Impact of culture in implementation lean manufacturing

Lean manufacturing (LM) has been applied widely in recent year in both manufacturing and service sectors because of its focus on cost reduction through eliminating non-value added activities. Despite pervasiveness of lean production, there is an increasing concern about the implementation of lean in both large and SMEs environment. One of the reasons for this is lack of full understanding of critical issues of lean implementation notably the cultural perspective of the organization and its people. Culture is a powerful, latent and often unconscious set of forces that determine both of our individual and collective behavior. This study addressed the key issues that relate to lean implementation with especial reference to impact of cultural factors by applying Schen’s three levels of organizational cultural theory on implementation of lean manufacturing.

Keywords: lean manufacturing, organizational culture, Keizen, Just-In-Time (JIT), Schen’s model.

Introduction

LM is one of the initiatives that many businesses in US, Europe and Japan adopted in order to remain competitive. Originating from the Toyota production system (TPS), the tools and techniques of lean such as just-in-time (JIT), total productive maintenance (TPM), single minutes exchange of dice (SMED), continuous improvement (kaizen), 5s visual management, values stream mapping (VSM), have been widely used in both manufacturing and service sectors regardless the organization size.

Lean is a systematic, continuous improvement philosophy that focuses on reducing waste while aligning process to customer value. With many organizations finding that over 60% of activities add no value to the customer or to the business. The overall objective of any lean initiative is to satisfy customer needs on the highest possible level through the identification and elimination waste. Understanding and being able to see and recognize waste is the first step in the lean journey. The main sources or forms of waste are:

Unnecessary human motion;

Internal transport;

Over-production;

Inventory;

defects;

Waiting;

Over processing; and

Unused creativity

Lean tools can be utilized to identify and eliminate above mentioned non-value adding activities and their associated costs. Applying lean tools and techniques to a traditional culture is not an easy task to do. The central theme of lean is a cultural and people oriented initiative. Key to make transition lean to organization is the fundamental change in the culture of the organization.

The objective of this study is to discuss and analyze different lean tools and focus on role of cultural aspect in lean implementation by applying Schen’s three levels organizational culture theory.

Whilst lean is concerned with reducing waste at all levels, it is also about changing corporate culture (Bhasin & Burcher, 2006). When we talk about culture we mean how the top management perform with the lower management and employees and as the lean system is Japanese system it’s important for any company around the world to understand how the Japanese culture have achieved their goals by adopting lean.

Literature review

Lean manufacturing

LM originated from TPS and has gained popularity as best practice manufacturing strategy. According to Karlsson and Ahlstrom (1996), lean permeates an entire organization.

*It is from Dr Ho mi should ask him about the reference.

Lean tools

Lean manufacturing is systematic and aiming for eliminating all kind of the major 7 or 8 wastes in the organization, any organization want to adopt such system need to follow the lean tools, a brief description of the most common lean tools is heighted by Monden (1998), Feld (2000) and Nahmias (2001) as follow:

5S: It’s visual housekeeping and it’s the first step of lean journey as it helps to focus on the shop floor to make standardized work procedures which devolved control to shop floor.

Just-in-time (JIT): is a pull system, which means produce only when a customer initiates demand which will help to reduce inventory level.

Kanbans: very essential for JIT, it is a card or signal system to control the production of the required parts in the required quantities and at the required time

Total preventive maintenance (TPM): the idea of TPM is to carry out a maintenance in regular basis to0 avoid any malfunction, by following TPM the focus of the organization will be changed from fixing to preventing the equipment which will save time and money for the organization.

VSM: Is one of the most powerful lean tools for reducing waste, it is focus on the process of the product flow to customer, it help to analyze and find the waste of non value added and try to get rid of it by initiate current state to see the product flow and improve it by establishing future state map for eliminating the waste.

SMED: it is concentrate on reducing production lot size and improves the flow by providing a changeover reduction technique form running the current product to shift for next product.

Keizen: It’s a Japanese term for improvement which means continuous improvement involving everyone including managers and workers. It has become common in many Western industries; the word Kaizen indicates a process of continuous improvement of the “standard” way of work. Kaizen technique is a creative improvement that every employee is capable of contributing to (Kaizen, 1992).

Lean and the role of culture

The concept of culture

Dianne Lewis (1996) explained in his study that the culture is following 4 themes as follow:

Is whether culture is directly behavioural or underlying shared assumptions;

Is whether culture is a variable or a root metaphor of an organization (Smircich, 1983b); that is, whether it is something an organization has or something an organization is (Schall, 1983);

Is culture’s effect on the organization; and the fourth theme

Is how culture is created and transmitted; that is, whether behaviour leads to shared feelings or shared feelings to behaviour (Lewis, 1996).

For the first theme and by knowing whether culture is directly behavioural or underlying shared assumptions would make us more comfortable to study and to change it in a good way (Allaire & Firsirotu, 1984). Many authors have defined the organization culture as combination of forms and meaning, while others see the culture as intangible shared meanings and basic assumptions (Lewis, 1996).

Some authors have defined the organization culture as combination of forms and meaning, while others see the culture as intangible shared meanings and basic assumptions (Lewis, 1996).

The second theme is whether culture is a variable or a root metaphor of an organization (Smircich, 1983b); that is, whether it is something an organization has or something an organization is (Schall, 1983), most authors sees the culture as variable and something the organization can have control on and they think it can be affected by internal and external stimuli (Lewis, 1996).

Third theme is culture’s effect on the organization, Peters and Waterman (1982) and Deal and Kennedy (1982) emphasized that strong culture can really have great impact on the organization. Authors who claim that culture has an impact on the effectiveness of the organization prefer to culture as a variable and most authors also say that the pattern of collective behaviour involves the culture of the organization.

Finally the fourth theme which how culture is created and transmitted; that is, whether behaviour leads to shared feelings or shared feelings to behaviour, many others believes that behaviour leads to shared feelings but that reinforcement of these norms by attempts to change attitudes would also be necessary so that people will eventually behave in the desired way even when the external justifications for their behaviour have been removed (Amsa, 1986) (Sutton & Nelson, 1990) (Sathe, 1983). Again, few authors draw the link between creation and transmittal of culture, and managerial control (Lewis, 1996).

Organizational culture

Many articles have been written about the organisational culture, the organisational culture is playing major role for any company want to adapt new method, techniques or new system. Thompson (2000) described culture as foremost constraint in an organisation ability to change working method, Peters and Waterman’s (1982) citing an essential quality of the organisation comes from coherence and dominance of culture. There are many issues can have direct impact on the culture of any organisation, Mullins (1999) outlined these issues as:

History;

Goal and objective;

Size;

Location;

Management and staffing;

Primary function and adjective; and finally

Environment (Mullins, 1999).

Moreover, research made by Appelbaum, Leblanc and Shapiro (1998) revealed that the poor communication and lack of leadership have direct impact on company culture. This view is supported by Swe and Kleiner (1998) who think a strong leadership ship is a key element to achieve the desired within the company.

Researchers have been demonstrated that the organisational culture has to be supportive of education, training, involvement and teamwork (Thompson, 2000), (Peters & Waterman, In search of excellence, 1982), (Dale, Cooper, & Wilkinson, Managing Quality and Human Resources, 1997), (Crosby, 1979) and (Dale, Managing Quality, 1999). For any business to stay on the competitive market place the continuous improvement must be a way of life for all employees (Bounds, Ranney, Yorks, & Adams, 1994).

Basically, the culture of creative tension and innovation which focus on producing less wasteful of production can only be achieved if the organisation have the people commitment towards solving their own problems and create and generating new ways to do their job in a very comfortable and secure environment, this is why lean techniques creates new demand from an industrial relations perspective (Forrester, 1995).

Of course if we want to make the organisation ready to change, a propitiate leadership is required to control the main resistance power to change, which I believe is the people in my perspective once you can change the people the rest would be easy to change.

People management

Forrester (1995) says the advent of fundamental changes in processing systems towards lean manufacturing has coincided with a period of transition within the field of people management (Forrester, 1995).

People are one the most important issues that the culture depends on, Hofstede (1982) consider that the human behaviour is not random, but predictable, and individuals carry mental programmes that are observed indirectly through their behaviours based on values and culture. A value represents “a broad tendency to prefer certain states of affaires over others” (Hofstede, Culture’s Consequences, 1982) and culture is a “the collective programming of the mind which distinguishes the members of one human group from another” (Hofstede, Culture’s Consequences, 1982).

Oldham (2004) believe that in order to manage people, practices into distinct and interrelated activities have been introduced by Society of British Aerospace Companies (SABC), these practices focusing on high involvement, human resource and employee relations (Oldham, 2004).

To create greater employee involvement, high involvement practices is suggested by Oldham (2004) according to SABC:

Semi-autonomous team working;

Continuous improvement team;

Responsibility for own work quality;

Job rotation;

Information sharing

Briefing groups.

To build skills level, motivation and ability, the human resource practice is suggested:

Appraisal;

Personal development plan;

Performance based reward;

High levels of training on and off the job;

Sophisticated recruitment techniques; and

Broad job grading structure.

And finally, to be able to build trust, loyalty and identity with organisation, employee relation is suggested:

Harmonised terms and conditions of employment (pensions, leave etc);

Induction programs;

Joint consultative committees;

Regular social gathering for employee; and

Same canteen and eating arrangement (Oldham, 2004).

Thompson (2000) shows some observation toward these practices as it’s depending on several organisation factors:

Degree of exposure to international competition;

Level of employee skills;

Company size; and

Management philosophy (Thompson, 2000).

Culture and resistance to change

Bunchanan and Huczynski (1997) defined resistance to change as inability or unwillingness to change and depend on the changing of organisational culture. Couture is something cannot be changed through rewards or controls by manager (Buchanan & Huczynski, 1997) and (Hofstede, Cultures and Organizations, 1997) support this view.

It is never too late for a company to change the way it does business, but if some companies delay much longer they will find the change required may be too great. The direction of change must come from the top of the organization and filter down very quickly to all levels. Once the change process is in place senior management should not just sit back and hope that improvements will happen automatically. All managers must be actively involved in the improvement initiatives and the strongest leader must drive the change process. Arbitration and communication are the key points to successful implementation. Above all there must be a commitment to change rather than carrying out change for change’s sake (Sohal & Egglestone, 1994).

Change in culture is a very hard task to do, Forrester (1995) emphasised not every culture is successful and it’s very hard to change the organisation culture to lean. Many researchers have argued that many organisation have failed in changing culture towards lean, Forrester (1995) think the major reason behind the failure is the organisational defence routine, these routines involve employees playing public games committing to the change, while their actions undermine the new culture (Forrester, 1995). Hall (2004) lean production system which invented and practiced by Toyota may not be easily adapted and emulated by other organizations due to variation of the prevailing culture and to the way process are managed (Hall, 2004).

Key finding

From the review been made we can conclude that the organisation can be influenced by their history in terms of values and beliefs which forms the culture. To implement a successful lean strategy, the company need to have; managing change, training and involvement of people as they are essential and fundamental to implement new strategy. The implementation of lean or any new strategy will be varying from place to place as it depends on the leadership style, the openness and willingness and above all these points it mostly depends on the culture. From the analysis of the data collected it appears that it is inevitable that companies must adopt lean manufacturing as a working philosophy within their organizations even if it is in a modified format that best suits their particular business culture.

Forrester declared that there are 4 key elements need to be considered before going towards change and implementing new advanced manufacturing technology (ATM), these four key elements are necessary (Forrester, 1995):

In terms of work force: skilled, flexible, coordinated and committed workforce;

In terms of the organisation: lean, flat, and innovative management;

The ability to retain experienced and added value workers; and finally

Strong relationship between management and union.

Bahasin and Burcher (2006) refer in their study the obstacles facing companies in implementing lean are represent in the lack of planning and direction. Bahasin and Burcher (2006) explained and suggest to any organisations want to implement lean in their organization to consider 3 points:

Take lean as long journey as it required long term commitment and don’t accept result straight away;

Apply five of lean tools simultaneously, for medium size company according to the current British classifications;

Change the culture, empower the employee and sponsor lean throughout value chain (Bhasin & Burcher, 2006).

It can be concluded that lean production it’s a philosophy more than techniques to be followed, it’s not plug and play system the organization need to be believe in the system and understand every aspect, although its required step to be followed before the implementation but the most important aspect it to set the right environment with the right employee to work on plus the organization need to define their problem and have clear vision what they want to get from lean. Which mean the culture needs to be changed to be able to adopt lean system and gain the competitive advantage.

Cultural framework

Many researchers have come a cross Schein framework to assess the organization culture and to measure how the change culture might be effected, this drive us to recommend the model. This model is consists of 3 levels each level represent part of organization culture, the levels are: level one the artifact, level two espoused values and finally level three which is the assumptions. In order to be able to understand the organization culture we need to know what these level means. The artifact is visible and easy to observe but it too difficult to decipher as its represent the language, the way of employee’s manners and attitude, climate and decor. Espoused value is the organizations philosophy of strategies and goals which leads to the explicit behavioral. The last level, the assumptions it’s ultimate source

of values and action), it’s more like the most sold thinking which is not unquestionable; it can be described as the awareness, felling and thought (Schein, 1999).

Wong (2007) explained in his research the organization culture are mixed of common values, beliefs and behaviors and from this mixing the organization gained their way of working and the way of thinking between different department (Wong, 2007). Goffee and Jones (1998) beliefs these issues are play major role for winning and losing for any organization. This is way most of production method and managerial theories are working well domestically but can’t have the same smooth way when they work abroad Wong (2007) declared. Schein (1999) defined culture as mix of element interacted together and emphases we get to understand the organization culture first before trying to tackle it (Schein, 1999).

Lean production became the most powerful tools to adapt, no matter the size of the organization. In last twenty years, the process of Lean Production System which is been created in Japan has been learned and imported globally (Wong, 2007), Recht and Wilderom (1998) believes the Japanese enterprises had this advantage and the success because of the culture, which is not exist in many organization and countries (Recht & Wilderom, 1998). So, each organization want to adapt Lean or any Japanese system need to alliterate their organization culture to implement it in a good way, Wong (2007) shows a very good example of typical case of culturally adaptive feature in his research he says in North America they have implemented the SDWT (Self-directed Work Team) to cope the lean in successful way. What SDWT can do is to get the best of the individuals by strengthen the teamwork over the individualism (Wong, 2007).

The impact of national culture

Many aspects can have direct impact on organizational culture and one of the most important aspects is the national culture, national culture is playing very essential role in forming the corporate culture (Adler, Doktor, & Redding, 1986) and (O’Connor, 1995). Oudenhoven (2001) believes the differences between the organizational culture is resulted from inconsistence of national culture, the national culture can have direct impact on managers which may hinders the transfer of production system or managerial modes (Yoshiaki, Hayashi, & Hidaka, 2000), Tanaka (1992) explained why Japanese culture is a quality culture, he says they are following the Tanaka formulae which is about adding value to their people, process and product by making the continuous improvement or Kaizen as daily attitude and lifetime process (Tanaka, 1992), and when Kaizen is taking as personal philosophy it will be life time process for personal development (Cartwright, 1999)

Wong (2007) reveled there are four dimensions addressed by Hofstede and Bond (1988) that can make difference from one organization to another, power distance, individualism/collectivism, masculinity/femininity and uncertainly avoidance, Wong (2007) says there one more dimension has been added to these dimension by Hofsted (1994) which the Confucian dynamism (Wong, 2007).

Conclusion

What makes lean production so specially and affective at the same time, the fact that this kind of techniques or philosophy rely on the methods, skills and the most important thing is the organizational collaborative between workers (Wong, 2007). Moreover, Wong (2007) declared, there is a need for cultural adaption to achieve descent results from implementing lean. Japanese enterprises have been described as a long term vision which can drive group’s self realization value. In order to keep the spirit of lean techniques it’s required to take different organization and method to adapt with, thus will derive you to competitive advantage in positive cycle (Wong, 2007).

Wong (2007) analyze how the how Taiwanese enterprises cope with the cultural resistance to achieve expected goals, he found that the Taiwanese enterprises has modified their culture in order to adapt lean in successful way; he described what they have done as an indicator for the degree culture change. They have changed their attitude towards the lower rank employee; they managed the culture change by several points (Wong, 2007);

The strategies and vision of the organization been discussed and expressed by the top manager to all employees, this help them to encourage worker and they will fell they are strong part in the organization, moreover, the idea behind this attitude is to help to derive the change easily in the different level of the organization;

They are trying to keep prevent the organization of being perfunctory by getting help from experts and invite them in the organization and raise higher rank of unit in charge plus what we have discussed in the previous point, these things are very essential before implementing lean; and

They kept the short-term incentive system as they think its necessary especially in the early stages, while the lifetime employment is been eliminated same as the long-term human resource.

It can be concluded that lean production it’s a philosophy more than techniques to be followed, it’s not plug and play system the organization need to be believe in the system and understand every aspect, although its required step to be followed before the implementation but the most important aspect it to set the right environment with the right employee to work on plus the organization need to define their problem and have clear vision what they want to get from lean. Which mean the culture needs to be changed to be able to adopt lean system and gain the competitive advantage.