TERMINOLOGY (cont.) The wastes are reduced radically by lean practices and techniques (lean principles). Lean Practices and Techniques to be discussed: Just-In-Time – JIT Continuous Improvement – CI New Product Development
HISTORICAL REVIEW Lean principles come from the Japanese manufacturing industry John Krafcik ,1988 Lean principles brought significant results to most of adopters, where the push systems were the mainstream that time. The main idea is in cutting the costs radically and maximizing the flexibility.
LEAN & MANAGEMENT CONTEXTS• The transfer of lean principles and limitations Different management context (lean manufacturing and lean service) Different culture• The article discuss an example for each context (automakers & Health Care).
LEAN MANUFACTURING & LIMITATIONS• There are several reasons why many Japanese, as well as non Japanese, firms have been unable or unwilling to follow the strict lean standards set by Toyota, or Honda to their fullest extreme.• Many difficulties and challenges rises up when some of those companies tried to introduce lean in their production systems.
LEAN MANUFACTURING & LIMITATIONS (cont.) • The main major limitations of lean manufacturing 1. Urban Congestion and Geographical Distance 2. Supplier Management 3. The Shortage of Blue- Collar Workers 4. Product Variety and environmental issues
LEAN MANUFACTURING & LIMITATIONS (cont.) 1. Urban Congestion and Geographical Distance The success of lean manufacturing encouraged other Japanese Companies. (traffic) • Traffic congestion wasted time (waiting for components to arrive) • Traffic congestion also pollutes the environment • Japanese government and media campaign (1990).
LEAN MANUFACTURING & LIMITATIONS (cont.) 2. Supplier Management Lean manufacturing application requires cooperative and reliable suppliers. (%75 of manufacturing, %50 of product development costs) • High pressure on Japanese suppliers • The Japanese and troubles with foreign. (culture, mentality, costs, rules … etc.) • Non-Japanese suppliers have not complied exactly with Japanese pricing and quality requirements, nor Japanese trusted foreign suppliers
LEAN MANUFACTURING & LIMITATIONS (cont.) 3. The shortage of blue-collar worker • Introduction of automated manufacturing systems in large number (1980`s) • There were more factories than demanded blue-collar • Intense competition for blue-collar workers • Reduce the productivity advantage • Needs for foreign labor
LEAN MANUFACTURING & LIMITATIONS (cont.)4. Product Variety and environmental issues Toyota and other companies had high flexible production system that let them produce too many models and features of products and maximize their competitive customizations.• The parts maker and assembly plants (responsive with small and rare orders frequently• The variety requires constant equipment setups, Kanban exchanges, and small lots
LEAN MANUFACTURING & LIMITATIONS (cont.) • The most pressing concern – the high cost of new model development • Interest rates in Japan reached international levels (Expensive Money) • Banks could no longer offer cheap loans – their portfolios of stocks and real estate and their customers’ portfolios had declined • Cuts on products development
LEAN MANUFACTURING & LIMITATIONS (cont.) • They reduced products variety to %20 of the products that achieve %80 of overall profits • The total sales may decline as the options and variety the customer used to enjoy is no longer available as before. • Exporting used-automobiles to other parts of world • recycle automobile materials more effectively.
Lean Service & BarriersAccording to Brandão L. and Pidd M. (2011), implementation barriers in health care are:1. Perception barriers2. Terminology barriers3. Personal/ professional skills of health care professional difference barrier4. Organizational momentum5. Hierarchy and management roles barrier6. Data collection and performance measurement barrier7. Professional and functional silos barrier8. Resistance change/ skepticisms barrier
Perception barriers A common misbelieve:• treated as a ‘piece of metal’• humanity would disappear from health care• every patient is different, unlike every manufactured product in a factory
Terminology barriers• A common vocabulary• Inconsistencies in terminology• Work-in progress can be called as waiting time or waiting lists
Terminology barriers (cont.) Seven types of wastes in healthcare• Transport- movement of patients and equipment• Inventory- unneeded stocks and supplies• Motion- movement of staff and supplies• Waiting- delays in diagnosis and treatment• Over production- unnecessary tests• Over burden- stressed, overworked staff• Defects – e. g. medications errors, infections
Personal/ professional skills of health care professional difference barrier• health care managers - ‘firefighting’• lean is not finding quick, temporary solution to problems
Organizational momentum A continuous improvement• training,• piloting and• overcoming some of the barriers described here. The rate of change in a typical lean program may be initially slow until organizational momentum is acquired.
Hierarchy & management roles barrier Cultural issues based on• the hierarchy of health care staff• the way management roles are allocated
Hierarchy & management roles barrier (cont.) : Ben-Tovim et al(2007b) Figure: Top-down versus bottom-up flow of ideas.
Data collection and performance measurement barrierSmith (1995) consider the effects ofpublishing performance data, which can leadto many different types of dysfunctionalbehavior if not carefully planned
Professional and functional silos barrier Structure of fragmented care and professional practice.• Care providers (doctors, nurses & physiotherapists).• Non-care providers (managers, secretaries & cleaners).
Resistance change/ skepticisms barrier• Resistance to change• Skepticism about change programs in general
Conclusion• Scalability is insufficient• Stressful for the suppliers and employees in the assembly line.• The hierarchal structures and management practices in different countries• It’s highly recommended for those who is willing to import lean for their industries to study the limitations of lean under which context it’s intended to operate on.
Findings:• Four limitations for lean manufacturing (automobile) and eight barriers for lean service (health care) have been discussed.
Future Study• It’s highly recommended to consider change management when lean practices and techniques are transformed to other culture and context.• Much of researching effort required to design appropriate lean style suits different cases.