Best practice report: Lean Thinking

May 26, 2014 by BPIR.com Limited
Survey and Research

 

Lean Manufacturing Brings US Operations OnshoreThree separate 2012 studies revealed that lean manufacturing processes had contributed to a rising trend of American manufacturers bringing operations and associated jobs back to the United States.

  1. The Boston Consulting Group surveyed decision makers at 106 companies across a broad range of industries. Of the respondents, 70% agreed that “sourcing in China was more costly than it appeared on paper”, and 37% reported they were either planning or strongly considering “re-shoring” some of their manufacturing jobs. This figure rose to 48% among larger firms.
  2. The Hackett Group’s 2012 Supply Chain Optimization study found that the number of jobs returning against the number of jobs still being off-shored annually almost cancelled each other out; however, the number of jobs returning continued to grow.
  3. An AlixPartners survey of 116 C-level executives in manufacturing firms found that while more than 50% of respondents viewed manufacturing relocation to areas closer to the American market as the best way of increasing value and profits, only 35% of that segment indicated the United States was the favoured destination. 50% placed Mexico at the top of their list.

All three organisations indicated their researchers expected more widespread re-shoring of American manufacturing jobs by 2015 should current trends hold. [10]

Lean Management Within Hospitals

A survey was undertaken of three not-for-profit hospitals in the United States that were using lean initiatives. A total of 220 completed surveys were received: 116 from the intervention group and 104 from a control group. Qualitative data was collected using direct observation, interviews, and focus groups with hospital employees. The study revealed the following:

  1. A large number of staff should participate in Rapid Improvement Events at the earliest opportunity.
  2. Lean should be deployed widely at an early stage of organisational maturity.
  3. Investment in time and effort to build a broad base of knowledge, experience and commitment was indispensable.
  4. Lean initiatives tend to have a net negative impact on cash flow and profitability in the early stages of implementation. Tough choices may have to be made.
  5. If the initiative is succeeding, it is likely to become widely accepted in the organisation, and the pressure to move faster with implementation will increase dramatically.
  6. Informal networks are critical for success. [11]

Lean Construction in the UK

In 2011, a study aimed to identify the key factors influencing the successful implementation of lean management principles in the United Kingdom’s construction industry. Respondents were asked to rate a range of barriers using a five-point Likert scale. A “5” equalled “strongly agrees”, and “1” equalled “strongly disagrees”. Mean values that scored “4’’ were classified as being a significant barrier. Figure 5, see below, outlines the mean values of the ten key barriers affecting the implementation of lean construction practices in the United Kingdom. [12]

Lean Manufacturing Companies Have Better Strategic Consistency

A 2013 study examined the differences between conventional companies and lean manufacturing companies. A questionnaire-based survey, mailed to 500 manufacturing firms in the United States, received 84 usable responses (33 from respondents in organisations practising lean manufacturing principles and 51 from respondents in conventional organisations). The results revealed that lean manufacturing companies were more consistent than conventional companies in:

  • setting long-term balanced goals and objectives
  • recognising external environmental factors
  • building core competencies to effectively deal with external environmental factors
  • aligning competitive priorities with goals and objectives
  • aligning competitive capabilities with competitive priorities
  • placing a higher emphasis on fundamental organisational and human development manufacturing objectives
  • using a broad range of balanced performance measures that are aligned with organisational strategy. [13]

Lean Production Principles Value Varies with Company Size

A 2013 study examined the influence of industry size in relation to the degree of adoption of lean production principles. Responses to a structured questionnaire were received from production managers at 79 kitchenware organisations in Chennai, India. 51 were from ancillary units, 22 from small-sized industries and six from medium-sized industries. The results revealed a significant difference in the degree of adoption of lean production principles compared to company size. For example, the study found:

  • waste elimination was ranked first in all company types
  • continuous improvement in medium-sized industries was superior
  • zero defects in medium-sized industries was of higher value than in small-sized industries
  • the “just-in-time” principle in medium-sized industries was more highly rated than in small-sized industries and ancillary units.
    [14]

Lean Thinking Improves Patient Care

A 2010 lean thinking initiative involving 62 wards across ten New Zealand district health boards (DHBs) enabled 2,275 ward nurses and therapists to spend more time in direct contact with patients. The reported improvements from the lean initiative included:

  • South Canterbury DHB: direct patient care involvement was doubled in one ward and improved in all others.
  • Unnamed DHB: direct care time was increased from 28% to 54%.
  • Tauranga DHB: nurses spent 59% of their time with patients, up 40% from the previous year.
  • Waikato DHB: nurses spent 10% more time with patients, resulting in calmer wards and better patient safety.
  • Hutt Valley DHB: the day surgery team reduced the average time patients spent in its unit by more than 10%.
  • Waitemata DHB: A short stay ward removed three cartons of excess stock saving $5,000 per month.

These direct contact improvements enabled patients to receive better care, have fewer falls, experience fewer medicine errors, and return home sooner. [15]

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