Art 7
Art 7
Art 7
D-O
International Conference on Industrial Engineering and Industrial Management
Madrid. September 5th-7th 2007
Abstract: European companies can beat competition companies that started a Lean implementation, or are
from low cost countries only through innovation, and lar- considering to do so, in achieving best results. 60 Lean
ge investments are devoted to R&D to improve products implementers and 45 Non Lean Implementers have be-
and processes. But this is not enough. Organisational en surveyed, out of companies of any manufacturing in-
and managerial innovation lever must be exploited too. dustr y, with at least 100 employees.
Typically, some 40-70% of total activities companies
carry out are waste because don’t add value to the cus- Due to space limitation, only a small portion of the re-
tomer. sults can be presented in this paper. Future papers will
present other results and comparisons with the results
Lean production focuses on waste reduction to impro- of other sur veys. Besides, the same sur vey is about to
ve operations’ performances. be conducted in other European countries, allowing a
much larger respondent sample and a comparison
Despite many firms report large benefits from lean im- among different countries.
plementation, a lot of scepticism still remains regarding
attainable results and on the possibility to apply Lean Key words: Lean production, sur vey, Italian Manufac-
approach outside high volume manufacturing. This is turing firms.
particularly true in Italy, where SMEs competing on high
variety and customization are a dominant portion of the
manufacturing industr y . 1. Introduction
Therefore a survey has been implemented to better un- European companies are facing the most impor tant
derstand Lean Production approach and implementa- competitive challenge since the second world war. It
tion, because it appears to be quite an effective orga- is well known that they can stay ahead of low cost
nisational and managerial innovation, as many Lean countries’ companies only through innovation. Large
implementer can testify. But, Lean Production is a trick investments and attention are devoted to techno-
easy approach, because it appears easy to understand logy innovation, but this is not enough: organisatio-
and implement, but it is not. And the number of com- nal and managerial innovation is an additional lever,
panies that have achieved no significant improvement that must be exploited. Most companies have 40-
is quite large. Therefore a survey has been designed and 70% of total activities carried out, which do not add
carried out, in order to deepen the knowledge and help value to the customer.These activities are waste, and
Nº 35
competitive advantage can be achieved through was- structural changes taking place as a result in the im-
te reduction (Ohno, 1988; Womack and Jones, 1996) plementation. Finally they present future trends in
Lean production.
Lean Production (LP) is the approach of the Toyota
Production System, and focuses on waste reduction Panizzolo (1998) presents 27 interviews to Lean im-
to improve operations’ performances. plementers, with the main scope to understand how
much firms are doing on various Lean improvement
Despite Toyota’s amazing performances, and a num- programmes and to understand which are the most
ber of cases repor ting large benefits from lean im- used and applicable.
plementation, a lot of scepticism still remains regar-
ding results that could be really achieved and on the White et al. (1999) investigate LP implementation dif-
possibility to apply Lean approach outside high vo- ferences between a set of 174 U.S. small manufactu-
lume manufacturing. This is par ticularly true in Italy, rers (with less than 250 employees) and one of 280
where SMEs are a dominant por tion of the manu- U.S. large manufacturers (with more than 1,000 em-
facturing industry, and mainly compete on large va- ployees) in order to understand to what extent LP
riety and high customisation. techniques have been implemented, and the rela-
tionships between implementation status of 10 speci-
Moreover, even if a lot of successful Lean program- fic LP management practices and associated changes
mes are known, many other Lean programmes fai- in performance in the two groups of manufacturers.
led. So an increasing number of companies and or-
ganisations are interested in better understanding Interviewing 14 companies and deepening 3-case stu-
Lean Production. In par ticular, we found a need to dies, Lewis (2000) investigates the impact of LP im-
deepen the knowledge on results achieved in im- plementation on overall competitive position of the
proving different performances, on how to maximi- company and overall business performances after Le-
se benefits from Lean implementation, and most an implementation. The paper argues that lean pro-
common difficulties faced by companies implemen- duction can underpin competitive advantage if the
ting LP. firm is able to appropriate the productivity savings it
creates.
In order to answer these and other questions a sur-
vey has been designed and performed, involving mo- In their work, Shah & Ward (2002) tr y to unders-
re than one hundred companies. tand, in a total of 1,757 respondents, how firm size,
age and unionization degree affect effor t needed for
The reminder of the paper is organised as follows: in Lean implementation and necessary effor t in achie-
section 2 a brief literature review is presented men- ving improvements. Research goal is also to unders-
tioning existing surveys having similar or related ob- tand if Lean bundles implementation have positive
jectives; section 3 describes the survey and the pro- effects on operative performances. Authors use To-
cedure followed to perform it. Section 4 presents tal Productive Maintenance (TPM), Human Resour-
main results of the survey with an interpretation and ces Management (HRM), Just in Time (JIT) and Total
a comment. Finally, conclusions and future develop- Quality Management (TQM) as estimators of LP im-
ments are presented in section 5. plementation. At the end of the ar ticle, differences
between discrete and process productions are analy-
zed too.
2. Literature review and objectives
of the research work Wu (2003) surveyed a total of 103 American first tier
automotive suppliers with more than 100 millions $
Over the last decade a number of surveys have be- in annual sales, with the aim to understand whether
en presented.The ones most related to our research significant performance/practice differences exist bet-
work are briefly presented next, in chronological or- ween lean suppliers and non-lean suppliers. In parti-
der, highlighting their scope and objectives. cular, he tries to understand if, even given the same
organizational constraints and resources, lean sup-
Sohal & Egglestone (1994) present a telephone sur- pliers gain significant competitive advantages over
vey of 42 Lean implementers, were they investigate non-lean suppliers in production systems, distribution
to what extent LP has been implemented in Austra- systems, information communications, containeriza-
lian organizations. They also seek to identify the be- tion, transport systems, customer-supplier relations-
nefits from LP implementation, and investigate the hips, and on-time staging/delivery performance.
53
56 Egyptian LP implementers and 38 Egyptian firms an operational level, addressing techniques and sin-
considering LP implementation are then considered gle performance.
by Salaheldin (2005) to delineate the major human
modifications to be under taken prior to LP imple- This work also aims to build the basis for an inter-
mentation in Egyptian manufacturing firms; to discern national comparison, based on the one hand on al-
benefits obtained from Lean Production implemen- ready existing research work, on the other hand on
tation; to identify the problems that Egyptian manu- the extension of the survey to other European coun-
facturing companies typically encounter in imple- tries. In par ticular, a comparison between Lean Im-
menting Lean philosophy; and to explore the plementers (LI) and Non Lean Implementers (NLI)
relationship between human modifications effor ts to is performed, testing whether there are differences
be undertaken prior to Lean implementation and Le- in external perception (competitive priorities), in-
an success. ternal perceptions (main problems), and key impro-
vement actions/tools.
Achanga et al. (2006) present the critical factors that
constitute a successful implementation of LP within The research work also wants to understand what
manufacturing SMEs. A combination of comprehen- performances are improved by Lean implementation,
sive literature review and visits to 10 SMEs based in and if performances improve over a number of ye-
the East of the UK were employed in the study. Com- ars, or rather level after initial success. Finally, the re-
panies practices were observed to highlight the de- search work wants to uncover the main difficulties
gree of LP implementation within these companies. and obstacles to LP implementation.
Then LP critical factors determining a successful Le-
an implementation within SMEs environment are cap-
tured and the authors provide SMEs with indicators 3. Research model and methodology
and guidelines for a successful implementation of Le-
an principles. Two different questionnaires have been designed: one
for Lean Implementers (LI) and one for Non Lean
Bonavia & Marin (2006) provide a view of the cera- Implementers (NLI). Each one of two surveys is di-
mic tile industry in Spain. In par ticular, main objecti- vided in two par ts: the first par t is common, the se-
ve of the 76 visits to companies was to assess the cond par t is specific for LI and NLI.
extent to which the ceramic tile industr y in Spain
uses LP practices. In addition, effects that the most Par t one analyses critical market requirements and
relevant Lean Production practices have on opera- so reflects strategic goals of the firm. Investigate the
tional performance are other desirable objectives major problems that are limiting the firm in reaching
too. To reach the goals, they try to investigate which the objectives that customers are highlighting, and
are the most used LP practices in this sector, if lar- tries to understand which actions are taken to over-
ger firms have installed LP practices to a higher de- come highlighted problems and reach the strategic
gree than smaller ones and if companies that adopt objectives. It analyses as well which of the Lean tech-
a LP practice to a greater extent obtain better re- niques are currently known, which are in use, which
sults in terms of quality, productivity, lead time or are considered not impor tant, and which are plan-
stocks. ned for the future. First par t ends by asking the kno-
wledge level about LP.
Aberdeen Group, The Manufacturer and The Manu-
facturing Research Centre perform frequent Lean In the second part the main goals are to understand
surveys in UK and USA, and present the evolution of the maturity degree of Lean implementation, the per-
lean implementation in those countries. formance level reached, the level of satisfaction and
difficulty encountered in adopting Lean concepts, main
The different surveys above mentioned address dif- advantages and barriers encountered, the time nee-
ferent issues showing that there are still many un- ded to gain advantages, which are the most impor-
clear points about LP implementations. Moreover, tant factors that make this implementation a success.
while UK and USA have some systematic sur vey,
other countries have much less empirical evidences. In addition, other understanding items are the Lean
organizational structure and the resources involved
The aim of this research work is to investigate Lean in the Lean implementation. Presently and in the fu-
implementation in Italy and set the basis for a better ture. In which non manufacturing areas of the com-
understanding of LP. Both at a strategic level, and at pany it is possible to implement the Lean approach
54
as well as what are next steps to push forward lean A lot of suggestions came out; in addition a better
implementation. understanding of current situation of Lean manufac-
turing in Italy did arise. Taking into consideration all
Survey ends asking an estimation of the percentage findings, the questionnaire has been fine tuned ac-
of companies that are implementing LP in the same cordingly.
industrial sector as the respondent, the present de-
velopment trend and what are the main questions Third phase, sample creation phase, was ran simul-
they have regarding the Lean approach. taneously with firms’ contact phase.
The survey par t two, addressed to NLI, tries to un- Firms to be contacted were selected among already
derstand why they don’t implement LP. Non-Lean existing contacts, and new ones were added sear-
firms are asked to answer 12 questions both multi- ching on the web. Firms received a preliminary pho-
ple choice and open questions and are asked to ans- ne call to introduce the project and to understand
wer about their opinions about LP. Why they don’t who could be the best person to answer the ques-
adopt Lean principles, where, within the company, tionnaire. A subsequent e-mail addressed such per-
Lean concepts could be applicable, what are the pos- son to the web link where they could find and fill the
sible advantages they relate with Lean production, on-line form.
what are Lean characteristics that should make ea-
sier the implementation in the firm and what are the Phase three and four were ran from mid February
barriers they presume they could experience when 2007 to mid April 2007. Firms could choose to ans-
adopting Lean principles. wer either via online form or via fax, depending on
the company most favourite means.
Firms are asked about any intention of applying LP
in the future, and what will probably push them to- During questionnaire collections, a person was avai-
wards implementing LP (internal necessities, sup- lable over the phone and over the e-mail to clarify
pliers, customers, etc.). doubts and answer possible questions of the com-
panies contacted.
At the end of questionnaire they also are requested
to estimate the percentage of LI in their own indus- As questionnaire arrived, they were checked and if
trial sector and the current trend in LP implementa- key answers were missing, or data was suggesting an
tion (decreasing, increasing, strongly increasing). Res- error (e.g., turnover, inventory level), the company
pondents are also invited to specifically request what was contacted again and clarifications made.
are the items and characteristics of Lean production
they are interested to analyse fur ther. On the total, 72 lean firms and 111 non lean firms fi-
lled the on line forms. 183 respondents correspond
Having taken into consideration existing surveys, a to a return rate of about 3,9%.
par t of the answers is easily comparable with those
of other surveys (e.g. UK or USA). This will allow to Finally, from data collected, a subset was extracted
analyse differences between Italian companies and according with the criteria of the needed analysis. For
companies in other countries, in terms of Lean ma- example, for the analysis presented in this paper, only
turity in firms, industrial sectors, knowledge and use companies with at least 100 employee have been
of various techniques, etc. considered, leading to a sample of 61 LI and 51 NLI.
After the concept phase (Januar y 2007) in which Due to space limitations, only a por tion of the re-
questionnaires were created, a validation phase (be- sults of the survey can be presented here. Full results,
ginning February 2007-mid February 2007) was con- and deeper analysis will be presented in another jour-
ducted visiting 5 companies and discussing the ques- nal ar ticle.
tionnaire with the Operations manager. This allowed
us to check that the questionnaire output would ha- Figure 1 presents, for each strategic objective, the
ve answered most relevant questions of Operations percentage of companies that selected that objecti-
Managers, and that the questionnaire was not ambi- ve to be one of the most impor tant (a maximum of
guous. 5 could be selected by each company). The first 4
55
Figure 1
Main strategic objetives (LI vs. NLI). * Accept item or quantity or color changes after receipt of order.
** Accept changes in due dates after receipt of order. *** Deliver what is ordered in the exact quantity
Other
Products with a higher degree of innovation
Wider product range
Lower environmental impact
Higher product customization
Higher delivery quality***
Higher quality conformance
Higher plan flexibility**
More frequent new products introduction
Higher order specs flexibility*
Lower prices
Shorter Time to Market
Higher delivery reliability
Shorter delivey times
0% 10% 20% 30% 40% 50% 60% 70%
most selected objectives are in common between LI select Process technology, Information Technology
and NLI, even if not with the same ranking. Moreo- and System flexibility, compared with LI’s selections.
ver most objectives show a very similar relevance for
LI and NLI (e.g. about 25% of both LI and NLI men- This again makes clear how Lean approach stresses
tion product innovation). But for 6 objectives the dif- control and reliability: LI pay much more attention to
ferences are very large. A much larger por tion of LI suppliers’ reliability than NLI.
select as top objectives Quality conformance, More
frequent new product introduction, On time delivery, Figure 3 presents most selected corrective actions
than NLI do. On the contrary, a much larger por tion that LI and NLI are under taking, or are about to un-
of NLI identify as most impor tant Higher plan flexi- der take (companies could select a maximum of 4).
bility, and Higher order spec flexibility than LI do.This Both LI and NLI state a good relevance of correc-
can be read as a will of NLI to better accommodate tive actions on Organisation/procedures and in Ma-
customer modification requests, while LI tend to fo- nagement techniques (more relevant for LI than for
cus more on meeting what has been promised, in NLI). But there is a large difference for other ac-
term of quality, and time. This is strongly related to tions. In par ticular LI focus on supply chain mana-
the philosophy of the Lean approach: process con- gement, involving customers and suppliers (the pro-
trol is fundamental. It forces a deeper understanding por tion of LI selecting this is more than the double
of the phenomena and leads to a much reliable compared with the one for NLI), a larger por tion
system. In turn, reliability means lower per turbation, of NLI select Increase automation level, Process
and less fire-fighting. These concepts are in common technology innovation, Information technology im-
with the Six Sigma approach. provement.
Figure 2 presents, for different possible problems li- This gives a strong confirmation that Lean approach
miting the achievement of strategic objectives, the opens the way to address managerial levers to im-
percentage of companies that selected that problem prove competitiveness, whilst NLI rely much more
to be one of the most impor tant (a maximum of 5 on technology. This is more clear if we group actions
could be selected by each company). Here LI and NLI according to whether they are related to Manage-
present more differences: only 2 of the top 4 pro- ment, Technology innovation/automation, or Product
blems are in common. In par ticular, a much larger Innovation, as in Figure 4. 70% of corrective actions
portion of LI indicate Quality conformance (from ex- selected by LI are in the management area, while only
ternal and from internal suppliers) and suppliers’ on 45% for NLI’s. On the contrary 45% of NLI selections
time deliver y as the key problems, compared with are in the Technology innovation area and only 20%
NLI indications. Whilst a much larger por tion of NLI of LI’s.
56
Figure 2
Major problems limiting the achievement of strategic objectives (LI vs. NLI)
Other
Low system flexibility
Suppliers' low delivery time reliability
Supplies' long lead times
Supplier's low quality confermance
Space shortage
Fire fighting management
Manpower poor skills / capabilities
High scraps / reworks
Unpredictable demand
Obsolete / inadequate Informative systems
Low manpower productivity
Long Lead Time
Old process technology
High product variety
High stock levels
0% 10% 20% 30% 40% 50% 60% 70%
Lean Implementers Non Lean Implementers Total Sample
Figure 5 presents, for each technique, the percenta- ment it in the future, making this the less implemen-
ge of LI companies that declare to implement it, not ted technique.This suggests that the other techniques
to implement it, or considering it for future imple- are perceived with a more general applicability. A few
mentation. SMED, 5S, Kanban and Value Stream Map- are sooner implemented (probably easier to imple-
ping appear to be the most commonly implemented. ment), other later on in the lean implementation pro-
On the contrary, very few LI started six sigma, total cess. Cell design is implemented in certain companies
productive maintenance projects, or implemented cell and perceived as not useful/applicable in others. This
design. But while six sigma and TPM have a 25% of LI point is worth a deeper investigation to understand
considering it for future implementations, cell design the reasons of such a perception, because in our opi-
has almost none. This means that 40% of LI do not nion cell design has a much broader applicability than
implement cell design and do not intend to imple- stated by surveyed companies.
Figure 3
Corrective actions (LI vs. NLI)
Other
No countermeasures
Customers / distributors involvement
Suppliers involvement
Changes in management methods
Changes in organization / procedures
Product innovation
Process innovation*
Improve / buy new software
Investments in Increase automation
57
Figure 4 mance dimension considered. Figure 6 shows that
Corrective actions areas (LI vs. NLI) there are limited improvements during the first year,
but then improvements increase a lot, and keep in-
80% creasing. This means that there are additional ad-
70% vantages even after 4 or more years of implementa-
60%
tion. Companies running a Lean project for more
50%
than 3 years state improvements score above 3 in a
40%
30%
0-5 scale: for all dimensions considered.
20%
10% But results are not achieved without difficulties.
0%
Technological Product Managerial Interestingly, Figure 7 shows that, when asked about
innovation innovation & organizational
innovation
the main causes (maximum 5) of difficulties in deve-
Lean Implementers Non Lean Implementers
loping the Lean implementation, the area of resistan-
ce (or limited support) from top management recei-
ved 15% of hits, the area of perturbation from other
urgent problems 27%, the difficulty in demonstrating
At this point we wanted to understand how satisfied a priori an economic advantage received 12% of hits,
are LI, and what kind of improvements companies and the area of resistance from bottom received the
achieved implementing the Lean approach. 70% of LI vast majority of hits: 45%. This highlight another big
stated a satisfaction level of 4 or 5 in a 0-5 scale, with area of interest for improving Lean implementation
an average for the whole sample just below 4. As for projects, i.e. having the operators really involved, pro-
the improvements, we investigated many different di- actively participating in the development of the pro-
mensions, and the average improvement is almost 3 ject, so to make the Lean approach a real part of the
on a 0-5 scale. DNA of the company. But difficulty is not the same le-
vel for all type of companies. In particular it is interes-
Stratifying companies on the base of the number of ting to compare companies producing on a repetitive
years the Lean project had been running, Figure 6 base, with companies that have a low volume-high va-
shows that companies running the project for more riety/customisation level. Whilst overall satisfaction le-
than 3 years have much better results than compa- vel for the Lean project is basically the same (almost
nies that have been running the project for 1-3 ye- 4 on a 0-5 scale for both groups), difficulty level is sta-
ars, and even more than companies that star ted the ted at level 2.5 for low variety companies, and at 3.3
project during the last 12 months. For every perfor- level for high variety/customisation companies.
Figure 5
Lean Techniques’ diffusion (LI)
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
We are not implementing it We will implement in future We have implemented / We are implementing it
58
Figure 6 5. Conclusions and future developments
Results over Lean implementation time
Empirical results of this research work show that
4.00 companies implementing Lean present a different
view of competitive dimensions, and rely on different
3.50 improvement actions to increase competitiveness. In
par ticular, Lean Implementers and Non Lean Imple-
3.00 menters are aligned on considering Shor ter delivery
time as one of the main priorities, but LI give much
2.50 more relevance to Quality conformance, and Deli-
very reliability is much more impor tant do LI than
2.00 for NLI. This can be related to the Lean idea (com-
mon to Six Sigma) to control processes. LI also have
1.50 a different perception of what are the causes of po-
or performances and, as a consequence, what are the
1.00 line of action to improve. NLI are more focused on
< 1 Year 1-3 Years > 3 Years
process technology, automation and Information
technology as a way improve, while LI give more at-
Cost reduction tention to Supply chain management, and in general
Increased manpower productivity
Shorter delivery time to managerial aspects.
Waste reduction
Increased profitability When we focus on LI we find that LI are well satis-
Increased flexibility
Increased customer satisfaction fied with the results achieved, and that results are
Increased product quality good for all performance considered. Besides, Lean
Increased staff morale implementation gives improvements over a number
Increased deliveries reliability
Reduced inventories of years, with all companies implementing Lean from
New products launched more quickly more than 3 years stating much bigger improve-
ments than companies implementing Lean for 1-3
years.
Figure 7
Main causes of difficulties in developing the Lean Implementation (number of citations)
No ostacles 2
Other 5
Poor commitment from the bottom because of employees' fear of job cutting 9 ⎩
⎪
Poor commitment from the bottom because of change inertia 31 ⎪
⎨
18 ⎪ Bottom
Poor commitment from the bottom because change was not shared ⎪
⎧
Poor commitment from the bottom because of poor knowledge / understanding 16
0 5 10 15 20 25 30 35 40
59
Another very interesting result is that main difficulties LEWIS, M. A. (2000). Lean Production and sustaina-
in implementing the Lean approach are coming from ble competitive advantage. International journal of
the Operators. This at least is the perception of the Operations & Production Management,Vol. 20, No.
respondents (top managers). This can be interpreted 8, pp. 959–978.
as the difficulty in really involving operators in a pro- OHNO, T. (1988). Toyota production system: beyond
active way. We think the main reasons could be the ne- large-scale production, Productivity Press.
ed to invest more in education, or the difficulty of top PANIZZOLO, R. (1998). Applying the lessons lear-
managers to really delegate, increase decision scope of ned from 27 lean manufacturers. The relevance of
operators, listen to them, and set with them a different relationships management. International Journal
relationship. This and other issues emerging from the Production Economics, 55, pp. 223–240.
complete analysis of the data of the survey will be de- SALAHELDIN, S. I. (2005). JIT Implementation in
epened through case studies in specific companies. Egyptian manufacturing firms: some empirical evi-
dence. International Journal of Operations & Pro-
The survey gathered a much larger number of data duction Management, Vol. 25, No. 4, pp.354–370.
than presented here, and they will be presented in a SHAH, R., y WARD P. T. (2003). Lean Manufacturing:
future journal paper. Moreover, the questionnaire will context, practice bundles, and performance. Jour-
be the base for surveys in other European countries nal of Operations Management, Vol. 21, pp.
so that we will have a better overview about Lean 129–149.
implementations, and it will be possible to make com- SOHAL, A. S., y EGGLESTONE, A. (1994). Lean Pro-
parisons between different countries. duction: Experience among Australian Organiza-
tions. International Journal of Operations & Pro-
duction Management, Vol. 14, No. 11, pp. 35–51.
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