Research Design and Research Sites
This chapter discusses: the research design; the sites selection for this research; development of the research questions. Section 4.1 discusses the characteristics of the Kaizen practices. Section 4.2 presents a brief historical review of the Indian automotive industry and automotive joint ventures in NCR Delhi REgion. Section 4.3 discusses the case study companies and their selection methodology. Section 4.4 discussess the findings of a single preliminary study from one organization, the settings of this research and the development of the research hypotheses.
Based on the discussion on the two Japanese Kaizen practices and their inter- relationship as presented in the literature, three of the inherent characteristics of Kaizen can be delineated:
• Kaizen produces small and incremental changes over the long-term period of time and requires involvement of everyone in the organisation, (Imai, 1986; Laraia et al., 1999; McNichols et al., 1999; Bateman and David, 2002);
• QCCs and Teians are two vital components of Kaizen which are applied to collect and implement all types of improvement ideas (Ghosh and Song, 1991; Tamura, 2006; Aoki, 2008; Liker and Hoseus, 2008; Marin- Garcia et al., 2008); and
• The support of shop floor management is must for Kaizen (Malaise, 1995; Handyside, 1997).
Thus, this present research postulates that there is a strong relationship between the application of shop floor management tools by individuals and the performance of Kaizen, quantified in terms of the number of improvement ideas submitted, implemented and the rate of long-term implementation.
This proposed research has been intended to explore and describe the situation concerned with adopting and utilising these tools for implementing continuous improvement. As such, the following research objectives were developed:
• To define the roles of QCCs and Teians in Kaizen;
• To explain the implementation of the building block shop floor management tools;
• To demonstrate the importance of shop floor management tools in supporting Kaizen;
• To explore the relationships between the Kaizen practices, shop floor management tools, and their long-term outcomes;
• To have a better understanding of Kaizen implementation in organizations located outside of Japan. These outcomes will be translated into actionable methods for practitioners to select the suitable practices for effective collection and execution of improvement ideas for long-term sustainable continuous improvement;
• To facilitate an empirically tested model for studying and managing the Kaizen practices. These outcomes will be applied to refine the model for implementing shop floor management to sustain continuous improvement.
The research questions were:
1. What is the Japanese Kaizen? How does it differ from other improvement systems?
2. What are QCCs and Teians? How do these two practices differ from each other in collecting improvement ideas?
3. Is there any the co-relation between these two Kaizen practices? Are they mutually inclusive and supportive? In case not, how do they influence each other?
4. Can the practices of the Japanese Kaizen be adopted and implemented to maintain long-term continuous improvement?
5. What are the building block shop floor management tools and logical sequence for their implementation?
6. Are Kaizen practices and the shop floor management tools inter-dependent with each other?
7. Can shop floor management tools be implemented independently of each other to support the Kaizen practices?
8. What is the relationship between the aforesaid two Kaizen practices? How these influence their outcomes?
9. How can these practices yield better outcomes?
10. How can these kaizen practices be applied for sustainable continuous improvement in long term basis?
Selection of Site for This Research
The work was based in NCR Delhi region of India. Primarily there are three reasons behind this:
(1)The Indian auto industry is one of the largest in the world. The Auto industry in India contributes 7.1 per cent in the country’s Gross Domestic Product (GDP). The Two Wheelers segment with 80 per cent market share is the leader of the Indian Automobile market. The overall Passenger Vehicle (PV) segment has 14 per cent market share.
(2)India has also become a leading exporter of Automobiles and outsourcing point of auto components. A very strong export growth expectation for the near future has been forecasted. Overall automobile exports grew 15.81 per cent year-on-year between April-February 2017-18. In addition, several initiatives by the Government of India and the major automobile players in the Indian market are expected to make India a leader in the 2W and Four Wheeler (4W) market in the world by 2020.
(3) Following the growing demand, almost all global auto makers have staked heavily in various segments of the industry since 1990s. Numerous major Japanese car makers and their parts suppliers have established joint venture relationships with Indian companies and thereby have established production facilities in India. As per the figures released by Department of Industrial Policy and Promotion (DIPP), the industry has attracted Foreign Direct Investment (FDI) worth US$ 18.413 billion during the period April 2000 to December 2017. The Indian automotive market is estimated to grow at around 10-15 per cent per annum to reach US$ 16.5 billion by 2021. This was estimated from around US$ 7 billion in the year 2016. It has the potential to generate up to US$ 300 billion in annual revenue by 2026, create 65 million additional jobs and contribute over 12 per cent to India’s Gross Domestic Product.
A brief History of Indian Automobile Industry
The first car on an Indian road was as early as 1897. Till 1930s these cars were imports in small numbers by Indian Royalty who were one of the largest buyers of luxury cars in world in pre-Independence British India. A seedling of automotive industry in India started in the 1940s. Hindustan Motors by Birla group was launched in 1942. Its longest running competitor Premier was launched in 1944 These were making Chrysler, Dodge, and Fiat products respectively. Mahindra & Mahindra was started in 1945, and began assembly of Jeep CJ-3A utility 4-wheelers. Post independence in 1947, the Government of India and the private sector put efforts to create an automotive-component manufacturing industry to supply to the automobile industry. 1953 An import substitution programme was initiated in 1953, and gradually restricted the import of fully built-up cars. Hindustan 10 was manufactured by Hindustan Motors, under the license from Morris Motors, UK In 1949. The Ambassador brand, made by Hindustan Motors, dominated India’s automotive market, from the 1960s until the mid-1980s and its manufacturing continued till 2014.
Fiat 1100D was built under license by Premier Automobiles , It was later renamed as ‘Premier Padmini’. It was the only real competitor of Ambassador. In 1952, the government of india constituted the first Tariff Commission, with the purposes of finding out a feasibility plan for the indigenization of the Indian automobile industry. Tthe commission submitted its report In 1953,in which recommended the classification of existing Indian car companies based on their manufacturing infrastructure, with licensed capacity to manufacture a certain number of vehicles. The Tariff Commission recommendations were implemented with new policies which excluded companies that only imported parts for assembly, and also, those with no Indian partner. Following the Tariff Commission implementation in 1954, General Motors, Ford, and Rootes Group, which had only assembly plants in Mumbai, moved out of India.
Nevertheless, the growth of Indian auto industry was quite slow in the 1950s and 1960s. In the early 1970s some growth potential was visible, although Cars were still synonymous with elite and Jeeps were largely used by government organizations and some rural belts. In commercial vehicle segments saw some developments by the end of the decade to serve better goods movements. The two-wheeler segment remained stagnant, except for to increased sales in urban middle class. As India was at the cusp of green revolution, the demand for farm tractors saw a quantum jump. The imports from Russian and eastern bloc countries were done to fulfill the increased demand. However, by the 1980s, the automobile market was still dominated by Hindustan and Premier, who sold superannuated products in fairly limited numbers, but by the same time a few competitors began to arrive on the scene
In 1984, the government India established the Ordnance Factory Medak, near Hyderabad. It began manufacturing Infantry Combat Vehicles named as Sarath, the backbone of India’s mechanised infantry. To manufacture the high-power engines used in ICVs and main battle tanks, Engine Factory Avadi, near Chennai was set in 1987. In 1986, the government established the Delhi Auto Expo to promote the auto industry
India began to liberalise its automobile market in 1991 in real earnest. A number of foreign firms also initiated joint ventures with existing Indian companies. multinational automakers, such as, Suzuki ,Toyota and Honda of Japan, DAEWOO and Hyundai of South Korea, were allowed to invest in the Indian market, furthering the establishment of an automotive industry in India. Suzuki, in a joint venture with Maruti, was the pioneer, as early as 1980s, and became the most successful among these new entrants. The variety of options available to the consumer began to multiply in the nineties, as the result of government policies to promote the automotive industry 1980s, whereas before there had usually only been one option in each price segment. By the turn of 2000, at least12 large automotive companies arrived in the Indian market, most of them off shoots of global companies. As on this day, India manufactures low-priced cars for markets across the globe
Encouraging the Local manufacturers
The import tax on imported cars in India is at the rate of 125%. On the other hand, a tax levied on the imported components like gearboxes, airbags, drive axles, is just10%. Obviously, this tax regime encourages cars makers to assemble their products in India rather than to import completely built units.
The seriousness with which the automotive industry is responding to the Indian government’s call to switch to electric mobility by 2030 is the ample proof of significance of India for the global players of this business. More than 45 companies, working on electric vehicle technologies participated in the Auto Expo 2018 in Greater Noida February 2018. A good number of these technologies are being developed keeping in mind the main selling factor in India: affordability. Once again, Suzuki is at the top of the race to bring electric vehicles to India, Its Indian arm, and also. the India market leader Maruti Suzuki, accounted for more than 52% of the Japanese parent’s sales volume in 2017. The volume share has grown more than five percentage points in two years. It sold over 1.7 million vehicles in India in 2017, in contrast to 1.4 million in 2015.
Suzuki has been making investments in capacity, being future-ready,” The chairman of Maruti Suzuki, Mr. RC Bhargava, in a recent interaction, told ET. “India is an important market for them. If the Indian market continues to grow (and) Maruti Suzuki manages to continue increasing its market share, sales contribution from India (for Suzuki) will go up even further in the years ahead,” he added.