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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
Murali.Bangalore Executive Post Graduate Diploma in Global Management Class of May -2009 CERTIFICATE This is to certify that Mr.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 .
I would also like to thank all my friends/colleagues and family for extending their support. . reports. format extra.D . time and help whenever needed. Alagappan and my company Tanishq for providing me the platform to build this project. Appan who has guided us throughout the project and has given us valuable suggestions to complete the project.Murali.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. I thank my project guide Mr. First of all I would like to thank our esteemed guide Pr. Last but not the least thanks to Alliance Business School for supplying us with necessary documents.
The whole at Lean roots focuses on supporting and encouraging people to continually improve the processes they work on. rather than wait for someone else to provide it.EXICUTIVE SUMMERY Titan Industries is one company which practices a fair amount of inter-disciplinary movement of its managers. Lean aim to keep everything in an organized way. Standardize. Cells. Empowered. But Tanishq started its Journey with “People First”. Kanban etc. Shine. reduce material wastage and costs. It Motivated. WHAT IS LEAN RETAILING? . Tanishq used Lean in Retailing. it helped each ordinary employee to realize his or her full potential. The biggest benefit of Lean to Toyota and to many others that followed it. It unleashed the entire human potential that Toyota had. Lean is not a just set of tools like Just in Time. improve efficiency. WHAT IS LEAN ? The company that invented Lean is Toyota. 5S (Sort. 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. and do all this through total employee engagement. 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. It is a Sophisticated System of Manufacturing in which all the parts contribute to a whole. Guided / Trained its employees with Lean experts. Lean is a Journey. making it ultimately a by-word for quality. by coming up with the solutions for all the workplace issues himself or herself. Stabilize. Sustain). save time and increase productivity.
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.
how to reduce high inventory holding costs & wastes. its 4Ps . Systematic Arrangement. People & Partners principals. Shine. This study defines the Basic of Lean. Problem Solving. Obstacles & realized benefits of Tanishq Boutiques. . 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. however. It helps to know. accrue gradually over time as the Lean journey progresses.2. Also opportunities offered by this to all Retailers / Organizations involved in the manufacturing / retaining of Jewellery. 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. Standardize. Process. 14 principles. Some of the benefits are dramatic and almost immediate such as reduced WIP and cycle times. next few years target planned & 13 Tips for transforming Company to Lean Enterprises. Finally the study ends with details of benefits realized. Implementation. To improve operational efficiency and eliminate waste through 7S : 7steps to keep the store environment spic and span (Sort. It describes the current process and issues faced by the industry / organizations.Philosophy. The study helps to know about the innovative way of Lean Retailing in Jewellery industry. Safety. Most benefits. Training.
the latest retail chain in the luxury segment. Titan Industries reached out to the youth segment with Fastrack. Titan Industries is also the largest jewellery retailer in India with over 110 Tanishq boutiques and Zoya stores. India’s most trusted and fastest growing jewellery brand. Titan Industries repeated its pioneering act and brought international brands into Indian market. ft. as well as prescription eyewear. focuses on the preferences of semi-urban and rural India.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 has also made its foray into eyewear. Titan Industries continues to grow and sets new standards for innovation and quality. Titan Industries launched Tanishq. The company has two exclusive design studios for watches and jewellery Backed by 4. as well as the Swiss made watch – Xylys owe their presence in Indian market to Titan Industries. The company has sold 100 million watches world over and manufactures 12 million watches every year.09. trendy and chic. Presenting Titan quartz watches that sported an international look. . complemented by international styling. With India's two most recognized and loved brands Titan and Tanishq to its credit. 11 manufacturing units. The organization has leveraged its manufacturing competencies and branched into precision engineering products and machine building. The organization is all geared to repeat the Titan and Tanishq success story with each new offering. its third brand. a value brand of functionally styled watches at affordable prices. Completing the jewellery portfolio is Zoya. With over 560 retail stores across a carpet area of over 7. Titan Industries is the fifth largest integrated watch manufacturer in the world. two exclusive design studios for watches and jewellery. Tommy Hilfiger and Hugo Boss. With a license for premium fashion watches of global brands.514 employees. The company has over 300 exclusive ‘World of Titan' showrooms and over 740 after-sales-service centers. Titan Industries has India’s largest retail network. Gold Plus. Titan Industries transformed the Indian watch market. and innumerable admirers world over. launching Fastrack eyewear and sunglasses. over 25 Gold Plus stores and over 85 Titan Eye+ stores.000 sq. After Sonata. Entering the largely fragmented Indian jewellery market with no known brands in 1995. the later addition. The success story began in 1984 with a joint venture between the Tata Group and the Tamil Nadu Industrial Development Corporation.
Some of the most notable brands in the division’s portfolio are: Titan Edge . The brand Titan enjoys a 60% market share in the organised watch market in India. 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. the division continues to add world-class brands to the company’s portfolio. India.a feminine and opulent accessory for today's affluent woman Nebula . Orion. Titan Raga . Zoop and series like Aviator. Octane and WWF. a manufacturing unit at Hosur and 3 assembly plants located in the north of India. 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. Raga. Today.TIME PRODUCTS DIVISION The Time Products division is where the Titan story began. Nebula. Heritage.a Swiss-made.45mm) that epitomizes the philosophy ‘less is more’. With over 2350 employees spread over 3 business units in Bangalore. 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. .the world's slimmest watch (at 3.watches crafted with solid 18k gold and precious stones Sonata .India's largest selling watch brand to suite the common man's wallet Xylys .
catering to global majors across industry verticals like aerospace. Titan initiated a PRECISION ENGINEERING DIVISION in 2002. 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. Sales counters now offer products and services of international quality standards coupled with transparency in pricing. Titan Eye+ provides an impressive range of stylish and contemporary eyewear. engineering. launched into the eyewear segment in March 2007. reading. PRECISION ENGINEERING DIVISION Leveraging precision engineering core competencies from watch making. automotive. With an investment of over $10 million. vision correction. through exclusive optical outlets. in sync with the TATA principles of quality and trust. and upbeat designs. hydraulics. Titan Eye+ stores are equipped to fill prescriptions for single vision lenses. style. Titan Eye+ heralded standardization by benchmarking with the world’s best. Precision Engineering Components & Sub-Assemblies (PECSA) Machine Building & Automation Solutions Tooling Solutions Electronic sub-assemblies . solar and medical instruments. the third major venture of consumer business by Titan Industries. the setup has four main business units. progressive no line or bifocal lenses. oil & gas. contact lenses or eye protection.EYEWEAR DIVISION Titan Eye+.
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.
and Ernest Jones all rolled in one. Using this gold. With a presence in 30 towns spread across 6 states. is perhaps the only major Tata brand with a strong appeal for women. In addition to gold jewellery. . the critics were silenced. By the time Tanishq established its manufacturing facility and entered the market. 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. however. the criticism for Titan’s foray into jewellery was loud and often bitter. jewellery is crafted in Titan Industries’ manufacturing units in Hosur. American diamonds (Cubic Zirconia) and other precious stones. Tanishq has brought to the market a whole new standard of business ethics and product reliability. Every Goldplus product is endorsed by a certificate that states the purity of the gold and the quality of diamonds used in the article. Esprit.Initially. Goldplus is the largest jewellery retail chain in Tamil Nadu. import licenses were easy to obtain and the global demand-supply equation for jewellery had shifted in favor of buyers. therefore. opened its doors to the world. in the process bringing about a transformation in the manner in which jewellery is bought and sold in India. The Indian market. and was now flooded with foreign currency. today. Tamilnadu where highly skilled artisans create traditional and modern designs. on the other hand. Foreign currency was no longer an issue. Eventually. The gold is purchased in the form of bars from only those banks that are certified by Reserve Bank of India (RBI). the brand also offers impressive designs embellished with diamonds. the premises on which the project was based had altered substantially. Tanishq. The Golplus jewellery comes with the assurance of purest 22karat (916) and 18-karat (750) gold and premium craftsmanship. GOLDPLUS Titan Industries’ Goldplus is designed for the jewellery preferences of the semi-urban and rural Indian customer. Very importantly. Tanishq. Tiffany. The elaborate and intense quality checks during the manufacturing process ensure the purity of gold and a perfect finish.
a leading Indian financial daily. Solitaire of India award presented by the Gem & jewellery Association for the pioneering work done by Tanishq in the jewellery industry. Tanishq brand has won the Images fashion award Best Jeweller brand award for the seventh consecutive year. Won the IIMM – Innovative SCM award for the Best Innovation in Supply Chain Management for the year 2008. a leading Indian magazine.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. The team has won 7 accreditations also. 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 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.
000 jewellers operating across the country. Jewellery buying was performed with jewellers who have very good trust and long term relationship with the family.JEWELLERY INDUSTRY OVER VIEW Indians have a huge fascination for gold. During April 2008 to February 2009. still in some parts of India it is prevailing. attracting both global and domestic players to this sector.79 billion was exported from the country. This is evident in the fact that India is the largest consumer as well as importer of gold in the world. Jewellery market in India is on the platform of Investment. religious and cultural life of Indians. Gold plays a very important role in the social. Jewellery was viewed as the specific identity of status of the family. leads to greater impact in the jewellery industry. 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. More than 50% of this is used for making gold jewelry. with over 300. 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 making was given significant importance in the activities of a family life in India against of Fashionable item in western countries. one of the world’s leading jewelry retailer entered India in 2003 with a 50-50 joint venture with Gitanjali Gems Ltd. After Globalization the view has changed. the life style of India has changed. SIZE OF INDIAN GOLD MARKET : The domestic India gold market is estimated to be more than US$15 billion and is expected to rise significantly in the coming years. It will open between 400 to 500 jewellery retail outlets across the country. occasional buying. Damas Jewelry. India consumes about 800 MT of gold which accounts to about 20% consumption of gold globally. Government allows 51 per cent foreign direct investment in single brand retail outlets. United Arab Emirates imported more than 30% of gems and jewelry from India. have a greater impact in family type of living. India Gold Market looks poised to achieve greater heights given the fascination for gold in the country. The gem and jewelry industry accounts for more than 10% of India's total commodities exports JEWELLERY RETAIL SECTOR : The Indian jewellery industry is fragmented. The jewellery is considered as one of the fashionable item in the western countries. . gems and jewelry worth US$ 17. making it the largest importer from the country.
the business was diversified into making jewellery aiming at export market by manufacturing through engineering industrial operations. plans to set up 50 stores by 2010. The business was driven to enter into the local market by making and selling 18 kt jewellery manufactured through engineering. Gold Souk India has plans for opening 100 Souks in 100 months. . Tanishq has established the process of giving guarantee to the customer by means of “Pure Jewellery. The Gitanjali Group has bought 'Nakshatra'. thus kick starting the partnering journey @ Tanishq. up from the current 15. Gitanjal Gems Ltd opened its first luxury jewellery mall in Gurgaon. Swarovski. Viswa and Devji Diamonds. 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. a partnership between the Indian group and the top jewellery retailer in UAE. opened its first diamond retail outlet. where a number of international brands have started their retail business. 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. 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”. Dubai-based Joy Alukkas has recently opened its largest showroom in Chennai. demanding 22 kt plain hand made artifact jewellery. started selling plain jewellery products made by hand work of karigars.6 % in 22 Kt and 75 % in 18 Kt.
It goes well beyond this. vendors. and most importantly—operators are all involved in continuous problem solving and improvement. The Toyota Way means more dependence on people. engineers. it’s the people who bring the system to life: working. identify hidden problems. communicating. team leaders. even more than a set of efficiency and improvement techniques. skilled workers. and growing together. It is a culture. purpose. not less. supports. resolving issues. which over time trains everyone to become better problem solvers. TPS system designed to provide the tools for people to continually improve their work. On a daily basis. The workers have a sense of urgency. “TPS HOUSE” . quality specialist. and teamwork because if they don’t fix it there will be an inventory outage. and in fact demands employee involvement.LEAN OVERVIEW THE COMPANY THAT INVENTED LEAN IS TOYOTA THE TOYOTA WAY IS MORE THAN TOOLS & TECHNIQUES In the Toyota Way / Lean. You depend upon the workers to reduce inventory. and fix them. it encourages.
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. SECTION II: The Right Process Will Produce the Right Results . People need purpose to find motivation and establish goals. even at the expense of short-term financial goals.
Over processing or incorrect processing 5. Use “pull” systems to avoid overproduction. the way that it is implemented allows for continuous improvement (kaizen) from the people affected by that system.) This helps achieve the goal of minimizing waste (muda). Principle 5. Although Toyota has a bureaucratic system. Unnecessary transport or conveyance 4. The pull system produces only the required material after the subsequent operation signals a need for it. to get quality right the first time. It empowers the employee to aid in the growth and improvement of the company. Standardized tasks and processes are the foundation for continuous improvement and employee empowerment. not the hare. Principle 6. Principle 4. Create a continuous process flow to bring problems to the surface. Waiting (time on hand) 3. The eight types of muda are: 1. Level out the workload (heijunka). A method where a process signals its predecessor that more material is needed. This process is necessary to reduce overproduction. Unused employee creativity Principle 3. Excess inventory 6. Unnecessary movement 7. Overproduction 2. not overburdening people or the equipment (muri). Build a culture of stopping to fix problems. (Work like the tortoise. .Principle 2. Defects 8. Quality takes precedence (Jidoka). and not creating uneven production levels (mura). Any employee in the Toyota Production System has the authority to stop the process to signal a quality issue. Work processes are redesigned to eliminate waste (muda) through the process of continuous improvement — kaizen.
Without constant attention.Principle 7. Included in this principle is the 5S Program . Principle 11. 5. Respect your extended network of partners and suppliers by challenging them and helping them improve. the principles will fade. thoroughly tested technology that serves your people and processes. Use only reliable. 2. SECTION III: Add Value to the Organization by Developing Your People Principle 9. Employees must be educated and trained: they have to maintain a learning organization. Teams should consist of 4-5 people and numerous management tiers. Success is based on the team. Use visual control so no problems are hidden. Toyota provides cross functional teams to help suppliers discover and fix problems so that they can become a stronger. 1. Technology is pulled by manufacturing.steps that are used to make all work spaces efficient and productive. Principle 10. live the philosophy. . 4. it must be the way one thinks. Toyota treats suppliers much like they treat their employees. challenging them to do better and helping them to achieve it. 3. not pushed to manufacturing. reduce time looking for needed tools and improve the work environment. and teach it to others. 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. better supplier. Grow leaders who thoroughly understand the work. The principles have to be ingrained. help people share work stations. Develop exceptional people and teams who follow your company’s philosophy. not the individual.
managers will not have an understanding of how it can be improved. 10.Section IV: Continuously Solving Root Problems Drives Organizational Learning Principle 12. Determine the underlying cause 3. Build consensus on the resolution 5. Go and see for yourself to thoroughly understand the situation (genchi genbutsu). Clearly assign tasks to yourself and others. Relentlessly strive to conduct kaizen activities. thoroughly considering all Otions. inform and consult in a timely manner. 5. Share information with others in a timely fashion. Consider a broad range of alternatives 4. Find what is really going on (go-and-see) to test 2. 2. Without experiencing the situation firsthand. Always be mindful of protecting your safety and health. 7. 9. proven information and data. Make decisions slowly by consensus. Think "outside the box. 4. Toyota managers are expected to "go-and-see" operations." or beyond common sense and standard rules. gather or discuss information. implement decisions rapidly (nemawashi). Think and speak on verified. Always keep the final target in mind. Always report. Principle 13. Furthermore. Use efficient communication tools . Analyze and understand shortcomings in your capabilities in a measurable way. 6. Take full advantage of the wisdom and experiences of others to send. 8. Toyota Technical Center (TTC)) ten management principles as a guideline: 1. The following are decision parameters: 1. 3. managers use Tadashi Yamashima's (President.
and the physical transformation task proceeding from raw materials to a finished product in the hands of the customer. nor political exigencies. The general problem solving technique to determine the root cause of a problem includes: 1." Above all. They simply start in the wrong place and end up at the wrong destination. 2. VALUE : The critical starting point for lean thinking is value. Value can only be defined by the ultimate customer. amounts of waste. and often both at once). Neither shareholder needs. indeed staggering. Clarify the problem 3. 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. Standardize Fundamentals of Lean Strategies to guide management’s actions toward success: 1. Evaluate 7. Countermeasure 6.Principle 14. . when providers or customers do decide to rethink value. Become a learning organization through relentless reflection (hansei) and continuous improvement (kaizen). Initial problem perception 2. Identifying the entire value stream for each product is the next step in lean thinking. the information management task running from order-taking through detailed scheduling to delivery. nor senior management¹s financial mind-set. a step which firms have rarely attempted but which almost always exposes enormous. Investigate root cause (5 whys) 5. Then. 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 process of becoming a learning organization involves criticizing every aspect of what one does. lean practitioners must be relentlessly focused on the customer when specifying and creating value. 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 often fall back on simply formulas lower cost. instant delivery rather than jointly analyzing value and challenging old definitions to see what’s really needed". which meets the customer's needs at a specific price at a specific time. Locate area/point of cause 4. increased product variety through customization. And it's only meaningful when expressed in terms of a specific product (a good or a service.
no one upstream function or department should produce a good or service until the customer downstream asks for it. PERFECTION : After having implemented the prior lean principles. Interesting. lean enterprises can now make a revolutionary shift: instead of scheduling production to operate by a sales forecast. ." write Womack and Jones. "You can let the customer pull the product from you as needed rather than pushing products. often unwanted. identify solutions and develop and document action plans for implementing process improvements. but can be used beneficially in service processes as well. 5. A3 Reporting: Used to define problems. Value-stream mapping (VSM): Used to statically visualize. including those shown below. the fifth and final principle. time. PULL : As a result of the first three principles. value-creating steps flow. Eliminates NVA activities. As Womack and Jones state. they can now simply make what the customer tells them to make. cost. analyze and improve process and information flows. onto the customer. 4. Note that these are not necessarily confined to manufacturing processes. Kanban (pull) production: Used to regulate production and movement between process steps where continuous flow isn’t possible." In other words. "Suddenly perfection." TOOLS AND TECHNIQUES OF LEAN There are many tools and techniques of Lean that help create Lean processes.3. Such a shift often requires a fundamental shift in thinking for everyone involved. doesn¹t seem like a crazy idea. FLOW : Only after specifying value and mapping the stream can lean thinkers implement the third principle of making the remaining. space. "flow" production was an even more valuable innovation of Henry Ford¹s than his better-known "mass" production model. and a "batch and queue" production mentality must get used to small lots produced in continuous flow. Eliminates overproduction. as functions and departments that once served as the categories for organizing work must give way to specific products. and mistakes while offering a product which is ever more nearly what the customer actually wants. it "dawns on those involved that there is no end to the process of reducing effort.
These tools should be used systematically rather than haphazardly. 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. this is a layout of the facility with arrowed lines depicting the physical flow of work (material. 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. Emphasizes employee involvement and preventive maintenance. Eliminates overproduction and waiting. Eliminates waiting time. Eliminates waiting. Eliminates operator waiting. Total productive maintenance (TPM): Systematically maintaining equipment to keep it operational. 5S: A systematic method for organizing and standardizing of the workplace (sort. shine. Cross-training: Employees can perform a variety of functions and thereby provide greater flexibility. Workflow diagram: a. Eliminates NVA activities and unnecessary handling. thus minimizing disruptions.k. Poka Yoke (mistake proofing): Makes the operation such that it can only be performed the right way. straighten. . standardize. sustain). people. Eliminates defects and wasted motion. Eliminates waiting and unnecessary handling. Eliminates defects. Visual Controls: Utilization of visual signals and images to quickly and clearly direct attention and provide feedback. Eliminates unnecessary handling and movement.) within the facility. NVA activities and overproduction. Quick Changeover: A method of reducing the time to setup operations to minimize process disruption and permit smaller batch sizes to be run. etc. spaghetti diagram. The idea is to identify the most detrimental waste in the system and then select and implement the solutions that best eliminate the waste. Point of use storage (POUS): Delivers items directly to the place where they are going to be used.a.
JEWELLERY DIVISION - VISION – MISSION – VALUES .Newness…Innovation…Product interrelationships Globalization . packing and indirect materials which was leading to high costs. the pace of change requires new thinking / new initiative. It emerged as LEAN RETAILING in Tanishq Boutiques. Mission & Values of Jewellery division. to provide the value addition. Working in isolation To overcome the above said challenges.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.Multi-brand….CHALLENGES FACED BY TANISHQ Consumers are more demanding than ever . to reach the Vision.More choice…Lower cost…Better quality Higher Expectations .Private label….Generics….Brand migration…Accelerating trend lifecycles Brand & SKU Proliferation .
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.
removed by the end of the each day by work group members. The results of inventory management is made visual & trend is improving. LEAN FLOW / INVENTORIES 1st Phase : 2nd Phase : 3rd Phase : 4 Phase : th Inventory management concept does not exist. MULTISKILL / Skill Flexibility 1st Phase : 2nd Phase : 3rd Phase : Training on different skills happens informally / only when a problem arises.3rd Phase : 4 Phase : th Daily Staff Meetings are held almost every day and are attended by most of the members. without exception. Skill flexibility for all appropriate tasks in the work group is tracked and displayed visually. The Staff is aware of SOP and follows it to some extent. 5S + 2S / HOUSEKEEPING 1st Phase : 2nd Phase : Open space and storage is cluttered with excess and unused items. Only rarely is an item out of place. A formalized plan to improve cleaning & organizing is being developed. 4th Phase : Work group members conduct cleaning & organizing activities during the day. MSF are labeled in both work area and storage areas. Every task can be done by at least two members. There is a lot of dirt in the store. Attendance is 100% and most members participate actively. At least 50% of the members are skilled in three critical tasks. Standard Operating Procedure (SOP) exists for inventory management. The staff begins to define tasks and begins to display skill flexibility charts in the work area. Members begin to plan for optimum placement of MSF. Audits show near perfect cleaning & organizing performance. Daily staffs meeting are held every day. 3rd Phase : Cleaning & organizing performance is assessed at least twice per week with checklists and visually displayed and reviewed results. Obvious trash is Unused display . equipment/attachment and out-of-date materials have been removed. Goals for staff flexibility are established. At least 75% of the staff members can do more than 3 tasks. 4th Phase : The staff has training plans for each member’s skill development.
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. outcomes. GLIMPSES FROM SHARING . 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. Team demonstrated the Lean way of learning.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. During the training they worked physically & made jewellery on their own. Tanishq Lean Core team took them through the lean initiatives.
However. Two. 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. like any good idea which only needs some time to seep in.LEAN IMPLEMENTATION METHODOLOGY TANISHQ FOLLOWED 10 STEPS FOR LEAN IMMPLEMENTATION : Step 1: Appointment and training of the Lean Champions. this time complicated further with strange words like kaizen and kanban. there was considerable skepticism in the early stages. it was built totally from bottom-up from the ideas of individual people. . it was totally practical. Its power squarely lay in 2 key concepts: One. which generated great excitement and pride. Lean also caught on. with every benefit perfectly visible and simple to perceive. To them it must have seemed one more HO fantasy.
17% Back sliding to the old ways of working.LEAN IMPLEMENTATION – OBSTACLES 1. 8% Lack of Crisis to create a sense of urgency. 6% Middle Management Resistance.How. Middle Management Resistance 10. Lean is viewd as the flavor of Month 8. Back sliding to the old ways of working 2. 13% F ailure to Remove"Anchor Draggers"Who oppose chage. Employee Resistance 6. 5% Employee Resistance. 14% F ailure of Past Lean Projects. Lack of Implementation Know – How 3. Failure to remove “Anchor Draggers” who oppose Change 7. 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 . Failur of Past Lean Projects 4. Supervisor Resistance 5. Lack of Crisis to create a sense of Urgency 9. 13% . 3% The Traditional Cost accounting system does not recognise the finacial value of shop floor improvements. 8% Lean is viewed as"the flavor of Month". 13% Supervisor Resistance.
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% 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 .10 .
files. suggest an improvement to resolve the abnormality which may initiate a kaizen. By improving standardized activities and processes. . The Toyota Production System is known for kaizen. When used in the business sense and applied to the workplace. Printer etc.KAIZEN Kaizen (Japanese for "improvement" or "change for the better") refers to philosophy or practices that focus upon continuous improvement of processes in manufacturing. and involves all employees from the CEO to the assembly line workers. 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. Just fold it & carry along the whole office with you. and management. kaizen refers to activities that continually improve all functions. where all line personnel are expected to stop their moving production line in case of any abnormality and. UPS. What else you need. It is an 8 shelves cubicle ideal for putting desktop / laptop. engineering. 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. kaizen aims to eliminate waste. supporting business processes. along with their supervisor.
This was a problem experienced in Gemba by the senior.Sony Founder. Chief Designer. light weight device.Ibuks personally carried heavy spool tape recorder when travelling. Ibuka challenged. Revolutionary “Walkman” was developed eventually leading to tiny i-pods . Norio Ohga to develop compact.
Impact : Customers Delight factor was clearly visible.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. On exit. credit notes etc was a big problem to customers. Implementer : “AC” . but they were not delighted. Impact : Overall the customer are extremely happy & satisfied. Improvement : The customers are wished live on AIR by the radio jockey & weekends. Even if they do not use file for keeping Tanishq related documents. it gets switched off. They used to forget the bill at home while doing TEP. 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. the lights gets switched on. at least the Brand is promoted. Impact : Power saving Implementer : “SP” INDORE AB ROAD INVOICE FILE FOR CUSTOMERS Problem : Managing the invoices. The brand is promoted on the file as all relevant offers / must know for customers are printed inside & outside. being live in AIR. Customer used to feel happy to receive calls. it used to get lost in other household documents. Whenever the toilet was occupied & door was closed. In which they can maintain all their documents related to Tanishq. For some customers celebration is in store with whole celebration. Improvement : Automatic / Door closure switch was installed in the store room as well as in the toilets. Improvement : On free of cost special file is given to customers. certificates. Implementer : “S” JAYANAGAR.
Impact : We found an appropriate gift to delight our customers on Birth days etc. Implementer : “M” CONNAUGHT PLACE. 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. 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” . 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. Customers feel nice while receiving the gift. LUCKNOW USE WEB CAM TO TAKE PHOTO ID PROOF Problem : During rush. They specially visit our showroom to say thanks & share their experience about Tanishq with others.HAZRATGANJ. Implementer : “A” AMRITSAR CUSTOMER DELIGHT Problem : Difficult to find exclusive gift to delight the customer whose Birthdays & anniversaries. Impact : It helped in saving time. Photo IDs are stored in system.
5 1.7 1 3.0 1 Jan 22 1 .0 1 Nov 21 1 .4 2.5 1 Aug 5 0.0 2009 .6 0.3 0.3 1 Jul 1 0 0.0 1 Dec 22 1 .2 0.1 1 May 5 0.9 0.2 1 Jun 7 0.1 1.0 2.0 1 Feb 30 1 .8 1.4 1 Mar 1 6 0.2 1 Sep 6 0.10 .3 1 Oct 0 0.7 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.
Thus. In general context. the supplier could be the person at the preceding station in a manufacturing facility. The kanban system is based on a customer of a part pulling the part from the supplier of that part. and purchase or work order number. customer. Some other common forms of kanban signals are supplier replaceable cards for cardboard boxed designed to hold a standard quantity. The premise of Kanban is that material will not be produced or moved until a customer sends the signal to do so. Likewise. They act as communication devices from the point of use to the previous operation and as visual communication tools. When the container is empty. Kanban serve many purposes. kanban are signals used to replenish the inventory of items used repetitively within a facility. the customer sends it back to the supplier. quantity.e. So Kanban refers to "visual cards". Hosur manufacturing unit. The container has attached to it instructions for refilling the container such as the part number. 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.INTRODUCTION TO KANBAN WHAT IS KANBAN? Kanban (kahn-bahn) is Japanese word that when translated literally means “visible record” or “visible part”. in the manufacturing environment. supplier. and color coded striped golf balls sent via pneumatic tubes from station to station. it refers to a signal of some kind. The typical Kanban signal is an empty container designed to hold a standard quantity of material or parts. But in our case such direct interaction with the supplier cannot be made through physical signaling. The word Kan means "visual" in Japanese and the word "ban" means "cards". description. thereby eliminating much of the paperwork that would otherwise be required. standard container enclosed by a painting of the outline of the container on the floor. . so we have thought of using the cards as a signal which will trigger the activity of indenting from our supplier i. 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. They act as purchase orders for your suppliers and work orders for the production departments.
Other systems such as Materials Requirement Planning (MRP) and Reorder Point (ROP) may remain in operation. Waste can come from over-production (inventory) and therefore. Part shortages (under-production) are also eliminated. 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. EKanban systems can be integrated into enterprise resource planning (ERP) systems. The push system is also more commonly known as the Materials Requirements Planning (MRP) system. other materials management system may be a better option such as MRP. Kanban is most beneficial when high volume/low value components are involved. Over-estimation and under-estimation may lead to excess inventory or part shortages. 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. For low volume and high value components. Integrating EKanban systems into ERP systems allows for real-time demand signaling across the supply chain and . Even though our business comes in the segment Low volume and high value component. KANBAN – RESPONSIVE TO CUSTOMERS Kanban results in a production system that is highly responsive to customers. the need for a stockroom. 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. PULL SYSTEM The kanban system described is a pull system.PUSH vs. Kanban does not necessarily replace all existing material flow systems within a facility. help to eliminate common problems such as manual entry errors and lost cards. The planning department’s workload is also reduced as they no longer need to produce work orders. Costs are reduced by eliminating the need for many of the purchasing personnel and the paperwork associated with purchasing. its benefit can be partially reaped in case of precious kanban items and can be fully utilized for Tools and consumables. or EKanban systems. Traditionally. E-KANBAN SYSTEMS Many manufacturers have implemented electronic kanban systems. This waste is eliminated. This detailed schedule then pushes the production people to make a part and push it forward to the next station. respectively. Instead of trying to anticipate the future (predicting the future is difficult) Kanban reacts to the needs. a push system is being employed. Electronic kanban systems.
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.
reducing waste and cutting storage costs. This gives us the flexibility to rapidly respond to a changing demand. there are still limits imposed by the types of machines and equipment. however the supply of raw materials and components is eliminated as a bottleneck. the work had been started to set up a Kanban system in the Tanishq Boutiques.BENEFITS OF KANBAN: Reduce inventory and product obsolescence. 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. Provides flexibility in production If there is a sudden drop in demand for a product. 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. . Kanban ensures us that we are not stuck with excess inventory. there is a reduced need for storage space. Product designs can be upgraded in small increments on a continual basis. Reduces waste and scrap Raw materials are not delivered until they are needed. Yes. Since component parts are not delivered until just before they are needed.
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 .
Current stock was mapped with actual stock Norm for better understanding of Alignment ratio . Step 3. The following steps were followed:Step 1.A Pareto diagram was prepared for finding out the contribution of each category to total sale. we shortlisted the categories to find out the optimum stock requirement.Based upon the Pareto analysis. Step 2.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.INVENTORY MANAGEMENT The purpose of doing scientific study of stock versus sale was to reach at Optimum stock level.
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.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.GAP in model stock was observed based upon the study and the same was filled by adding more variants from the stores wish list.Based upon the final outcome.
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.Inventory turn ratio was then calculated for each category Step 11. Step 10. • • • Each RSO got better in-sight of their respective category and contribution to total sale.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. . A clear ‘SENSE OF OWNERSHIP’ is visible in each team member towards stocks.Based upon the next years target. without increasing the NEW PROPOSED STOCK NORM. More and more in-puts started coming from each team member related to the stock.
94 kg sales with 22 kg stock.5 for the Plain group as much as Rajouri. It is crucial that each boutique learns from such benchmark boutiques on how to manage stock better. One reason for this is the level of sales value in a store. Store Manager – Patna Boutique 1 4. 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. For example. But this stock turn figure varies significantly across stores.9. Store Manager – Lucknow Boutique 1 2. This is because South Extension sells 5. The Patna 1 boutique has done even better: 112 kg sales with 26 kg stock. But the second reason for differences in stock turn is the way each store manages its norm. Madurai 3. . Associate. while Rajouri Garden in the same city is delivering a stock turn of only 1. The Allahabad store kept an average stock of only 29 kg of Plain.STOCK TURN Tanishq have more than 1000 crores of inventories in its stores. but has achieved a sale of 100 kg by end Oct. The Madurai boutique. Some of the sores have mastered the art of stock management. but needs only 5 times as much stock as Rajouri to do that. That's quite a lot of money. South Extension store in Delhi delivers a stock turn of 6. Some of them are 1.
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. the same will be sent to corporate for necessary action in a continues process. Store Store started working on ready recknor. Corporate All the data which are collected monthly. 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. 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.
VARIOUS ANALYSIS CHARTS .
VARIOUS ANALYSIS CHARTS .
VARIOUS ANALYSIS CHARTS .
Quick service – billing time reduction (about 50%). etc Informal comments like visitor book comments has been captured through portal system and action taken.3 • The latest Customer Satisfaction score of customer satisfaction as on Mar’10 has gone to 8. which is considered to be excellent in retail standards. maintenance. Retail space recovery. Branding etc) • 5666 Kaizens (improvements) made by Retail Sales Officers. Cost savings through Kaizens 1. 7s audit. Ensured through audit .g. Multiskilled employee . store running expenditures. Revenue enhancement.3 to 1:5. cleaning items Better store upkeep / organized.) • • Quick service – billing time reduced (50%). etc. diesel.search time is far less • • • Simplified / Improved / standardized operations across the stores. electricity expenditure. pantry items.1 Cr.65 Cr to 0. . Opportunity for Improvement Vs positive comments ratio improved from 1:3. CUSTOMERS : (e. retail space recovery. Score gone up to 71%.g.6 from 8.BENEFITS REALIZED COMPANY: (e. stationary items. Improved sales with optimization of Inventory and daily indenting by RSOs.09 Cr • • • • • Defective stock in retail system reduced from 1.0. enhanced C-sat. • • Improved revisiting of existing customers (34% from 26%) Improved revisiting of existing customers 34% from 26% as depicted in Anuttara details. Best kaizens / practices implemented across the showrooms • Cost reduction in inventory carrying cost. customer loyalty. Cost reduction. repair. as a results of Kaizens (continuous improvements) done at stores. 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. telephone bills. etc.
Kanbans. and help in the final implementation. satisfaction The focus on training and development for the boutique staff not only gave them the confidence but also made them self managed.g. peers / business partners / etc. 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.2009 – 2010 . No of Kaizens. OTHERS : (Employee) • • • Simplified work and easy to understand visual communications Helped to work peacefully without fire fighting. it has helped them discover their own hidden talent and take pride in their contribution to the business. Employee engagement 12.) • 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.INDUSTRY : (e. 7S Score & Aged Stock Sold .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. 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. In that whole process. voice the idea.
COST SAVING .2009 – 2010 –Q1 COST SAVING – 2010 – 2011 Q1 .2010 – 2011. 7S Score & Aged Stock Sold .Q1 COST SAVING .2009 – 2010 No of Kaizens. Kanbans.
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% . Kanban system for all consumables.EXPECTED BENEFITS IN NEXT TWO YEARS : • Cost reduction in inventory carrying cost.
The Toyota Way is about learning by doing. a model is created. . Leaders must be involved in the value stream mapping and shop floor transformation so they can learn to see waste. 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. In a service organization. 2) Learn by doing first and training second. the right approach. It is believed that in the early stages of lean transformation there should be at least 80% doing and 20% training and informing. if a company wants to change the culture. the Toyota Supplier Support Center implements in companies to teach lean. this usually means creating one product line. follow quickly with cultural change. The Toyota approach to training is to put people in difficult situations and let them solve their way out of the problems. For a plant. Within a value stream. Unfortunately you cannot PowerPoint TM your way to lean. The best training is training followed by immediately doing … or doing followed by immediate training. 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. The best way a company can develop this is through action to improve the company’s core value streams. “Before started with all these radical changes. such as surfacing problems that employees must learn how to solve. it must also develop true lean leaders who can reinforce and lead that cultural change. it is one complete business process from start to finish within the company boundaries. Most companies attempting a lean transformation focus on the “process layer” of the 4P model and this is. 3) Start with value stream pilots to demonstrate lean as a system and provide a “go see” model. But the social and technical systems of TPS are intertwined. By model. as the technical systems of lean drive the Toyota Way behaviors. In Find Solid Partners and Grow Together to Mutual Benefit in the Long Term. defined by a product family. beginning with raw materials received and ending with finished goods. supported by committed leaders who reinforce culture change. in fact. we need to inform people of what we are doing through training courses.13 TIPS FOR TRANSFORMING COMPANY TO LEAN ENTERPRISE : 1) Start with action in the technical system.” This has led to elaborate corporate training programs with PowerPoint TM presentations.
see the waste. In many companies. value stream mapping is a method for clearly showing in diagram form the material and information flow. In a factory. 5) Use kaizen workshops to teach and make rapid changes. and apply it to that particular process. etc. In Lean Thinking. 6) Organize around value streams. engineering.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. The team learns together as they see the waste in the current state. managers own steps in the process of creating value for customers and nobody is responsible for the value stream. 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. Transformation at Cuautitlan was the result of a shift from management suggesting lean to making it mandatory with consequences for not buying in. In other words. management is organized by process or function. it will simply not happen. and quality. “lean efforts” revolve around having numerous workshops: the more the better. If a company looks at lean transformation as a nice thing to do in any spare time or as voluntary. However. and a manager of the maintenance department. 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. 7) Make it mandatory. Never had that debate in a value stream mapping workshop. This leads to “point kaizen”—fixing individual problems without straightening out the core value stream. there is a manager of the paint department. as is setting aside the time for those individuals and giving them a lot of management support. Kaizen workshops are best used as one tool to implement specific improvements guided by a future state value stream map. a manager of order fulfillment. 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. a manager of the assembly department. there may be a manager of order processing. In most organizations. and action plan for implementation. In a bank. a manager of customer complaints. 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. the kaizen workshop should not become an end in itself. develop a lean vision. and in the future state they come together to figure out how to apply the lean tools and philosophy. 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. Value stream mapping should be applied only to specific product families that will be immediately transformed. Selecting the right people for the team is critical. 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. When developing the current state map. . Womack and Jones recommend creating value stream managers who have complete responsibility for the value stream and can answer to the customer. As described in Using the Toyota Way to Transform Technical and Service Organizations. because the mapping creates a language and tool for the team to actually pick apart a specific process.
Leaders must thoroughly understand. companies track indirect / direct labor ratios and call to the carpet those with unfavorable ratios. it will not happen. The way to make the ratio look good is to have lots of direct labor and keep those people busy making parts. believe in. If you are reading this article hoping to improve your company. When Toyota works with companies to teach TPS. It is OK to borrow some of the insights from the Toyota Way and it is recommend to adopt the basic principles. What it means to be a Toyota leader in Growing your Leaders rather than purchasing hem. Someone did something right to get you to this point. they insist that the companies develop their own system. Senior management proactively championed improvement. Toyota focuses on improving processes. 12) Hire or develop lean leaders and develop a succession system. “You get what you measure” has become a truism in most companies. The first step therefore is to eliminate non-lean metrics that are wreaking havoc with those seriously invested in improving operational excellence. even if they are overproducing or doing wasteful jobs. A large majority of business start-ups fail within the first three years. What is important is that lean leadership is focused on longterm learning. 11) Build on your company’s roots to develop your own way. but may not be necessary to turn a company around. and live the company’s “way. Creating a team leader role for support like Toyota’s structure means damaging that ratio and a short path to the unemployment line. If the top is not driving the transformation. However. 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. Build on your company’s heritage to identify what you stand for. most likely you are one of the survivors. 10) Realign metrics with a value stream perspective. The Toyota Way evolved through some inspired leaders who provided a very rich cultural heritage. when a company does not yet believe in the lean philosophy heart and soul. it is particularly important to achieve some big wins. 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. Toyota has its way.8) A crisis may prompt a lean movement. A sinking ship certainly mobilizes management and the work force into getting serious about lean. 9) Be opportunistic in identifying opportunities for big financial impacts. For example. . You need to have your way. Build on that. But metrics are used very differently by Toyota compared to most companies. At most companies they are mainly a tool for short-term cost control by managers who do not understand what they are managing. 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.” All leaders must understand the work in detail and know how to involve people. Your company probably has a rich heritage as well. confident that this in turn will improve financial results.
improvement experts. but to develop a lean learning enterprise you need to build internal expertise—senior executives. a market that goes sour. Typical obstacles may be reluctant top managers who do not understand. there is no reason why it cannot profit by implementing its version of the Toyota Way principles. managers willing to try lean tools but are not committed to following through. But a good teacher will not do it all for you. An expert. A company needs a sensei to provide technical assistance and change management advice when it is trying something for the first time. the rewards and results will far outweigh the great effort required. It will not be easy. and keep the momentum building. get quick results. If Toyota is any example. either by hiring experts with a minimum of five years’ lean experience or by hiring outside experts as consultants. whether internal or external. Having said all this. or a buyout. can a company transform and sustain a culture to become a lean learning organization? If a company can maintain continuity of leadership over time. the question remains.13) Use experts for teaching and getting quick results. and group leaders who believe in the philosophy and will spread lean throughout the organization over time. you need to get lean knowledge into your company. Good luck on your journey! . a management shakeup from committed lean leaders to anti-lean managers. This “teacher” will help facilitate the transformation. If you want a lean organization. The word “sensei” is used in Japan with some reverence to refer to a teacher who has mastered the subject. can quick-start the process by educating through action. You will simply be the best in your business because you will be using operational excellence as a strategic weapon.
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