Bangalore

Lean Retailing in Tanishq Boutiques

Prepared by

Murali.D

EPG9-05091534

Under the Guidance of Prof. Appan

In partial fulfillment of the Course: Project Work

In Term – IV of the Executive Post Graduate Program in Management

Class of May 2009

Bangalore

Executive Post Graduate Program in Management Class of May 2009

Term – IV: Project Work

DECLARATION This is to declare that the Report entitled “Lean Retailing in Tanishq Boutiques” has been made for the

partial fulfillment of the Course: Project Work in Term – IV by me at Tanishq Boutiques under the

guidance of Prof. Appan.

I confirm that this Report truly represents my work undertaken as a part of my Project Work. This work is

not a replication of work done previously by any other person. I also confirm that the contents of the

Report and the views contained therein have been discussed and deliberated with the Faculty Guide.

Signature of the Student : Name of the Student (in Capital Letters) : MURALI. D Enrollment No : EPG9-05091534

Bangalore

Executive Post Graduate Program in Management Class of May 2009

CERTIFICATE This is to certify that Mr. Murali.D (Enrollment No. EPG9-05091534) has completed the Report entitled

“Lean Retailing in Tanishq Boutiques” under my guidance for the partial fulfillment of the Course:

Project Work in Term – IV of the Executive Post Graduate Program in Global Management (Batch 2009-

2010).

Signature of Faculty Guide : Name of the Faculty Guide : Prof. Appan

Bangalore

Executive Post Graduate Diploma in Global Management Class of May -2009

CERTIFICATE

This is to certify that Mr. Murali.D Employee No. 375195 has completed the Report entitled “Lean

Retailing in Tanishq Boutiques” under my guidance as part of his current assignment and practiced the

concepts learnt in the project.

Signature of Industry Guide : Name of the Industry Guide : Alagappan

ACKNOWLEDGEMENT

I take this opportunity to express my sincere sense of gratitude to all those who have helped me in

the completion of this project. First of all I would like to thank our esteemed guide Pr. Appan who

has guided us throughout the project and has given us valuable suggestions to complete the

project.

I would also like to thank all my friends/colleagues and family for extending their support, time

and help whenever needed.

I thank my project guide Mr. Alagappan and my company Tanishq for providing me the platform

to build this project.

Last but not the least thanks to Alliance Business School for supplying us with necessary

documents, reports, format extra.

- Murali.D

EXICUTIVE SUMMERY

Titan Industries is one company which practices a fair amount of inter-disciplinary movement of its managers. One

such fortuitous movement brought a seasoned manufacturing manager into retailing who ended up conceiving and

implementing Lean principles in the all the Jewellery stores of Tanishq.

WHAT IS LEAN ? The company that invented Lean is Toyota. Lean is a Journey. Lean is not a just set of tools like Just in Time, Cells,

5S (Sort, Stabilize, Shine, Standardize, Sustain), Kanban etc. It is a Sophisticated System of Manufacturing in

which all the parts contribute to a whole. Tanishq used Lean in Retailing. The whole at Lean roots focuses on

supporting and encouraging people to continually improve the processes they work on. Unfortunately many

misunderstands that it is a collection of tools that lead to more efficient operations. The purpose of these tools is lost

& the centrality of the people is missed. But Tanishq started its Journey with “People First”. It Motivated,

Empowered, Guided / Trained its employees with Lean experts. Lean aim to keep everything in an organized way,

improve efficiency, save time and increase productivity, reduce material wastage and costs, and do all this through

total employee engagement. The biggest benefit of Lean to Toyota and to many others that followed it, it helped each ordinary employee to

realize his or her full potential, by coming up with the solutions for all the workplace issues himself or herself,

rather than wait for someone else to provide it. It unleashed the entire human potential that Toyota had, making it

ultimately a by-word for quality.

WHAT IS LEAN RETAILING?

Lean Retailing focuses on

Exactly what the customer wants

Where the customer wants it

When the customer wants it

In the quantity the customer wants it

Utilizing minimum resources and minimizing customers’ effort

Providing the full value that consumers desire with the greatest efficiency and least pain

LEAN / TOYOTA “4P” MODEL WITH 14 PRINCIPLES

Borrowing the principles of Lean from Toyota, Lean Retailing team dreamt to set up the following objectives for

the Tanishq stores:

1. To generate Total Employee Involvement through

Kaizen : Innovative employee suggestions for improvement

Multi-skilling : Training employees in at least one additional skill required in the store, for helping

double up when necessary

Ownership : Helping generate total ownership for the store issues

2. To improve operational efficiency and eliminate waste through

7S : 7steps to keep the store environment spic and span

(Sort, Shine, Systematic Arrangement, Standardize, Safety, Spirit and Self-Discipline to follow the

first 4 steps all the time)

Kanban : visual system of managing secondary material

Better inventory management

BENEFITS OF LEAN Lean provides numerous benefits including:

Reduced lead/cycle time

Decreased work-in-process (WIP)

Reduced cost

Increased resource (equipment, operator) utilization

Easier scheduling

More streamlined flow

Reduced floor space

Improved quality

Improved worker morale

These benefits lead to increased profitability and an improved workforce. Some of the benefits are dramatic and

almost immediate such as reduced WIP and cycle times. Most benefits, however, accrue gradually over time as the

Lean journey progresses.

This study defines the Basic of Lean, its 4Ps - Philosophy, Process, People & Partners principals, Problem Solving,

14 principles, Training, Implementation, Obstacles & realized benefits of Tanishq Boutiques. Also opportunities

offered by this to all Retailers / Organizations involved in the manufacturing / retaining of Jewellery.

The study helps to know about the innovative way of Lean Retailing in Jewellery industry. It helps to know, how to

reduce high inventory holding costs & wastes. It describes the current process and issues faced by the industry /

organizations.

Finally the study ends with details of benefits realized, next few years target planned & 13 Tips for transforming

Company to Lean Enterprises.

INTRODUCTION

COMPANY PROFILE Titan Industries is the organization that brought about a paradigm shift in the Indian watch market when it introduced its futuristic quartz technology, complemented by international styling. With India's two most recognized and loved brands Titan and Tanishq to its credit, Titan Industries is the fifth largest integrated watch manufacturer in the world. The success story began in 1984 with a joint venture between the Tata Group and the Tamil Nadu Industrial

Development Corporation. Presenting Titan quartz watches that sported an international look, Titan Industries

transformed the Indian watch market. After Sonata, a value brand of functionally styled watches at affordable

prices, Titan Industries reached out to the youth segment with Fastrack, its third brand, trendy and chic. The

company has sold 100 million watches world over and manufactures 12 million watches every year.

With a license for premium fashion watches of global brands, Titan Industries repeated its pioneering act and

brought international brands into Indian market. Tommy Hilfiger and Hugo Boss, as well as the Swiss made watch

– Xylys owe their presence in Indian market to Titan Industries.

Entering the largely fragmented Indian jewellery market with no known brands in 1995, Titan Industries launched Tanishq, India’s most trusted and fastest growing jewellery brand. Gold Plus, the later addition, focuses on the preferences of semi-urban and rural India. Completing the jewellery portfolio is Zoya, the latest retail chain in the luxury segment.

Titan Industries has also made its foray into eyewear, launching Fastrack eyewear and sunglasses, as well as prescription eyewear. The organization has leveraged its manufacturing competencies and branched into precision engineering products and machine building.

With over 560 retail stores across a carpet area of over 7,09,000 sq. ft. Titan Industries has India’s largest retail network. The company has over 300 exclusive ‘World of Titan' showrooms and over 740 after-sales-service centers. Titan Industries is also the largest jewellery retailer in India with over 110 Tanishq boutiques and Zoya stores, over 25 Gold Plus stores and over 85 Titan Eye+ stores. The company has two exclusive design studios for watches and jewellery

Backed by 4,514 employees, two exclusive design studios for watches and jewellery, 11 manufacturing units, and innumerable admirers world over, Titan Industries continues to grow and sets new standards for innovation and quality. The organization is all geared to repeat the Titan and Tanishq success story with each new offering.

TIME PRODUCTS DIVISION The Time Products division is where the Titan story began. Today, this division has placed Titan Industries among

the world’s largest retail networks and earned the company the place of fifth largest integrated watch manufacturer

in the world. With over 2350 employees spread over 3 business units in Bangalore, India, a manufacturing unit at

Hosur and 3 assembly plants located in the north of India, the division continues to add world-class brands to the

company’s portfolio.

OUTSTANDING BRANDS

Our customers have been at the core of this growth and the division offers a slew of products that cater to their

inherent needs. Some of the most notable brands in the division’s portfolio are:

Titan Edge - the world's slimmest watch (at 3.45mm) that epitomizes the philosophy ‘less is more’.

Titan Raga - a feminine and opulent accessory for today's affluent woman

Nebula - watches crafted with solid 18k gold and precious stones

Sonata - India's largest selling watch brand to suite the common man's wallet

Xylys - a Swiss-made, impeccably designed watch for the connoisseur and new age achiever

Fastrack – watches created to accessorise the trendy youth of today

The watch division also boasts of collections such as Automatic, Heritage, Nebula, Orion, Raga, Zoop and series

like Aviator, Octane and WWF.

The brand Titan enjoys a 60% market share in the organised watch market in India.

EYEWEAR DIVISION Titan Eye+, the third major venture of consumer business by Titan Industries, launched into the eyewear segment in March 2007.

Titan Eye+ provides an impressive range of stylish and contemporary eyewear, through exclusive optical outlets. Titan Eye+ heralded standardization by benchmarking with the world’s best, in sync with the TATA principles of quality and trust. Sales counters now offer products and services of international quality standards coupled with transparency in pricing, style, and upbeat designs.

Titan Eye+ stores are now staffed with professional optometrists who deal with every eye-care requirement – be it a need for prescription eyeglasses for distance or nearsightedness, reading, vision correction, contact lenses or eye protection. Titan Eye+ stores are equipped to fill prescriptions for single vision lenses, progressive no line or bifocal lenses.

PRECISION ENGINEERING DIVISION Leveraging precision engineering core competencies from watch making, Titan initiated a PRECISION

ENGINEERING DIVISION in 2002, catering to global majors across industry verticals like aerospace, automotive,

oil & gas, engineering, hydraulics, solar and medical instruments.

With an investment of over $10 million, the setup has four main business units.

Precision Engineering Components & Sub-Assemblies (PECSA)

Machine Building & Automation Solutions

Tooling Solutions

Electronic sub-assemblies

Precision Engineering Division is ISO 9001:2000 and ISO 14001:2004 certified. Additionally the unit catering to

Aerospace segment is AS 9100B certified and the unit catering to automotive segment is TS 16949 certified.

The Division has demonstrated consistent quality and delivery performance through several customer accolades like

the ford Q1 award and the Continuous improvement award received from the CEO of UTC, Louis Chenevert.

JEWELLERY DIVISION Tanishq Titan’s flagship line of jewellery is today a resounding success with discerning customers. Tanishq has performed exceedingly well and has set standards, in what could best be described as a largely unorganised and unscrupulous jewellery market.

The growth of the brand has once again been a testament to our customer focus. Tanishq is today a hallmark of trust, an island of purity. It is a certified division under the ISO 9001:2000 Quality Management System Standards. Established to addresses the urban market, its growth has transformed Titan into the largest integrated jewellery manufacturer and outsourcing company of India.

Tanishq is India's fastest growing jewellery brand with a premium range of jewellery, studded with diamonds or coloured gems in 18-karat gold, 22-karat pure gold and platinum jewellery. We are now one of India's largest speciality retailers and are transforming India’s jewellery market with a Pan-India presence. Titan felt a need and created a means to offer elegant gold jewellery to smaller towns and rural markets. The recent launch of a retail initiative - GoldPlus caters to the need.

Both brands contributed to over Rs.450 million USD, and are still flourishing. Truly a phenomenon in itself, Tanishq is our pioneering Indian brand storming a market of over 300,000 independent jewelers. The brand is evolving faster than the market and is either leading or closing gaps between competitors in urban markets where we have a presence.

The trust connotations that the Tata -Titan association evokes, never fails to attract increasing numbers of jewellery seekers to the fledgling designer brand. Titan ensures that they are spoilt for choice, transparency and a great shopping experience with Tanishq, the jewel of its crown.

Tanishq is a trustworthy, popular jewellery brand from India’s largest integrated jewellery manufacturer.

Zoya, by Tanishq is a chain of luxury jewellery boutiques which targets elite, discerning ladies seeking designer wear of international standards. Zoya is a best-in-class shopping experience. Stores offer exquisite, artistically styled masterpieces, studded in diamonds, apart from traditional, fusion polki and kundan jewelry. There are magnificent designs to choose from, all in ultra-premium luxury, these outlets showcase luxury unsurpassed.

Zoya creations are world-class in terms of quality and have been crafted in India and abroad. It boasts the finest quality in India and is on par with the best in the world. Zoya stores are located in GK I, M Block - Delhi and Warden Road - Mumbai.

TANISHQ Tanishq, India's largest, most trusted and fastest growing jewellery brand, offers traditional as well as trendy designs in gold, diamond and platinum. With retail sales of over Rs. 3000 crores last financial year, Tanishq has delivered value to its customers and shareholders.

Backed by in-depth research in the jewellery space, the production and sourcing units of Tanishq create exquisite designs with faultless finish. Located at Hosur (Tamil Nadu) and Dehradun (Uttarakhand)) the 1,35,000 sq. ft. manufacturing unit is equipped with the latest and most up-to-date technology and tools. The unit also complies with the labour and environmental standards.

Stringent quality standards ensure that every product at Tanishq is crafted to perfection with unmatched finish. With innovations like the karatmeter - the only non-destructive means to check the purity of gold - Tanishq introduced technology-backed challenge in the category completely governed by individual trust. The brand propagates ethical practices and provides the customer a certification of purity of material and reselling policies. Following the line of ethical practice further, adequate policies are in place for the artisans who create the jewelry.

Tanishq has a Golden Harvest savings scheme which is a unique Jewellery purchase scheme, leading to an easy purchase of tanishq Jewellery of your choice. With this scheme you can buy for more than what you save because Tanishq will add a special bonus at the end of the scheme.

Tanishq introduced specialized retailing in the fragmented jewellery market of India. Today, with 117 opulent stores in 75 Indian cities, Tanishq continues to rule the jewellery space.

TANISHQ: A SPARKLING JOURNEY

The Tanishq saga began in the early 1990’s, primarily fuelled by the fabled Tata entrepreneurial spirit and

partly forced by circumstance.

The splendid Titan watches success story was already up and running, and happened to need more foreign exchange

to purchase the imported components and machines required to keep up with the burgeoning watch production. But

with India going through a foreign exchange crisis, there was no help coming in, forcing Titan to search for a

business that would earn them the required foreign currency.

The first precision engineered watch, Tanishq created with 103 diamonds and pure 18 carat gold.

Indian-made jewellery was already a big foreign currency earner and being strongly supported by the central

government, and also happened to be a very good fit with the watch business as articles of adornment. The best

known brand names in both Europe and America had watches and jewellery together, offering further proof that the

two industries are intrinsically linked.

It was a business with a huge wealth potential and it added a very feminine offering to Tata’s long line of products

that appealed mostly to the opposite gender. It also called for an organization that inspired trust and had high order

design, manufacturing, marketing and retailing skills, and Tata fit the bill on all accounts.

A revolution in Gold Purity Standards across the country.

Tanishq was coined from a combination of Tata/Tamil Nadu and Nishq (meaning a necklace of gold coins) and,

again, from Tan, meaning body and Ishq, meaning love.

It was launched in 1994 as a range of jewellery and jewellery watches meant for the European & American markets.

But things began to change globally around this time, and the West entered a protracted period of slow economic

growth followed by recession. Supplying jewellery to the Americans & Europeans suddenly no longer seemed an

attractive proposition.

Initially, the criticism for Titan’s foray into jewellery was loud and often bitter. Eventually, however, the critics

were silenced. Tanishq, today, is perhaps the only major Tata brand with a strong appeal for women. Very

importantly, Tanishq has brought to the market a whole new standard of business ethics and product reliability, in

the process bringing about a transformation in the manner in which jewellery is bought and sold in India.

The Indian market, on the other hand, opened its doors to the world, and was now flooded with foreign currency. By

the time Tanishq established its manufacturing facility and entered the market, the premises on which the project

was based had altered substantially.

Foreign currency was no longer an issue, import licenses were easy to obtain and the global demand-supply

equation for jewellery had shifted in favor of buyers. Tanishq, therefore, switched tracks and shifted its focus to the

Indian market and develop a somewhat grandiose vision of the brand as a composite avatar of Cartier, Tiffany,

Esprit, and Ernest Jones all rolled in one.

GOLDPLUS Titan Industries’ Goldplus is designed for the jewellery preferences of the semi-urban and rural Indian customer. With a presence in 30 towns spread across 6 states, Goldplus is the largest jewellery retail chain in Tamil Nadu.

In addition to gold jewellery, the brand also offers impressive designs embellished with diamonds, American diamonds (Cubic Zirconia) and other precious stones. The Golplus jewellery comes with the assurance of purest 22-karat (916) and 18-karat (750) gold and premium craftsmanship. Every Goldplus product is endorsed by a certificate that states the purity of the gold and the quality of diamonds used in the article.

The elaborate and intense quality checks during the manufacturing process ensure the purity of gold and a perfect finish. The gold is purchased in the form of bars from only those banks that are certified by Reserve Bank of India (RBI). Using this gold, jewellery is crafted in Titan Industries’ manufacturing units in Hosur, Tamilnadu where highly skilled artisans create traditional and modern designs.

RECOGNITION The company has been awarded the following distinctions: Named the No. 1 Brand in the consumer durables category in the ‘Brand equity’ Survey of the Economic, a

leading Indian financial daily. Tanishq brand has won the Images fashion award Best Jeweller brand award for the seventh consecutive year. Solitaire of India award presented by the Gem & jewellery Association for the pioneering work done by

Tanishq in the jewellery industry. Best Retail chain by Retail Jeweller India Awards 360 degrees marketing campaign of the year for Jodha Akbar Campaign by Retail Jeweller India Awards TV campaign of the year – diamond TVC featuring Nafisa Ali by Retail Jeweller India Awards Gold Vivaha jewellery – Jodha Akbar Swan set by Retail Jeweller India Awards CNBC Awaaz Award for most preferred brand Won MMA award on Managerial excellence for 2009 We have been short listed among top 50 international company on Best supply chain practices by European

school of Management. Won the IIMM – Innovative SCM award for the Best Innovation in Supply Chain Management for the year

2008. Won first prize for Promising Innovation in 2006 at the First Tata Innovation contest at National level Won first prize for Promising Innovation in 2007 at the second Innovation contest at Regional Level Created the world’s Biggest Gold Bangle – entered in Limca Book of Records The Titan team won the Young design Entrepreneur of the year awarded at the design awards institute by the

National institute of design and Business world, a leading Indian magazine. The team has won 7 accreditations

also.

JEWELLERY INDUSTRY OVER VIEW

Indians have a huge fascination for gold. This is evident in the fact that India is the largest consumer as well as

importer of gold in the world. Gold plays a very important role in the social, religious and cultural life of Indians.

India Gold Market looks poised to achieve greater heights given the fascination for gold in the country. India

consumes about 800 MT of gold which accounts to about 20% consumption of gold globally. More than 50% of this

is used for making gold jewelry.

SIZE OF INDIAN GOLD MARKET :

The domestic India gold market is estimated to be more than US$15 billion and is expected to rise significantly in

the coming years. During April 2008 to February 2009, gems and jewelry worth US$ 17.79 billion was exported

from the country. United Arab Emirates imported more than 30% of gems and jewelry from India, making it the

largest importer from the country. Hong Kong was the second largest importer with 25% followed by United States

with 20%. The gem and jewelry industry accounts for more than 10% of India's total commodities exports

JEWELLERY RETAIL SECTOR :

The Indian jewellery industry is fragmented, with over 300,000 jewellers operating across the country. Jewellery

market in India is on the platform of Investment, occasional buying, have a greater impact in family type of living.

Jewellery making was given significant importance in the activities of a family life in India against of Fashionable

item in western countries. Jewellery buying was performed with jewellers who have very good trust and long term

relationship with the family. Jewellery was viewed as the specific identity of status of the family, still in some parts

of India it is prevailing. The jewellery is considered as one of the fashionable item in the western countries. After

Globalization the view has changed, the life style of India has changed, leads to greater impact in the jewellery

industry.

Government allows 51 per cent foreign direct investment in single brand retail outlets, attracting both global and

domestic players to this sector. A booming market has in recent years attracted a large number of players to the

Indian gems and jewellery retail sector:

Reliance Retail is planning an aggressive entry into the jewellery retail market. It will open between 400 to 500

jewellery retail outlets across the country. Damas Jewelry, one of the world’s leading jewelry retailer entered India in 2003 with a 50-50 joint venture with

Gitanjali Gems Ltd. It is one of the largest jewellery retail outlets in the world and is adding 16 new stores to

the 12 stores it currently has in India.

Swarovski, the global crystal goods manufacturer and marketer, plans to set up 50 stores by 2010, up from the

current 15. The Gitanjali Group has bought 'Nakshatra', the premium brand of jewellery promoted by Diamond Trading

Company (DTC) Mumbai-based Vardhaman Developers plans to build four more jewellery malls in the city. Dubai-based Joy Alukkas has recently opened its largest showroom in Chennai. Viswa and Devji Diamonds, a partnership between the Indian group and the top jewellery retailer in UAE,

opened its first diamond retail outlet. Gitanjal Gems Ltd opened its first luxury jewellery mall in Gurgaon, where a number of international brands

have started their retail business. Gold Souk India has plans for opening 100 Souks in 100 months.

TRENDS :

Growing Organized Retail Space Aggressive Marketing & Advertising

Large Scale Shows & Exhibitions

Domestic players acquiring foreign companies

Investment from PE Firms

Corporate houses entering the Market

ENTRY BY “TANISHQ” INTO INDIAN MARKET After the successful introduction of the branded watches in the name of “Titan”, the business was diversified into

making jewellery aiming at export market by manufacturing through engineering industrial operations. The business

was driven to enter into the local market by making and selling 18 kt jewellery manufactured through engineering.

The business then answering to the needs of family type of Jewellery purchasing, demanding 22 kt plain hand made

artifact jewellery, started selling plain jewellery products made by hand work of karigars, thus kick starting the

partnering journey @ Tanishq. Tanishq has established the process of giving guarantee to the customer by means of

“Pure Jewellery, Pure Joy” which certifies the purity of the gold ornament at 91.6 % in 22 Kt and 75 % in 18 Kt.

LEAN OVERVIEW

THE COMPANY THAT INVENTED LEAN IS TOYOTA

THE TOYOTA WAY IS MORE THAN TOOLS & TECHNIQUES In the Toyota Way / Lean, it’s the people who bring the system to life: working, communicating, resolving issues,

and growing together. It goes well beyond this; it encourages, supports, and in fact demands employee involvement.

TPS system designed to provide the tools for people to continually improve their work. The Toyota Way means

more dependence on people, not less. It is a culture, even more than a set of efficiency and improvement techniques.

You depend upon the workers to reduce inventory, identify hidden problems, and fix them. The workers have a

sense of urgency, purpose, and teamwork because if they don’t fix it there will be an inventory outage. On a daily

basis, engineers, skilled workers, quality specialist, vendors, team leaders, and most importantly—operators are all

involved in continuous problem solving and improvement, which over time trains everyone to become better

problem solvers.

“TPS HOUSE”

TOYOTA / LEAN 14 PRINCIPLES IN 4 “P”s / FOUR BROAD CATEGORIES:

SECTION I: Long-Term Philosophy

Principle 1. Base your management decisions on a long-term philosophy, even at the expense of

short-term financial goals. People need purpose to find motivation and establish goals.

SECTION II: The Right Process Will Produce the Right Results

Principle 2. Create a continuous process flow to bring problems to the surface. Work processes are redesigned to eliminate waste (muda) through the process of continuous improvement —

kaizen. The eight types of muda are:

1. Overproduction

2. Waiting (time on hand)

3. Unnecessary transport or conveyance

4. Over processing or incorrect processing

5. Excess inventory

6. Unnecessary movement

7. Defects

8. Unused employee creativity

Principle 3. Use “pull” systems to avoid overproduction. A method where a process signals its predecessor that more material is needed. The pull system produces only the

required material after the subsequent operation signals a need for it. This process is necessary to reduce

overproduction.

Principle 4. Level out the workload (heijunka). (Work like the tortoise, not the hare.) This helps achieve the goal of minimizing waste (muda), not overburdening people or the equipment (muri), and not

creating uneven production levels (mura).

Principle 5. Build a culture of stopping to fix problems, to get quality right the first time. Quality takes precedence (Jidoka). Any employee in the Toyota Production System has the authority to stop the

process to signal a quality issue.

Principle 6. Standardized tasks and processes are the foundation for continuous improvement and

employee empowerment. Although Toyota has a bureaucratic system, the way that it is implemented allows for continuous improvement

(kaizen) from the people affected by that system. It empowers the employee to aid in the growth and improvement

of the company.

Principle 7. Use visual control so no problems are hidden. Included in this principle is the 5S Program - steps that are used to make all work spaces efficient and productive,

help people share work stations, reduce time looking for needed tools and improve the work environment.

1. Sort: Sort out unneeded items

2. Straighten: Have a place for everything

3. Shine: Keep the area clean

4. Standardize: Create rules and standard operating procedures

5. Sustain: Maintain the system and continue to improve it

Principle 8.

Use only reliable, thoroughly tested technology that serves your people and processes. Technology is pulled by manufacturing, not pushed to manufacturing.

SECTION III: Add Value to the Organization by Developing Your People

Principle 9. Grow leaders who thoroughly understand the work, live the philosophy, and teach it to

others. Without constant attention, the principles will fade. The principles have to be ingrained; it must be the way one

thinks. Employees must be educated and trained: they have to maintain a learning organization.

Principle 10. Develop exceptional people and teams who follow your company’s philosophy. Teams should consist of 4-5 people and numerous management tiers. Success is based on the team, not the

individual.

Principle 11. Respect your extended network of partners and suppliers by challenging them and

helping them improve. Toyota treats suppliers much like they treat their employees, challenging them to do better and helping them to

achieve it. Toyota provides cross functional teams to help suppliers discover and fix problems so that they can

become a stronger, better supplier.

Section IV: Continuously Solving Root Problems Drives Organizational Learning

Principle 12. Go and see for yourself to thoroughly understand the situation (genchi genbutsu).

Toyota managers are expected to "go-and-see" operations. Without experiencing the situation firsthand, managers

will not have an understanding of how it can be improved. Furthermore, managers use Tadashi Yamashima's

(President, Toyota Technical Center (TTC)) ten management principles as a guideline:

1. Always keep the final target in mind.

2. Clearly assign tasks to yourself and others.

3. Think and speak on verified, proven information and data.

4. Take full advantage of the wisdom and experiences of others to send, gather or discuss information.

5. Share information with others in a timely fashion.

6. Always report, inform and consult in a timely manner.

7. Analyze and understand shortcomings in your capabilities in a measurable way.

8. Relentlessly strive to conduct kaizen activities.

9. Think "outside the box," or beyond common sense and standard rules.

10. Always be mindful of protecting your safety and health.

Principle 13. Make decisions slowly by consensus, thoroughly considering all Otions; implement

decisions rapidly (nemawashi). The following are decision parameters:

1. Find what is really going on (go-and-see) to test

2. Determine the underlying cause

3. Consider a broad range of alternatives

4. Build consensus on the resolution

5. Use efficient communication tools

Principle 14. Become a learning organization through relentless reflection (hansei) and continuous

improvement (kaizen). The process of becoming a learning organization involves criticizing every aspect of what one does. The general

problem solving technique to determine the root cause of a problem includes:

1. Initial problem perception

2. Clarify the problem

3. Locate area/point of cause

4. Investigate root cause (5 whys)

5. Countermeasure

6. Evaluate

7. Standardize

Fundamentals of Lean Strategies to guide management’s actions toward success:

1. VALUE : The critical starting point for lean thinking is value. Value can only be defined by the ultimate customer. And it's

only meaningful when expressed in terms of a specific product (a good or a service, and often both at once), which

meets the customer's needs at a specific price at a specific time." Above all, lean practitioners must be relentlessly

focused on the customer when specifying and creating value. Neither shareholder needs, nor senior management¹s

financial mind-set, nor political exigencies, nor any other consideration should distract from this critical first step in

lean thinking. "Why is it so hard to start at the right place, to correctly define value? Partly because most producers

want to make what they are already making and partly because many customers only know how to ask for some

variant of what they are already getting. They simply start in the wrong place and end up at the wrong destination.

Then, when providers or customers do decide to rethink value, they often fall back on simply formulas lower cost,

increased product variety through customization, instant delivery rather than jointly analyzing value and challenging

old definitions to see what’s really needed".

2. THE VALUE STREAM The value stream is the set of all the specific actions required to bring a specific product through the critical

management tasks of any business: the problem-solving task running from concept through detailed design and

engineering to production launch, the information management task running from order-taking through detailed

scheduling to delivery, and the physical transformation task proceeding from raw materials to a finished product in

the hands of the customer. Identifying the entire value stream for each product is the next step in lean thinking, a

step which firms have rarely attempted but which almost always exposes enormous, indeed staggering, amounts of

waste.

3. FLOW : Only after specifying value and mapping the stream can lean thinkers implement the third principle of making the

remaining, value-creating steps flow. Such a shift often requires a fundamental shift in thinking for everyone

involved, as functions and departments that once served as the categories for organizing work must give way to

specific products; and a "batch and queue" production mentality must get used to small lots produced in continuous

flow. Interesting, "flow" production was an even more valuable innovation of Henry Ford¹s than his better-known

"mass" production model.

4. PULL : As a result of the first three principles, lean enterprises can now make a revolutionary shift: instead of scheduling

production to operate by a sales forecast, they can now simply make what the customer tells them to make. As

Womack and Jones state, "You can let the customer pull the product from you as needed rather than pushing

products, often unwanted, onto the customer." In other words, no one upstream function or department should

produce a good or service until the customer downstream asks for it.

5. PERFECTION : After having implemented the prior lean principles, it "dawns on those involved that there is no end to the process

of reducing effort, time, space, cost, and mistakes while offering a product which is ever more nearly what the

customer actually wants," write Womack and Jones. "Suddenly perfection, the fifth and final principle, doesn¹t

seem like a crazy idea."

TOOLS AND TECHNIQUES OF LEAN There are many tools and techniques of Lean that help create Lean processes, including those shown below. Note

that these are not necessarily confined to manufacturing processes, but can be used beneficially in service processes

as well.

Value-stream mapping (VSM): Used to statically visualize, analyze and improve process and

information flows. Eliminates NVA activities.

A3 Reporting: Used to define problems, identify solutions and develop and document action plans for

implementing process improvements.

Kanban (pull) production: Used to regulate production and movement between process steps where

continuous flow isn’t possible. Eliminates overproduction.

Workflow diagram: a.k.a. spaghetti diagram, this is a layout of the facility with arrowed lines depicting

the physical flow of work (material, people, etc.) within the facility. Eliminates unnecessary handling and

movement.

Work cells: A streamlined arrangement (usually in a U-shape) of sequential operations where single-piece

flow can occur and workers can be effectively shared. Eliminates NVA activities and unnecessary handling.

5S: A systematic method for organizing and standardizing of the workplace (sort, straighten, shine,

standardize, sustain). Eliminates defects and wasted motion.

Quick Changeover: A method of reducing the time to setup operations to minimize process disruption

and permit smaller batch sizes to be run. Eliminates waiting time, NVA activities and overproduction.

Total productive maintenance (TPM): Systematically maintaining equipment to keep it operational,

thus minimizing disruptions. Emphasizes employee involvement and preventive maintenance. Eliminates

waiting.

Visual Controls: Utilization of visual signals and images to quickly and clearly direct attention and

provide feedback. Eliminates overproduction and waiting.

Poka Yoke (mistake proofing): Makes the operation such that it can only be performed the right way.

places accountability for quality on the operation where it is controlled and makes the operation as error

proof as possible. Focuses on prevention of defects rather than detection and correction. Eliminates defects.

Point of use storage (POUS): Delivers items directly to the place where they are going to be used.

Eliminates waiting and unnecessary handling.

Cross-training: Employees can perform a variety of functions and thereby provide greater flexibility.

Eliminates operator waiting.

These tools should be used systematically rather than haphazardly. The idea is to identify the most detrimental

waste in the system and then select and implement the solutions that best eliminate the waste.

CHALLENGES FACED BY TANISHQ Consumers are more demanding than ever - More choice…Lower cost…Better quality

Higher Expectations - Newness…Innovation…Product interrelationships

Globalization - Brand migration…Accelerating trend lifecycles

Brand & SKU Proliferation - Private label….Generics….Multi-brand….segmentation

More Branded competitors

Raising Gold Prices

Competition from the unorganized players

Increased Company’s Over Head expenditures

Need of Creating Point of differentiation through Gold Standard in services

Employees were not involved in solving routine store problems

Fire fighting for most of the needs

Time spent on non-value added activities leading to stress for the employee as well as customers

Keep excess stock of consumables, packing and indirect materials which was leading to high costs.

Working in isolation

To overcome the above said challenges, to provide the value addition, to reach the Vision, Mission & Values of

Jewellery division, the pace of change requires new thinking / new initiative. It emerged as LEAN RETAILING in Tanishq Boutiques.

JEWELLERY DIVISION - VISION – MISSION – VALUES

DREAM - “What Toyota is to Manufacturing Tanishq is to Retailing”

OBJECTIVE At present jewellery division is achieving a sale of 3500 + Cr for the financial year. With in next 5 years aim is to:

Reach a top line of Rs 10000 cr with a 10% bottom line.

Improve stock turn from 3.3 in 09-10 to 4.5 in 14-15. i.e Stock turn of 3000 + cr stock is required for 10000

cr sale. Need to do the same in 2200 cr stock.

To develop the attitude to serve and to create max time & resources to serve customers better – a pre-

requisite to create fans and align the processes in the best possible sequence to deliver maximum value to

customer.

Improve operational efficiencies & Total Employee Involvement

1. Elimination of non - value added activities / wastes in the retail operation, need for simplification

2. Elimination of consumables excess stocking / stock out situations

3. Better store upkeep

4. Better customer service / delight

5. Better employee engagement , ownership

6. Cost reduction

7. Inventory management - Sales Vs Stock ratio ( stock turn )

MILESTONES / GOALS to reach:

5S Score – Each store to cross 80% & Sustain

Kanban – All consumables to be covered – should reduce inventory by a minimum 25% & nil stock outs

Kaizen – One implemented improvement per person per month

Multiskilling – 80% of Front end staff should be able to do 80% of the various types jobs likes

1. Sale of Plain & Studded

2. Billing (all combinations of cash, credit card, TEP/GEP, GV etc..)

3. Karatmeter operation & Calibration

4. Jewellery Melting, Steam , Ultrasonic cleaning

5. Reading Energy meter ( Electricity Bill) etc..

Indenting:

1. Daily Indenting. Each category owner to indent daily what is sold that day except those variants

which sold after long time or on discount – Weekly consolidation is the indent

2. SOP in place

Cost – Every store should achieve a minimum 10% reduction in overheads with respect to last year.

TRAINING Tanishq hired an expert Lean Consulting Company which helped the Jewellery Division in a WCM ( Worl Class

Manufacturing) implementation in 2002. Core team was formed to train & implement the Lean Retaining in

Tanishq Boutiques. All RSOs, RBMs & ABMs had undergone extensive training on the following Lean Retailing process.

o TOYOTA WAY 14 PRINCIPLES

o TOYOTA WAY 4 “P” s

1) Philosophy – Long Term Thinking

2) Process- Eliminate Waste

3) People & Partners – Respect, Challenge & Grow them

4) Problem Solving – Continuous improvement

** Work processes are redesigned to eliminate waste (muda) through the process of continuous

improvement — kaizen. The eight types of muda are:

9. Overproduction

10. Waiting (time on hand)

11. Unnecessary transport or conveyance

12. Over processing or incorrect processing

13. Excess inventory

14. Unnecessary movement

15. Defects

16. Unused employee creativity

** 5S + 2S Program - steps that are used to make all work spaces efficient and productive, help people

share work stations, reduce time looking for needed tools and improve the work environment.

1. Sort: Sort out unneeded items

2. Straighten: Have a place for everything

3. Shine: Keep the area clean

4. Standardize: Create rules and standard operating procedures

5. Sustain: Maintain the system and continue to improve it

6. Self Discipline

7. Spirit

** To generate Total Employee Involvement through

Multi-skilling : Training employees in at least one additional skill required in the store, for

helping double up when necessary

Ownership : Helping generate total ownership for the store issues

**Knowledge on 14 Keys to become World Class is also shared. Out of 14 Key points common points to Lean

Retailing are discussed. As mentioned below these can be achieved in phases / Steps :

CUSTOMER SERVICE :

1st Phase : The staff has little or no knowledge of who the customer is and / or how their work impacts the

customer.

2nd Phase : Customer data relevant to the staff’s performance is displayed in the work group and reviewed and

discussed e.g Walk ins, conversions/non conversions. Staff begins to make plans to address the

most critical issues.

3rd Phase : The Staff has a posted plan with milestone, completion dates, and accountabilities for dealing with

all major EC issues. Many major issues have been resolved.

4th Phase : All major issues have been resolved and the staff is addressing the minor issues with detailed

plans.

PROFITS / COSTS

1st Phase : Profit and cost tracking do not exist or not known to the staff.

2nd Phase : Costs are displayed to the Staff. Periodically (at least quarterly), Staff performance against profit is

reported and displayed.

3rd Phase : Profits are established at year start and displayed. Performance is discussed monthly among the

staff.

4th Phase : The staff participates in development of its annual budget. Staff is responsible for budget

performance with management approval / review.

LEAN DAILY MANAGEMENT MEETINGS

1st Phase : No staff meetings are held or they are only held when there is special news.

2nd Phase : Daily Staff meetings have begun but are not attended by all members. Some meetings are missed.

3rd Phase : Daily Staff Meetings are held almost every day and are attended by most of the members.

4th Phase : Daily staffs meeting are held every day, without exception. Attendance is 100% and most members

participate actively.

LEAN FLOW / INVENTORIES

1st Phase : Inventory management concept does not exist.

2nd Phase : Standard Operating Procedure (SOP) exists for inventory management.

3rd Phase : The Staff is aware of SOP and follows it to some extent.

4th Phase : The results of inventory management is made visual & trend is improving.

MULTISKILL / Skill Flexibility

1st Phase : Training on different skills happens informally / only when a problem arises.

2nd Phase : The staff begins to define tasks and begins to display skill flexibility charts in the work area.

3rd Phase : Skill flexibility for all appropriate tasks in the work group is tracked and displayed visually. Goals

for staff flexibility are established. At least 50% of the members are skilled in three critical tasks.

4th Phase : The staff has training plans for each member’s skill development. Every task can be done by at

least two members. At least 75% of the staff members can do more than 3 tasks.

5S + 2S / HOUSEKEEPING

1st Phase : Open space and storage is cluttered with excess and unused items. There is a lot of dirt in the store.

2nd Phase : A formalized plan to improve cleaning & organizing is being developed. Obvious trash is

removed by the end of the each day by work group members. Unused display

equipment/attachment and out-of-date materials have been removed.

3rd Phase : Cleaning & organizing performance is assessed at least twice per week with checklists and visually

displayed and reviewed results. MSF are labeled in both work area and storage areas.

4th Phase : Work group members conduct cleaning & organizing activities during the day. Audits show near

perfect cleaning & organizing performance. Only rarely is an item out of place. Members begin to

plan for optimum placement of MSF.

14 KEYS TO BECOME WORLD CLASS

1) Leadership

2) External Customer Service

3) Profits / Costs

4) Ownership of Objectives

5) Lean Flow / Inventories

6) Lean Daily Management System

7) Multiskill / Skill Flexibility

8) Competence

9) Housekeeping

10) Time Management

11) Deadline & Commitments

12) Problem Solving

13) Work Standard

14) Process Metrics & Reward

SHARING LEAN BEST PRACTICES Watches Team & CFA Operations Team visited Tanishq Retail Team to understand & implement / take

forward the best Lean practices to their division. Tanishq Lean Core team took them through the lean

initiatives, outcomes, metrics & the entire journey undergone by Tanishq boutiques.

DIGNITY OF LABOUR Retail team of RBM’s & ABM’s across network has undergone 4 day training on Jewellery product making at

Jewellery manufacturing unit & understood the process. During the training they worked physically & made

jewellery on their own, Team demonstrated the Lean way of learning.

GLIMPSES FROM SHARING

LEAN IMPLEMENTATION METHODOLOGY

TANISHQ FOLLOWED 10 STEPS FOR LEAN IMMPLEMENTATION :

Step 1: Appointment and training of the Lean Champions, from the Retail Operations Teams

Step 2: Training and assessment of the Lean Champions

Step 3: Cascading the Lean programme to all the franchisees and the store staff

Step 4: Training of all the store staff

Step 5: Gemba: Implementation of the Lean techniques

Step 6: Regular visits by the Lean champions

Step 7: Up gradation training on other Lean techniques

Step 8: Reviews and Celebration of Victories/Victors

Step 9: Continuous improvements

Step 10: Implementation of key improvements across all stores

As expected, there was considerable skepticism in the early stages. To them it must have seemed one more HO

fantasy, this time complicated further with strange words like kaizen and kanban. However, like any good idea

which only needs some time to seep in, Lean also caught on. Its power squarely lay in 2 key concepts: One, it was

built totally from bottom-up from the ideas of individual people, which generated great excitement and pride; Two,

it was totally practical, with every benefit perfectly visible and simple to perceive.

Back sliding to the old ways of working, 14%

The Traditional Cost accounting system does not recognise the finacial

value of shop floor improvements, 13%

Middle Management Resistance, 13%

Lack of Crisis to create a sense of urgency, 13%

Lean is viewed as"the flavor of Month", 8%

Failure to Remove"Anchor Draggers"Who oppose

chage, 8%

Employee Resistance, 6%

Supervisor Resistance, 5%

Failure of Past Lean Projects, 3%

Lack of Implementation Know - How, 17%

LEAN IMPLEMENTATION – OBSTACLES

1. Back sliding to the old ways of working - 14%

2. Lack of Implementation Know – How - 17%

3. Failur of Past Lean Projects - 03%

4. Supervisor Resistance - 05%

5. Employee Resistance - 06%

6. Failure to remove “Anchor Draggers” who oppose Change - 08%

7. Lean is viewd as the flavor of Month - 08%

8. Lack of Crisis to create a sense of Urgency - 13%

9. Middle Management Resistance - 13%

10. The traditional cost accounting system does not recognise the financial

Value of shop floor improvements - 13%

5S AT TANISHQ BOTIQUES

5S AT TANISHQ BOTIQUES

5S AT TANISHQ BOTIQUES (Continues)

5S AT TANISHQ BOTIQUES (Continues)

5S AT TANISHQ BOTIQUES (Continues)

7S Score 85%

40%

50%

60%

70%

80%

90%

100%

2009 - 10

Perc

enta

ge

7's Score 7168 58 81 87 77 75 75 69 72 73 75 9293 90 85 85 88 90 85 85 8585 80 85 85 8580 80 82 82 83 80 82 83 84 8686 88 89 88 89 80 87 85 85 85 85

Target 80 80 80 80 80 80 80 80 80 80 80 80 8080 80 80 80 80 80 80 80 8080 80 80 80 8080 80 80 80 80 80 80 80 80 8080 80 80 80 80 80 80 80 80 80 80

Week1Week2Week3Week4Week1Week2Week3Week4Week1Week2Week3Week4Week1Week2Week3Week4Week1Week2Week3Week4Week1Week2Week3Week4Week1Week2Week3Week4Week1Week2Week3Week4Week1Week2Week3Week4Week1Week2Week3Week4Week1Week2Week3Week4Week1Week2Week3Week4

Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar

KAIZEN Kaizen (Japanese for "improvement" or "change for the better") refers to philosophy or practices that focus upon

continuous improvement of processes in manufacturing, engineering, supporting business processes, and

management. When used in the business sense and applied to the workplace, kaizen refers to activities that

continually improve all functions, and involves all employees from the CEO to the assembly line workers. By

improving standardized activities and processes, kaizen aims to eliminate waste.

The Toyota Production System is known for kaizen, where all line personnel are expected to stop their moving

production line in case of any abnormality and, along with their supervisor, suggest an improvement to resolve the

abnormality which may initiate a kaizen.

The cycle of kaizen activity can be defined as:

Standardize an operation

Measure the standardized operation (find cycle time

and amount of in-process inventory)

Gauge measurements against requirements

Innovate to meet requirements and increase

productivity

Standardize the new, improved operations

Continue cycle ad infinitum

The five main elements of kaizen

Teamwork

Personal discipline

Improved morale

Quality circles

Suggestions for improvement

A classic example of a Space saving

Kaizen. It is an 8 shelves cubicle ideal for

putting desktop / laptop, files, UPS, Printer

etc. Just fold it & carry along the whole

office with you. What else you need.

Sony Founder,Ibuks personally carried heavy spool tape recorder when travelling. This was a problem experienced

in Gemba by the senior. Ibuka challenged, Chief Designer, Norio Ohga to develop compact, light weight device.

Revolutionary “Walkman” was developed eventually leading to tiny i-pods

FEW KAIZENS @ TANISHQ BOTIQUES IN DETAIL JAMSHEDPUR A STEP FURTHER FOR CUSTOMER DELIGHT Problem : The delight factor was missing in the birthday & anniversary wishes –

same being a routine Job. Customer used to feel happy to receive calls, but they were

not delighted.

Improvement : The customers are wished live on AIR by the radio jockey &

weekends. For some customers celebration is in store with whole celebration, being live in AIR.

Impact : Customers Delight factor was clearly visible.

Implementer : “S”

JAYANAGAR, BANGALORE POWER SAVING THROUGH AUTOMATION Problem : The Staff used to forget putting off the lights of the toilets, some times

it used to whole day.

Improvement : Automatic / Door closure switch was installed in the store room as

well as in the toilets. Whenever the toilet was occupied & door was closed, the

lights gets switched on. On exit, it gets switched off.

Impact : Power saving

Implementer : “SP”

INDORE AB ROAD INVOICE FILE FOR CUSTOMERS Problem : Managing the invoices, certificates, credit notes etc was a big problem to customers.

They used to forget the bill at home while doing TEP, it used to get lost in other household

documents.

Improvement : On free of cost special file is given to customers. In which they can maintain

all their documents related to Tanishq.

Impact : Overall the customer are extremely happy & satisfied. The brand is promoted on the

file as all relevant offers / must know for customers are printed inside & outside. Even if they

do not use file for keeping Tanishq related documents, at least the Brand is promoted.

Implementer : “AC”

HAZRATGANJ, LUCKNOW USE WEB CAM TO TAKE PHOTO ID PROOF Problem : During rush, it takes time to take photo copy of ID Proof / Xerox

Improvement : Use Web cam to take a snap of the Customer ID Proof.

Impact : It helped in saving time, Photo IDs are stored in system. Web cam is

also useful for sending photograph of products for customer orders.

Implementer : “M”

CONNAUGHT PLACE, DELHI SHORTKEYS FOR FASTER BILLING Problem : Working on system was very time consuming

due to the unawareness of short keys

Improvement : Provided the Short keys list next to the

Computer

Impact : Helped in fasten the billing procedure ^ saving time.

Implementer : “A”

AMRITSAR CUSTOMER DELIGHT Problem : Difficult to find exclusive gift to delight the customer whose

Birthdays & anniversaries, we celebrate at showroom

Improvement : On the special day we capture the moments of celebration.

Frame it & send it to Customer’s home as surprise gift.

Impact : We found an appropriate gift to delight our customers on Birth days

etc. Customers feel nice while receiving the gift. They specially visit our

showroom to say thanks & share their experience about Tanishq with others.

Implementer : “R”

Kaizen Chart

0

5

10

15

20

25

30

35

2009 - 10

No

of k

aize

ns

0.00.30.60.91.21.51.82.12.42.73.0

No of Kaizen 2 5 7 10 5 6 0 21 22 22 30 16

Kaizen / RSO 0.1 0.2 0.3 0.5 0.2 0.3 0.0 1.0 1.0 1.0 1.4 0.7

Target (Kaizen per Rso) 1 1 1 1 1 1 1 1 1 1 1 1

Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar

INTRODUCTION TO KANBAN

WHAT IS KANBAN?

Kanban (kahn-bahn) is Japanese word that when translated literally means “visible record” or “visible part”. The

word Kan means "visual" in Japanese and the word "ban" means "cards".

So Kanban refers to "visual cards". In general context, it refers to a signal of some kind. Thus, in the

manufacturing environment, kanban are signals used to replenish the inventory of items used repetitively within a

facility. The kanban system is based on a customer of a part pulling the part from the supplier of that part. The

customer of the part can be an actual consumer of a finished product (external) or the production personnel at the

succeeding station in a manufacturing facility (internal) as in our case. Likewise, the supplier could be the person at

the preceding station in a manufacturing facility. The premise of Kanban is that material will not be produced or

moved until a customer sends the signal to do so.

The typical Kanban signal is an empty container designed to hold a standard quantity of material or parts. When the

container is empty, the customer sends it back to the supplier. The container has attached to it instructions for

refilling the container such as the part number, description, quantity, customer, supplier, and purchase or work order

number. Some other common forms of kanban signals are supplier replaceable cards for cardboard boxed designed

to hold a standard quantity, standard container enclosed by a painting of the outline of the container on the floor,

and color coded striped golf balls sent via pneumatic tubes from station to station.

But in our case such direct interaction with the supplier cannot be made through physical signaling, so we have

thought of using the cards as a signal which will trigger the activity of indenting from our supplier i.e. Hosur

manufacturing unit.

Kanban serve many purposes. They act as communication devices from the point of use to the previous operation

and as visual communication tools.

They act as purchase orders for your suppliers and work orders for the production departments, thereby eliminating

much of the paperwork that would otherwise be required. In addition, kanban reinforce other manufacturing

objectives such as increasing responsibility of the machine operator and allowing for proactive action on quality

defects by sending a signal for the defect observed to the warehouse where another batch manufacturing is under

progress.

PUSH vs. PULL SYSTEM The kanban system described is a pull system. Traditionally, a push system is being employed. The push system is

also more commonly known as the Materials Requirements Planning (MRP) system. This system is based on the

Planning Department setting up a long-term production schedule which is then dissected to give a detailed schedule

for making or buying parts. This detailed schedule then pushes the production people to make a part and push it

forward to the next station. The major weakness of this system is that it relies on guessing the future customer

demand to develop the schedule that production is based on and guessing the time it takes to produce each part.

Over-estimation and under-estimation may lead to excess inventory or part shortages, respectively.

One of the major reasons kanban are used is to eliminate or reduce the above mentioned wastes throughout an

organization due to the pull system that is employed. Waste can come from over-production (inventory) and

therefore, the need for a stockroom. This waste is eliminated. Part shortages (under-production) are also

eliminated. Costs are reduced by eliminating the need for many of the purchasing personnel and the paperwork

associated with purchasing. The planning department’s workload is also reduced as they no longer need to produce

work orders.

KANBAN – RESPONSIVE TO CUSTOMERS Kanban results in a production system that is highly responsive to customers. Instead of trying to anticipate the

future (predicting the future is difficult) Kanban reacts to the needs.

Kanban does not necessarily replace all existing material flow systems within a facility. Other systems

such as Materials Requirement Planning (MRP) and Reorder Point (ROP) may remain in operation.

Kanban is most beneficial when high volume/low value components are involved. For low volume and

high value components, other materials management system may be a better option such as MRP.

Even though our business comes in the segment Low volume and high value component, its benefit can

be partially reaped in case of precious kanban items and can be fully utilized for Tools and consumables.

E-KANBAN SYSTEMS

Many manufacturers have implemented electronic kanban systems. Electronic kanban systems, or E-

Kanban systems, help to eliminate common problems such as manual entry errors and lost cards. E-

Kanban systems can be integrated into enterprise resource planning (ERP) systems. Integrating E-

Kanban systems into ERP systems allows for real-time demand signaling across the supply chain and

improved visibility. Data pulled from E-Kanban systems can be used to optimize inventory levels by better

tracking supplier lead and replenishment times.

FEW KANBAN IMPLEMENTED PHOTOS

PACKING MATERIAL – KANBAN SYSTEM

After Before

BENEFITS OF KANBAN:

Reduce inventory and product

obsolescence.

Since component parts are not

delivered until just before they

are needed, there is a reduced

need for storage space. Product

designs can be upgraded in

small increments on a continual

basis, and those upgrades are

immediately incorporated into

the product with no waste from

obsolete components or parts.

Reduces waste and scrap

Raw materials are not delivered until they are needed, reducing waste and cutting storage costs.

Provides flexibility in production If there is a sudden drop in demand for a product, Kanban ensures us that we are not stuck with excess inventory.

This gives us the flexibility to rapidly respond to a changing demand.

They can quickly be switched to different products as demand for various products changes. Yes, there are still

limits imposed by the types of machines and equipment, and employee skills; however the supply of raw materials

and components is eliminated as a bottleneck.

Reduces Total Cost :

The Kanban system reduces your total costs by: Developing Flexible Work Stations

Reducing Waste and Scrap

Minimizing Wait Times and Logistics Costs

Reducing Stock Levels and Overhead Costs

Saving Resources by Streamlining Production

Reducing Inventory Costs

With these benefits in mind, the work had been started to set up a Kanban system in the Tanishq Boutiques.

MULTISKILL OBJECTIVE : 80% of the staff should know 80% of the Skills

• Multiskilling chart prepared based on the skills of the RSO’s

• Implementation of Training plan and schedule

• Detailed Skills description chart introduced

COMPETENCY MAPPING

INVENTORY MANAGEMENT The purpose of doing scientific study of stock versus sale was to reach at Optimum stock level. The following steps were followed:- Step 1- A Pareto diagram was prepared for finding out the contribution of each category to total sale. Step 2- Based upon the Pareto analysis, we shortlisted the categories to find out the optimum stock requirement.

Step 3- Last one year’s Sales data was captured to find out the WEEKELY SALES trend of each category in each

Weight/Price Band

Step 4- Current stock was mapped with actual stock Norm for better understanding of Alignment ratio

Step 5- Weekly Sales trend was captured by each RSO to find out the actual number of pieces shown to the

customer for converting sale against the actual stock Norm vise versa current stock

Step 6- Based upon the final outcome, we proposed the desired stock norm for each category to convert a sale

Step 7- We then mapped the Model Stock with the proposed quantity to find out the number of designs available for

daily Indenting

Step 8- GAP in model stock was observed based upon the study and the same was filled by adding more variants

from the stores wish list. This was done to ensure that enough number of designs were available in Model stock for

selection and good mix.

Step 9- We then extracted the sales trend of current financial year for each category and calculated the average

stock value and projected Sales figure of same for the entire year.

Step 10- Inventory turn ratio was then calculated for each category

Step 11- Based upon the next years target, without increasing the NEW PROPOSED STOCK NORM, the Stock

Turn Ratio and Sales were calculated

THE IMPACT

• First and foremost is that all the RSO’s got involved in the process and understood the importance of doing

the Scientific study to reach Optimum stock.

• Each RSO got better in-sight of their respective category and contribution to total sale.

• More and more in-puts started coming from each team member related to the stock.

• A clear ‘SENSE OF OWNERSHIP’ is visible in each team member towards stocks.

STOCK TURN

Tanishq have more than 1000 crores of inventories in its stores. That's quite a lot of money. It delivers a certain

level of stock turn (total value of sales in a year divided by the total value of stock) to the company. But this stock

turn figure varies significantly across stores. One reason for this is the level of sales value in a store. For example,

South Extension store in Delhi delivers a stock turn of 6, while Rajouri Garden in the same city is delivering a stock

turn of only 1.9. This is because South Extension sells 5.5 for the Plain group as much as Rajouri, but needs only 5

times as much stock as Rajouri to do that.

But the second reason for differences in stock turn is the way each store manages its norm. The Allahabad store

kept an average stock of only 29 kg of Plain, but has achieved a sale of 100 kg by end Oct. The Patna 1 boutique

has done even better: 112 kg sales with 26 kg stock. The Madurai boutique, 94 kg sales with 22 kg stock.

It is crucial that each boutique learns from such benchmark boutiques on how to manage stock better.

Some of the sores have mastered the art of stock management. Some of them are

1. Store Manager – Lucknow Boutique 1

2. Associate, Madurai

3. Store Manager – Patna Boutique 1

4.

ANALYSIS / PROBLEM SOLVING TECHNIQUES

ANALYSIS / PROBLEM SOLVING TECHNIQUES Training given with the help of “ Why Why” analysis and Fish Bone Diagram

The Impact of GHS Why 5 Analysis with help of Fish Bone Analysis Impact on RSO’s

Motivation and reminder in MM RSO wise monthly GH trend Chart Golden Egg

BOS/ Cashiers got involved

Targets given to BOS and Cashiers also A special Prolip system introduced by corporate was an additional help.

BTL activities

Customer Meets to promote GH Focus on existing GH Customers for Re-enrolments

Analysis : Interruption in Reminder Mgs for GHS Payment

Action Taken for improvement in process of Reminder SMS sent to customers for payments RSO

All the RSO’s were asked to enter the customer data properly in POSS and to tick the message option.

Customers

Educated the customer about the importance of their Mobile No in system by each RSO.

We also requested to update their new no if it is changed.

Store

Store started working on ready recknor.

The register has been placed near the cash counter to register these kind of complain their and then so that

the necessary action can be taken on time.

Corporate

All the data which are collected monthly, the same will be sent to corporate for necessary action in a

continues process.

VARIOUS ANALYSIS CHARTS

VARIOUS ANALYSIS CHARTS

VARIOUS ANALYSIS CHARTS

BENEFITS REALIZED

COMPANY: (e.g. Cost reduction, Revenue enhancement, Branding etc)

• 5666 Kaizens (improvements) made by Retail Sales Officers. Best kaizens / practices implemented across

the showrooms

• Cost reduction in inventory carrying cost, store running expenditures, maintenance, repair, electricity

expenditure, diesel, telephone bills, retail space recovery, etc. as a results of Kaizens (continuous

improvements) done at stores. Cost savings through Kaizens 1.09 Cr

• Defective stock in retail system reduced from 1.65 Cr to 0.1 Cr.

• Product sales Vs stock ratio improved to 25% from 21%

• Savings through introduction of kanban system for packing material is 67 lakhs

• 20% savings through introduction of kanban for jewellery spares, stationary items, pantry items, cleaning items

• Better store upkeep / organized. 7s audit, Score gone up to 71%. Ensured through audit , Retail space

recovery, Multiskilled employee ,search time is far less

• Simplified / Improved / standardized operations across the stores.

• Improved sales with optimization of Inventory and daily indenting by RSOs.

• Quick service – billing time reduction (about 50%).

CUSTOMERS : (e.g. enhanced C-sat, customer loyalty, etc.)

• Quick service – billing time reduced (50%), etc

• Informal comments like visitor book comments has been captured through portal system and action taken.

Opportunity for Improvement Vs positive comments ratio improved from 1:3.3 to 1:5.3

• The latest Customer Satisfaction score of customer satisfaction as on Mar’10 has gone to 8.6 from 8.0,

which is considered to be excellent in retail standards.

• Improved revisiting of existing customers (34% from 26%)

• Improved revisiting of existing customers 34% from 26% as depicted in Anuttara details.

INDUSTRY : (e.g. peers / business partners / etc.)

• Pioneer in the industry by applying lean principles into jewellery retail thereby getting competitive

advantage in the process transforming the practices of Jewellery retailing – making it more transparent and

organized.

OTHERS : (Employee)

• Simplified work and easy to understand visual communications

• Helped to work peacefully without fire fighting, satisfaction

• The focus on training and development for the boutique staff not only gave them the confidence but also

made them self managed, as well personal gain to apply at home

• Rewards & recognition of good kaizens ( 60 kaizens & 30 boutiques recognized )

• 550 RSOs rewarded for Tanishq fan club.

• Employee engagement 12.25 : 1

• Multiskilling score of employees improved to 69%

• It has given them an opportunity to think about a problem, come up with an idea to solve it, voice the idea,

and help in the final implementation. In that whole process, it has helped them discover their own hidden

talent and take pride in their contribution to the business. It developed the attitude to serve and to create

max time & resources to serve customers better – a prerequisite to create fans and aligned the processes in

the best possible sequence to deliver maximum value to customer.

No of Kaizens, Kanbans, 7S Score & Aged Stock Sold - 2009 – 2010

COST SAVING - 2009 – 2010

No of Kaizens, Kanbans, 7S Score & Aged Stock Sold - 2010 – 2011- Q1

COST SAVING - 2009 – 2010 –Q1

COST SAVING – 2010 – 2011 Q1

EXPECTED BENEFITS IN NEXT TWO YEARS : • Cost reduction in inventory carrying cost, Kanban system for all consumables, store running expenditures

and through kaizens 9 Crore

• Sustaining & bringing the habit to implement 1 Kaizen / month / RSO

• Store upkeep >80%

• Multiskilling – 80% of employee know 80% of skill

• Zero stock out incident for all consumable items by maintaining kanban system

• Opportunity for Improvement Vs positive comments ratio improved to 1: 8

• C-sat Score will go up 90%

• Employee engagement score 15 : 1

• Improving revisiting of existing customers 50% from 34%

• Improving walk-in conversions 10%

13 TIPS FOR TRANSFORMING COMPANY TO LEAN ENTERPRISE :

1) Start with action in the technical system; follow quickly with cultural change. Most

companies attempting a lean transformation focus on the “process layer” of the 4P model and this is, in fact, the

right approach, as the technical systems of lean drive the Toyota Way behaviors, such as surfacing problems that

employees must learn how to solve. But the social and technical systems of TPS are intertwined; if a company

wants to change the culture, it must also develop true lean leaders who can reinforce and lead that cultural change.

The best way a company can develop this is through action to improve the company’s core value streams, supported

by committed leaders who reinforce culture change. Leaders must be involved in the value stream mapping and

shop floor transformation so they can learn to see waste.

2) Learn by doing first and training second. “Before started with all these radical changes, we need to

inform people of what we are doing through training courses.” This has led to elaborate corporate training programs

with PowerPoint TM presentations. Unfortunately you cannot PowerPoint TM your way to lean. The Toyota Way is

about learning by doing. It is believed that in the early stages of lean transformation there should be at least 80%

doing and 20% training and informing. The best training is training followed by immediately doing … or doing

followed by immediate training. The Toyota approach to training is to put people in difficult situations and let them

solve their way out of the problems.

3) Start with value stream pilots to demonstrate lean as a system and provide a “go see” model. In Find Solid Partners and Grow Together to Mutual Benefit in the Long Term, the Toyota Supplier

Support Center implements in companies to teach lean. Within a value stream, defined by a product family, a model

is created. By model, It is meant that implementing the whole system of tools and ultimately human resource

practices so other employees from your company can go and see lean in action without having to go to some other

company. For a plant, this usually means creating one product line, beginning with raw materials received and

ending with finished goods. In a service organization, it is one complete business process from start to finish within

the company boundaries. The go-and-see model line should become a singularly focused project with a great deal of

management attention and resources to make it a success and an object lesson in management commitment.

4) Use value stream mapping to develop future state visions and help “learn to see.” In

Using the Toyota Way to Transform Technical and Service Organizations, value stream mapping is a method for

clearly showing in diagram form the material and information flow. When developing the current state map, future

state map, and action plan for implementation, It is recommend to use a cross-functional group consisting of

managers who can authorize resources and doers who are part of the process being mapped. The team learns

together as they see the waste in the current state, and in the future state they come together to figure out how to

apply the lean tools and philosophy. Spent endless hours debating with individuals over whether lean can apply to

their particular situation since they do not have the high volumes and repetitive processes of Toyota. Never had that

debate in a value stream mapping workshop, because the mapping creates a language and tool for the team to

actually pick apart a specific process, see the waste, develop a lean vision, and apply it to that particular process.

Value stream mapping should be applied only to specific product families that will be immediately transformed.

5) Use kaizen workshops to teach and make rapid changes. As described in Using the Toyota

Way to Transform Technical and Service Organizations, the kaizen workshop is a remarkable social invention that

frees up a cross-functional team to make changes in a week that otherwise can drag on for months. Selecting the

right people for the team is critical, as is setting aside the time for those individuals and giving them a lot of

management support. Using a talented and experienced facilitator who has a deep understanding of lean tools and

philosophy with a specific problem to tackle makes all the difference in what you can accomplish. However, the

kaizen workshop should not become an end in itself. In many companies, “lean efforts” revolve around having

numerous workshops: the more the better. This leads to “point kaizen”—fixing individual problems without

straightening out the core value stream. Kaizen workshops are best used as one tool to implement specific

improvements guided by a future state value stream map.

6) Organize around value streams. In most organizations, management is organized by process or

function. In a factory, there is a manager of the paint department, a manager of the assembly department, and a

manager of the maintenance department. In a bank, there may be a manager of order processing, a manager of order

fulfillment, a manager of customer complaints, etc. In other words, managers own steps in the process of creating

value for customers and nobody is responsible for the value stream. In Lean Thinking, Womack and Jones

recommend creating value stream managers who have complete responsibility for the value stream and can answer

to the customer. A manager is responsible for each product family (value stream) and has control of all the

resources needed to make the truck cockpit—including maintenance, engineering, and quality. Someone with real

leadership skills and a deep understanding of the product and process must be responsible for the process of creating

value for customers and must be accountable to the customer.

7) Make it mandatory. If a company looks at lean transformation as a nice thing to do in any spare time or as

voluntary, it will simply not happen. Transformation at Cuautitlan was the result of a shift from management

suggesting lean to making it mandatory with consequences for not buying in.

8) A crisis may prompt a lean movement, but may not be necessary to turn a company around. A

sinking ship certainly mobilizes management and the work force into getting serious about lean. Senior

management proactively championed improvement. What is important is that lean leadership is focused on long-

term learning.

9) Be opportunistic in identifying opportunities for big financial impacts. Toyota focuses on improving

processes, confident that this in turn will improve financial results. However, when a company does not yet believe

in the lean philosophy heart and soul, it is particularly important to achieve some big wins. By picking the right

product family and with experienced lean expertise, a serious effort has about a 100% chance of making huge and

visible improvements that will impress any executive.

10) Realign metrics with a value stream perspective. “You get what you measure” has become a truism in

most companies. But metrics are used very differently by Toyota compared to most companies. They are an overall

tool for tracking progress of the company and they are a key tool for continuous improvement. At most companies

they are mainly a tool for short-term cost control by managers who do not understand what they are managing. For

example, companies track indirect / direct labor ratios and call to the carpet those with unfavorable ratios. The way

to make the ratio look good is to have lots of direct labor and keep those people busy making parts, even if they are

overproducing or doing wasteful jobs. Creating a team leader role for support like Toyota’s structure means

damaging that ratio and a short path to the unemployment line. The first step therefore is to eliminate non-lean

metrics that are wreaking havoc with those seriously invested in improving operational excellence. The next step is

to measure a variety of value stream metrics from lead time to inventory levels to first-pass quality and treat these

metrics as seriously as labor productivity and other short-term cost metrics.

11) Build on your company’s roots to develop your own way. Toyota has its way. You need to have your

way. When Toyota works with companies to teach TPS, they insist that the companies develop their own system. It

is OK to borrow some of the insights from the Toyota Way and it is recommend to adopt the basic principles. But

you need to put them into your language in a way that fits your business and technical context. The Toyota Way

evolved through some inspired leaders who provided a very rich cultural heritage. Your company probably has a

rich heritage as well. A large majority of business start-ups fail within the first three years. If you are reading this

article hoping to improve your company, most likely you are one of the survivors. Someone did something right to

get you to this point. Build on that. Build on your company’s heritage to identify what you stand for.

12) Hire or develop lean leaders and develop a succession system. What it means to be a Toyota leader in

Growing your Leaders rather than purchasing hem. Leaders must thoroughly understand, believe in, and live the

company’s “way.” All leaders must understand the work in detail and know how to involve people. If the top is not

driving the transformation, it will not happen.

13) Use experts for teaching and getting quick results. The word “sensei” is used in Japan with some

reverence to refer to a teacher who has mastered the subject. A company needs a sensei to provide technical

assistance and change management advice when it is trying something for the first time. This “teacher” will help

facilitate the transformation, get quick results, and keep the momentum building. But a good teacher will not do it

all for you. If you want a lean organization, you need to get lean knowledge into your company, either by hiring

experts with a minimum of five years’ lean experience or by hiring outside experts as consultants. An expert,

whether internal or external, can quick-start the process by educating through action, but to develop a lean learning

enterprise you need to build internal expertise—senior executives, improvement experts, and group leaders who

believe in the philosophy and will spread lean throughout the organization over time.

Having said all this, the question remains, can a company transform and sustain a culture to become a lean learning

organization? If a company can maintain continuity of leadership over time, there is no reason why it cannot profit

by implementing its version of the Toyota Way principles. It will not be easy.

Typical obstacles may be reluctant top managers who do not understand, managers willing to try lean tools but are

not committed to following through, a management shakeup from committed lean leaders to anti-lean managers, a

market that goes sour, or a buyout.

If Toyota is any example, the rewards and results will far outweigh the great effort required. You will simply be the

best in your business because you will be using operational excellence as a strategic weapon. Good luck on your

journey!