|
|
|
|
|
|
Recommended posts: Hopeful About India's Manufacturing Sector - 2005 Deming Prize - IT Outsourcing Slowing
Related: Curious Cat Investing and Economics Blog
Tata Steel, India, has been awarded the 2008 Deming Prize. They were the only organization to receive the prize this year.
Mr. B. Muthuraman, Managing Director, Tata Steel, while expressing satisfaction over this accomplishment said, “No other activity made us think so deeply about our business and relationships than the process of applying for the Deming Prize. Total Quality Management (TQM) is a fundamental way of managing business and every organization can gain from institutionalizing the culture necessary to win this prize.” He dedicated this recognition to the employees of Tata Steel, its customers and business partners who have consistently embraced the culture of continuous improvement and demonstrated a great teamwork leading to several recognitions in the last 20 years since the TQM journey started at the Steel Company in 1988.
India continues to do very well, collecting more Deming Prizes than all other countries combined since 2000. Countries of organizations receiving the Deming Prize since 2000 (prior to that almost all winners were from Japan):
| Country | Prizes |
| India | 15 |
| Thailand | 8 |
| Japan | 4 |
| USA | 1 |
| Singapore | 1 |
The 2007 Deming Prize for Individuals went to Mr. Masahiro Sakane, Chairman, Komatsu Limited, Japan. Previous recipients include: Kaoru Ishikawa, Genichi Taguchi, Shoichiro Toyoda, Hitoshi Kume and Noriaki Kano.
Related: 2008 the Deming Prize Winners Announced - Tata Steel India wins Deming Application Prize-2008 - Deming Prize 2007 - 2005 Deming Prize - Dr. Deming’s Thoughts on Management
India’s Economic Times has an interview with James Womack, Now is the time for lean management, with an interesting quote:
I have discussed TVS several times in the past; TVS has won several Deming Prizes.
Related: TVS Group Director on India - Manufacturing, Economy… - Deming Prize 2007 - Indian Deming Prize Winner Expanding - Toyota Chairman Comments on India and Thailand - Curious Cat Lean Manufacturing
Toyota is investing $350 million in a second Indian manufacturing plant. The plant is focused on producing vehicles for the local market - as the Toyota Production System suggests that production be close to the market.
Toyota to invest Rs1,400 crore for “strategic” small car in India
The plant will make the Corolla sedans along with the small cars The company plans to have high level of localisation for the small car by procuring several components and sub-systems from Indian vendors. Primarily the car maker plans to sell the small car in the fast growing domestic market, though some will be exported as well, the company stated.
…
The Japan-based automaker said last year that it plans to capture 10 per cent of India’s market. In 2007 Toyota sales accounted for a mere 0.6 per cent of the Indian car market
Related: Manufacturing Takes off in India - Toyota Chairman Comments on India and Thailand - Top 10 Manufacturing Countries 2006 - Indian companies have received as many awards as companies from all other countries combined since 2000 - Toyota to Build New Plant in India to Make Small Cars - TVS Group Director on India - Manufacturing, Economy
Jules Verne predicted cars would run on air. The Air Car is making that a reality. The car would be powered by compressed air. Certainly seem like an interesting idea. Air car ready for production:
The car is said to have a driving range of 125 miles so by my calculation it would cost about 1.6 cents per mile. A car that gets 31 mpg would use 4 gallons to go 124 miles. At $3 a gallon for gas, the cost is $12 for fuel or about 9.7 cents per mile. I didn’t notice anything about maintenance costs. I don’t see any reason why the Air Car would cost more to maintain than a normal car. Five-seat concept car runs on air
Now does that sound like the Toyota Production System to you? It should. If I were an executive at Toyota I would sure examine this to see if it really is as promising as it looks. And if it is Toyota sure has plenty of cash and the management practice to make a very compelling case for allowing Toyota to produce this globally. The engineers desires closely match what Toyota has learned. Both seek to eliminate the waste of transportation (friction).
Related: Click Fraud = Friction for Google - Manufacturing Takes off in India - Electric Automobiles
Here is updated data from the UN on manufacturing output by country. China continues to grow amazingly moving into second place for 2006. I plan to write more on this data in the Curious Cat Investing and Economics Blog. UN Data, in billions of current US dollars:
| Country | 1990 | 2000 | 2004 | 2005 | 2006 |
|---|---|---|---|---|---|
| USA | 1,040 | 1,543 | 1,545 | 1,629 | 1,725 |
| China | 143 | 484 | 788 | 939 | 1096 |
| Japan | 808 | 1,033 | 962 | 954 | 929 |
| Germany | 437 | 392 | 559 | 584 | 620 |
| Italy | 240 | 206 | 295 | 291 | 313 |
| United Kingdom | 207 | 230 | 283 | 283 | 308 |
| France | 223 | 190 | 256 | 253 | 275 |
| Brazil | 117 | 120 | 130 | 172 | 231 |
| Korea | 65 | 134 | 173 | 199 | 216 |
| Canada | 92 | 129 | 165 | 188 | 213 |
| Additional countries of interest - not the next largest | |||||
| Mexico | 50 | 107 | 111 | 122 | 136 |
| India | 50 | 67 | 100 | 118 | 130 |
| Indonesia | 29 | 46 | 72 | 79 | 103 |
| Turkey | 33 | 38 | 75 | 92 | 100 |
Bringing ‘Lean’ Principles to Service Industries by Julia Hanna
In their research, Staats and Upton document how the use of lean principles affected the workflow at Wipro. The concept of “kaizen,” or continuous improvement, for example, resulted in a more iterative approach to software development projects versus a sequential, “waterfall” method in which each step of the process is completed in turn by a separate worker.
By sharing mistakes across the process, the customer and project team members benefit individually and collectively from increased opportunities to learn from their errors; the project also moves along more quickly because bugs are discovered in the system earlier in the development process.
Iteration is very important. It is important in proper use of the PDSA cycle - many quick iterations are much better than one long slow one. And for software application development it is an excellent strategy.
I think iteration is even more important in software application development than most other areas (for now anyway) because many stakeholders cannot visualize what they need from software. Therefore attempts to force rigid requirements up front fail. No matter how much effort you put in the stakeholder just doesn’t know until they see it and use it - then they can tell you what they want changed. so design a system that works given this - iteration and agile development work very well.
Related: lean thinking articles - Experiment Quickly and Often - Management Consulting (what does the consultants web site show?) - Indian Firms Learning From Toyota (on Wipro posted here in 2005) - posts on improving software development - Not Lean Retailing
Manufacturing takes off in India by John Elliott:
This is not some futuristic vision of India. It’s the main factory of Moser Baer, a 24-year-old Indian company that was one of the first in the world to make high-definition DVDs and is now starting on flash memories and solar panels. And while not typical of most Indian factories, Moser Baer is one of a number of companies utilizing the same brainy ability that fueled the country’s IT boom to remake its manufacturing landscape.
…
The second problem is India’s infrastructure, especially power shortages and the grossly inadequate highways and ports that make it difficult to transport goods. New highways are helping, but growing urban congestion is making the problem worse, and there are seemingly endless bureaucratic and physical delays at ports.
India has a great deal of potential for manufacturing. The roadblocks are largely economic I think. Poor infrastructure is a huge problem that requires huge investments be made. China has made huge investments in infrastructure and they have paid off. Another incredible drain on India’s progress in manufacturing is the government bureaucracy.
Related: Manufacturing in Asia - Hopeful About India’s Manufacturing Sector - Top 10 Manufacturing Countries - articles on manufacturing management
India continues to shine with Deming Prizes (and of course there economy and stock market have been doing pretty well too). Companies based in India took home both Deming Prizes this year and the Japan Quality Medal. Countries of organizations receiving the Deming Prize since 2000 (prior to that almost all winners were from Japan):
| Country | Prizes |
| India | 14 |
| Thailand | 8 |
| Japan | 4 |
| USA | 1 |
| Singapore | 1 |
The 2007 Deming Prizes went to Asahi India Glass Limited, Auto Glass Division and Rane (Madras) Limited. Three different divisions of Rane received awards in the previous the last 4 years, making this Rane’s fourth prize in 5 years.
The 2007 Japan Quality Medal went to Mahindra & Mahindra Limited, Farm Equipment Sector.
The 2007 Deming Prize for Individuals went to Mr. Masayoshi Ushikubo, Chairman, Sanden Corporation. The Sanden International portion of Sanden was the third USA based organization to win a prize in 2006 (prior winners were: Florida Power & Light Company in 1989 and AT&T Power Systems in 1993). I mentioned India’s economy and stock market above, China’s economy and stock market are doing amazingly well also and then have yet to have a Deming Prize winner. I hope China, USA and many another countries can follow India’s current performance in this area. Deming Prizes are not awarded on a quota or forced ranking basis - any deserving applicants in any year can receive a prize.
Learn more about the Deming Prize.
Related: Deming Prize 2006 - Deming Prize 2005 - Deming Prize 2004 - Top 10 Manufacturing Countries - Toyota Chairman Comments on India and Thailand - 2006 Deming Medal presented to Peter R. Scholtes
Gopal Srinivasan is Director of TVS Electronics Limited, Joint Managing Director of Sundaram-Clayton Limited and Director of various other TVS Group companies. TVS group companies, based in India, have been awarded 5 Deming Prizes. He discusses Deming and quality a bit. He also discusses their experiences in manufacturing in China and the strengths they have found in each country. And he discusses the Indian economy and manufacturing.
In the second part of the podcast he talks about the growth of the economy of Tamil Nadu and the inclusive approach required to help India grow. via Gopal Srinivasan of TVS Group of Companies on Entrepreneurship
Related: Hopeful About India’s Manufacturing Sector - Toyota Chairman Comments on India and Thailand - Indian Deming Prize Winner Expanding - 2005 Deming Prize Awardees - 2004 Deming Prize
A good post on some of the difficulties of outsourcing. Also a good illustration of how economics is suppose to work. If labor is underpriced in India and the market is opened labor rates should rise to a level where they are equivalent (given productivity… differences). Don’t be lead to believe all labor prices in India have experienced anything like this. Those areas where the value to cost difference was largest is where rates increased a great deal in a short period of time.
Related: IT Outsourcing Slowing - Google India not Finding Enough Engineers - The Power of Silicon Valley
The newest data from the UN confirms most of the recent trends in manufacturing output - most notably that China continues to grow dramatically. The data also shows a stagnation in USA manufacturing output over the last several years, though the USA remains by far the largest manufacturer. The most significant news from this latest data, I believe, is that that manufacturing output growth in the USA has been slower than global manufacturing output growth from 2002-2005. This was not the case prior to 2002. I will be writing more on this data in the Curious Cat Investing and Economics Blog. UN Data, in billions of current US dollars:
| Country | 1990 | 1995 | 2000 | 2001 | 2002 | 2003 | 2004 | 2005 |
|---|---|---|---|---|---|---|---|---|
| USA | 1,040 | 1,289 | 1,543 | 1,460 | 1,471 | 1,488 | 1,545 | 1,493 |
| Japan | 809 | 1,217 | 1,033 | 857 | 807 | 886 | 962 | 964 |
| China | 143 | 299 | 484 | 527 | 573 | 664 | 788 | 895 |
| Germany | 437 | 517 | 392 | 389 | 407 | 490 | 566 | 594 |
| United Kingdom | 207 | 221 | 230 | 218 | 222 | 239 | 283 | no data |
| Italy | 240 | 226 | 206 | 205 | 218 | 259 | 295 | 291 |
| France | 200 | 233 | 190 | 185 | 192 | 228 | 256 | 253 |
| Korea | 200 | 233 | 190 | 185 | 192 | 228 | 256 | 253 |
| Canada | 92 | 100 | 129 | 119 | 120 | 149 | 170 | 196 |
| Brazil | 117 | 149 | 120 | 102 | 95 | 109 | 130 | 171 |
| Spain | 108 | 107 | 98 | 100 | 108 | 134 | 153 | 160 |
| Mexico | 50 | 55 | 107 | 110 | 111 | 104 | 111 | 122 |
| Russia | 201 | 104 | 73 | 77 | 54 | 64 | 92 | 117 |
| India | 50 | 60 | 67 | 68 | 72 | 84 | 100 | 116 |
The Economist explores the trend to manufacture in Vietnam, Indonesia, Malaysia… instead of China in: The problem with Made in China:
It is nice to see this reported properly. The USA manufacturing share of global output has risen, not fallen, as we have stated numerous times: Manufacturing Value Added Economic Data - Manufacturing Jobs Data: USA and China - Global Manufacturing Data by Country. The most fundamental facts of global manufacturing - Global output is increasing. Jobs are decreasing (everywhere, not moving from one place to another - decreasing everywhere). China’s output is growing rapidly. The USA is still by far the largest manufacturer, USA output is growing faster than global output and much slower than China’s output. Japan is the second largest manufacturer with China third, by a fairly large margin though China is growing very rapidly.
Related: Manufacturing Jobs - China’s Manufacturing Economy - America’s Manufacturing Future
(more…)
Outsourcing bubble getting Busted: What should India do? - commenting on the 2006 Global IT Outsourcing Study
Essentially the study says the outsourcing IT will continue to grow though more slowly than it has. It also states the benefits of outsourcing have not reached the level that was predicted for a number of reasons. The study predicts vastly increased competition from China for IT outsourcing work (which reinforces the general consensus).
Six Sigma spells success for BPOs by Pradeep Kapur:
Related:
Lucas TVS on Global and Local Expansion Mode
The purpose of the visit was to introduce the delegation to the best practices amongst the member companies and also outside Japan. In 2004, Lucas TVS had won the prestigious Deming medal…
According to Balaji the Japanese delegation led by Tadashi Onishi, JTEKT Corporation, said that quality is not a magic solution but a systematic practice, and quality should not be measured by the absence of defect. A company should reach a condition where it innovates in quality. Further, all the stakeholders-employees, suppliers and others- should be involved in quality control. “The delegation also told us that quality systems should be at all levels of management and not only at the shop floor level,” Balaji said.
Via Panta Rei, Business Process Outsourcing, Meet Value Engineering, Measure for Measure
For one of its customers consolidating operations from multiple centres to one, offshoring the processes and Six Sigma initiatives delivered a productivity benefit of $300 million, he says.
According to S. Nagarajan, Founder and Chief Operating Officer of 24/7Customer, value engineering is a means of value creation more than cost reduction.
Another interesting quote:
Related Posts:
A Wake-up Call From Asia by Patricia Panchak:
From my previous post, Relative Engineering Economic Positions:
The challenges to USA manufacturing will continue. The best hope, as I see it, for retaining manufacturing leadership in the USA is through increasing the adoption of management improvement methods including lean manufacturing.
(more…)
I just added a post, USA Under-counting Engineering Graduates, to our Curious Cat Science and Engineering Blog on a new report from Duke concerning data on engineering degrees from China, India and the USA: Framing the Engineering Outsourcing Debate. I think it is a great report. If you have any interest in this topic I strongly recommend it.
Related posts:
Why Am I Hopeful About India’s Manufacturing Sector by Indra:
Since India’s manufacturing economy is so small now they would actually see increases in manufacturing jobs. China has lost many more manufacturing jobs than the USA (15 million to 2 million from 1995 to 2002) as previously China’s factories were staffed with millions of workers with no actual work to do.
(more…)
Toyota Chief Comments on India, Thai Cos.
While this might be a bit of an exaggeration part of what keeps Toyota improving is that they do not rest on their past success. They are continually looking to improve.
More news on Okuda Hiroshi’s visit to India, Japan sees India shining
The delegation is likely to meet Prime Minister Manmohan Singh, finance minister P Chidambaram and commerce minister Kamal Nath.
Related Posts:
Curious Cat Management Improvement Blog curiouscat.com 2005-2006 powered by WordPress - Curious Cat Investment Dictionary: IRA
