India needs companies to become engines of manufacturing growth, create products which are really Indian, and go on to become global icons, building the nation’s brand identity. Seven success stories of the ‘Indian’ way of implementing Japanese manufacturing Management methods are creating a buzz about Indian Manufacturing.

2. manufacturing
cover story
7 Dreams to Reality
Transforming Indian
Manufacturing
India needs companies to become engines of manufacturing growth,
create products which are really Indian, and go on to become global
icons, building the nation’s brand identity. Seven success stories of
the ‘Indian’ way of implementing Japanese Manufacturing Management
methods are creating a buzz about Indian Manufacturing
T
o sustain double-digit growth in Gross Domestic
Product (GDP), India needs to increase the
share of its manufacturing sector in GDP to
at least 25% from the current 17%. All the
stakeholders now agree that manufacturing must take
an important role in India’s GDP growth, employment
creation and export capability.
Manufacturing, like any other sector, has its own
challenges as well as opportunities. Thus far, Indian
companies depended mostly on bringing in technology
from outside, and merely produced products. But, as a
young nation, the challenge is to develop new products
for our own huge domestic market. Opportunities are
aplenty. We need companies, like in the developed
world, who become our engines of manufacturing
growth, and create products which are really Indian,
and go on to become global products, building India’s
brand identity.
To realize this, companies need to identify young talent
and transform them into leaders of the future and
‘engines’ to drive change. These visionary leaders for
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tomorrow need to unlearn past successes and acquire
new methods continuously. They must develop new
way of ‘breakthrough thinking,’ to create and add new
value, to discover the needs of the customer, and to
fulfill those needs.
Way back in 2004, CII sensed this latent need and
approached Prof Shoji Shiba, an international expert in
Breakthrough Management and then Adjunct Professor
in MIT’s Leaders’ for Manufacturing Program (now known
as Leaders for Global Operation) in USA, to guide
Indian manufacturing. With Prof Shiba’s experience,
CII, in collaboration with the National Manufacturing
Competitiveness Council and the Japanese International
Cooperation Agency (JICA), developed a set of
programmes under the aegis of the Visionary Leaders
for Manufacturing (VLFM) programme, in 2007, and
the Visionary Small and Medium Enterprises (VSME)
programme, in 2010. Both these programmes opened
the eyes of Indian companies and managers to the
concept of Breakthrough to face a world undergoing
drastic (10X) changes.
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3. cover story
Can Transformation really make a difference?
The unique seven-year (2007 – 2013)VLFM journey has
created more than 200 excellent success stories. Of
these, CII proudly presents 7 chosen success stories
of Real Change Leaders from Indian Industry: Anand
Group, Godrej & Boyce, and Sona Group, and from
Academia: IIM Kolkata in partnership with IIT-K and IIT-M,
whose dream of taking Indian manufacturing to the next
level became a true reality, with a new mindset and
skills of ‘breakthrough thinking and implementation.’
These 7 success stories of the VLFM programme,
demonstrating an ‘Indian’ way of implementation
of Japanese Manufacturing Management methods,
are creating a buzz across the globe about Indian
Manufacturing. The successes were first showcased
in Tokyo to Japanese industry in July 2013, and
subsequently to the top Management of Indian Public
Sector Undertakings (PSUs) in September 2013 in
New Delhi.
The case studies demonstrate breakthrough in the
way
• New products are developed and organizations are
transformed
• Customers and suppliers work together
• Society is impacted
• Higher Education is imparted through IndustryAcademia collaboration
These success stories were presented in Prof Shoji
Shiba’s book titled ‘Creating Visionary Leaders for
Manufacturing,’ and are now being published by Penguin
in November 2013, with the title ‘7 Dreams to Reality:
Transforming Indian Manufacturing.’
Of the seven stories, two are about new product
development and organization transformation, three are
about creating win-win amongst customers and suppliers
and sustaining them through community activities, and
two about societal transformation. The basic
principles in each of these studies can be
applied to other fields as well.
New Product Development and
Organization Transformation
Breakthrough Product: Sona EPAM
The 12-year journey of this breakthrough
product – an Electric Power Assisted
Module (EPAM) began in 2000 when
the Sona Group was drawing up its
vision for the 21st century. Dr. Surinder
8 | October 2013
Demonstration of EPAM during the visit of a Japanese Parliamentary
Delegation to the Sona Plant in Gurgaon
Kapur, Founder-Chairman of the company, foresaw the
increasing application of electronics in industry, and
realized that Sona – which manufactured mechanical
steerings and parts – could find it difficult to survive
in such an environment. Convinced that his company
should plan for its own electronic power steering, he
wanted a transition from `build to print’ to `print to
build.’
EPAM is critical for steering systems for off-highway
vehicles, such as golf carts, garden utility vehicles, and
tractors. Traditionally, these vehicles had never been fitted
with power steering, and were difficult to manoeuvre.
EPAM makes steering these vehicles easy.
Mr Kiran M. Deshmukh, then Sona’s Chief Operating
Officer, joined the first VLFM Learning Community as
a Module Director. His learning, that an innovative
organization and a facilitative work environment are
critical to achieving a breakthrough, led him to form a
dream team for this project, led by Dr. Ravindra Nath
Sharma (now General Manager, R&D). There were three
critical reasons for the success of this team: the team
leader and the COO developed an emotional bond;
the team leader and his deputy were experts in the
relevant technology; and the entire team
was passionate about the project.
EPAM is a breakthrough product born in
the innovative environment created by Sona
within their organization. This was supported
by the commitment of the top management
and the unique engagement with the customer,
who partnered in its development.
Sona created an open innovative office space,
300m away from the main building, with no
cabins, for the entire team. It offered a flat
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4. cover story
organization with flexible timings. The team created
an environment of fun and togetherness, celebrating
every occasion.
To further promote the feeling of unity in the team, Mr
Deshmukh gave the team a logo- InnovaTEam. He made
sure to spend at least 20% of his time with the team to
give an outsider’s perspective of their work, and provide
solutions to technical problems.
The decision to co-develop the product with a leading
American company helped it get immediate acceptance
from others in the industry. The enthusiastic response to
EPAM surprised even the partner customer. In 2013, the
customer’s order of EPAM jumped more than 150%!
Sona’s EPAM journey is important not just for the
technological development for a particular company, but
for manufacturing in general. It shows how companies
can undertake breakthrough projects and deliver them
successfully.
Having conquered a foreign market, Sona has now set
its sights on the Indian market, and is excited about
making a difference to the lives of Indian farmers.
Transforming an Organization: Godrej Shirwal
This story is about the complete transformation journey
of the Godrej Shirwal plant, located 40 km from Pune,
both in its internal processes and its interactions with
the outside world. The transformation at Shirwal was not
an easy journey. It took two-and-a-half years from the
change at the periphery to involving the society.
Mr Hussain Shariyarr, the young head of the Shirwal plant,
which manufactures washing machines, refrigerators,
ChotuKool and air conditioners, led this transformation
as a Real Change Leader. Attending the VLFM senior
managers’ course brought about a paradigm shift
in his thinking. The most important learning was
how to transform himself from an effective manager
to a Real Change Leader. For the organizational
The Shirwal Plant Scrapyard was renamed ‘Waste Management and
Control Department’
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change, he followed the seven
infrastructure tools model learnt
during the course. He also
learnt that transformation is
a slow and gradual process,
which generally starts from an
individual. But one individual
cannot transform an entire
organization successfully;
the whole organization
has to be involved in the
process of change.
Interestingly, Mr Hussain chose the scrap
yard as a starting point for the transformation of the
periphery, believing that the best place to start is at the
weakest point. The scrap yard is the most unattractive
part of any factory and also the most undisciplined.
This sent out the message that nothing is a waste,
everything has value. This was combined with greening
of the campus, setting up a national flag pole, founders’
gallery, and more.
The Shirwal team rolled out activities such as
Departmental Safety Score (DSS), Asset Identification
and Control, a common canteen and uniforms to
build trust between the workers and the management,
accountability among employees, and unity irrespective
of hierarchies. These initiatives increased employee
participation, and diluted the earlier mistrust that
marked management - worker relations. When a wage
settlement that had been pending for three years was
being negotiated, the trade union leaders were more
receptive and the issue was resolved amicably. The
number of trade unions in the plant has also come
down from three to one.
Taking the transformation from the company to the
suppliers and society at large, the Shirwal factory’s
interactions with the local community helped save
The Shirwal Story
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5. cover story
the imminent closure of its operations due to water
shortage when the area was affected by near-drought
conditions in 2012.
management laid emphasis on the behavior of the leader,
while another module was about understanding the
customer’s requirements and identifying latent needs.
Creating Win-win amongst Customers and
Suppliers, and Sustaining them through
Community Activities
The classroom inputs were supported by visits to
factories of the companies and their suppliers. Prof Shoji
Shiba and Prof Furuhashi hand-held the transformation
teams during the implementation of various measures
as well as internal training. It is this hand-holding that
makes VSME unique.
This section highlights the success of the Visionary
SME programme which attempts to fashion a paradigm
change in the relationship between a company and its
suppliers, to make it more sustainable.
Early successes, which can be showcased and
implemented in other areas, are important for team
motivation. So, the selection of the model line, a small
Transforming a Tier 1 Enterprise through VSME
Initiative: Gabriel
part of the plant or a section
of operations where change
The Visionary Small and
has to be effected before
Medium Enterprise (VSME)
being diffused to other
course is one of the four
parts of the organization, is
VLFM courses, started in
Line efficiency
rd
critical. Gabriel selected its
2010. The 3 batch of the
Improvement
SA3 assembly line, which
VSME course was conducted
(%)
produces two varieties of
in 2013 in Hosur, Tamil
shock absorbers.
Nadu, for companies based
Gabriel: VSME Benefits
in southern India. Gabriel,
an Anand Group Company,
Productivity
also participated in this
Improvement
(Units/manhour)
course. Ms Sandeep Kaur,
Deputy General Manager,
Programme Management, at
Gabriel, was given the task
of implementing the VSME
programme in her plant in
Hosur. With a VLFM Senior
Manager background, she not only played a key role in
the transformation in her company, but also introduced
several innovations of her own.
In VSME, the first step is the supplier’s voluntary
agreement and then final selection. For this, Ms Sandeep
shared the success stories of suppliers from previous
VSME batches to motivate the Hosur suppliers. Four
suppliers joined this programme along with Gabriel–
Hosur Steel Industries, Vinsar Elastomers, Standard
Elastomers and Yeko Enterprises. A team of focused
group of people was formed, starting from the top,
including the CEO, Plant Head, support engineers, and
inter-company group representatives. Involvement of the
CEO was necessary, as it sent out a message about their
commitment and the importance of the programme.
After the CEO programme, training was started at
the unique classroom created for operating the
VLFM Programme at the CII Naoroji Godrej Center of
Excellence in Mumbai.The first module on breakthrough
12 | October 2013
Delivery Performance
Improvement
(%)
All the four suppliers chosen
for the VSME programme
were supplying components
to the SA3 assembly line.
These suppliers too went
through all the steps that
Gabriel had undergone.
They also defined their goals,
1
formed a team which went
for training, and selected
model lines.
The first step was to transform the SA3 model line. In
transforming a workplace, the VSME initiative focuses
not on stand-alone improvements in individual processes
(which is the traditional approach), but on the seamless
flow of production across processes and different levels
of suppliers. Gabriel got quick results in terms of saving
floor space, reducing the time and distance involved in
moving components and making the workplace safe.
The company then invited the four suppliers and showed
them what it had done. This motivated them to take up
similar activity in their plants. Following this, the support
engineers and functional heads went to the suppliers’
premises and carried out the same activities there. This
yielded quick visible results.
More business results followed as they focused on
flow. However, a more far-reaching benefit is that the
relationship between Gabriel and its suppliers has
changed.
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6. cover story
Transformation of Tier 2 or small
company: Sona - Paragon
The second aspect of Transformation
presents the Supplier or Tier 2 perspective.
This story is about Paragon Autotech
Products, which supplies rubber and
plastic components to the auto component
industry. From 2008, the company’s
performance started deteriorating. It
was making cash losses for two years,
till it reached a point where it had no
cash balance.
Mr Rahul Jain, Managing Director, who took over the
company from his father, Mr R. L. Jain in 2005, got an
ultimatum from his father to close down the company
by March 2012.
The turnaround in Paragon’s fortunes came from
Sona Koyo Steering Systems, the auto-component
manufacturer of which Paragon was a supplier. Mr R.
B. Singh, the VSME chief of Sona Koyo, persuaded
Paragon to join the second batch of the Visionary Small
and Medium Enterprises (VSME) programme. And the
MD decided to try it out before accepting defeat and
proving his father right.
Mr R B Singh participated in the Real Change Leaders’
workshop during the first Learning Community in 2004
and attended the 11 days first module of the one-year
Before
After
PGPEX- VLM programme for middlelevel executives at IIM Calcutta (IIM-C)
in 2011. There, he learned breakthrough
management principles, expected behavior
and body language of CEOs, opening up to
new ideas, and unlearning past ones.
On his return, Mr Singh got immersed in the
VSME programme, attending all the modules,
identifying the model lines in Sona Koyo to be
taken up for improvement, and working along
with the company’s VSME team to practice the
learnings. Sona Koyo chose Column 2, which
manufactures various models of steering columns, as
its model line. Paragon was selected as one of the
four suppliers.
This transformation process had four stages. In the first,
the mindset change cycle, the change began with the
CEO of the company leading the transformation, and
cascaded to the CEO of the supplier. Next came the
immediate results cycle, where visible problems were
addressed and quick results obtained. This was followed
by the pregnant results cycle, where hidden problems
were identified and analyzed and counter-measures taken.
Finally, in the business results cycle, the tangible and
intangible results of transformation activities were seen.
Paragon, which was deep in the red when the VSME
initiative began, not only achieved huge cost saving
under various heads, but also significant intangible
benefits.
The Sona-Paragon story is not just an example of a
successful VSME initiative where a company and its
supplier move to a mutually beneficial win-win relationship;
it is one which shows how this can completely transform
an organization through mindset change.
An Indian Way of Community Activity for
Accelerating SME Growth: Anand VSME
Community
Paragon’s environment before and after the VSME programme
14 | October 2013
This story takes the VSME
initiative, which helped companies
and their suppliers move away
from the traditional hierarchical
relationships to one of win-win
partnerships, one step further.
Communities are meant to
ensure the sustainability of
the VSME after the one
year programme, further
develop the capability of the
suppliers, and continue the win-win
relationship with the supplier companies.
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7. cover story
The Visionary Laghu-Udyog Mitra Mandal or VLMi (small
industry friend group), the brainchild of Mr C. S. Patel,
Member, Supervisory Board of Anand Automotive, is
about moving from a traditional individual-based selfdevelopment model to a community learning-based
model.
Mr Patel realized that transformation is a slow process
and what had begun with VSME could take at least
three more years to consolidate and sustain. Also,
each company and each of its suppliers had only one
model line. It was necessary to diffuse the transformation
to all the lines in the plant and all the suppliers of a
company, to make it sustainable. He thought of forming
a community to take the transformation process forward
to more people. Each company had a model supplier,
and Mr Patel suggested that this supplier become a
kind of a demonstrator of change for other suppliers
of that company.
He took on board the top management of the Anand
group, the CEOs of the group companies, and the
suppliers, telling them that VSME was the first phase,
and this community would be the second. They
also realized that learnings of the VSME programme
was limited to the top two or three persons in the
organization, and needed to be diffused to others as
well.
Each company formed communities with their suppliers,
and appointed a support engineer for the community.
In the case of Spicer, an Anand Group company, Mr
Sangramsingh D. Pardeshi, a young and enthusiastic
senior manager, and a graduate of the VSME programme,
drew up a manual for organizing activities under VLMi.
This set out a standard operating procedure for VLMi,
helping to sustain it.
Every month, there is a community meeting, usually at
the plant of a member, or a Spicer facility. Spicer’s top
management regularly visits suppliers’ plants, not as a
mere formality, but for close interaction with the team
there, sharing valuable suggestions and feedback. This
has given the suppliers significant operational results,
and motivation to sustain the activity.
Society Transformation
Godrej ChotuKool-2012 Edison Award Winner
Today’s unsolved problems of society are tomorrow’s
market opportunities. The story of Godrej ChotuKool is
the story of the visionary leaders of a company seeing
the invisible – a market that did not exist. It is also about
a challenge that faces those eyeing the Bottom of the
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Godrej ChotuKool
Pyramid (BOP) as a market. It demonstrates the role
companies can play in building inclusive growth, and
exemplifies a new relationship between business and
society through applying breakthrough principles to
understand human nature, especially at the Bottom of
the Pyramid.
Mr G. Sunderraman, Executive Vice President-Corporate
Development, Godrej & Boyce, was the Real Change
Leader in this story. As part of Prof Shiba’s first Learning
Community in 2004, and then an active supporter of the
VLFM Senior Managers Programme as Module Director
of the product development module, he understood how
to see the invisible – the latent need of the customer
that is not expressed. His idea for a product that meets
the daily needs of a family of five in rural households
met ready acceptance from Mr Jamshyd N. Godrej, Past
President, CII, and Chairman and Managing Director,
Godrej & Boyce. Mr Godrej dedicated Mr Sunderrajan
totally to this project.
ChotuKool, a small-sized, light weight portable cooling
revolution for low-income homes in India, keeps the
basic needs of water, milk, vegetables and fruits, fresh
and cool between 5°C to 15° C. It uses advanced semiconductor technology, not a conventional compressor, to
keep the price affordable. Apart from regular AC power,
it can work on a battery, inverter and even solar power.
It also consumes 30% less power than conventional
refrigerators. Every aspect of ChotuKool was based on
the just right philosophy: size, weight, cooling capacity,
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8. cover story
power consumption, even colour!
ChotuKool is not just a new product, it is a new
idea. It has evolved from being just a cooling device
for daily household items to become an asset to
generate income for kiosk-based businesses run by
small entrepreneurs. For example, a young man who
runs a kiosk selling paan (betel leaf) and cigarettes in
Nashik bought a ChotuKool because many customers
wanted their paan served cold, and often asked for
cold water. He was not able to provide either because
his small stall could not accomodate a refrigerator.
Now, he could, thanks to ChotuKool. His daily earnings
have also gone up.
In an innovative product, reaching out is a big
breakthrough. The more innovative the product, the more
innovative is the need to reach out. The breakthrough
team decided not to go through the regular distribution
system but opted for channels that had the patience to
create value for customers, such as NGOs and India
Post.
It is no surprise that ChotuKool won the Edison Gold
Award 2012 in the social impact category.
Preparing Leaders: PGPEX VLM
This story describes a unique Industry-AcademiaGovernment collaboration to launch a joint programme
to secure the future of Indian Manufacturing by creating
an entirely new generation of engineer-managers.
For the manufacturing sector to grow and prosper,
a fusion of engineering and management skills is
necessary. A technologist without managerial skills
will continue with his engineering mentality and will
not be able to lead a manufacturing organization.
Combining these skills becomes even more important
in a world where technology is getting increasingly
advanced and technological changes are happening
rapidly.
The Post Graduate Programme for ExecutivesVisionary Leadership in Manufacturing (PGPEX-VLM)
is a one-year full-time diploma programme, offered
jointly by the Indian Institute of Management Calcutta
(IIM-C) and the Indian Institutes of Technology at
Kanpur and at Madras (IIT-K, IIT-M). It is open only
to engineers with at least five years’ experience
in the manufacturing sector. The curriculum offers
courses in both management and engineering.
This programme spans various subjects such as
strategy, finance, human resources, marketing, and
especially, leadership skills. The course structure is
path-breaking in many ways, with much emphasis
on the practical application of knowledge.
The programme is taught by the three institutes,
starting with IIM-C, followed by IIT-K and then IIT-M.
IIM-C focuses on management principles, and the
global economic and business scenario. The two IITs
deal with engineering subjects with a management
focus, like supply chain management and technology
management.
The students have to form groups and take up projects
like developing product concepts and prototypes. Cash
awards are given to the best product concepts and
prototypes. Besides visits to factories during various
modules, there is a two-month industry internship
towards the end of the course, with the finale being a
10-15 day visit to Japan.
Spreading the course across different institutions is
a breakthrough element in the programme. Getting
participants to spend five months in IIM-C and two
months each in the two IITs, acquaints them with
different learning environments as well as different
cultures.
The course, now in its 7th year, is gaining in popularity
among both students and recruiting companies.
Every year the programme turns out around 35
young men and women engineer-managers, equipped
with leadership skills which help them move up
the corporate ladder faster, and bring value to the
organization.
Sensing that these numbers are not sufficient to meet
the needs of the Indian manufacturing sector, the
Government of India is now actively working on scaling
up the programme to other institutions, to develop
more engineer-managers for the nation’s manufacturing
sector.
16 | October 2013
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