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Copyright 2009 by Kelley School of Business, Indiana University. For reprints, call HBS Publishing at (800) 545-7685.
www.elsevier.com/locate/bushor
Institute of Technology Management, University of St. Gallen, Dufourstrasse 40a, 9000 St. Gallen,
Switzerland
b
Schwartz School of Business & IS, St. Francis Xavier University, Antigonish, Nova Scotia, Canada B2G 2W5
KEYWORDS
Lean production;
Case study;
Best management
practices
Abstract Its not easy being lean. And for many companies, getting lean right the
rst time does not always happen. Lean is a management philosophy focused on
identifying and eliminating waste throughout a products entire value stream,
extending not only within the organization but also along the companys supply chain
network. Lean promises signicant benets in terms of waste reduction, and increased organizational and supply chain communication and integration. Implementing lean, however, and achieving the levels of organizational commitment, employee
autonomy, and information transparency needed to ensure its success is a daunting
task. This article describes in detail two lean implementation projects within the
same company: a global manufacturer of food processing machines and equipment.
The rst project was a failure, while the second is viewed as a success. Examining
these projects in detail, the major criteria and conditions that led to either lean
failure or lean success are identied. Based on these conditions, we highlight a
number of lessons learned, all of which may help other organizations ensure the
success of their own lean implementation and improvement efforts.
# 2008 Kelley School of Business, Indiana University. All rights reserved.
0007-6813/$ see front matter # 2008 Kelley School of Business, Indiana University. All rights reserved.
doi:10.1016/j.bushor.2008.08.004
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M. Scherrer-Rathje et al.
2. What is lean?
When examining studies addressing lean, it is important to distinguish between those considering
lean from a philosophical perspective related to
guiding principles or overarching goals, and those
analyzing the concept from a practical perspective
as a set of management practices, tools, or techniques that can be observed directly (Shah & Ward,
2007). Lean from a practical or operational perspective involves implementing a set of shop oor tools
and techniques aimed at reducing waste within the
plant and along the supply chain (de Treville &
Antonakis, 2006; Hopp & Spearman, 2004; Liker,
2004; Narasimhan et al., 2006; Shah & Ward,
2003, 2007). Such tools and techniques include,
for example, setup time reduction, kaizen (i.e.,
continuous improvement), six-sigma quality, visual
displays (e.g., 5S), kanban, just-in-time supply systems, and preventative maintenance (Shah & Ward,
2003; White & Prybutok, 2001). Lean as a philosophy, however, considers the interrelationship and
synergistic effect of these practices in order to
improve overall levels of productivity and product
3. Machinery Inc.
To identify lean success criteria, as well as lessons
learned which should be considered by other companies, this research explores two lean implementation
projects within one large, global organization. The
company chosen for analysis, hereafter referred to as
Lean, take two! Reections from the second attempt at lean implementation
Machinery Inc., is a leading European manufacturer
of food processing machines and equipment. For the
past several years, Machinery Inc. has generated
annual sales of over s 1 billion (U.S. $1.44 billion).
The company employs approximately 6,200 people
worldwide, 3,000 of whom are located at the head
ofce in Switzerland. During the course of our research, 20 interviews were conducted with managers
and employees representing different functional
areas of the rm. All interviewees were selected
based on their involvement with the current lean
implementation project, or knowledge of/experience with the unsuccessful project in 1997. The
Appendix presents additional details regarding participants involved in the study, interview questions
asked, and the research protocol adopted.
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M. Scherrer-Rathje et al.
Lean, take two! Reections from the second attempt at lean implementation
convinced that a pull system (seen as a critical
component of lean production) was needed to reduce production costs and remain competitive.
Second, manufacturing was struggling with a volume of orders never before seen in the history of
Machinery Inc. With product demand having doubled from 2005 to 2006, the manufacturing manager
was forced to inform customers that Machinery Inc.
would delay delivering orders for up to 12 months.
Not surprisingly, the customers were frustrated
with the situation and began looking for alternative
suppliers. Initial discussions regarding the increased volume situation led the CEO and senior
management to give lean another try, with the
expectation that lean would not only decrease
throughput time by 50% but also reduce
manufacturing costs. As part of this new lean implementation project, a Japanese consultanta
former Toyota employee who had, in recent years,
focused his efforts on bringing the lean philosophy
to Europebecame a major source for information
on lean improvement.
Remembering the impact that employee resistance had on the rst lean attempt, senior managers
realized the importance of getting employees involved as early as possible and, as a result, decided
to begin the lean journey using a pilot project. The
company decided to focus its initial lean efforts on
one particular business unit and process; specically,
the assembly of machines designed for the chocolate
confectionary industry. A major driver for applying
lean to this business unit was that the area had
experienced a recent spike in product demand,
and was having difculty completing orders on time.
The most important criterion in choosing this area,
however, was that it promised to be a good proving
ground: chocolate confectionary machines are less
intricate than many other Machinery Inc. products,
and thus this business unit would reduce some of the
complexities of applying lean. Management felt this
would improve the chances of initial lean success,
and therefore help demonstrate the value of lean to
the entire company.
Recognizing the need to address spikes in product
demand across the entire manufacturing department, and with the pilot project well underway
at 2 months duration, the decision was made to
roll out lean to all processes involving the chocolate
confectionary machines. Building upon the pilot
project approach, lean was also applied to the
assembly of all other food processing machines
(e.g., our mills), and later to all relevant processes
for these machines. Lean was also implemented in
related areas such as Treasury and Finance. As a
result, in early 2007, the entire manufacturing department and some processes from other functional
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dened tactical and strategic goals could overwhelm employees and lead to boycotts of the project. As a result, it was decided that the next steps in
achieving lean would only be introduced when employees accepted and successfully carried out the
current step. A machine assembler appreciated this
approach and described it as follows:
I liked that we had not been told the overall goal.
Otherwise, some employees would have been
against the project from the beginning and
would not have been open to the new solutions.
The leader of worldwide production saw both
advantages and disadvantages:
Not communicating the overall goal leads to
confusion, but the good employees bring their
own ideas. In the end, the employees are supporting the new system because they designed
it.
After a few months, managers felt the initial
approach of restricting communication was leading
to a growing fear among employees. The employees
started to believe that although a small step was
successful, they could possibly be going in the wrong
direction. An employee in planning and controlling
stated that:
Some employees had started to fear that even if
the single steps made sense, they would realize
too late that they went in a completely wrong
direction by blindly following the small goals.
Recognizing the growing frustration that employees felt about not knowing the general direction of
lean changes, senior managers at Machinery Inc.
changed their communication tactics. Specically,
6 months into the project, they initiated monthly
debrieng meetings which involved the lean team,
senior managers, and consultants on the project.
During these meetings, managers were updated on
all major lean discussions and issues that occurred
during the month, and what the next short- and
long-term lean steps should be. Managers were then
expected to communicate to their employees what
was discussed at the meetings and how it might affect
them. This new approach to goal disclosure is more
in line with the extant literature, which strongly
emphasizes the importance of openly disclosing
lean goals versus keeping employees in the dark
(e.g., Hines, Holweg, & Rich, 2004; Lathin & Mitchell,
2001).
Reecting on the 1997 lean attempt, managers
recognized that proper mechanisms must be in place
so as to prevent employees from returning to pre-lean
habits. Thus, throughout the second attempt, a
number of changes were made to ensure this.
Lean, take two! Reections from the second attempt at lean implementation
tion transparency of lean goals; and evidence of
initial performance improvements and long-term
sustainability of lean efforts. It appears that Machinery Inc.s second attempt at lean has proven to be
successful. Management has shown active and visible
commitment to the project from the beginning. The
utilization of JDI rooms ensures employee autonomy
in process changes. Although low during the beginning of the second attempt, we now witness transparency in communication with employees.
Machinery Inc. is already seeing the performance
benets of lean in terms of reduced lead times,
increased efciency, and reduced operating costs.
Based on these accomplishments, it appears the lean
at Machinery Inc. will be sustainable in the long run.
So, what led to the success of the current lean
project? Summarizing the interview data, a number
of factors were highlighted by employees and managers. Both groups emphasized that visible and
active senior management participation in the project proved a critical cornerstone for success. This
participation helped the employees in becoming
convinced of the necessity of lean. This commitment was also important as it ensured that managers stayed involved, understood the challenges
faced, and were enabled to make quick decisions
as needed. The director of engineered products
underscored these issues:
Top management commitment is a must. The
employees must see that management is interested in the changes. Without the commitment,
employees will not see the necessity to spend
even one minute thinking about the project.
A machine assembler also stressed how management commitment improved the chances of success
of the project:
It was important for us to see that the whole
management team, the CEO, and the board
members were committed to the project. It
motivated us to work on the project and to share
our ideas with others. We knew that if we needed
more time for the project, it was not a problem
to ask for it, because it was top priority.
Illustrating quick lean wins as achieved via the
pilot project, as well as the communication of those
victories throughout the organization, was also
cited as a major factor leading to the success of
the second lean project. Managers emphasized the
importance of a pilot project which could produce
speedy yet tangible results. As stated by the director
of engineered products:
Choosing such a project not only allowed employees to experience rst-hand the value of
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M. Scherrer-Rathje et al.
Lean, take two! Reections from the second attempt at lean implementation
This issue was underlined by many, including a
project leader in information systems, the leaders
of international projects and worldwide production,
and the heads of the following departments: shipping, logistics, quality management, and detail
manufacturing. Initially, management felt that
not disclosing goals would help to reduce resistance,
as employees would not be aware of any potential
in-depth changes which could spark a boycott. This
black-box approach is counter to the common management belief that only a full disclosure of information guarantees success. However, considering
the special circumstances surrounding Machinery
Inc. (i.e., change fatigue and a prior failed attempt
at lean implementation), this approach was probably the only way to get the initial support of the
employees. Such a scenario may not play out well in
other companies, and must thus be approached with
caution. While initially successful, the decision to
not disclose the tactical and strategic lean goals
ultimately increased frustration and confusion for
those involved. Machinery Inc. is certainly not the
only company to have ever faced resistance and fear
at the hand of less than full disclosure regarding lean
goals and activities. Tracing one companys transition from batch to lean manufacturing, Brown,
Collins, and McCombs (2006, p. 12) relate that:
Communication to the employees was the single
biggest lesson learned. Company-wide meetings
were started after the rst three [Kaizen] events
caused increased tension and job security concerns on the shop oor. It is recommended to
have a meeting with the entire work team affected by an upcoming Kaizen to dispel rumors,
ease tension, and answer questions.
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Appendix
To explore the two lean projects, detailed interviews were conducted with a wide variety of individuals from Machinery Inc. Senior managers
interviewed included the director of engineered
products, head of risk management and insurances,
head of IT and processes, leader of international
projects, leader of worldwide production, and the
manager of production for Switzerland. Middle and
tactical managers interviewed included heads of
detail manufacturing, assembly, quality management, logistics, shipping, customer services, as well
as the treasurer and a project leader from information systems, who was also the lean project leader in
1997. Shop oor employees interviewed included a
member from planning and controlling, nancial
services, detail manufacturing, strategic procurement worldwide, as well as the chief designer and a
machine assembler.
Questions posed to participants covered their
role in the lean implementation projects; the motivations to implement lean; the major differences
between the two implementation projects; what
they had learned from the implementation projects;
what recommendations they would give other companies implementing lean; and what could be done
so that the implementation will remain sustainable.
Each interview lasted approximately 1.5 hours and
was attended by two researchers. In addition to the
interviews, the researchers conducted three plant
visits/tours lasting 1-3 hours each, as well as two
discussion sessions within the business unit to expe-
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