Rug01-002273989_2016_0001_ac.pdf

UNIVERSITEIT GENT GHENT UNIVERSITY

FACULTEIT ECONOMIE EN BEDRIJFSKUNDE FACULTY OF ECONOMICS AND BUSINESS ADMINISTRATION ACADEMIC YEAR

2015 – 2016

Comparison of Lean Management in Japanese and Belgian Manufacturing SMEs Masterproef voorgedragen tot het bekomen van de graad van Master’s Dissertation submitted to obtain the degree of Master of Science in Business Engineering

Jasmien Dierickx Under the guidance of Prof. Veronique Limère

UNIVERSITEIT GENT GHENT UNIVERSITY

FACULTEIT ECONOMIE EN BEDRIJFSKUNDE FACULTY OF ECONOMICS AND BUSINESS ADMINISTRATION ACADEMIC YEAR

2015 – 2016

Comparison of Lean Management in Japanese and Belgian Manufacturing SMEs Masterproef voorgedragen tot het bekomen van de graad van Master’s Dissertation submitted to obtain the degree of Master of Science in Business Engineering

Jasmien Dierickx Under the guidance of Prof. Veronique Limère

PERMISSION I declare that the content of this Master’s Dissertation can be consulted and/or reproduced if the sources are mentioned. Name student: Jasmien Dierickx Signature:

Samenvatting CONTEXT - Sterkere concurrentie en de toenemende veeleisendheid van klanten zetten bedrijven steeds meer onder druk om beter en sneller te doen. Kmo’s in het bijzonder zijn gevoelig voor deze toenemende druk. In deze context richten veel bedrijven zich tot nieuwe manieren van bedrijfsvoeren, zoals lean management, dat bijgevolg dan ook steeds meer aan populariteit wint. Lean implementeren is echter niet gemakkelijk en veel kmo’s blijken hierbij nog heel wat moeilijkheden te ondervinden. ONDERZOEK - Het doel van deze masterproef is om op basis van een vergelijking van Japanse en Belgische kmo’s meer inzicht te krijgen in de factoren voor succes en faling van lean implementatie in kmo’s. Doorheen het onderzoek wordt gefocust op het beantwoorden van drie onderzoeksvragen. Ten eerste wordt onderzocht of er verschillen zijn tussen beide landen op vlak van lean implementatie. Ten tweede wordt nagegaan of lean bewustheid al dan niet een invloed heeft op de lean implementatie. Met de derde onderzoeksvraag wordt ten slotte de invloed van nationale cultuur op lean implementatie bestudeerd. METHODE - Door middel van een vragenlijstonderzoek, gecombineerd met persoonlijke interviews en bedrijfsbezoeken, werden vijf Japanse en vijf Vlaamse kmo’s bestudeerd, allemaal actief in de verwerkende industrie. Alle bedrijven werden gescoord en geanalyseerd op basis van de 3 M’en – muda (afval), muri (overbelasting) en mura (variatie) – en lean bewustheid. RESULTATEN - Uit deze meervoudige casestudie kwamen volgende bevindingen naar voor. De meerderheid van de kmo’s geeft blijk van een gebrek aan middelen (tijd, geld en kennis) om veel te investeren in lean management. Daarom wordt continue verbetering niet toegepast in de letterlijke zin van het woord, maar probeert men de processen te verbeteren op basis van gezond verstand en het oplossen van problemen. Verder zijn er tussen de Japanse en Belgische kmo’s geen grote verschillen merkbaar. Belgische bedrijven lijken iets beter te scoren op vlak van efficiëntie, maar zowel de Japanse als Belgische kmo’s hadden veel aandacht voor de kwaliteit van de producten en respect voor de werknemers. Wat betreft lean bewustheid werd er geen sterke link vastgesteld met lean implementatie. Bedrijven die zich heel erg bewust zijn van lean, blijken wel beter te scoren, maar onder de andere bedrijven is geen algemene trend merkbaar en lean bewustheid blijkt geen noodzakelijke voorwaarde te zijn voor efficiëntie. Vooral het menselijke aspect en de manier van denken blijken doorslaggevend voor een goede of minder goede implementatie. Tot slot blijkt de nationale cultuur wel degelijk een invloed te hebben op de lean implementatie, maar vele andere factoren zoals de organisatiecultuur kunnen deze impact verkleinen. BEPERKINGEN - De kleinschaligheid en selectie van de respondenten maken veralgemening moeilijk. TYPE ONDERZOEK - Exploratief onderzoek. I

Preface This research was carried out as a master dissertation for acquiring Master of Science in Business Engineering (Operations Management) from Ghent University. The subject of this thesis is situated in the field of lean management. The research is centered around a comparison of Japanese and Belgian manufacturing SMEs. The goal is to investigate the possible differences between both countries and whether lean awareness and national culture have an influence on the lean implementation level. The writing of this dissertation has taught me a lot, not only knowledge on lean management and cultural differences, but other valuable skills as well. Lastly, I would like to thank everyone who contributed to the accomplishment of this master dissertation, in special I thank: 

The participating companies for their time and willingness to participate in this research. Without them this research would not have been made possible.



Prof. V. Limère for coordinating my master dissertation and providing helpful advice.



Prof. K. Hidaka for providing helpful advice and support for my research in Japan, and for assisting me in the field visits.



Mr. M. Yotsu and Y. Takano for offering help and assistance during the field visits in Japan.



My friends in Japan for helping me translate the questionnaire and e-mails into Japanese and for their support.



Veltion, for providing helpful advice and for their support in reaching Belgian SMEs.



Prof. L. Chalmet and Jim Lippens for offering helpful advice and insights.



My friends and family for correcting the thesis writing, for their continuous patience and for their endless support.

Jasmien Dierickx

II

Table of contents 1.

2.

Introduction ..................................................................................................................................... 1 1.1.

Personal motivation ................................................................................................................ 1

1.2.

Research subject...................................................................................................................... 1

Literature review ............................................................................................................................. 5 2.1.

What is lean? ........................................................................................................................... 5

2.1.1.

Defining the lean concept ............................................................................................... 5

2.1.2.

History of lean ............................................................................................................... 13

2.2.

Lean in practice ..................................................................................................................... 15

2.2.1.

General issues................................................................................................................ 15

2.2.2.

SME-specific issues ........................................................................................................ 20

2.3.

Influence of national culture on lean implementation ......................................................... 22

3.

Research design ............................................................................................................................. 25

4.

Research methodology .................................................................................................................. 26

5.

4.1.

Selection of participants ........................................................................................................ 26

4.2.

Online questionnaire ............................................................................................................. 27

4.3.

Personal interview and field visit .......................................................................................... 28

Research results and analysis ........................................................................................................ 29 5.1.

Lean in Japanese SMEs .......................................................................................................... 29

5.1.1.

Introduction ................................................................................................................... 29

5.1.2.

Results field study.......................................................................................................... 30

5.1.3.

Analysis and conclusion ................................................................................................. 41

5.2.

Lean in Belgian SMEs ............................................................................................................. 43

5.2.1.

Introduction ................................................................................................................... 43

5.2.2.

Results field study.......................................................................................................... 44

5.2.3.

Analysis and conclusion ................................................................................................. 54

5.3.

Comparison of Japan and Belgium ........................................................................................ 57

6.

Conclusion and discussion ............................................................................................................. 61

7.

References ........................................................................................................................................ I

Appendix.................................................................................................................................................. V

III

List of abbreviations 5S

Sifting, Sorting, Sweeping, Standardise, Sustain

ERP

Enterprise Resource Planning

JIT

Just-in-time

LA

Lean awareness

PDCA

Plan, Do, Check, Act

Quest.

Questionnaire

SMED

Single-Minute Exchange of Die

TPS

Toyota Production System

IV

List of tables Table 1 Examples of SME definitions in different countries ................................................................................... 2 Table 2 Overview of visited SMEs in Japan, Tokyo ................................................................................................ 29 Table 3 Lean implementation in J1 ....................................................................................................................... 30 Table 4 Lean implementation in J2 ....................................................................................................................... 32 Table 5 Lean implementation in J3 ....................................................................................................................... 34 Table 6 Lean implementation in J4 ....................................................................................................................... 36 Table 7 Lean implementation in J5 ....................................................................................................................... 38 Table 8 Overview of visited SMEs in Belgium, Flanders ........................................................................................ 43 Table 9 Lean implementation in B1 ...................................................................................................................... 44 Table 10 Lean implementation in B2 .................................................................................................................... 46 Table 11 Lean implementation in B3 .................................................................................................................... 48 Table 12 Lean implementation in B4 .................................................................................................................... 50 Table 13 Lean implementation in B5 .................................................................................................................... 53

V

List of figures Figure 1 SME definitions Europe and Japan ............................................................................................................ 3 Figure 2 Research hypothesis 1 ............................................................................................................................... 4 Figure 3 Research hypothesis 2 ............................................................................................................................... 4 Figure 4 Research hypothesis 3 ............................................................................................................................... 4 Figure 5 The interrelated 3 M’s of lean manufacturing .......................................................................................... 8 Figure 6 The five principles of lean thinking (based on Womack & Jones (1996)) ................................................. 8 Figure 7 Lean triangle (based on Convis (2001)) ..................................................................................................... 9 Figure 8 Toyota Production System House (Marchwinski, 2009) ........................................................................ 11 Figure 9 Lean leadership as missing link (adapted from Dombrowski, Mielke, and Convis) ................................ 15 Figure 10 Cultural dimensions of Belgium vs Japan (retrieved from (Hofstede, 2016)) ....................................... 23 Figure 11 Research framework ............................................................................................................................. 25 Figure 12 Summary results Japanese SMEs .......................................................................................................... 41 Figure 13 Lean awareness in Japanese SMEs (n = 9) ............................................................................................. 42 Figure 14 Summary results Belgian SMEs ............................................................................................................. 55 Figure 15 Lean awareness in Belgian companies (n = 21) ..................................................................................... 56 Figure 16 Japan versus Belgium, based on the 3M scores .................................................................................... 57 Figure 17 Japan vs Belgium: spread of the M scores ............................................................................................ 58 Figure 18 Summary table of LA and the 3M’s ....................................................................................................... 60 Figure 19 Conclusion 1: Lean implementation of Japan versus Belgium .............................................................. 61 Figure 20 Conclusion 2: Link between lean awareness and implementation ....................................................... 61 Figure 21 Conclusion 3: Impact of national culture .............................................................................................. 62

VI

List of figures Image 1 Shop floor J1 ............................................................................................................................................ 31 Image 2 Factory visit J2 ......................................................................................................................................... 33 Image 3 Visual board on the shop floor with overview of production progress ................................................... 36 Image 4 Organised parts and tools ....................................................................................................................... 38 Image 5 Shop floor of J5 with movable cart for tools (example of continuous improvement) ............................ 40 Image 6 Lean improvements of B2 ....................................................................................................................... 48 Image 7 Improvement suggestions and process control at B3 ............................................................................. 50 Image 8 B4’s organised workspace ....................................................................................................................... 52 Image 9 Shop floor of B5 ....................................................................................................................................... 54

VII

1. Introduction 1.1.Personal motivation During my first master year, I was granted the opportunity to study as an exchange student at the Tokyo Institute of Technology, more in particular at the Graduate School of Innovation Management. During my search for a master thesis topic, I realised it would be a unique opportunity to link my thesis to my stay in Japan. Since Japan is the birthplace of lean, my interest was immediately aroused by a topic related to lean management. Many small and medium Belgian enterprises still seem to struggle with implementing lean, so a comparison with Japanese SMEs could broaden our insights. I was introduced to lean and the Toyota Production System for the first time in a third bachelor course, called “Operations Management” and instructed by Professor L. Chalmet. With all their simplicity and still so powerful, the Japanese ideas and terminology seemed very intriguing to me and caught my interest. At first sight, lean seems fairly simple and logical, with most of its principles being quite straightforward and easy to understand. Implementing it in a successful way, however, is a different story. There are so many subtleties that make it hard to just copy and paste from for instance Toyota. Each company needs to find an approach that suits its own specific needs, because one technique might work in a certain situation but not in another one. And this is what makes it so difficult, but at the same time very fascinating. This is why I am so interested in lean and eager to learn more about it. And how could lean management be studied better than by comparing with Japan, the country where it all began? Many SMEs state that they miss some kind of practical approach towards lean that is adapted to their specific needs and can guide them through the implementation process. With this thesis, I hope to gain more insight in what makes lean successful, and to share my insights with SMEs in order to help them with their struggles.

1.2.Research subject Stronger competition and increasingly demanding customers are constantly pushing today’s companies to perform better and faster. Especially SMEs are sensitive to this high pressure. In this context, many companies turn to new ways of managing operations such as lean manufacturing. Implementing lean is however not easy, and many have been struggling with it. The subject of this 1

dissertation is a comparison of lean management between Japanese and Belgian SMEs, to obtain insight in how SMEs in both countries manage their operations. The study takes the form of a multiple-case study, comprising five Japanese and five Belgian cases. First the results of the single cases will be presented for each country, followed by a cross-case analysis over the different SMEs across both countries (Yin, 2013). The majority of the researched SMEs were small-sized (which will be defined in the following paragraph), and all situated in the manufacturing sector. Limited research has been conducted so far on the impact of national culture on lean implementation. Therefore, throughout the research, the main focus was on the impact of culture and lean awareness on the level of lean implementation. The purpose of this research is mainly exploratory, in order to find out what is happening and in an attempt to obtain new insights. Based on these findings, propositions and hypotheses for future research have been developed (Yin, 2013). To situate the subject of this research, it is important to start with clarifying what is understood by SMEs. First of all, it should be noted that in fact there is no uniform definition of small and mediumsized enterprises and differences can be quite big depending on the country or region. In China for instance, the employee number should stay below 999, while this is only 499 in the US and 250 in the European Union. Table 1 provides some examples of definitions.1 Table 1 Examples of SME definitions in different countries (Commission, 2011; Hu, Mason, Williams, & Found, 2015) Country/region

Definition of SMEs

China

Less than or equal to 999 employees

European Union

Less than or equal to 250 employees

Japan

Less than or equal to 300 employees (manufacturing)

US

Less than or equal to 499 employees (manufacturing)

However, employee number is not the only criterion for determining the size of a company. Other aspects such as sales volume, stated capital, total assets, can also be included in the definition, but again these are different depending on the country or region. Since this dissertation focuses on Japan and Belgium, we will only zoom in on these countries. The following figures give an overview of the employed definitions in both countries.

1

In several countries, SMEs are defined in a different way depending on the sector. The table only includes definitions for the manufacturing sector, since this is the focus of this research.

2

Figure 1 SME definitions Europe and Japan

Japan and Belgium are both developed economies in which SMEs play an important role. With a share of more than 99% in the economy and 70-80% of employment creation, the SMEs form the backbone of EU and Japanese economies. Moreover, they are engines for economic growth (especially through internationalization into foreign strategic markets). (Commission, 2011; David, 2015; METI) Competition can be very harsh for SMEs, both nationally – between SMEs within the same region or country – and internationally – because of increasing pressure from abroad. In order to survive and stay competitive, they start exploring new ways of managing their operations, such as lean management.

Throughout this study, the following three research questions have been addressed: Q1.

How does the level of lean implementation differ between Japanese and Belgian SMEs, in terms of the 3 manufacturing M’s?

Q2.

How does the level of lean awareness differ between Japanese and Belgian SMEs, and to what degree does it influence the level of lean implementation?

Q3.

To what extent can national culture influence the level of lean implementation in SMEs?

After a preliminary literature review and gaining some insights in Japanese culture, the following three hypotheses were formed:

3

H1:

Japanese SMEs have a higher level of lean implementation than Belgian SMEs, because continuous improvement thinking and group feeling is inherently present in Japanese culture. Figure 2 Research hypothesis 1

H2:

Belgian SMEs show a higher lean awareness than Japanese SMEs, but Japanese SMEs are more successful in implementing lean because lean thinking is inherently present in their culture. Figure 3 Research hypothesis 2

H3:

National culture has an impact on lean implementation through behaviour and thinking patterns of employees and cultural beliefs. Figure 4 Research hypothesis 3

4

2. Literature review 2.1.What is lean? 2.1.1. Defining the lean concept The history of lean management goes back to the first half of the 21st century, when Ford in the US and Toyota in Japan started exploring new ways of improving their processes. Today, the Toyota Production System (TPS) is still seen as the ultimate example of lean. According to the Lean Enterprise Institute, lean can be described as “creating more value for customers with fewer resources” (Lean Enterprise Institute, 2016c). The main idea is to maximize customer value while minimizing waste. In the traditional mass production model, companies gain competitive advantage through economies of scale. In times of strong economic growth and prosperity, the model has proven to be very effective. However, especially in times of economic slowdown, this traditional model also brings along inefficiencies (Dombrowski & Mielke, 2014; Rother, 2010). In a market environment as today, where globalisation, growing competition and increasingly demanding customers are putting more and more pressure on companies worldwide, lean can offer an alternative (Bhamu & Sangwan, 2014). Opposite to the mass production model, lean aims at delivering the best possible value to customers through the optimization of processes and reduction of waste, throughout the entire supply chain (Hu et al., 2015). Basically, the goal is to deliver higher quality for the customer, at lower costs and in less time. Central to this lean culture is a people-oriented approach, with emphasis on continuous improvement and problem-solving (Dombrowski & Mielke, 2014). If companies succeed in creating this cultural change and become truly lean, it will enhance their competitive position and create a sustainable advantage (Hu et al., 2015). The 3 M’s of lean manufacturing Elimination of waste is an essential aspect of the lean production philosophy. At Toyota, waste is interpreted in a very broad way. They identify three types of waste, also known as the 3 M’s of lean manufacturing: muda (waste), muri (overburden) and mura (unevenness) (McManus, 2013; Pieńkowski, 2014; J. Womack, 2006). The three M’s are interconnected and illustrate the fundamental ideas behind lean. In order to create a sustainable lean process, the key is to learn recognise muda, muri and mura, and to reduce them. Since this research will be focused on the three M’s, they will be discussed in what follows (Lean Enterprise Institute, 2016b; Marchwinski & Shook, 2014).

5

Muda The first M – ‘muda’ – is literally translated from Japanese as ‘waste’, which is defined as anything that does not add value for the customer. It mainly refers to what is visible on the surface, and not to underlying or invisible aspects of processes. Ohno identified 7 types of waste (Marchwinski & Shook, 2014; Ohno, 1988): 1. Overproduction: producing more than what is actually needed or at a faster pace than what the market is demanding. 2. Waiting: idle time of products, people or machines (e.g. waiting for the previous process to end, for necessary parts to arrive, for equipment to be repaired, etc.). 3. Transportation: unnecessary or inefficient movements of parts or products. 4. Overprocessing: unnecessary or incorrect processing (e.g. when more work is done than needed or when tools are more sophisticated than necessary). 5. Inventory: unnecessary stocks, basically defined as anything in excess of a one-piece-flow. 6. Motion: any movement of operators or machines that does not add value for the customer (e.g. searching for tools). 7. Defects: the extra material, man hours and machine time needed to inspect and repair defects. Ohno (1988) argues that by eliminating these seven wastes, production costs will go down and consequently profit will increase. Since overproduction and inventory are the most common types of waste and contribute to other types of waste as well, they should receive the highest priority (McManus, 2013). Furthermore, it should be noted that managers often focus on the processes and productivity when it comes to these 7 wastes. Additionally, it is also important not to ignore the viewpoint of operators. That is why later an eighth, more people-oriented type of waste was added to the list: ‘non-utilized talent’. It identifies the waste related to not fully exploiting employees’ talents and capabilities (Ballé, 2012; J. K. Liker, 2004). Another distinction is made between ‘type one muda’ and ‘type two muda’. The former refers to wasteful activities that can be reduced but not quickly eliminated, while the latter involves waste that can be eliminated through continuous improvement (Marchwinski & Shook, 2014). Muri ‘Muri’ or ‘overburden’ refers to overburdening people or equipment by pushing them beyond their limits. At peak moments for instance, machines and operators can be required to work faster, harder or for a longer period of time than they are capable of (Marchwinski & Shook, 2014). Flexible 6

employees are key elements of lean manufacturing, but using overtime to respond to unanticipated peaks in demand should always be a temporary condition; otherwise employees will become overburdened. Therefore, it is important to carefully monitor overtime such that it does not become a permanent measure. If the peak in demand is not temporary, an increase in capacity should be considered (Hobbs, 2003). Pieńkowski (2014) identifies three main causes of muri: poorly designed workstations that do not support the operators, a lack of standardized work and variability in demand (also known as mura, the third M). He also states that muri can refer to the opposite of overburden as well, namely underutilization of employees or machines. Overburden can be prevented by ensuring that variability in production is kept within certain limits. Furthermore, allocating the right time frames to jobs is a difficult balancing exercise. On the one hand, sufficient time is needed for employees and machines to complete their tasks in an adequate way without being overburdened, while on the other hand allowing too much time would be detrimental to productivity (McManus, 2013). Inevitably, overburden will lead to an increase in other types of waste such as quality issues, more defects, waiting times, etc. Not being able to manage muri will thus undermine efforts to reduce muda. Mura The last – but certainly not least important – M stands for ‘mura’, which means ‘variability’ or ‘unevenness’ in Japanese. Mura has a direct and indirect impact on muri and muda. For instance, high variability in production processes will cause employees and equipment to be overburdened at peak times and inventory will be increased to be able to satisfy the demand. Eliminating irregularities or

unevenness

in

processes

is

consequently

one

of

the

key

principles

of

lean

manufacturing(McManus, 2013). Variability is not only caused by variability in customer demand, but also by variability in processes such as a varying work speed in certain operations. One way to decrease variability is by levelling the production schedule, a principle that is also known as ‘Heijunka’ and will be discussed further in this chapter. Another is by carefully paying attention to the work speed (Marchwinski & Shook, 2014). Having multi-skilled employees that are capable of handling several machines can also help to create more evenness in the workflow. As mura drives both muri and muda, it should be given the highest attention of all 3 M’s. As already mentioned, the three M’s are interrelated and influence each other. The elimination of one type of waste can automatically lead to the elimination of others, but the opposite could also be true (Lean Enterprise Institute, 2016b). Figure 5 gives a visual representation of these relations.

7

Figure 5 The interrelated 3 M’s of lean manufacturing

Muda

Mura

Muri

As basis for analysis and evaluation of the participating SMEs, the framework of muda, muri and mura will play a central role throughout the research. Lean thinking With their book, The Machine That Changed the World, Womack and Jones (1990) truly brought a breath of fresh air into the manufacturing world. The book included a comprehensive description of the thought process behind lean and is held responsible for its popularisation. In Lean Thinking (1996), they further refined these ideas into five lean principles (Figure 6), which will be briefly discussed in this paragraph (Lean Enterprise Institute, 2016a; Marchwinski & Shook, 2014). Figure 6 The five principles of lean thinking (based on Womack & Jones (1996))

1. Value

2. Value stream

3. Flow

4. Pull

5. Perfection

The first and most important principle is that operational processes have to add value for the customer. It is thus important to determine the value that the customer seeks, and what is considered as waste from their perspective. Second, a value stream has to be identified for each of these products or services that add value. Here, one should strive to eliminate all steps that do not add value for the customer, in other words waste. The third principle is to ensure a continuous flow of the product through all the remaining steps, which can be facilitated by, inter alia, the standardisation of processes. Fourth, pull should be introduced wherever continuous flow is possible. The focus should be on the demand of the customer, which passes on signals to the rest of the value chain. The fifth and last principle involves acting and striving for perfection, so that the customer service continuously becomes better (less steps, less time needed, and less information needed). Together these five principles constitute the basis of lean and can serve as a guideline to implement 8

lean. Womack & Jones (1996) see “lean thinking” as a remedy against the seven types of muda. However, it is clear that lean thinking also has a positive impact on muri and mura. Furthermore, having a vision is very important for leaders when implementing lean (Rother, 2010). In 2007, Womack and Jones translated this into the need for managers to reflect about 3 aspects – namely purpose, process, and people – which are actually a simplification of the five lean principles (Marchwinski & Shook, 2014). Purpose refers to defining the value desired by the customer (the first lean principle), such that all members of the organisation can work towards that same goal. After defining the purpose, the attention is shifted to the process that is in place to reach this. According to Womack and Jones, the ideal process should be valuable, capable, available, adequate and flexible (Marchwinski & Shook, 2014); it goes beyond the scope of this literature review however to elaborate further on them. The third aspect – people – involves making someone responsible for each process, to ensure that everyone’s actions are aligned towards the same direction and to regularly evaluate the progress. Triangle of Convis A similar framework to the one of Womack and Jones was proposed by Convis (2001), who was president of Toyota Motor Manufacturing in Kentucky until 2007. Although both frameworks include the process and people focus, Convis especially puts emphasis on the human aspect. As an experienced practitioner, he realised that total commitment is a necessary condition to come to a successful implementation of TPS. He considers TPS as an integrated system that can be represented by means of a triangle – philosophy, technology, and management – with people in the middle, because human development is at the very centre of lean (Figure 7). As will be discussed further in the literature review, the importance of people is widely supported in lean literature (J. Liker & Rother, 2011; Rother, 2010; S. Spear & Bowen, 1999; S. J. Spear, 2004; Sugimori, Kusunoki, Cho, & Uchikawa, 1977). Figure 7 Lean triangle (based on Convis (2001))

9

Since the Convis’ triangle will form an important part of the analysis framework of this research, its elements will be briefly defined: 

Philosophy: the lean philosophy involves putting people and customers first, having a shopfloor focus, being committed to continuously improve, and paying attention to the impact on the environment.



Technology: the technology pillar refers to the lean tools and techniques, which are important to manage daily operations as efficient as possible.



Management: the management should have a shop-floor focus with emphasis on supporting and helping the team members in doing their jobs. They have the important task to motivate and engage employees to work together towards a shared goal, in an atmosphere of trust and teamwork.

The three interrelated pillars constitute the basis of a successful implementation of TPS, and thus indirectly also of lean. Despite the fact that lean is a very popular concept, literature reviews have shown no real consensus on its definition, nor on the characteristics associated with it (Bhamu & Sangwan, 2014; Hu et al., 2015; Pettersen, 2009). For instance, some authors define the lean concept merely as a set of practical tools to help reduce waste, while others lean more towards a philosophical approach and consider it as a lot more than just a set of tools. Ranging from a practical operational focus to a more philosophical strategic one, Pettersen (2009) even identifies four different ways to approach lean: “toolbox lean”, “becoming lean”, “leanness”, and “lean thinking”. On the other hand, this lack of uniform definition could also be considered as a benefit. If organisations that wish to implement lean are aware of these various interpretations, it can help them to adapt the concept to their own specific needs, which will more likely lead to a successful and sustainable change (Pettersen, 2009). But even though there is no consensus on a definition, Pettersen’s literature review (2009) shows that the following characteristics have been discussed by almost all authors: -

Continuous improvement (‘kaizen’)

-

Setup time reduction

-

Just-in-time production (JIT)

-

Failure prevention (‘poka yoke’)

-

Production levelling (‘heijunka’)

The Just-in-time principle for instance was already mentioned in the 1970s by Sugimori et al. (1977) as one of the two major features of TPS and Kanban. These elements are therefore considered as 10

being inherent to the lean concept. In the subsequent paragraph, the Toyota Production System House is used to elaborate further on the concept’s key characteristics. The Toyota Production System House Figure 8 Toyota Production System House (Marchwinski, 2009)

The idea behind the TPS House is that one can only build a stable house if one has strong foundations. Likewise, in order to successfully implement TPS, it is important that the two pillars – just-in-time and jidoka – and foundations – heijunka, standardized work and kaizen – are present. In this sense, the TPS House shows the sequence in which the lean methods should be applied to achieve success. Several versions of the lean house have already been developed, but the following discussion will be based on Figure 8, retrieved from the Lean Lexicon (2014). At the basis of TPS are stable processes. This means that variability should be limited and processes should be predictable and reliable. As discussed before in this chapter, variability is at the very basis of lean and is associated with one of the three manufacturing M’s, namely mura. Without this basic stability, future improvement efforts will simply be undermined. Tools that can help to assess variability are for instance value stream mapping and control charts. When a process is not stable, it is important to first find the root causes of the variability and to subsequently address them. Also still at the basis of lean are the following principles: heijunka, standardised work and kaizen. Heijunka or levelling ensures that production lines run smoothly, without interruption, even when several products are being produced simultaneously on the same production line. Standardised work 11

ensures consistent quality levels and helps levelling the production flow. Kaizen or continuous improvement refers to continuously questioning the current situation and solving problems in a scientific way. It is fundamental to the Toyota Production System. The two main pillars of the TPS house are Just-in-time (JIT) and Jidoka, and both play a key role in the Toyota Production System. The idea behind JIT is that we only make what we need, when we need it. Downstream processes take what they need from upstream processes (pull) and a continuous flow is ensured. Kanban cards are used on the production line to replenish parts just in time when stocks become low. The goal is to produce at the rate at which customers demand the products, also defined as the takt time. (Hobbs, 2003) The second pillar is Jidoka, also known as ‘automation with a human touch’ or ‘autonomation’, which refers to making abnormalities visible. The principle is that no mistake or defect is allowed to proceed in a process. Mistakes should be highlighted and trigger corrective action before the defect can move on to the next step. This can be achieved by Andon signals, which are visual signals to indicate an abnormal condition. Every operator is empowered to stop the production line whenever a potential problem is detected, such that a solution can be found immediately. Another part of Jidoka is the concept of Poka-yoke, also referred to as ‘built-in quality’ or ‘mistake proofing’. This is basically any device that can prevent a mistake from happening or that can stop or alert the process that a mistake is about to happen or has already happened. Whenever a problem occurs, it is important to go and see to the source – also called ‘Genchi Genbutsu’ – to try to find the root cause of the problem and solve it. Contrary to automation, which is focused on labor reduction, autonomation is focused on quality improvement and the independence of man versus machine. (Chalmet, 2014; Sugimori et al., 1977) The roof is determined by the ultimate goal of TPS: offering the highest quality, at the lowest cost, and with the shortest lead time. In collaboration with the Lean Enterprise Institute, Marchwinski et al. (2014) bundled all important lean terminology and principles in a book, as a guide for practitioners. Some organisations have adapted the lean house to their own specific situation, but the fundamental ideas behind it remain the same.

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2.1.2. History of lean In order to fully understand the lean concept, it is important to know the history behind it. Apart from some early developments in process thinking2, the origin of lean goes back to the 1920s. At that time, Henry Ford introduced flow production at Highland Park, a Ford Motor Company factory in Michigan. In the traditional approach, machines were generally grouped per type of process and parts had to find their way through them into a final product, resulting in high inventories and long throughput times. Ford on the other hand decided to integrate the entire production process by lining up the different production steps in the sequence of the process. This allowed to improve efficiency significantly and keep up with expanding sales. However, even though the moving assembly line was truly revolutionary at that time, only one type of vehicle was manufactured at Highland Park and their way of working was not quite flexible. When customers started demanding more variety, the need for a new approach arose. In the 1930s and especially after the Second World War, Toyota was looking for new ways of manufacturing. The just-in-time concept, that still forms a key principle of lean manufacturing today, was developed by Kiichiro Toyoda in the 1930s. After the war, some American management gurus such as Deming were sent to Japan to help rebuild the country. Thanks to their advice and by studying American production methods, Toyota gained new insights into quality and statistical process control. Moreover, Eiji Toyoda and Taiichi Ohno were given the opportunity in 1950 to visit Ford in Detroit. By building on Ford’s original thinking and recognizing the shortcomings of the system, the Toyota Production System was developed. Taiichi Ohno, the architect of TPS, invented many of the lean tools that are still being used today (e.g. the Kanban principle and the importance of waste removal). (Chalmet, 2014; Lean Enterprise Institute, 2016a; Marchwinski & Shook, 2014; Rother, 2010) The fact that lean management was mainly developed in Japan is certainly not a coincidence. First of all, Japan has a lack of natural resources, forcing them to rely on other countries for import of raw materials. Toyota turned this competitive disadvantage into a motivation to strive for higher quality products at a lower cost (Sugimori et al., 1977). Second, Japan is characterised by a culture of hard work, strong group feeling, sense of equality, and highly skilled and motivated workers. Toyota realised that they could build on these unique strengths, so they formed the basis for the Toyota Production System. (Sugimori et al., 1977). Last but not least, TPS emerged in a challenging economic period after the Second World War. Everything had to be rebuilt after the war, but there was not enough money for all the required investments. Competition was intense, Japanese manufacturers

2

The Arsenal in Venice in the 1450s and Eli Whitney’s concept of interchangeable parts in 1799 represent some th important manufacturing breakthroughs before the 20 century.

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were struggling to survive and were trying very hard to find ways to become profitable. Becoming more lean proved to be the answer to their problems (Chalmet, 2014). However, it was only later that lean management really began to spread. By the end of the 1970s, the second oil crisis increased interest in western countries for new management paradigms (Samuel, Found, & Williams, 2015). Among the first English publications was the article of Sugimori et al. (1977), in which they discussed the unique production system of Toyota and its main features. The term ‘lean’ was then not used yet, but was only introduced in 1988 by John Krafcik3 (Krafcik, 1988). It is the merit of Womack et al. (1990) on the other hand that lean was popularised and spread worldwide. Their book The Machine That Changed the World – the result of five years of extensive research – revealed the lean production system behind Toyota's success and became a best-seller. Remarkably, the term ‘lean’ is actually not so well known in Japan, where they prefer to use ‘Toyota production’ instead (Bhamu & Sangwan, 2014). Since The Machine That Changed the World, a lot of research has been conducted about lean. An extensive review of literature published in the past 25 years shows how lean has evolved from a mere description of the Toyota Production System, to a comprehensive value system that is useful for any organisation that wants to improve, regardless of the sector (Samuel et al., 2015). Moreover, some recent trends are the integration of lean management with other philosophies (e.g. ‘lean sigma’, lean and agile manufacturing) or new methods, such as the harada method.

3

John Krafcik was an MIT researcher who was working on the International Motor Vehicle Programme (IMVP) at that time.

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2.2.Lean in practice 2.2.1. General issues Lean management aims at creating the highest value for the customer with at least waste as possible. To support this goal, many lean solutions have been developed over the years, with the Toyota Production System (TPS) as the ultimate example. However, in practice, the rate of successful lean initiatives appears to be rather low. Even though many organisations that implement lean succeed in making significant short term improvements, the most difficult part seems to be to turn it into a sustainable advantage. All too often, organisations fall back into their old practices. A major reason is that many companies have been focusing too much on the visible aspects of lean, rather than on the underlying principles. They try to implement lean as merely a set of tools to reduce waste, instead of approaching it as a holistic philosophy (Bhasin & Burcher, 2006; Dombrowski & Mielke, 2014; J. Liker & Rother, 2011; Rother, 2010; S. J. Spear, 2004). Nonetheless, it is really the thinking and behaviour behind TPS that enables Toyota to continuously improve and to maintain its competitiveness. The tools are merely the visible result of this continuous improvement culture. However, changing an organisation’s culture is of course much more difficult than introducing some tools or techniques, which explains why so many organisations fail in doing so. As shown in Figure 9, lean leadership could be the answer on how to move from ‘toolbox lean’ to a truly ‘lean culture’ (Dombrowski & Mielke, 2014; J. Liker & Convis, 2011). Figure 9 Lean leadership as missing link (adapted from Dombrowski, Mielke, and Convis)

A first approach to lean leadership is the ‘lean leadership diamond’. It states that a lean leader should be truly committed and go through the following four steps: developing himself, developing and coaching others, supporting daily improvement and aligning goals toward a long term vision (J. Liker & Convis, 2011). A second approach towards lean leadership is the Toyota kata approach, consisting of the ‘improvement kata’ and ‘coaching kata’ (Rother, 2010). Both approaches underline the importance of a good leader who acts both as an example and as a coach in the lean implementation process. Instead of solving the problem himself, a coach should lead his trainee through questions (Dombrowski & Mielke, 2014; Rother, 2010; S. J. Spear, 2004), and his ultimate goal should actually be to make himself superfluous (Dombrowski & Mielke, 2014; Lippens, 2015).

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Based on these approaches and the fundamental principles of lean leadership, Dombrowski and Mielke (2014) formulated 15 practical guidelines for managers. As a detailed explanation of these guidelines goes beyond the scope of this literature review, the reader is invited to consult their work4. Most researchers in the field agree that it is important to see lean as a philosophy instead of only a set of tools. When it comes to the degree to which should be focused on philosophy, however, there do exist some opposing views. Bhasin and Burcher (2006) for instance conclude from their literature review that technical as well as cultural factors need to fulfilled and complement each other to come to a successful lean implementation. They list a specific range of lean tools (e.g. continuous improvement, Kanban, 5S) that serve as a minimum technical requirement for companies to apply lean, complemented with some equally important cultural requirements. Rother (2010) on the other hand really puts emphasis on the improvement philosophy and having a long term vision, and rather sees the technical tools as a result of this thinking process. In his view, the tools are just a means while striving for the company’s long term goals. So they do agree that lean philosophy is a necessary condition for success, but they have some opposing views on how it should be incorporated. The problem of focusing too much on the visible aspects of lean can also be looked at from another perspective, by linking it to the 3 M’s. As discussed in the beginning of this chapter, muda, muri and mura practically comprise everything what lean is about. By eliminating these three key concepts, the efficiency of a company can be improved significantly. Nevertheless, in practice many companies tend to focus too much on muda, while often forgetting about the other two wastes (J. Womack, 2006). This finding should not be surprising however, since muda is the most visible of the three M’s and consequently seems the easiest problem to start with. Muri and mura on the other hand take more place below the surface and require a more thorough understanding of the processes, making them more difficult to manage. Jim Womack only came to this insight in 2006, when he realised that most people had been focusing on the lean concepts in a wrong way in the preceding 20 years, including himself. Since the three wastes are interrelated, only focusing on muda however does not make much sense, because efforts to reduce it will simply be undone if muri and mura are still high. Therefore, the 3 M’s should be addressed together. Again, this shows that lean management is not as simple as it might seem and that merely copying from other companies will most likely not lead to success. It involves a lot of subtleties and requires time, practice and perseverance to fully understand it.

4

Dombrowski, U., & Mielke, T. (2014). Lean leadership–15 rules for a sustainable lean implementation. Procedia CIRP, 17, 565-570.

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In the 1970s, Sugimori and his colleagues also already pointed out the significance of the human aspect of TPS. They described TPS and Kanban as having the following two major features: just-intime and respect-for-human (Sugimori et al., 1977). Toyota recognized the importance of using its workers’ capabilities to the fullest, by giving them enough autonomy while also treating them with respect and giving them recognition for their work. However, the authors did not dig much deeper into Toyota’s culture at that time. When it became more and more clear that many organisations failed at imitating Toyota, other researchers and practitioners – such as Bowen (1999), Spear (1999; 2004) and Convis (2001) – also started to investigate why and they drew attention to the importance of people and thinking in successful lean projects. In 2010 – based on 6 years of extensive research on Toyota’s management practices – Mike Rother brought new fundamental insights into the company’s success and why so many other organisations fail to do the same (Rother, 2010). Indirectly, Sugimori already briefly mentions about a one-piece-flow conveyor line as ultimate goal of TPS. Mike Rother however really puts emphasis on the importance of having a vision and target conditions in every aspect of Toyota’s continuous improvement culture. They make sure that all actions are aligned towards the same ultimate goal and guide the company into the right direction whenever obstacles occur along the way. Combining this with continuous improvement is the secret to Toyota’s success. Implementing lean in a company is a big change, which needs to be done gradually and consequently requires time. When an organisation wants to change, resistance is generally shown by several parties within the organisation. This is especially the case with a concept such as lean management, because it often has a negative connotation when it comes to the employees’ well-being. When the term ‘lean’ was introduced, Womack and other researchers focused on doing more or better with less, with emphasis on the ‘more’. When the concept became popularised however, many people and organisations misinterpreted this and started putting emphasis on the ‘less’ (Samuel et al., 2015). This is why lean is sometimes still incorrectly associated with redundancies and deterioration of working conditions. Apart from the operators on the work floor, there could also be resistance from higher management if they are too focused on statistics and results instead of on processes.5 It could be argued however that this applies less on SMEs, since the management is in this case often also the initiator of a lean implementation project. Overcoming resistance is not easy, but in any case, making sure that people are well informed is already a first step to eliminate misperceptions. By convincing them of the benefits lean can actually bring to the organisation, a lot of resistance might disappear. There is need for at least a few people who are motivated enough to improve, and to transfer this

5

However, it could be argued that resistance from higher management applies less on SMEs, since the management is in this case often also the initiator of a lean implementation project.

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enthusiasm to the rest of the organisation. From a personal interview with Jim Lippens6 (2015), it became clear that changing a company’s way of thinking and behaving takes a lot of courage and endurance. Even though in the beginning both the board and employees were strongly opposed to his ideas, he was determined to implement lean. Eventually, his persistence paid off, the statistics improved tremendously and other departments suddenly wanted to follow his example. There is also some disagreement among authors about the situations in which lean can be applied. Since lean has not clearly spread in Japan from the automotive sector to other industries, Pettersen (2009) questions the statement of Womack et al. (1990) that the lean principles would be applicable to any industry. Likewise, Cooney states that certain business conditions need to be fulfilled before lean can be applied (Cooney, 2002). Copying Toyota’s lean tools would indeed not work for the majority of companies. Looking from a more philosophical perspective however, other researchers argue that lean is truly about the underlying mindset and behaviour (Bhasin & Burcher, 2006; Dombrowski & Mielke, 2014; J. Liker & Rother, 2011; Rother, 2010; S. J. Spear, 2004). Spear and Bowen (1999) identify 4 rules behind the Toyota Production System: 

Rule 1: All aspects of every process should be predefined in detail. This allows employees to detect abnormalities and thus supports continuous improvement.



Rule 2: Supplier-customer relationships within the organisation should be very clear. Every member of the organisation knows who and when someone is supplying to him, as well as who he needs to supply to himself.



Rule 3: Every product and service should flow in a simple and direct way, that is well specified beforehand.



Rule 4: Improvements should take place at the lowest possible level of the organisation with coaching support from the operator’s direct supervisor and always based on the scientific method.

It becomes clear that these principles are not limited to the automotive industry, but can be applied in any industry. In a later article, in which Spear (2004) focuses more on how managers can learn TPS, he stresses the importance of direct observation, short and frequent experiments and the coaching skills of managers. As a matter of fact, these ideas as well as the fourth rule correspond to the improvement and coaching kata, which is – as already mentioned in the beginning of this chapter – one possible approach towards lean leadership (Dombrowski & Mielke, 2014; Rother, 2010). Since it is based on the scientific method, the improvement kata is universal and thus independent from the 6

Jim Lippens is Partner and VP of the Lean Leadership Institute, and a certified Six Sigma Master Black Belt, Lean Manufacturing Expert, and Harada Method Master trainer. As an experienced practitioner, he is working as a continuous improvement manager at a Flemish manufacturer of hybrid grass systems.

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specific characteristics of an industry. What will really help an organisation move forward and form the basis for long term success, is putting emphasis on the development of skills and behaviour routines for employees to proceed through uncertain conditions. This is something that any organisation can learn and do, regardless of the type or industry. It only needs time and enough perseverance to get to that point. Lean projects in healthcare are a perfect example of the universality of lean thinking. Spear (2004) also provides some examples of companies who – even though they are very different from Toyota – successfully applied the principles behind TPS. So depending on how narrow or broad lean is defined, it can be applied in few or many industries. It cannot be denied that lean is a controversial concept. Advocates of lean point out the many benefits and tremendous improvements that result from a successful implementation of lean. In non-supporting groups on the other hand, lean is often associated with negative ideas such as restructuring, redundancies or increased pressure on employees, even though this does not reflect the correct way of using lean. Research has shown that in practice lean implementation indeed comes with positive as well as negative effects on the working environment and employees (Hasle, Bojesen, Langaa Jensen, & Bramming, 2012). From an extensive literature review, Hasle et al. (2012) conclude that the effect of lean on the working environment is not only influenced by a company's lean practices, but more importantly by hów lean is being introduced and implemented and in which context this is taking place. Mainly because of the lack of a standard lean model, the findings of the review were contradictory and no clear positive or negative causal relationship between lean and the working environment was found. However, the positive effect of employee involvement was generally supported by literature. Creating an atmosphere of trust and motivating employees to support the lean project plays a crucial role in the implementation process. This again points out the importance of the human aspect as a basis for sustainable improvements, as supported by many other authors as well (Convis, 2001; Rother, 2010; Sugimori et al., 1977).

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2.2.2. SME-specific issues SMEs appear to struggle more with lean implementation than larger companies and often seem to be rather hesitant towards lean, because they believe they do not have enough resources (money, personnel and time) and knowledge to actually implement it in a successful way (Matt & Rauch, 2013). However, the smaller size of SMEs can facilitate as well as complicate their lean implementation. For instance, SMEs might not have enough resources to hire external specialists to guide them through the lean implementation process, but they do have the advantage that the pace of the employees can be taken into account. From an extensive review covering the existing literature on lean in SMEs, Hu et al. (2015) conclude that there appear to be more inhibiting than enabling factors for SMEs in the implementation process. The biggest difficulties for SMEs compared to LEs are the large investment costs (in terms of effort, time and financial resources), the typical low degree of power in the supply chain, the small influence on demand (often leading to high variability and difficult predictability), and a lack of support and knowledge. On the opposite side, SMEs often benefit from a committed and highly motivated management, higher degree of teamwork and easier communication, multi-skilled employees, government support, and the uniqueness of their business area in case it increases power on the supplier side. However, these favourable factors generally do not weigh up against the unfavourable factors, which in sum makes it more challenging for SMEs to implement lean in a successful way. Nonetheless, some of these disadvantageous factors can be influenced to support the lean implementation. For instance, in case of a lack of knowledge, external consultants could offer support and help fill the knowledge gap in the first stages of the lean implementation process. Van Landeghem (2014) has developed a back to basics approach, specifically for SMEs to help them in the lean implementation process. Only one research focuses solely on the critical success factors for lean implementation in SMEs (Achanga, Shehab, Roy, & Nelder, 2006), but other authors discussed the critical success factors as well and some suggest some additional success factors to those presented by Achanga et al. Moreover, these critical success factors are not necessarily distinctive for SMEs and are in fact important for any size of organisation (Bhamu & Sangwan, 2014). Furthermore, contextual factors (such as size and age of the company) do have an influence on the implementation of lean, but the effect of applying interrelated bundles of lean practices together can compensate for these contextual factors (Shah & Ward, 2003). This is good for SMEs, because it would mean that the difficulties of size could be overcome as long as they are motivated enough and apply the lean principles in a reinforcing and cooperative way. 20

Depending on the approach an SME chooses to take towards lean, the situation can be more or less complicated. Obviously, there is a difference in degree of difficulty whether a company decides to just introduce some lean tools and not go further than “toolbox lean”, or whether they really try to incorporate the philosophy (“lean thinking”) into their business (Hu et al., 2015). Moreover, lean implementation in SMEs is in many cases internally focused, without taking into account the rest of the supply chain, and they apply more likely an operationally focused type of lean instead of a strategic philosophy (Hu et al., 2015). Hu et al. listed the most common lean approaches and tools that have been employed by SMEs and that have been discussed in the literature. Given the smaller size of SMEs and the associated limitations, it is suggested that SMEs should start with not too costly and easy-to-use tools – such as 5S, standardized work, or visual management – to move on in a later stage towards more advanced lean techniques or integration with other concepts – for instance integration with Six Sigma or IT (e.g. ERP system). Hu et al. (2015) formulate 9 suggestions for further research, of which two receive attention in this dissertation. The first gap regards the used methodologies. This research investigates multiple cases in two different countries, which addresses the lack of multiple-case study researches in the field. Second, concerning the content of the research, many authors have mainly focused on tools and techniques so far. This research also directs attention to the underlying thinking and philosophy. Research on lean in SMEs has been mainly focused so far on single case studies (35%) and surveys (32%) (Hu et al., 2015). Consequently, there is still lack of multiple case studies, mixed research and action research in the field. This dissertation responds to this existing gap by conducting a multiple case study, with five cases being studied in two different countries. Furthermore, different research methods – questionnaire, personal interview and field observation – are combined to offer a better insight into the degree of lean implementation. Since most previous research has focused on the lean tools and techniques, Hu et al. (2015) also identify a need for further research to dig deeper into the underlying motivations and philosophy behind lean. By looking at both the lean tools and the underlying thinking patterns that get SMEs into implementing them, this dissertation also partly addresses this need.

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2.3.Influence of national culture on lean implementation Since lean implementation involves a change that especially affects the human side of an organisation, it is expected that the cultural background of the employees plays a role. In discussing the history of lean management was mentioned that it is not a coincidence that TPS was developed in Japan. Sugimori et al. (1977) state that the unique strengths of the Japanese culture – namely a culture of hard work, strong group feeling, sense of equality, and highly skilled and motivated workers – formed the basis for the Toyota Production System. Many people indeed believe that the secret of Toyota’s success can be found in the Japanese culture. However, Spear & Bowen (1999) argue that this is not the case, since other automotive companies in Japan, such as Nissan, are not able to equal Toyota’s performance. Moreover, Toyota has managed to reach the same efficiency levels in its factories all around the world, despite different national cultures. This suggests that, even if national culture has an impact on lean implementation, it can be overcome by other factors, such as organisational culture. Nontheless, even though already a lot of research has been done on lean management, only little research has been conducted so far on the role of culture in implementing lean. One research of Wong (2007) studied the impact of culture on lean implementation, based on a case study of two Taiwanese companies. The research identified a significant impact of national culture during the lean implementation process, and the need is expressed for cultural adaptation of the lean production system. More specifically, the author found four culturally adaptive features in place to implement the lean production system in the Taiwanese companies. The first one, participation of top management, seems easier achievable for SMEs than for large enterprises, since the distance between management and employees is usually smaller. The other three features involve help from external experts, the creation of internal competition and short term incentives, in order to get employees motivated. However, these seem to apply less on SMEs, given their smaller scale and the fact that SMEs usually lack money and time to invest a lot in lean implementation. Previous research of Recht and Wilderom (1998), on the other hand, argued that organisational culture would have a larger impact on Kaizen-oriented suggestion systems than national culture. Therefore, they state that the systems can perfectly be applied in non-Japanese environments as well, but instead of the cultural adaptations suggested by Wong (2007), they explain the need for the following six necessary conditions of the organisational culture to increase the chance of success: a clear orientation towards employees, commitment of employees, free flow of information, empowerment of employees, a pragmative orientation and process- and result-oriented employees. Moreover, the authors argue that implementing a kaizen-oriented suggestion system does not 22

require a lot of money. Both researches thus seem to recognise the impact of national culture, but to a different degree and they define different conditions for success. However, the research of Wong was only based on a small scale case study, and the research of Recht and Wilderom is already outdated. A more recent and larger scale research was conducted by Kull et al. (2014). Based on data of more than 1400 companies in 24 countries, the effect was studied of the cultural dimensions on lean manufacturing practices. Their findings suggest that lean manufacturing is easier to implement in countries with the following cultural characteristics: high uncertainty avoidance, low assertiveness, low future orientation and low performance orientation. At the end of this master dissertation, it will be interesting to see whether the results of the lean implementation of the studied Japanese and Belgian SMEs confirm these findings or not. Therefore, since this research is focused on Japan and Belgium, in what follows will be elaborated on the specific characteristics of both countries, based on the cultural dimensions of Geert Hofstede (2016). Figure 10 Cultural dimensions of Belgium vs Japan (retrieved from (Hofstede, 2016))

Looking at the cultural dimensions of both countries, there are in fact many similarities, namely in terms of power distance, uncertainty avoidance, long term orientation and indulgence. There are two dimensions on which the countries differ significantly, namely individualism and masculinity. As regards to the individualism dimension, Japan scores much higher on collectivism. This originates from the fact that Japan has always had a very homogeneous society, resulting in a very strong group feeling. As Japanese citizen, being part of a group is important and belonging to a group defines your identity. This finds expression in customs such as uniforms and the typical drinking parties. Belgian 23

people on the other hand are much more individually oriented, and being part of a group is considered as less important compared to Japan. Another dimension on which Japan and Belgium differ significantly is masculinity. Japanese society is distinctly masculine, while Belgian society is not strongly masculine nor very feminine. In a masculine society, achievement is highly rewarded and the society is very competitive. However, the Japanese are generally not assertive and the competitiveness is only reflected on a group level (not individually), given their high score on collectivism. On the work floor, this is translated into a strong motivation to fight against competing companies. The strong masculinity also explains why Japanese generally strive for perfection and companies are known for their high quality products. Apart from these two cultural aspects, Japan and Belgium score quite similarly. They have intermediate scores on power distance and indulgence. Moreover, they both score high on uncertainty avoidance and long term orientation. As regards to uncertainty avoidance, predictability is highly valued and risk is limited as much as possible. Trying to implement change in an organisation is therefore usually considered as difficult. The long term orientation is translated into a high level of attention towards long term development of a company and its employees. These characteristics will be used in chapter 5 for the comparison of SMEs in both countries. To conclude this chapter, even though the discussed literature already resulted in interesting findings on the impact of national culture on lean implementation, only little research has been conducted yet on the topic and the opinions differ. Therefore, it offers an opportunity for this dissertation to contribute to the field. This research serves as an exploratory study to broaden the insights on the existence or absence of a link between culture and lean implementation.

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3. Research design As mentioned before, this dissertation is structured around the 3 M’s of lean manufacturing: muda, muri and mura. For the analysis of the participating SMEs, the concept of the 3 M’s was combined with the lean triangle of Convis (2001), which has been explained in chapter 2. Its three composing elements are philosophy, management and technology. All elements are interrelated and needed for a successful lean implementation. Throughout the empirical research, a combination of these two frameworks was used as a basis for analysis. The performances of the studied companies were evaluated in the following way: each company was given a score for muda, muri and mura, based on the questionnaire and the visits respectively. It should be noted that the score that was given based on the visit, is a subjective value judgment, taking into account all observations and information collected during the interview and visit. They were scored in such a way that the higher the score, the better or more lean the company. So for example, if a company has a high score out of 10 on muda, this would imply that it has not much muda and that attention is paid to the reduction of muda. For every M, the lean performance of the company was then analysed by looking at how this specific M related to the elements of Convis’ triangle. Based on the scores and analysis of underlying mechanisms (management, philosophy and technology), a conclusion was finally formed about the lean implementation level, also considering the degree of lean awareness. Lean awareness represents the extent to which a company is familiar with the lean terminology, that was introduced in chapter 2. Figure 11 gives an overview of the conceptual framework that was used throughout this research. Figure 11 Research framework

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4. Research methodology As mentioned in the introduction, the purpose of this research is mainly exploratory. Since lean is a concept that is not easy to grasp and difficult – if not impossible – to assess with one single method, it was decided to use a combination of different research methods. By using questionnaires, personal interviews and field visits, different aspects of lean could be mapped and companies were given a certain score. Throughout the research, the focus was on the collection and analysis of qualitative data.

4.1.Selection of participants First of all, companies needed to be invited to participate in the research. The selection of companies was based on the following criteria. First, they had to comply with the definition of a manufacturing SME, as discussed in the introduction. Second, due to practical reasons, they needed to be reachable and accessible. Based on these criteria, a list of companies was composed and they were contacted, mainly through e-mail. In Japan, SMEs were selected via the following channels: -

“Excellent SMEs and Micro Enterprises Selection 300”, a list composed by the Japanese Minister of Economy, Trade and Industry (METI) (Excellent SMEs and Micro Enterprises Selection 300, 2013).

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J-Net 21 (SMRJ), a portal site for SME general information, managed by the Organization for Small & Medium Enterprises and Regional Innovation of Japan (SMRJ).

-

The Ota City Industrial Promotion Organization.

-

Techno City Sumida.

In Belgium, companies were reached via the following way: -

Veltion, a dynamic spin-off of Ghent University, that guides Flemish SMEs in the implementation of continuous improvement in production, administration and logistics. The online questionnaire was sent out via their newsletter, to about 1000 companies.

-

A workshop about lean, organised by Lean Lead and Agoria (a sectoral employers’ federation for companies in the technology industry, the largest in Belgium) in October 2015, with around 90 participants.

-

The online database of Trends Top.

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4.2.Online questionnaire In order to get a first overview of how the companies operate and how much they know about lean management, the companies were invited to fill in an online questionnaire (see appendix). The questionnaire was designed based on the study of previous research (Ariyawongrat, 2002; Bakås, Govaert, & Van Landeghem, 2011; Chalmet, 2013, 2014; Mirdad, 2014; Pieńkowski, 2014), combined with own insights and tailored to the specific research framework. It has then been improved with the insights of Professor K. Hidaka 7 and experienced practitioner Jim Lippens8. The questionnaire was composed of three parts, asking about the following aspects: 

the company in general



the use of techniques



lean awareness

The majority of the questions were set up as a 5 point Likert scale, ranging from complete disagreement to complete agreement. This question type was chosen to get an overall measurement on how the companies are doing: it can measure the attitude of the respondents well and makes it possible to score the companies (De Pelsmacker & Van Kenhove, 2014). As for the final part about lean awareness, the participant was asked about the company’s knowledge of lean terminology by answering either ‘yes’, if they knew the term, or ‘no’, if they were not familiar with it. The questionnaire was translated into Japanese and Dutch, such that language did not form a barrier to participate. The Japanese questionnaire was open between May and mid-August 2015, the Belgian questionnaire from November 2015 to March 2016. Based on the questionnaire, the companies were scored on the different aspects of lean such as muda, mura and muri. Even though the questionnaire could not provide detailed insight in the underlying mechanisms, it could already give an initial impression of how well the SMEs were doing in terms of lean implementation. The fact that all participants were asked to answer the same questions, allowed for an objective comparison of the different companies. As for the analysis of the questionnaire, some of the questions were not included in the scoring of the companies. However, they still gave some useful extra information for the further analysis of the

7

Professor K. Hidaka is teaching at the Graduate School of Innovation Management of the Tokyo Institute of Technology, and conducting research in the fields of Service Science, Service Innovation, Operations Research, and R&D Management. 8 Jim Lippens is Partner and VP of the Lean Leadership Institute, and a certified Six Sigma Master Black Belt, Lean Manufacturing Expert, and Harada Method Master trainer. As an experienced practitioner, he is working as a continuous improvement manager at a Flemish manufacturer of hybrid grass systems.

27

companies, combined with the personal interviews and field visits. A more detailed explanation on the questions and how the scores were calculated can be found in appendix 1.1 and 1.2.

4.3.Personal interview and field visit In a next phase, some of the companies that had participated in the questionnaire were studied more in depth by a personal interview and field visit. This allowed to gain a deeper insight in how the companies really operate and in the underlying mechanisms of the lean implementation (Karlsson, 2009; Yin, 2013). During a semi-structured personal interview, the responsible person (either the CEO or production manager) was asked ten open questions about several aspects of lean, ranging from the process flow to the relationship with their customers and suppliers (see appendix 1.3). In each company, the same questions were discussed. This personal interview was followed by a visit on the shop floor, in order to observe the employees and daily operations. Through observation on the shop floor, other aspects of lean, that are difficult to grasp by only questionnaires and interviews, could be investigated. Combining the questionnaire, interview and field research made it possible to assess how lean an SME is and to make comparisons, not only between the countries but also within the same country.

28

5. Research results and analysis 5.1.Lean in Japanese SMEs 5.1.1. Introduction Because of practical reasons, the research in Japan was limited to manufacturing SMEs that are located inside Tokyo, the capital city. This means that the conclusions from this research have to be interpreted with care and cannot simply be generalised to other regions in Japan. Even though national regulations are the same for SMEs all over Japan, each region can still have its own characteristics and support mechanisms for SMEs. This can influence the lean implementation and thus result in regional differences. Tokyo is divided into eight regional areas, subdivided into 23 wards. In total, 130 companies located in different wards of Tokyo were contacted through e-mail, of which 11 participated in the online questionnaire (corresponding to a response rate of 8.5%). Out of these 11 companies, five SMEs were willing to contribute further to the research by allowing a personal interview, followed by a field visit. All five companies that were studied are situated in Ota Ward, which is part of the Jonan area. This area is characterized by many top class SMEs, mainly operating in the field of machining and metalworking and chemical surface treatment. Ota Ward has the largest number of manufacturing companies and employees, and its SMEs have an outstanding reputation as regards to the high level of technology. The ward takes a leading position in the metal products, production machinery and transportation machinery sector. An overview of the companies that were visited in Japan is given in Table 2. Table 2 Overview of visited SMEs in Japan, Tokyo Area

Industry/Products

Founded in

Size (# employees)

J1

Tokyo (Ota ward)

Metal industry, heat treatment

1950-1960

25-50

J2

Tokyo (Ota ward)

Metal industry, bearing manufacturer

1900-1910

50-75

J3

Tokyo (Ota ward)

Metal industry, ball screw manufacturer

1960-1970

10-25

J4

Tokyo (Ota ward)

Robotics, custom development of robots and equipment

2000-2010

1

J5

Tokyo (Ota ward)

Metal industry, precision prototype working

1960-1970

50-75

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5.1.2. Results field study 5.1.2.1. Company J1 The first Japanese company that was visited, is situated in the processing industry and specialised in heat-treatment. They treat metal parts to make them stronger and improve their characteristics. While large companies are able to perform this heat-treatment process inhouse, smaller companies cannot afford this and have to rely on outsourcing, which is J1’s mission. The company was founded in the 1950s and has 48 employees. Strengths of the company are multi-skilled and specialised employees, high quality and a unique product (the salt bus). The main concern is the high fluctuation in customer demand. The following table gives an overview of the lean implementation level in J1, assessed on the basis of the 3 M’s. Table 3 Lean implementation in J1 Quest.

Visit

Total

Link with Management, Philosophy and Technology

LA

M: shop-floor focus Muda

7.25/10 6.75/10

7/10

P: commitment to continuous improvement and waste reduction, customer-first focus T: visualisation, standard work, root cause analysis M: management supports employees, good relationship

Muri

7.5/10

8.5/10

8/10

14/14

P: job rotation to keep employees motivated T: / M: decision about production 2x/day taking into account efficiency

Mura

5/10

5/10

5/10

P: multi-skilled employees to manage fluctuations T: quick changeovers, small lots, standard work

J1 distinguishes itself from competitors by producing high quality products that require special skills, which cannot be equalled my machines. The well-educated employees only have to focus on one process per day, but rotate in order to learn all the skills. Furthermore, they are self-directed. People thus play a central role in the production processes. Moreover, J1 pays a lot of attention to continuous improvement, and problems are being addressed in a structured way. Whenever a problem occurs, it will be discussed in order to find its root cause and subsequently improve it. In case there is a problem in the bottleneck, employees from other processes will help to solve it as quickly as possible. Once a month, 1-hour employee meetings are held to share problems that occurred in the past month. The factory has three production lines and one cleaning line. Efforts are being done to reduce muda as much as possible. Great importance is dedicated to visual management, waste and defects. Warning signs and procedure instructions can be found throughout the factory and products are

30

repeatedly being checked for defects during the production process. However, out of the interview came forward that there are still quite some defects and products that have been returned for remake. This takes the score for muda slightly down. Moreover, not as much attention is given to inventory. As regards muri, the manager is especially concerned with people management. Employees work 8 hours a day and attention is paid to their well-being. During the visit of the shop floor, employees appeared to be relaxed and focused, and certainly not stressed. Machines are also well maintained. The high fluctuations in demand – both daily and hourly – create a big challenge for the operations. Nothing is being planned beforehand. Two times a day, management decides about the production schedule, which is just based on the incoming orders in the morning. The reason why this does not seem to pose a problem is because the fluctuations are partly compensated in two ways. First, the cycle times are short. Second, employees are multi-skilled and able to perform different operations, which creates more flexibility and helps to make the workflow more even. With some of its customers, J1 also has special agreements, which increases predictability. Since quality is of major importance for the business, the quality level is being kept as stable as possible by keeping data about the quality per customer. Finally, since they knew all of the terminology in the questionnaire, it can be concluded that they have a high lean awareness. In summary, J1 scores relatively good on muda and muri, while mura remains an important point to work on (certainly given the fact that mura creates extra muda and muri). Image 1 Shop floor J1

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5.1.2.2. Company J2 The second SME, a bearing manufacturer, was founded in 1905 and employs 61 people. The company’s products are primarily intended for large ships and undergo many processes (30 to 45). The main steps taking place at J2 involve casting, machining, plating and inspection. J2 distinguishes itself from competitors by its high quality products and strong technology capabilities. Table 4 Lean implementation in J2 Quest.

Visit

Total

6.5/10

5.5/10

6/10

Link with Management, Philosophy and Technology

LA

M: shop-floor focus Muda

P: customer-first focus T: 5S, poka-yoke, root cause analysis, checklists M: good relationship of management with employees, teamwork

Muri

5.83/10

8/10

6.92/10

P: low employee motivation

8/14

T: 5S (reduces stress) M: / Mura

3.13/10

4.5/10

3.82/10

P: experienced employees (less process variability), not multi-skilled T: small lots, 5S, checklists

Continuous improvement is considered by management as important. Problems are being addressed by means of a root cause analysis (e.g. in testing rooms). Afterwards, the results are communicated to other employees through a report, in order to prevent the problem from reoccurring in the future. However, improvement efforts are mainly focused around solving problems when they occur, rather than proactively looking for improvement opportunities or seeing problems before they occur. As regards to muda, efforts are being done to reduce waste. 5S sheets have been spread all across the factory and the effect is clearly visible. Moreover, all products are continually traceable with barcodes and the production process is frequently evaluated. From the questionnaire was derived that J2 strongly focuses on customer demand as well as on quality and speed. From the visit however, it became clear that quality is given a higher priority than speed of delivery. Because reliability of the parts is of vital importance, products are being thoroughly tested (e.g. by quality control with liquids, or molecular analysis of components). Speed and efficiency on the other hand have not yet been optimised. Concerning inventory, stock of common materials is visualised and managed by means of a reorder point, but J2 has a remarkably large amount of dead stock of finished products. Since the products are highly customized, some extra units of each order are being held in stock for in case defects arise. However, the majority of stocked items will not be needed anymore, implying that they just take up a lot of space. This obviously entails a lot of waste and an opportunity cost. Another observation during the visit involves 32

idle time: several operators were not doing anything while waiting for other operators or machines to finish their process step. Weighing the positives (clean working environment, little defects) against the negatives (efficiency, high inventory levels, waiting times), the resulting score for muda is mediocre. Even though the management maintains a good relationship with its employees and importance is attached to teamwork, employee involvement and motivation are rather low. Moreover, operators are not able to perform a high variety of tasks. Due to the highly specialised processes and the need for trained and experienced operators, it is difficult to hire extra people when a big order comes in. Therefore, it is first determined how the requirements can be achieved, before an order is actually accepted. In this way, overburden of employees and machines is kept within limits. Customer demand is characterised by seasonal, weekly and daily fluctuations, and is difficult to predict. The variability of processes on the other hand is low, since this is crucial for the quality. Production is planned one or two weeks in advance, based on the incoming orders and available capacity. The barcode system does not only enable J2 to make accurate estimations of the cycle times, but also allows to adjust the production schedule along the way to increase the efficiency. J2 is familiar with some of the important lean principles, such as kanban, 5S, and PDCA, but does not know, for instance, the terms “lean management” or “just-in-time”. This results in a medium lean awareness score. In conclusion, the lean thinking mainly seems to be present in the management layer, but is not yet supported by employees to the same extent. However, management expressed the will to develop a more education-oriented environment in the near future, and to motivate employees to improve by themselves. Image 2 Factory visit J2

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5.1.2.3. Company J3 The third Japanese SME has 20 employees and was established in 1962 as a gauge manufacturer. Meanwhile, the main focus has been shifted to ball screws, but the pursuit of the highest quality has remained the same. Serving both domestic and foreign customers, J3’s motto is to provide more precise machining in a shorter turnaround time. With the machines requiring a big investment and thus forming a barrier to enter the market, J3 is the sole company in Ota City equipped with these technologies. Table 5 Lean implementation in J3 Quest.

Visit

Total

5.75/10

6/10

5.88/10

Link with Management, Philosophy and Technology

LA

M: shop-floor focus Muda

P: / T: standard work, no 5S M: good employee relationship, not much attention for well-being

Muri

3.33/10

7/10

5.17/10

P: employees not really motivated

11/14

T: standard work M: / Mura

5/10

9/10

7/10

P: special agreements with customers, employees not multi-skilled T: balancing of demand, standard work

To every process have been assigned 3 to 5 employees, which makes employees truly dedicated to their process. However, due to a continuous time pressure to deliver products, improving their skills is perceived by management as difficult. Additionally, employees are not particularly encouraged to actively think about improvement opportunities for the working environment or processes. In the questionnaire as well, was indicated that currently only little time and money are being invested in continuous improvement, but that there is a will to invest more. Recently, the CEO has for instance launched a learning programme for new employees. Moreover, J3 is characterised by a top-down approach. Every decision goes through the CEO and the same applies for the majority of the problems. The main reason is that employees lack the necessary technical knowledge to solve problems, which are primarily machine-related. Obviously, this is not a sustainable way of working, but, as mentioned, the CEO recognises this and is planning to invest more in the education of his employees. Nevertheless, some space is provided on the shop floor to share problems with all employees. J3 is aware of the amount of waste it creates and is doing efforts to decrease it. Defects are prevented as much as possible, due to high quality standards. Only little attention is given to visualisation techniques, but one positive example is a visual board on the shop floor (Image 3) that

34

gives an overview of the stage of every product. The average lead time of products is 2 months and they stay on average 2 to 4 months in inventory. J3 has a clear view on its inventory and products will be removed if they stay too long in inventory without being sold. Noteworthy is the crowded impression inside the factory. Machines are placed close to each other, leaving only little room for people to move around and not many options for the lay-out to be changed to a more efficient setup. Moreover, at certain places tools and equipment seem to have a fixed place, while other areas are rather disorganized. Part of the manufactured products is made-to-order, while part is planned based on forecasting. From the questionnaire could be derived that market demand is characterised by high seasonal and weekly fluctuations, explaining the fairly low score on mura. The interview however led to far more positive findings. Since J3 has customers in Japan, China and Korea, individual market fluctuations of the countries generally compensate for each other and J3 is able to balance its total demand. As a result, the impact of demand variability on the actual production schedule is in fact rather limited. Furthermore, J3 has some special agreements with large companies. Those contracts are very stable – they already include all details such as risks, content and quantity – and are automatically renewed each year. These findings certainly provide a counterbalance to the low questionnaire score. Concerning muri, it is remarkable that employees seem to experience more joy and less stress in busy periods. In recession periods on the other hand, employees feel more stressed due to fear of losing their job. The reason for the low questionnaire score on muri is twofold: no special measures are taken to ensure the employee’s well-being and machines are not regularly checked or maintained in order to prevent failures. The muri score based on the interview and visit is higher, mainly because peak periods are limited thanks to the balanced demand (low mura). In conclusion, despite the quite high lean awareness of the management and the positive score on mura, employees do not yet share the enthusiasm to learn and improve. In other words, lean thinking is not yet present in the entire company. However, the manager is determined to improve and the company is certainly heading towards the right direction. As committed management is a crucial element in becoming lean, this first condition is already fulfilled.

35

Image 3 Visual board on the shop floor with overview of production progress

5.1.2.4. Company J4 As regards the fourth Japanese SME, it should be noted that it is a one-man business. Despite the fact that some authors believe that implementing lean does not make sense for micro enterprises (enterprises with less than 10 employees) (Matt & Rauch, 2013), it was decided to still include the SME in this study. Lean leadership obviously does not make sense with only one employee, but – as discussed in Chapter 2 – the fundamental principles behind lean can basically be applied to any situation. For this company, the focus was therefore mainly on lean thinking. It was investigated whether the person was taking a critical look at his own operations, whether he was trying to continuously improve, and whether he attached great importance to supplier and customer relationships. J4 was founded in 2006 and is situated in the robotics industry. Its main objective is to provide order-made experimental equipment, machines and robots for universities and laboratories. J4’s activities comprise the complete manufacturing of the products, from design to assembly. Table 6 Lean implementation in J4 Quest.

Visit

Total

4.25/10

8/10

6.13/10

Link with Management, Philosophy and Technology

LA

M: / Muda

P: customer-first focus, commitment to waste reduction T: 5S, standard work, ‘5 Why’ for problem solving M: /

Muri

3.33/10

4.5/10

3.92/10

8/14

P: / T: 5S, balancing of demand M: /

Mura

3.13/10

8.5/10

5.82/10

P: multi-skilled employee T: modular product design, standard work, balancing of demand

Quality and customer demand are the main focus, while speed is not considered as important. Concerning continuous improvement, there is actively being thought about how to improve the working situation and processes. Whenever a problem occurs, the ‘5 Why’ technique is used to find the root cause. However, he believes that there is not much room left for improvement, which is a 36

thought that does not comply with lean thinking. Especially as regards to the speed of delivery, there is certainly still an opportunity to improve. All operations take place in one single room. J4 is aware of the amount of waste and an effort is being done to decrease it. Quality is of major importance, which explains the strong focus on the prevention of defects. Furthermore, 5S is thoroughly applied. The workplace is well organised, with every tool and part being assigned to a fixed place with clear labels. This does not only allow to quickly find the needed materials, but also makes problems visible. In addition, many parts are extremely small and expensive, which makes the need for a very clean environment of particular importance. Losing such a part would imply a huge cost, especially time-wise, because it will have to be reordered. Inventory on the other hand is not given as much attention. J4 only holds stock of common parts, but parts management is regarded as the most difficult task. As regards to the supply of materials, J4 invests in long-term collaborations. Besides the fact that the materials consequently comply with J4’s high quality expectations, good supplier relationships also result in less defects and thus save time. The low questionnaire score on muda is mainly attributable to a lack of visualisation (e.g. guidelines that are visible on the shop floor to ensure a good execution). However, since this is only a one-person company, some of these techniques are simply not applicable, which makes the questionnaire score in this case not representative for the actual situation at J4. Production is planned ad hoc. The fluctuations in demand are high (which explains the low questionnaire score on mura), but is compensated by flexibility in terms of workload and overtime. Furthermore, variation is reduced by rejecting orders or by adapting overambitious requests to more realistic and achievable proposals, always in consultation with the customer. The variation of the production process on the other hand is low. As far as possible, the basic product design is largely kept the same, while new functions are simply being added to it. Hence, the majority of common parts can be assembled through standardised processes, which increases efficiency and decreases variability. Since this is a one-man business, a lot depends on his personal condition, resulting in a high pressure. No special measures are in place to reduce his workload, but, as discussed, demand variability is balanced as much as possible. Concerning lean awareness, around half of the provided terms were known. He was not familiar with, inter alia, the 7 types of waste, heijunka or the PDCA-cycle. Interestingly however, he did apply many of those principles. During the interview, he even specifically mentioned that the Toyota Production System is not applicable to J4’s situation, but that some of its principles (e.g. 5S, ‘5 Why’ and Kaizen)

37

can indeed be implemented and happen quite naturally. In summary, some elements of J4 cannot be considered as lean thinking, but the positive elements still predominate. Image 4 Organised parts and tools

5.1.2.5. Company J5 The last SME, visited in Japan, is situated in the metal machining field and specialises in precision prototype working, from design to manufacturing. J5 was established in 1965 and currently employs around 60 people. Apart from the plant in Tokyo, the company has two other facilities in other regions of Japan. J5’s strengths are its quality, short delivery time and superior cutting and milling technologies. Table 7 Lean implementation in J5 Quest.

Visit

Total

8.25/10

8.5/10

8.38/10

Link with Management, Philosophy and Technology

LA

M: long-term thinking Muda

P: commitment to continuous improvement and waste reduction T: root cause analysis, visualisation, just-in-time, standard work M: good relationship with employees, attention for education

Muri

6.67/10

9/10

7.84/10

P: job rotation over time, emphasis on people first

NA

T: standard work, organised working environment M: / Mura

3.13/10

8/10

5.57/10

P: employee training to reduce process variability T: balancing of demand, standard work, kanban-like system

J5 is ISO-certified and quality is one of its biggest strengths. Several instruments (e.g. a CNC 3dimensional machine) are in use to ensure product quality. Moreover, inspection data is appended at the time of product delivery. The ISO requirements also include the need for continuous improvement, which explains why a lot of money as well as time are being invested in it. Education of employees is considered as important. Operators are generally not multi-skilled, but they are motivated, eager to learn and think actively about improvement opportunities. Problems are being approached via root cause analysis in order to prevent future issues. The internal inspection

38

department plays an important role in this. In addition, defect or failure manuals have been composed and group meetings are being held daily. Guidelines, safety warnings, etc. are visible for all employees on the work floor. Products are characterised by a unique bar code so that the product is traceable in every production stage. As J5 is no high-volume company and mainly produces made-to-order, some waste is involved in the processing of materials. It is not uncommon that more material than needed is provided for a specific product, resulting in leftover material which cannot be used anymore. As regards to inventory, J5’s policy is to have as little inventory as needed. A basic inventory of raw materials and common parts is required to ensure the continuity of production. However, since J5 is located in Ota City, the company has a wide range of suppliers to its disposal so that materials can be supplied in a very short time span, allowing J5 to reduce its own inventory to a minimum and to work according to the justin-time philosophy. The management visits the work floor frequently and has a considerable impact on the employees’ motivation. Over time, employees are given the opportunity to carry out different jobs within the company. An employee can for instance move from the machining department to a sales or programming job. Through this job rotation, employees become multi-talented. For efficiency reasons, this kind of job rotation does however not take place within the same department, but only between different departments. Switching operators to other machines on the work floor is not considered to be efficient anymore, since technologies have become increasingly complicated nowadays and require specialised skills. In case of an overflow of machining work, external people are hired to manage the peak in demand. Furthermore, measures have been taken to make the work less physically aggravating for employees. Consequently, stress on employees is limited. As regards to machinery and equipment, they are maintained and checked frequently to prevent failure. With 75 machining centers, these are not likely to be overburdened in peak periods either. The specialised machines on the other hand are less numerous, but in case they are not able to meet demand, they can rely on other contractors. J5 delivers to customers in the automotive, aviation, communications equipment, medical equipment and optical goods industries. Even though demand is characterised by daily and hourly fluctuations (explaining the low questionnaire score for mura), the fluctuations largely compensate each other due to the variety of industry segments. As a result, the total demand variability for J5 is only little. Nonetheless, the difficulty level of the manufacturing operations can be high and adjustments are sometimes being made after an order has been placed, resulting in a need for

39

flexible planning. The extent to which J5 is able to adapt quickly to changes determines its sales results. That is why continuous improvement plays such a crucial role and is given a lot of attention. Even though the lean awareness section was not answered in the questionnaire, it became clear during the interview and visit that the management does know about the Toyota Production System. However, they believe it is not applicable to their situation, apart from some of its principles such as kanban, just-in-time and standard work. Moreover, J5 realises that part of the reason why they are able to adapt so quickly to changing conditions, can be found in the fact that the company manufactures a wide range of customised products, which enables them to learn more at a fast pace. J5 genuinely relies on the skills of its employees. Compared to high-volume low-mix companies, J5 is able to train its employees much faster – in 3 to 4 years instead of the usual 10 years in other companies – because they can gain a lot of experience in a short term by making many different products. The company thus considers the complexity of its products and the constantly changing conditions as opportunities to grow, which certainly corresponds with lean thinking. Furthermore, J5 expressed its ambition for the future to increase collaboration and co-development with other companies. They also regularly participate in exhibitions, where they can learn about new market needs and connect with universities and students. In conclusion, J5 can be considered as the leanest company of all five visited Japanese SMEs. Image 5 Shop floor of J5 with movable cart for tools (example of continuous improvement)

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5.1.3. Analysis and conclusion Based on the questionnaire, interviews and visits, every Japanese company was evaluated and scored on muda, muri and mura. Figure 12 gives an overview of all five visited SMEs.

Score on 10

Figure 12 Summary results Japanese SMEs 9 8 7 6 5 4 3 2 1 0

muda

muri

mura

J1

7,00

8,00

5,00

J2

6,00

6,92

3,82

J3

5,88

5,17

7,00

J4

6,13

3,92

5,82

J5

8,38

7,84

5,57

J1

J2

J3

J4

J5

As regards to muda, certain companies focused more on inventory, while others focused more on the eliminiation of waste, but on average they have a similar score. The differences in muri on the other hand are larger, which is mainly attributable to the different organisational cultures and structures. Some companies offer better support to their employees and have more measures in place to prevent overburden of people and machines than others. The one-man business (J4) scores the lowest, since all pressure to deliver is on one person. The scores on mura largely depend on the extent to which the companies can differentiate in terms of customers. In most cases, this can however not be influenced by the SMEs, given their low market power. In conclusion, all visited Japanese SMEs gave the highest priority to quality and satisfying customer needs, which explains the high attention for defect prevention. They distinguish themselves from competing firms mainly by their level of quality and unique processing capabilities and expertise. Speed is therefore generally considered as being of secondary importance. Even though 4 out of the 5 SMEs did declare in the questionnaire their strong focus on speed as well, in practice, only J5 clearly puts equal emphasis on short term delivery. Consequently, the efficiency level of the factories did not entirely meet the high expectations set up at the beginning of the research. Another finding is that the Japanese culture of respect was clearly noticeable during the visits of the SMEs. Employees are treated with respect and in turn they show respect for the management. Even though Japanese culture is characterised by strong hierarchical relationships, this was not directly 41

observable during the visits. The management is certainly held in high regard by the employees, but they do not behave in a condescending way relative to the operators. This mutual relationship of respect and understanding improves the working atmosphere and forms the basis for a lean environment. Furthermore, Japanese employees are generally truly loyal to their employer, which enables them to develop their skills through gaining experience. This corresponds to the learning curve concept: knowledge is accumulated and one can learn from previous mistakes to become better. Figure 13 Lean awareness in Japanese SMEs (n = 9) Percentage of participants

56%

33%

11% 0%

0%

[0,2]

[2,4]

[4,6]

[6,8]

[8,10]

Lean awareness score (on 10)

Taking into account all participants of the questionnaire that filled in the last section about lean awareness (corresponding to a sample of 9 SMEs), the majority of companies score mediocre (Figure 13). Even though the results show some large individual differences, the following general remarks can be made. All participating companies were familiar with ‘Toyota Production System’, ‘lead time’, and ‘continuous improvement’, while the majority of participating companies (6 out of 9) did not know what ‘lean management’ was. This last finding is of particular interest, since ‘lean management’ is a very popular term in western countries. Moreover, these findings are in line with what Bhamu and Sangwan (2014) already stated, namely that the term ‘lean’ is not so well known in Japan, but that ‘Toyota Production System’ is preferred instead. Looking at the lean techniques that were actually applied on the shop floors, it was observed that root cause analysis, standard work and 5S were present in the majority of the SMEs. It can be concluded that lean thinking is present in all five SMEs, but not to the same extent. Some of the SMEs are already more ‘lean’ than others, whereby motivation and commitment – of both managers and employees – play a central role. In J3 for instance, the manager is already strongly committed, but he first needs to motivate his employees more in order to make the company really move forward.

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5.2. Lean in Belgian SMEs 5.2.1. Introduction In Belgium, the research was focused on SMEs located in Flanders. This is the Dutch-speaking, northern part of the country and accommodates 56% of the total number of SMEs in Belgium (Unizo, 2016). Often operating as supplier companies, the SMEs are at the basis of the region’s economy. Moreover, with 20% of the gross value-added, the industry sector plays a very important role in Flanders (EC, 2016). The other two Belgian regions – namely Brussels-Capital and Wallonia – where not included in this research. The conclusions from this research consequently have to be interpreted with care and cannot simply be generalised to the rest of Belgium. Via a combination of different channels, which have been explained in the methodology section, around 1100 SMEs could be reached, of which 38 filled in the questionnaire (some of which anonymous). The response rates were different for each channel: 14.4% for the workshop on lean management, 2.3% for the newsletter of Veltion, and 7.4% for the personal invitations through email to companies found via Trends Top. Out of these 38 companies, 10 were contacted with a request for an interview and visit.9 In the end, five SMEs were willing to contribute further to the research by allowing a personal interview and a field visit. Three of these participating SMEs (B1, B2 and B3) have deliberately chosen to invest in lean management. Table 8 gives an overview of the companies that have been visited in Flanders. Table 8 Overview of visited SMEs in Belgium, Flanders Area

Industry/Products

Founded in

Size (# employees)

B1

East Flanders

Telecommunication: electronics production

1960-1970

>50, <75

B2

East Flanders

Plastics industry: cutting of plastic foils

1950-1960

>25, <50

B3

West Flanders

Textile industry: screen fabrics

1950-1960

>75, <100

B4

East Flanders

Metal industry: machining of castings and forgings

1980-1990

>25, <50

B5

East Flanders

Metal and plastics industry: machining of diverse materials

1940-1950

>25, <50

9

The selection of these 10 companies was based on the following criteria: an employee number of no more than 250, and the type of products they manufacture (metal industry or similar).

43

5.2.2. Results field study 5.2.2.1. Company B1 As a pioneer in the production of high-tech electrical equipment, the first SME that was visited in Belgium is situated in the electronics sector. B1 was founded in 1969 and has been acquired in 2002 by a larger R&D group that is active worldwide. With around 60 employees, B1 is still defined as an SME. Interestingly, it was one of the first companies in Belgium to implement lean management and recently even received an award for its outstanding performance in terms of production. Table 9 Lean implementation in B1 Quest.

Visit

Total

8/10

9/10

8.5/10

Link with Management, Philosophy and Technology

LA

M: shop-floor focus, management supports team members Muda

P: commitment to improvement, skill development T: 5S, jidoka, poka-yoke, standard work, value stream map, U-cell

Muri

8.33/10

8/10

8.17/10

M: shop-floor focus, developing and sustaining a sense of trust, good relationship with employees

14/14

P: intrinsic motivation T: 5S, jidoka, standard work M: / Mura

4.38/10

4/10

4.19/10

P: multi-skilled and flexible employees T: kanban, levelling, standard work

B1 has an equally strong focus on customer requirements, quality and speed. As indirectly already mentioned, the company has deliberately chosen to implement lean management. B1 has therefore invested in automation as well as in people development. High attention is paid to improvement and employee involvement. During monthly team meetings, everything that is not going well is discussed. This happens in a structured way: little notes with problems/suggestions and a motivation are first collected, after which they are then sorted according to their relevance or priority (categories are: irrelevant, not urgent, immediately solvable). For problems that can be solved now, a project is set up by means of the A3 method: an A3 sheet is made, containing information about the background, current situation, target, root cause analysis and follow-up. Problems are recorded via a registration system so that they can be looked at historically. Visual management (e.g. info screens, electronic work instructions, boxes showing the number of orders) has been thoroughly applied on the work floor. Considerable attention is given to defects and inventory management, all ERP-supported. Concerning defects, quality is built into the processes and employees are encouraged to stop the line with a start-stop call whenever they doubt (jidoka). 70% of the occurring errors are human, but poka-yoke is used wherever possible in order to avoid this. As

44

regards to inventory, there is no stock of finished goods, but only of raw materials. Not as much effort is being done however to manage waste. Process variability is not particularly measured or approached in a statistical way. Even though there is an average lead time, there is a considerable degree of variation. Employees are however crosstrained, enabling them to perform the process steps before and after their own step, in case a problem appears. Concerning customer demand, B1 has to deal with strong weekly and daily fluctuations. Before, production was planned on the basis of demand predictions, in the hope that the customer would order that specific product a few months later. Nontheless, this situation was no longer tenable in the view of the strong international competition in B1’s market segment, so the company decided to drastically change direction. By becoming lean, B1 has managed to reduce its delivery time from several months to only 1 to 2 weeks. In the current way of working, orders that come in today will normally be delivered next week, enabling B1 to flexibly respond to market changes and to stay ahead of the competition. Nothing is planned, but production is just based on incoming orders, combined with levelling (daily time slots are filled in according to priority). Since B1 does not have a buffer in terms of inventory of finished products, it is compensated by a buffer in delivery time and capacity. If demand is low, employees will be assigned to other tasks. In the opposite case, if demand is too high, the delivery time of the products will be increased. However, as soon as the delivery time exceeds 10 days, a system of ‘flex-time’ goes into action, meaning that employees can work 10 instead of 9 hours. As for the supply of raw materials, a kanban system is used, but dealing with the variation is challenging. The downside of this way of operating and thus having a lot of mura (variation) is that it requires a high degree of flexibility of employees. Employees are however intrinsically motivated – because they are proud of the high quality products they create and because of the challenging environment – which makes them willing to be flexible. The employees embrace the company culture and want to help making B1 successful. This motivation is crucial for the quality of the products as well. Furthermore, measures are in place to ensure the employees’ well-being and the maintenance of machinery. Not surprisingly, B1 has a very high lean awareness. The company has experienced that lean implementation is a gradual process, taking place one step at a time. As discussed in the literature review as well, it is important to not only copy from other lean companies, but to do it by oneself. It took B1 fifteen years to come to where they are today. In a first phase, the current situation was studied and they learned how to deal with variation. In a second phase, Toyota was studied and they realised that lean is more than just waste removal. B2 started seeing the importance of employees 45

and targets and started integrating everything in a more complete philosophy. Changing the employees’ mindset played a crucial role in this transition. In summary, apart from the high mura, B1 is very lean. 5.2.2.2. Company B2 B2, operating in the plastics industry as a subsidiary of an American company, was established in 1957 and employs 48 people, working in 3 shifts per day. While the parent company produces polystyrene films, B2 only cuts the plastic foils. The plastic films arrive at the plant in the form of ‘mother roles’, after which they are being cut into the requested sizes. B2 consciously tries to become more lean. Table 10 Lean implementation in B2 Quest.

Visit

Total

7.25/10

8/10

7.63/10

Link with Management, Philosophy and Technology

LA

M: shop-floor focus, management supports and guides operators Muda

P: customer-first focus, commitment to waste reduction T: 5S, SMED, PDCA-cycle, jidoka M: shop-floor focus, good relationship with employees, respect

Muri

6.67/10

8.5/10

7.59/10

13/14

P: / T: 5S, jidoka M: management guides employees to reduce process variability

Mura

5/10

7/10

6/10

P: / T: 5S

Customer needs, quality and speed of delivery are all considered equally important. The operations are frequently evaluated (e.g. a monthly 5S audit to ensure that efforts are being sustained). Moreover, regular meetings are held to assess quality, discover problems, suggest improvement projects, etc. Problems are being solved in a scientific way by using the PDCA-cycle to get to the root cause. B2’s lean journey started with the implementation of 5S, which was a true culture shock for the employees at that time. Moreover, waste, defects and inventory are closely being monitored and visual management plays an important role. Concerning quality, B2 has switched from quality control by a quality manager to quality control by the operators. During a monthly quality meeting, concerns are expressed and constructive feedback is given, which plays an important role in motivating the employees. Inventory is kept as low as possible and is frequently evaluated, with a special follow-up towards costs. Additionally, KPIs are set to optimise the inventory turnover. B2 only has 5 to 6 suppliers for its raw materials, which ensures a good collaboration and high reliability. Downtime is limited by adjusting machines in an efficient way and by using SMED. 46

The management has a good relationship with its employees and measures are being taken to reduce their physical workload. The pace of the employees is carefully taken into account and there is a culture of respect. Specific goals are being set to gradually improve the employees’ productivity (e.g. 20 cuts per day), without however pushing them too much and making them become demotivated. Machinery and equipment are well maintained, but the machine capacity exceeds personnel availability with 40%, resulting in idle time of machines (muda). Employees are not particularly multi-skilled. However, in case of a peak in demand, interim workers are being activated to help operators with easy tasks. 99% of production is made to order. Apart from weekly fluctuations, customer demand is relatively stable. The delivery time for the customer is calculated based on the production capacity (machines and personnel). Production is planned in a very short term and is still done manually at the moment. The operations manager however realises that this situation is not optimal yet, so B2’s next improvement project would be to optimise the planning by using its new ERP system. It should be noted, however, that improvement is merely seen as something additional on top of the normal daily activities. Satisfying the customer receives the highest priority and improvement is only being thought of whenever there is some time left. The reason for B2 not investing more in improvement appears to be twofold. The first argument is a lack of time. Since serving the customers already takes up all available time, there is simply no time left for improvement projects. Second, B2 does not see the benefits that new small improvements could still bring for the company. As an SME, they feel they have a lack of knowledge on how to calculate the figures behind the improvement projects, making a cost-benefit analysis very difficult. However, by mainly focusing on outcomes (instead of processes) and therefore only going for projects with a directly visible return on investment, B2’s progress is slowing down. By setting a clear long term vision and translating this into short term target conditions, B2 could challenge itself and its employees again to keep exploring the boundaries of its current capabilities and thus move forward. People need to be challenged to stay focused. Since lean management is consciously applied, it is not unexpected that B2 has a high score for lean awareness. The company was familiar with all given terms except for ‘heijunka’. Regarding the level of lean implementation, B2 scores relatively well on all 3 M’s. Lean is not implemented in a very theoretical way or by using the popular lean techniques and tools, but operations are mainly improved by using common sense. Being an SME, B2’s motto is to keep it simple and to only stick with the fundamental issues. It can be concluded that B2 is already quite lean, but they just need to

47

be careful not to lose their focus and to keep challenging themselves by constantly setting new targets. Image 6 Lean improvements of B2

5.2.2.3. Company B3 The third Belgian SME produces a wide range of screen fabrics and is thus situated in the textile sector. The company was founded in 1950 and counts 99 employees. B3’s mission is to ensure an extensive collection, constant quality and outstanding service for its customers. Lean is applied in a conscious way, whereby a lean expert has been assigned to guide the entire implementation process. Since he is also taking up the role of production manager, he mainly focuses on the lean projects with most impact. Table 11 Lean implementation in B3 Quest.

Visit

Total

8.75/10

6/10

7.38/10

Link with Management, Philosophy and Technology

LA

M: shop-floor focus, management supports team members Muda

P: commitment to continuous improvement T: value stream map, poka-yoke, 5S, PDCA, SMED, visualisation M: shop-floor focus, good relationship with employees, teamwork

Muri

8.33/10

8.5/10

8.42/10

14/14

P: joint shop-floor T: / M: /

Mura

7.5/10

5/10

6.25/10

P: flexible employees T: statistical process control

Producing ‘first time right’ is B3’s major objective, but the company also strongly focuses on customer demand and short term delivery. A great deal of attention is being addressed to continuously improving the operations and the manager has even moved his office to the shop floor. B3 stresses the importance of not only performing root cause analysis for bad results or problems, but for good results as well. This allows the company to thoroughly understand why something happened, in order to know how to respond in the future. Every morning, a meeting is held with the heads of the departments to discuss the main concerns. Furthermore, B3 realises that – as an SME 48

with only limited resources (e.g. time, money, knowledge) – it is important to deploy its scarce resources in the best possible way by focusing on what offers the most benefits. That is why, for instance, B3 did not yet implement 5S in the entire factory, but first focused on improving the processes that yield most profits. Waste and defects are limited as much as possible and SMED is being used for efficient changeovers. In addition, everything is supported by statistical analysis and visual graphs. Visual management is applied throughout the entire factory, but B3 still wants to improve it. Furthermore, there is a communication corner on the shop floor to share information with employees. Management has a good relationship with the employees and employees are strongly involved in the improvement projects. Something that B3 has experienced firsthand during its lean implementation process, is the utmost importance of motivating its employees and of the chef’s role in this. In order to engage employees, they have to be convinced of the benefits the improvements can bring to them: in general, 5% of employees are usually very motivated, 90% have a quite neutral opinion, and 5% are opposed. Employees who are not willing to cooperate, however, are capable of counteracting the efforts of people who do want to improve and thus demotivating them. What apparently happened at B3, was that a minority of the employees with bad intentions had deliberately impeded and sabotaged the lean improvement efforts, in the hope of getting a higher wage. This kind of thinking however certainly does not fit into a culture of continuous improvement. Therefore, if certain employees truly do not want to cooperate, they should be ignored and the company is better off without them. Regarding mura, customer demand is characterised by very strong seasonal fluctuations: sales in high season are twice as high as the sales in low season. Therefore, a stock is built up during the low season in order to be able to satisfy demand in the high season. When B3 had once consciously decreased the level of stock after criticism of the financial department, the company was not able to meet demand and had big problems. That is why it was again decided to use inventory as a buffer, despite the fact that it significantly increases muda. This high level of inventory explains why the muda score based on the visit is lower than the questionnaire score. However, B3 does have a clear overview of its inventory, which is well monitored and visualised (as illustrated in the second part of Image 7). Apart from inventory, there is also some flexibility of employees in terms of overtime. At the time of the visit in the beginning of February, the production was already fully scheduled until June. However, by already allocating 100% of its capacity, B3 is not able anymore to respond flexibly to changes in demand. The operations manager is aware of this issue and wants to address it in the

49

near future. As regards to process variability, this is being measured and approached in a statistical way. Given the background of the production manager, the high lean awareness is not surprising. The employees might not know all the lean terms, but the manager knows how to guide them. Becoming lean involves a culture shift and B3 recognises that implementing lean takes time. In the view of its lean journey, B3 has set up a big project whereby the factory is evaluated on 20 different aspects every 6 months, in order to measure its progress. There is still a long way to go, but the good scores on the 3M’s show that the company is on the right track and its improvement efforts are already paying off. Image 7 Improvement suggestions and process control at B3

5.2.2.4. Company B4 B4 employs 30 people and was – although it already has a longer history – founded in 1989. The company is active in the metal industry and specialised in machining of castings and forgings. B4 is equipped with the latest machining technology and offers customers a complete material handling service. With 95% of its sales being export, the company is very internationally oriented. Its biggest strengths are the high precision and quality of its products, which are very hard to equal by competitors. Table 12 Lean implementation in B4 Quest.

Visit

Total

7.25/10

7/10

7.13/10

Link with Management, Philosophy and Technology

LA

M: shop-floor focus and involvement in the work Muda

P: / T: 5S principles, standard work, root cause analysis

Muri

5.83/10

8.5/10

7.17/10

M: shop-floor focus, good relationship with employees, developing and sustaining a sense of trust P: emphasis on people first T: 5S principles, standard work M: management can guide employees to reduce process variability

Mura

8.75/10

8/10

8.38/10

P: multi-skilled employees T: standard work

50

6/14

While short term delivery is also regarded as important, customer demand and high quality receive the highest priority. From the questionnaire was derived that continuous improvement is not given particular attention, but improvement projects are being set up to improve quality. Since B4 is performing serial work, a piece is optimised the first time it is made. With remarks of employees or in the view of new trends, the production process is then followed up and the program adjusted. Whenever a problem occurs, it is reported to the foreman. Complaints are discussed together with the employees to look for the cause and consequently solve them. After a problem has been solved, it is added to the measurement report (a sort of checklist) in order to prevent it in the future. On the shop floor, not many visualisation techniques (e.g. warning signs) have been used to guide the employees. On the other hand, special attention is directed towards the management of waste and defects and machine changeovers happen in an efficient way. Interestingly, in the questionnaire was denoted that the company was not familiar with 5S. In reality however, B4 did appear to have applied its principles. Tools were for instance organised in a standardised way (see Image 8) and the work floor was kept clean and organised. Concerning inventory, a big part of the delivered inventory is out of B4’s control, given the variability at the suppliers. Therefore, when ordering materials, delays of the supplier as well as possible order modifications of the customer are taken into account. Moreover, the supplier is often the final customer as well. The manager has a shop-floor focus and treats his employees with a lot of respect. He does not feel superior to them and is willing to help out whenever there is a problem, e.g. when an employee got sick, the manager jumped in for him and took over his task for two days. Employees are being involved and are not afraid to turn towards their manager for problems or questions. If an employee has made a specific mistake, the manager will talk to that person to find out the reason. This does however not happen in an accusatory way, but in a constructive manner. The mistake is seen as an opportunity to learn and to grow, so that it will not happen again in the future and possibly greater problems can be prevented. Even though no specific measures are in place to reduce the physical workload, the employees’ well-being is highly valued. Employees are multi-skilled, motivated to deliver high quality and flexible to do overtime. Generally, production is handled in two shifts. However, when there is a peak in demand, this is often managed by means of an extra third shift during the night. This night shift serves as a buffer capacity to absorb fluctuations. Concerning customer demand, B4 delivers to customers in the wind energy and automotive industry. As for the wind energy segment, customer demand remains fairly stable over time. Given the strong demand for their high quality products, B4 has the luxury of even refusing orders. Excess orders have to be ordered at other companies. The company deliberately chooses to maintain an employee 51

number of 30, because it is happy with the current situation and expanding capacity would only complicate its operations. Regarding to the automotive customers, B4 only knows two weeks beforehand what needs to be produced. Therefore, the automotive companies require from B4 a stock of at least one month to be able to satisfy those fluctuations. Even though the lean awareness is very low, it can be concluded that lean thinking is actually present in the company. By looking at the operations with a healthy common sense and in the view of improving, lean is so to speak implemented from the inside. It is clear that the commitment of the manager plays a crucial role here. By creating a pleasant and constructive work environment, people enjoy working here, are eager to learn and motivated to deliver high quality. Image 8 B4’s organised workspace

5.2.2.5. Company B5 The last SME that was visited in Belgium supplies machine parts for larger companies, active in a variety of sectors (e.g. automotive industry, renewable energy, etc.). B5 does machining of diverse materials, ranging from metals to plastics. The company differentiates itself by its expertise and by offering more technically complicated products than competing firms. With 70% of its products going to foreign countries, there is a high degree of internationalization. All products are made to order, resulting in a high diversity of products and the need for flexibility to adapt to changing requirements.

52

Table 13 Lean implementation in B5 Quest.

Visit

Total

5.25/10

7/10

6.13/10

Link with Management, Philosophy and Technology

LA

M: shop-floor focus, management supports team members Muda

P: skill development T: root cause analysis, work cells M: shop-floor focus, good relationship with employees

Muri

5.83/10

8/10

6.92/10

8/14

P: / T: / M: /

Mura

5/10

6.5/10

5.75/10

P: most employees can manage multiple machines T: balancing of demand, small lots

High quality (ISO-certified), speed of delivery and customer demand are equally focused upon. B5 uses a healthy common sense to improve its processes. Continuous improvement is however limited to the foremen. Since the processes are highly complicated, it is too difficult for employees to suggest improvements by themselves. A lot of guidance is still needed for the common operations, not to mention for improvement actions. As regards to the approach towards problems, root cause analysis is conducted to find their cause and to learn how to prevent them in the future. The solution of a problem is generally not written down, but communicated verbally. Due to the constantly changing products, there are only little recurring problems. The production processes are frequently evaluated, but not strongly supported by statistics or other performance indicators. Not much attention is given to waste and visualisation on the shop floor. Regarding inventory, the company has done great efforts to reduce its level to a minimum. Finished products are immediately being picked up by the customer. Defects are mainly being checked at the end of the production process. Very positive is the flexible set-up of the machinery, allowing B5 to adjust the location of machines depending on the scheduled operations, in order to optimise efficiency. Attention is paid to the preventive maintenance of machinery. The management has a strong shopfloor focus and its relationship with the employees is good. Employees are involved in the creation of best practices and the development of new products and processes. Regardless of their motivation, most employees are however not well educated, due to the generally negative reputation of the turning and milling profession. Therefore, they need considerable assistance in doing their jobs. It is recognised by B5’s manager that the best motivator for employees is to be proud of their work. Yet, unfortunately, he notices that younger generations increasingly seem to lose this sense of pride and intrinsic motivation, which certainly poses a challenge for B5’s operations. While the older employees are still very motivated, it becomes far more difficult to keep motivating the younger

53

people. Nevertheless, this does not alter the fact that management still has a big influence on their motivation. By continuously being engaged, the management shows that they are truly committed. While customer demand used to follow a pattern of successive long waves in the past, nowadays the industry is characterised by fast and aggressive changes. This poses a big challenge for B5 in terms of planning. However, since B5 serves customers in different sectors, the fluctuations partly compensate each other. Production is being planned manually by using healthy common sense combined with experience. Due to the diversity of manufactured products, cycle times can differ a lot. Part of the process variability is also attributable to the employees: some work more consistently than others. Regarding the lean awareness – which is rather low – the company knows some important principles (e.g. just-in-time, 5S), while it is not familiar with others (e.g. PDCA-cycle, levelling). Interesting to note is that the company knows the term ‘lean management’, but not the ‘Toyota Production System’. Based on the questionnaire and visit, B5 scores mediocre in terms of leanness. There are indeed some efforts to improve, but there is still room for further growth. Its high quality and unique products are the company’s biggest strengths. In the view of the increasing international competition, B5 feels that Belgian SMEs are disadvantaged compared to foreign SMEs in terms of legislations and norms. This disadvantage could however be used as an incentive to further improve. By seeing it as an opportunity to grow, it can enable B5 to move beyond its current capabilities. Given that B5 invests a lot in innovation and has already entered new markets, surely shows that they are taking on this challenge. Image 9 Shop floor of B5

5.2.3. Analysis and conclusion The following figure gives an overview of the scores on muda, muri and mura of the five visited Belgian SMEs, based on the questionnaire, interviews and visits.

54

Score on 10

Figure 14 Summary results Belgian SMEs 9 8 7 6 5 4 3 2 1 0

muda

muri

mura

B1

8,50

8,17

4,19

B2

7,63

7,59

6,00

B3

7,38

8,42

6,25

B4

7,13

7,17

8,38

B5

6,13

6,92

5,75

B1

B2

B3

B4

B5

Concerning muda and muri, the scores of the visited SMEs do not differ much. Despite some individual differences, all participants are doing an effort to optimise their operations and attach importance to creating an enjoyable work atmosphere and motivating their employees. As regards to mura, there are larger individual differences, which can be explained by the extent to which the companies are able to differentiate their customers, as well as by the type of products they produce and the sector. Since they are SMEs, most of them do not have a large influence on the market demand. B1 is for instance operating in a market environment with high variation in demand, resulting in a low score on mura. The visited Belgian SMEs do not only give a high priority to quality and customer demand, but to short term delivery as well. Getting the products as fast as possible to the customer is considered as an important part of the service. That is why all companies, regardless of their lean awareness, are clearly doing efforts to optimise efficiency. Continuous improvement is not applied in a theoretical way, but with a healthy common sense. Only techniques that are useful for their own specific situation are being implemented. Moreover, the management recognises the importance of its employees and of keeping them motivated. Therefore, they are treated with respect and attention is given to their well-being. The first three companies had a very high lean awareness, while the other two knew only little about lean management and consequently did not consciously implement it. However, the results show that the scores on muda, muri and mura do not differ significantly, suggesting that the link between lean awareness and lean implementation is not very strong.

55

Percentage of participants

Figure 15 Lean awareness in Belgian companies (n = 21) 49%

29% 20%

0% [0,2]

3% [2,4]

[4,6]

[6,8]

[8,10]

Lean awareness score on 10

Figure 15 gives an idea of the lean awareness of Belgian SMEs, taking into account not only the visited SMEs, but also the other SMEs that completely filled in the questionnaire10. With almost half of the participating SMEs scoring very high and less than 25% low to mediocre, these results suggest that the lean awareness in Belgian SMEs is generally high. All participating SMEs knew the term ‘lean management’ and 15 out of 21 knew the ‘Toyota Production System’. Moreover, almost all companies were familiar with ‘5S’ and the ‘PDCA-cycle’. ‘Heijunka or levelling’ and the concept of the 3M’s were only known by a minority. Important to note, however, is that most of the participating companies were reached through a workshop about lean and the newsletter of Veltion. Therefore, it is likely that many of the companies that filled in the questionnaire were already interested in lean, which can explain why such a large proportion of companies scored very high on lean awareness. Consequently, these results are mainly exploratory and should be interpreted with care. Looking at the lean techniques that were actually applied on the shop floors, it was observed that the PDCAcycle, standard work and 5S were present in most visited SMEs. Regarding employee involvement and the extent to which lean thinking is supported by the entire organisation, individual differences could be observed. In B1 and B4, employees already share the lean thinking the most. In B2 and B3, the management has already done a lot of efforts to improve and change the way of thinking, but still some more time is needed for employees to completely share this improvement mindset. In B2 for instance, the management is careful not to push the employees too much so that they would become demotivated. As for B5, improvement thinking has been adopted the least by the operators, given the complexity of the machinery combined with the employees’ low education.

10

The answers of companies with more than 250 employees (14 of the 35 participating companies) were removed from the questionnaire data, leaving a sample of 21 SMEs.

56

5.3.Comparison of Japan and Belgium After having studied both Japanese and Belgian manufacturing SMEs, there appear to be more similarities than differences in terms of how the operations are being managed. They all have to cope with increasing competitive pressure and they mainly try to differentiate themselves from competing companies by offering unique and often complex products of high quality. The interview results and observations suggest that Japanese SMEs primarily focus on quality, with efficiency being considered of secondary importance, while the Belgian SMEs more equally focus on quality and speed. This could explain why the level of efficiency in the Japanese SMEs was lower than expected at the outset of this research. A general finding is that SMEs do not seem to have enough resources (time, capital, knowledge) to invest a lot in lean implementation. Most of the SMEs still have a production philosophy, rather than a truly improvement philosophy. Therefore, as regards to continuous improvement, the visited SMEs do not apply it in the most literal sense of the word, but more based on problem solving and using healthy common sense. The improvement efforts of the SMEs are also mainly internally focused, without taking into account the rest of the supply chain, which is in line with previous research (Hu et al., 2015). All ten companies demonstrate commitment towards improvement, but the extent to which lean thinking is already present, differs from company to company. However, a general perception is that in most Belgian SMEs, this improvement thinking has already spread more to the entire organisation, or in other words, employees already seem to share the improvement thinking slightly more. Lean implementation is a culture shift and takes time. Consequently, the efforts will usually not be directly visible in the results. By aggregating the questionnaire and visit scores of the individual companies for each country, Figure 16 is obtained. Figure 16 Japan versus Belgium, based on the 3M scores

Japan

6,68

Belgium 7,65

7,35 6,37

5,44

muda

muri

57

6,11

mura

On average, the Belgian SMEs score slightly better on all 3 M’s, but overall the chart shows no significant differences. These findings suggest the rejection of hypothesis 1, stating that Japanese companies would perform significantly better in terms of lean implementation. Figure 17 Japan vs Belgium: spread of the M scores

In order to see the spread of the scores, Figure 17 shows the individual company results (green for Belgian SMEs, blue for Japanese). They again show no clear trend, but suggest that the differences in scores on the 3M’s are rather attributable to the characteristics of the individual companies than to the country in which they are operating. As regards to muda, the highest and lowest score only differ with 2.62 out of 10. The similar scores express the commitment of all visited companies towards improving. The companies with the highest scores (B1, J5 and B2) have attention for the level of inventory as well as for a clean working environment, visualisation, defect prevention and reduction of other types of waste. The companies with lower scores usually focus on one or two types of muda, while giving less attention to other types of muda. B5, for instance, has done tremendous efforts to reduce inventory to a minimum, but has given less attention to waste and visualisation on the shop floor. J4, on the other hand, attaches the greatest importance to a clean an organised working environment, but has difficulties with managing its inventory. For muri, the difference between the upper and lower score is larger, with B3 scoring 8.42 and J4 only 3.92. The scores are mainly the result of the company culture and working atmosphere, combined with the level of mura. The highest score can be explained by B3’s strong focus on employee motivation and their well-being, and the measures that are in place to make the work less physically aggravating for employees. The very low score for J4, as mentioned before, can be explained by the fact that it is a one-man business. J3 scores low as well because there are no particular measures in place to prevent overburden of people and machinery. Nontheless, in all visited SMEs (except for J4 with only one person) the management maintains a good relationship with its employees, has attention for their well-being and treats them with respect. This respect 58

between employees and employers is especially present in the Japanese SMEs. The reason for this can be found in the Japanese national culture, where group feeling and respect are inherently present. Concerning mura, the graphs show a wide spread as well, with a range of 4.56 out of 10. There is again no clear difference between Japanese and Belgian SMEs, but the different scores are mainly attributable to the type of products that are being manufactured and the sector. The SMEs with customers in different sectors or countries (such as J3 and B4) are mostly able to balance their demand quite well, because the fluctuations largely compensate each other. For SMEs that do not have this luxury on the other hand, mura seems to be difficult to influence, partly because of their lack of power as an SME to influence demand. Therefore, mura appears to be the biggest challenge for SMEs in both countries. Regarding the impact of culture on lean implementation, the following remarks can be made. As explained in the literature review, Belgium and Japan only differ on two cultural dimensions, namely individualism and masculinity. As regards to masculinity, the Japanese SMEs indeed gave the highest priority to quality, but the visited Belgian SMEs attached great importance to it as well. Concerning individualism, the Japanese employees are generally less assertive than Belgian employees. This might lead to a faster rate of improvement in Belgian SMEs compared to Japanese SMEs, because Belgian employees will more easily express their opinion and say when something is wrong. On the other hand, Japan and Belgium have similar scores on the 4 other dimensions. Moreover, Kull et al. (2014) suggest that lean manufacturing is most effective when there is high uncertainty avoidance, low assertiveness, low future orientation, and low performance orientation. Belgium and Japan both score high on uncertainty avoidance and low on assertiveness. In addition, they both score high on future orientation and performance orientation (in Japan on a group level). These similarities in culture of both countries can possibly explain why the differences in leanness between the Japanese and Belgian SMEs appeared to be rather limited. Even though no large differences between the Japanese and Belgian SMEs were found, national culture does seem to have an impact on the leanness of the companies to some extent. Some of the cultural characteristics were noticeable on the work floor and came forward out of the interviews, especially through the thinking and behavior of employees. Given the importance of people in lean management, it is not surprising that this can have an influence. Especially for SMEs, culture seems to have more influence compared to larger companies. However, as suggested in the literature, other factors such as organisational culture and management commitment might play a more important role. They can also explain the differences between the SMEs within the same country. 59

To conclude this chapter, the link between lean awareness and lean implementation will be addressed. Figure 18 Summary table of LA and the 3M’s

LA

J1 10,00

J2 5,71

J3 7,86

J4 5,71

B1 10,00

B2 9,29

B3 10,00

B4 4,29

B5 5,71

muda

7,00

6,00

5,88

6,13

8,50

7,63

7,38

7,13

6,13

muri

8,00

6,92

5,17

3,92

8,17

7,59

8,42

7,17

6,92

mura

5,00

3,82

7,00

5,82

4,19

6,00

6,25

8,38

5,75

Figure 18 shows a summary of the visited companies and their according scores, also including the lean awareness dimension. J5 was not included, since they did not fill in the lean awareness section in the questionnaire. The graph suggests that there is a link between lean awareness and lean implementation level, but that is not very strong or binding. The companies with a very high lean awareness indeed seem to score better than average on muda and muri. As for the other companies however, no clear trend can be seen. B4 in particular can be regarded as remarkable: despite a very low lean awareness, they score very high on all 3 M’s. J3 on the other hand, has a quite high lean awareness, but scores below average on muda and muri. It shows that a high lean awareness is no guarantee for success. In the end, the most important factor still seems to be the commitment of the management and the extent to which this enthusiasm is shared with the employees. A high lean awareness can help to fill in some knowledge gaps and raise the company to a slightly higher level than it already is, but people and their way of thinking still remain the most important aspect, which is something that the companies with very high lean awareness certainly recognised. In the end, lean is about being able to quickly adapt to changing situations and to overcome all kinds of obstacles along the way. So developing people’s skills to enable them move through uncertain situations is the key to long term success, which is something that SMEs can also focus on.

60

6. Conclusion and discussion The objective of this master dissertation was to investigate the differences in terms of lean implementation between Japanese and Belgian manufacturing SMEs, and the extent to which lean awareness and national culture can have an impact on the level of lean implementation. In general, SMEs do not seem to have enough resources to spend a lot of time or money in lean implementation, which confirms previous research (Matt & Rauch, 2013), but they use common healthy sense to improve their operations. The research addressed three research questions, leading to the following conclusions. Conclusion research question 1: Figure 19 Conclusion 1: Lean implementation of Japan versus Belgium

The findings suggest that the level of lean implementation in Japanese and Belgian SMEs is similar, contrary to hypothesis 1 at the outset of the research in which was expected that Japanese SMEs would score significantly better. Based on a combination of questionnaire research, interviews and visits, the Belgian SMEs even score slightly higher on the 3M’s (visualised in Figure 19). Conclusion research question 2: Figure 20 Conclusion 2: Link between lean awareness and implementation

61

The findings of this research suggest that lean awareness is indeed higher in Belgian SMEs than in Japanese SMEs. An explanation can be found in the fact that the lean concept is becoming increasingly popular in western countries and that the lean terminology has been mainly introduced by western authors. The level of leanness on the other hand does not seem to differ significantly between the two countries and Belgian SMEs even seem to score slightly better than Japanese SMEs, as presented in Figure 20 and which contradicts hypothesis 2. Concerning the impact of lean awareness on the operations, the link between lean awareness and lean implementation is not regarded as very strong. Being aware of lean management can support a company in its improvement efforts, but this does not mean that having a high lean awareness automatically leads to better results or that companies with a low lean awareness are working less efficiently. In the end, people and their way of thinking matter the most. Conclusion research question 3: Figure 21 Conclusion 3: Impact of national culture

As regards to the third research question, national culture indeed appears to have an impact on the leanness of SMEs. The culture is primarily reflected in the working atmosphere and in the way how employees think and behave. The resemblances of the Japanese and Belgian national cultures – they score similarly on 4 out of 6 cultural dimensions (Hofstede, 2016) – possibly explains why only minor differences regarding leanness were observed between SMEs in both countries. Nevertheless, whether or not being lean eventually depends on a combination of many different factors, of which national culture is just one. Other elements, such as the organisational culture, the commitment of the management or the motivation of employees, play an at least equally important role (Figure 21). Hypothesis 3 is thus partially accepted. There are however a number of limitations of this research. A first important limitation surrounds the selection of participants and the difficulties related to reaching SMEs. Based on the literature review (such as the findings of Van Landeghem (2010)) and personal insights, it became clear that the investigated SMEs are possibly not representative for the entire population of SMEs in both countries, mainly because of two reasons. First, given the small scale of this research and due to practical reasons, participating companies were more or less situated in the same regions (Ota City in Japan and Flanders in Belgium). Therefore, caution is required in generalising and further research is needed to test whether the findings apply to other SMEs in the countries as well. Second, the SMEs 62

that were willing to participate in the research belong to a limited group of SMEs which have already implemented lean, are planning to implement lean, or who are at least eager to learn and improve their operations. SMEs who were not interested in the outcome of this research or who were not willing or able to offer their time and effort, are consequently not included in the research, possibly resulting in a distorted view on the lean implementation level in both countries. If future research could include these companies as well (for instance by means of an incentive), this would lead to a more unbiased view on the lean implementation level in SMEs in both countries. A further limitation emerged from the fact that Japan and Belgium show many similarities in terms of cultural dimensions. This makes it difficult to form an unambiguous conclusion about the impact of culture on leanness, since many other factors can have an impact on the lean implementation level as well. Future research could compare companies in countries with greater differences in terms of national culture, so that a better insight can be offered in the role of national culture, regardless of other factors. A third limitation is that, even though the cases were analysed based on a well-determined framework, there is still an element of subjectivity involved over the eventual interpretation of the results. Nevertheless, the research was mainly of exploratory nature and still offered valuable insights in how Japanese and Belgian manufacturing SMEs operate and how lean awareness and national culture can have an impact on the leanness SMEs. The following opportunities for future research are suggested. A first suggestion is that research on a larger scale is conducted to test the findings of this dissertation. An extensive survey could be used to investigate whether the link between lean awareness and lean implementation is indeed not very strong, as the results of this research suggest. In order to further investigate the impact of national culture on lean implementation, it is suggested that a cross-case analysis is conducted between countries with larger differences in terms of national culture. Second, this dissertation focuses on SMEs in the manufacturing sector, which has already been the main focus in lean research so far (Hu et al., 2015). This is not surprising, as lean has originated from Toyota in the automotive industry, but it still leaves a gap that is an opportunity for further

research.

63

7. References Achanga, P., Shehab, E., Roy, R., & Nelder, G. (2006). Critical success factors for lean implementation within SMEs. Journal of Manufacturing Technology Management, 17(4), 460-471. doi:10.1108/17410380610662889 Ariyawongrat, P. (2002, 2002). Development of a Lean Activity-Based Scorecard for Process Improvement. Bakås, O., Govaert, T., & Van Landeghem, H. (2011). Challenges and success factors for implementation of lean manufacturing in europeans SMEs. Mitip 2011. Ballé, M. (2012). Real Lean vs. Fake Lean. Retrieved from www.lean.org website: http://www.lean.org/balle/DisplayObject.cfm?o=2083 Bhamu, J., & Sangwan, K. S. (2014). Lean manufacturing: literature review and research issues. International Journal of Operations & Production Management, 34(7), 876-940. doi:10.1108/IJOPM-08-2012-0315 Bhasin, S., & Burcher, P. (2006). Lean viewed as a philosophy. Journal of Manufacturing Technology Management, 17(1), 56-72. doi:doi:10.1108/17410380610639506 Chalmet, L. (2013). Wij zijn TOYOTA niet, iedereen op weg naar Lean Agility. Brugge: die Keure. Chalmet, L. (2014). Productiebeleid [Lecture notes]: Ghent University. Commission, E. (2011). Key figures on European business. Convis, G. (2001). Role of management in a lean manufacturing environment. Learning to think lean, 01, 1014, 2001. David, I. (2015). Economisch Belang van KMO's in België. Retrieved from De Pelsmacker, P., & Van Kenhove, P. (2014). Marktonderzoek, methoden en toepassingen (4 ed.). Amsterdam: Pearson Benelux. Dombrowski, U., & Mielke, T. (2014). Lean Leadership-15 Rules for a sustainable Lean Implementation. Variety Management in Manufacturing: Proceedings of the 47th Cirp Conference on Manufacturing Systems, 17, 565-570. doi:10.1016/j.procir.2014.01.146 EC. (2016). Flanders - Internal Market, Industry, Entrepreneurship And Smes. Retrieved from https://ec.europa.eu/growth/tools-databases/regional-innovation-monitor/baseprofile/flanders Excellent SMEs and Micro Enterprises Selection 300. (2013). Japanese Ministry of Economy, Trade and Industry (METI) Retrieved from http://www.meti.go.jp/english/press/2013/1225_03.html. Hasle, P., Bojesen, A., Langaa Jensen, P., & Bramming, P. (2012). Lean and the working environment: a review of the literature. International Journal of Operations & Production Management, 32(7), 829-849. I

Hobbs, D. P. (2003). Lean manufacturing implementation: a complete execution manual for any size manufacturer: J. Ross Publishing. Hofstede, G. (2016). Dimensions - Geert Hofstede. Retrieved from https://geerthofstede.com/national-culture.html Hu, Q., Mason, R., Williams, S. J., & Found, P. (2015). Lean implementation within SMEs: a literature review. Journal of Manufacturing Technology Management, 26(7), 980-1012. Karlsson, C. (2009). Researching operations management. New York: Routledge. Krafcik, J. F. (1988). Triumph of the lean production system. MIT Sloan Management Review, 30(1), 41. Kull, T. J., Yan, T., Liu, Z., & Wacker, J. G. (2014). The moderation of lean manufacturing effectiveness by dimensions of national culture: Testing practice-culture congruence hypotheses. International Journal of Production Economics, 153, 1-12. doi:10.1016/j.ijpe.2014.03.015 Lean Enterprise Institute, I. (2016a). A Brief History of Lean. Retrieved from http://www.lean.org/WhatsLean/History.cfm Lean Enterprise Institute, I. (2016b). Muda, Mura, Muri. Retrieved from http://www.lean.org/lexicon/muda-mura-muri Lean Enterprise Institute, I. (2016c). What is Lean? Retrieved from http://www.lean.org/WhatsLean/ Liker, J., & Convis, G. L. (2011). The Toyota way to lean leadership: Achieving and sustaining excellence through leadership development: McGraw Hill Professional. Liker, J., & Rother, M. (2011). Why lean programs fail. Knowledge Center of Lean Enterprise Institute, http://www. lean. org/common/display. Liker, J. K. (2004). The Toyota way: 14 Management Principles from the World's Greatest Manufacturer. New York: McGraw-Hill. Lippens, J. (2015) Lean implementation at Desso/Interviewer: D. Jasmien. Marchwinski, C. (2009). Toyota Production System House: Lean Enterprise Institute. Marchwinski, C., & Shook, J. (2014). Lean lexicon: a graphical glossary for lean thinkers (5 ed.). Cambridge: Lean Enterprise Institute, Inc. Matt, D. T., & Rauch, E. (2013). Implementation of Lean Production in Small Sized Enterprises. Procedia CIRP, 12, 420-425. doi:10.1016/j.procir.2013.09.072 McManus, W. (2013, 2013-05-31). Muda, Muri, Mura - Toyota Production System guide. Retrieved from http://blog.toyota.co.uk/muda-muri-mura-toyota-production-system METI. Retrieved from http://www.meti.go.jp/english/. Mirdad, W. K. (2014, 2014). A Conceptual and Strategy Map for Lean Process Transformation. Ohno, T. (1988). Toyota production system: beyond large-scale production: crc Press. II

Pettersen, J. (2009). Defining lean production: some conceptual and practical issues. The TQM Journal, 21(2), 127-142. doi:10.1108/17542730910938137 Pieńkowski, M. (2014). Waste Measurement Techniques For Lean Companies. International Journal of Lean Thinking, 5(1), 9-24. Recht, R., & Wilderom, C. (1998). Kaizen and culture: on the transferability of Japanese suggestion systems. International Business Review, 7(1), 7-22. doi:http://dx.doi.org/10.1016/S09695931(97)00048-6 Rother, M. (2010). Toyota kata : managing people for improvement, adaptiveness, and superior results. New York: McGraw Hill. Samuel, D., Found, P., & Williams, S. J. (2015). How did the publication of the book The Machine That Changed The World change management thinking? Exploring 25 years of lean literature. International Journal of Operations & Production Management, 35(10), 1386-1407. doi:10.1108/ijopm-12-2013-0555 Shah, R., & Ward, P. T. (2003). Lean manufacturing: context, practice bundles, and performance. Journal of operations management, 21(2), 129-149. Spear, S., & Bowen, H. K. (1999). Decoding the DNA of the Toyota production system. Harvard Business Review, 77, 96-108. Spear, S. J. (2004). Learning to lead at Toyota. Harvard business review, 82(5), 78-91. Sugimori, Y., Kusunoki, K., Cho, F., & Uchikawa, S. (1977). Toyota production system and Kanban system Materialization of just-in-time and respect-for-human system. International Journal of Production Research, 15(6), 553. Unizo. (2016). Aantal kmo’s in Vlaanderen, Brussel en Wallonië. Retrieved from http://www.unizo.be/sites/default/files/aantalkmos_0.pdf Van Landeghem, H. (2014). A Management System for Sustainable Lean Implementation (pp. 173187). Van Landeghem, H., & April, J. (2010). People driven productivity: Lean for small businesses. 16th World Productivity Congress and 2010 European Productivity Conference, Proceedings. doi:10.1017/CBO9781107415324.004 Womack, J. (2006). MURA, MURI, MUDA? Retrieved from http://www.lean.org/womack/DisplayObject.cfm?o=743 Womack, J. P., & Jones, D. T. (1996). Lean thinking: banish waste and create wealth in your corporation: Simon and Schuster. Womack, J. P., Jones, D. T., & Roos, D. (1990). Machine that changed the world: Simon and Schuster. Wong, M. (2007). The Role of Culture in Implementing Lean Production System. In J. Olhager & F. Persson (Eds.), Advances in Production Management Systems: International IFIP TC 5, WG 5.7 III

Conference on Advances in Production Management Systems (APMS 2007), September 17–19, Linköping, Sweden (pp. 413-422). Boston, MA: Springer US. Yin, R. K. (2013). Case study research: Design and methods: Sage publications.

IV

Appendix Appendix 1.1 – Online questionnaire questions 0. Positioning Business sector Year founded Number of employees The company in general 1. Company focus Our company focuses on delivering products of high quality Our company focuses on delivering products as fast as possible Our company focuses on the demands of the customer 2. Management contact Management communicates frequently with office employees Management communicates frequently with factory workers Management visits the work floor frequently to observe the production process Management has a good relationship with its employees Management has a big influence on the motivation or demotivation of its employees 3. Employee involvement Employees are involved in the creation of best practices Employees are involved in the development of new products and processes Employees are open-minded towards change Employees are motivated to deliver high quality All employees embrace the culture and vision of the company 4. Employee competences Employees are eager to learn Employees have the opportunity to improve their skills Employees think out of the box and have creative ideas Employees are able to manage a variety of tasks 5. Continuous improvement Our company invests sufficient time in continuous improvement of products and processes Our company invests a lot of money in continuous improvement of products and processes If we would have more money and time, we would invest more in continuous improvement Employees think actively about ways to improve the working situation and production process 6. Evaluation of production process The production system is evaluated frequently We use several indicators to identify areas for improvement Evaluation indicators are made visible for everyone on the work floor 7, Remarks The use of techniques

V

1. Visualisation techniques We use a lot of warning signs to ensure the safety in the production area Products are characterized by a unique barcode so that the product can be tracked at any time Signs with guidelines for the production procedures are made visible on the work floor to ensure a good execution 2. Waste We are aware of the amount of waste that is produced during the production process We are doing efforts to reduce the amount of waste 3. Defects We check for defects in the products after each production step We only check for defects in the products at the end of the production process When a problem is detected, the production line is stopped immediately until the problem is solved 4. Inventory We know how long a product stays in inventory on average If a product stays too long in the inventory without being sold, it is removed 5. Production planning - volume The production quantity is based on the demand of the customers The production quantity is based on the amount of available resources 6. Production planning - frequency How frequently is the production planned? 7. Variability (external and internal) The production is characterized by seasonal fluctuations The production is characterized by weekly fluctuations The production is characterized by daily fluctuations The production is characterized by hourly fluctuations Employees are flexible to work overtime 8. Employee ergonomics Measures are taken to make the work less physically aggravating for employees Measures are taken to ensure the mental health of employees 9. Machinery and equipment performance Machinery and equipment are maintained and checked frequently to prevent failure 10. Remarks Lean awareness 1. Does your company know about the following terms and principles? Toyota Production System Lean management Kanban Six Sigma Just-in-time 7 types of waste

VI

PDCA-cycle (Plan, Do, Check, Act) 5S method Lead time Takt time 3M's of lean manufacturing (Muda, Mura and Muri) Heijunka (Mixed-Model Production) Total Productive Maintenance Kaizen/ Continuous Improvement

The questions on the company in general and the use of techniques were based on a 5 point Likert scale, ranging from complete disagreement to complete agreement. Only question 6 of the ‘use of techniques’ section (“How frequently is the production planned?”) had different answer options: hourly, daily, weekly, monthly, or other. As for the last section on lean awareness, the answer options were ‘yes’ and ‘no’. Moreover, after each part the opportunity was offered to the respondents to add remarks, in case some further clarification on the answers was needed.

VII

Appendix 1.2 – Score calculation of muda, muri, mura and lean awareness Muda We use a lot of warning signs to ensure the safety in the production area Products are characterized by a unique barcode so that the product can be tracked at any time Signs with guidelines for the production procedures are made visible on the work floor to ensure a good execution We are aware of the amount of waste that is produced during the production process We are doing efforts to reduce the amount of waste We check for defects in the products after each production step We only check for defects in the products at the end of the production process When a problem is detected, the production line is stopped immediately until the problem is solved We know how long a product stays in inventory on average If a product stays too long in the inventory without being sold, it is removed Muri Measures are taken to make the work less physically aggravating for employees Measures are taken to ensure the mental health of employees Machinery and equipment are maintained and checked frequently to prevent failure Mura The production is characterized by seasonal fluctuations The production is characterized by weekly fluctuations The production is characterized by daily fluctuations The production is characterized by hourly fluctuations

Calculation of the muda, muri and mura scores based on the questionnaire: The answers were valued from 0 for complete disagreement to 4 for complete agreement. Since the questions in red were negatively formulated, their values were reversed. The scores were then calculated as an average of the values of the corresponding questions, and converted to a score on 10. Note: the score for Mura is only based on variability in demand and does not take into account variability in production. This is further investigated through the interviews and visits.

Questions of the online questionnaire that were not included in the scores: Q11_3 – How frequently is the production planned? – was removed for the calculations of the scores, since the answer options were not completely ordinal (the last answer option was “Others”). Furthermore, the frequency of production planning should be compared with the variability in demand to form a reasonable conclusion. This could be done better during the interview and visit. VIII

Question Q12_5 – Employees are flexible to work overtime – was not included in the scores, because it can be considered as part of muri as well as mura. On the one hand, having flexible employees can help level the workflow and thus compensate for or decrease mura. As long as this is a temporary measure, this is very lean. However, when overtime becomes the rule rather than the exception, this causes employees and machines to become overburdened and thus has a negative impact on muri. Hence, since flexibility in terms of overtime can be either positive or negative depending on the situation, no conclusion was formed based on the questionnaire and more information was collected during the interview and visit.

Calculation of the lean awareness score based on the questionnaire: As for the lean awareness, the score was based on knowledge of the provided lean terms (see appendix 1.1). The ‘yes’ answers were assigned value 1, the ‘no’ answers value 0. All answers were added up and converted to a score on 10. Note: the lean terminology included in the questionnaire obviously does not cover every aspect of lean

management,

but

it

was

tried

to

IX

include

the

most

important

ones.

Appendix 1.3 – Interview questions Q1.

What does the production process of your company look like (process flow diagram)?

Q2.

How do you try to continuously improve in your daily operations (kaizen)? How is this being taught to the employees?

Q3.

Are employees being motivated to continuously improve and deliver high quality? If yes, how are they being encouraged?

Q4.

What happens if a problem occurs? How are problems approached and how are they communicated to the employees afterwards?

Q5.

How does your company manage inventory?

Q6.

How is the production being planned and how is being coped with fluctuations in demand? Do the fluctuations sometimes lead to overburden of employees/machinery?

Q7.

Do you know for each product how long it takes to produce and deliver it (lead time)?

Q8.

Do you know where the bottleneck of the production process is situated? If yes, how do you manage it?

Q9.

Does your company have special agreements with suppliers and/or customers?

Q10. Does your company try to implement lean in a conscious way? If yes, which motivation has led to this, how long have you already been working on it, what have been the greatest difficulties that you have experienced so far, and what are the most important results?

X