Pilot Study on Lean Manufacturing Implementation

PILOT STUDY ON LEAN MANUFACTURING
IMPLEMENTATION BETWEEN BUMIPUTERA
AND NON BUMIPUTERA SME AUTOMOTIVE
VENDORS
REDZA BIN AMIN SUGGUN
(2013633972)
BACHELOR ENGINEERING (HONS.) MECHANICAL
UNIVERSITI TEKNOLOGI MARA (UiTM)
JULY 2016

“I declared that this thesis is the result f my own work except the ideas and
summaries which I have clarified their sources. The thesis has not been accepted for
any degree and is not concurrently submitted in candidature of any degree”
Signed : ……………………
Date : ……………………
Redza Bin Amin Suggun
UiTM No: 2013633972

“I declared that I read this thesis and in our point of view this thesis is qualified in
term of scope and quality for the purpose of awarding the Bachelor Degree of
Mechanical Engineering”
Signed : ……………………
Date : ……………………
Supervisor or Project Advisor
Nurul Syuhadah Khusaini
Faculty of Mechanical Engineering
Universiti Teknologi MARA (UiTM)
40450 Shah Alam
Selangor

Accepted:
Signed : ……………………
Date : ……………………
Course Tutor
Dr. Wan Emri Wan Abdul Rahman
40450 Shah Alam
Selangor

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PILOT STUDY ON LEAN MANUFACTURING IMPLEMENTATION
BETWEEN BUMIPUTERA AND NON BUMIPUTERA SME AUTOMOTIVE
VENDORS
REDZA BIN AMIN SUGGUN
(2013633972)
A thesis submitted in partial fulfillment of the requirements for the award of
Bachelor Engineering (Hons) (Mechanical)
JULY 2016

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ACKNOWLEDGEMENT
In the name of the Almighty, Allah SWT, I would like to express my gratitude
and appreciation to my supervisor, Puan Nurul Syuhadah Khusaini for her continuous
support, guidance, help and encouragement throughout the whole duration of the thesis
preparation until its completion. I would also like to thank my parents for their
undivided support and believe for the whole duration of my degree course. They also
inspired me to keep moving forward. Thank you to all Faculty of Mechanical
Engineering UiTM lecturers and my friends who guide me and help me throughout the
duration. Special mentions to Mr. Luqman Hadi Azahar and Perushaan Otomobil
Nasional, for their co-operation and generosity in helping me to gain every information
for this project.

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ABSTRACT
This project describes a study on the differences in implementation of lean
manufacturing among Bumiputera and Non-Bumiputera manufacturing companies.
We have chosen PROTON vendors as our point of reference for this project. Other
factors that give these international vendors major advantages when it comes to
producing goods and products are also being studied. Because there are cases where
Bumiputera small and medium enterprise (SMEs) companies that produced high
quality product and meet the standard required by Malaysian Automotive Industry to
compare to Non-Bumiputera vendors hired by Proton. Therefore, it is interesting to
see if there are any other factors that made them prime candidates and preferences for
Proton to become one of its vendor.

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TABLE OF CONTENTS
CONTENTS PAGE
PAGE TITLE i.
ACKNOWLEDGEMENT ii.
ABSTRACT iii.
TABLE OF CONTENTS iv.
LIST OF TABLES viii.
LIST OF FIGURES ix.
LIST OF ABBREVIATIONS x.
CHAPTER 1 INTRODUCTION
1.1 Background Study 1
1.2 Brief Introduction 1
1.3 Problem Statement 2
1.4 Research Objectives 3
1.5 Research Questions 4
1.6 Scope of Works and Limitation of Study 5
1.7 Significance of Study 6

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CHAPTER 2 LITERATURE REVIEW
2.1 Overview of the Small And Medium Enterprise SMEs 7
2.2 Bumiputera and Non Bumiputera Companies in SMEs 8
2.3 Manufacturing 10
2.4 Lean Manufacturing 11
2.5 Automotive Industries and Lean Manufacturing 12
2.6 Decision Making and Challenges in Implementing 13
Lean Manufacturing
2.7 Benefits of Lean Manufacturing 16
CHAPTER 3 RESEARCH METHODOLOGY
3.1 Introduction 18
3.2 Research Design 18
3.3 Sampling Frame and Population 22
3.4 Sample Size 23
3.5 Distribution of Questionnaire 24
3.6 Data Analysis 24
CHAPTER 4 RESULTS AND DISCUSSIONS
4.1 Pilot Study 25
4.2 Demographical Studies 26
4.2.1 Years of Establishment 26

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4.2.2 Company Ownership 27
4.2.3 Company Size 28
4.2.4 Company Nature of Business 28
4.3 Overall Analysis 29
4.3.1 Summary Analysis 29
4.3.2 Person-Item Distribution Map 31
4.3.3 Item Factor Analysis 33
4.4 Analysis by Construct 35
4.4.1 Lean Manufacturing Practices 35
4.4.2 Investment 39
4.5 Differential Item Functioning 42
4.5.1 Effect of Organizational Years of Establishment 43
4.5.2 Effect of Company Ownership 44
4.5.3 Effect of Company Size 45
4.5.4 Effect of Company Nature of Business 46
4.6 Proton’s View and Answer 49
4.6.1 On Bumiputera Vendors 49
4.6.2 On Lean Practices 49
CHAPTER 5 CONCLUSIONS AND FUTURE WORKS
5.1 Introduction 50
5.2 The Level of Lean Manufacturing Implementation 51
5.3 Lean Manufacturing Implementation Sequence 51
5.4 Limitation of Research 52
5.5 Future Works 52

vii
REFERENCES 54
APPENDICES 57
Appendix A Survey Questionnaire 58

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LIST OF TABLES
TABLE TITLE PAGE
1.1 Research Questions 4
3.1 Minimum Sample Size Range 23
4.1 Years of Establishment 27
4.2 Company Ownership 27
4.3 Company Size 28
4.4 Company Nature of Business 29
4.5 Summary of 25 Persons Measured 30
4.6 Summary of 11 Items Measured 30
4.7 Summary of Item Misfits 33
4.8 Summary of Six Items for Lean Manufacturing Practices 36
Construct
4.9 Item Validity for Lean Manufacturing Practices Construct 37
4.10 Summary of Five Items for Investment Construct 39
4.11 Item Validity for Investment Construct 40
4.12 Consolidated DIF: Organizational Years of Establishment 44
4.13 Consolidated DIF: Company Ownership 45
4.14 Consolidated DIF: Company Size 46
4.15 Consolidated DIF: Nature of Business 48

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LIST OF FIGURES
TABLE TITLE PAGE
1.1 PROTON and DRB HICOM Logo 3
2.1 Example of Manufacturing Process 11
2.2 Example of Assembly Line 12
2.3 List of Lean Tools 14
3.1 Research Methods Flowchart 20
3.2 Research Methods Flowchart 21
4.1 Person-Item Distribution Map (Overall) 32
4.2 Scalogram Analysis (Overall) 34
4.3 Scalogram Analysis (Lean Manufacturing Practices) 37
4.4 Person-Item Distribution Map (Lean Manufacturing Practices) 38
4.5 Scalogram Analysis (Investment) 41
4.6 Person-Item Distribution Map (Investment) 42
4.7 Consolidated DIF t-Value: Years of Establishment 44
4.8 Consolidated DIF t-Value: Company Ownership 45
4.9 Consolidated DIF t-Value: Company Size 46
4.10 Consolidated DIF t-Value: Company Nature of Business 48

x
LIST OF ABBREVIATIONS
LM - Lean Manufacturing
MnSq - Mean Squared
DIF - Differential Item Functioning
ZStd - Z Standard

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CHAPTER 1
INTRODUCTION
1.1 BACKGROUND STUDY
This chapter give details about the pre study subject of the research including
problem statement, research objectives, scope of study, and significance of study.
1.2 BRIEF INTRODUCTION
Manufacturing is a process where raw materials (input) being converted into
products (output) which comply to design specifications. Manufacturing also can be
stated as transformation of materials and information into goods for the fulfilment of

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human needs. The process of production depend upon the nature of the product and
customers need (Yusuff M, 2009). Type of process is determined by the size and
volume of products.
Several aspects that need to be considered to create a product are:
i. Resources
ii. Materials
iii. Information
iv. Customers
v. Finances
vi. Staffs
It is important to consider these aspects before we start to create a product.
Manufacturing industries has undergone several evolutions. Manual and conventional
process have been replaced by fully automated process nowadays. Revolution are
needed in manufacturing to reduce the risk and hazards for the employee, to increase
product variety, quality and productivity. This justification is aligned to the lean
manufacturing that has become one of the most important method in manufacturing
industry today.
Lean manufacturing is a method of eliminating waste within manufacturing
system. The aim of this method is reduce waste and cost production for a better
productivity. Basic types of waste in manufacturing are:
i. Transportation
ii. Inventory
iii. Movement
iv. Waiting
v. Overproduce
vi. Over-process
vii. Defects
These basic types of waste can be categorized into three categories, Muda, Muri
and Mura which means waste, waste created through overburden and waste created
through unevenness respectively.

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1.3 PROBLEM STATEMENT
PROTON is one of Malaysia national automotive project and has become one of
household name in local automotive industries. Vendors from local and abroad have
been hired to supply and manufactured its parts. However, the likelihood for the
Bumiputera vendors to be hired by PROTON is lower to compare with Non-
Bumiputera vendors. Malaysian Automotive Industries (MAI) has set standards for
manufacturing in small and medium enterprise which includes the implementation of
lean manufacturing. Fellow candidates have to meet the standard set to be considered
or hired as vendors.
For this project, we would like to study the differences in implementation of
lean manufacturing between Bumiputera and Non-Bumiputera among PROTON
vendors. Also, we would like to know other factors that give these Non-Bumiputera
vendors major advantages when it comes to producing goods and products due to a
request from a Bumiputera vendors, as they are concerned for there are cases where
Bumiputera small and medium enterprise (SME) companies produced high quality
product and meet the standard required by MAI have been overlooked by PROTON.
Therefore, it is interesting to see if there are any other factors that made them prime
candidates and preferences for Proton to become one of its vendor.
Figure 1.1

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1.4 RESEARCH OBJECTIVES:
The objectives for this study are:
i. To investigate the degree of Lean Manufacturing implementation among SMEs.
ii. To identify the implementation sequence of Lean Manufacturing elements among
SMEs.
iii. To provide a preliminary overview of differences of Lean Manufacturing
implementation between Bumiputera and Non-Bumiputera companies.
1.5 RESEARCH QUESTIONS
Table 1.1
Objectives Research Questions
To investigate the degree of Lean
Manufacturing implementation
among SMEs.
1) Lean implementation is important
for the manufacturing industries
2) Lean implementations are important
aspects and considerations for the
company productions and
productivity.
3) The company apply lean thinking
and lean tools.
4) The company leaders ensure
everyone are involved in lean
manufacturing implementation.

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To identify the implementation
sequence of Lean Manufacturing
elements among SMEs.
5) The company apply lean thinking and
lean tools
6) The company uses lean tools such as
Kanban System, 5s and Kaizen as
guidelines in order to make decision
in lean manufacturing
7) The company uses concepts such as
Total Quality Management, Just in
Time, Six Sigma and etc. in order to
improve lean implementation and
productivity.
To provide a preliminary overview of
differences of Lean Manufacturing
implementation between Bumiputera
and Non-Bumiputera companies.
8) The company provides training for
the employee.
9) The company invests on employee
empowerment.
10) The company uses Human
Resources Management practices to
improve the standard, quality and
knowledge of the employee
11) The company provides sufficient
facilities for the employees.
12) The company invests on advanced
and up-to-date machineries for
production.

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1.6 SCOPE OF WORK AND LIMITATIONS OF STUDY
Main purpose of the study is to determine lean implementation and practices
among PROTON Bumiputera and Non-Bumiputera companies. The origins of the
vendors is also one of the scopes for the study.
Manufacturers for smaller parts such as fastener, door hinge and absorbers are the
ones that have been the subject of the studies. However, the manufacturing process of
the companies does not affect the outcomes of the study.
1.7 SIGNIFICANCE OF STUDY
The study will highlight the traits that are important for a company to be
successful and achieve World Class status in terms on Lean Manufacturing
implementation. This study also can be theoretical guidance for organizations
recognize Lean Manufacturing practices, its technique and degree of implementation
to ensure an accomplished implementation. Although the explanation for this study
only in the general terms, it can give preliminary ideas and basic pictures to the
organizations who want to implement Lean Manufacturing. Ultimately, this study
provide an initial insight on differences between Bumiputera and Non-Bumiputera
companies in their working culture and lean implementation which is important if the
Bumiputera companies want to be more competitive in manufacturing industry and to
be able to sustain through time.

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CHAPTER 2
LITERATURE REVIEW
2.1 OVERVIEW OF THE SMALL AND MEDIUM ENTERPRISE SMEs
According to the website www.thefsegroup.com, European Commission
defined a small or medium-sized enterprise or SME as a business or company:
i. That has less than 250 employee;
ii. Annual turnover not exceeding €50 million (approximately RM 229 million) or an
annual balance-sheet total not exceeding €43 million (approximately RM197 million);
iii. Those companies with capital or voting rights, 25 per cent or more is not owned by
one enterprise, or jointly by several enterprises, that fall outside this definition of an
SME. This threshold may be exceeded in the following two cases: (a) if the enterprise
is held by public investment corporations, venture capital companies or institutional
investors provided no control is exercised either individually or jointly, or (b) if the
capital is spread in such a way that it is not possible to determine by whom it is held
and if the enterprise declares that it can legitimately presume that it is not owned as to

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25% or more by one enterprise, or jointly by several enterprises, falling outside the
definitions of an SME.
However, contrary to United States of America, any firm from a small-office
home-office (SOHO) to a huge corporation may be classified as SME. To be precise,
firms included in Russel indices such as Russel 2500 index and Russel Midcap index
are classified as SME.
In Malaysia, the definition of SMEs as approved by the National SME
Development Council for manufacturing sector is a company or enterprise that annual
turnover less than RM 50 Million and has 200 or less workers. SMEs companies and
ventures have several advantages to compare with big companies. According to
Rymaszewka A. D. (2013) manufacturing process are flexible for the small firms and
they can respond quicker to indifferent consumer’s needs by being able to address the
request for variety better. The fact that SMEs are often young companies with younger
staff, the willingness to become more innovative and take risk are increased.
2.2 BUMIPUTERA AND NON BUMIPUTERA COMPANIES IN SMEs.
Bumiputera is a word extract from Sanskrit word Bhumiputra, which means
the “Son of the Earth”. The official definition which is widely used in Malaysia
whereby it taking up ethnic Malays as well as other indigenous ethnic group. In
Malaysia, generally all Malays are considered as bumiputeras. A company can be
regarded as “Bumiputera-controlled-company” when either one of the following
criteria is fulfilled apart from 30 per cent equity ownership by bumiputeras in any
listed company in Malaysia. The criteria for Bumiputera companies are:
i. 50 percent of the equity must be owned by Bumiputera shareholders.
ii. Individual Bumiputera shareholder must own at least 35 percent of the equity.
The shareholding of the Bumiputera group is not related directly or indirectly with
any non-bumiputera group. Bumiputera group is the rightful owner and have total
control attached to its shareholding and free from any outside influence.

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However, scenario in manufacturing industries in Malaysia today shows that
Non-Bumiputera companies are controlling and have major influence in the industry
to compare with Bumiputera companies. This scenario is by no means happens by
accident. Hamidon S. (2009), stated that one of the factor that are hindering the
development of Bumiputera entrepreneur is attitudes and mindsets. Negative attitudes
and mindsets are often associated with Bumiputera entrepreneur especially the Malay
ones. They are too greedy and eager to get rich fast and easy. They (Malays) always
look for a short cut in doing business rather than going through the process of creating
and establishing. Another negative attitude that can be observed is materialistic culture
of the Malay society. Material consumption is regarded as an absolute measure of
success amongst the Malay community which then will lead them to spend lavishly
for their personal pleasure rather than to develop their business.
While according to Kamal E. M and Flanagan R., (2014) one of the factors that
are hampering the progress of Malay entrepreneurship is method of approaching
business. Bumiputera entrepreneur and Non-Bumiputera have different business
approaches. In this case we use Chinese as our prime example, Dependent on
government project have been one of the traits that is popular among the Bumiputera
entrepreneurs. They refrain themselves to tender for private projects, in fact some of
the cases, they never tender for the private projects. Some suggested that the stiff
competition from the Chinese contractors makes it difficult for small Bumiputera
contractors to bid for private projects. The Chinese took full advantages in private
project sector as they cannot bid for government projects due to “Non-Bumiputera”
status. Another factor that Chinese contractors are competitive is they are more
commercially aware than the Bumiputera companies in their effort to gain new
information and knowledge to improve and increase their productivity. However, it
cannot be said that everything is different between Bumiputera and Non-Bumiputera
companies as they have similarities in working attitude where both are equally
hardworking and have same goals to survive and remain in the business for as long as
possible.
Another factors that is mentioned by Kamal E. M. and Flanagan R. (2014),
small number of employees might contributed to the lack of development. For SMEs,
they did not directly employ their own site labor, in fact they rely heavily on the use
of sub-contraction and often than not most laborers did not have any related skills. The

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contractors suggested that it is not economical for them to hire their own labor because
of limited numbers of project and there is no guarantee in continuity of work and
projects. Foreign labors have been one of the preferences for the SMEs are as they
have wide availability and low on wages. Therefore, the contractors have little
motivation to increase their productivity. Another comparison that can be drawn
between Malay and Chinese companies is Malay company lack of co-operation and
networking. Disinclination among the Malays is preventing them to co-operate and
help one another to share their expertise and knowledge and further improve
themselves to be more competitive with Non-Bumiputera companies. Therefore, this
will create division and prevent Malays from being unite which then will only lead
them to undermine the business success of their own kind instead of supporting and
helping one another. To compare with the Chinese who will help and provide any kind
of supports to most of their own people rather than competing with one another.
These are some of the factors that differentiate between Bumiputera and Non-
Bumiputera companies regardless of sectors that they are involved in. However, we
need not to jump into conclusion too fast by saying that Bumiputera companies are all
bad, because there are several big names in the industry that are owned by Malay and
Bumiputera such as Sapura Group of Companies. But we must admit that there a lot
to be desired and improve in order to be competitive with non Bumiputera companies
2.3 MANUFACTURING
Manufacturing is a process of converting raw materials, components or parts
into a product that satisfy customer’s needs and expectations. Commonly consist of a
man-machine setup with section of labor in a large scale production. Common process
that are used in manufacturing such as casting, shaping, pressing and joining, to name
a few. Manufacturing process are widely used nowadays. Automotive industry is one
of those that is commonly associates with manufacturing, because manufacturing often
related with large scale or mass production. Furthermore, automotive manufacturing
industry can be considered as technological trend setter among manufacturing

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industries. Manufacturing also often linked with frequent changes in demand thus it
is in line with the automotive industries that are evolving every day at a high pace.
Figure 2.1
2.4 LEAN MANUFACTURING
Before lean manufacturing was introduced, manufacturing sector were using
Cellular Manufacturing (CM) as one of the ways to reduce set-up time and material
handling cost. According to Kant R. et al. (2015), Cellular Manufacturing also referred
as group technology (GT) in manufacturing context, involves grouping of parts based
on similarities and formation of machine cells in such a way that a group of parts could
be processed in a machine cell. In 1990, lean production has been introduced and it is
proven that lean production produced higher productivity strategy.
Formal documentation about lean manufacturing was published in 1990.
However, Toyota Production System were practicing lean manufacturing long before
the formal documentation is published, after the World War II to be exact. The persons
responsible in introducing the strategy are Taiichi Ohno and Shigeo Shingo from
Japan. It focus on reducing the cost of production by reducing the unnecessary
activities. Main features of Lean Manufacturing are continuous flow, just in time,
standardization and synchronization. This strategy can be achieved through
eliminating waste within the manufacturing system, known as Muda. Mura and Muri,

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terms which describe as waste created through overburden and unevenness are also
needs to be taken into account as afromentioned in the introduction.
2.5 AUTOMOTIVE INDUSTRIES AND LEAN MANUFACTURING
Today, automotive industries are growing rapidly with new technologies and
new cars being launched almost every day. Big names like Mercedes Benz,
Volkswagen and BMW are among the prime contributors towards the growth of the
industries and technologies revolved around it. Automotive product industry can be
defined as company that produced original equipment and “aftermarket” products for
motor vehicles. Original parts are products that go into the manufacture of a motor
vehicle or acquired by the assembler for its service network to be used as an
aftermarket part. Different from aftermarket parts, it is separated into two parts,
replacement products and accessories. Replacement products are built to replace OE
parts as they become worn out. As for accessories products, they are made for comfort,
convenience, safety, performance or customization and it is sole separately from the
original sale of the motor vehicle.
Figure 2.2
According to Goss J. in her article, Henry Ford and the Assembly Line, Henry
Ford began production of the Model T automobile in 1908. This creation has been the

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pioneer of mass production assembly line. This idea was based on the concept of
simply assembling interchangeable components parts. During this time, Henry Ford
developed an assembly stands where the whole vehicle was built. However, he found
out that this method is time consuming. Ford soon realized that walking from stand to
stand are time wasting and in 1913, he found the solution to this problem by
introducing assembly line, a conveyor that move the vehicles to the assembly station.
This ideology and method can be declared as the first lean manufacturing method been
used in automotive industries. After the World War II, Taiichi Ohno and Shigeo
Shingo from Toyota Production System (TPS) became one of the first organization to
develop a method that reminiscence the lean manufacturing. According to Walton D.
et al. (2010), Lean manufacturing and Toyota Production System (TPS) are one and
the same. Toyota involved in automobiles industries in mid-1930s with parts are being
acquired from General Motors.
2.6 DECISION MAKING AND CHALLENGES IN IMPLEMENTING LEAN
MANUFACTURING
Implementation of lean manufacturing involves choosing appropriate tools
from the lean tools to achieve process fineness. However, do not over focus on the tool
benefit and striving for process excellence but overlooking the sustainability of the
lean tool within specific work culture. According to Bottani E. (2013), there are several
questions needs to be ask in order to select lean tools such as:
i. What is the benefit of the lean technique under consideration and how likely or difficult
is it to achieve? (Is it worth doing this?)
ii. How do the usage of the lean technique and its benefits relate to the sustainability of
the change intervention? (Would doing this have long-term benefits?)
Lean manufacturing comprises many set of tools and techniques. The tools and
technique are illustrates in the diagram below.

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Figure 2.3
Work has been done on the classification and relevance of tool to specific waste, but
it is still not possible to identify which tools are most suitable in which situation. As a
result, those who implement the tools often lack the means to make informed decisions
about which tools they are using.
Kovacheva A. (2010) stated in her articles, Challenges in Lean Implementation,
there are five factors that are significant for lean implementation:
i. Change strategy targeted and holistic:
- Managers often implement lean tools or technique without better understanding as a
whole. On the other hand this more tentative approach is being used because
employees are not open to new ideas. Focused training needs to be provided in order
to educate among personnel of the key principles of waste elimination.
ii. Effects of company culture:
- In order to make the employees to think differently, changes of mindset are needed as
it gives people an aim in their working life and have the potential to change attitudes
and are more willing to contribute to company’s improvement initiatives. Difficulties
to change the existing ways of doing things is the result of stronger management
control makes the organization structure bureaucratic.
iii. Product focus:
- Lean changes need to be focused on the specific product value stream, so that the
control over resources to be dependent mainly on the improvement team.

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iv. Senior management commitment:
- Consistency in management commitment is an important element in effective
implementation of changes in organizations (Kotter 2007)
v. Timing for performance improvements:
- Companies need to be prepared for the lean transformation along with reacts quickly
to the change and even taking a risk and later deal with consequences.
Kropf P. (n.d) stated that three common scenarios that are usually faced by
companies in implementing lean manufacturing are:
i. Challenges with employee empowerment,
ii. Other functional groups
iii. Past experience.
One of the most important aspects in lean manufacturing is to make decision
that are close to the customer. This means the decision are made by the people that
position at the bottom of the organizational chart that are as close to the manufacturing
process as possible. New senior manager may open to this idea only to discover that
those who are responsible to make the decision are not ready yet. This will leave no
choice for the new manager other than take the additional decision-making workload
while coaching the team to become empowered. As a result, this situation will slow
down the lean implementation progress.
A new senior manager may not expect the level of reliance of other functional
groups. Usually, this aspect have been taken for granted in previous jobs. For example,
an automotive supplier decided to switch from assembly-line-based system towards a
cellular layout. Previously, the employees performed a single job at a single
workstation. Although products were built on a assembly-line, the inventory will
eventually piled up between operations. Production could not run smoothly without
the presence of all employees which will results in complaints among some employees
who had to accept the unwanted behavior of “few minutes here or there did not matter”.
Finally, a new manager may find it difficult to implement lean manufacturing
with new employer that has less to do with the company itself and more with the
manager’s skill set. According to Kropf P. (n.d), “A lean professional's ability to
transform a traditional manufacturer into one that embraces the Kaizen philosophy is
greatly co-related with whether that person was part of a company's lean
transformation from the ground up as opposed to joining an already well-working

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production system”. Therefore, it can be said that an individual who are more involved
with the lean culture will find it easy to implement it in another company.
In conclusions, to implement lean manufacturing and apply lean tools, it takes
a great team effort in order to make this method a success. It can only bring benefits
and increased the productivity of a company.
2.7 BENEFITS OF LEAN MANUFACTURING
The benefits that can be obtained by implementing lean manufacturing are well
documented:
i. Increased Efficiency
- This can be seen in the process line as line balancing will ensure every workers
involved is working in the most efficient way. The worker will follow the
standardization set by the company and it will leads to repeatability and increased
efficiencies as they just following the same method every time.
ii. Improve Quality
- Mistake proofing is put in place to prevent the occurrence of defects on the products
and further strengthen the process. This will result in improvement on the product
quality.
iii. Reduce Inventory Space
- As part of lean manufacturing, the products will be produced according to the number
of quantity desired. This will lead to reducing the inventory space for the excess
product as there are no overproduced products occurs.
iv. Problem Elimination
- Lean manufacturing emphasizes on eliminating problem and further investigate it to
prevent it from repetitive occurrence. Root cause analysis and cross functional teams
are used to pay attention to in correction of the problem.
According to Melton T (2005), by implementing lean manufacturing, business
process will be faster. For example the speed of response to a request for the business
process will be quicker, and as most business processes are linked to organizational

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supply chains, then this can deliver significant financial benefits to a company. Melton
T (2005), also added that typical benefits of implementing lean manufacturing are less
process waste, reduced inventory, reduced lead-time, less reworks financial savings
and increased process understanding. Thus, it is why this strategy have become a
revelation and one of the most important aspects in manufacturing industries. To
implement lean manufacturing, one has to develop lean thinking. “Lean thinking
focuses on developing a process that provides more value to the client.”, Walton D et
al. (2010). However, despite all this, many companies are not able and struggle to
transform themselves to become world-class companies by adapting lean
manufacturing.

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CHAPTER 3
RESEARCH METHODOLOGY
3.1 INTRODUCTION
This chapter explain the methodology used to find the solution for the
objectives of this study. All the activities carried out throughout the process are
explained in this chapter. Those activities are information prospecting (literature
review), survey (both pilot study and field study), survey and data analysis.
3.2 RESEARCH DESIGN
Method that have been chosen to conduct future survey has been decided. The
method chosen is to conduct Questionnaire type of survey. According
www.businessdictionary.com website, questionnaire is a list of research questions
asked to respondents in order to get specific information. The purpose of this method
is to collect appropriate data and make it comparable and amendable to analysis.

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The advantages of this method are:
i. Practical
ii. Information can be collected from a large number of people in a short period of time
in a cost effective way.
iii. The results can be quickly and easily quantified manually or by a software.
iv. Respondent has time to consider questions
v. The answers given by the respondent has longer period of validity as the responses
given by the subjects are available in their own language and version. Therefore, it will
prevent any wrong interpretation by the researcher.
Figures below show the research design for the whole process of this study. It includes
Literature Review, Data Analysis and Results Findings.

20
START
- Project title are given and the
process of study the subject is
started.
PROBLEM IDENTIFICATION
- International and non bumi
vendors are among the majority
vemdors for Proton.
LITERATURE REVIEW
- Insight review about the project
and subject being study.
Explaination of the studies being
made.
DECISION
- Decision about which type of
research method should be used
for this studies. Either
questionnaire, interview or
survey.
PRELIMINARY OUTCOMES
- Questions for the research
method are being constructed in
order to collect data
- The origin of the vendors have
been known.

21
Figure 3.1 & Figure 3.2
The project have been divided into two parts. The first part is the proposal,
where the topic of this project was proposed to the supervisor. The breakdown of the
proposal part is shown in Figure 3.1. After approval been given by the supervisor, then
the project can start. The first step taken to start the research study is problem
identification. For this topic, the problem identified is the number of Non-Bumiputera
vendors hired by PROTON is higher than Bumiputera vendors. Problem identification
process was followed by Literature Review. The purpose of this process is to have
RESEARCH
- Research are being conducted
in order to collect all the data
needed for the studies.
DATA CONVERSION
- Data collected will be convert into
coding by using SPSS analysis
software and Winstep.
DATA ANALYSIS
- Converted data will be
interpret using Rasch Model
analysis.
RESULTS
- Results outcomes from the
Rasch Model will be analyzed.
CONCLUSION
- Conclusion about the study
can be made if desired results is
achieved however failure to do
so, we have to re-analyzed the
data collected and repeat the
cycles

22
insight review and further study about the project. Explanation on manufacturing, lean
manufacturing, differences of Bumiputera and Non-Bumiputera and definition of
Small Medium Enterprises are acquired through this process. This process is important
because it gave better understanding about the project and problem. Next, decision
regarding information gathering method and analyzing method are being discussed
and made. For this project, we used questionnaire technique to gather information
about PROTON and its vendors. For data interpretation and analysis, we used Rasch
Model Analysis.
For the second part as shown in Figure 3.2, the research for the project began
whereby numbers of questionnaires were distributed to PROTON and its vendors to
collect all the data needed to analyze. After all the data needed have been gathered and
collected, it will undergo conversion into coding using SPSS analysis software and
Winsteps before data interpretation process takes place. All the data will be cumulated
and interpret using Rasch Model Analysis to achieve the objectives. Next, result from
the analysis are analyzed and conclusion can be made if the results achieved satisfy
the objective of the project.
3.3 SAMPLING FRAME AND POPULATION
As mentioned earlier in the objectives, the population for this study was the
vendors from PROTON. As with other industries, the automotive vendors consists of
small, medium and large companies. The definition for respective industries have been
mentioned in Chapter 2, Literature Review. Total of 1500 numbers of PROTON
vendors have been identified. However, only selected amounts of vendors satisfy our
criteria for the questionnaire to be distributed.

23
3.4 SAMPLE SIZE
Before distributing the survey questionnaires, it is important to recognize the
sample size from total population. Since this study used the Rasch Model as the
method of analysis, the consideration for the sample size was different as compared to
other studies. According to Linacre M. (1994), the Rasch Model is capable of
analysing as low as sixteen (16) respondents for a 95 percent of confidence level, and
as low as twenty-seven (27) respondents for a 99% confidence level. The details are
shown in Table 3.1.
Table 3.1
Source: Linacre
Total of 50 sets of questionnaire have been distributed to various companies in
order to get the minimum amount required. This is due to lower response among SMEs
companies. The distribution of the questionnaire started on the 20th
February 2016 and
ended on the 20th
May 2016. The data was analyzed from then onwards.

24
3.5 DISTRIBUTION OF QUESTIONNAIRES
The survey questionnaires were distributed to the organizations among
PROTON vendors, specifically in the manufacturing sector.
3.6 DATA ANALYSIS
The type of analysis chosen to analyze the data for this study was by using the
Rasch Model. The Rasch Model provides empirical proof of the mutual latent trait on
what are the likelihoods of a person (based on his or her ability) to correctly responds
to given items at different levels of difficulty of an established unit named “Logit”.
According to Khusaini N.S (2014) the Rasch Model is one of the best method for data
analysis since it provides a reliability score for both items and respondents. It also
summarizes total score completely based on a person’s view on variable rises from a
more necessary requirement. For example, if we compare the performance of two
students exam sheets. By using Rasch Model, we can know how they behave towards
each questions and to know the degree of understanding of the students towards each
questions. This features makes the Rasch Model unique.
For this study, the analysis concentrated on the reliability of the item and the
respondent, person separation and item factor analysis.

25
CHAPTER 4
RESULTS AND DISCUSSIONS
4.1 PILOT STUDY
Pilot study is important process to conduct before any operation to ensure the
operation is successful. It allows the author to identify problems that needs to be faced
before distributing the field survey. It is also important for the instrument development,
where issues, such as item difficulty, internal consistency and unidimensionality play
an important role are relevant in line with the topic of this project.
With the reference to Table 3.1, number of respondents must be selected for
this project and total of ideal number of respondents should be at 16 to 36 respondents.
Thus, 50 survey questionnaires were distributed, with a response rate of 50 percent.
However, according to the respondent feedback, some of the questions need to be
rephrased and some are not clear. Suggestions and recommendations received helped
the author to improve the content.

26
In this study, Winstep software version 3.72.3 was used to conduct Rasch
Model Analysis. This software provided figures and tables of the data analysis for the
author to study the fitness of the data. Analysis of the summary statistics was
conducted for the pilot study. Important parameters, such as item and person
reliability, Cronbach Alpha value and person measurements were confirmed so that
the data were suitable for further analysis. Further information will be explained in the
following subsections.
4.2 DEMOGRAPHICAL STUDIES
The demographic studies in the survey consists of years of the company’s years
of establishment, company ownership, size of the company as well as company
business nature. This questions were asked to study the organizational background of
the company and to achieve the research objectives.
4.2.1 Years of Establishment
The first demographic question being asked to the participant is the year of
establishment for their respective companies. Three options were given to the
respondents as answers. The result was as per shown in Table 4.1. 12 percent of the
respondents stated that their companies established less than ten years. According to
the answer given, 28 percent of the respondents came from companies that were
established between 10 to 30 years. Majority of the respondents came from companies
that were established more than 30 years, with the percentage stand at 40 percent.

27
However, 20 percent of the respondent did not state the year of establishment of their
companies.
Table 4.1
Years of Establishment Frequency Percentage %
Below 10 years
10 to 30 years
More than 30 years
Did Not State
TOTAL
3
7
10
5
25
12
28
40
20
100
4.2.2 Company Ownership
For the type of company ownership, has two options Bumiputera and Non-
Bumiputera. The details are as per stated in Table 4.2. Majority of the companies were
Non-Bumiputera with the percentage of 64 percent. While the rest is from Bumiputera
company with percentage of 36 percent.
Table 4.2
Ownership Frequency Percentage %
Bumiputera
Non-Bumiputera
TOTAL
9
16
25
36
64
100

28
4.2.3 Company Size
For the company size, most of the respondents came from Large Industries.
The percentage for the respondents is 76 percent. Respondents from SMEs companies
had percentage of 24 percent. This results have been tabulated in Table 4.3.
Table 4.3
Industry Frequency Percentage %
SME
Large Industries
TOTAL
6
19
25
24
76
100
4.2.4 Company Nature of Business
Table 4.4 shown the nature of business for each respondent respective
companies. The respondents were given two choices of answers, Small Parts and Large
Parts. 56 percent of the respondents came from companies that manufactured small
parts. As for the companies that manufactured large part, the percentage stands at 36
percent. However, there are 8 percent of the respondents did not stated nature of
business of their companies.

29
Table 4.4
Nature of Business Frequency Percentage %
Small Parts
Large Parts
Did Not State
TOTAL
14
9
2
25
56
36
8
100
4.3 OVERALL ANALYSIS
Rasch Model analysis was performed to measure the invariance; by means the
trait which is not a norm amongst the PROTON vendors. Rasch Model was also
performed to perceive the overall item and person reliability, the person separation,
the order of the Lean Manufacturing tools and practices; as well investment made. On
the other hand, the item factor analysis and unidimensionality have also been analyzed.
4.3.1 Summary Statistic
All the data collected are analyzed by Rasch Model. Cronbach Alpha value is
the value to determine the reliability of this test. The Cronbach Alpha value should be
higher than 0.7 to be considered as reliable. The Cronbach Alpha obtained from the
analysis for this test is 0.8, therefore it can be classified as reliable test. For this test,
the value of item reliability is 0.46 which indicates more items needs to be added. Item
sufficiency is related to how much the items spread along the continuum. The value
can be seen in Table 4.6. It can be concluded that the amount of items was sufficient.
The maximum person measurement was high at +6.09 logit (S.E=1.85) than the
maximum item measurement at +0.91 logit (S.E=0.44). This indicates that the

30
respondents (person) of the survey are implementing lean manufacturing practices
successfully and more questions (items) should be added to know more in details about
their lean manufacturing practices. On the other hand, there were sufficient items since
the minimum item measurement was -1.00 logit, compared to the minimum person
measurement which was 0.33 logit. The instrument’s model error was at +/-0.27 logit,
but it was enough to give good person separation of 1.53 ≈ 1.59 (as shown in Table
4.5).
Table 4.5
Summary of 25 persons measured
Table 4.6
Summary of 11 items measured

31
4.3.2 Person-Item Distribution Map
In the Rasch Model, the Variable Map, also called Person-Item Distribution
Map, is a feature that explains the relationships between the respondents and items.
The measurement consists of three (3) criteria:
• Must be equal intervals (e.g. clock)
• Must have numbers and be ordered
• Must have a unit of measurement (e.g., minute, seconds, kilogram).
As shown in Figure 4.1, the Person Item Distribution Map consists of one
vertical dashed line which distinguished the data generated for persons (on the left)
and items (on the right). This vertical dashed line is represented by one established
unit, called “Log of odd units” or “Logit” and has equal intervals. Logit is a unit of
intangible measurement. The letter M in the map represents the mean for item and
person; whilst the letters S and T denotes one standard deviation and two standard
deviations away from the mean, respectively. The item mean has been standardized
(zero-set) by the Winstep software, and is always at zero (0) Logit. However, the mean
for person rely on the respondents, since there is 50:50 chance that these respondents
do implement Lean Manufacturing (LM) effectively.
As for the position of person and item along the continuum, the person and
item in Figure 4.1 have been arranged so that the highest Logit value is at the top;
whilst the lowest is at the bottom. The arrangement for the person section are set such
that the least LM implementer positioned at the bottom, whereas the most LM
implementer positioned at the top. For the item segment, it is arranged from the least
implementing/ agreeable (bottom) to the most implementing/ agreeable (top).
Overall, the items’ spread was about +2 logit, whilst the persons’ spread
broadened at about +5 logit. This indicate that more items need to be added to the
instrument. Also can be seen from figures, the items have been grouped to the domain.
There were 2 domains, Lean Practices and Investment respectively. This domain
represent the basic LM implementation of the companies or organizations. Therefore,
from Figure 4.1, we can see that most of the persons implement LM successfully since
majority of them are positioned above the items domains. However, there are two

32
persons or organizations positioned parallel to the items which indicate that they are
not implementing LM enough in their organizations. It can be seen that for Investment
domain, item I2 is the most difficult to implement by the respondent while many
respondent agreed that item I3 is the most easiest to implement. As for Lean Practices
domain, Figure 4.1 shows that item LP3 is the most difficult for the respondent to
implement whereas item LP2 is the most easiest to implement. This satisfy our first
objective to investigate the degree of implementation of Lean Manufacturing practices
among SMEs.
Figure 4.1
Person-Item Distribution Map

33
4.3.3 Item Factor Analysis
The first method in identifying a misfit item is by looking at the Point Measure
Correlation (PMC). The first sign of multidimensionality is negative value of PMC. In
general, all items have a positive PMC, and with error of Mean S.E at +0.38 logit.
Three (3) parameters should be considered for an item to be misfit.
The three parameters are:
• Point Measure Correlation ; 0.32 < x <0.8
• Outfit Mean Squared ; 0.5 < y < 1.5
• Outfit Z-Standard ; -2 < z < 2
Overall, the MnSq and ZStd for possible misfit items can be seen from the
“Outfit” column in Table 4.7 which ranged from 0.53 logit to 1.35 logit (MnSq) and
-1.8 to 1.1 (ZStd). A fit item should have values within specifications for all three
parameters above. As shown in Table 4.7, none of the items violated all three
parameters which indicates that the items are not misfits and relevant to the objective
of the project. However according to Donaldson, respondent tends to give feedback in
such a way as to look good when answering self-reporting questions (Donaldson &
Grant-Vallone, 2002). This actions will caused the statistical analysis inaccurate.
Table 4.7
Summary of Item Misfits

34
Gunttman scaling is also sometimes known as cumulative scaling or scalogram
analysis. The use of the scaling is to create a range for a concept you wish to measure
(Tochim W., 2008). In a simple term, it shows and indicates the total score or
performance of the respondents towards all questions. In Figure 4.2, it can be seen that
person who are best implementer of LM are positioned higher in the scalogram
(Orange Highlighted). Figure 4.2 shown that person number nine (9) is the best
implementer whereas person number seven (7) is the poor LM implementer. As for
item sequences, the simplest item is positioned at the left endd of the scalogram (Red
Highlighted). In Figure 4.2, item number two (2) is regarded as the simplest question
by the respondents and item number three (3) is the most difficult. This scalogram
have satisfy the second objective for the project which is to identify the
implementation sequence of LM among SMEs. Through the scalogram, the
implementation sequence have been identified as it already categorized from the
easisest implementation to the most difficult.
Figure 4.2
Scalogram for overall analysis

35
4.4 ANALYSIS BY CONSTRUCT
This section explains the findings further based on three bases; the item
reliability, the quality of the item and the validity of the item in each construct. The
constructs are Lean Manufacturing Practices and Investment. Findings based on the
response received, are also shown in this section. By doing construct analysis, the third
objective have been achieved as the differences of LM implementation between
Bumiputera and Non-Bumiputera can be identified.
4.4.1 Lean Manufacturing Practices
This construct consist of six (6) items:
LP1) Lean implementation is important for the manufacturing industries
LP2) Lean implementations are important aspects and considerations for the company
productions and productivity.
LP3) The company apply lean thinking and lean tools.
LP4) The company leaders ensure everyone are involved in lean manufacturing
implementation.
LP5) The company uses lean tools such as Kanban System, 5s and Kaizen as
guidelines in order to make decision in lean manufacturing.
LP6) The company uses concepts such as Total Quality Management, Just in Time,
Six Sigma and etc. in order to improve lean implementation and productivity.
From table 4.8 the item reliability for this construct is 0.70 and it shows the
sufficiency of the items. The model error is at a small 1,11 logit. Hence, it proves that
the construct have good and quality items.

36
Table 4.8
Summary of Six items for Lean Manufacturing Practices Construct
Item validity is used to ensure the item is measuring in the right direction. To
determine whether an item is measuring in the right direction; value of Point Measure
Correlation (PMC) in Table 4.9 is read. A negative value of Point Measure Correlation
indicates that there are respondents decide to disagree; when the respondents are
supposed to agree; or vice versa. An item is only valid when it is measuring in the right
direction according to expectation.
Rasch Model had sorted the items based on the responses from the easiest Lean
Manufacturing Practices to be implemented (bottom) to hardest Lean Manufacturing
Practices to implement (top). According to Table 4.9, LP2 is the easiest to implement
with logit -1.35, while LP3 is the most difficult to implement with logit +1.50. This
shows that companies and organizations among themselves are having difficulties to
apply lean thinking and lean tools. This may be caused by factors such as lack of
expertise, lack of awareness or lack of knowledge. However, according to the
response, most of respondents agree that lean implementation is important for
manufacturing industries.
The Rasch Model principle state that; an easy item will most likely to be
implemented by any person at any given ability. In theory, all the person will have
difficulties to apply LP3. However, looking at the scalogram, there are company that
found applying LP3 is easy, located at the bottom. For example, in Figure 4.3, we
compare person number fourteen (14) and number three (3). Person number 14 did
applied LP3 better than person number 3. This can be caused by the expertise or

37
services acquired by person 14 in applying lean thinking to compare with person 3
(blue highlighted).
Even though other items have positive Point Measure Correlation, but there is
other item with low Point Measure Correlation in LP4. These item is easy to moderate
items (-0.11 logit) yet there is organization that find it is hard to implement these items.
The response from the organizations can be seen from green highlighted column in
Figure 4.3.
Table 4.9
Item Validity for Lean Manufacturing Practices Construct
Figure 4.3
Scalogram for Lean Manufacturing Practices Construct

38
To see the sequence of items difficulty, the Person-Item Distribution Map for
this construct is generated from Winstep software. The logit value for this map is taken
from Table 4.9 from ‘Measure’ column. The easiest Lean Manufacturing practices
based on the response is LP2 at -1.35 logit, and the most difficult is LP3 at +1.50 logit.
The overall sequence for this construct can be seen from Figure 4.3.
The hypothesis for this section is that companies involved in large industries
does implement LM more efficiently and Figure 4.3 does reflect that as seven
companies that are involved in large industries sitting at the top of the scalogram.
(Yellow Highlighted). This can be due to maintaining their high rate of productivity
and meeting large demand of their customers, therefore efficient and proper
implementation of LM may help smoothen their process and increase productivity.
Figure 4.4
Person-Item Distribution Map for Lean Manufacturing Practices Construct

39
4.4.2 Investment
This construct consist of six (5) items:
I1) The company provides training for the employee
I2) The company invests on employee empowerment.
I3) The company uses Human Resources Management practices to improve the
standard, quality and knowledge of the employee.
I4) The company provides sufficient facilities for the employees.
I5) The company invests on advanced and up-to-date machineries for production
From table 4.9 the item reliability for this construct is 0.55 and the items are
deemed to be sufficient. Small error was identified with 1.07 logit. Therefore it can be
said that the construct have good and quality items.
Table 4.10
Summary of five items for Investment Construct
The PMC for the investment shows that the item is measured in the right
direction. According to Table 4.10, most organizations did invest on employee training
(I1) whereas many did not properly provide employee empowerment (I2).

40
Table 4.11
Item Validity for Investment Construct
Figure 4.5 also indicates that while I1 is the least difficult to implement, there
are person who did not implement it successfully however they did invest in other area.
For example, we take person number 7 to compare with person number 1 (blue
highlighted). While person number 1 did not invest heavily in employee training, they
did invest on other area such as facilities (I4) and utilized human resource management
(I3) better than person number 7. This may be due to the employment of highly skilled
worker that requires less training to operate for person number 1.
The hypothesis for this section is that Non-Bumiputera companies provide
investment for their company. Figure 4.5 does reflect and support the hypothesis as
the first four companies at the top are non bumiputera companies (Green Highlighted).
One of the possible reason for this is that they may have large financial aid and
resources to be spend on improving their productivity.

41
Figure 4.5
Scalogram for Investment Construct
According to Figure 4.6, there are thirteen (13) companies that are located in
+1.00 logit to +3.00 logit. This indicate the likelihood of the companies invested on
their organizations are high as the logit for the items are from approximately -0.5 logit
to +0.7 logit. There are also a company in which did not competent or apply any of the
investment as it located at -2.0 logit.

42
Figure 4.6
Person-Item Distribution Map for Investment Construct
4.5 DIFFERENTIAL ITEM FUNCTIONING
The purpose of Differential Item Functioning (DIF) is to see which items that
may create bias based on the respondents demographic details (e.g gender). However
for this study, DIF is used to identify which items are affected in terms of the
agreement and the implementation based on the organization background of the
respondents. The DIF size limit is +/- 0.5 and the ZStd; t > +/-2.

43
4.5.1 Effect of Organizational Years of Establishment
In terms of years of establishment, there are few items that show differences
with respect to the level of Lean Manufacturing implementation. For this demographic
aspect, there are three person class; representing the options given in the survey. Those
options are (1) Below 10 years, (2) 10 – 30 years and (3) More than 30 years. The DIF
size is as high as +1.37 and as low as -1.17 were found. The DIF t-value was recorded
as high as +1.93 logit and was at -1.13 logit on the opposite direction. Figure 4.7 shows
the DIF t-value and Table 4.10 shows the consolidated DIF size.
From the understanding of Chapter 2, hypothesis can be made that newly
assembled company did not implement LM and make investment as successful as older
established companies. From the analysis, items number 1,6,8,10 and 11 are those
which did not satisfy the range. For item 1, it represents item LP1. Although the
ownership of this company is not stated, it suggests that maybe a newly assembled
company also agreed and aware about the importance of LM. Next, for item LP6 (item
6), it shows that new company does used lean tools such as Six Sigma, Just in Time
and Total Quality Management in order to improve their productivity thus this is differ
from the hypothesis made and shows that small companies does applied LM. As for
item 8, it represent I2, in which investment on the employee empowerment being
asked. According to Table 4.10, there are a few in person class 2 did not agree with
item 8. It shows that not all established companies invest on employee empowerment.
As for item 10 (I4), it suggest that not only new companies did not provide sufficient
facilities for the employees, the same can be said for established companies as the
person class suggest that it can be both. For item 11 (I5), it is expected that small
companies did not invests on up to date technologies and machineries for their
companies, however data from Table 4.10 suggest otherwise. Small companies did
invests on new technologies for their companies.

44
Figure 4.7
Consolidate DIF t Value: Years of Establishment
Table 4.12
Consolidated DIF: Organizational Years of Establishment
4.5.2 Effect of Company Ownership
For this group (Company Ownership), there are two person class namely
Bumiputera (1) and Non-Bumiputera (2). As shown in Table 4.11 the highest DIF size
is -1.40 logit while the DIF t-value is -1.87. Figure 4.8 show the consolidated DIF t-
value and Table 4.11 shows the consolidated DIF size.
It is expected that Bumiputera companies did not uses Human Resource
Management practices to improve the standard, quality and knowledge of the
employee, however Table 4.11 suggests otherwise. It shows that Bumiputera
companies does utilize Human Resources Management to improve their employees.
-3
-2
-1
0
1
2
DIFMeasure(diff.)
ITEM
DIF t Value:
1
2
3
9
*

45
Figure 4.8
Consolidate DIF t Value: Company Ownership
Table 4.13
Consolidated DIF: Company Ownership
4.5.3 Effect of Company Size
For this demographic group, the person class is divided to two groups; SMEs
Companies (1) and Large Industries (2). All items show differences with respect to
company size. As shown in Table 4.12, the value of DIF size is -1.75. On the other
hand, the DIF t-value is -1.99 logit. Figure 4.9 show the graph of the consolidated DIF
t-value and and Table 4.12 for DIF size.
-1.5
-1
-0.5
0
0.5
1
1.5
DIFMeasure(diff.)
ITEM
DIF t Value
1
2
*

46
The results suggest that SMEs companies utilized Human Resources
Management to improve their employee standard. Contrary to our understanding
whereby SMEs companies did not utilized Human Management Resources.
Figure 4.9
Consolidate DIF t Value: Company Size
Table 4.14
Consolidated DIF: Company Size
-2
-1.5
-1
-0.5
0
0.5
1
1.5
DIFMeasure(diff.)
ITEM
DIF t Value
1
2
*

47
4.5.4 Effect of Company Nature of Business
For this demographic group, the person class is divided to three groups; (1)
small parts, (2) large parts, and (3) not stated. However, items I3 and I4 does not satisfy
the requirement to analyze.
As shown in Table 4.13, the highest value of DIF size is +1.15 and the lowest
value is -1.95. On the other hand, the DIF t-value is as high as +1.74 logit and as low
as -1.18 logit. Figure 4.10 and Table 4.13 show the graph of the consolidated DIF t-
value and DIF size.
Items number 1, 4, 5, 9, 10 and 11 are those that are out of range for the DIF
values. For item 1 (LP1), it is expected that companies that produced small parts did
not agree that LM implementation is important for manufacturing industries, however
the results obtained suggest that it can go the other way round. For item 4 (LP4), it is
expected that companies that produces large parts have leaders that ensure everyone
involved in LM implementation. However the results in Table 4.13 shows otherwise.
Item 5 (LP5), results obtained shows that companies that producing small parts did
used lean tools as their guidelines in order to make decision in lean manufacturing
implementation and vice versa. Table 4.13 shows that person class (2) did not utilized
Human Resources utilized Human Resources Management to improve their employee
standard contrary to the expectation, where it is expected that person class (1) did not
utilized Human Resources Management (Item 9, I3). For Item 10 (I4), it is expected
that person class (1) did not provides sufficient facilities for the employees, however
results obtained show otherwise. There are class (2) person whom did not provide
sufficient facilities for the employees. Finally for item 11 (I5), the results shows that
person class (2) did not invests on advanced and up-to-date machineries for their
production.

48
Figure 4.10
Consolidate DIF T Value: Nature of Business
Table 4.15
Consolidated DIF: Nature of Business
-2
-1.5
-1
-0.5
0
0.5
1
1.5
2
DIFMeasure(diff.)
ITEM
DIF t Value
1
2
9
*

49
4.6 PROTON’S VIEWS AND ANSWER
Proton have given answers on several questions that are being posed to them.
Their answers are only based on Components Vendors.
4.6.1 On Bumiputera Vendors
According to Proton, there are 25% of the vendors are from Bumiputera
vendors on their list (overall). These vendors are deemed to be competitive enough as
they need to undergo several assessments in Technical & Commercial before
appointment. Chances will be given to every competitive and qualified Bumiputera
vendors to be in Proton supply chain. However, with this being said, there are lack of
participation of Bumiputera vendors in Chassis and Powertrain area where majority of
the vendors comes from foreign vendors. Most Bumiputera vendors involved in less
technical manufacture and complexity supply such as interior parts.
4.6.2 On Lean Practices
For Proton, currently they are practicing Syncro supply for bulky and
different variants parts such as seat, instrument panel and tires. Kanban practices is
also being used in Proton. For the Syncro system, Proton hired Bumiputera vendors to
supply the system.

50
CHAPTER 5
CONCLUSIONS AND FUTURE WORKS
5.1 INTRODUCTION
This chapter explains the conclusion for all three research objectives and future
works recommendation, based on the results and discussion made in Chapter 4. In
Chapter 4, the findings were validated to confirm the relevancy of sequence generated
from the survey.

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5.2 THE LEVEL OF LEAN MANUFACTURING IMPLEMENTATION
The first research objective in this study is to investigate the degree of
implementation for Lean Manufacturing in among PROTON vendors in automotive
industry. Set of questionnaires have been distributed among PROTON vendors in
order to achieve the objective.
From the findings, the level of Lean Manufacturing implementation among
PROTON vendors in automotive industry is high at +6.09 logit. This indicates that all
of the vendors hired by PROTON implemented Lean Manufacturing successfully on
the surface basis. From the Person-Item distribution map in Figure 4.1, differences at
approximately ±4.00 logit shows that more items needs to be inserted in order to know
specific degree of Lean Manufacturing amongst the vendors, regardless of their origin.
However, there are vendors who found some of the practices are difficult to implement
as we can see in Figure 4.1, items LP3, LP5, LP6, I2, I3, and I5 are among the items
that are difficult for couple of vendors.
Looking at the demographic influences (years of establishment, company size,
company ownership and company nature of business) towards the implementation of
Lean Manufacturing, it can be deduced that the findings are consistent with the
conjunction used, based on previous study. Out of four demographic attributes, the
influence from Years of Establishment showed the highest DIF at +1.37. This shows
that the older organizations implement Lean Manufacturing the best. This can be said
due to their experience and reputation in manufacturing industries.
5.3 LEAN MANUFACTURING IMPLEMENTATION SEQUENCE
The second research objective in this study is to identify the implementation
sequence of Lean Manufacturing practices and Lean Manufacturing tools in PROTON
automotive vendors. The purpose of identifying the implementation sequences from

52
the easiest item to the hardest item, for both Lean Manufacturing practices and
investment needed to assist the organizations in the PROTON automotive vendors.
Hence, the research questions are answered.
It has been found that, the most vendors agree Lean Manufacturing practice are
important aspects and considerations for the company production and productivity.
However, most vendors find it difficult to implement lean thinking and tools and as
for the investment part, most companies provide training for their employee but they
did not emphasize on employee empowerment.
5.4 LIMITATION OF RESEARCH
A drawback of this study has been its inability to obtain real-time data of
relevant parameters to indicate the progress of Lean Manufacturing. The practices
presented in the theoretical framework were developed using qualitative inputs.
However, the key areas included in the framework can act as a guide to measure the
implementation of lean manufacturing in companies.
5.5 FUTURE WORKS
This study opens another opportunity for researchers in Malaysia to explore
more on the Lean Manufacturing implementation amongst vendors in Automotive
Industry. Overall findings identified from this research allow further investigation as
suggested below;
1) To conduct intensive interview with those organizations in the ‘Leaders’ group to
identify the best practices in implementing Lean Manufacturing within this industry.

53
2) To explore the common practices in Automotive vendors that are related to Product
Design, Supplier Relationship, Manufacturing Process and Control, as well as Lean
Manufacturing tools to fill in the gap (as shown in the Person-Item Distribution Map).
3) To conduct case studies that involve wider range and broader scope among
Automotive industry to investigate the implementation of Lean Manufacturing in their
companies.

54
REFERENCES
1. Amrina, E., & Yusof, S. M. (2010). Manufacturing performance evaluation tool for
Malaysian automotive small and medium-sized enterprises. International Journal of
Business and Management Science, 3(2), 195-213. Retrieved from
http://search.proquest.com.ezaccess.library.uitm.edu.my/docview/892278319?accoun
tid=42518
2. Becker, R. M. (2001). Learning to think lean: Lean manufacturing and the Toyota
Production System. Automotive Manufacturing & Production, 113(6), 64-65.
Retrieved from
http://search.proquest.com.ezaccess.library.uitm.edu.my/docview/217426405?accoun
tid=42518
3. Definition of an SME - FSE. (n.d.). Retrieved December 2, 2015, from
http://www.thefsegroup.com/definition-of-an-sme
4. Donaldson, S. & Grant-Vallone, E., 2002. Understanding Self-Report Bias In
Organizational Behavior Research. Journal Of Business And Psychology, 17(2),
pp.245–260. Available at: http://link.springer.com/article/10.1023/A:1019637632584
5. Hamidon S. (2009), The Development of Malay Entrepreneurship in Malaysia,
Massey University, Auckland.
6. Herron C. & Hicks C. (2007), The Transfer of Selected Lean Manufacturing
Techniques from Japanese Automotive Manufacturing into General Manufacturing
(UK) Through Change Agents, University of Newcastle, United Kingdom.

55
7. Ishar, N. & Masodi, M., 2012. Students’ perception towards quality library service
using Rasch Measurement Model. In Innovation Management and …. pp. 21–22.
Available at: http://ieeexplore.ieee.org/xpls/abs_all.jsp?arnumber=6236479
8. Kamal M. E. & Flanagan R. (2014), Key Characteristics of Rural Construction SMEs,
Universiti Sains Malaysia
9. Kovacheva A.(2010) Challenges in Lean Implementation, Aarhus School of Business,
University of Aarhus.
10. Kumar, N. (2013). Implementing Lean Manufacturing System: ISM approach. Journal
of Industrial Engineering and Management, 6(4), 996.
doi:http://dx.doi.org/10.3926/jiem.508
11. Lean Implementation Solutions. (n.d.). Retrieved December 3, 2015, from
http://www.reliableplant.com/Read/29170/lean-implementation-solutions
12. Linacre, J.M., 1994. Sample size and item calibration stability. Rasch Measurement
Transaction, 7(4),
13. Melton T. (2005), Benefits of Lean Manufacturing: What Lean Thinking has to Offer
the Process Industries, Glasgow, Institutions of Chemical Engineers
14. Nordin, N., Deros, B. M., & Wahab, D. A. (2010). A survey on lean manufacturing
implementation in Malaysian automotive industry. International Journal of Innovation,
Management and Technology, 1(4), 374.
15. Rymaszewska A. D., (2012), The Challenges of Lean Manufacturing Implementation
in SMEs, Department of Production, University of Vaasa.
16. Scott W. M. & Walton D. A. (2010) , Maximizing Case Efficiency: Lessons Learned
From Lean- A Process Management Philosophy Utilized In Automotive
Manufacturing, University of California-Berkeley
17.Syuhadah N. Khusaini (2014), Development Of Lean Iso 9001:2008 Theoretical
Framework Using Rasch Model In Malaysian Food And Beverages Industry,
Universiti Teknologi Mara (UiTM)
18. Tochim W. M. K. (2008). Guntmann Scaling, Web Center for Research Methods.
Retrieved from http://www.socialresearchmethods.net/kb/scalgutt.php
19. Vamsi, K. J., & Kodali, R. (2014). Validity and Reliability Of Lean Manufacturing
Frameworks. International Journal of Lean Six Sigma, 5(4), 361. Retrieved from
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ntid=42518

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20. Yusuff M. (2009), Manufacturing Processes Course Manual. UiTM Fakulti
Kejuruteraan Mekanikal

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APPENDIX A – SURVEY QUESTIONNAIRE
Dear Sir / Madam,
I am requesting for a favor as I need your help in completing my survey questions.
This is a research project being conducted for my final year project at Universiti
Teknologi Mara, (UiTM) Shah Alam.
We will do our best to keep your information confidential. To help protect your
confidentiality, the surveys will not contain information that will personally
identify you. The results of this study will be used for scholarly purposes only and
may be shared with UiTM Shah Alam representatives.
Details about the project are attached together with this document. Thank you so
much for your co-operation.
Best Regards,
REDZA AMIN SUGGUN (2013633972)
Student of Faculty of Mechanical Engineering UiTM Shah Alam
PARTICIPANT CONSENT
Please tick the boxes before you start the survey.
1. I have read and understand the purpose of the study.
2. My answers are professional and does not influenced by any party.
3. I agree to participate in the survey.

59
PROJECT ABSTRACT
Proton is one of Malaysia national automotive project and has become one of
a household name in local automotive industries. Proton hired local and international
vendors to supply and manufacture its mechanical parts. Recent studies shown that
majority of Proton vendors are from international and non-bumiputera manufacturers.
For this project, lean manufacturing implementation sector will be the main
focus to be dissected among the bumiputera, non-bumiputera and international
vendors, whether they applied it in their companies and the application of lean
manufacturing does give them advantages in Proton vendor selections. Also, other
factors and criteria that give selected vendors advantages when it comes to producing
goods and products will be studied.

60
QUESTIONNAIRE
IMPLEMENTATION OF LEAN MANUFACTURING IN YOUR COMPANY
NATURE OF BUSINESS
NAME (optional):
COMPANY NAME*:
SECTION 1: DEMOGRAPHICAL SURVEY
1) Year of Establishment:
_________________________________________________________________
2) Please state whether your company involved in SME or Large industries:
_________________________________________________________________
3) Please state whether your company is Bumiputera or Non-Bumiputera company:
_________________________________________________________________
4) Please state your company nature of business (eg; small parts manufacturing,
hinge manufacturing) :
_________________________________________________________________
SECTION 2: LEAN PRACTICES
Direction: Please check (√) and rate your score honestly based on your company nature
of business and lean implementation manufacturing using the following scales:
5 – STRONGLY AGREE 4 – AGREE 3 – NEUTRAL 2 – DISAGREE 1 –
STRONGLY DISAGRE

61
QUESTION 5 4 3 2 1
1) Lean implementation is important for the manufacturing
industries
2) Lean implementations are important aspects and
considerations for the company productions and
productivity.
3) The company apply lean thinking and lean tools.
4) The company leaders ensure everyone are involved in lean
manufacturing implementation.
5) The company uses lean tools such as Kanban System, 5s
and Kaizen as guidelines in order to make decision in lean
manufacturing.
6) The company uses concepts such as Total Quality
Management, Just in Time, Six Sigma and etc. in order to
improve lean implementation and productivity.

62
SECTION 3: INVESTMENT
Direction: Please check (√) and rate your score honestly based on your company nature of business and lean implementation manufacturing using
the following scales:
5 – STRONGLY AGREE 4 – AGREE 3 – NEUTRAL 2 – DISAGREE 1 – STRONGLY DISAGREE
QUESTION 5 4 3 2 1
1) The company provides training for the employee.
2) The company invests on employee empowerment.
3) The company uses Human Resources Management
practices to improve the standard, quality and knowledge of
the employee
4) The company provides sufficient facilities for the
employees.
5) The company invests on advanced and up-to-date
machineries for production.

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SECTION D: SUGGESTIONS AND OPINIONS
1) What is your future plan regarding the investment that will be made by your
company in terms of investment on training, machineries and lean
manufacturing system :
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________

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