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Benefits of continuous improvement movement for Indian manufacturing industry
Articles- Sep 17,25
In this article, R Jayaraman explains how the continuous improvement movement transformed Indian manufacturing, boosting competitiveness, quality, and sustainability while driving global leadership.
In the early 1980s Indian industry was at the crossroads of an open economy. JRD Tata and other industry leaders like him were urging the Indian government to free the industry from the stranglehold of the licence and permit raj, by allowing players from outside India to contribute to the development of the economy.
Owing to the various permits to be obtained by industry for carrying on activities, as well as the restrictions placed on them on a continuous basis, the Indian industry could not get out of the rut that it had gotten into. It was a self-fulfilling prophecy – poor infra, leading to poor efficiencies across the board, leading further to corporate losses, leading to a funds crunch for the government to make the Indian industry, resulting in higher taxes, and so on. It was a vicious down-cycle. It was under these circumstances that Indian industry demanded for over ten years, beginning with former Prime Minister Indira Gandhi, for ‘liberation’.
The irony was that, as the industry leaders sensed that the Indian government was at last going to ‘liberalise’ conditions, and open the doors to foreign investments, a doubt was being raised – was Indian industry ready to receive the expected foreign influx, and survive the possible onslaught. Of course, later events have proved that the Indian industry has more than survived, but, at that time, this was a serious question for debate. Some senior leaders became aware of the key developments in quality, a key variable for being competitive, happening in Japan, and felt that these could help the Indian industry to meet and overcome competitive pressures.
Thus began the Indian industry engagement with quality management, which later became synonymous with continuous improvement, leading to business excellence, further to Industry 4.0 and 5.0. Presently, Industry 4.0 is in its infancy in India, with Industry 5.0, a not yet fully defined movement, knocking on its doors. While Industry 4.0 has become a huge stream with a host of alignments with many developments in technologies (viz., IOT, AI, ML, VR, 3 D Printing etc), Industry 5.0 is a bit of a ‘brake’ on the rampant automation and machine-driven Industry 4.0, emphasizing the human factor in manufacturing (especially), and the ‘rediscovery’ of the importance of human involvement and its need to guide and stay in charge of the future of the human race.
Sustainability is the key driver of such a movement, and, with the 17 SDGs defined by the UN, the direction of future manufacturing is firmly in harmony with climate change reversal, and other such concepts being adopted to lengthen the survival of life in the universe as we know it.
The initiator of this trail of constructive steps that have permeated the manufacturing sector, the ‘continuous improvement’ movement (CIM), is the ‘mother lode’ of all that followed. Indian manufacturing has adopted this movement to an extent that it has been able to not only withstand the foreign onslaught, as feared by JRD Tata and others, but join the global stream of manufacturing fraternity, to enrich lives.
The quality, quantity and variety of products being put out by the manufacturing sector globally has mushroomed since the invention of the mass production line by Henry Ford in the 1920’s, following the work of Frederick Taylor. The 1950’s was a period of quality leapfrogging in manufacturing, driven by the work led by Toyota in automotives. Total Quality Management became a stream of initiatives, which, in time, included Hoshin Kanri, X matrix, quality circles, quality function deployment and many more. The overall impact was to improve productivity, production volumes, varieties, to cater to an increasingly sophisticated consumer market.
In India, in the first round, many corporate groups adopted these techniques and principles, the principal amongst them being Tata, TVS, Mahindra, L&T, NTPC, BPCL, BHEL and many more. In the second round, in the sense that these corporates became a significant force in the Indian products markets, companies like ABB, Siemens, Bosch, Schneider, Toyota Kirloskar, Maruti Suzuki, and such. While the CIM was initially limited to within the four walls of factories, it soon rolled out to customer interactions, vendor management, logistics management, warehouse management, and, more recently, in ecommerce, online trading, electronic currency transactions and remotely delivered education. What was a novelty in the 1950’s, has now become a routine in many manufacturing units.
To cite a few examples of what the CIM has wrought in Indian manufacturing industry, Tata Steel became the first Indian company to produce crude steel at the lowest cost in the 1990’s, TVS became a company to be appointed as a sole supplier to many automobile products to the Big Three of the US, L&T has become a household name in handling large projects in many fields with distinction, BPCL has become one of the most profitable oil companies in India, JSW steel has introduced many new technologies, like Continuous Strip Production in India at par with the best in the world. More importantly, the competitive position of manufactured goods in India is globally at the forefront, with the automobile industry leading with the exports of car and two wheelers to many countries in the world. Indian auto designs lead the world.
The CIM is currently characterized by the Malcolm Baldrige Business Excellence model for performance excellence, or its many variants worldwide. This model has undergone many updates and has continuously, true to its primary objective, modified itself to adapt to current realities. However, the eleven ‘core values’ have remained the same, justifying the model founders’ visionary insight. These values still encompass the best propositions to run modern businesses.
Together with awards from organisations like JUSE, the status of activities in modern business organisations has undergone a huge ‘efficiency upgrade’. Currently, developments in IOT, ML, AI and other fields, including big data processing, are continuing these efforts. The Baldrige model recognized the adverse effects of climate change, environmental degradation, waste, and so on, and provided a framework to address all the related issues in a systematic, scientific way. Today, in India, the ESG movement has finally recognised the importance of the model and has taken steps to link the adoption of the model to the lending of money to businesses by banks and financial institutions. The journey, begun a few years ago, is still in its infancy, and yet to mature, but it is certainly a step in the right direction. Good things take time.
About the author:
R Jayaraman is the Head, Capstone Projects, at Bhavan's S P Jain Institute of Management & Research (SPJIMR). He has worked in several capacities, including Tata Steel, for over 30 years. He has authored over 60 papers in academic and techno economic journals in India and abroad. Jayaraman is a qualified and trained Malcolm Baldrige and EFQM Business Model Lead Assessor.
R Jayaraman
Tata Steel
TVS
L&T
BHEL
Indian Manufacturing
Continuous Improvement
Industry 4.0
JRD Tata
Malcolm Baldrige
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