This action might not be possible to undo. Are you sure you want to continue?
Lean Retailing in Tanishq Boutiques
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
Executive Post Graduate Program in Management
Class of May 2009
Term – IV: Project Work
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
MURALI. D EPG9-05091534
Name of the Student (in Capital Letters) : Enrollment No :
Executive Post Graduate Program in Management Class of May 2009
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 20092010).
Signature of Faculty Guide
Name of the Faculty Guide
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 .Bangalore Executive Post Graduate Diploma in Global Management Class of May -2009 CERTIFICATE This is to certify that Mr. Murali.
D . I would also like to thank all my friends/colleagues and family for extending their support. time and help whenever needed. Appan who has guided us throughout the project and has given us valuable suggestions to complete the project. .Murali. I thank my project guide Mr.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. Last but not the least thanks to Alliance Business School for supplying us with necessary documents. reports. First of all I would like to thank our esteemed guide Pr. format extra. Alagappan and my company Tanishq for providing me the platform to build this project.
WHAT IS LEAN RETAILING? . Lean is not a just set of tools like Just in Time. Standardize. Sustain). save time and increase productivity. It unleashed the entire human potential that Toyota had. WHAT IS LEAN ? The company that invented Lean is Toyota. 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. improve efficiency. Tanishq used Lean in Retailing. making it ultimately a by-word for quality. Stabilize. The biggest benefit of Lean to Toyota and to many others that followed it. The whole at Lean roots focuses on supporting and encouraging people to continually improve the processes they work on. by coming up with the solutions for all the workplace issues himself or herself. Kanban etc. The purpose of these tools is lost & the centrality of the people is missed. reduce material wastage and costs. and do all this through total employee engagement. 5S (Sort. Unfortunately many misunderstands that it is a collection of tools that lead to more efficient operations. Cells. It is a Sophisticated System of Manufacturing in which all the parts contribute to a whole. rather than wait for someone else to provide it. Lean aim to keep everything in an organized way. But Tanishq started its Journey with “People First”. It Motivated. Guided / Trained its employees with Lean experts. Empowered. Lean is a Journey. it helped each ordinary employee to realize his or her full potential.EXICUTIVE SUMMERY Titan Industries is one company which practices a fair amount of inter-disciplinary movement of its managers. Shine.
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.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. for helping double up when necessary Ownership : Helping generate total ownership for the store issues . Lean Retailing team dreamt to set up the following objectives for the Tanishq stores: 1.
Finally the study ends with details of benefits realized. next few years target planned & 13 Tips for transforming Company to Lean Enterprises. To improve operational efficiency and eliminate waste through 7S : 7steps to keep the store environment spic and span (Sort. Obstacles & realized benefits of Tanishq Boutiques. Systematic Arrangement.2. Training. its 4Ps . Shine. accrue gradually over time as the Lean journey progresses. however. It describes the current process and issues faced by the industry / organizations. Safety. This study defines the Basic of Lean. Implementation. Some of the benefits are dramatic and almost immediate such as reduced WIP and cycle times. how to reduce high inventory holding costs & wastes. Most benefits. . Also opportunities offered by this to all Retailers / Organizations involved in the manufacturing / retaining of Jewellery. Standardize. Problem Solving. 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. 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. It helps to know. 14 principles. Process. People & Partners principals.Philosophy. The study helps to know about the innovative way of Lean Retailing in Jewellery industry.
Tommy Hilfiger and Hugo Boss. India’s most trusted and fastest growing jewellery brand. Titan Industries repeated its pioneering act and brought international brands into Indian market. 11 manufacturing units. and innumerable admirers world over. Titan Industries is the fifth largest integrated watch manufacturer in the world. the latest retail chain in the luxury segment. The success story began in 1984 with a joint venture between the Tata Group and the Tamil Nadu Industrial Development Corporation. two exclusive design studios for watches and jewellery. focuses on the preferences of semi-urban and rural India. Titan Industries continues to grow and sets new standards for innovation and quality. Titan Industries transformed the Indian watch market. the later addition.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. . Titan Industries is also the largest jewellery retailer in India with over 110 Tanishq boutiques and Zoya stores.514 employees. The company has sold 100 million watches world over and manufactures 12 million watches every year. complemented by international styling. With over 560 retail stores across a carpet area of over 7. The organization is all geared to repeat the Titan and Tanishq success story with each new offering. The organization has leveraged its manufacturing competencies and branched into precision engineering products and machine building. Completing the jewellery portfolio is Zoya. Entering the largely fragmented Indian jewellery market with no known brands in 1995. With a license for premium fashion watches of global brands. its third brand. Titan Industries reached out to the youth segment with Fastrack. The company has two exclusive design studios for watches and jewellery Backed by 4. a value brand of functionally styled watches at affordable prices. After Sonata. launching Fastrack eyewear and sunglasses. as well as prescription eyewear. The company has over 300 exclusive ‘World of Titan' showrooms and over 740 after-sales-service centers. trendy and chic.09. Titan Industries has India’s largest retail network. Presenting Titan quartz watches that sported an international look. Titan Industries launched Tanishq. ft. as well as the Swiss made watch – Xylys owe their presence in Indian market to Titan Industries. With India's two most recognized and loved brands Titan and Tanishq to its credit.000 sq. Titan Industries has also made its foray into eyewear. over 25 Gold Plus stores and over 85 Titan Eye+ stores. Gold Plus.
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. . 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. Orion. With over 2350 employees spread over 3 business units in Bangalore.TIME PRODUCTS DIVISION The Time Products division is where the Titan story began.a Swiss-made. Raga.the world's slimmest watch (at 3.45mm) that epitomizes the philosophy ‘less is more’.a feminine and opulent accessory for today's affluent woman Nebula . India. Today. The brand Titan enjoys a 60% market share in the organised watch market in India. Titan Raga .India's largest selling watch brand to suite the common man's wallet Xylys . Nebula. Zoop and series like Aviator. the division continues to add world-class brands to the company’s portfolio. Some of the most notable brands in the division’s portfolio are: Titan Edge . a manufacturing unit at Hosur and 3 assembly plants located in the north of India. Octane and WWF. Heritage.watches crafted with solid 18k gold and precious stones Sonata . 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.
oil & gas. progressive no line or bifocal lenses. reading.EYEWEAR DIVISION Titan Eye+. Titan initiated a PRECISION ENGINEERING DIVISION in 2002. Titan Eye+ provides an impressive range of stylish and contemporary eyewear. Precision Engineering Components & Sub-Assemblies (PECSA) Machine Building & Automation Solutions Tooling Solutions Electronic sub-assemblies . in sync with the TATA principles of quality and trust. the setup has four main business units. solar and medical instruments. and upbeat designs. Titan Eye+ stores are equipped to fill prescriptions for single vision lenses. vision correction. automotive. Titan Eye+ heralded standardization by benchmarking with the world’s best. catering to global majors across industry verticals like aerospace. 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. launched into the eyewear segment in March 2007. Sales counters now offer products and services of international quality standards coupled with transparency in pricing. the third major venture of consumer business by Titan Industries. With an investment of over $10 million. contact lenses or eye protection. style. engineering. hydraulics. through exclusive optical outlets. PRECISION ENGINEERING DIVISION Leveraging precision engineering core competencies from watch making.
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.
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, 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.
With a presence in 30 towns spread across 6 states. 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 brand also offers impressive designs embellished with diamonds. therefore.Initially. today. The Golplus jewellery comes with the assurance of purest 22karat (916) and 18-karat (750) gold and premium craftsmanship. on the other hand. however. Foreign currency was no longer an issue. Using this gold. GOLDPLUS Titan Industries’ Goldplus is designed for the jewellery preferences of the semi-urban and rural Indian customer. import licenses were easy to obtain and the global demand-supply equation for jewellery had shifted in favor of buyers. Esprit. the critics were silenced. By the time Tanishq established its manufacturing facility and entered the market. . opened its doors to the world. Tanishq has brought to the market a whole new standard of business ethics and product reliability. Very importantly. The gold is purchased in the form of bars from only those banks that are certified by Reserve Bank of India (RBI). American diamonds (Cubic Zirconia) and other precious stones. 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. Tanishq. In addition to gold jewellery. is perhaps the only major Tata brand with a strong appeal for women. and Ernest Jones all rolled in one. Tamilnadu where highly skilled artisans create traditional and modern designs. The Indian market. Tanishq. in the process bringing about a transformation in the manner in which jewellery is bought and sold in India. jewellery is crafted in Titan Industries’ manufacturing units in Hosur. The elaborate and intense quality checks during the manufacturing process ensure the purity of gold and a perfect finish. the premises on which the project was based had altered substantially. Tiffany. and was now flooded with foreign currency. the criticism for Titan’s foray into jewellery was loud and often bitter. Goldplus is the largest jewellery retail chain in Tamil Nadu. Eventually.
Won the IIMM – Innovative SCM award for the Best Innovation in Supply Chain Management for the year 2008. a leading Indian magazine. . The team has won 7 accreditations also. a leading Indian financial daily. Tanishq brand has won the Images fashion award Best Jeweller brand award for the seventh consecutive year. 1 Brand in the consumer durables category in the ‘Brand equity’ Survey of the Economic. 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. 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.RECOGNITION The company has been awarded the following distinctions: Named the No.
During April 2008 to February 2009. Damas Jewelry. SIZE OF INDIAN GOLD MARKET : The domestic India gold market is estimated to be more than US$15 billion and is expected to rise significantly in the coming years. United Arab Emirates imported more than 30% of gems and jewelry from India. Jewellery was viewed as the specific identity of status of the family. one of the world’s leading jewelry retailer entered India in 2003 with a 50-50 joint venture with Gitanjali Gems Ltd.JEWELLERY INDUSTRY OVER VIEW Indians have a huge fascination for gold. making it the largest importer from the country. More than 50% of this is used for making gold jewelry. religious and cultural life of Indians. After Globalization the view has changed. The gem and jewelry industry accounts for more than 10% of India's total commodities exports JEWELLERY RETAIL SECTOR : The Indian jewellery industry is fragmented.79 billion was exported from the country. attracting both global and domestic players to this sector. the life style of India has changed. Hong Kong was the second largest importer with 25% followed by United States with 20%. It is one of the largest jewellery retail outlets in the world and is adding 16 new stores to the 12 stores it currently has in India. Government allows 51 per cent foreign direct investment in single brand retail outlets. India consumes about 800 MT of gold which accounts to about 20% consumption of gold globally. occasional buying. India Gold Market looks poised to achieve greater heights given the fascination for gold in the country. leads to greater impact in the jewellery industry. gems and jewelry worth US$ 17. still in some parts of India it is prevailing. It will open between 400 to 500 jewellery retail outlets across the country. 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. Jewellery market in India is on the platform of Investment. This is evident in the fact that India is the largest consumer as well as importer of gold in the world. Jewellery buying was performed with jewellers who have very good trust and long term relationship with the family.000 jewellers operating across the country. Gold plays a very important role in the social. have a greater impact in family type of living. The jewellery is considered as one of the fashionable item in the western countries. . with over 300. Jewellery making was given significant importance in the activities of a family life in India against of Fashionable item in western countries.
The Gitanjali Group has bought 'Nakshatra'.6 % in 22 Kt and 75 % in 18 Kt. Gold Souk India has plans for opening 100 Souks in 100 months. plans to set up 50 stores by 2010. 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. The business was driven to enter into the local market by making and selling 18 kt jewellery manufactured through engineering. demanding 22 kt plain hand made artifact jewellery. Tanishq has established the process of giving guarantee to the customer by means of “Pure Jewellery. where a number of international brands have started their retail business. Swarovski. Pure Joy” which certifies the purity of the gold ornament at 91. the global crystal goods manufacturer and marketer. The business then answering to the needs of family type of Jewellery purchasing. the business was diversified into making jewellery aiming at export market by manufacturing through engineering industrial operations. opened its first diamond retail outlet. started selling plain jewellery products made by hand work of karigars. . Gitanjal Gems Ltd opened its first luxury jewellery mall in Gurgaon. thus kick starting the partnering journey @ Tanishq. Dubai-based Joy Alukkas has recently opened its largest showroom in Chennai. a partnership between the Indian group and the top jewellery retailer in UAE. up from the current 15. 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”. Viswa and Devji Diamonds.
and teamwork because if they don’t fix it there will be an inventory outage. On a daily basis. vendors. quality specialist. it encourages. It is a culture.LEAN OVERVIEW THE COMPANY THAT INVENTED LEAN IS TOYOTA THE TOYOTA WAY IS MORE THAN TOOLS & TECHNIQUES In the Toyota Way / Lean. The Toyota Way means more dependence on people. resolving issues. purpose. and most importantly—operators are all involved in continuous problem solving and improvement. which over time trains everyone to become better problem solvers. skilled workers. not less. supports. and in fact demands employee involvement. The workers have a sense of urgency. TPS system designed to provide the tools for people to continually improve their work. You depend upon the workers to reduce inventory. engineers. and fix them. even more than a set of efficiency and improvement techniques. identify hidden problems. communicating. It goes well beyond this. it’s the people who bring the system to life: working. team leaders. “TPS HOUSE” . and growing together.
People need purpose to find motivation and establish goals.TOYOTA / LEAN 14 PRINCIPLES IN 4 “P”s / FOUR BROAD CATEGORIES: SECTION I: Long-Term Philosophy Principle 1. SECTION II: The Right Process Will Produce the Right Results . even at the expense of short-term financial goals. Base your management decisions on a long-term philosophy.
Although Toyota has a bureaucratic system. not the hare. Waiting (time on hand) 3. It empowers the employee to aid in the growth and improvement of the company. Use “pull” systems to avoid overproduction. This process is necessary to reduce overproduction.) This helps achieve the goal of minimizing waste (muda). Overproduction 2. to get quality right the first time. Level out the workload (heijunka). Quality takes precedence (Jidoka). Over processing or incorrect processing 5. Standardized tasks and processes are the foundation for continuous improvement and employee empowerment. Defects 8. not overburdening people or the equipment (muri). The pull system produces only the required material after the subsequent operation signals a need for it. Create a continuous process flow to bring problems to the surface. The eight types of muda are: 1. (Work like the tortoise. Principle 6. Work processes are redesigned to eliminate waste (muda) through the process of continuous improvement — kaizen. Unnecessary transport or conveyance 4. the way that it is implemented allows for continuous improvement (kaizen) from the people affected by that system.Principle 2. Unnecessary movement 7. Build a culture of stopping to fix problems. Excess inventory 6. and not creating uneven production levels (mura). Principle 5. A method where a process signals its predecessor that more material is needed. Any employee in the Toyota Production System has the authority to stop the process to signal a quality issue. . Principle 4. Unused employee creativity Principle 3.
better supplier. Employees must be educated and trained: they have to maintain a learning organization. Principle 11.steps that are used to make all work spaces efficient and productive. Included in this principle is the 5S Program . Use only reliable. help people share work stations. Success is based on the team. Toyota treats suppliers much like they treat their employees. and teach it to others. 1. 2. the principles will fade. thoroughly tested technology that serves your people and processes. Without constant attention. it must be the way one thinks. Teams should consist of 4-5 people and numerous management tiers. SECTION III: Add Value to the Organization by Developing Your People Principle 9. The principles have to be ingrained. live the philosophy. not pushed to manufacturing. 4. 5. 3. Sort: Sort out unneeded items Straighten: Have a place for everything Shine: Keep the area clean Standardize: Create rules and standard operating procedures Sustain: Maintain the system and continue to improve it Principle 8. not the individual. Respect your extended network of partners and suppliers by challenging them and helping them improve. Develop exceptional people and teams who follow your company’s philosophy. Principle 10. Toyota provides cross functional teams to help suppliers discover and fix problems so that they can become a stronger. Grow leaders who thoroughly understand the work. Use visual control so no problems are hidden. .Principle 7. Technology is pulled by manufacturing. reduce time looking for needed tools and improve the work environment. challenging them to do better and helping them to achieve it.
Think and speak on verified. 2. 4. managers use Tadashi Yamashima's (President. inform and consult in a timely manner. Build consensus on the resolution 5. Always be mindful of protecting your safety and health. 3. managers will not have an understanding of how it can be improved. 5. Without experiencing the situation firsthand. gather or discuss information. implement decisions rapidly (nemawashi). 7. Principle 13. The following are decision parameters: 1. Use efficient communication tools . thoroughly considering all Otions. Always keep the final target in mind. Take full advantage of the wisdom and experiences of others to send. Go and see for yourself to thoroughly understand the situation (genchi genbutsu). Think "outside the box. 9. 10. 8. Always report. Furthermore. proven information and data. Find what is really going on (go-and-see) to test 2. Relentlessly strive to conduct kaizen activities. Consider a broad range of alternatives 4. Toyota managers are expected to "go-and-see" operations. Make decisions slowly by consensus. Toyota Technical Center (TTC)) ten management principles as a guideline: 1. 6. Share information with others in a timely fashion." or beyond common sense and standard rules. Determine the underlying cause 3. Clearly assign tasks to yourself and others.Section IV: Continuously Solving Root Problems Drives Organizational Learning Principle 12. Analyze and understand shortcomings in your capabilities in a measurable way.
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. 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. lean practitioners must be relentlessly focused on the customer when specifying and creating value. the information management task running from order-taking through detailed scheduling to delivery. Countermeasure 6. . Standardize Fundamentals of Lean Strategies to guide management’s actions toward success: 1. when providers or customers do decide to rethink value. Locate area/point of cause 4. Become a learning organization through relentless reflection (hansei) and continuous improvement (kaizen). instant delivery rather than jointly analyzing value and challenging old definitions to see what’s really needed". and the physical transformation task proceeding from raw materials to a finished product in the hands of the customer. nor political exigencies. nor any other consideration should distract from this critical first step in lean thinking. 2. The process of becoming a learning organization involves criticizing every aspect of what one does. and often both at once). they often fall back on simply formulas lower cost. Value can only be defined by the ultimate customer. Initial problem perception 2. The general problem solving technique to determine the root cause of a problem includes: 1. Neither shareholder needs. They simply start in the wrong place and end up at the wrong destination. And it's only meaningful when expressed in terms of a specific product (a good or a service. "Why is it so hard to start at the right place. Investigate root cause (5 whys) 5." Above all. amounts of waste. indeed staggering. Identifying the entire value stream for each product is the next step in lean thinking. VALUE : The critical starting point for lean thinking is value. Then. which meets the customer's needs at a specific price at a specific time. Clarify the problem 3. Evaluate 7.Principle 14. nor senior management¹s financial mind-set. increased product variety through customization. a step which firms have rarely attempted but which almost always exposes enormous.
Eliminates NVA activities. space. FLOW : Only after specifying value and mapping the stream can lean thinkers implement the third principle of making the remaining. Such a shift often requires a fundamental shift in thinking for everyone involved. and a "batch and queue" production mentality must get used to small lots produced in continuous flow. "You can let the customer pull the product from you as needed rather than pushing products. but can be used beneficially in service processes as well. 5. Value-stream mapping (VSM): Used to statically visualize.3. analyze and improve process and information flows. . cost. Note that these are not necessarily confined to manufacturing processes. as functions and departments that once served as the categories for organizing work must give way to specific products." TOOLS AND TECHNIQUES OF LEAN There are many tools and techniques of Lean that help create Lean processes. identify solutions and develop and document action plans for implementing process improvements. lean enterprises can now make a revolutionary shift: instead of scheduling production to operate by a sales forecast. As Womack and Jones state. value-creating steps flow. the fifth and final principle. it "dawns on those involved that there is no end to the process of reducing effort. onto the customer. time. A3 Reporting: Used to define problems. no one upstream function or department should produce a good or service until the customer downstream asks for it. Eliminates overproduction. 4. "flow" production was an even more valuable innovation of Henry Ford¹s than his better-known "mass" production model. doesn¹t seem like a crazy idea. PERFECTION : After having implemented the prior lean principles. often unwanted." write Womack and Jones. Interesting. PULL : As a result of the first three principles." In other words. Kanban (pull) production: Used to regulate production and movement between process steps where continuous flow isn’t possible. including those shown below. they can now simply make what the customer tells them to make. "Suddenly perfection. and mistakes while offering a product which is ever more nearly what the customer actually wants.
Visual Controls: Utilization of visual signals and images to quickly and clearly direct attention and provide feedback. Eliminates defects.a.) within the facility. Eliminates unnecessary handling and movement.k. The idea is to identify the most detrimental waste in the system and then select and implement the solutions that best eliminate the waste. NVA activities and overproduction. standardize. Quick Changeover: A method of reducing the time to setup operations to minimize process disruption and permit smaller batch sizes to be run. etc. 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. 5S: A systematic method for organizing and standardizing of the workplace (sort. sustain). thus minimizing disruptions. Total productive maintenance (TPM): Systematically maintaining equipment to keep it operational. Poka Yoke (mistake proofing): Makes the operation such that it can only be performed the right way. spaghetti diagram. shine. straighten. Emphasizes employee involvement and preventive maintenance. Eliminates waiting and unnecessary handling. Eliminates operator waiting. Eliminates NVA activities and unnecessary handling. Cross-training: Employees can perform a variety of functions and thereby provide greater flexibility. Point of use storage (POUS): Delivers items directly to the place where they are going to be used. Eliminates waiting time. 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 overproduction and waiting. this is a layout of the facility with arrowed lines depicting the physical flow of work (material. people. Eliminates defects and wasted motion. These tools should be used systematically rather than haphazardly. . Eliminates waiting. Workflow diagram: a.
Multi-brand…. the pace of change requires new thinking / new initiative. Mission & Values of Jewellery division.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. It emerged as LEAN RETAILING in Tanishq Boutiques.CHALLENGES FACED BY TANISHQ Consumers are more demanding than ever . JEWELLERY DIVISION - VISION – MISSION – VALUES . Working in isolation To overcome the above said challenges.Generics….Brand migration…Accelerating trend lifecycles Brand & SKU Proliferation .Private label….More choice…Lower cost…Better quality Higher Expectations . to reach the Vision. to provide the value addition. packing and indirect materials which was leading to high costs.Newness…Innovation…Product interrelationships Globalization .
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 prerequisite 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..
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.
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
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. 2. 3. 4. 5. 6. 7. Sort: Sort out unneeded items Straighten: Have a place for everything Shine: Keep the area clean Standardize: Create rules and standard operating procedures Sustain: Maintain the system and continue to improve it Self Discipline 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 : 2nd Phase : The staff has little or no knowledge of who the customer is and / or how their work impacts the customer. 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. 3 Phase : 4th 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. All major issues have been resolved and the staff is addressing the minor issues with detailed plans.
PROFITS / COSTS
1st Phase : 2 Phase :
Profit and cost tracking do not exist or not known to the staff. Costs are displayed to the Staff. Periodically (at least quarterly), Staff performance against profit is reported and displayed.
3 Phase : 4th Phase :
Profits are established at year start and displayed. Performance is discussed monthly among the staff. 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 : 2nd Phase : No staff meetings are held or they are only held when there is special news. Daily Staff meetings have begun but are not attended by all members. Some meetings are missed.
Standard Operating Procedure (SOP) exists for inventory management. MULTISKILL / Skill Flexibility 1st Phase : 2nd Phase : 3rd Phase : Training on different skills happens informally / only when a problem arises. Only rarely is an item out of place. equipment/attachment and out-of-date materials have been removed. The results of inventory management is made visual & trend is improving. Audits show near perfect cleaning & organizing performance. Attendance is 100% and most members participate actively. A formalized plan to improve cleaning & organizing is being developed. The staff begins to define tasks and begins to display skill flexibility charts in the work area. At least 75% of the staff members can do more than 3 tasks. Daily staffs meeting are held every day. 4th Phase : Work group members conduct cleaning & organizing activities during the day. Skill flexibility for all appropriate tasks in the work group is tracked and displayed visually. Every task can be done by at least two members.3rd Phase : 4 Phase : th Daily Staff Meetings are held almost every day and are attended by most of the members. without exception. At least 50% of the members are skilled in three critical tasks. removed by the end of the each day by work group members. 4th Phase : The staff has training plans for each member’s skill development. MSF are labeled in both work area and storage areas. 5S + 2S / HOUSEKEEPING 1st Phase : 2nd Phase : Open space and storage is cluttered with excess and unused items. The Staff is aware of SOP and follows it to some extent. Goals for staff flexibility are established. 3rd Phase : Cleaning & organizing performance is assessed at least twice per week with checklists and visually displayed and reviewed results. Members begin to plan for optimum placement of MSF. There is a lot of dirt in the store. Obvious trash is Unused display . LEAN FLOW / INVENTORIES 1st Phase : 2nd Phase : 3rd Phase : 4 Phase : th Inventory management concept does not exist.
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 .
metrics & the entire journey undergone by Tanishq boutiques. Tanishq Lean Core team took them through the lean initiatives.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. outcomes. GLIMPSES FROM SHARING . During the training they worked physically & made jewellery on their own. Team demonstrated the Lean way of learning. 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.
To them it must have seemed one more HO fantasy. this time complicated further with strange words like kaizen and kanban. . there was considerable skepticism in the early stages. Its power squarely lay in 2 key concepts: One. 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. it was built totally from bottom-up from the ideas of individual people. Two. However.LEAN IMPLEMENTATION METHODOLOGY TANISHQ FOLLOWED 10 STEPS FOR LEAN IMMPLEMENTATION : Step 1: Appointment and training of the Lean Champions. Lean also caught on. it was totally practical. which generated great excitement and pride. like any good idea which only needs some time to seep in. with every benefit perfectly visible and simple to perceive.
LEAN IMPLEMENTATION – OBSTACLES 1. 3% The Traditional Cost accounting system does not recognise the finacial value of shop floor improvements. 5% Employee Resistance. Back sliding to the old ways of working 2. 8% Lean is viewed as"the flavor of Month". The traditional cost accounting system does not recognise the financial Value of shop floor improvements 13% 14% 17% 03% 05% 06% 08% 08% 13% 13% Lack of Implementation Know . 17% Back sliding to the old ways of working. Middle Management Resistance 10.How. Failur of Past Lean Projects 4. 14% F ailure of Past Lean Projects. 13% . 13% Supervisor Resistance. Lean is viewd as the flavor of Month 8. Supervisor Resistance 5. 6% Middle Management Resistance. Lack of Implementation Know – How 3. Employee Resistance 6. 8% Lack of Crisis to create a sense of urgency. 13% F ailure to Remove"Anchor Draggers"Who oppose chage. Lack of Crisis to create a sense of Urgency 9. Failure to remove “Anchor Draggers” who oppose Change 7.
5S AT TANISHQ BOTIQUES .
5S AT TANISHQ BOTIQUES .
5S AT TANISHQ BOTIQUES (Continues) .
5S AT TANISHQ BOTIQUES (Continues) .
10 .5S AT TANISHQ BOTIQUES (Continues) 7S Score 85% 100% 90% 80% 70% 60% 50% 40% W W WW W W W WW W W W WW W W WW W W W WW W W W WW W W W WW W W W WW W W WW W W W WW W eek1 eek3 eek1 eek3 eek1 eek3 eek1 eek3 eek1 eek3 eek1 eek3 eek1 eek3 eek1 eek3 eek1 eek3 eek1 eek3 eek1 eek3 eek1 eek3 eek2 eek4 eek2 eek4 eek2 eek4 eek2 eek4 eek2 eek4 eek2 eek4 eek2 eek4 eek2 eek4 eek2 eek4 eek2 eek4 eek2 eek4 eek2 eek4 Apr May Jun Jul Aug Sep O ct Nov Dec Jan Feb Mar Percentage 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 .
KAIZEN Kaizen (Japanese for "improvement" or "change for the better") refers to philosophy or practices that focus upon continuous improvement of processes in manufacturing. where all line personnel are expected to stop their moving production line in case of any abnormality and. Just fold it & carry along the whole office with you. along with their supervisor. files. . It is an 8 shelves cubicle ideal for putting desktop / laptop. supporting business processes. suggest an improvement to resolve the abnormality which may initiate a kaizen. By improving standardized activities and processes. and involves all employees from the CEO to the assembly line workers. kaizen aims to eliminate waste. 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. When used in the business sense and applied to the workplace. and management. The Toyota Production System is known for kaizen. engineering. kaizen refers to activities that continually improve all functions. UPS. What else you need. Printer etc. 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.
Sony Founder. light weight device. Norio Ohga to develop compact. This was a problem experienced in Gemba by the senior. Revolutionary “Walkman” was developed eventually leading to tiny i-pods . Chief Designer.Ibuks personally carried heavy spool tape recorder when travelling. Ibuka challenged.
On exit. Impact : Overall the customer are extremely happy & satisfied. Implementer : “AC” . Improvement : Automatic / Door closure switch was installed in the store room as well as in the toilets. at least the Brand is promoted. Implementer : “S” JAYANAGAR. Impact : Power saving Implementer : “SP” INDORE AB ROAD INVOICE FILE FOR CUSTOMERS Problem : Managing the invoices. In which they can maintain all their documents related to Tanishq. The brand is promoted on the file as all relevant offers / must know for customers are printed inside & outside. BANGALORE POWER SAVING THROUGH AUTOMATION Problem : The Staff used to forget putting off the lights of the toilets. it used to get lost in other household documents. but they were not delighted. Impact : Customers Delight factor was clearly visible. Customer used to feel happy to receive calls. Improvement : The customers are wished live on AIR by the radio jockey & weekends. being live in AIR. They used to forget the bill at home while doing TEP. Whenever the toilet was occupied & door was closed. the lights gets switched on. Even if they do not use file for keeping Tanishq related documents. Improvement : On free of cost special file is given to customers. For some customers celebration is in store with whole celebration. it gets switched off. some times it used to whole day. certificates. credit notes etc was a big problem to customers.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.
HAZRATGANJ. Frame it & send it to Customer’s home as surprise gift. it takes time to take photo copy of ID Proof / Xerox Improvement : Use Web cam to take a snap of the Customer ID Proof. LUCKNOW USE WEB CAM TO TAKE PHOTO ID PROOF Problem : During rush. Customers feel nice while receiving the gift. Implementer : “A” AMRITSAR CUSTOMER DELIGHT Problem : Difficult to find exclusive gift to delight the customer whose Birthdays & anniversaries. 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 : “R” . Implementer : “M” CONNAUGHT PLACE. Web cam is also useful for sending photograph of products for customer orders. we celebrate at showroom Improvement : On the special day we capture the moments of celebration. They specially visit our showroom to say thanks & share their experience about Tanishq with others. Impact : We found an appropriate gift to delight our customers on Birth days etc. Photo IDs are stored in system. Impact : It helped in saving time.
7 1 3.0 1 Nov 21 1 .1 1.0 1 Jan 22 1 .10 .0 1 Feb 30 1 .0 1 Dec 22 1 .2 0.5 1.2 1 Sep 6 0.3 0.8 1.3 1 Jul 1 0 0.5 1 Aug 5 0.4 2.Kaizen Chart 35 30 No of kaizens 25 20 15 10 5 0 No of Kaizen Kaizen / RSO Target (Kaizen per Rso) Apr 2 0.3 1 Oct 0 0.9 0.7 2.0 2.0 2009 .4 1 Mar 1 6 0.2 1 Jun 7 0.1 1 May 5 0.6 0.
So Kanban refers to "visual cards".INTRODUCTION TO KANBAN WHAT IS KANBAN? Kanban (kahn-bahn) is Japanese word that when translated literally means “visible record” or “visible 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. In general context. the supplier could be the person at the preceding station in a manufacturing facility. Thus. kanban are signals used to replenish the inventory of items used repetitively within a facility. and purchase or work order number. 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. it refers to a signal of some kind. They act as purchase orders for your suppliers and work orders for the production departments. In addition. The premise of Kanban is that material will not be produced or moved until a customer sends the signal to do so. Hosur manufacturing unit. But in our case such direct interaction with the supplier cannot be made through physical signaling. thereby eliminating much of the paperwork that would otherwise be required. The word Kan means "visual" in Japanese and the word "ban" means "cards". . They act as communication devices from the point of use to the previous operation and as visual communication tools.e. customer. standard container enclosed by a painting of the outline of the container on the floor. The kanban system is based on a customer of a part pulling the part from the supplier of that part. The container has attached to it instructions for refilling the container such as the part number. so we have thought of using the cards as a signal which will trigger the activity of indenting from our supplier i. When the container is empty. supplier. Kanban serve many purposes. in the manufacturing environment. quantity. the customer sends it back to the supplier. Some other common forms of kanban signals are supplier replaceable cards for cardboard boxed designed to hold a standard quantity. Likewise. description. The typical Kanban signal is an empty container designed to hold a standard quantity of material or parts. and color coded striped golf balls sent via pneumatic tubes from station to station.
Instead of trying to anticipate the future (predicting the future is difficult) Kanban reacts to the needs. Electronic kanban systems. KANBAN – RESPONSIVE TO CUSTOMERS Kanban results in a production system that is highly responsive to customers. 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. the need for a stockroom. Traditionally. This waste is eliminated. The push system is also more commonly known as the Materials Requirements Planning (MRP) system. or EKanban systems. Kanban is most beneficial when high volume/low value components are involved. Even though our business comes in the segment Low volume and high value component. PULL SYSTEM The kanban system described is a pull system. Waste can come from over-production (inventory) and therefore. E-KANBAN SYSTEMS Many manufacturers have implemented electronic kanban systems.PUSH vs. 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. 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. Costs are reduced by eliminating the need for many of the purchasing personnel and the paperwork associated with purchasing. EKanban systems can be integrated into enterprise resource planning (ERP) systems. Kanban does not necessarily replace all existing material flow systems within a facility. Part shortages (under-production) are also eliminated. The planning department’s workload is also reduced as they no longer need to produce work orders. For low volume and high value components. Over-estimation and under-estimation may lead to excess inventory or part shortages. its benefit can be partially reaped in case of precious kanban items and can be fully utilized for Tools and consumables. other materials management system may be a better option such as MRP. This detailed schedule then pushes the production people to make a part and push it forward to the next station. respectively. Other systems such as Materials Requirement Planning (MRP) and Reorder Point (ROP) may remain in operation. a push system is being employed. help to eliminate common problems such as manual entry errors and lost cards. Integrating EKanban systems into ERP systems allows for real-time demand signaling across the supply chain and .
FEW KANBAN IMPLEMENTED PHOTOS PACKING MATERIAL – KANBAN SYSTEM Before After .improved visibility. Data pulled from E-Kanban systems can be used to optimize inventory levels by better tracking supplier lead and replenishment times.
BENEFITS OF KANBAN: Reduce inventory and product obsolescence. This gives us the flexibility to rapidly respond to a changing demand. 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. and employee skills. however the supply of raw materials and components is eliminated as a bottleneck. Yes. there are still limits imposed by the types of machines and equipment. reducing waste and cutting storage costs. Provides flexibility in production If there is a sudden drop in demand for a product. there is a reduced need for storage space. Reduces waste and scrap Raw materials are not delivered until they are needed. Since component parts are not delivered until just before they are needed. . Kanban ensures us that we are not stuck with excess inventory. They can quickly be switched to different products as demand for various products changes. and those upgrades are immediately incorporated into the product with no waste from obsolete components or parts. Product designs can be upgraded in small increments on a continual basis. 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 .
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.Based upon the Pareto analysis. we shortlisted the categories to find out the optimum stock requirement.Current stock was mapped with actual stock Norm for better understanding of Alignment ratio .INVENTORY MANAGEMENT The purpose of doing scientific study of stock versus sale was to reach at Optimum stock level. Step 2.A Pareto diagram was prepared for finding out the contribution of each category to total sale. Step 3. The following steps were followed:Step 1.
GAP in model stock was observed based upon the study and the same was filled by adding more variants from the stores wish list.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. This was done to ensure that enough number of designs were available in Model stock for selection and good mix.Based upon the final outcome.We then mapped the Model Stock with the proposed quantity to find out the number of designs available for daily Indenting Step 8. we proposed the desired stock norm for each category to convert a sale Step 7.Step 5. .
Step 9. Step 10. . A clear ‘SENSE OF OWNERSHIP’ is visible in each team member towards stocks. • • • Each RSO got better in-sight of their respective category and contribution to total sale.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.Inventory turn ratio was then calculated for each category Step 11. without increasing the NEW PROPOSED STOCK NORM. More and more in-puts started coming from each team member related to the stock. 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.Based upon the next years target.
That's quite a lot of money. For example. Some of the sores have mastered the art of stock management. The Madurai boutique. while Rajouri Garden in the same city is delivering a stock turn of only 1.STOCK TURN Tanishq have more than 1000 crores of inventories in its stores. Madurai 3. But the second reason for differences in stock turn is the way each store manages its norm. But this stock turn figure varies significantly across stores. but needs only 5 times as much stock as Rajouri to do that. Store Manager – Lucknow Boutique 1 2.5 for the Plain group as much as Rajouri.9. Associate. Some of them are 1. South Extension store in Delhi delivers a stock turn of 6. 94 kg sales with 22 kg stock. The Patna 1 boutique has done even better: 112 kg sales with 26 kg stock. 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. One reason for this is the level of sales value in a store. Store Manager – Patna Boutique 1 4. but has achieved a sale of 100 kg by end Oct. It is crucial that each boutique learns from such benchmark boutiques on how to manage stock better. The Allahabad store kept an average stock of only 29 kg of Plain. This is because South Extension sells 5. .
ANALYSIS / PROBLEM SOLVING TECHNIQUES .
BTL activities Customer Meets to promote GH Focus on existing GH Customers for Re-enrolments .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.
Corporate All the data which are collected monthly. 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.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. the same will be sent to corporate for necessary action in a continues process. Customers Educated the customer about the importance of their Mobile No in system by each RSO. .
VARIOUS ANALYSIS CHARTS .
VARIOUS ANALYSIS CHARTS .
VARIOUS ANALYSIS CHARTS .
65 Cr to 0. Opportunity for Improvement Vs positive comments ratio improved from 1:3. retail space recovery. telephone bills. Revenue enhancement. electricity expenditure.search time is far less • • • Simplified / Improved / standardized operations across the stores.g.1 Cr.0.BENEFITS REALIZED COMPANY: (e. Cost savings through Kaizens 1.3 to 1:5. Branding etc) • 5666 Kaizens (improvements) made by Retail Sales Officers.g.) • • Quick service – billing time reduced (50%). Cost reduction. • • Improved revisiting of existing customers (34% from 26%) Improved revisiting of existing customers 34% from 26% as depicted in Anuttara details. etc Informal comments like visitor book comments has been captured through portal system and action taken. CUSTOMERS : (e.3 • The latest Customer Satisfaction score of customer satisfaction as on Mar’10 has gone to 8. Improved sales with optimization of Inventory and daily indenting by RSOs. Retail space recovery. as a results of Kaizens (continuous improvements) done at stores.09 Cr • • • • • Defective stock in retail system reduced from 1. enhanced C-sat. . Quick service – billing time reduction (about 50%). maintenance. Ensured through audit . repair. 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. diesel. etc. Best kaizens / practices implemented across the showrooms • Cost reduction in inventory carrying cost. 7s audit. pantry items. customer loyalty.6 from 8. which is considered to be excellent in retail standards. cleaning items Better store upkeep / organized. etc. stationary items. Score gone up to 71%. store running expenditures. Multiskilled employee .
peers / business partners / etc. satisfaction The focus on training and development for the boutique staff not only gave them the confidence but also made them self managed.) • 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. it has helped them discover their own hidden talent and take pride in their contribution to the business. In that whole process.INDUSTRY : (e. 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.25 : 1 Multiskilling score of employees improved to 69% It has given them an opportunity to think about a problem. Employee engagement 12. voice the idea. 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. come up with an idea to solve it. OTHERS : (Employee) • • • Simplified work and easy to understand visual communications Helped to work peacefully without fire fighting. 7S Score & Aged Stock Sold .g. Kanbans.2009 – 2010 . and help in the final implementation. No of Kaizens.
COST SAVING .2009 – 2010 No of Kaizens.Q1 COST SAVING . Kanbans. 7S Score & Aged Stock Sold .2009 – 2010 –Q1 COST SAVING – 2010 – 2011 Q1 .2010 – 2011.
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% .EXPECTED BENEFITS IN NEXT TWO YEARS : • Cost reduction in inventory carrying cost. Kanban system for all consumables.
By model. Within a value stream. a model is created. as the technical systems of lean drive the Toyota Way behaviors. The best training is training followed by immediately doing … or doing followed by immediate training.13 TIPS FOR TRANSFORMING COMPANY TO LEAN ENTERPRISE : 1) Start with action in the technical system. Most companies attempting a lean transformation focus on the “process layer” of the 4P model and this is. it is one complete business process from start to finish within the company boundaries. Unfortunately you cannot PowerPoint TM your way to lean. follow quickly with cultural change. “Before started with all these radical changes. if a company wants to change the culture. such as surfacing problems that employees must learn how to solve. defined by a product family. 2) Learn by doing first and training second. the Toyota Supplier Support Center implements in companies to teach lean. the right approach. The Toyota Way is about learning by doing. Leaders must be involved in the value stream mapping and shop floor transformation so they can learn to see waste. in fact. The Toyota approach to training is to put people in difficult situations and let them solve their way out of the problems. we need to inform people of what we are doing through training courses. The best way a company can develop this is through action to improve the company’s core value streams. 3) Start with value stream pilots to demonstrate lean as a system and provide a “go see” model. supported by committed leaders who reinforce culture change. . In Find Solid Partners and Grow Together to Mutual Benefit in the Long Term. For a plant.” This has led to elaborate corporate training programs with PowerPoint TM presentations. this usually means creating one product line. 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. It is believed that in the early stages of lean transformation there should be at least 80% doing and 20% training and informing. But the social and technical systems of TPS are intertwined. it must also develop true lean leaders who can reinforce and lead that cultural change. beginning with raw materials received and ending with finished goods. In a service organization. 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.
As described in Using the Toyota Way to Transform Technical and Service Organizations. a manager of customer complaints. Never had that debate in a value stream mapping workshop. 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. . there may be a manager of order processing. 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. future state map. In many companies. In most organizations. 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. Selecting the right people for the team is critical. 5) Use kaizen workshops to teach and make rapid changes. In a bank. However. management is organized by process or function. there is a manager of the paint department. see the waste. The team learns together as they see the waste in the current state. because the mapping creates a language and tool for the team to actually pick apart a specific process. value stream mapping is a method for clearly showing in diagram form the material and information flow. and quality. When developing the current state map. engineering. a manager of order fulfillment.” In Using the Toyota Way to Transform Technical and Service Organizations. and in the future state they come together to figure out how to apply the lean tools and philosophy. In a factory. managers own steps in the process of creating value for customers and nobody is responsible for the value stream. Kaizen workshops are best used as one tool to implement specific improvements guided by a future state value stream map. 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. 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. etc. Womack and Jones recommend creating value stream managers who have complete responsibility for the value stream and can answer to the customer. Transformation at Cuautitlan was the result of a shift from management suggesting lean to making it mandatory with consequences for not buying in. and apply it to that particular process. In Lean Thinking. it will simply not happen. 7) Make it mandatory. If a company looks at lean transformation as a nice thing to do in any spare time or as voluntary.4) Use value stream mapping to develop future state visions and help “learn to see. 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. In other words. Value stream mapping should be applied only to specific product families that will be immediately transformed. as is setting aside the time for those individuals and giving them a lot of management support. and action plan for implementation. the kaizen workshop should not become an end in itself. and a manager of the maintenance department. 6) Organize around value streams. This leads to “point kaizen”—fixing individual problems without straightening out the core value stream. “lean efforts” revolve around having numerous workshops: the more the better. develop a lean vision. a manager of the assembly department.
Build on your company’s heritage to identify what you stand for. At most companies they are mainly a tool for short-term cost control by managers who do not understand what they are managing. most likely you are one of the survivors. 12) Hire or develop lean leaders and develop a succession system.” All leaders must understand the work in detail and know how to involve people. 11) Build on your company’s roots to develop your own way. A large majority of business start-ups fail within the first three years. it will not happen. But you need to put them into your language in a way that fits your business and technical context. They are an overall tool for tracking progress of the company and they are a key tool for continuous improvement. believe in. they insist that the companies develop their own system. a serious effort has about a 100% chance of making huge and visible improvements that will impress any executive. A sinking ship certainly mobilizes management and the work force into getting serious about lean. “You get what you measure” has become a truism in most companies. confident that this in turn will improve financial results. companies track indirect / direct labor ratios and call to the carpet those with unfavorable ratios. 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. Toyota has its way. When Toyota works with companies to teach TPS. Someone did something right to get you to this point. 9) Be opportunistic in identifying opportunities for big financial impacts. . It is OK to borrow some of the insights from the Toyota Way and it is recommend to adopt the basic principles. If you are reading this article hoping to improve your company. Your company probably has a rich heritage as well. The first step therefore is to eliminate non-lean metrics that are wreaking havoc with those seriously invested in improving operational excellence. Senior management proactively championed improvement. For example. By picking the right product family and with experienced lean expertise. Toyota focuses on improving processes. The Toyota Way evolved through some inspired leaders who provided a very rich cultural heritage. What it means to be a Toyota leader in Growing your Leaders rather than purchasing hem. You need to have your way. it is particularly important to achieve some big wins. Build on that. If the top is not driving the transformation. when a company does not yet believe in the lean philosophy heart and soul. but may not be necessary to turn a company around. Creating a team leader role for support like Toyota’s structure means damaging that ratio and a short path to the unemployment line. However. even if they are overproducing or doing wasteful jobs.8) A crisis may prompt a lean movement. Leaders must thoroughly understand. The way to make the ratio look good is to have lots of direct labor and keep those people busy making parts. 10) Realign metrics with a value stream perspective. But metrics are used very differently by Toyota compared to most companies. and live the company’s “way. What is important is that lean leadership is focused on longterm learning.
there is no reason why it cannot profit by implementing its version of the Toyota Way principles. and group leaders who believe in the philosophy and will spread lean throughout the organization over time. a market that goes sour. It will not be easy. A company needs a sensei to provide technical assistance and change management advice when it is trying something for the first time. But a good teacher will not do it all for you. If Toyota is any example. You will simply be the best in your business because you will be using operational excellence as a strategic weapon. can a company transform and sustain a culture to become a lean learning organization? If a company can maintain continuity of leadership over time. managers willing to try lean tools but are not committed to following through. whether internal or external. a management shakeup from committed lean leaders to anti-lean managers. and keep the momentum building. improvement experts. The word “sensei” is used in Japan with some reverence to refer to a teacher who has mastered the subject.13) Use experts for teaching and getting quick results. Good luck on your journey! . you need to get lean knowledge into your company. the rewards and results will far outweigh the great effort required. can quick-start the process by educating through action. Having said all this. the question remains. but to develop a lean learning enterprise you need to build internal expertise—senior executives. If you want a lean organization. An expert. either by hiring experts with a minimum of five years’ lean experience or by hiring outside experts as consultants. or a buyout. Typical obstacles may be reluctant top managers who do not understand. get quick results. This “teacher” will help facilitate the transformation.