JOIN USLean is what keeps Toyota hungry for growth in India
The famed Toyota Production System (TPS), from which lean manufacturing evolved as a management philosophy, is doing wonders at Toyota Kirloskar Motor Private (TKM), the company’s Indian arm.
Shekar Viswanathan, vice chairman and director of TKM, told Deccan Herald recently that the company’s inventory levels are very low.
“There are several suppliers that give us inventory for only four hours. Every four hours they come and replenish the line site. We don’t have to create space for six-day supply or ten-day supply or anything of that kind. We only keep either two hours, four hours, or eight hours of inventory. Only in case of imported products, do we have to keep one week to 10 days of supplies because of port issues.” Another exception to this would be for disruptions, like when a bandh call is given. “Then we have to make sure that on the previous day itself, one full day’s stock comes to our factory.”
The lean inventory levels were not achieved overnight. TKM, now in its 18th year in India, has been training its suppliers and their personnel for years through its supplier association and the supplier support centre. To get a good working system in place, it took about two to three years, the vice chairman admitted. “That’s why the initial production of our Qualis and other offerings were ramped up slowly from the 10,000 to 12,000 to 20,000 levels,” Viswanathan said.
TKM is proud that the supplier defects level has come down drastically. “When we started operations, it was at 900 ppm (parts per million). It has now come down to eight ppm, and this year we are targeting six ppm. Japan is at two ppm or three ppm. That’s the kind of gap that our supplier partners have bridged. Let me tell you that our Indian workforce is excellent. We can compete with the rest of the world. Where we lose out is on the infrastructure front,” Viswanathan said. There’s also a cascading effect created by TPS. “Suppliers come and learn TPS in our factory, and they implement it in theirs,” the TKM vice chairman said. This, in turn, ensures that his/her supplier delivers the goods on a low inventory basis.
Sales rose 10% in 2014-15
TKM sold 1,41,347 cars, out of the 1,42,077 produced for the domestic market in the just concluded fiscal year (2014-15), a nearly 10 per cent rise in sales over the previous year. It also exported 17,650 cars. Viswanathan said the volume growth has happened despite the company significantly raising prices.
“In fact if you compare the price of our products with that of the competition, you will find us fairly expensive. Initially, our fear was there will be some people who will go away. And there are people who are going away from us, not because of any quality issues, but they are finding that on the affordability index, they are unable to keep pace. This is the reputation we have acquired.”
He also disclosed that the company is now a very profitable entity, despite budgeting at Rs 65 to the dollar. He, however, refused to share the profitability and revenue numbers, saying the board is yet to meet.
On market share, he said as of March 2015, the company had the fifth position in the hotly contested space.
While Maruti, Hyundai, and M&M take up the first three slots, Toyota is marginally behind Honda with 5-6 per cent share of the market, he said.
DH News Service