Archive for December, 2011

‘ToC abandons local measures and focuses on global picture’
December 13, 2011

‘ToC abandons local measures and focuses on global picture’  so goes the title of Vikram Chaudhary’s interview of Sanjay Ghoshal in The Financial Express of 12th December 2011.

In this brief interview Sanjay states in his simple direct and lucid style the fundamental principles of the Theory of Constraints and its application across businesses and activities ranging from Production to Project to Sales & Distribution. It is a good interview, but one thing is patently clear, the interviewer could have delved deeper into Sanjay’s mind and brought out some of the insights Sanjay has gained over a long time of implementing ToC in India and abroad.

Sanjay has been a keen student of ToC.  He has had the good fortune study under Dr Goldratt himself.  For quite some time he was part of SOLUTIONS FOR SALES – a separate company headed by Rami Goldratt which worked in the area of applying ToC to the Sales function.  Sanjay founded Avenir Management Services along with Prasun.  Avenir have been one of the most ardent implementors of ToC.

 

I was introduced to Sanjay by our mutual friend Ravi Gilani many years ago.  I distinctly remember getting a call from Ravi asking me to meet him at the Le Meridien Hotel in Madras at 4 pm, saying, as though as an added incentive, “Cheenu, I want you to take the trouble of coming over in order to meet someone very interesting”.  Not that I needed any incentive to meet with Ravi.  But, if Ravi said someone is interesting, then he or she will be a very interesting person indeed with many great achievements.

That was my first meeting with Sanjay. I was deeply impressed at the first meeting itself and I found Sanjay to be warm, friendly gentleman with a great sense of humour.  Over the years, we have met several times and for a brief while, when Sanjay was the Regional Director of Goldratt Consulting, I had the opportunity to work closely with him.  After every meeting and interaction with Sanjay, I came out the gainer, having learnt something new and every interaction confirmed my view that here is an extraordinarily capable thinker.

I have wanted to learn ToC Applications in Sales from Sanjay for a long time and I hope to do so soon.  I am keen to publish Selling the ToC by Sanjay Ghoshal in the not too distant future.

Shigeo Shingo and his Revolutionary SMED
December 9, 2011

A Revolution in Manufacturing

It is rightly said “Necessity is the Mother of Invention”. This is what led Dr. Shigeo Shingo, a manufacturing expert who served as consultant in TOYOTA and several other Japanese Companies and is widely known as the father of Toyota production, to think of a methodology that can reduce, if not totallyeliminate, any  wastage in the manufacturing process.

Dr. Shingo, rated as the 2nd best industrial thinker of the 20th century, after Henry Ford, introduced the methodology of SMED – Single Minute Exchange of Dies.  This method is also called, “Quick Change Over (QCO)” which solved a very major problem of changing the dies for TOYOTA in the late 1950’s. The dies on the large- transfer stamping machines that produce car vehicle bodies must be changed for each model which took a minimum of twelve hours and a maximum of three days to complete earlier. Shingo improvised his QCO methodology and placed précised measurement devices and installed the die against the measurements recorded for each model die. This process of quick change over and accurate measurement cut down the lag time to mere hour and a half.   Later, under Dr Shingo’s guidance the Toyota Manufacturing team, led by Taiichi Ohno, were able to bring it down further to under 10 minutes !  Today, they easily do it in abut a minute !  

Dr. Shingo has introduced many methods for improvement in the manufacturing process and was the author of many path breaking books in the field of industrial manufacturing. His book “A Revolution in Manufacturing: The SMED System” explained the QCO methodology in detail and is being used world over to save time and wastage. A similar example is of a motorcycle factory that makes mudguards by pressing the metal sheets. In this case too, the die in a mammoth press machine has to be changed for each model. This process of changing the die and starting the machine for the next production took almost ten hours. With the adaptation of SMED methodology and further consultation with experts and reworking the system, the chagover time between the production of two models of mudguards reduced from 10 hours to 2 hours and further to just 1minute 22seconds.

Another great piece of work by the effective implementation of internal and external setup methodology devised by Shingo and explained in detail n the book cited, is the Aravind Eye Hospital at Madurai in Tamilnadu, India. Aravind is the largest provider of eye care services and trainer of ophthalmic personnel in the world. Generally, 1 eye surgeon can perform 5 cataract surgeries in a day. The Aravind eye hospital with its aim to eradicate needless blindness adopted the internal and external setup methodology. It made several changes in their setup like placing multiple operation beds in a large hall, 1 surgeon was allocated to only 2 patients to be operated consecutively, also 2 helping nurses and 2 running nurses were appointed for both the patients. Today 1 surgeon of the Aravind Eye Hospital can perform 25 cataract surgeries in a day without compromising the quality. There is a case study based on Aravind Eye Hospital at the Harvard Business School that discusses the effective implementation of processes to ensure that quality and quantity are maintained at the Aravind Eye Hospital. The hospital earns a surplus every year in spite of performing nearly 70% of its surgeries for free.

All these are the perfect examples of effective implementation of methodologies. Several companies worldwide are adopting Shegio Shingo’s process and methods to reduce the time and wastage of resources and improve the production capacity and results for their organization.

Mercedes Benz……. Continuation of my previous blog
December 9, 2011

Last week, I had blogged aout the growing sales of Merced cars in India.

 

Sunday New Indian Express reported – in a small report – Ashok Leyland sold 7878 Commercial Vehicles in November !  A mere 53% increase YoY !!!

 

If vehicle sales drop, or if there is even a minor blip in the IIP, we will see Screaming headlines in Newspaper – not only of the pink variety – and TV anchors of even mainline TV channels would have shouted themselves hoarse.  But an important news of a big jump in sales in a sector that is supposed to be facing a slowing market, seems to deserve only mere mention  at the bottom of the page !  Strange are the priorities of some people.

 

Anyway, if we re-look at this piece of news, one thing that comes to mind is that the market seems to have shrugged of the impact of high interest rates, and there is greater demand for transportation !

 

In a similar vain, another piece of news on Monday quotes an Audi official saying their sales are on course and that they are confident of achieving the target.

This brings me back to what Eli Goldratt said in 2009, some parts of the economy is affected, but it doesn’t mean there is a recession.  Lets focus on producing more, selling more and creating more wealth which alone in the the long run will ensure peace and prosperity for every Indian.

 

 

Mercedes Benz records positive November sales
December 3, 2011

So says the headline in Zigwheels http://www.zigwheels.com/news-features/news/mercedes-benz-records-positive-november-sales/10754/1

According to the report Mercedes Benz has recorded 31% growth between January and November 2011 compared to the same period last year.
They have achieved this by having a great product, an effective distribution system and a value proposition that seems to have struck a chord with the customer.
This just goes on to show that a combination of these three factors can help any business beat business cycles.
This is what Dr Eli Goldratt has tried to show in his books, specially in The Choice http://www.pqp.in/scart/TheChoice.aspx