Monday, 7 January 2013

Case study: How Lean Manufacturing Failed

Case study: How Lean Manufacturing Failed
Maizul Afzairizal Bin Mohd Adnan

Lean is a powerful organization and manufacturing model that most experts agree could be the dominant paradigm worldwide in the next five to 10 years. Among the benefit of using lean manufacturing is to lower the production cost, as well as effective use of space and equipment. Benefit of lean can be categorized as;

  •          Improved Customer Service; delivering exactly what the customer wants when they want it.
  •         Improved Productivity; Improvements in throughput and value add per person.
  •         Quality; Reductions in defects and rework.
  •          Innovation; staff are fully involved so improved morale and participation in the business
  •        Reduced Waste; Less transport, moving, waiting, space, and physical waste.
  •          Improved Lead Times; Business able to respond quicker, quicker set ups, fewer delays.
  •         Improved Stock Turns; Less work in progress and Inventory, so less capital tied up.

Lean manufacturing focus on eliminate the seven wastes there are: transportation, overproduction, motion, waiting, inventory, defect and over processing. However, current lean implementation failure rates—well over 50 percent according to many lean advocates and professionals—are much too high for this to happen.

Lean in definition can be: lacking in richness, fullness, quantity; poor that in word brings up unfortunate connotation. Lean is a business methodology, not a simply manufacturing tool. In other word, it requires total commitment from top management level and must flow down to all departments and throughout all level of business. Failure to understand how improvements are made can affect another area in transformation failure. Many believes that by simply applying the tool such as visual management, value stream mapping, kaizen, or even 5S will get them quick success. Is there any time to learn the theories and concept needed to sustain the transformation? Is there any review done on the theories and concepts thoroughly and align the business to the methodology? Is there any plan on how to sustain and improve the concepts? How about the management decision and goal?   
Base on a case study by Ortiz (2008), he provided a great example base on his own experience as a lean manufacturing engineer at a company that fail to achieve success while implementing lean manufacturing. Lean in term of definition is a systematic approach to identify and eliminate the waste through the continuous improvement concept, by following the product at the pull of the costumer to achieve perfection. In his case study, there were several aspects that he touches as a contribution for failure in lean implementation.
First is the poor management commitment. Managers that not pay attention and not aware about the goal of implementing lean will be confused and loss focuses. As a leader and manager it is on their hand to set a goal, vision, mission, and change the company culture by demonstrates the commitment and accountability for the changes. They have to show total commitment to the process and listen to people under who also have the same vision to achieve the continuous improvement. From the case study Ortiz (2008) believed that, the top management made a lot of mistake. The company only selected two managers to attend the workshop while in lean manufacturing it is important to involve many people, from various departments. When many people were trained by lean concept, they can return to their department and train their additional employee. When there only two managers involve, their only focus on their own department.
The other problem in the case study was the consultant appointed. The consultant never gives the proper training on kaizen or how kaizen events were conducted. Ortiz (2008), find that the consultant make the employee become confuse and at the same time, lower the employees’ morals. It’s all because the lack of communication and structure between the consultant and employee involved. At this time, the management should play their role. But it has same featured as audit; the management is always ‘busy’ entertaining the consultant rather that focus on why the consultant is paying for. Hiring a lean consultant should be very helpful, but only if the consultant selected is knowledgeable and proficient, provides hand-on consulting and has excellent communication skills. It’s not about how much you pay or how long the consultant play the game, but how effective and efficient the consultant work and how much the company can improve. The company that was more concern about impressing the consultant than listen to its people neither will provide neither direction nor improvement.   
Lack of accountability was the other problem in the case study. It affects the performance of the whole line of assembly. When operator resists operating with the new standard and requirement, it will affect the whole team. Moreover, the supervisor refuse to enforces the new procedure and allow the operators to do whatever they wanted. It is because in the mind of employee, new procedure means more work. In this case, new environment of continuous improvement cannot be implemented. In order to implement something new the first things that a manager have to consider is how to make it as a culture. For example, 5S maybe can be implemented very easy in ‘all Japanese’ company because it is part of their own culture. But how to implement 5S in other places where 5S is not a culture? The answer is the manager has to make it as a culture starting within him or herself. Show that it can be implemented. Show the commitment and willingness to achieve the goal. Make the employee believe that the goal can be achieved. Give full support and by doing that, it will motivate the employee and at the same time naturally follow the new standard and requirement. It will automatically become a culture when the result in term of profit can be interpreted.
Another problem occur in the case study is when the production manager begin to change the roles of the production supervisor. A supervisor is like a key player for a production line. The problem is when the supervisor is placed with the new supervisor from outside the line, the conflict will arise when the supervisor don’t have any trained about lean manufacturing and try to use the method that he used in his previous place which are not systematic as new line his in charges. It will affect the morale of all the team involved and it will create argument into agreement without any solution. To avoid this, the management should not replace staffs that work very good in a team. If the managers want to employ a new staffs or replace the old staff, make sure that the staff have enough knowledge about the line and some knowledge about lean manufacturing. Business committing to lean transformation should not use the time benefit gained from Lean as an excuse to pile more work onto their employees. Simply adding more work to the pile only lower productivity, morale, and both the physical and mental health of the employee. Taking the time to work with the employee, learning the to identify necessary task, removing unnecessary work and discovering more available time to do more valuable work without increasing the overall workload will result in better understanding between employee and manager, more trust, communication and overall employee performance.

It seems that the failure of lean manufacturing is not because of the lean itself, but it is more to the person who involve in lean itself. In the case study, Ortiz (2008) was the lean manufacturing engineer where he had a lot of idea to expand the lean manufacturing in the company. However, he doesn’t get any support from the top management and insignificantly been accuse of the failure of the lean implementation. Base on Ortiz (2008) case study, it shows that the top management plays the biggest role in succession of implementing lean. It is because lean is not a simply manufacturing tool, Lean is a business methodology. Its cover all aspect in the business. The waste reduction is not only focus on the production line but most of the waste the can be eliminate is outside the production line itself such as transportation, waiting time, inventory and so on. Commitment and communication is the key to success in lean manufacture. The top management also must have a clear goal in implementing lean manufacturing and give full support to the lower subordinate. Listen to the employees who have the same vision in continuous improvement. When assign a consultant, make sure they done their job well and value for the money. Train the employees and make sure that they have the knowledge about lean manufacturing. Involve all people and make a strong team. Make sure managers know what they are doing and accountable in any decision their made. Last and not least create the culture of continuous improvement as the main culture of the company.      


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