Companies are losing out on the experience and the learnings of these 70% or 60% of the workers who are on the shop floor. I do think while we have understood the importance of quality circles, we never went deeper into it to understand how and why quality circles were successful in Japan. In Japan, workers actually do this on their own time. Last year we had over a million suggestions which are actually implemented.
Mr. Um, we discussed how to make workers as part of the team and so that they feel engaged with the company, and as a result we also discussed how that can lead to cost reduction because you are getting workers who work on time and the attendance levels are very high and then there is a huge value release that can happen. But I remember you talking about a point where you said that there are 70% of the workforce whose experience and all can also be encashed. So can you talk about that part as to how do I get more out from these workers?
See, certainly you get a lot of gain if workers don't have to be, if I may use the word, policed, and they do things on their own. They don't have to be enforced discipline but it is voluntary discipline. But the other thing which we must not forget is that the workers are actually on the shop floor and they are the persons who are making the products, whether it is machining or welding or fitting or electrical works or whatever, they are the guys who do it. Now over a period of time, a worker who's working at a particular station in a company gets to understand a lot of the problems associated with the processes which have been given down to him, and if he feels that it would be in his interest, in his interest in two ways: one, that if he makes a suggestion, his manager will actually take that seriously and examine it properly; and the second is that if he does it and the company benefits, then company benefit will ultimately also reflect in some benefit to him also. If these two conditions are met, then the workers with their experience on the shop floor can have a potential of contributing a lot of suggestions on how to improve the process time, make it shorter, how to avoid wastage, how to avoid defects, where one can look at some low-cost automation to avoid a difficult situation which can't be solved otherwise, and a whole lot of improvements. Now the reason why it's important for the workers to do this is because their managers or even the supervisors who have not been working on the line are actually not able to do this kind of thing because those guys who are the supervisors and higher, they don't know how to make the product because there's a difference between actually welding and knowing the theory of welding. I mean, anybody who's been to college will understand, engineers if they're asked today to weld something, they won't be able to do it, but the guy who is doing it will do it with his eyes shut. And the experience in Japan first was that if you actually first motivate these workers by making them understand that their future depends on the growth of the company, and if you motivate them by making them realize that they will benefit if they do this, and then you can train them as to how to use the knowledge which they have gathered to actually make suggestions for improvement. I'm saying train them because it will not come automatically. It is very difficult for a person to make suggestions for improvement, but it requires a certain amount of training and time over which he then understands how he should solve problems. And this is what we did in Maruti. We started cross-functional teams and small quality circle groups, and they made initially not very many suggestions, but then our managers worked with them and taught them the methodology of trying to solve problems. How to identify a problem? How to determine its priorities? How to determine the possible causes of the problem? How to eliminate those causes? Come to the root cause. Then how to look at possible solutions and then try those solutions and see which one actually solved the problem.
So how did you do this tactically? Because if I look at a typical shop floor, what managers should be bothered about is how do I get 8 hours from this guy, then he goes home, and what you're talking about is spending time in training, suggestion ideating, brainstorming sessions.
See, I am assuming that you have done one part of the job, which is to make workers believe that they are part of the team. Now how to actually identify and solve problems and make suggestions. What Japan had and we had, we put aside every month a time period of about 1 hour during which we have a quality circle meeting. So people in that area get together and then the process starts with the help of the manager initially. What I said: identify all the possible problems in that area which people encountered, then prioritize them and pick the most important problem to be solved first, then get everybody's ideas on how can we solve this problem, what is the cause of it, and that process then over time builds up and people get more and more capable of doing this exercise of solving problems and making suggestions. It's been increasing in Maruti over the years. Last year, 2024, we had over a million suggestions which were actually implemented.
And it's the highest ever. Okay. Now you see that over 40 years, well the suggestions didn't start 40 years ago, started maybe 30 years ago, but over 30 years people have been making suggestions and the numbers have been growing. It's in Japan they still have suggestions coming up after 70 years of work and getting to be so highly competitive.
Still there's so much more to extract from.
There's never an end to this. The word kaizen in Japan, as you know, means that everything is capable of being improved.
And there's no end to this process of making improvements in your manufacturing processes. So I think in not only in India but all over the world, except for places where they have implemented this workers participation, companies are losing out on the experience and the learnings of the 70% or 60% of the workers who are on the shop floor. We are losing out that we don't get this value and they could do so much more to help the company grow.
Yeah, very interesting because I also see and these two topics are linked to each other. The first part of dealing with workers being part of the company and the second is trying to engage them for ideation. What I have seen in many companies is you have these quality circles but they fizzle out within no time. And from this discussion I'm just thinking that if you don't do the first part right and you just do the quality circle program, you can't get that value, so the two things fit together.
At one time, maybe 20, 30 years ago, there was a great movement towards learning from Japanese management.
And amongst the things was just in time and these quality circles. We have all India kaizen competitions, but if you actually look at the results which are achieved in the company in terms of suggestions implemented and benefits value coming out of that, it's minuscule. And that is the reason why I told many of these companies, I was in the boards of some of these companies also, I said the reason is unless the worker feels that he is a part of the company, that making these improvements and suggestions for improvements will actually also benefit him because as the company grows, he grows.
