If you haven’t picked up a copy of the August 22/29 special double issue of BusinessWeek, I’d highly recommend it. The entire issue is dedicated to looking at almost every aspect of how the emergence of China and India will affect the global economy. There are many fascinating tidbits that I’ll be blogging on soon, but for now I found especially interesting some information that makes me believe that India may be creating the next Lean powerhouse.
BusinessWeek devotes an entire section to how India is embracing Toyota principles. Not just manufacturing companies, but the infotech industries as well. Indian companies seem to feel a "kindred spirit" with Toyota’s history, as they are also trying to claw their way into a global business with low prices and a passion for quality.
Wipro, a US$1.7 billion infotech company with 42,000 employees, has a stated goal of wanting to become the "Toyota of Business Services." They have become very focused on examining all of their business processes, breaking them into discrete components, and eliminating non-value-added. Wipro has become so efficient that it now provides one-day mortgage processing services for U.S. financial companies.
You may have heard of Tata Group in India, a conglomerate that now includes the most efficient steelmaking factory in the world. Four years ago the company plunged into the passenger car business, and created India’s first indigenously designed, developed, and produced car… the $6,600 Indica.
Tata is now leveraging India’s low-cost engineering skills to develop a "people’s car" that will sell for only $2,200. This car will use leading-edge materials such as composites and industrial adhesives, but the real advantage is the business model to eliminate the middleman. The cars will be delivered to Tata-trained franchisees as kits, similar to how bicycles are shipped in knocked-down form. The cars will be assembled and configured on demand, basically next door to the customer, thereby giving eager franchisees the opportunity to create enterprises. Before thoughts of "Yugo" appear, understand that the V2 version of the Indica has received numerous quality awards and is now being sold in Europe and South Africa.
India and China will definitely be major competitors in the future… but they are also a significant opportunity for North American manufacturers. We’ll report more in the upcoming days.