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PII:
Sequences in the
Implementation of Lean
Production
M, London Business School
R HLSTRO
PA
One question facing a company wanting to improve
manufacturing performance is whether to
implement improvement initiatives in parallel or
sequentially. This article examines whether any
sequences of manufacturing improvement initiatives exist and what these sequences are. For two
and a half years, the author participated in and
studied one companys implementation of lean production. The findings group the principles of lean
production into
four different
categories,
depending on when management devoted effort
and resources to the principles. The conclusions
indicate that there are sequences in which lean production principles are implemented, but management also need to devote effort and resources to a
set of principles in parallel. 1998 Elsevier Science
Ltd. All rights reserved
Research on Manufacturing
Improvement Sequences
Existing research on the implementation of manufacturing improvement initiatives supports the idea
there are sequences of improvement initiatives in
manufacturing. According to Roos (1990), it is first
necessary to change employees attitudes to quality,
in order to attain a material flow containing only
value adding operations. When non-value adding
operations have been removed can just-in-time be
implemented, by emphasising the group instead of
the individual, through reward systems and quality
circles? Implementing just-in-time also requires the
implementation of techniques such as kanban and
reorganisation of the plant into flow layouts.
Storhagen (1993) suggested there is a need to start
implementing what he termed process factors, for
example job rotation and teamwork. The main purpose of process factors is to support continuous
improvement and change. After implementing process factors, a company can implement what was
termed structural factors and/or interaction factors:
Structural factors are techniques and methods that
alter the structural features of the manufacturing
system, such as layouts and set-up time reduction.
327
Figure 1
Elimination of Waste
Lean productions most distinguishing principle is
the relentless pursuit of waste: everything that does
not add value to the product. The most important
source of waste is inventory. Inventory in the form of
work-in-progress is especially wasteful, since it hides
problems and keeps problems from getting solved.
However, since inventory exists for a reason, the
causes behind the existence of inventory must be
removed first. Important ways of reducing the need
Table 1 Changes in Operational Performance at
Office Machines: 199296
Operational performance measure
Percentage of
initial value
15
73
20
6
50
43
238
128
for inventory are, to reduce set-up times, use preventive maintenance to reduce machine downtime, and
change layouts to reduce transportation distances
for parts.
The elimination of waste at Office Machines
especially took place through the creation of manufacturing cells. The cells contained both parts manufacturing and assembly and were built around families of similar products. Two manufacturing cells
were created as pilot projects in April 1993. Due to
the functional layout of the manufacturing process,
the change required the physical relocation of manufacturing tasks between and within the companys
two plants. The assembly task was also changed in
April 1993 and each operator was made responsible
for the assembly of a complete product. The larger
manufacturing cell was split in two in February 1994,
to simplify material flows. Machines permanently set
up to produce certain parts were installed in one of
the cells in mid-May 1994. The creation of manufacturing cells continued in February 1995 and 14 cells
were in place by June 1995.
Pull Scheduling
In a lean production system, material is scheduled
through a pull system. The starting point for manufacture in a pull system is a customer order, which
goes to final assembly, that orders parts from the
upstream manufacturing process. This manufacturing process orders parts from its upstream process,
and so on. The customer order is thus passed backwards through the manufacturing process. Two prerequisites for implementing pull scheduling are to
reduce batch sizes and to manufacture fault-free
parts.
At Office Machines the change-over to pull scheduling started in June 1993, as batch sizes in the MRP
system were reduced to better fit with the situation
in the manufacturing cells. In October 1993, all operations decisions within the manufacturing cells were
channelled to one planning point, for which capacity
planning was performed and to which jobs were
released. Batch sizes could thereby be reduced by a
factor six. From May 1994 onwards all parts manufacturing within the cells took place only when a customer order was received. In May 1995, a system simplifying material control was implemented. Kanban
cards were used to control the movements of the
more valuable parts. Re-order points utilising the
MRP system were used for less expensive parts.
Zero Defects
Quality is paradoxically both a prerequisite of a lean
production system and a by-product of a successful
implementation. To attain high productivity, all parts
and products need to be fault-free from the begin329
Figure 2
ning. The principle of zero defects includes the practices used to attain quality products in lean production. A salient feature of a lean production system
is the lack of employees dedicated to quality control.
Quality assurance is instead the responsibility of
everyone. A goal of the quality-related work is to
achieve a higher degree of process capability and
control. Instead of inspecting manufactured parts
after a potential problem has occurred, the manufacturing process is kept under control to prevent
defects from occurring in the first place.
An important impetus for the quality improvement
work at Office Machines was pressure from a large
customer. The customer audited Office Machiness
quality management system and found it unsatisfactory. Office Machines was presented with an action
list which led to the following major activities:
Forty hours of quality training for operators took
place in March and April of 1993.
A system for tracing parts in the operation was
installed in May 1993.
A computerised system for statistical process control was installed in June 1993.
A system for corrective action was installed starting in April 1993.
Most items on the action list were addressed by November 1993 and the new quality routines had become
part of the daily operation.
Multifunctional Teams
The use of teamwork is widespread in lean production. Teams are often organised around manufac330
turing cells and process flows. Each team is responsible for performing all tasks in their part of the
material flow. The teams are manned by multifunctional operators, who are able to perform several
tasks in the team. The development of multifunctional operators calls for broad job specifications and
appropriate reward systems. An individual oriented
piece-rate system is inappropriate in a lean production environment. The teams are also made
responsible for a number of indirect tasks, such as
maintenance, procurement, quality, and material
handling and control.
Office Machines created two multifunctional teams in
the manufacturing cells in April 1993. The teams
were made responsible for the manufacture of complete products and a number of previously indirect
responsibilities were transferred to the teams. Piecerates were replaced by a salary in April 1993, and a
new payment system was introduced in November
1993; consisting of a merit-based salary and a bonus
tied to the performance of the team. Finally, multifunctional teams were created for the manufacturing
cells around the summer of 1995.
Delayering
In a lean production system responsibility and authority are consistently pushed down to the lowest levels of the organisation. The number of hierarchical
levels in the organisation can be reduced as a consequence. Changes to the work organisation at Office
Machines started in January 1993, when one supervisor was transferred to a new job within the company. Other changes were made to the organisation
European Management Journal Vol 16 No 3 June 1998
331
literature on cellular manufacturing. Cellular manufacturing implies a wider task variety and a need for
higher skills. There is also an opportunity for teamwork and for operators to focus on the manufacturing process from raw material through to finished
parts (Hyer and Wemmerlov, 1984).
The relationship between elimination of waste and
pull scheduling is rather straightforward. A prerequisite for moving towards pull scheduling is to reduce
batch sizes. Batch size reduction, in turn, requires
reduced set-up times: an important part of the elimination of waste. A reduction of batch sizes is feasible
also through the creation of manufacturing cells
around family-like products (Hyer and Wemmerlov, 1984).
The relationship between multifunctional teams and
pull scheduling is illustrated by the way the multifunctional teams are made responsible for production
control in a manufacturing cell. Managers can simplify production planning and control by considering
the cell as one planning point, for which capacity
planning is performed and to which jobs are released.
However, it is the multifunctional teams task to balance the load in the cell (Hyer and Wemmerlov,
1984). The task of balancing the load is part of the
previously indirect planning and control responsibilities which are transferred to the multifunctional
team in lean production.
333
334
M,
R
PA
HLSTRO
Centre for Operations
Management,
London
Business School, Sussex
Place, Regents Park,
London NW1 4SA, UK.
Par hlstrom holds a
PhD from Stockholm
School of Economics.
When writing this article, he was a Research
Officer at the Centre for Operations Management,
London Business School. In July 1998 he took up a
position as Assistant Professor of Industrial Production at Stockholm School of Economics. His
research interests are in the areas of manufacturing
strategy and operations management. He has previously published in Journal of Product Innovation Management and International Journal
of Operations and Production Management.