Chapter 4 Research Design and Research Sites This chapter discusses

Chapter 4
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.

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Research Design
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.
The automotive manufacturing base at NCR Delhi
The majority of India’s car manufacturing industry is evenly divided into three “clusters”:
(1) Around Chennai: It is the southernmost and largest, contributes 60% of the country’s automotive exports, with a 35% revenue share. It is home of the operations of , Ford, Hyundai, Renault, Mitsubishi, Heavy Vehicles Factory, Engine Factory Avadi, Nissan, BMW, Hindustan Motors, Daimler, Caparo, and Datsun.
(2) Along the Chakan corridor Pune, Near Mumbai, Maharashtra: It is the western cluster, with a 33% share of the market. Aurangabad is the home of Audi, Volkswagen, and Skoda . Mahindra and Mahindra has an SUV and engine assembly plant at Nashik. Tata Motors, Mercedes Benz, General Motors, Land Rover, Jaguar, Fiat, and Force Motors have their assembly plants located in this area.
(3) The northern cluster: it is around the National Capital Region, Delhi and accounts for 32% of market share. The country’s largest car manufacturer, Maruti Suzuki, is based in this cluster at Gurgaon and Manesar, in Haryana,. Another Japanese global car Honda car india is also situated in greater noida of the same region.
Thus, NCR Delhi is home to two major Indo-Japanese joint venture car assemblers and over four hundred suppliers. These joint ventures and their tiered suppliers have adopted Lean Production and implemented Kaizen to support their daily production and improvement activities . This research was carried out in this region. The research domain was the population of Indo-Japanese joint ventures at sites having experience of implementing Lean Production, shop floor management and continuous improvement.

The selected companies
Ten Indo-Japanese companies from NCR Delhi were selected. The following criteria were applied for choosing these companies:

• the data from the company had to be measurable, demonstrable, and replicable;

• the company must be in the automotive sector;

• the company had to be either a fully Japanese-owned company or an Indo- Japanese joint venture (in order to test a manufacturing practice which originated in Japan); and
• The company was willing to divulge information to assist the research.

The companies, selected by the above criteria, were the leading Indo-Japanese joint ventures in the automotive field. These companies are headquartered in NCR Delhi. These have joint venture arrangement with many Japanese partners to produce Japanese branded cars, buses and automotive parts/components for sale in India as well as to export. As the Japanese had invested in the companies, the expected changes are coming to their place gradually, like the introduction of the advanced production technology, management knowledge and improvement skills. At the time of this study, the employees throughout the companies have participated actively in their improvement practices.

Company Main Products Establishment of Joint-venture Annual production capacity (m=million) No. of employees
Comp_1 Cars 1995 0.30 3500
Comp_2 HVAC and Engine Parts 2000 0.23 600
Comp_3 Air conditioners 1997 0.35 400
Comp_4 Plastic components 2002 0.6 250
Comp_5 Aluminium alloys 2003 0.12 (tons) 300
Comp_6 Seats, door Trim 1997 0.5 350
Comp_7 Wiring harness, Dashboards 1986 0.4 450
Comp_8 Electric Products 1984 0.8 1200
Comp_9 Switches, Locks 1998 1 550
Comp_10 Clutch , Brake 1998 1 500
Table 4.3 The companies selected for case study (2015)
As depicted in Table 4.3, the selected companies included one major car assembler (Comp_1) and nine smaller automotive parts/components manufacturers which are first-tier suppliers (Comp_2 to Comp_10). Each one of these selected companies had experience of implementing Lean shop floor management tools and continuous improvement (Table 4.4). Thus, they were apt for exploring the relationship between Genba Kanri and continuous improvement.
Company Experience of Kaizen (2014) Teians
(per person per month) QCCs
Time span No. of members involved Source of the members
Comp-_1 15 Years Minimum of 1¹ 3-6 months 6-10 Different shop floor
Comp-2 9 Years No minimum requirement ² 6 months 7-15 Same shop floor
Comp-_3 12 Years Minimum of 1 6-9 months 5-10 Different shop floor
Comp-4 9 Years Minimum of 1² 6 months 5-15 Different shop floor
Comp-_5 7 Years Minimum of 1² 6 months 5-15 Same shop floor
Comp-_6 10 Year No minimum requirement 3-6 months Not specified Same shop floor
Comp-_7 20 Year Minimum of 1 6 months 5-10 Not specified
Comp-_8 25 Years Minimum of 1* 3-6 months 5-10 Not specified
Comp-_9 12 Years Minimum of 1 3-6 months 5-10 Not specified
Comp-_10 16 years Minimum of 1 3-6 months 5-10 Not specified
Teians can be submitted either online or in a paper-based format.
Shop floor management theory: Genchi-Genbutsu (Japanese for ‘go to see the place and collect the data from where the problem is occurring’).
Financial incentive: Teians reward based on participation, QCCs reward based on outcome
¹Teians for environment, creative, safety or cost.
²Teians for cost or quality.
³Teians for quality only.
*Teians can only be submitted in a paper-based format.
Table 4.4 the Kaizen implementation in each of the selected case companies

Comp-1 is an assembler of cars, headquartered in NCR Delhi. The company started as a 50:50 Indo-Japanese joint venture, but now is 100% Japanese owned, to assemble Japanese-branded automobiles. The company was started in 1995 with investment of Rupees 4.5 billion in the very beginning, with the production capacity of 30000 units.
Today, Comp_1 is one of the top 3 car assemblers in India. It has two plants and two assembly-lines, covering a land area of approximately 2 lakh square metres, that produces 13 models of passenger cars. The annual production capacity is more than 3 lakh units. It employs over 3500 employees, of which 30% are graduates. Comp-1 has been highly successful in implementing Lean manufacturing system and collecting ideas from employees to support Kaizen (Section 4.3).

Com-2 was established as an Indo-Japanese joint venture in 2000, in partnership with one of the leading provider of automotive HVAC and engine parts in the world. It manufactures and supplies engine parts and air conditioners to many car assembly companies. This has high regards for the principles of Kaizen, collaboration and team working and also believes in shop floor management based on effective problem solving. By 2015, the company had 9 years of experience in implementing both QCCs and Teians , based on the fundamental behaviour of Genchi-Genbutsu (Japanese for ‘go to see the place and collect the data from where the problem is occurring’).

Comp-3 was started in 1997 jointly by an Indian air conditioner manufacturer in collaboration with a Japanese car air conditioner manufacturer. Its production is on Japanese technology and it is a 50:50 joint venture. This company is also located in NCR Delhi region. It has got strong tie-up with Comp-1 and is a tier 1 supplier of the same.

Comp-4 is a manufacturer of plastic components like rubber parts,link bush, o rings and gaskets. It began manufacturing in 2002 and became joint venture in technical collaboration with a Japanese company in 2004. It is tier 1 supplier of 3 major Indian automobile assemblers, including comp-1.

Comp-5 Supplies Aluminium components to comp-1and situated in Gurugram industrial zone of NCR Delhi. It has been a joint venture right since its inception in 2003. It manufactures aluminium components of around 0.12 ton annually and employs around 300 people. It has been implementing Kaizen from the very beginning and encouraging the whole-hearted participation of all employees in QCCs and Teians. It has got a seamless relation with comp-1 and also supplies to another major automobile assembler.

Comp-6 is another tier-1 supplier of comp-1. It manufactures seats door and trim panels for cars as well as seats for motor cycle. It manufactures around 0.5 million components annually by deploying around 350 people. Being a joint venture with a Japanese company since its beginning in 1997, it has been practicing kaizen from the very first day. It is situated in Noida region of NCR Delhi.

Comp-7 is an Indian arm of a major Japanese company in the field of wiring harness, dashboard and extruded rubber components and wholly owned by the parent company. It is situated in Noida region of NCR Delhi, produces more than 0.4 million pieces of its products by employing around 450 people. It has a very long experience of kaizen.

Comp-8 was started in 1984 as an Indian company and became a joint venture in 1990. The Company became a joint venture partnering a Japanese company which is a global leader in the field of electrical systems.
Its main products are Electrical automotive components, Alternator, starter, magneto, CDI etc. It is located in Greater noida of NCR Delhi and has also got another plant in Haridwar. It employs around 1200 people and manufactures around 0.8 million parts per annum. It is a preferred supplier of most of car assemblers in this region of India.

Comp-9 was started in 1998 and located in the Noida region of NCR Delhi. It was converted into a joint venture in 2002 to develop, design and manufacture switches, locks and electrical equipment. It mainly supplies to Com_1 and has acquired enough experience from its Japanese partner in implementing a continuous improvement programme. It strongly believes in, collecting ideas from employees’ daily shop floor experience for the continuous improvement programme.
Comp-10 was incorporated in 1998 in technical collaboration with a major Japanese company. It manufactures friction materials like clutch and brake. It is located in Ghaziabad region of NCR Delhi and main supplier of these components to comp-1 and to many other companies beyond this region as well. It employs around 550 people to manufacture around 1 million components. It is also exporting to major European countries.

Pilot Study and the Development of Research Hypotheses
A pilot study is a must to probe the research questions and objectives (Ma et al., 2010). This was conducted in Comp_1 in the very first step. This organisation was selected because of the following reasons: (1) it facilitated an opportunity and appropriate contact (2) it had relatively high production volume and it was the end point in this manufacturing chain and (4) it had considerable experience in implementing Lean Production, shop floor management and Kaizen (Table 4.3).
The outcomes from Comp-1 were primarily developed for three objectives: (1) to have a better comprehension of continuous improvement in the selected site; (2) to compare and contrast the results of implementing continuous improvement from the real life study and those articulated in the literature; (3) to structure a theoretical framework and hypotheses.
The outcomes of the pilot study
A triangulated method (Figure 4.2) was applied in the pilot study to collect data from multiple sources including: documentation, archival records, unstructured interviews and conversations with the members of the company, and first hand observation.

Figure 4.2 The triangulated data collection method for the preliminary studies

Unstructured interviews (Babbie, 2004; Saunders et al., 2007) were done with 10 employees from Comp-1. The interviewees included one manager, three first line supervisors, and six shop floor operators. They all had been working in the company for a minimum of 5 years, and four had been working in the joint venture since its inception

Comp-1 had implemented both shop floor management and Kaizen. The company had over 10 years of experience of implementing shop floor management (Figure 4.3) to augment their Kaizen.

Figure 4.3 One of the safety checks on the shop floor, an example of shop floor management implementation

The pilot study yielded two important findings:

First: the company had widely implemented shop floor management.
The development of improvement ideas in Comp-1 was strongly supported by many vital shop floor management tools which include 5S, visual management and waste elimination. These were applied overwhelmingly on the shop floor for housekeeping as well as for maintaining shop floor cleanliness and safety (Figure 4.4).

Apart from this, the Comp-1 had committed itself to support continuous improvement by facilitating training for employees in implementing shop flooring management tools and emphasising the importance of those tools. Thus, almost all employees had received regular on-the-job as well as off-the-job training on implementing standard operation procedures (Figure 4.5). The application of these tools was the foundation of the company’s shop floor philosophy: ‘Genchi Genbutsu’. The objective of this was to understand the root cause of problems. It permits shop floor operatives to consistently detect problems along with identify and implement solutions based on their shop floor knowledge, skills and experience.

(a) The use of the 5S practice for placing the telephones
(b) The use of visual management to locate files and folders location
(c) Kanbans were being printed for JIT delivery to reduce waste
(d) The 5S practice promoting board on the shop floor
Figure 4.4 Some examples of the implementation of shop floor management tools

Figure 4.5 An example of a standard operations procedure card

Second: the company had implemented both QCCs and Teians for Kaizen (Table 4.5 and Table 4.6).
Year 2000 2001 2002 2003 2004 2005 2006 2007 2008
QCC groups 25 44 102 205 286 332 395 444 491
Participation rate (%) 12 30 45 65 79 85 86 93 89
Participants 160 242 753 1430 2085 2123 2405 2525 3016
Presented QCC groups 16 24 26 36 36 36 42 52 65
Presented participants 80 710 750 790 900 930 1140 1450 1560
Table 4.5 The implementation of QCCs from the company archives

2006 2007 2008 2009 2010
Teians submitted 428 1591 2563 4368 7141
Teians implemented 387 1467 2423 3952 6370
Teians resulted in savings ; s(lakhs) 12 15 18 25 *
*Data not available in 2010
Table 4.6 The implementation of Teians from the company archives

Comp-1 had the policies to involve the all employees actively, including the production line supervisors as well as managers, to conceive and execute improvement ideas in four areas, including environmental, safety and cost.

Figure 4.6 An example of a QCC meeting place (with memebrs picture display to increase attdence and promote teamwork)

The improvement practices existed along with the other shop floor management tools in this organization. The QCCs (Figure 4.6) were actively encouraged for enhancing teamwork and communications (Figure 4.7). These were also implemented to unearth the large potential improvement opportunities (e.g., innovation and Kaikaku). Teians (Figure 4.8) were extensively implemented to solve localised problems at the very place of their occurrence. These were continuously solicited from the employees. The practice generated a structured method to collect improvement ideas. The production Shop floor employees were expected to hand over their Teian sheets on a monthly basis to track their improvement results.

Figure 4.7 An example of a QCC improvement record card

Figure 4.8 An example of a Teian suggestion form

These outcomes confirmed that Kaizen included the two types of improvement practices: the solo schemes (Teians) and small group activities (QCCs). These helped to delineate their significance and the intimate connections with 5S, waste elimination, visual management and standard operations. These findings also created a better understanding of Kaizen in both theory and practice. These were later used in the development of the research hypotheses.

The development of the research hypotheses
Keeping in mind the aforesaid research objectives and to answer the research questions, the study in hand was conducted as empirical research (Flynn et al., 1990) to explore and investigate the relationships between individuals’ implementation of the shop floor management tools, Kaizen and their associated outcomes.

The proposed research hypotheses are depicted below:

Figure 4.9 The hypothesised model (1)

H1. the building block shop floor management tools have positive effects on improvement practices (Figure 4.9);
H2. the two improvement practices are mutually supportive; and
H3. the two improvement practices have positive effects on the long-term outcomes (Figure 4.10).

Figure 4.10 The hypothesised model (2)

4.4 Summary
This chapter has introduced the current research setting and explained the rationale for selecting the ten indo-Japanese automotive joint ventures. These joint ventures were selected from the region which is one of the three currently existing crucial automotive manufacturing bases in India. This region is well known for owning two Indo-Japanese car assemblers (with a strong relationship with Suzuki and Honda) and with the total annual production of more than 1.3 million. The selected organizations included one car assembler and its nine first-tier suppliers. These were the top end Indo-Japanese joint ventures in the region. The high production volume and considerable experience in implementing Lean Production, shop floor management and Kaizen was also a crucial factor In selecting these companies.

The subsequent chapter introduces the strategy and the methodology adopted in this research. It explains the design of the questionnaire and the development of the respective questions to measure the impact of the improvement practices.