Page 156 - DMGT547_INTERNATIONAL_MARKETING

Unit 8: Pricing Decisions for International Markets

Notes
undeveloped. So, it is a good testing ground for a new system. In fact, that is why they took
special care to train two of our engineers for 9 weeks, so that they could then come and
train our vendors in Japanese systems. But we weren’t sure if it would work. So, we did not
build the VIT into the other programme. We started out carefully too. We picked –
handpicked, I must add – 10 of the medium-sized vendors out of our 128 suppliers to try
out the VIT. And it has always been optional. Of course, we have gone on to cover close to
50 vendors now, but we are not sure whether we should continue.…
Niyogi: Perhaps I should explain a little about how the VIT works, Arnab. Once a vendor
firm has agreed, we begin with a half-day presentation to its senior managers, where we
try to allay their apprehensions – especially about additional costs, investments, or
disruptions – and get them to commit themselves to the.…”
Niyogi’s voice trailed off in Kshirsagar’s ears as he recalled the way the whole thing had
been explained to him. The man who had done the talking was a manager from Nichita,
and he had made a powerful but dense presentation on how the VIT worked. Kshirsagar
tried to relive that session 2 years ago.…
“…The standard presentation begins with a description of what continuous improvement
is, and the benefits it brings in terms of cost-reduction and quality-enhancement. After
that session is over, the VIT briefs other people in the vendor firm, and undertakes what
is called a Factory Assessment. The Assessment is discussed with the supplier’s senior
management, and used to identify areas of concern and targets for improvement. Although
based on the tools, techniques and experience of Nichita in Japan, the programme has
been tailored to meet the specific needs of Indian suppliers.
The next step is the formation of an Improvement Team comprising the supplier’s own
people. It includes operators and supervisors from the relevant production area as well as
from maintenance, process Engineering, quality, and, sometimes, administration. Next,
targets for improvement are established. The team leader prepares the ground for the
activity by briefing the members, and making the necessary resources available.
The first week is devoted to training. During the second week, the team splits into smaller
groups to analyse and discuss the various processes to be improved. The groups use a
combination of hard data and subjective opinions to identify the roots of the problem, and
arrive at possible solutions.
In the third week, the individual groups reconvene as a team. The team makes a flow-
diagram of each process so that everyone appreciates what is involved, and agrees on the
changes that will bring the best benefits. The data that has been collected by the groups is
analysed by the entire team.
The period between the fourth and the eighth weeks is spent on implementation. Although
the VIT returns often to observe the progress, the responsibility for this phase vests
entirely with the supplier’s people. The VIT returns full-time in the ninth and tenth weeks
to help the team review what it has learnt and achieved, and to ensure that all changes are
fully documented. It also discusses the outstanding issues and concerns, and potential
improvement projects. The final task is to make a presentation to senior managers,
describing the changes achieved and the benefits gained.…”
Kshirsagar suddenly switched back to what Niyogi was saying as he realised that his CEO
was explaining the improvements that had since been made to the process.
Roychowdhury stood for a moment in the long men’s room, and recalled the briefing he
had been given by his boss, Sampat ‘Sam’ Mathur.
Contd...

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