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Lean as a management strategy: universal or domain specific
adaptation required
A contingency framework for the assessme...
A contingency framework for Lean
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V.Wiegel – Draft version – under review and not open for citation
2 Contingencies
One o...
A contingency framework for Lean
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V.Wiegel – Draft version – under review and not open for citation
4.2 Six elements of t...
A contingency framework for Lean
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V.Wiegel – Draft version – under review and not open for citation
 mediating – technol...
A contingency framework for Lean
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V.Wiegel – Draft version – under review and not open for citation
variation in demand w...
A contingency framework for Lean
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V.Wiegel – Draft version – under review and not open for citation
Figure 1 Characteriza...
A contingency framework for Lean
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V.Wiegel – Draft version – under review and not open for citation
Literatuur
Antony, J....
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Wiegel, Vincent; Lean contingency framework extended abstract

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Paper for 2nd International Conference on Lean Six Sigma for Higher Education
Lean as a management strategy: universal or domain specific adaptation required

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Wiegel, Vincent; Lean contingency framework extended abstract

  1. 1. 1 Lean as a management strategy: universal or domain specific adaptation required A contingency framework for the assessment and adaptation of Lean Vincent Wiegel – HAN university of applied sciences, vincent.wiegel@han.nl Introduction Lean is applied in wide range of economic sectors (application domains) ranging from industry to services, from health to education. Domains that do differ markedly in structure (private vs public), drivers (profit vs non-profit), local vs global, customer freedom vs patient dependency, technologically advanced vs basic, tangible products vs intangible services, etc. etc. Given these wide ranging application domains and their differences the Lean practice is remarkably uniform. That raises some questions. Is Lean indeed an universally applicable operations management strategy? If not, the Lean practice must fall short. What adjustments are required to account for the various differences in its application domains? If it is an universal strategy why do we see the proliferation of domain specific Lean flavors (Lean health, Lean government, Lean education, etc.)? And why are these flavors existing? Various authors have looked into Lean applications in specific domains and noted serious lack of progress. Some attribute this to general challenges of leadership, ownership, wrong scoping, etc. If this is the case there is no need to speak of specific strands of Lean. We will argue that there exist more structural differences that need to be accommodated when applying Lean in different domains. 1 Lean as an (operations) management strategy This paper begins when we revisited our efforts in applying Lean in the field of higher education. Exercising some Hansei the key questions were: why is or ought there be anything such as Lean education? And, if affirmative, what is about? These question evoked two observations that seem paradoxical. One, organization and management theories are mostly general, i.e. not domain specific. This in contrast to the tendency in Lean where we find Lean healthcare, Lean government, Lean services, etc. Two, organization and management theories (e.g. Porter, Montgommery) offer several variables and mechanisms to account for and adjust to structural, environmental and technological differences that characterize various domains and organizations. This in stark contrast to Lean theory that is remarkably void of any specific or adjustable variables and mechanisms. It might be that Lean theory is an universal theory that needs no adjustments. Another explanation, more plausible we argue, could be that Lean as it stands is undertheorized. Lean started as an operations management strategy. Since operations is about processes and everything is a process Lean has gradually moved into areas outside operations such as for example sales and HR. Nonetheless it remains in essence an operations management strategy. Its core assignment is to deal with the contingencies and constraints posed by the environment in which the organization operates and the contingencies and constraints of the technology deployed by the organization (Thompson, 2008).
  2. 2. A contingency framework for Lean 2 V.Wiegel – Draft version – under review and not open for citation 2 Contingencies One of the key objectives of an operations management strategy is to deal with and exploit the uncertainties and contingencies an organization faces. The degree, type and source of contingencies varies across organization within a domain and across domains (Thompson, 2008). Our simple argument is the following. Organizations operate in varying environments, with varying technologies. They adapt their structure and operations strategies accordingly. Lean as a strategy for operations management needs to facilitate these adaptions if it is to be successful. In as far as Lean has not been adapted / or capable of adaptation we would expect Lean to be unsuccessful in application domains (e.g. public services, education, healthcare) that differ markedly from the application domain for which it was originally developed (large scale industrial production). 3 Falling short Various authors have evaluated Lean practices in relatively new application domains such as healthcare and education. The general tenor seems to be that the Lean practices and impact fall short of expectation and performance compared to other domains. The reasons for this failure can be grouped in two groups: one, general (change) management related issues, two, structural, domain specific issues. An instance of the first group is provided by Antony et. al. (2012). Radnor et. al. 2013) provide an example of the second group. Our argument is not one of the two groups being wrong or incorrect. Change management capabilities in HE might poorly developed. Education as with all public services might be different in that it involves, for example, strong customer participation in the production of the service. In the first case the redress is practices and execution. In the second case the challenges to Lean are more fundamental and of a conceptual nature. Antony et. al. (2012) conclude that Lean is fit for higher education but that application is lagging far behind compared to other application domains. They note that Lean for HE faces various challenges. None of these challenges however are specific to the nature of higher education. Lack of visionary leadership or process ownership would be a challenge in any application domain. This lack might be (though arguably is not) more prevalent in higher education than in other application domain but does not relate to the structure of the HE application domain. The redress would be in change management practices. We argue that though these challenges do exist they are not specific to HE. More importantly they overlook structural differences from the traditional Lean application domain that requires adaptations. 4 A contingency framework for Lean 4.1 A framework Following Klingenberg (forthcoming) and Thompson (2008) we use a framework to define the various sources of contingency. A set of six elements that are a source of contingency define our framework1 . The degree of uncertainty associated with these contingency has implications for the operations strategy deployed. In our case we argue that it determines to some extent the use and usefulness of the various Lean concepts and tools (section five) and possibly the need for adjustments. 1 Our definition of contingency sources is such that it encompasses Slack’s four V’s. Volume, Variety, Variation and Visibility.
  3. 3. A contingency framework for Lean 3 V.Wiegel – Draft version – under review and not open for citation 4.2 Six elements of the contingency framework So we have six elements that together comprise our contingency framework. 1. Output variation 2. Co-production 3. Interdependency 4. Technology 5. Input variation 6. Informational nature Ad 1) Output variation Output variation refers to the variation in demand with regard to both quantity and specification of the output, i.e. the products and services. Output quantity can be stable or vary strongly either with or without patterns. Some products are in demand according to a stable, regular pattern and in high quantities and little variation in specification. Ad 2) Co-production Co-production refers to the extent in which the customer has (not) a large contribution (input and continued involvement) in the actual production of the good or service. Production and consumption appear simultaneously and cannot (always) be clearly distinguished. The production process can be part of the actual product or service. Ad 3) Interdependence Various parts of an organization are interdependent. Thompson (2008:54-55) distinguishes three types of interdependence: a) pooled, b) sequential and c) reciprocal. In the instance of pooled dependence parts of the organization are not necessarily interacting but nonetheless require (every) other part to make its contribution for the organization and each to be successful. In the case of sequential dependence the order and direction of the interdependence is specific. It is asymmetrical in that one requires input of another part. The most complex type of interdependence is constituted by reciprocal interdependence in which the involved parts of the organization need each other to complete the working. In the context of our framework this is important because “…the three types of interdependence are increasingly difficult to coordinate because they contain increasing degrees of contingencies.” (Thompson, 2008:55) Ad 4) Technology Technology refers to the method by which the product or service is rendered / produced. Though we tend to think of technology as tangible, technical matter in the sense in which it is used here a teaching pedagogy is also a technology as is therapy for example. Technology has two dimensions that are important in the context of this paper: a) linkage (Thompson 2008, pp 15-18), b) predictability. Both are indicators for the uncertainty associated with technology. Linkage refers to technology that is either  long-linked – serial linked, interdependent activities applying (parts) of technology – mass production assembly lines are a typical example;
  4. 4. A contingency framework for Lean 4 V.Wiegel – Draft version – under review and not open for citation  mediating – technology linking groups of customers requiring different but complementary services – insurance and banking business are typical examples;  intensive – multiple techniques applied in various configurations according to the feedback from the customer and or object – therapy and construction are typical examples. Predictability refers to the extent in which the outcome of the process in which the technology is applied can be reliably predicted. And whether any uncertainty is definable in individual instances. Ad 5) Input variation Input to the production process can vary in quantity and specification. The extent in which the input is constant and homogeneous or not is a contingency that creates uncertainty. It creates larger demand on the technology and organization processing the input. It requires greater flexibility both in capacity and robustness in dealing with variation. A university or a hospital typically are dealing with high input variation. Traditional chemical industry on the other hand deals fairly well controlled resources as input to its processes. Ad 6) Informational nature Products and services seldom are exclusively informational or material in nature. Most services has physical components and most material products require some information for its use. The larger the informational content of the product or service c.p. the larger the uncertainty. Information in as far as it is intended for communication with human agents is more ambiguous than material. Each of the elements in the framework is a source of varying uncertainty. As it is one of the goals of an organization and particularly of operations management to deal with contingencies it helps to determine the challenges that an operations management strategy must answer. In dealing with these challenges the operations management strategy deploys various concepts and tools. These concepts and tools might (will) need tailoring to be fit for purpose. If we characterize the different application domains through this framework we might find significant differences that require adaptions of the Lean concepts and tools used. If this is the case it might explain why Lean as an operations management strategy is more or less successful. 5 Adjustment of Lean concepts based on the contingency profile of an application domain The upshot of our analysis is that it might be the case that within an application domain structural differences can be very large. Sub-domains might have more in common with sub-domains from other application domains than with sub-domains within the same domain. E.g. trying murders has more in common with engineer-to-order gas treatment systems than with the processing of speeding tickets. The latter might be more similar to the industrial mass production of paperclips. The contingencies that an organization faces determines in part the way it is organized. And more importantly for our current purpose it determines the operations management strategies. The way Lean is applied and what concepts and tools can be and are used. Given that Lean has been developed in and for a rather specific situation implies that new application domains might require a different and/or adapted set of concepts and tools. E.g. organizations that face a high degree of
  5. 5. A contingency framework for Lean 5 V.Wiegel – Draft version – under review and not open for citation variation in demand with small quantities will have trouble implementing concepts such as takt and Kanban. 6 Characterizing Lean for Higher Education Using the Contingency framework for Lean we now try to identify some defining aspects of Lean for Higher Education. As uncertainty grows and an organization is characterized more by the right-hand extreme of our scales and organization tends to be more decentralized with quasi-autonomous professionals working in small groups but with some strict, central rule setting. An university is a typical example. The various faculties are strongly separated with institutes and research groups that are largely autonomous. They are governed though by a set of strict, central rules regarding financing, HR policy, student treatment, quality monitoring, etc. Otherwise they face very different customers (defined as both students, and as organizations as future employers and consumers of research output). Different is numbers of students, varying degrees of knowledge and attitudes of students, using different technologies (e.g. arts classes versus nuclear power studies), etc. The heterogeneity of such an organization is much larger than other larger organizations such as a copper miner. The introduction of Lean by a central staff in the former is much more like introducing Lean in ten organizations than the formally one that it is. In higher education demand varies a little but the timing, seasonal influences are well-known and mostly determined by law. The output qualifications are relatively straight forward and determined at national level. The student is heavily involved in the learning process and both input and output. The teacher and student, and the students are heavily and reciprocally interdependent. The teacher applies various techniques making the technology intensive. The effectiveness of the various techniques is at times know though varies strongly among individual cases (students). Students come with different backgrounds (former high school education, family situation), different sex (boys and girls have markedly different study preferences and respond differently to the ways information is presented), different ambitions, preferred learning style, prior knowledge, social skills, etc. All these factors cause a high degree of variation in input. Finally, teaching is a predominantly information oriented activity. Information that is ambiguous, the impact of which is further enlarged by the preceding aspects of input variation and uncertainty related to the applied technology. The following characterization of Higher Education presented in figure 2 indicates why adjustments to Lean might be in order. We think it would be naïve to assume that the same tools and techniques apply to education as to mass production without any further adjustment. Though there is a prima facie case for the application of Lean to HE there is also a prima facie case for adjustment. The lack of success so far might have to do a lot with the lack of change management skill but also probably with differences in application domain. A proposition that deserves at least consideration based on the analysis provided in this paper.
  6. 6. A contingency framework for Lean 6 V.Wiegel – Draft version – under review and not open for citation Figure 1 Characterization of Higher Education
  7. 7. A contingency framework for Lean 7 V.Wiegel – Draft version – under review and not open for citation Literatuur Antony, J., Krishan, N., Cullen, D., Kumar, M.,, 2012, Lean Six Sigma for higher education institutions in International Journal of Productivity and performance management, Vol. 61 Klingenberg, W., Slomp, J., Gaalman, G., (forthcoming) Mass customisation - a contingency framework Larsson, R., Bowen, D.E. (1989) “Organization and Customer: Managing Design and Coordination of Services”, Academy of Management Review, Vol. 14(2), pp. 213-233. Mazzocato, P., … , 2010, Lean thinking in healthcare: a realist review of the literature, in Qual Saf Health Care 2010;19:376-382 Montgommery, C., 2012, The strategist, HarperBusiness Porter, Michael E., 2014, "What is strategy?" Harvard Business Review 74.6 (1996): 61 Radnor, Z., Osborne, S., 2012 (online), Lean, a failed theory for public services in Public management review, Volume 15, Issue 2, 2013 Sanders, N., 2014, The Definitive Guide to Manufacturing and Service Operations Scott, R.W., 2008, Introduction to the transaction edition: Thompson’s bridge over troubled waters Slack, N., Brandon-Jones, A., Johnston, R., 2013, Operations management 7th edition Thompson, J.D., 2008, Organizations in action,

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