What Are the Main Challenges When Implementing Lean and How Do Industry and Company Characteristics Influence These Challenges?

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What Are the Main Challenges When Implementing Lean and How Do Industry and Company Characteristics Influence These Challenges? Wageningen University Bachelor thesis What are the main challenges when implementing lean and how do industry and company characteristics influence these challenges? 28th November 2013, Wageningen Author: Ruben Cornelissen Supervisor: Jacques Trienekens Second reader: Domenico Dentoni Table of content Introduction ................................................................................................................................................2 1. What is the definition of lean and what are its main elements .................................................................2 1.1 The history and evolvement of lean thinking ......................................................................................2 1.2 Defining main elements of lean and its concepts ................................................................................3 2. Lean implementation challenges ............................................................................................................ 10 2.1 Resource management .................................................................................................................... 10 2.2 People management ........................................................................................................................ 15 2.3 Standardization ................................................................................................................................ 24 Conclusion and discussion ......................................................................................................................... 26 References................................................................................................................................................. 28 Annex ........................................................................................................................................................ 31 1 Introduction The research question of this thesis ‘What are the main challenges when implementing lean and how do industry and company characteristics influence these challenges’ will investigate the problems that arise when trying to implement lean in different production or service environments. The subject of lean implementation challenges has, until now mostly focused on specific industries and company characteristics. This paper tries to identify the challenges that are general and thus applicable to almost every lean environment. Besides the general challenges, this paper has the goal of identifying challenges that are specific to certain industries and company characteristics. By doing so, the author hopes to bring more clarity to the subject of lean implementation challenges which will be beneficial for people studying lean, as well as for lean practitioners and the body of academic knowledge. Chapter 1 consists of a view into the history of lean and how it evolved. This will subsequently be followed by an analysis of what lean exactly is and what elements lean consists of. Chapter 2 will investigate the different general challenges of lean initiatives and give specific information about industry and company specific challenges. This chapter is followed by the conclusion and discussion. 1. What is the definition of lean and what are its main elements 1.1 The history and evolvement of lean thinking One root of lean comes from the person of Sakichi Toyoda inventing a loom in 1924, that automatically stopped when a threat broke (Hayes, 2010). This was a groundbreaking method which saved a lot of time and guaranteed a high quality standard. The Platt Brothers bought the patent rights of the machines in 1929. The money that Sakichi Toyoda raised with the selling of the patent right was the seed-money for the Toyota Motor Corporation. A second root of lean can be found in the development of the first moving assembly line to manufacture cars, which was invented by Henry Ford in 1913 (Black, 2007). This production line can be seen as the first use of ‘flow’ in a production environment (Hayes, 2010). A third originator of lean thinking was the invention of continuous improvement, which can be traced back to the ideas of W. Edwards Demming. Demming brought his Plan Do Check Act (PDCA) methodology to Japan after World War II (Liker and Morgan, 2006; Hayes, 2010). Taiichi Ohno put those flow, quality prevention and continuous improvement ideas together to form the basis of the Toyota Production System also called TPS (Arlbjørn and Freytag 2013). After that, other elements are added which make lean how it currently is. All these elements will be discussed in the next paragraph. It took a few decades before the philosophy and tools of TPS would reach the American and European business literature. This was mainly caused by the language and cultural barriers but also by the lack of interest of Western manufacturers (Hines et al., 2004). The book ‘The machine that changed the world’ written by Womack and Jones in 1990 was the first to mention the word ‘Lean production’ (Black, 2007). This book, together with the success of Toyota at the American and European continent speeded up the process of integration of lean ideas in the western production environment. Since then, many non- Japanese firms have tried to replicate the success of Toyota, applying Lean thinking to their processes, but with highly varying results. Many of the companies that fail at applying Lean do not fully understand the fundamental elements of lean as developed by Taiichi Ohno. The understanding of lean is made more complex by the fact that lean is still constantly evolving (Pettersen, 2009). Schonberger (2005) already comes up with a new form of lean, formulated as ‘lean extended’. The next paragraph will try to give an overview and explanation of what the essential elements of lean are. 2 1.2 Defining main elements of lean and its concepts Definitions of lean Authors agree on the fact that there is no real clear definition of lean (Pettersen, 2009; Arlbjørn and Freytag 2013). Definitions given by Arlbjørn and Freytag (2013) are; ‘doing more with less’ and ‘manufacturing without waste’. A central point of lean that is mentioned by his founder – Toyota executive Taiichi Ohno – is the elimination of waste or ‘muda’ as the Japanese call it (Womack and Jones, 2003). A citation about the definition of waste found in Taj and Berro (2006), as cited in Arlbjørn and Freytag (2013; page 183) is ‘waste is anything other than the minimum amount of equipment, materials, parts and working time that are absolutely essential to production’. Chauhan and Singh (2012) define waste as ‘any activity that absorbs resources but creates no value’. Those activities can be in production but also customer relations, product design, supplier networks and factory management (Chauhan and Singh, 2012). Taiichi Ohno defined the seven wastes (Chauhan and Singh, 2012; Womack and Jones, 2003; Hayes, 2010) being; 1) overproduction; 2) excess motion (of operator, material or machine); 3) waiting (of operator, material or machine); 4) transportation; 5) excess processing; 6) inventory; and 7) defects (rework and scrap) Other authors also added waste categories to this list, with ‘goods and services which do not meet the needs of the customer’ (Womack and Jones, 2003; page 15). Waste is also ‘unused employee creativity’ according to Czabke et al. (2008; page 78). Atkinson (2010) confirms this idea by giving the example that the average Toyota employee comes up with 187 ideas each year, of these ideas 98% gets implemented to improve the processes. Taiichi Ohno distinguished two types of waste being type 1 and type 2. Type 1 waste is waste that is not possible to eliminate with the current state of technologies and type 2 waste is waste that can be eliminated immediately. Major components of lean Pettersen (2009) did a literature study about lean techniques and/or goals. Pettersen searched for the keywords ‘Lean production’ and ‘lean manufacturing’ in the databases ISI and Scopus. Of those two databases the twenty most cited articles were selected. After screening the 37 unique articles found, 12 articles were selected, based on the criteria of containing presentations of techniques and/or overall goals associated with lean production. On the basis of citation rankings there were also 13 books included in the study. Pettersen (2009) grouped the lean characteristics he found in his literature study into nine collective terms as can be seen in figure 1, at the right of this page. Although this is not an exhaustive list of all tools and techniques available, it covers the Figure 1; Grouping of lean characteristics as suggested by Pettersen3 (2009) elements that are most central to lean. The seven wastes as described in the previous paragraph can, just like the nine lean elements, be seen as central to the lean practice and philosophy. Because the nine major lean components and the seven wastes are both central to lean, this chapter will explain those parts of lean together. A third part of lean that has become ingrained into the lean literature comprises of the five steps to lean as developed by Womack and Jones (2003). These steps are in chronological order: identify the value, identify the value stream, introduction of flow, getting customers to pull, and finally striving for perfection. These five steps can be seen as essential lean steps to a successful lean implementation and will therefore be combined with the explanation of the seven wastes and the nine lean elements. By connecting those steps to the nine
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