setting targets and milestone dates,
and as and when additional information
is received, the requirements and targets
get changed accordingly. In UK and in
India, so many times the amendments are
made put additional burden on suppliers
in meeting milestone dates and affecting
quality of the items.
According to us, lean approach needs
relational coordination between various
parties through:
• Frequency of communication
• Timeliness of communication
• Problem solving communication
• Helpfulness
• Shared goals
• Mutual respect
5.8 Functional expertise and stability
Every company depends on highly skilled
engineers, designers, and technicians to
bring a product to markets. Organisation
can develop standard skills by giving each
person within a specialty the same set of
skills to accomplish his or her tasks. In
order to achieve that Toyota rotates most
of its engineers within one function,
unlike U.S. companies, which tend to
rotate their people among functions.
Cross-functional job rotation is unusual
for the first ten to twenty years of an
engineer’s career. Since most engineers
Mohanty et al , Implementation of lean ... 23
rotate primarily within their engineering
function, they gain the experience that
encourages standard work, making
communication with other functional
groups easier because engineers know
each other very well for a long time and
develop good understanding with each
other. Also the stability over time means
that the company’s engineers in one
functional division need to spend less
time and energy communicating and
coordinating with their counterparts in
other functional areas because they know
each others requirements and
expectations.
There is common belief that rotating
locally and building functional expertise
would result into rigid functional
boundaries in which engineers work only
to be best in their function and fail to
visualise the whole picture of the system.
Toyota, however, takes care to rotate most
of its senior people broadly (Sobek et al.
1998). Senior engineers with at least 20
years experience typically rotate widely
across the company to areas outside their
expertise. Such moves force senior people
to rely heavily on the experts in their new
area, building broad networks of mutual
obligation. At the same time, these senior
engineers bring their own expertise,
experience, and network of contact that
they can use to facilitate integration.
In contrast, we could find in our study,
there are frequent job rotations and
transfers moving people from one
functional area to another. The average
stay of each person in one functional area
24 Vilakshan, XIMB Journal of Management
is around two years, hardly sufficient to
get functional expertise, to develop good
understanding of the system, and to get
to know other people well. During our
interaction with engineers and
supervisors, we came to know about few
instances where both supervisor and
engineer recently moved from different
functional areas and now struggling
together to get familiarised with new job
requirements as well as system. These
kinds of unplanned rotation of people
result in great loss of productivity and
disrupt smooth functioning of the
department. Authors have confronted
with situations in Indian organisations
where engineers were sent for advance
training programs in order to build
functional expertise. However, after 3-6
months, those same people were either
moved to different functional areas or
they had opted for different job
responsibility. These instances clearly
show that development of functional
expertise and stability is not well taken
care of. Further, most of the companies
that we studied rely heavily on
universities or training consultants to
provide their people with the skills
needed to do their job, where as Toyota
relies primarily on training within the
company.
5.9 Striving for ideal goal
People at Toyota have a unified
inspirational vision. They have a common
sense of what the ideal system would be,
and that shared goal motivates them to
make improvements beyond what would
be necessary merely to meet the current
needs of their customers. Their ideal goal
is not something philosophically abstract
but has a concrete and consistent
definition. Toyota’s ideal state shares
many features of the popular notion of
mass customisation—the ability to create
virtually infinite variations of a defect free
product as efficiently as possible and at
the lowest possible cost in a safe work
environment. To the extent that a Toyota
plant or a Toyota worker’s activity falls
short of this ideal, that shortcoming is a
source of creative tension for further
improvement efforts.
Our in-depth study reveals that very few
organisations claim to have ideal goal set
for achieving excellence in world market.
Majority of organisation are struggling to
stay in business by adopting drastic cost
cutting measures and frequently changing
their business focus rather than setting
ideal goals to achieve. Our interaction
with people from US auto industry
reveals that imitating Toyota’s
performance is becoming their ideal goal
but not by fundamentally adhering to TPS
and internally struggling to keep their
operations in good shape to stay in
business. Interestingly, people in these
companies don’t share common goal. We
found majority of people in India and UK
giving more importance to their personal
goals over common shared goal of the
company. We believe that it reflects the
lack of employee’s commitment towards
organisation and their job, and major
failure of industry leaders in developing

long-term shared inspirational vision.
According to us, the ideal goal helps in:
• Creating a compelling future
• Letting the customer drive the
organisation
• Involving collective minds.
5.10Cultivating organisational knowl-
edge
Toyota documents current capabilities of
its products and processes in the form of
an engineering checklist. When a product
engineer begins a design, the production
engineer sends the latest checklist so that
the product engineer knows the current
constraints on the solution space.
Whenever the design or process changes
are made, the engineer responsible for
those changes updates the checklist also.
Toyota engineers capture what they have
learned from each project, problem
solving exercise, and lessons learned from
different efforts by documenting
alternative, trade-offs, and technical
design and process standards. Toyota has
high regard for the learning acquired in
the work on multiple ideas as pointed out
by Sobek et al. (1999). It seems to have faith
that the skills and knowledge generated
will pay off later; either directly through
incorporation into next project or
indirectly through expanded skill sets and
knowledge. In case of western
organisations, few automotive companies
have been building organisational
knowledge base. For example, Ford
Motor Company documents the
Mohanty et al , Implementation of lean ... 25
knowledge generated from successful
projects and problem-solving exercises,
known as Engineering Knowledge Base
(EKB). However, Ford engineers fail to
capture all the lessons learned from
unsuccessful projects and alternative
ideas/concepts, which were not selected
as final product. Few organisations, as
authors have observed, maintain multiple
knowledge bases separately within each
division or platform. These multiple
knowledge bases don’t communicate with
each other resulting in redundancies as
well as duplicating the efforts in solving
same problem again and again in different
divisions. It seems western organisations
are far behind in documenting the
knowledge generated within company
and are yet to cultivate organisational
knowledge fully. However, Indian
companies fail to understand the
importance of human capital and people
have unequal access to knowledge
management tools and a strategic
framework for knowledge management
is missing.
6.0 CRITICAL OBSERVATIONS
Our initial results showed positive
response from majority of companies we
have surveyed. However, subsequent
follow-up study of inner working of
these companies presented different
scenarios and therefore, helped us to
understand the real problems thriving
and disconcerting these companies. Our
in-depth research shows that among
western organisations, especially US
26 Vilakshan, XIMB Journal of Management
automotive industry, there has been
tremendous amount of interest to
understand the inner working of TPS.
These organisations are striving hard to
imitate Toyota system with little success.
Their initial efforts show reasonable
improvement in organisation’s
performance. However, they have not
been able to maintain similar
performance consistently and achieve
further improvement.
Many companies in UK seem to be
looking for improvement process
cookbook, a step-by-step method that,
if properly executed, improves
organisational performance many folds.
The lean principles are not steps,
prescriptions, or recipes. Rather, these
principles are building blocks—
essential elements of any system, which
need to be seamlessly integrated into
whole system and culture of the
organisation. The lean principles
identified by various researchers, if
understood and implemented with
dedication along with other tools and
techniques, will enable any company to
replicate Toyota’s performance and
even challenge Toyota. Further, our
study indicates the keen interest on the
part of Indian manufacturing companies
to adapt or learn new approaches and
techniques in order to improve their
performance; but it is only the beginning
of the journey.
The main focus of this study was to
understand and highlight major concerns
and issues preventing these companies to
replicate Toyota’s performance. The
following remarks are worth noting:
• It is important to emphasise here that
efforts to implement any one lean
principle alone would accomplish
little, but every principle has its own
role and at the same time reinforces
others. Many automotive companies
in USA and UK have attempted to
implement few of these lean
principles independently without
much success. Our study discovers
that most of the organisations have
been very successful in
implementing techniques like JIT,
Kanban, production leveling, team
building, quality circle, and others.
But it did not bring them kind of
success they have been striving for.
On the other hand, Toyota has been
very successful in continuously
improving its performance because
of coherence in implementing
principles with models, tools and
techniques.
• The ingrained responses of many
western managers and engineers,
derived from their education and
their cultural roots, work against the
foundations of lean approach. For
example, western companies
approach team empowerment by
allowing team considerable
autonomy. However, this
empowerment introduces
tremendous amount of variations in

output and hinders the possibility of
finding real causes or any deficiencies
existing in the process for further
improvement.
• Managers and supervisors need to
play role of facilitators (teachers and
coaches), get involved in problem-
solving projects, and work along with
subordinates to enhance the learning
of whole team rather than
demonstrating her/his authority.
Managers and supervisors need to
demonstrate exemplary technical
expertise and fluency in synthesizing
technical knowledge into innovative
solutions to wield respect from
subordinates and also to get
promotions. However, majority of
companies do not have such stringent
technical competency requirements
to get promoted.
• Most companies seriously need to
curtail the tendency of making
changes for the sake of changing the
existing procedures. To make
changes, people should present the
explicit logic of the hypothesis, fully
explore all improvement
opportunities, and conduct scientific
based experiment to test the
hypothesis and expectations.
Companies seriously need to rein in
this tendency and inculcate the
scientific methods at all levels of the
workforce by involvement of
managers and supervisors in
problem-solving projects.
Mohanty et al , Implementation of lean ... 27
• The prevailing tendency in most
organisations is to attempt to resolve
the problem to address specific issue,
treat it as a final solution and move
on to next one. That tentative solution
becomes permanent remedy to the
problem and no body looks back to it
unless it props up again with same
issue and different one. This attitude
doesn’t support the continuous
improvement principle.
• Finally, we believe that in order to
excel in world market, any
organisation needs to transform
itself into a learning organisation.
The answer is in the professional
practice, which requires pragmatic
acculturation and corporate
discipline by making people
capable of and responsible for
learning by doing and improving
their own work, by standardising
connections between individual
customers and suppliers, by
pushing the resolution of
connection and flow problems to
the lowest possible level, striving
for ideal goal, and cultivating
organisational knowledge.
7.0 LEARNING FOR INDIAN COMPANIES
In Indian companies, we could observe
the following factors as the major
impediments in promoting lean
practices:
• Power politics between various
functional departments
28 Vilakshan, XIMB Journal of Management
• Low investment in human resource
development
• Short term interests of business
leaders
• Quick-fix expectations and shallow
thinking of most managers
• Emphasis over administration over
learning and knowledge transfer
However, some well established auto-
manufacturing companies have achieved
the following:
• Reducing cycle time and customer
lead-time
• Reducing inventory
• Improving productivity
• Reducing material cost
• Improving performance of the supply
chain
• Effective supplier and dealer
networking
• Multi-skilled workforce
For most companies that we studied in
India are striving to learn lean practices
and the ability to deliver lean practices
on a sustainable basis require them to
look within and renew the fabric of the
organisation itself. There are three
aspects of this internally focused lean
approach:
• Culture: the mind set that allow
individuals and teams to think
imaginatively and competitively to
take prudent risks to seek out, create
and introduce lean projects.
• Process: the business processes and
practices that enable people to
operate effectively and collaborate
towards a common purpose- as well
as a robust set of lean tools.
• Structure: organisational structures
and supporting technologies that
enable collaboration across the
company.
From our study, we will put forth the
following guidelines for Indian managers:
• Establish a clear sense of direction for
lean manufacturing
• Open communication and continuing
education
• Reduce bureaucracy
• Instill a sense of ownership
• A tolerance for risk and failure
Sustained practices come from
developing a collective sense of purpose;
from unleashing the creativity of people
throughout organisation and from
teaching them how to recognise
unconventional opportunities. As lean
practice takes its roots, a clear sense of
mission empowers front-line employees
to act on new ideas that further company’s
purpose. Lean practices require optimism.
It’s about an attitude of continually
reaching for higher performance.
Summarily, Indian companies have to
learn more and more about structural
 Mohanty et al , Implementation of lean ... 29

FUNDAMENTAL PRINCIPLES CRITICAL SUCCESS FACTORS

STANDARDISATION PRODUCTS, PROCESSES, METHODS, TOOLS,

SYSTEMS

TEACHING & LEARNING COMMITMENT TO HUMAN CAPITAL

SOCIALISATION RELATIONSHIP MANAGEMENT, DIVERSITY

MANAGEMENT

SUPPLIER CUSTOMER MUTUAL RESPECT, SHARED TECHNOLOGY,

RELATIONSHIP STRUCTURAL BONDS

COHERENT WORK TEAMS, PULL SYSTEMS

SIMPLE & SPECIFIED
PATHWAYS

SYSTEMS THINKING, PROCESS OWNERSHIP

CONTINUOUS IMPROVEMENT

PURSUIT OF PERFECTION TOTAL QUALITY MANAGEMENT, GOAL SETTING,

INSPIRATIONAL LEADERSHIP

COORDINATION COMMUNICATION SYSTEMS, INFORMATION

TECHNOLOGY AND SYSTEMS

MANAGEMENT BY IDEOLOGY
STRIVING FOR IDEAL GOAL

FUNCTIONAL EXPERTISE & HUMAN CAPITAL MANAGEMENT

STABILITY

CULTIVATING KNOWLEDGE MANAGEMENT, EMPOWERMENT

ORGANISATIONAL AND INCLUSIVENESS
KNOWLEDGE

Fig.1: Linking Lean Principles to Critical Success Factors

30 Vilakshan, XIMB Journal of Management

integration, process integration, and management practices. Those companies

external integration.
8.0 CONCLUSION AND USEFULNESS FOR
THE PROFESSION
All the mass production and efficiency
models typified by Taylor, Ford, and
Sloan, placing high value on rationality,
have traditionally stressed strong division
of labour and prescribed rigid
bureaucratic forms. These organisational
forms became increasingly incompatible
with the new business environments of
the late twentieth century, which forced
more flexible means of production and
improved service delivery performance
(TPS). The high value placed on lean
system thinking has emerged in the
who have focused on competency and
readiness for continuously deepening and
strengthening their technical capabilities,
scientific bases and then reacting
systematically to invest resources in
developing and articulating a strategic
intent for lean enterprise have succeeded
in the long term. To strengthen the lean
system movement, and its robustness as
an approach to coping with future
economic and market conditions, we have
to enrich the professional practice. This
research is a step in that direction. We
present Fig.1 and Fig.2 as the significant
learning for professionals and academia
for furtherance of research and
applications.

LEAN ENTERPRISE

A M F P M I D
R O A R O N E
T T C E B N T
I I I P I O E
C V L A L V R
U A I R I A M
L T T A Z T I
A I A T A I N
T O T I T O A
I N I O I N T
O O N O I
N N N O
N

7 PILLARS OF LEAN MANUFACTURING PRACTICES

Fig.2: Seven Pillars of Lean Manufacturing Practices

 Mohanty et al , Implementation of lean ... 31

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2007 INTERNATIONAL CONFERENCE

on

“INDIA IN THE EMERGING GLOBAL ORDER”

29-31 JANUARY, 2007

at
Xavier Institute of Management, Bhubaneswar

CONFERENCE TRACKS

Institutional Framework and Global order

Indian Industry in Global order
Indian enterprises in Global Order
Indian Science and Technology in Global Perspective
Indian Traditions and Culture in Global perspective
Indian Political Economy in Global perspective
Performance and Outcomes of India in Global perspective

Last date for paper submission: October 16, 2006

Last date for registration: December 30, 2006

For details check at:

www.ximb.ac.in/start/conference2007.php