What is Lean Production? Organizational Performance and Benefits

The history of lean production spans approximately 60 years. Singh and Singh (2009) asserted that the kaizen approach embodies the fundamental principles of lean production, and was developed in post World War II Japan. It is interesting to note, particularly in light of the ongoing debate about lean production’s impact on employees, that these researchers identify labor shortage and an effort to improve a confrontational environment between management and labor as motivations for development of kaizen. In the years since 1950 a tremendous body of literature has been developed around lean production.

Nearly 20 years ago, Golhar and Stamm (1991) asserted that there had been “over 860 just-in-time (JIT) articles published in professional journals since 1970” (p. 657). A number of years passed between the creation of the lean concept in 1950s Japan and the emergence in English language professional journals of articles about lean. Vokurka and Davis (1996) referenced the 1977 article by Sugimori et al. in asserting that the just-in- time philosophy was first introduced in the United States in the late 1970s. Despite the voluminous research conducted and the vast number of articles on lean production published since 1977, researchers continue to view lean production differently and to use widely varying terminology in describing it.

Perhaps one of the more comprehensive definitions of lean is provided by Drew et al. (2004), who offered the following:

Lean is an integrated set of principles, practices, tools and techniques designed to address the root causes of operational underperformance. It is a systematic approach to eliminating the sources of loss from entire value streams in order to close the gap between actual performance and the requirements of customers and shareholders. Its objective is to optimize cost, quality and delivery while improving safety. To meet this objective, it tries to eliminate three key sources of loss from the operating system: waste, variability, and inflexibility.

Olivella, Cuatrecasas, and Gavilan (2008) focused upon the organizational structure aspects of lean production, identifying the following as the defining characteristics of successful lean organizations: continuing training and learning, team- based organization, participation and empowerment, and worker multi-skilling, among others. These researchers, while clearly familiar with the more technical tools of lean implementation, argued that the organizational and workforcnts are more critical to organizational success in implementing lean production.

In summary, researchers responsible for the extensive literature on lean production produced primarily over the last three decades have utilized varying definitions and understandings of the meaning of the term lean production. Some researchers see lean as a subset of JIT. JIT itself is understood by some researchers to be a purely tactical operations technique and by others to be a global philosophy.

Most critically, review of the literature on lean revealed a significant gap. Little research had been done at the individual employee level. This research addressed an element of the gap by exploring whether relationships exist between individual employees’ strengths and the degree to which those employees evidence commitment to their organizations’ efforts to implement lean production.

The Effects of Lean Production on Organizational Performance

Organizations undertaking an implementation of lean production face significant challenges and risks. Particularly when the fact that many, if not most, organizations undertaking a lean transformation do not fully succeed is considered, it’s clear that only substantial benefits would motivate so many organizations to attempt such a transformation. Literature describing and documenting several of the benefits of successful lean implementations is explored in this section.

Benefits of Lean Production

In the same way that researchers evidence different understandings about what lean production is, they differ in their estimations of its benefits. Over the past several decades the lean philosophy has been adopted by literally thousands of both service- and product-producing organizations in many different industries. As lean has spread across the globe, increasing numbers of organizations have achieved and sustained impressive levels of performance through implementation of the lean philosophy. Early in the diffusion of the lean philosophy, when this track record was less robust, researchers critical of lean production produced more, and more critical, literature. Williams et al. (1992), for instance, are obvious skeptics, referring to the “legend of lean production” and concentrating on “refuting the metaphysics of lean production which represents the apotheosis of the business school’s infatuation with Japan” (p. 352). More recent researchers, even when critical of lean, tend to be less aggressive in asserting that lean is a “legend” incapable of providing sustainable benefits.

Thus, while more recent researchers highly critical of lean, including Parker (2003), continue to assert “there is also debate about its productivity implications” (p. 632), the preponderance of researchers appear to accept that very substantial performance improvements can be achieved through lean implementation. Even Parker noted that some researchers believe lean is the only means of achieving world class levels of performance, while others argue merely that under certain circumstances lean does not produce the highest performing organization.

Robinson and Schroeder (2009) asserted that the purpose of implementing lean production is to drive rapid operational improvement. They postulated that one of the most important improvements afforded by lean production is increased participation by front-line employees in driving that improvement. They noted that Toyota has long emphasized getting “a continuous stream of front-line ideas” from its production workers (p. 28). Their study involving over 300 organizations in 25 countries identified “a relationship between the performance of a company’s idea system and the success of its lean effort, as defined by its rate of productivity improvement” (p. 29). In short, the creation of an organizational culture characterized by rapid learning and a workforce engaged in daily efforts to drive improvement are seen both as elements of lean production and as conditions necessary for successful implementation of lean production.

Lean production has been employed by increasing numbers of organizations across the globe. These organizations are diverse: they span service and product organizations competing in a tremendous range of industries. A number of examples culled from an extensive body of literature documenting the benefits of lean production have been reviewed. A complete understanding of lean production also requires, however, an appreciation for the challenges and risks inherent in both implementation and sustainment of that philosophy.

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1 Comment

  1. Forex Review
    April 19, 05:08 Reply

    What are the Benefits of Lean manufacturing? What are the advantages to your business of implementing Lean Production methods or even within a service organisation? Lean manufacturing is both a business improvement philosophy and a collection of well proven tools to improve your production processes. Lean is about defining value as perceived by the customer, the actual features and services that they expect.

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