Bangalore

Lean Retailing in Tanishq Boutiques

Prepared by

Murali.D

EPG9-05091534
Under the Guidance of Prof. Appan

In partial fulfillment of the Course: Project Work

In Term – IV of the Executive Post Graduate Program in Management
Class of May 2009
 Bangalore

Executive Post Graduate Program in Management

Class of May 2009

Term – IV: Project Work

DECLARATION

This is to declare that the Report entitled “Lean Retailing in Tanishq Boutiques” has been made for the
partial fulfillment of the Course: Project Work in Term – IV by me at Tanishq Boutiques under the
guidance of Prof. Appan.

I confirm that this Report truly represents my work undertaken as a part of my Project Work. This work is
not a replication of work done previously by any other person. I also confirm that the contents of the
Report and the views contained therein have been discussed and deliberated with the Faculty Guide.

Signature of the Student :

Name of the Student (in Capital Letters) : MURALI. D

Enrollment No : EPG9-05091534
 Bangalore

Executive Post Graduate Program in Management

Class of May 2009

CERTIFICATE

This is to certify that Mr. Murali.D (Enrollment No. EPG9-05091534) has completed the Report entitled
“Lean Retailing in Tanishq Boutiques” under my guidance for the partial fulfillment of the Course:
Project Work in Term – IV of the Executive Post Graduate Program in Global Management (Batch 2009-
2010).

Signature of Faculty Guide :

Name of the Faculty Guide : Prof. Appan

 Bangalore

Executive Post Graduate Diploma in Global Management

Class of May -2009

CERTIFICATE

This is to certify that Mr. Murali.D Employee No. 375195 has completed the Report entitled “Lean
Retailing in Tanishq Boutiques” under my guidance as part of his current assignment and practiced the
concepts learnt in the project.

Signature of Industry Guide :

Name of the Industry Guide : Alagappan

 ACKNOWLEDGEMENT

I take this opportunity to express my sincere sense of gratitude to all those who have helped me in
the completion of this project. First of all I would like to thank our esteemed guide Pr. Appan who
has guided us throughout the project and has given us valuable suggestions to complete the
project.

I would also like to thank all my friends/colleagues and family for extending their support, time
and help whenever needed.

I thank my project guide Mr. Alagappan and my company Tanishq for providing me the platform
to build this project.

Last but not the least thanks to Alliance Business School for supplying us with necessary
documents, reports, format extra.

- Murali.D
 EXICUTIVE SUMMERY
Titan Industries is one company which practices a fair amount of inter-disciplinary movement of its managers. One
such fortuitous movement brought a seasoned manufacturing manager into retailing who ended up conceiving and
implementing Lean principles in the all the Jewellery stores of Tanishq.

WHAT IS LEAN ?

The company that invented Lean is Toyota. Lean is a Journey. Lean is not a just set of tools like Just in Time, Cells,
5S (Sort, Stabilize, Shine, Standardize, Sustain), Kanban etc. It is a Sophisticated System of Manufacturing in
which all the parts contribute to a whole. Tanishq used Lean in Retailing. The whole at Lean roots focuses on
supporting and encouraging people to continually improve the processes they work on. Unfortunately many
misunderstands that it is a collection of tools that lead to more efficient operations. The purpose of these tools is lost
& the centrality of the people is missed. But Tanishq started its Journey with “People First”. It Motivated,
Empowered, Guided / Trained its employees with Lean experts. Lean aim to keep everything in an organized way,
improve efficiency, save time and increase productivity, reduce material wastage and costs, and do all this through
total employee engagement.

The biggest benefit of Lean to Toyota and to many others that followed it, it helped each ordinary employee to
realize his or her full potential, by coming up with the solutions for all the workplace issues himself or herself,
rather than wait for someone else to provide it. It unleashed the entire human potential that Toyota had, making it
ultimately a by-word for quality.

WHAT IS LEAN RETAILING?

Lean Retailing focuses on

 Exactly what the customer wants

 Where the customer wants it
 When the customer wants it
 In the quantity the customer wants it
 Utilizing minimum resources and minimizing customers’ effort
 Providing the full value that consumers desire with the greatest efficiency and least pain

LEAN / TOYOTA “4P” MODEL WITH 14 PRINCIPLES

Borrowing the principles of Lean from Toyota, Lean Retailing team dreamt to set up the following objectives for
the Tanishq stores:

1. To generate Total Employee Involvement through

 Kaizen : Innovative employee suggestions for improvement
 Multi-skilling : Training employees in at least one additional skill required in the store, for helping
double up when necessary
 Ownership : Helping generate total ownership for the store issues
 2. To improve operational efficiency and eliminate waste through
 7S : 7steps to keep the store environment spic and span
 (Sort, Shine, Systematic Arrangement, Standardize, Safety, Spirit and Self-Discipline to follow the
first 4 steps all the time)
 Kanban : visual system of managing secondary material
 Better inventory management

BENEFITS OF LEAN

Lean provides numerous benefits including:

 Reduced lead/cycle time

 Decreased work-in-process (WIP)
 Reduced cost
 Increased resource (equipment, operator) utilization
 Easier scheduling
 More streamlined flow
 Reduced floor space
 Improved quality
 Improved worker morale

These benefits lead to increased profitability and an improved workforce. Some of the benefits are dramatic and
almost immediate such as reduced WIP and cycle times. Most benefits, however, accrue gradually over time as the
Lean journey progresses.

This study defines the Basic of Lean, its 4Ps - Philosophy, Process, People & Partners principals, Problem Solving,
14 principles, Training, Implementation, Obstacles & realized benefits of Tanishq Boutiques. Also opportunities
offered by this to all Retailers / Organizations involved in the manufacturing / retaining of Jewellery.

The study helps to know about the innovative way of Lean Retailing in Jewellery industry. It helps to know, how to
reduce high inventory holding costs & wastes. It describes the current process and issues faced by the industry /
organizations.

Finally the study ends with details of benefits realized, next few years target planned & 13 Tips for transforming
Company to Lean Enterprises.
 INTRODUCTION
COMPANY PROFILE
Titan Industries is the organization that brought about a paradigm shift in the Indian watch market when it
introduced its futuristic quartz technology, complemented by international styling. With India's two most
recognized and loved brands Titan and Tanishq to its credit, Titan Industries is the fifth largest integrated watch
manufacturer in the world.

The success story began in 1984 with a joint venture between the Tata Group and the Tamil Nadu Industrial
Development Corporation. Presenting Titan quartz watches that sported an international look, Titan Industries
transformed the Indian watch market. After Sonata, a value brand of functionally styled watches at affordable
prices, Titan Industries reached out to the youth segment with Fastrack, its third brand, trendy and chic. The
company has sold 100 million watches world over and manufactures 12 million watches every year.

With a license for premium fashion watches of global brands, Titan Industries repeated its pioneering act and
brought international brands into Indian market. Tommy Hilfiger and Hugo Boss, as well as the Swiss made watch
– Xylys owe their presence in Indian market to Titan Industries.

Entering the largely fragmented Indian jewellery market with no known brands in 1995, Titan Industries launched
Tanishq, India’s most trusted and fastest growing jewellery brand. Gold Plus, the later addition, focuses on the
preferences of semi-urban and rural India. Completing the jewellery portfolio is Zoya, the latest retail chain in the
luxury segment.

Titan Industries has also made its foray into eyewear, launching Fastrack eyewear and sunglasses, as well as
prescription eyewear. The organization has leveraged its manufacturing competencies and branched into precision
engineering products and machine building.

With over 560 retail stores across a carpet area of over 7,09,000 sq. ft. Titan Industries has India’s largest retail
network. The company has over 300 exclusive ‘World of Titan' showrooms and over 740 after-sales-service centers.
Titan Industries is also the largest jewellery retailer in India with over 110 Tanishq boutiques and Zoya stores, over
25 Gold Plus stores and over 85 Titan Eye+ stores. The company has two exclusive design studios for watches and
jewellery

Backed by 4,514 employees, two exclusive design studios for watches and jewellery, 11 manufacturing units, and
innumerable admirers world over, Titan Industries continues to grow and sets new standards for innovation and
quality. The organization is all geared to repeat the Titan and Tanishq success story with each new offering.
TIME PRODUCTS DIVISION
The Time Products division is where the Titan story began. Today, this division has placed Titan Industries among
the world’s largest retail networks and earned the company the place of fifth largest integrated watch manufacturer
in the world. With over 2350 employees spread over 3 business units in Bangalore, India, a manufacturing unit at
Hosur and 3 assembly plants located in the north of India, the division continues to add world-class brands to the
company’s portfolio.

OUTSTANDING BRANDS
Our customers have been at the core of this growth and the division offers a slew of products that cater to their
inherent needs. Some of the most notable brands in the division’s portfolio are:

Titan Edge - the world's slimmest watch (at 3.45mm) that epitomizes the philosophy ‘less is more’.

Titan Raga - a feminine and opulent accessory for today's affluent woman

Nebula - watches crafted with solid 18k gold and precious stones

Sonata - India's largest selling watch brand to suite the common man's wallet

Xylys - a Swiss-made, impeccably designed watch for the connoisseur and new age achiever

Fastrack – watches created to accessorise the trendy youth of today

The watch division also boasts of collections such as Automatic, Heritage, Nebula, Orion, Raga, Zoop and series
like Aviator, Octane and WWF.

The brand Titan enjoys a 60% market share in the organised watch market in India.
EYEWEAR DIVISION
Titan Eye+, the third major venture of consumer business
by Titan Industries, launched into the eyewear segment in
March 2007.

Titan Eye+ provides an impressive range of stylish and

contemporary eyewear, through exclusive optical outlets.
Titan Eye+ heralded standardization by benchmarking
with the world’s best, in sync with the TATA principles
of quality and trust. Sales counters now offer products
and services of international quality standards coupled
with transparency in pricing, style, and upbeat designs.

Titan Eye+ stores are now staffed with professional

optometrists who deal with every eye-care requirement – be it a need for prescription eyeglasses for distance or
nearsightedness, reading, vision correction, contact lenses or eye protection. Titan Eye+ stores are equipped to fill
prescriptions for single vision lenses, progressive no line or bifocal lenses.

PRECISION ENGINEERING DIVISION

Leveraging precision engineering core competencies from watch making, Titan initiated a PRECISION
ENGINEERING DIVISION in 2002, catering to global majors across industry verticals like aerospace, automotive,
oil & gas, engineering, hydraulics, solar and medical instruments.

With an investment of over $10 million, the setup has four main business units.

Precision Engineering Components & Sub-Assemblies (PECSA)

Machine Building & Automation Solutions

Tooling Solutions

Electronic sub-assemblies
Precision Engineering Division is ISO 9001:2000 and ISO 14001:2004 certified. Additionally the unit catering to
Aerospace segment is AS 9100B certified and the unit catering to automotive segment is TS 16949 certified.

The Division has demonstrated consistent quality and delivery performance through several customer accolades like
the ford Q1 award and the Continuous improvement award received from the CEO of UTC, Louis Chenevert.

JEWELLERY DIVISION
Tanishq Titan’s flagship line of jewellery is today a resounding success with discerning customers. Tanishq has
performed exceedingly well and has set standards, in what could best be described as a largely unorganised and
unscrupulous jewellery market.

The growth of the brand has once again been a testament to our customer focus. Tanishq is today a hallmark of
trust, an island of purity. It is a certified division under the ISO 9001:2000 Quality Management System Standards.
Established to addresses the urban market, its growth has transformed Titan into the largest integrated jewellery
manufacturer and outsourcing company of India.

Tanishq is India's fastest growing jewellery brand with a premium range of jewellery, studded with diamonds or
coloured gems in 18-karat gold, 22-karat pure gold and platinum jewellery. We are now one of India's largest
speciality retailers and are transforming India’s jewellery market with a Pan-India presence. Titan felt a need and
created a means to offer elegant gold jewellery to smaller towns and rural markets. The recent launch of a retail
initiative - GoldPlus caters to the need.

Both brands contributed to over Rs.450 million USD, and are still flourishing. Truly a phenomenon in itself,
Tanishq is our pioneering Indian brand storming a market of over 300,000 independent jewelers. The brand is
evolving faster than the market and is either leading or closing gaps between competitors in urban markets where
we have a presence.

The trust connotations that the Tata -Titan association evokes, never fails to attract increasing numbers of jewellery
seekers to the fledgling designer brand. Titan ensures that they are spoilt for choice, transparency and a great
shopping experience with Tanishq, the jewel of its crown.

Tanishq is a trustworthy, popular jewellery brand from India’s largest integrated jewellery manufacturer.

Zoya, by Tanishq is a chain of luxury jewellery boutiques which targets elite, discerning ladies seeking designer
wear of international standards. Zoya is a best-in-class shopping experience. Stores offer exquisite, artistically
styled masterpieces, studded in diamonds, apart from traditional, fusion polki and kundan jewelry. There are
magnificent designs to choose from, all in ultra-premium luxury, these outlets showcase luxury unsurpassed.

Zoya creations are world-class in terms of quality and have been crafted in India and abroad. It boasts the finest
quality in India and is on par with the best in the world. Zoya stores are located in GK I, M Block - Delhi and
Warden Road - Mumbai.
TANISHQ
Tanishq, India's largest, most trusted and fastest growing jewellery brand, offers traditional as well as trendy
designs in gold, diamond and platinum. With retail sales of over Rs. 3000 crores last financial year, Tanishq has
delivered value to its customers and shareholders.

Backed by in-depth research in the jewellery space, the production and sourcing units of Tanishq create exquisite
designs with faultless finish. Located at Hosur (Tamil Nadu) and Dehradun (Uttarakhand)) the 1,35,000 sq. ft.
manufacturing unit is equipped with the latest and most up-to-date technology and tools. The unit also complies
with the labour and environmental standards.

Stringent quality standards ensure that every product at Tanishq is crafted to perfection with unmatched finish. With
innovations like the karatmeter - the only non-destructive means to check the purity of gold - Tanishq introduced
technology-backed challenge in the category completely governed by individual trust. The brand propagates ethical
practices and provides the customer a certification of purity of material and reselling policies. Following the line of
ethical practice further, adequate policies are in place for the artisans who create the jewelry.

Tanishq has a Golden Harvest savings scheme which is a unique Jewellery purchase scheme, leading to an easy
purchase of tanishq Jewellery of your choice. With this scheme you can buy for more than what you save because
Tanishq will add a special bonus at the end of the scheme.

Tanishq introduced specialized retailing in the fragmented jewellery market of India. Today, with 117 opulent
stores in 75 Indian cities, Tanishq continues to rule the jewellery space.

TANISHQ: A SPARKLING JOURNEY

The Tanishq saga began in the early 1990’s, primarily fuelled by the fabled Tata entrepreneurial spirit and
partly forced by circumstance.
The splendid Titan watches success story was already up and running, and happened to need more foreign exchange
to purchase the imported components and machines required to keep up with the burgeoning watch production. But
with India going through a foreign exchange crisis, there was no help coming in, forcing Titan to search for a
business that would earn them the required foreign currency.

The first precision engineered watch, Tanishq created with 103 diamonds and pure 18 carat gold.

Indian-made jewellery was already a big foreign currency earner and being strongly supported by the central
government, and also happened to be a very good fit with the watch business as articles of adornment. The best
known brand names in both Europe and America had watches and jewellery together, offering further proof that the
two industries are intrinsically linked.

It was a business with a huge wealth potential and it added a very feminine offering to Tata’s long line of products
that appealed mostly to the opposite gender. It also called for an organization that inspired trust and had high order
design, manufacturing, marketing and retailing skills, and Tata fit the bill on all accounts.

A revolution in Gold Purity Standards across the country.

Tanishq was coined from a combination of Tata/Tamil Nadu and Nishq (meaning a necklace of gold coins) and,
again, from Tan, meaning body and Ishq, meaning love.

It was launched in 1994 as a range of jewellery and jewellery watches meant for the European & American markets.
But things began to change globally around this time, and the West entered a protracted period of slow economic
growth followed by recession. Supplying jewellery to the Americans & Europeans suddenly no longer seemed an
attractive proposition.
Initially, the criticism for Titan’s foray into jewellery was loud and often bitter. Eventually, however, the critics
were silenced. Tanishq, today, is perhaps the only major Tata brand with a strong appeal for women. Very
importantly, Tanishq has brought to the market a whole new standard of business ethics and product reliability, in
the process bringing about a transformation in the manner in which jewellery is bought and sold in India.

The Indian market, on the other hand, opened its doors to the world, and was now flooded with foreign currency. By
the time Tanishq established its manufacturing facility and entered the market, the premises on which the project
was based had altered substantially.

Foreign currency was no longer an issue, import licenses were easy to obtain and the global demand-supply
equation for jewellery had shifted in favor of buyers. Tanishq, therefore, switched tracks and shifted its focus to the
Indian market and develop a somewhat grandiose vision of the brand as a composite avatar of Cartier, Tiffany,
Esprit, and Ernest Jones all rolled in one.

GOLDPLUS
Titan Industries’ Goldplus is designed for the jewellery
preferences of the semi-urban and rural Indian customer.
With a presence in 30 towns spread across 6 states,
Goldplus is the largest jewellery retail chain in Tamil
Nadu.

In addition to gold jewellery, the brand also offers

impressive designs embellished with diamonds, American
diamonds (Cubic Zirconia) and other precious stones. The
Golplus jewellery comes with the assurance of purest 22-
karat (916) and 18-karat (750) gold and premium
craftsmanship. Every Goldplus product is endorsed by a
certificate that states the purity of the gold and the quality of diamonds used in the article.

The elaborate and intense quality checks during the manufacturing process ensure the purity of gold and a perfect
finish. The gold is purchased in the form of bars from only those banks that are certified by Reserve Bank of India
(RBI). Using this gold, jewellery is crafted in Titan Industries’ manufacturing units in Hosur, Tamilnadu where
highly skilled artisans create traditional and modern designs.
RECOGNITION

The company has been awarded the following distinctions:

 Named the No. 1 Brand in the consumer durables category in the ‘Brand equity’ Survey of the Economic, a
leading Indian financial daily.

 Tanishq brand has won the Images fashion award Best Jeweller brand award for the seventh consecutive year.

 Solitaire of India award presented by the Gem & jewellery Association for the pioneering work done by
Tanishq in the jewellery industry.

 Best Retail chain by Retail Jeweller India Awards

 360 degrees marketing campaign of the year for Jodha Akbar Campaign by Retail Jeweller India Awards

 TV campaign of the year – diamond TVC featuring Nafisa Ali by Retail Jeweller India Awards

 Gold Vivaha jewellery – Jodha Akbar Swan set by Retail Jeweller India Awards

 CNBC Awaaz Award for most preferred brand

 Won MMA award on Managerial excellence for 2009

 We have been short listed among top 50 international company on Best supply chain practices by European
school of Management.

 Won the IIMM – Innovative SCM award for the Best Innovation in Supply Chain Management for the year
2008.

 Won first prize for Promising Innovation in 2006 at the First Tata Innovation contest at National level

 Won first prize for Promising Innovation in 2007 at the second Innovation contest at Regional Level

 Created the world’s Biggest Gold Bangle – entered in Limca Book of Records

 The Titan team won the Young design Entrepreneur of the year awarded at the design awards institute by the
National institute of design and Business world, a leading Indian magazine. The team has won 7 accreditations
also.
 JEWELLERY INDUSTRY OVER VIEW

Indians have a huge fascination for gold. This is evident in the fact that India is the largest consumer as well as
importer of gold in the world. Gold plays a very important role in the social, religious and cultural life of Indians.
India Gold Market looks poised to achieve greater heights given the fascination for gold in the country. India
consumes about 800 MT of gold which accounts to about 20% consumption of gold globally. More than 50% of this
is used for making gold jewelry.

SIZE OF INDIAN GOLD MARKET :

The domestic India gold market is estimated to be more than US$15 billion and is expected to rise significantly in
the coming years. During April 2008 to February 2009, gems and jewelry worth US$ 17.79 billion was exported
from the country. United Arab Emirates imported more than 30% of gems and jewelry from India, making it the
largest importer from the country. Hong Kong was the second largest importer with 25% followed by United States
with 20%. The gem and jewelry industry accounts for more than 10% of India's total commodities exports

JEWELLERY RETAIL SECTOR :

The Indian jewellery industry is fragmented, with over 300,000 jewellers operating across the country. Jewellery
market in India is on the platform of Investment, occasional buying, have a greater impact in family type of living.
Jewellery making was given significant importance in the activities of a family life in India against of Fashionable
item in western countries. Jewellery buying was performed with jewellers who have very good trust and long term
relationship with the family. Jewellery was viewed as the specific identity of status of the family, still in some parts
of India it is prevailing. The jewellery is considered as one of the fashionable item in the western countries. After
Globalization the view has changed, the life style of India has changed, leads to greater impact in the jewellery
industry.

Government allows 51 per cent foreign direct investment in single brand retail outlets, attracting both global and
domestic players to this sector. A booming market has in recent years attracted a large number of players to the
Indian gems and jewellery retail sector:

 Reliance Retail is planning an aggressive entry into the jewellery retail market. It will open between 400 to 500
jewellery retail outlets across the country.

 Damas Jewelry, one of the world’s leading jewelry retailer entered India in 2003 with a 50-50 joint venture with
Gitanjali Gems Ltd. It is one of the largest jewellery retail outlets in the world and is adding 16 new stores to
the 12 stores it currently has in India.
 Swarovski, the global crystal goods manufacturer and marketer, plans to set up 50 stores by 2010, up from the
current 15.

 The Gitanjali Group has bought 'Nakshatra', the premium brand of jewellery promoted by Diamond Trading
Company (DTC)

 Mumbai-based Vardhaman Developers plans to build four more jewellery malls in the city.

 Dubai-based Joy Alukkas has recently opened its largest showroom in Chennai.

 Viswa and Devji Diamonds, a partnership between the Indian group and the top jewellery retailer in UAE,
opened its first diamond retail outlet.

 Gitanjal Gems Ltd opened its first luxury jewellery mall in Gurgaon, where a number of international brands
have started their retail business.

 Gold Souk India has plans for opening 100 Souks in 100 months.

TRENDS :

 Growing Organized Retail Space

 Aggressive Marketing & Advertising

 Large Scale Shows & Exhibitions

 Domestic players acquiring foreign companies

 Investment from PE Firms

 Corporate houses entering the Market

ENTRY BY “TANISHQ” INTO INDIAN MARKET

After the successful introduction of the branded watches in the name of “Titan”, the business was diversified into
making jewellery aiming at export market by manufacturing through engineering industrial operations. The business
was driven to enter into the local market by making and selling 18 kt jewellery manufactured through engineering.
The business then answering to the needs of family type of Jewellery purchasing, demanding 22 kt plain hand made
artifact jewellery, started selling plain jewellery products made by hand work of karigars, thus kick starting the
partnering journey @ Tanishq. Tanishq has established the process of giving guarantee to the customer by means of
“Pure Jewellery, Pure Joy” which certifies the purity of the gold ornament at 91.6 % in 22 Kt and 75 % in 18 Kt.
 LEAN OVERVIEW
THE COMPANY THAT INVENTED LEAN IS TOYOTA

THE TOYOTA WAY IS MORE THAN TOOLS & TECHNIQUES

In the Toyota Way / Lean, it’s the people who bring the system to life: working, communicating, resolving issues,
and growing together. It goes well beyond this; it encourages, supports, and in fact demands employee involvement.

TPS system designed to provide the tools for people to continually improve their work. The Toyota Way means
more dependence on people, not less. It is a culture, even more than a set of efficiency and improvement techniques.
You depend upon the workers to reduce inventory, identify hidden problems, and fix them. The workers have a
sense of urgency, purpose, and teamwork because if they don’t fix it there will be an inventory outage. On a daily
basis, engineers, skilled workers, quality specialist, vendors, team leaders, and most importantly—operators are all
involved in continuous problem solving and improvement, which over time trains everyone to become better
problem solvers.
“TPS HOUSE”
 TOYOTA / LEAN 14 PRINCIPLES IN 4 “P”s / FOUR BROAD CATEGORIES:

SECTION I: Long-Term Philosophy

Principle 1. Base your management decisions on a long-term philosophy, even at the expense of
short-term financial goals.
People need purpose to find motivation and establish goals.

SECTION II: The Right Process Will Produce the Right Results
Principle 2. Create a continuous process flow to bring problems to the surface.
Work processes are redesigned to eliminate waste (muda) through the process of continuous improvement —
kaizen. The eight types of muda are:

1. Overproduction
2. Waiting (time on hand)
3. Unnecessary transport or conveyance
4. Over processing or incorrect processing
5. Excess inventory
6. Unnecessary movement
7. Defects
8. Unused employee creativity

Principle 3. Use “pull” systems to avoid overproduction.

A method where a process signals its predecessor that more material is needed. The pull system produces only the
required material after the subsequent operation signals a need for it. This process is necessary to reduce
overproduction.

Principle 4. Level out the workload (heijunka). (Work like the tortoise, not the hare.)
This helps achieve the goal of minimizing waste (muda), not overburdening people or the equipment (muri), and not
creating uneven production levels (mura).

Principle 5. Build a culture of stopping to fix problems, to get quality right the first time.
Quality takes precedence (Jidoka). Any employee in the Toyota Production System has the authority to stop the
process to signal a quality issue.

Principle 6. Standardized tasks and processes are the foundation for continuous improvement and
employee empowerment.
Although Toyota has a bureaucratic system, the way that it is implemented allows for continuous improvement
(kaizen) from the people affected by that system. It empowers the employee to aid in the growth and improvement
of the company.
Principle 7. Use visual control so no problems are hidden.
Included in this principle is the 5S Program - steps that are used to make all work spaces efficient and productive,
help people share work stations, reduce time looking for needed tools and improve the work environment.

1. Sort: Sort out unneeded items

2. Straighten: Have a place for everything
3. Shine: Keep the area clean
4. Standardize: Create rules and standard operating procedures
5. Sustain: Maintain the system and continue to improve it

Principle 8.
Use only reliable, thoroughly tested technology that serves your people and processes.
Technology is pulled by manufacturing, not pushed to manufacturing.

SECTION III: Add Value to the Organization by Developing Your People

Principle 9. Grow leaders who thoroughly understand the work, live the philosophy, and teach it to
others.
Without constant attention, the principles will fade. The principles have to be ingrained; it must be the way one
thinks. Employees must be educated and trained: they have to maintain a learning organization.

Principle 10. Develop exceptional people and teams who follow your company’s philosophy.
Teams should consist of 4-5 people and numerous management tiers. Success is based on the team, not the
individual.

Principle 11. Respect your extended network of partners and suppliers by challenging them and
helping them improve.
Toyota treats suppliers much like they treat their employees, challenging them to do better and helping them to
achieve it. Toyota provides cross functional teams to help suppliers discover and fix problems so that they can
become a stronger, better supplier.
Section IV: Continuously Solving Root Problems Drives Organizational Learning

Principle 12. Go and see for yourself to thoroughly understand the situation (genchi genbutsu).

Toyota managers are expected to "go-and-see" operations. Without experiencing the situation firsthand, managers
will not have an understanding of how it can be improved. Furthermore, managers use Tadashi Yamashima's
(President, Toyota Technical Center (TTC)) ten management principles as a guideline:

1. Always keep the final target in mind.

2. Clearly assign tasks to yourself and others.
3. Think and speak on verified, proven information and data.
4. Take full advantage of the wisdom and experiences of others to send, gather or discuss information.
5. Share information with others in a timely fashion.
6. Always report, inform and consult in a timely manner.
7. Analyze and understand shortcomings in your capabilities in a measurable way.
8. Relentlessly strive to conduct kaizen activities.
9. Think "outside the box," or beyond common sense and standard rules.
10. Always be mindful of protecting your safety and health.

Principle 13. Make decisions slowly by consensus, thoroughly considering all Otions; implement
decisions rapidly (nemawashi). The following are decision parameters:

1. Find what is really going on (go-and-see) to test

2. Determine the underlying cause
3. Consider a broad range of alternatives
4. Build consensus on the resolution
5. Use efficient communication tools
Principle 14. Become a learning organization through relentless reflection (hansei) and continuous
improvement (kaizen).
The process of becoming a learning organization involves criticizing every aspect of what one does. The general
problem solving technique to determine the root cause of a problem includes:

1. Initial problem perception

2. Clarify the problem
3. Locate area/point of cause
4. Investigate root cause (5 whys)
5. Countermeasure
6. Evaluate
7. Standardize

Fundamentals of Lean Strategies to guide management’s actions toward success:

1. VALUE :
The critical starting point for lean thinking is value. Value can only be defined by the ultimate customer. And it's
only meaningful when expressed in terms of a specific product (a good or a service, and often both at once), which
meets the customer's needs at a specific price at a specific time." Above all, lean practitioners must be relentlessly
focused on the customer when specifying and creating value. Neither shareholder needs, nor senior management¹s
financial mind-set, nor political exigencies, nor any other consideration should distract from this critical first step in
lean thinking. "Why is it so hard to start at the right place, to correctly define value? Partly because most producers
want to make what they are already making and partly because many customers only know how to ask for some
variant of what they are already getting. They simply start in the wrong place and end up at the wrong destination.
Then, when providers or customers do decide to rethink value, they often fall back on simply formulas lower cost,
increased product variety through customization, instant delivery rather than jointly analyzing value and challenging
old definitions to see what’s really needed".

2. THE VALUE STREAM

The value stream is the set of all the specific actions required to bring a specific product through the critical
management tasks of any business: the problem-solving task running from concept through detailed design and
engineering to production launch, the information management task running from order-taking through detailed
scheduling to delivery, and the physical transformation task proceeding from raw materials to a finished product in
the hands of the customer. Identifying the entire value stream for each product is the next step in lean thinking, a
step which firms have rarely attempted but which almost always exposes enormous, indeed staggering, amounts of
waste.
3. FLOW :
Only after specifying value and mapping the stream can lean thinkers implement the third principle of making the
remaining, value-creating steps flow. Such a shift often requires a fundamental shift in thinking for everyone
involved, as functions and departments that once served as the categories for organizing work must give way to
specific products; and a "batch and queue" production mentality must get used to small lots produced in continuous
flow. Interesting, "flow" production was an even more valuable innovation of Henry Ford¹s than his better-known
"mass" production model.

4. PULL :
As a result of the first three principles, lean enterprises can now make a revolutionary shift: instead of scheduling
production to operate by a sales forecast, they can now simply make what the customer tells them to make. As
Womack and Jones state, "You can let the customer pull the product from you as needed rather than pushing
products, often unwanted, onto the customer." In other words, no one upstream function or department should
produce a good or service until the customer downstream asks for it.

5. PERFECTION :
After having implemented the prior lean principles, it "dawns on those involved that there is no end to the process
of reducing effort, time, space, cost, and mistakes while offering a product which is ever more nearly what the
customer actually wants," write Womack and Jones. "Suddenly perfection, the fifth and final principle, doesn¹t
seem like a crazy idea."

TOOLS AND TECHNIQUES OF LEAN

There are many tools and techniques of Lean that help create Lean processes, including those shown below. Note
that these are not necessarily confined to manufacturing processes, but can be used beneficially in service processes
as well.

 Value-stream mapping (VSM): Used to statically visualize, analyze and improve process and
information flows. Eliminates NVA activities.

 A3 Reporting: Used to define problems, identify solutions and develop and document action plans for
implementing process improvements.

 Kanban (pull) production: Used to regulate production and movement between process steps where
continuous flow isn’t possible. Eliminates overproduction.
  Workflow diagram: a.k.a. spaghetti diagram, this is a layout of the facility with arrowed lines depicting
the physical flow of work (material, people, etc.) within the facility. Eliminates unnecessary handling and
movement.

 Work cells: A streamlined arrangement (usually in a U-shape) of sequential operations where single-piece
flow can occur and workers can be effectively shared. Eliminates NVA activities and unnecessary handling.

 5S: A systematic method for organizing and standardizing of the workplace (sort, straighten, shine,
standardize, sustain). Eliminates defects and wasted motion.

 Quick Changeover: A method of reducing the time to setup operations to minimize process disruption
and permit smaller batch sizes to be run. Eliminates waiting time, NVA activities and overproduction.

 Total productive maintenance (TPM): Systematically maintaining equipment to keep it operational,

thus minimizing disruptions. Emphasizes employee involvement and preventive maintenance. Eliminates
waiting.

 Visual Controls: Utilization of visual signals and images to quickly and clearly direct attention and
provide feedback. Eliminates overproduction and waiting.

 Poka Yoke (mistake proofing): Makes the operation such that it can only be performed the right way.
places accountability for quality on the operation where it is controlled and makes the operation as error
proof as possible. Focuses on prevention of defects rather than detection and correction. Eliminates defects.

 Point of use storage (POUS): Delivers items directly to the place where they are going to be used.
Eliminates waiting and unnecessary handling.

 Cross-training: Employees can perform a variety of functions and thereby provide greater flexibility.
Eliminates operator waiting.

These tools should be used systematically rather than haphazardly. The idea is to identify the most detrimental
waste in the system and then select and implement the solutions that best eliminate the waste.
CHALLENGES FACED BY TANISHQ
 Consumers are more demanding than ever - More choice…Lower cost…Better quality
 Higher Expectations - Newness…Innovation…Product interrelationships
 Globalization - Brand migration…Accelerating trend lifecycles
 Brand & SKU Proliferation - Private label….Generics….Multi-brand….segmentation
 More Branded competitors
 Raising Gold Prices
 Competition from the unorganized players
 Increased Company’s Over Head expenditures
 Need of Creating Point of differentiation through Gold Standard in services
 Employees were not involved in solving routine store problems

 Fire fighting for most of the needs

 Time spent on non-value added activities leading to stress for the employee as well as customers

 Keep excess stock of consumables, packing and indirect materials which was leading to high costs.

 Working in isolation

To overcome the above said challenges, to provide the value addition, to reach the Vision, Mission & Values of
Jewellery division, the pace of change requires new thinking / new initiative. It emerged as LEAN RETAILING
in Tanishq Boutiques.

JEWELLERY DIVISION - VISION – MISSION – VALUES

DREAM - “What Toyota is to Manufacturing Tanishq is to Retailing”

OBJECTIVE
At present jewellery division is achieving a sale of 3500 + Cr for the financial year. With in next 5 years aim is to:

 Reach a top line of Rs 10000 cr with a 10% bottom line.

 Improve stock turn from 3.3 in 09-10 to 4.5 in 14-15. i.e Stock turn of 3000 + cr stock is required for 10000
cr sale. Need to do the same in 2200 cr stock.
 To develop the attitude to serve and to create max time & resources to serve customers better – a pre-
requisite to create fans and align the processes in the best possible sequence to deliver maximum value to
customer.
 Improve operational efficiencies & Total Employee Involvement

1. Elimination of non - value added activities / wastes in the retail operation, need for simplification
2. Elimination of consumables excess stocking / stock out situations
3. Better store upkeep
4. Better customer service / delight
5. Better employee engagement , ownership
6. Cost reduction
7. Inventory management - Sales Vs Stock ratio ( stock turn )

MILESTONES / GOALS to reach:

 5S Score – Each store to cross 80% & Sustain

 Kanban – All consumables to be covered – should reduce inventory by a minimum 25% & nil stock outs
 Kaizen – One implemented improvement per person per month
 Multiskilling – 80% of Front end staff should be able to do 80% of the various types jobs likes
1. Sale of Plain & Studded
2. Billing (all combinations of cash, credit card, TEP/GEP, GV etc..)
3. Karatmeter operation & Calibration
4. Jewellery Melting, Steam , Ultrasonic cleaning
5. Reading Energy meter ( Electricity Bill) etc..
 Indenting:
1. Daily Indenting. Each category owner to indent daily what is sold that day except those variants
which sold after long time or on discount – Weekly consolidation is the indent
2. SOP in place
 Cost – Every store should achieve a minimum 10% reduction in overheads with respect to last year.
TRAINING
Tanishq hired an expert Lean Consulting Company which helped the Jewellery Division in a WCM ( Worl Class
Manufacturing) implementation in 2002. Core team was formed to train & implement the Lean Retaining in
Tanishq Boutiques.

All RSOs, RBMs & ABMs had undergone extensive training on the following Lean Retailing process.

o TOYOTA WAY 14 PRINCIPLES

o TOYOTA WAY 4 “P” s

1) Philosophy – Long Term Thinking

2) Process- Eliminate Waste

3) People & Partners – Respect, Challenge & Grow them

4) Problem Solving – Continuous improvement

** Work processes are redesigned to eliminate waste (muda) through the process of continuous
improvement — kaizen. The eight types of muda are:
9. Overproduction
10. Waiting (time on hand)
11. Unnecessary transport or conveyance
12. Over processing or incorrect processing
13. Excess inventory
14. Unnecessary movement
15. Defects
16. Unused employee creativity
** 5S + 2S Program - steps that are used to make all work spaces efficient and productive, help people
share work stations, reduce time looking for needed tools and improve the work environment.
1. Sort: Sort out unneeded items
2. Straighten: Have a place for everything
3. Shine: Keep the area clean
4. Standardize: Create rules and standard operating procedures
5. Sustain: Maintain the system and continue to improve it
6. Self Discipline
7. Spirit
** To generate Total Employee Involvement through

 Multi-skilling : Training employees in at least one additional skill required in the store, for
helping double up when necessary
 Ownership : Helping generate total ownership for the store issues

**Knowledge on 14 Keys to become World Class is also shared. Out of 14 Key points common points to Lean
Retailing are discussed. As mentioned below these can be achieved in phases / Steps :

CUSTOMER SERVICE :

1st Phase : The staff has little or no knowledge of who the customer is and / or how their work impacts the
customer.
2nd Phase : Customer data relevant to the staff’s performance is displayed in the work group and reviewed and
discussed e.g Walk ins, conversions/non conversions. Staff begins to make plans to address the
most critical issues.
rd
3 Phase : The Staff has a posted plan with milestone, completion dates, and accountabilities for dealing with
all major EC issues. Many major issues have been resolved.
4th Phase : All major issues have been resolved and the staff is addressing the minor issues with detailed
plans.

PROFITS / COSTS

1st Phase : Profit and cost tracking do not exist or not known to the staff.
nd
2 Phase : Costs are displayed to the Staff. Periodically (at least quarterly), Staff performance against profit is
reported and displayed.
rd
3 Phase : Profits are established at year start and displayed. Performance is discussed monthly among the
staff.
4th Phase : The staff participates in development of its annual budget. Staff is responsible for budget
performance with management approval / review.

LEAN DAILY MANAGEMENT MEETINGS

1st Phase : No staff meetings are held or they are only held when there is special news.
2nd Phase : Daily Staff meetings have begun but are not attended by all members. Some meetings are missed.
3rd Phase : Daily Staff Meetings are held almost every day and are attended by most of the members.
th
4 Phase : Daily staffs meeting are held every day, without exception. Attendance is 100% and most members
participate actively.

LEAN FLOW / INVENTORIES

1st Phase : Inventory management concept does not exist.

2nd Phase : Standard Operating Procedure (SOP) exists for inventory management.
3rd Phase : The Staff is aware of SOP and follows it to some extent.
th
4 Phase : The results of inventory management is made visual & trend is improving.

MULTISKILL / Skill Flexibility

1st Phase : Training on different skills happens informally / only when a problem arises.

2nd Phase : The staff begins to define tasks and begins to display skill flexibility charts in the work area.

3rd Phase : Skill flexibility for all appropriate tasks in the work group is tracked and displayed visually. Goals

for staff flexibility are established. At least 50% of the members are skilled in three critical tasks.

4th Phase : The staff has training plans for each member’s skill development. Every task can be done by at

least two members. At least 75% of the staff members can do more than 3 tasks.

5S + 2S / HOUSEKEEPING

1st Phase : Open space and storage is cluttered with excess and unused items. There is a lot of dirt in the store.

2nd Phase : A formalized plan to improve cleaning & organizing is being developed. Obvious trash is

removed by the end of the each day by work group members. Unused display

equipment/attachment and out-of-date materials have been removed.

3rd Phase : Cleaning & organizing performance is assessed at least twice per week with checklists and visually

displayed and reviewed results. MSF are labeled in both work area and storage areas.

4th Phase : Work group members conduct cleaning & organizing activities during the day. Audits show near

perfect cleaning & organizing performance. Only rarely is an item out of place. Members begin to

plan for optimum placement of MSF.

14 KEYS TO BECOME WORLD CLASS

1) Leadership
2) External Customer Service
3) Profits / Costs
4) Ownership of Objectives
5) Lean Flow / Inventories
6) Lean Daily Management System
7) Multiskill / Skill Flexibility
8) Competence
9) Housekeeping
10) Time Management
11) Deadline & Commitments
12) Problem Solving
13) Work Standard
14) Process Metrics & Reward
SHARING LEAN BEST PRACTICES

Watches Team & CFA Operations Team visited Tanishq Retail Team to understand & implement / take
forward the best Lean practices to their division. Tanishq Lean Core team took them through the lean
initiatives, outcomes, metrics & the entire journey undergone by Tanishq boutiques.

DIGNITY OF LABOUR

Retail team of RBM’s & ABM’s across network has undergone 4 day training on Jewellery product making at
Jewellery manufacturing unit & understood the process. During the training they worked physically & made
jewellery on their own, Team demonstrated the Lean way of learning.

GLIMPSES FROM SHARING

LEAN IMPLEMENTATION METHODOLOGY

TANISHQ FOLLOWED 10 STEPS FOR LEAN IMMPLEMENTATION :

Step 1: Appointment and training of the Lean Champions, from the Retail Operations Teams
Step 2: Training and assessment of the Lean Champions
Step 3: Cascading the Lean programme to all the franchisees and the store staff
Step 4: Training of all the store staff
Step 5: Gemba: Implementation of the Lean techniques
Step 6: Regular visits by the Lean champions
Step 7: Up gradation training on other Lean techniques
Step 8: Reviews and Celebration of Victories/Victors
Step 9: Continuous improvements
Step 10: Implementation of key improvements across all stores

As expected, there was considerable skepticism in the early stages. To them it must have seemed one more HO
fantasy, this time complicated further with strange words like kaizen and kanban. However, like any good idea
which only needs some time to seep in, Lean also caught on. Its power squarely lay in 2 key concepts: One, it was
built totally from bottom-up from the ideas of individual people, which generated great excitement and pride; Two,
it was totally practical, with every benefit perfectly visible and simple to perceive.
LEAN IMPLEMENTATION – OBSTACLES

1. Back sliding to the old ways of working - 14%

2. Lack of Implementation Know – How - 17%
3. Failur of Past Lean Projects - 03%
4. Supervisor Resistance - 05%
5. Employee Resistance - 06%
6. Failure to remove “Anchor Draggers” who oppose Change - 08%
7. Lean is viewd as the flavor of Month - 08%
8. Lack of Crisis to create a sense of Urgency - 13%
9. Middle Management Resistance - 13%
10. The traditional cost accounting system does not recognise the financial
Value of shop floor improvements - 13%

Lack of Implementation
Back sliding to the old
Know - How, 17%
ways of working, 14%

Failure of Past Lean The Traditional Cost

Projects, 3% accounting system does
not recognise the finacial
value of shop floor
improvements, 13%
Supervisor Resistance,
5%

Employee Resistance, 6%
Middle Management
Resistance, 13%

Failure to Remove"Anchor
Draggers"Who oppose
chage, 8%

Lean is viewed as"the Lack of Crisis to create a

flavor of Month", 8% sense of urgency, 13%
5S AT TANISHQ BOTIQUES
5S AT TANISHQ BOTIQUES
5S AT TANISHQ BOTIQUES (Continues)
5S AT TANISHQ BOTIQUES (Continues)
5S AT TANISHQ BOTIQUES (Continues)

7S Score 85%

100%
90%
Percentage

80%
70%
60%
50%
40% Week1
Week2
Week3
Week4
Week1
Week2
Week3
Week4
Week1
Week2
Week3
Week4
Week1
Week2
Week3
Week4
Week1
Week2
Week3
Week4
Week1
Week2
Week3
Week4
Week1
Week2
Week3
Week4
Week1
Week2
Week3
Week4
Week1
Week2
Week3
Week4
Week1
Week2
Week3
Week4
Week1
Week2
Week3
Week4
Week1
Week2
Week3
Week4

Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar

7'sScore 71 68 58 81 87 77 75 75 69 72 73 75 92 93 90 85 85 88 90 85 85 85 85 80 85 85 85 80 80 82 82 83 80 82 83 84 86 86 88 89 88 89 80 87 85 85 85 85

Target 80 80 80 80 80 80 80 80 80 80 80 80 80 80 80 80 80 80 80 80 80 80 80 80 80 80 80 80 80 80 80 80 80 80 80 80 80 80 80 80 80 80 80 80 80 80 80 80

2009 - 10
KAIZEN
Kaizen (Japanese for "improvement" or "change for the better") refers to philosophy or practices that focus upon
continuous improvement of processes in manufacturing, engineering, supporting business processes, and
management. When used in the business sense and applied to the workplace, kaizen refers to activities that
continually improve all functions, and involves all employees from the CEO to the assembly line workers. By
improving standardized activities and processes, kaizen aims to eliminate waste.

The Toyota Production System is known for kaizen, where all line personnel are expected to stop their moving
production line in case of any abnormality and, along with their supervisor, suggest an improvement to resolve the
abnormality which may initiate a kaizen.

The cycle of kaizen activity can be defined as:

 Standardize an operation
 Measure the standardized operation (find cycle time
and amount of in-process inventory)
 Gauge measurements against requirements
 Innovate to meet requirements and increase
productivity
 Standardize the new, improved operations
 Continue cycle ad infinitum

The five main elements of kaizen

 Teamwork
 Personal discipline
 Improved morale
 Quality circles
 Suggestions for improvement

A classic example of a Space saving

Kaizen. It is an 8 shelves cubicle ideal for
putting desktop / laptop, files, UPS, Printer
etc. Just fold it & carry along the whole
office with you. What else you need.
Sony Founder,Ibuks personally carried heavy spool tape recorder when travelling. This was a problem experienced
in Gemba by the senior. Ibuka challenged, Chief Designer, Norio Ohga to develop compact, light weight device.
Revolutionary “Walkman” was developed eventually leading to tiny i-pods
FEW KAIZENS @ TANISHQ BOTIQUES IN DETAIL

JAMSHEDPUR

A STEP FURTHER FOR CUSTOMER DELIGHT

Problem : The delight factor was missing in the birthday & anniversary wishes –
same being a routine Job. Customer used to feel happy to receive calls, but they were
not delighted.
Improvement : The customers are wished live on AIR by the radio jockey &
weekends. For some customers celebration is in store with whole celebration, being live in AIR.
Impact : Customers Delight factor was clearly visible.
Implementer : “S”

JAYANAGAR, BANGALORE

POWER SAVING THROUGH AUTOMATION

Problem : The Staff used to forget putting off the lights of the toilets, some times
it used to whole day.
Improvement : Automatic / Door closure switch was installed in the store room as
well as in the toilets. Whenever the toilet was occupied & door was closed, the
lights gets switched on. On exit, it gets switched off.
Impact : Power saving
Implementer : “SP”

INDORE AB ROAD

INVOICE FILE FOR CUSTOMERS

Problem : Managing the invoices, certificates, credit notes etc was a big problem to customers.
They used to forget the bill at home while doing TEP, it used to get lost in other household
documents.
Improvement : On free of cost special file is given to customers. In which they can maintain
all their documents related to Tanishq.
Impact : Overall the customer are extremely happy & satisfied. The brand is promoted on the
file as all relevant offers / must know for customers are printed inside & outside. Even if they
do not use file for keeping Tanishq related documents, at least the Brand is promoted.
Implementer : “AC”
HAZRATGANJ, LUCKNOW

USE WEB CAM TO TAKE PHOTO ID PROOF

Problem : During rush, it takes time to take photo copy of ID Proof / Xerox
Improvement : Use Web cam to take a snap of the Customer ID Proof.
Impact : It helped in saving time, Photo IDs are stored in system. Web cam is
also useful for sending photograph of products for customer orders.
Implementer : “M”

CONNAUGHT PLACE, DELHI

SHORTKEYS FOR FASTER BILLING

Problem : Working on system was very time consuming

due to the unawareness of short keys
Improvement : Provided the Short keys list next to the
Computer
Impact : Helped in fasten the billing procedure ^ saving time.
Implementer : “A”

AMRITSAR
CUSTOMER DELIGHT

Problem : Difficult to find exclusive gift to delight the customer whose

Birthdays & anniversaries, we celebrate at showroom
Improvement : On the special day we capture the moments of celebration.
Frame it & send it to Customer’s home as surprise gift.
Impact : We found an appropriate gift to delight our customers on Birth days
etc. Customers feel nice while receiving the gift. They specially visit our
showroom to say thanks & share their experience about Tanishq with others.
Implementer : “R”
 Kaizen Chart
35 3.0
2.7
30
2.4
No of kaizens

25 2.1
20 1.8
1.5
15 1.2
10 0.9
0.6
5 0.3
0 0.0
Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar

No of Kaizen 2 5 7 10 5 6 0 21 22 22 30 16
Kaizen / RSO 0.1 0.2 0.3 0.5 0.2 0.3 0.0 1.0 1.0 1.0 1.4 0.7
Target (Kaizen per Rso) 1 1 1 1 1 1 1 1 1 1 1 1

2009 - 10
INTRODUCTION TO KANBAN

WHAT IS KANBAN?

Kanban (kahn-bahn) is Japanese word that when translated literally means “visible record” or “visible part”. The
word Kan means "visual" in Japanese and the word "ban" means "cards".

So Kanban refers to "visual cards". In general context, it refers to a signal of some kind. Thus, in the
manufacturing environment, kanban are signals used to replenish the inventory of items used repetitively within a
facility. The kanban system is based on a customer of a part pulling the part from the supplier of that part. The
customer of the part can be an actual consumer of a finished product (external) or the production personnel at the
succeeding station in a manufacturing facility (internal) as in our case. Likewise, the supplier could be the person at
the preceding station in a manufacturing facility. The premise of Kanban is that material will not be produced or
moved until a customer sends the signal to do so.

The typical Kanban signal is an empty container designed to hold a standard quantity of material or parts. When the
container is empty, the customer sends it back to the supplier. The container has attached to it instructions for
refilling the container such as the part number, description, quantity, customer, supplier, and purchase or work order
number. Some other common forms of kanban signals are supplier replaceable cards for cardboard boxed designed
to hold a standard quantity, standard container enclosed by a painting of the outline of the container on the floor,
and color coded striped golf balls sent via pneumatic tubes from station to station.

But in our case such direct interaction with the supplier cannot be made through physical signaling, so we have
thought of using the cards as a signal which will trigger the activity of indenting from our supplier i.e. Hosur
manufacturing unit.

Kanban serve many purposes. They act as communication devices from the point of use to the previous operation
and as visual communication tools.

They act as purchase orders for your suppliers and work orders for the production departments, thereby eliminating
much of the paperwork that would otherwise be required. In addition, kanban reinforce other manufacturing
objectives such as increasing responsibility of the machine operator and allowing for proactive action on quality
defects by sending a signal for the defect observed to the warehouse where another batch manufacturing is under
progress.
PUSH vs. PULL SYSTEM

The kanban system described is a pull system. Traditionally, a push system is being employed. The push system is
also more commonly known as the Materials Requirements Planning (MRP) system. This system is based on the
Planning Department setting up a long-term production schedule which is then dissected to give a detailed schedule
for making or buying parts. This detailed schedule then pushes the production people to make a part and push it
forward to the next station. The major weakness of this system is that it relies on guessing the future customer
demand to develop the schedule that production is based on and guessing the time it takes to produce each part.
Over-estimation and under-estimation may lead to excess inventory or part shortages, respectively.

One of the major reasons kanban are used is to eliminate or reduce the above mentioned wastes throughout an
organization due to the pull system that is employed. Waste can come from over-production (inventory) and
therefore, the need for a stockroom. This waste is eliminated. Part shortages (under-production) are also
eliminated. Costs are reduced by eliminating the need for many of the purchasing personnel and the paperwork
associated with purchasing. The planning department’s workload is also reduced as they no longer need to produce
work orders.

KANBAN – RESPONSIVE TO CUSTOMERS

Kanban results in a production system that is highly responsive to customers. Instead of trying to anticipate the
future (predicting the future is difficult) Kanban reacts to the needs.

Kanban does not necessarily replace all existing material flow systems within a facility. Other systems
such as Materials Requirement Planning (MRP) and Reorder Point (ROP) may remain in operation.

Kanban is most beneficial when high volume/low value components are involved. For low volume and
high value components, other materials management system may be a better option such as MRP.

Even though our business comes in the segment Low volume and high value component, its benefit can
be partially reaped in case of precious kanban items and can be fully utilized for Tools and consumables.

E-KANBAN SYSTEMS

Many manufacturers have implemented electronic kanban systems. Electronic kanban systems, or E-
Kanban systems, help to eliminate common problems such as manual entry errors and lost cards. E-
Kanban systems can be integrated into enterprise resource planning (ERP) systems. Integrating E-
Kanban systems into ERP systems allows for real-time demand signaling across the supply chain and
improved visibility. Data pulled from E-Kanban systems can be used to optimize inventory levels by better
tracking supplier lead and replenishment times.

FEW KANBAN IMPLEMENTED PHOTOS

PACKING MATERIAL – KANBAN SYSTEM

Before After
BENEFITS OF KANBAN:

Reduce inventory and product

obsolescence.

Since component parts are not

delivered until just before they
are needed, there is a reduced
need for storage space. Product
designs can be upgraded in
small increments on a continual
basis, and those upgrades are
immediately incorporated into
the product with no waste from
obsolete components or parts.

Reduces waste and scrap

Raw materials are not delivered until they are needed, reducing waste and cutting storage costs.

Provides flexibility in production

If there is a sudden drop in demand for a product, Kanban ensures us that we are not stuck with excess inventory.
This gives us the flexibility to rapidly respond to a changing demand.
They can quickly be switched to different products as demand for various products changes. Yes, there are still
limits imposed by the types of machines and equipment, and employee skills; however the supply of raw materials
and components is eliminated as a bottleneck.

Reduces Total Cost :

The Kanban system reduces your total costs by: Developing Flexible Work Stations

 Reducing Waste and Scrap

 Minimizing Wait Times and Logistics Costs
 Reducing Stock Levels and Overhead Costs
 Saving Resources by Streamlining Production
 Reducing Inventory Costs

With these benefits in mind, the work had been started to set up a Kanban system in the Tanishq Boutiques.
MULTISKILL

OBJECTIVE : 80% of the staff should know 80% of the Skills

• Multiskilling chart prepared based on the skills of the RSO’s

• Implementation of Training plan and schedule
• Detailed Skills description chart introduced
COMPETENCY MAPPING
INVENTORY MANAGEMENT
The purpose of doing scientific study of stock versus sale was to reach at Optimum stock level.

The following steps were followed:-

Step 1- A Pareto diagram was prepared for finding out the contribution of each category to total sale.

Step 2- Based upon the Pareto analysis, we shortlisted the categories to find out the optimum stock requirement.

Step 3- Last one year’s Sales data was captured to find out the WEEKELY SALES trend of each category in each
Weight/Price Band

Step 4- Current stock was mapped with actual stock Norm for better understanding of Alignment ratio
Step 5- Weekly Sales trend was captured by each RSO to find out the actual number of pieces shown to the
customer for converting sale against the actual stock Norm vise versa current stock

Step 6- Based upon the final outcome, we proposed the desired stock norm for each category to convert a sale

Step 7- We then mapped the Model Stock with the proposed quantity to find out the number of designs available for
daily Indenting

Step 8- GAP in model stock was observed based upon the study and the same was filled by adding more variants
from the stores wish list. This was done to ensure that enough number of designs were available in Model stock for
selection and good mix.
Step 9- We then extracted the sales trend of current financial year for each category and calculated the average
stock value and projected Sales figure of same for the entire year.

Step 10- Inventory turn ratio was then calculated for each category

Step 11- Based upon the next years target, without increasing the NEW PROPOSED STOCK NORM, the Stock
Turn Ratio and Sales were calculated

THE IMPACT

• First and foremost is that all the RSO’s got involved in the process and understood the importance of doing
the Scientific study to reach Optimum stock.
• Each RSO got better in-sight of their respective category and contribution to total sale.
• More and more in-puts started coming from each team member related to the stock.
• A clear ‘SENSE OF OWNERSHIP’ is visible in each team member towards stocks.
STOCK TURN

Tanishq have more than 1000 crores of inventories in its stores. That's quite a lot of money. It delivers a certain
level of stock turn (total value of sales in a year divided by the total value of stock) to the company. But this stock
turn figure varies significantly across stores. One reason for this is the level of sales value in a store. For example,
South Extension store in Delhi delivers a stock turn of 6, while Rajouri Garden in the same city is delivering a stock
turn of only 1.9. This is because South Extension sells 5.5 for the Plain group as much as Rajouri, but needs only 5
times as much stock as Rajouri to do that.

But the second reason for differences in stock turn is the way each store manages its norm. The Allahabad store
kept an average stock of only 29 kg of Plain, but has achieved a sale of 100 kg by end Oct. The Patna 1 boutique
has done even better: 112 kg sales with 26 kg stock. The Madurai boutique, 94 kg sales with 22 kg stock.

It is crucial that each boutique learns from such benchmark boutiques on how to manage stock better.

Some of the sores have mastered the art of stock management. Some of them are
1. Store Manager – Lucknow Boutique 1
2. Associate, Madurai
3. Store Manager – Patna Boutique 1
4.
ANALYSIS / PROBLEM SOLVING TECHNIQUES
ANALYSIS / PROBLEM SOLVING TECHNIQUES

Training given with the help of “ Why Why” analysis and Fish Bone Diagram

The Impact of GHS Why 5 Analysis with help of Fish Bone Analysis

Impact on RSO’s

 Motivation and reminder in MM

 RSO wise monthly GH trend Chart
 Golden Egg

BOS/ Cashiers got involved

 Targets given to BOS and Cashiers also

 A special Prolip system introduced by corporate was an additional help.

BTL activities

 Customer Meets to promote GH

Focus on existing GH Customers for Re-enrolments

Analysis : Interruption in Reminder Mgs for GHS Payment

Action Taken for improvement in process of Reminder SMS sent to customers for payments

RSO
 All the RSO’s were asked to enter the customer data properly in POSS and to tick the message option.

Customers
 Educated the customer about the importance of their Mobile No in system by each RSO.
 We also requested to update their new no if it is changed.
Store
 Store started working on ready recknor.
 The register has been placed near the cash counter to register these kind of complain their and then so that
the necessary action can be taken on time.
Corporate
 All the data which are collected monthly, the same will be sent to corporate for necessary action in a
continues process.
VARIOUS ANALYSIS CHARTS
VARIOUS ANALYSIS CHARTS
VARIOUS ANALYSIS CHARTS
 BENEFITS REALIZED

COMPANY: (e.g. Cost reduction, Revenue enhancement, Branding etc)

• 5666 Kaizens (improvements) made by Retail Sales Officers. Best kaizens / practices implemented across
the showrooms

• Cost reduction in inventory carrying cost, store running expenditures, maintenance, repair, electricity
expenditure, diesel, telephone bills, retail space recovery, etc. as a results of Kaizens (continuous
improvements) done at stores. Cost savings through Kaizens 1.09 Cr

• Defective stock in retail system reduced from 1.65 Cr to 0.1 Cr.

• Product sales Vs stock ratio improved to 25% from 21%

• Savings through introduction of kanban system for packing material is 67 lakhs

• 20% savings through introduction of kanban for jewellery spares, stationary items, pantry items, cleaning
items

• Better store upkeep / organized. 7s audit, Score gone up to 71%. Ensured through audit , Retail space
recovery, Multiskilled employee ,search time is far less

• Simplified / Improved / standardized operations across the stores.

• Improved sales with optimization of Inventory and daily indenting by RSOs.

• Quick service – billing time reduction (about 50%).

CUSTOMERS : (e.g. enhanced C-sat, customer loyalty, etc.)

• Quick service – billing time reduced (50%), etc

• Informal comments like visitor book comments has been captured through portal system and action taken.
Opportunity for Improvement Vs positive comments ratio improved from 1:3.3 to 1:5.3

• The latest Customer Satisfaction score of customer satisfaction as on Mar’10 has gone to 8.6 from 8.0,
which is considered to be excellent in retail standards.

• Improved revisiting of existing customers (34% from 26%)

• Improved revisiting of existing customers 34% from 26% as depicted in Anuttara details.
INDUSTRY : (e.g. peers / business partners / etc.)

• Pioneer in the industry by applying lean principles into jewellery retail thereby getting competitive
advantage in the process transforming the practices of Jewellery retailing – making it more transparent and
organized.

OTHERS : (Employee)
• Simplified work and easy to understand visual communications

• Helped to work peacefully without fire fighting, satisfaction

• The focus on training and development for the boutique staff not only gave them the confidence but also
made them self managed, as well personal gain to apply at home

• Rewards & recognition of good kaizens ( 60 kaizens & 30 boutiques recognized )

• 550 RSOs rewarded for Tanishq fan club.

• Employee engagement 12.25 : 1

• Multiskilling score of employees improved to 69%

• It has given them an opportunity to think about a problem, come up with an idea to solve it, voice the idea,
and help in the final implementation. In that whole process, it has helped them discover their own hidden
talent and take pride in their contribution to the business. It developed the attitude to serve and to create
max time & resources to serve customers better – a prerequisite to create fans and aligned the processes in
the best possible sequence to deliver maximum value to customer.

No of Kaizens, Kanbans, 7S Score & Aged Stock Sold - 2009 – 2010

 COST SAVING - 2009 – 2010

No of Kaizens, Kanbans, 7S Score & Aged Stock Sold - 2010 – 2011- Q1

COST SAVING - 2009 – 2010 –Q1

COST SAVING – 2010 – 2011 Q1

EXPECTED BENEFITS IN NEXT TWO YEARS :
• Cost reduction in inventory carrying cost, Kanban system for all consumables, store running expenditures
and through kaizens 9 Crore

• Sustaining & bringing the habit to implement 1 Kaizen / month / RSO

• Store upkeep >80%

• Multiskilling – 80% of employee know 80% of skill

• Zero stock out incident for all consumable items by maintaining kanban system

• Opportunity for Improvement Vs positive comments ratio improved to 1: 8

• C-sat Score will go up 90%

• Employee engagement score 15 : 1

• Improving revisiting of existing customers 50% from 34%

• Improving walk-in conversions 10%

 13 TIPS FOR TRANSFORMING COMPANY TO LEAN ENTERPRISE :

1) Start with action in the technical system; follow quickly with cultural change. Most
companies attempting a lean transformation focus on the “process layer” of the 4P model and this is, in fact, the
right approach, as the technical systems of lean drive the Toyota Way behaviors, such as surfacing problems that
employees must learn how to solve. But the social and technical systems of TPS are intertwined; if a company
wants to change the culture, it must also develop true lean leaders who can reinforce and lead that cultural change.
The best way a company can develop this is through action to improve the company’s core value streams, supported
by committed leaders who reinforce culture change. Leaders must be involved in the value stream mapping and
shop floor transformation so they can learn to see waste.

2) Learn by doing first and training second. “Before started with all these radical changes, we need to
inform people of what we are doing through training courses.” This has led to elaborate corporate training programs
with PowerPoint TM presentations. Unfortunately you cannot PowerPoint TM your way to lean. The Toyota Way is
about learning by doing. It is believed that in the early stages of lean transformation there should be at least 80%
doing and 20% training and informing. The best training is training followed by immediately doing … or doing
followed by immediate training. The Toyota approach to training is to put people in difficult situations and let them
solve their way out of the problems.

3) Start with value stream pilots to demonstrate lean as a system and provide a “go see”
model. In Find Solid Partners and Grow Together to Mutual Benefit in the Long Term, the Toyota Supplier
Support Center implements in companies to teach lean. Within a value stream, defined by a product family, a model
is created. By model, It is meant that implementing the whole system of tools and ultimately human resource
practices so other employees from your company can go and see lean in action without having to go to some other
company. For a plant, this usually means creating one product line, beginning with raw materials received and
ending with finished goods. In a service organization, it is one complete business process from start to finish within
the company boundaries. The go-and-see model line should become a singularly focused project with a great deal of
management attention and resources to make it a success and an object lesson in management commitment.
4) Use value stream mapping to develop future state visions and help “learn to see.” In
Using the Toyota Way to Transform Technical and Service Organizations, value stream mapping is a method for
clearly showing in diagram form the material and information flow. When developing the current state map, future
state map, and action plan for implementation, It is recommend to use a cross-functional group consisting of
managers who can authorize resources and doers who are part of the process being mapped. The team learns
together as they see the waste in the current state, and in the future state they come together to figure out how to
apply the lean tools and philosophy. Spent endless hours debating with individuals over whether lean can apply to
their particular situation since they do not have the high volumes and repetitive processes of Toyota. Never had that
debate in a value stream mapping workshop, because the mapping creates a language and tool for the team to
actually pick apart a specific process, see the waste, develop a lean vision, and apply it to that particular process.
Value stream mapping should be applied only to specific product families that will be immediately transformed.

5) Use kaizen workshops to teach and make rapid changes. As described in Using the Toyota
Way to Transform Technical and Service Organizations, the kaizen workshop is a remarkable social invention that
frees up a cross-functional team to make changes in a week that otherwise can drag on for months. Selecting the
right people for the team is critical, as is setting aside the time for those individuals and giving them a lot of
management support. Using a talented and experienced facilitator who has a deep understanding of lean tools and
philosophy with a specific problem to tackle makes all the difference in what you can accomplish. However, the
kaizen workshop should not become an end in itself. In many companies, “lean efforts” revolve around having
numerous workshops: the more the better. This leads to “point kaizen”—fixing individual problems without
straightening out the core value stream. Kaizen workshops are best used as one tool to implement specific
improvements guided by a future state value stream map.

6) Organize around value streams. In most organizations, management is organized by process or

function. In a factory, there is a manager of the paint department, a manager of the assembly department, and a
manager of the maintenance department. In a bank, there may be a manager of order processing, a manager of order
fulfillment, a manager of customer complaints, etc. In other words, managers own steps in the process of creating
value for customers and nobody is responsible for the value stream. In Lean Thinking, Womack and Jones
recommend creating value stream managers who have complete responsibility for the value stream and can answer
to the customer. A manager is responsible for each product family (value stream) and has control of all the
resources needed to make the truck cockpit—including maintenance, engineering, and quality. Someone with real
leadership skills and a deep understanding of the product and process must be responsible for the process of creating
value for customers and must be accountable to the customer.

7) Make it mandatory. If a company looks at lean transformation as a nice thing to do in any spare time or as
voluntary, it will simply not happen. Transformation at Cuautitlan was the result of a shift from management
suggesting lean to making it mandatory with consequences for not buying in.
8) A crisis may prompt a lean movement, but may not be necessary to turn a company around. A
sinking ship certainly mobilizes management and the work force into getting serious about lean. Senior
management proactively championed improvement. What is important is that lean leadership is focused on long-
term learning.

9) Be opportunistic in identifying opportunities for big financial impacts. Toyota focuses on improving
processes, confident that this in turn will improve financial results. However, when a company does not yet believe
in the lean philosophy heart and soul, it is particularly important to achieve some big wins. By picking the right
product family and with experienced lean expertise, a serious effort has about a 100% chance of making huge and
visible improvements that will impress any executive.

10) Realign metrics with a value stream perspective. “You get what you measure” has become a truism in
most companies. But metrics are used very differently by Toyota compared to most companies. They are an overall
tool for tracking progress of the company and they are a key tool for continuous improvement. At most companies
they are mainly a tool for short-term cost control by managers who do not understand what they are managing. For
example, companies track indirect / direct labor ratios and call to the carpet those with unfavorable ratios. The way
to make the ratio look good is to have lots of direct labor and keep those people busy making parts, even if they are
overproducing or doing wasteful jobs. Creating a team leader role for support like Toyota’s structure means
damaging that ratio and a short path to the unemployment line. The first step therefore is to eliminate non-lean
metrics that are wreaking havoc with those seriously invested in improving operational excellence. The next step is
to measure a variety of value stream metrics from lead time to inventory levels to first-pass quality and treat these
metrics as seriously as labor productivity and other short-term cost metrics.

11) Build on your company’s roots to develop your own way. Toyota has its way. You need to have your
way. When Toyota works with companies to teach TPS, they insist that the companies develop their own system. It
is OK to borrow some of the insights from the Toyota Way and it is recommend to adopt the basic principles. But
you need to put them into your language in a way that fits your business and technical context. The Toyota Way
evolved through some inspired leaders who provided a very rich cultural heritage. Your company probably has a
rich heritage as well. A large majority of business start-ups fail within the first three years. If you are reading this
article hoping to improve your company, most likely you are one of the survivors. Someone did something right to
get you to this point. Build on that. Build on your company’s heritage to identify what you stand for.

12) Hire or develop lean leaders and develop a succession system. What it means to be a Toyota leader in
Growing your Leaders rather than purchasing hem. Leaders must thoroughly understand, believe in, and live the
company’s “way.” All leaders must understand the work in detail and know how to involve people. If the top is not
driving the transformation, it will not happen.
13) Use experts for teaching and getting quick results. The word “sensei” is used in Japan with some
reverence to refer to a teacher who has mastered the subject. A company needs a sensei to provide technical
assistance and change management advice when it is trying something for the first time. This “teacher” will help
facilitate the transformation, get quick results, and keep the momentum building. But a good teacher will not do it
all for you. If you want a lean organization, you need to get lean knowledge into your company, either by hiring
experts with a minimum of five years’ lean experience or by hiring outside experts as consultants. An expert,
whether internal or external, can quick-start the process by educating through action, but to develop a lean learning
enterprise you need to build internal expertise—senior executives, improvement experts, and group leaders who
believe in the philosophy and will spread lean throughout the organization over time.

Having said all this, the question remains, can a company transform and sustain a culture to become a lean learning
organization? If a company can maintain continuity of leadership over time, there is no reason why it cannot profit
by implementing its version of the Toyota Way principles. It will not be easy.

Typical obstacles may be reluctant top managers who do not understand, managers willing to try lean tools but are
not committed to following through, a management shakeup from committed lean leaders to anti-lean managers, a
market that goes sour, or a buyout.

If Toyota is any example, the rewards and results will far outweigh the great effort required. You will simply be the
best in your business because you will be using operational excellence as a strategic weapon. Good luck on your
journey!