Can You Afford to Dream in Business?

Let me start with a dream in which Bill Gates is hanging out with the chairman of General Motors. "If automotive technology had kept pace with computer technology over the past few decades," boasts Gates, "you would now be driving a V-32 instead of a V-8, and it would have a top speed of 10,000 miles per hour. Or, you could have an economy car that weighs 30 pounds and gets a thousand miles to a gallon of gas. In either case, the sticker price of a new car would be less than $50."

"Sure," says the GM chairman. "But would you really want to drive a car that crashes four times a day?" 

Those who have been using Microsoft products for a number of years can rattle out a few other unparliamentary words on behalf of the GM chairman.  No doubt Bill Gates had dreamt of putting a computer in every home, and he started working on developing one for this purpose for past several years.  What he has dreamt can be read in the books he has written (The Road Ahead and Business @ speed of Thought)

It is evident that Bill Gates was not daydreaming but backed up by business acumen and hard work.  Unfortunately, no one in the automotive industry, except possibly Henry Ford, dreamt in a similar fashion, but that was a long time ago.

What has not taken place in the US is happening on the other side of the Pacific.  Toyota Motor Company developed Toyota Production System (TPS), later named as lean manufacturing practices.  Since 1980 Toyota has practiced what was dreamt off by Henry Ford in 1930. The Toyota Group founder, Sakichi Toyoda, dreamt what Bill Gates dreamt about, for changes in the automobile industry.

Toyota who pioneered Lean manufacturing has set a target to produce a car that can cross the American continent on just one tank full of gas.  This was spelled out by Katsuaki Watanabe, who took over as President of Toyota Motor Company in 2005.  He says, “My dream of car making, for instance, when it comes to the environment, is to make cars that can cross the American continent on just one tank full of gas or cars that make the atmosphere cleaner the more we use them, and in terms of safety, cars that do not cause accidents, cars that do not injure people or cars that make people healthier when they drive. And to realize this dream, I intend to vigorously promote research and development activities.”

Even though Toyota cars bear the highest mark of quality his thinking was not enough.  He thinks, “Regarding quality, even if a defect involves only one out of a million aspects of a car, to the customer using that car, it means all and everything about that car is defective and wrong.”  And this is not untrue. Think of it: with a one in million India has 1120, and in China there could be 1300 people having the same fate.  That is why with 7.5 million cars sold in 2004, and more expected to be sold year after year, Watanabe feels “Given the number of customers that use Toyota cars today, I realize even more acutely that we now have a heightened responsibility for the quality of the vehicles we produce.”

Industry experts think that the cost is high for quality.  Not for Watanabe. He sees “Relating to cost, we will seek more innovative and creative ways of reducing costs. For example, by involving all the processes for proceeding and following, including development, production and sales in cost-reduction activities, or focusing on component systems rather than individual pieces of parts as a target of cost reduction efforts. At the same time, I want to eliminate muda, mura and muri, that is, non-value-adding activities, unevenness, and over-burdening from around us, in order to build more resilient fundamentals as a corporation.”

You may not be aware but Microsoft spends much larger portion of their income on R & D and that’s why they are ahead of their competitors.  Toyota also plans in similar fashion.  But what I see as glaring difference between Microsoft and Toyota is the way they look at muda that is waste in the process.

As I see more and more offices during my training programs I notice that the majority offices are not even aware what productivity is, and a tremendous amount of waste takes place in form material and process time.  A minor community is aware of material waste but the process waste is nowhere in the picture.  Lean office can concentrate on removing process waste which will automatically reduce material waste and gain in productivity. 

My humble contention is to see this muda, just keep your eye open and start analyzing at various levels in offices.  Dreaming Lean Enterprise is fine but it must be backed up by analytical approach and follow up to see that dreams turn out to be a reality.

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Copyright © 2005 Satish Hulyalkar
Last modified: September 18, 2007