Category Archives: India

2010 Deming Prize

image of the Deming Prize medal

The Union Japanese Scientists and Engineers (JUSE) has awarded the Deming Prize to 4 companies in 2010: Corona Corporation (Japan), Meidoh (Japan), GC Dental (China) and National Engineering Industries Limited (India).

Organizations receiving the Deming Prize since 2000 by country (prior to that almost all winners were from Japan):

Country	Prizes
India	16
Thailand	9
Japan	7
USA	1
Singapore	1
China	1

This is the first time a Chinese company has won a Deming Prize. The parent company, GC Dental (Japan), was awarded the Deming Prize in 2000 and the Japan Quality Medal in 2004.

The 2010 Deming Prize for Individuals went to Dr. Takao Enkawa, Professor, Department of Industrial Engineering and Management, Tokyo Institute of Technology. Previous recipients include: Kaoru Ishikawa, Genichi Taguchi, Shoichiro Toyoda, Hitoshi Kume and Noriaki Kano.

Frugal Innovation

First break all the rules

The device is a masterpiece of simplification. The multiple buttons on conventional ECGs have been reduced to just four. The bulky printer has been replaced by one of those tiny gadgets used in portable ticket machines. The whole thing is small enough to fit into a small backpack and can run on batteries as well as on the mains. This miracle of compression sells for $800, instead of $2,000 for a conventional ECG
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Frugal products need to be tough and easy to use. Nokia’s cheapest mobile handsets come equipped with flashlights (because of frequent power cuts), multiple phone books (because they often have several different users), rubberised key pads and menus in several different languages. Frugal does not mean second-rate.

The article goes on to talk about several methods for how to profit from reducing costs which seem misguided. Frugal innovation is about thinking about meeting the needs of huge numbers of customers that can’t afford conventional solutions. By talking a new look at the situation and attempting to find solutions with significant price constraints new markets can be opened. Often this requires thinking similar to disruptive innovation (products that serve a similar need but less completely than current options).

It also requires the engineering principles of appropriate technology. I highlight this thinking in my Curious Cat Engineering blog and find it very worthwhile. For organizations that have a true mission to serve some purpose using such thinking allows a greatly expanded potential market in which to make a difference in the world.

There is a great quote from Jeff Bezos that captures one reason why organizations so often fail to address frugal innovation: “There are two kinds of companies, those that work to try to charge more and those that work to charge less.” Many organizations are focused on trying to charge more, not less. Another problem is that decision makers often have no life experience with cheap solutions – this doesn’t prevent frugal innovation but it does make them less likely to see the need and to decide to solve those customer needs.

Lean Manufacturing Webcast from India

This lean thinking webcast from India actually does a pretty decent job of providing an overview (for a business TV channel) even if they get some things a bit confused. The discuss TQM in India preceding lean which is an accurate view in my opinion – quality management shared many lean principles. They even talk of lean at Ford doing lean first. But they get the decades for that a bit off. They seem to mash together the “quality is job one” refocus on quality lead by Dr. Deming in the 1980’s with Henry Ford in the early 1900’s.

The webcast includes Jim Womack discussing lean thinking. He mentions the misunderstanding of lean as primarily cost cutting.

Management Improvement Carnival #48

Nicole Radziwill is hosting the Management Improvement Carnival #48 on the Quality and Innovation blog, highlights include:

With so much focus on Mumbai this week, Joe Munte’s post on the dabbawallas of Mumbai focuses on a illuminating and positive aspect of the dynamic city that provides lessons for effective management…
Keep it simple! Checklists and Change Programs by Crossderry is a couple months old – but I still like it. It provides a “useful reminder to avoid a common error made when PMOs first implement processes and controls – over-engineering”…
John Hunter reflects on Management at Google, and features a video of Schmidt and Hamel chatting. I am a big fan of Google because they skillfully implement effective, agile quality systems in an environment highly conducive to innovation…

This edition of the carnival is the first on our new schedule: we will now be publishing 3 times a month. Submit your nominations for management posts to include in future editions. The Quality and Innovation blog is the 6th blog to host the carnival, the others are: Evolving Excellence, Lean Blog, Lean Six Sigma Academy, Capable Blog and our own Curious Cat Management Improvement Blog.

Global Manufacturing Data 2007

The updated data from the United Nations on manufacturing output by country clearly shows the USA remains by far the largest manufacturer in the world. UN Data, in billions of current US dollars:

Country	1990	1995	2000	2005	2006	2007
USA	1,041	1,289	1,543	1,663	1,700	1,831
China	143	299	484	734	891	1,106
Japan	804	1,209	1.034	954	934	926
Germany	438	517	392	566	595	670
Russian Federation	211	104	73	222	281	362
Italy	240	226	206	289	299	345
United Kingdom	207	219	228	269	303	342
France	224	259	190	249	248	296
Korea	65	129	134	200	220	241
Canada	92	100	129	177	195	218

See manufacturing data for more countries.

The USA’s share of the manufacturing output of the countries that manufactured over $200 billion in 2007 (the 12 countries on the top of the chart above) in 1990 was 28%, 1995 28%, 2000 33%, 2005 30%, 2006 28%, 2007 27%. China’s share has grown from 4% in 1990, 1995 7%, 2000 11%, 2005 13%, 2006 15%, 2007 16%.

Total manufacturing output in the USA was up 76% in 2007 from the 1990 level. Japan, the second largest manufacturer in 1990, and third today, has increased output 15% (the lowest of the top 12, France is next lowest at 32%) while China is up an amazing 673% (Korea is next at an increase of 271%).
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2008 Deming Prize: Tata Steel

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.

India Lean Management

India’s Economic Times has an interview with James Womack, Now is the time for lean management, with an interesting quote:

When I last visited India in 2002, I looked carefully at several operations of the TVS group in the Chennai area. I found that they were the best examples of lean manufacturing I had ever seen outside of Toyota City. In my mind these facilities completely eliminated any questions as to whether “lean” would work in India. However, I have not visited India in six years and I have no data on the performance of Indian firms on average, so I can’t say what the trend is or how many success stories I might find if I had the time to visit at length. How-ever, I have high expectations for the potential of Indian firms to embrace the full range of lean principles and methods.

I have discussed TVS several times in the past; TVS has won several Deming Prizes.

Toyota Building Second Plant in India

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 new plant will have a production capacity of 100,000 units and will become operational by 2010, he added. The company’s current plant has a capacity of 63,000 units a year.

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.
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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

Car Powered Using Compressed Air

car powered using compressed air

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:

Refueling is simple and will only take a few minutes. That is, if you live nearby a gas station with custom air compressor units. The cost of a fill up is approximately $2.00. If a driver doesn’t have access to a compressor station, they will be able to plug into the electrical grid and use the car’s built-in compressor to refill the tank in about 4 hours.

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

An engineer has promised that within a year he will start selling a car that runs on compressed air, producing no emissions at all in town.
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Tata is the only big firm he’ll license to sell the car – and they are limited to India. For the rest of the world he hopes to persuade hundreds of investors to set up their own factories, making the car from 80% locally-sourced materials.
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“Imagine we will be able to save all those components traveling the world and all those transporters.” He wants each local factory to sell its own cars to cut out the middle man and he aims for 1% of global sales – about 680,000 per year. Terry Spall from the Institution of Mechanical Engineers says: “I really hope he succeeds. It is a really brave experiment in producing a sustainable car.”

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).

Top 10 Manufacturing Countries 2006

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

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