CHALLENGES OF LEAN MANAGEMENT Investigating the challenges and developing a recommendation for implementing Lean management techniques Bachelor’s thesis Supply Chain Management Forssa spring 2013 Fiona Keru Mwacharo ABSTRACT Forssa Supply Chain Management Author Fiona Keru Mwacharo Year 2013 Subject of Bachelor’s thesis Challenges of Lean Management: Investigating the challenges and developing a recommendation for Lean Management techniques ABSTRACT This thesis seeks to find out what the main challenges of implementing Lean management techniques and to develop a recommendation on how to manage these challenges. A qualitative research was conducted via ques- tionnaire and one interview on several companies in Finland (five of whom responded to the research). These companies gave their opinions on the challenges they had in implementing Lean management. The theory of this thesis was based largely on published literature, such as books, journals, and theses, as well as a few websites on the subject of Lean and Lean management. The research method was a qualitative research in the form of an online questionnaire. The questionnaire was sent to a total of twenty-two similar, large, Finnish companies. A total of five companies responded. Also a phone interview was conducted with one of the responding companies. The thesis reveals that the main challenge that the companies had was in having workers who were not motivated or not accepting the change, at least initially. Another challenge was in maintaining Lean. Lean manage- ment is meant to be a continuing process (it never ends), thus it is chal- lenging for some of the companies to sustain it. Companies need to understand the importance of motivating their workers as they are the ones who will ultimately deem the Lean implementation a success or failure. The workers need to have excellent leaders and the company needs to establish excellent communication channels so that the workers can be well motivated and feeling confident in embarking on the Lean journey. This thesis topic could be developed further by focusing on one company and working closely with them in order to determine further internal and external challenges to Lean implementation and how this can be rectified. Keywords Lean management, Muda, Mura, Muri Pages 38 p. + appendices 1p. ABBREVIATIONS JIT – Just In Time TPS – Toyota Production System PDCA – Plan Do Check Act IDEA – Investigate Design Execute Adjust DMAIC – Design Measure Analyse Improve Control DPMO – Defects per million opportunities CONTENTS 1 INTRODUCTION AND RESEARCH METHODOLOGY ....................................... 1 1.1 Background ......................................................................................................... 1 1.2 Objective ............................................................................................................. 1 1.3 Scope ................................................................................................................... 1 2 RESEARCH METHODOLOGY ................................................................................ 1 2.1 Qualitative research ............................................................................................. 2 2.1.1 Questionnaire ........................................................................................... 2 2.2 Validity ................................................................................................................ 3 3 LEAN .......................................................................................................................... 4 3.1 History ................................................................................................................. 4 3.2 The five Lean principles ...................................................................................... 5 3.3 Muda, Muri, and Mura ........................................................................................ 7 3.4 Lean Enterprise ................................................................................................... 8 3.4.1 Objectives ................................................................................................ 8 4 LEAN TOOLS AND TECHNIQUES ......................................................................... 8 4.1 5S ......................................................................................................................... 8 4.1.1 Sort ........................................................................................................ 10 4.1.2 Set in order ............................................................................................ 10 4.1.3 Shine ...................................................................................................... 10 4.1.4 Standardize ............................................................................................ 11 4.1.5 Sustain ................................................................................................... 11 4.2 Just-in-Time (JIT) ............................................................................................. 11 4.3 Kaizen................................................................................................................ 12 4.4 Kanban .............................................................................................................. 13 4.4.1 Single and dual card kanban .................................................................. 13 4.5 Improvement Cycles: PDCA and IDEA ........................................................... 15 4.5.1 Plan Do Check Act (PDCA) .................................................................. 15 4.5.2 Investigate Design Execute Adjust (IDEA) .......................................... 15 4.6 Value Stream Mapping...................................................................................... 15 4.7 Poka-yoke .......................................................................................................... 16 4.8 Takt time ........................................................................................................... 17 5 LEAN SIX SIGMA ................................................................................................... 17 5.1 Six Sigma .......................................................................................................... 17 5.1.1 Define Measure Analyse Improve Control (DMAIC) ........................... 17 5.2 How to calculate a Sigma level ......................................................................... 18 5.3 Integrating Lean and Six Sigma ........................................................................ 19 6 CHANGE MANAGEMENT ..................................................................................... 19 6.1 Change models .................................................................................................. 20 6.1.1 Lewin’s change model ........................................................................... 20 6.1.2 Planning model ...................................................................................... 20 6.2 Mindset .............................................................................................................. 21 6.3 Employee types ................................................................................................. 22 6.3.1 Good soldiers ......................................................................................... 22 6.3.2 Skeptics .................................................................................................. 22 6.3.3 Resisters ................................................................................................. 23 7 IMPLEMENTING LEAN ......................................................................................... 23 7.1 Implementing stand-alone lean techniques ....................................................... 23 7.2 Implementing Lean according to the five Lean principles ................................ 24 8 THE CHALLENGES OF LEAN .............................................................................. 26 9 LEAN CASE STUDIES ............................................................................................ 28 9.1 Lantech case study ............................................................................................ 28 9.2 The Wiremold Company case study ................................................................. 30 10 RESEARCH RESULTS ............................................................................................ 31 10.1 Summary and analysis of results ....................................................................... 31 11 RECOMMENDATION ............................................................................................. 33 11.1 Communication ................................................................................................. 33 11.2 How to motivate workers .................................................................................. 34 11.3 How to implement the Lean tools ..................................................................... 35 12 CONCLUSION ......................................................................................................... 36 12.1 Challenges of thesis .......................................................................................... 36 SOURCES ...................................................................................................................... 37 Appendix 1 Questionnaire