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The East African : March 3rd 2014
The EastAfrican 34 OUTLOOK MARCH 1-7,2014 e -AF R ICAN How Toyota’s ‘lean machine’ will transform the world Applying these techniques enables companies to please thei≥ custome≥s and boost p≥oduction By EWAN DUNCAN and RON RITTER Special Correspondent W hen the first issue of McKinsey Quarterly rolled off the print- ing presses 50 years ago, nearly everyone in senior management thought that manufacturing operations had been perfected. Henry Ford’s great innovation, the moving assembly line, had been refined over the previous five decades, and by the mid-1960s was operating efficiently, at great scale, in a wide range of industries around the world. Quietly, though, in Nagoya, Japan, Taiichi Ohno and his engineering colleagues at Toyota were perfecting what they came to call the Toyota production system, which we now know as lean production. Initially, lean was best known in the West by its tools: For example, kaizen workshops, where frontline workers solve knotty problems; kanban, the scheduling system for just-in-time production; and the andon cord, which, when pulled by any worker, causes a production line to stop. Lean is one of the biggest man- agement ideas of the past 50 years. It has transformed how leading companies think about operations — starting in assembly plants and other factory settings and moving more recently into services ranging from retailing and healthcare ful new data sources are becoming available, along with analytical tools that make ever more sophisticated frontline problem solving possible. Similarly, leading-edge companies are discovering that lean can supply strong insights about the next frontiers of energy efficiency. Toyota itself is pushing the boundaries of lean, rethinking the art of the possible in production-line changeovers, for example, and bringing customer input more directly into factories. What’s more, new technologies, new analytical tools, and new ways of looking at customers are making it possible, with greater precision, to learn what they value. The implications are profound because one of the primary constraints on the ability to design a perfect lean system in any operating environment has always been the challenge of understanding customer value, lean’s ultimate “north star.” The present round of improve- ments won’t be the first time lean has catalysed management innovation by bringing together what seemed to be strange bedfellows. The first time around, lean op- Toyota Boshoku displays a design study model of four-seater wagon “T-Brain.” Picture: File to financial services, IT and even the public sector. But lean has not reached its full potential. As senior executives gain more exposure to lean and deepen their understanding of its principles and disciplines, they will seek to derive even more value from it. The opportunities available to them are considerable. For example, power- RESULTS The end result should be more scientific insight into how product and service attributes contribute to customer value; new ways to look at what matters most for classic lean variables, such as lead time, cost, quality, responsiveness, flexibility, and reliability; and new opportunities for cross-functional problem solving to eliminate anything that strays from customer-defined value. erating principles were applied to service industries that had not previously thought of themselves as having factory-like characteristics. In the years ahead, service and product companies alike will increasingly be able to reach their long-term goal of eliminating waste as defined directly by customers across their entire life cycle — or journey — with a company. A number of aerospace and in- dustrial-equipment companies are starting to tap into this information. They are learning — directly from customer experience with their products — about issues such as the reliability of giant marine engines and mining equipment or the fuel efficiency of highway trucks in different types of weather. Ewan Duncan is a principal in McKinsey’s Seattle office, and Ron Ritter is a principal in Miami Uganda ≥olls out plan to beat digital mig≥ation deadline By RUSSELL SOUTHWOOD Special Correspondent THERE IS an old saying that the pioneers get the arrows and the settlers get the land. Those countries that sought to be first across the line with the digital transition in broadcasting have — with the exception of Mauritius — all stored up more problems than they have solved. A recent technology conference in Uganda concluded that there is sort of a phoney war between governments and their citizens in Africa. Deadlines for things like the digital transition are purposely set early to try to focus political energy. Governments take the view that the stick is more effective than the carrot when you ask your citizens to do something. Uganda has already missed its first deadline and has reset it for the end of December. Paul Kihika, managing director of Uganda Broadcasting Corporation (UBC) said it would consider switching off the greater Kampala area if there were one million set top boxes sold. Since there were only 50 test set-top boxes in the market already in early February, this makes in greater Kampala and 24 channels to the rest of the country. Eight of these channels would be for radio stations. The total budget for the plan is $74.6 million but the Ugandan parliament has refused to approve funds for the whole plan. Currently, there is transmission coverage in greater Kampala but only enough capacity to deliver 40 channels. There were supposed to be eight transmitters but there are only four so far. According to Mr Kihika, the whole national Citizens buy set top boxes ahead of digital migration. Picture: FILE that deadline unlikely. Type approvals should be ready from Uganda Communication Commission (UCC) shortly. UBC has been granted the only five-year signal carrier licence by UCC, which is also drafting the new digital content channel licences. UBC’s ambition is to have national coverage with 28 transmission sites backed up with 40 gap feeders that will cover every town and village in Uganda. This would supply 96 channels transmission project was to take six to eight months but now that part of the greater Kampala work has been done, it should only take four months. He said that more funding would come when UBC submitted its budget for this financial year. The transmission area extendsto Entebbe and Miyana on the west, to Luwero north of Kampala and beyond the Mabira forest to the east, about two-thirds of the way to Jinja. In all, it is about a 60km radius on a line of sight basis. However, the signal at Mukono where the workshop took place, 30 minutes’ drive outside the city centre, was not strong enough to power a demonstration TV bought along for the purpose. BRIEFS Tigo launches multi-currency money transfer service Telecom operator Millicom has launched an international multicurrency mobile money service. Two of Millicom’s operations in Africa are pioneering the new international money transfer service. Tigo Cash users in Rwanda and Tigo Pesa customers in Tanzania will be able to send money in their respective currencies directly from their handsets. The service enables customers to use the funds to access a range of services in each country. Two regions to record fastest data traffic growth The Middle East and Africa (MEA) regions will post the world’s fastest mobile data traffic growth from 2013 to 2018, according to a new Cisco study. The Cisco Visual Networking Index Global Mobile Data Traffic Forecast for 2013 to 2018 says that mobile data traffic in the regions will increase 14-fold by 2018. Across MEA, mobile data traffic growth is being driven by the world’s fastest uptake of Internet Protocol version 6 (Ipv6) -capable smartphones and tablets, with a CAGR of 35 per cent, rising from 133 million in 2013 to almost 598 million in 2018. A mobile phone user. Pic: File Kenya leads the world in mobile money Kenya is a global leader in the mobile phone-based cash business, holding a third of the world’s 61 million mobile phone-based money accounts. GSMA, an association of mobile operators, in a meeting in Spain last week said nine markets — Cameroon, the Democratic Republic of Congo, Gabon, Kenya, Madagascar, Tanzania, Uganda, Zambia and Zimbabwe — had more mobile money accounts than bank accounts, compared with just four markets last year. Telkom Kenya freezes hiring of new staff Telkom Kenya has frozen hiring of new staff to cut on the wage bill. Chief executive Mickael Ghossein said only departing staff will be replaced on a case-by-case basis, as the loss-making firm reduces its current payroll, which eats up 22 per cent of its revenue. Telkom Kenya currently has slightly above 1,700 employees, who cost the company more than Ksh1.2 billion annually, according to the management. “We have frozen our recruitment of new employees as our head count does not match our revenue,” Mr Ghossein said.
February 24th 2014
March 10th 2014