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Companies should think lean for better performance

Mike Wader

If India has to stand up alongside China and the United States as a leading manufacturing power, it will have to implement lean manufacturing techniques, according to Mike Wader, Senior Consultant of LeanPlus, United States of America, a global company providing consultancy services on lean manufacturing.

In Coimbatore to conduct a workshop organised by LeanPlus, India, he spoke to Anasuya Menon on lean and the need for companies to be more open to the concept.

"Lean as a concept is all about doing the right things in the right place at the right time," he says.

It is about reducing wastage, defects, time, improving quality and saving costs. It is about hidden wastes in the system that can be eliminated.

Lean can be implemented wherever a process takes place - in banks, hospitals, restaurants, and in Business Process Outsourcing, he says.

Companies usually spend too much on inventory without realising how much expense it incurs. They don't realise that carrying high levels of inventory is expensive as a lot is spent on interest.

"One has to remember that the world now has gone back to a time before Christopher Columbus. He sailed around the world to prove it was round. But, now it is flat. The Internet has made the global marketplace flat. In global competition, unless the processes are lean, you don't stand anywhere," Mr. Wader observes.

It is more important for Indian companies to implement lean because they are doing extremely well and the Indian Stock Exchange is riding high.

But they are not looking at doing better. Comparing it with China, they are hardly moving and are complacent. China has 12 times more Direct Foreign Investment than in India, as they know the importance of being lean.

Though the Americans introduced the concept of lean way back during the World War II, they forgot how to sustain it.

They thrived in surplus and thought of nothing else. But, the Japanese on the other hand did not have anything. They realised they didn't have enough money, material or manpower.

The reason why they are such a powerful economy now is because they thought `lean' and got the maximum out of very little, Mr.Wader says.

In India, the concept became popular during the eighties.

But, not all companies see the benefit of implementing it.

However, some companies such as Larsen and Toubro (L&T), Tata Motors, Reliance and Hero Honda have decided to become lean and the difference it has made to their performance is phenomenal, he adds.

"In the case of L&T, the first year return on investment after implementing lean was 5-1 to 7-1. Which bank will give you that?" Mr.Wader asks.

"Companies hesitate to implement lean because they don't believe it is simple.

They don't understand the financial benefits it can bring them," he says.

Lean is not just relevant to manufacturing processes. It can be done in even in educational institutions and offices to improve efficiency and performace.

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