Lean Manufacturing in Pakistan – MIA?
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I have had the chance to meet some manufacturers now in Pakistan, and have observed the supply practices of several companies, and I keep seeing a disconcerting trend.
Manufacturing operations here work quite the same way as IT software houses — entirely project-based, and quite unwilling to explore different supply models.
The factories would do nothing until they get a well defined order — “Give me 30,000 units in two months, here are the specs”. The factory would then plan, build capacity and execute the project. They would expect bulk payments, sometimes even in advance as a mobilization charge.
The term in the industry for this is “lag capacity”.
What concerns me more is the supply models used by companies: only build-to-stock manufacturing.
We analyse some examples after the link.
I want to explain the particular build-to-stock strategy used by businesses.
Small businesses do this : they would make a large purchase where they buy up a lot of inventory, and basically stop worrying about demand until they are about to run out, be it in 3-4 months or years. When inventory is running out they make another purchasing run. I would understand that this is because they dont have leverage to pull on suppliers.
However, ever larger players with more leverage do this. Keeping items in stock until basically they run out.
What is worse is that most of these businesses do not forecast sales even for stock levels. They are either dealing in areas where the products are too commoditized that the customers in general would not have specific preferences (e.g. office furniture) or dealing in products where the customer basically has no choice (lets say a WLL operator with only one choice of handset). Both of them wait long enough for their inventory to run dry, and then do another blind bulk purchase.
You also see this in companies like ChenOne that have to undergo costly end-of-season promotions to burn off excess inventories.
Master (of the moltyfoam fame) is making office chairs (great chairs for the back btw) which they claim to ‘assemble-to-order’ and deliver to you in 7 days if you are in Islamabad. I suspect they only ‘deliver-to-order’ from their warehouse in Karachi. I would be willing to guess that that they wait until the end of the week to send in a bulk order (3-4 days on average) and then have it delivered by land in 3 days.
So, does lean manufacturing exist anywhere in Pakistan? I would be happy if it does, so please let me know if you are doing it.
If it does not, then I think we should start discussing strategies for moving this country into it.
5:29 am
Hello,
Sir I didnt find your name is thins whole article.
This is really an interesting article, espacially for me as we are working to improve suply-chain in pakistan, and really working hard, implementing new process etc.
Thankyou for your article
12:36 am
Hello,
Hope you are fine and enjoying a healthy life.
I am doing my final year project on Lean Manufacturing. it is case study based. we chose PEL( Pak elktron lim) for this purpose. Basically i am doing B.se(hons) Industrial Engineering & Manugement from Punjab University. we have done a lot of literature work on lean manufacturing.Now we are in a position to go to PEL and do our level best. We are interested for your kind help in this case because_ i know the human of this country have the potentional to work but the difficulty is we don’t have the right direction. so please Sir i request you to help us in this project so as we will make our country at level of the world. i am waiting for your e mail.. or kind help…
with best wishes
Zohaib Arif
phonenumber +92+0321-4535612
e-mail id zohaibyup@hotmail.com
12:46 pm
ASALAM O ALAIKUM,i am interested in this,#0 3 2 3 – 5 4 7 3 1 9 8
5:49 pm
I read your query regarding Lean manufacturing in Pakistan. Im Talha from Birmingham UK. Currently im doing MSc Engineering Management from Aston University here. Basically im from Lahore. Ive studied Lean and Agile manufacturing and my thesis is on Application of lean in manufacturing organizations. Im planning to do my thesis in Pakistan. Is there sufficient helo that i can find in Pakistan, from Universities or industries? Pls do lemme know. I would be thankful to you. Thanks.
12:15 pm
http://www.greenwhite.org is really a walk-through for all of the info you wanted about this and didn’t know who to ask. Glimpse here, and you’ll definitely discover it.
8:42 pm
First reason is external to the organizations, out of their control. It has to do with market conditions. Build to stock is an old process, tried and tested, and it seems to work, well adapted to the current market conditions of uncertainty and unpredictability. Switching to a new SC model is always risky. In Pakistan, risk is a do or die situation, so people don’t try something different.
Second reason is internal, has to do with capability of the enterprise itself. Lean manufacturing requires intellectual effort, skilled labor, and management. It depends on efficiency in processing, inspection, transport, and inventory. It requires advanced statistical analysis, and TQM techniques. A good number of manufacturing houses of Pakistan, with the exception of few, are being run by Seths. Most can’t understand what ANOVA, process capability index, or confidence interval means. It also depends on mature and stable supply and delivery infrastructure in the whole ecosystem. For example in Japan, where it originated, they have highly efficient transport infrastructure, which ensures supplies are delivered on time. Lean manufacturing is a culture, sustained by higher order brain functions, skills and training. In Pakistan, labor is cheap, mostly under trained, unskilled, and frankly not much capable of running a lean manufacturing system.