Manufacturing and service industries in India have taken a liking for lean concepts and techniques as they provide several advantages. Some of the advantages are: Increased productivity, better control on quality, lower cost, and improved employee involvement. All these result in greater customer satisfaction. However, for this to transform into a sustained competitive advantage, the impact on HRM and the corresponding modifications required to the HRM policies and practices will need to be studied.
Taichi Ohno first developed the lean concepts at Toyota (Womack, 1998). Lean would mean to remove muda (means `waste' in Japanese), among other things. Muda is any activity which absorbs resources but ends up creating waste. These activities add no value to the product, service or the customer. Value can be defined well only by the end customer. It is defined in terms of specific product-service mix which meets the end customers' needs at a given point of time (ibid). Creating value for the customer must take priority over the need to making short-term profits. As one enlightened industrialist put it, "We want our customers to come back, not our products."
In order to ensure value there is a need to have a good value-stream in place. A value-stream is the list of all the activities/processes required to develop a product or service through the critical tasks of problem solving, information gathering, and physical transformation or service compliance. For example, is the customer for a can of cola really concerned where the metal for the can is mined or the wasteful (muda?) transportation it undergoes from the mine to the bottler. A can of cola begins its journey in Australia where it is mined and converted to powdery alumina, it is transported to Norway or Sweden for smelting into aluminium. From there it goes to Germany to a hot rolling mill and then onward to England for making the cans. The amount of transportation which goes into the manufacture of cola cans is literally muda.
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