MASTER’ THESIS
LEAN STRATEGY DEVELOPMENT IN
SMEs BY MEANS OF
SELF-ASSESSMENT
by
RUBEN J. VAN EWIJK
S2412764
&
B4062924
22-12-2015
Universities
University of Groningen, Faculty of Economics and Business Nettelbosje 2, 9747 AE Groningen
+31(0)50 363 4624
Newcastle University Business School
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Master’ Thesis
Lean implementations in SMEs by means of self-assessment. EBM028A30 & NBS8399
Ruben J. van Ewijk B.Eng Lauwersstraat 47 9725HE Groningen The Netherlands +31(0)6 221 38 479 RubenvanEwijk@gmail.com
15,409 words (excluding appendix and references)
22-12-2015
DD-MSc. Technology & Operations Management
Groningen supervisor & assessor: Dr. Ir. Jannes Slomp
Newcastle supervisor & assessor: Christian Hicks BSc PhD CEng FIET CDipAF
Universities
University of Groningen, Faculty of Economics and Business Nettelbosje 2, 9747 AE Groningen
+31(0)50 363 4624
Newcastle University Business School
4
Preface
I would first like to acknowledge my supervisors, Dr. Ir. Slomp and Prof. Hicks. I would like to thank them for their advice in finding a research topic and their feedback during my research and writing of this thesis.
Furthermore, I would like to thank the researchers of the Lean/QRM-centre of the Hogeschool Arnhem and Nijmegen for sharing their data with me. I would like specially thank Wilfred Knol, who helped me with obtaining and interpreting the data.
I am grateful that I could join the self-assessment at ‘Case 0’ with researchers of the Hanze Hogeschool Groningen. I want to thank Erik Soepenberg and Gejo Nanninga for involving me in their self-assessment process. Additionally, I want to thank the management of Case 0 for their openness in giving me a look behind the scenes.
I also want to thank all the other companies I have visited. I want to thank all the managers and directors for making time in their schedule for the interviews. Furthermore, I want to thank them for providing me with a tour through their company.
I want to thank my fellow students and team Bigg Market for their support in writing my thesis. I would like to especially thank Roy Greijdanus for the feedback he provided on my draft.
Lastly, I want to thank everyone for supporting my family and me during the illness of my sister. We all hope she recovers well.
I hope you will enjoy reading this thesis,
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Table of content
PREFACE 4 LIST OF FIGURES 7 LIST OF TABLES 7 ABSTRACT 8 1 INTRODUCTION 9 2 THEORETICAL BACKGROUND 112.1 SMALL AND MEDIUM ENTERPRISES 11
2.2 IMPLEMENTATION STRATEGY 11
2.2.1 STRATEGY 12
2.2.2 STRATEGY REALISATION 12
2.2.3 STRATEGY IN SMALL AND MEDIUM SIZED ENTERPRISES 14
2.3 LEAN 15
2.3.1 DEFINITION AND OBJECTIVES OF LEAN 15
2.3.2 LEAN IN SMALL TO MEDIUM ENTERPRISES 16
2.4 SELF-ASSESSMENT 16 2.4.1 BENEFITS 18 2.4.2 PROCESS 19 2.4.3 LIMITATIONS 22 3 METHOD 23 3.1 RESEARCH PHILOSOPHY 23 3.2 RESEARCH APPROACH 24 3.3 RESEARCH PURPOSE 24 3.4 RESEARCH STRATEGY 24
3.5 MULTIPLE METHODS CHOICES 25
3.6 TIME HORIZON 26
3.7 VALIDITY AND RELIABILITY 26
3.8 SELECTING SAMPLES 27
3.8.1 SELF-ASSESSMENT SELECTION 28
3.8.2 CASE SELECTION 30
3.8.3 CASE SELECTION CRITERIA 30
3.9 CASE DESCRIPTION 31
3.10 CONCEPTUAL FRAMEWORK 32
3.11 DATA GATHERING 33
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4 RESULTS 36
4.1 WITHIN-CASE RESULTS 36
4.1.1 CASE A 36
4.1.2 CASE B 37
4.1.3 CASE C 39
4.1.4 CASE D 40
4.1.5 CASE E 42
4.2 BETWEEN-CASE RESULTS 42
4.2.1 CONSEQUENCE 42
4.2.2 LEAN IMPROVEMENT STRATEGY 44
4.2.3 ADVANTAGES 44
4.2.4 DISADVANTAGES 45
4.2.5 REASONS FOR CONDUCTING A SELF-ASSESSMENT 46
4.2.6 AREAS OF IMPROVEMENT 47
5 DISCUSSION 48
5.1 LEAN STRATEGY DEVELOPMENT 48
5.1.1 EXPERIENCE WITH LEAN 49
5.1.2 EXPECTATIONS 50
5.1.3 RESPONDENTS’ CONSENSUS 50
5.1.4 RECOGNITION 51
5.1.5 SENSE OF URGENCY 52
5.2 LIMITATIONS AND FURTHER RESEARCH 52
6 CONCLUSION 53
7 REFERENCES 54
8 APPENDIX 60
8.1 APPENDIX A:COMPANIES THAT PARTICIPATED IN THE HAN LEAN SELF-ASSESSMENT 60
8.2 APPENDIX B:CASE DESCRIPTION 61
8.2.1 CASE A 61
8.2.2 CASE B 61
8.2.3 CASE C 62
8.2.4 CASE D 62
8.2.5 CASE E 63
8.3 APPENDIX C:CASE STUDY PROTOCOL 64
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List of figures
Figure 2-1: Framework of Kim and Arnold (1996) _________________________________________________ 13 Figure 2-2: Self-assessment process, adopted from van der Wiele et al. (2000) __________________________ 21 Figure 3-1: Conceptual framework _____________________________________________________________ 33 Figure 4-1: advantages of the self-assessment and strategy concepts _________________________________ 44 Figure 5-1: Summary of the discussion _________________________________________________________ 49
List of tables
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Abstract
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1 Introduction
Increasing performance is one of the main issues companies face in gaining a competitive advantage. In some cases, it is straightforward what aspects of the business require change to improve performance. However, in most practical situations this is not self-evident. Organisations need insight into their strengths and weaknesses to allocate resources to the appropriate improvement areas (Ford and Evans 2001; Van der Wiele et al. 2000). This is, even more, important for Small and Medium-sized Enterprises (SMEs), who have fewer resources for improvement than their larger counterparts (Thomas et al. 2014). There are various techniques to assess the internal strengths and weaknesses. A technique that became increasingly popular over the last few decades is organisational self-assessment (Ford and Evans 2001). Self-assessment has gained popularity because it was used in various national quality awards (Evans, 1996). These provide a best-practice example for organisations to compare with. Currently, organisational self-assessment tools are utilized in all parts of the business, amongst them is the lean self-assessment (Malmbrandt and Åhlström 2013).
Lean supports companies in improve performance by means of waste reduction (Pavnaskar et
al. 2003). Lean was initially developed at Toyota, a large car manufactory (Womack and Jones,
1996). More recently, lean became accessible for SMEs and even outside the manufacturing sector (Shah and Ward 2003). The benefits of lean for SMEs are well documented (Achanga et
al. 2006; Antony et al. 2005). However, many SMEs experience difficulties implementing lean.
Sim and Rogers (2009) identified that only a small percentage of the UK manufacturing SME can successfully implement lean. In addition, Shah and Ward (2003) identified that SMEs often experience more difficulties due to a lack of time, less financial and human resources.
Lean self-assessments assess organisations against a lean framework or model. This helps them to allocate resources and prioritise the implementation of practices (Ritchie and Dale 2000). The assessment provides insight into the current and desired level of lean maturity. After a self-assessment is conducted, managers should be able to develop a lean implementation strategy to reduce waste and improve performance. However, for many scholars, it is unclear how managers establish an implementation strategy after a self-assessment is conducted. For example, Ahmad and Alaskari (2014: 496) stated that future research should be directed to uncover “what should be done after an assessment of the company’s performance”. Moreover, Ford and Evans (2001: 21–22) stated, “Little is known about how self-assessment actually
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gap between the assessment’s output and the implementation of lean practices. In addition, assessment literature focusses mostly on large organisations. SMEs might practice self-assessment to a different degree (Ahmad and Alaskari 2014; Nudurupati et al. 2011; Van der Wiele et al. 2000). Therefore, the research question this dissertation will try to answer is:
How does an organisational lean self-assessment tool help to develop a lean implementation strategy in small and medium-sized enterprises?
The results of this research will uncover how a self-assessment tool proves useful for determining and executing a lean implementation strategy. Even though much academic research had been dedicated to the usefulness, implementation and Critical Success Factors (CSFs) of lean, no academic research had been devoted to uncovering how a self-assessment helps an organisation to become leaner. Therefore, this study is interesting for managers that seek ways to select appropriate lean practices within their organisation using self-assessment. Additionally, this research might be interesting for developers of lean self-assessments, which want to improve the effectiveness of their self-assessment.
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2 Theoretical background
A literature review was performed to get a better understanding of the various concepts of the research question. Firstly, the definition and importance of SMEs are elaborated. Secondly, the notion of strategy and implementation strategy are defined. Additionally, strategy realisation and strategy within SMEs are discussed. Thirdly, the concept of lean is elaborated. Lastly, the concept of self-assessment is defined along with its benefits and limitations. The gap in literature and practice is further elaborated.
2.1 Small and Medium Enterprises
In literature, there is a consensus regarding the vital importance of SMEs to nation’s economic systems (Timans et al. 2012). It is widely acknowledged that SMEs are drivers of innovation, create employment, increase the level of competition within the marketplace and create wealth in general (Smith, 1998). According to the European Commission (2010: 8), SME’s can be defined as:
“SME companies with less than 250 employees and maximum turnover of 50 million Euros or with a balance sheet total of 43 million Euros”.
Even though SMEs are so important, their existence is not effortless. According to Achanga et
al. (2006), based on Porter (1985), SMEs are situated in a strategically poor position. This is
because they often operate in industries with low entry barriers to new entrants and have little bargaining power with their suppliers. Most SMEs operate in dynamic and rapidly changing environments (Cocca and Alberti 2010). It is, therefore, crucial that SMEs are able to respond quickly to changing market circumstances (Ahmad and Alaskari 2014). In addition, SMEs have a disadvantageous competitive position in comparison with larger firms, because they are less able to exploit economies of scale (Yusof and Aspinwall 2000).
More specific details of SMEs regarding lean implementations, strategy and self-assessments are discussed in the following subchapters.
2.2 Implementation strategy
12 2.2.1 Strategy
The concept of strategy is defined to get a better understanding of how a lean implementation strategy is established.
Mintzberg and Quin (1998: 3) define strategy as:
‘[…] the pattern or plan that integrates an organization’s major goals, policies, and action sequences into a cohesive whole. A well-formulated strategy helps to marshal and allocate an organization’s resources into a unique and viable posture based on it’s relative internal competencies and shortcomings, anticipated changes in the environment, and contingent moves by intelligent opponents’.
Mintzberg and Quin (1998) define strategy as planned or seen as a pattern. Strategy as a plan is consciously and purposefully developed. Resulting actions are taken based on, and in coherence with the strategic plan. In this case, a strategy is the means by which an organisation strives to complete its objectives. In order to achieve an organisation’s goals, it is concerned with the long-term planning of, and commitment to specific products, markets and technologies (Karami 2007). The definition implies that a lean implementations strategy would be a predetermined statement. A lean strategy is consciously developed with the goal to implement certain lean practices. The process of strategy development and implementation is defined as strategic management (Cole, 1994). In the development part, the firm defines its strategy and formulates how the strategy can be implemented (Bowman, 1998; Collin, 1995). Strategy development includes the short and long-term objectives, long-term planning and commitment to practices (Karami 2007; Slack and Lewis 2008). Furthermore, resource allocation decisions are made in order to support the implementation process (Analoui and Karami 2003; Rumelt, 1991).
Strategy as a pattern emerges from behaviours of an organisation in the form of a stream of actions (Karami 2007). Strategy as a pattern is noticed on hindsight. Therefore, the strategy is always realised. Strategy as a plan is not always realised. In the context of this research, this implies the actions that have led to the implementation of lean practices, even if they were unintended, are related to the lean implementation strategy.
2.2.2 Strategy realisation
After a strategy is formulated, managers can realise them by means of action plans. “Strategy
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realisation is described in the framework of Kim and Arnold (1996). The framework is displayed in Figure 2-1. In their model, they describe how action plans are derived from the overall (business) strategy, through the prioritisation of competitive priorities and setting of manufacturing objectives.
Figure 2-1: Framework of Kim and Arnold (1996)
Firstly, competitive priorities need be in line with the (business) strategy in order to meet the strategic goals set by the organisation. According to Kim and Arnold (1996: 49), competitive priorities describe, “What the manufacturing function should achieve with regard to cost,
quality, flexibility and delivery, in order to support the business strategy effectively”. Slack and
Lewis (2008) stated that a business strategy is a path an organisation takes in order to comply with its customer’s needs. This strategy should direct the firm towards an overall goal by setting objectives and determine which resources are applied for what purposes.
Secondly, an organisation can deduce manufacturing objectives from the competitive priorities. These objectives should not only focus on tangible traditional cost accounting tools but also on intangible benefits and strategic objectives (Chan et al. 2001; Kim and Arnold, 1996). Therefore, manufacturing objectives are defined as: “the relative emphasis on various
performance measures” (Kim and Arnold, 1996: 50). These can relate the product (e.g. unit
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implement improvement approaches to increase performance. These implementation strategies involve resource allocation, prioritising and planning improvement plans, commitment to these plans and alignment with the overall business strategy (Karami 2007; Kim and Arnold, 1996; Slack and Lewis 2008).
This research will focus on how the self-assessment helps the organisation to select competitive priorities, set manufacturing objectives and choose the corresponding action plans.
2.2.3 Strategy in Small and Medium Sized Enterprises
In order to uncover how SMEs formulate and implement their strategy, the concept of strategy in SMEs is further elaborated. The framework of Kim and Arnold (1996) proposes a clear view of to how improvement strategies are derived from the business strategy. However, there is a limitation regarding the applicability in SMEs. Most SMEs do not have a formal written strategy to build on (Rue and Ibrahim, 1996). Andersen and Mutal, (1997) reported that in a questionnaire to 3,033 SMEs, 69 percent stated that they had no written strategic plan. Furthermore, Greenwald and Associates (1993) discovered that over half of the 614 SMEs in their sample had no written business plan. In this way, SMEs are unable to profit from strategic management approaches, which mainly focusses on formal strategy development and implementation (Curran, 1996; Shuman et al. 1985). Benefitting from strategic management approaches might be of vital importance for SMEs to ensure improved performance and company growth. SMEs can increase their performance (Berry, 1998; Scott and Bruce, 1987), grow and ensure long-term success if they need to adopt a formal and sophisticated strategic orientation (Wolff and Pett 2000) A study by Karami (2007) demonstrated that as organisations grow, the likelihood of them making use of more formal planning methods increases. Karami found that most small organisation (less than 10 employees) had no strategic planning. On the other hand, organisations that grow larger tent to have formal strategic planning methods.
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Thus, even though most SMEs do not have a formal strategy, they have other means of improving and accomplishing long-term plans. In the case of a lean improvement strategy, it is most likely that it has not been formalised in SMEs. This implies that a strategy as a pattern is most likely to be found. However, larger SMEs will probably have more formal techniques for strategy formation.
2.3 Lean
The concept of lean is explored in order to put in into the context of the research question. First, the definition and objectives of lean are explored. Thereafter lean in SMEs is discussed. 2.3.1 Definition and objectives of lean
Lean is defined as “a multi-dimensional approach that encompasses a wide variety of
management practices, including just-in-time, quality systems, work teams, cellular manufacturing, supplier management, etc. in an integrated system” (Shah and Ward 2003: 129).
The concept of lean production originated in Japan and was derived from the Toyota Production System (Womack and Jones, 1996). In order to support organisations in maintaining and improving their competitive advantage, improvement approaches such as lean became increasingly popular (Moyano-Fuentes and Sacristán-Díaz 2012; Netland et al. 2015).
The objectives of lean are to “reduce waste in human effort, inventory, time to market and
manufacturing space to become highly responsive to customer demand while producing world-class quality products in the most efficient and economical manner” (Pavnaskar et al. 2003:
3076). Everything that is added to a product or service without adding value from the customer’s perspective can be considered as a waste (Ramesh and Kodali 2012). Lean became increasingly popular in the 1980s. Over time, the focus of lean shifted from creating lean consciousness to quality, cost and delivery and most recently towards customer value (Moyano-Fuentes and Sacristán-Díaz 2012).
16 2.3.2 Lean in Small to Medium Enterprises
Even though the potential benefits are known, and lean provides specific tools and techniques to implement, there are organisations (mostly SMEs) that have trouble with implementing the practices (Achanga et al. 2006). Lean is known to be best applicable in a low-variety environment with stable demand (Christopher et al. 2006). However, Most SMEs operate in low-volume high-variety markets (Thomas et al. 2014).
In order to uncover why SMEs conduct lean self-assessments, the aspirations of SMEs for lean is discussed. The aspirations for SMEs to become lean are similar to those of larger companies. However, there are some differences. According to Bhasin (2012), SMEs were more likely to be interested in adopting lean practices because they hoped to increase competitiveness, increase productivity, increase profitability, improve employee performance and lower manufacturing costs. On the other hand, they were less interested in improving supply chain management, reduce stock levels, improve market share and the reduction of downtime, than larger organisations. These expectations might line up with the expectations of the self-assessment by being the criteria for success (Ritchie and Dale 2000).
The number of SMEs where lean is successfully implemented is limited. This is partly due to the preconceptions SME’s managers have towards lean. Some managers feel that lean is just a short-lived fashion, they consider it as any standard improvement programme (Manville et al. 2012). Additionally, the improvements brought from lean are not entirely appreciated by SME’s managers (Kumar and Antony 2008). They feel that only larger organisations are able to experience the full benefits of lean implantations. Moreover, the investments required to implement lean practices are believed to be too high. In general, the lack of resources is often addressed in the literature. Often SMEs believe that they do not have the technical capabilities of human resources to drive lean to its full potential (Thomas et al. 2014). It is critical for SMEs to prioritise properly the lean practices they wish to implement according to the organisations policy, capabilities and market position (Ahmad and Alaskari 2014). By doing so, SMEs will address the most pressing issues first while the remaining noncritical issues can be dealt with over time. This can be seen as realising their lean implementation strategy.
2.4 Self-assessment
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Award introduced in 1987 and the European Quality Award introduced in 1991 (EFQM, 1999; Gravin, 1991). These and other national quality award assessments (e.g. Japan's Deming Prize, Australian Quality Award, and UK Quality Award) allow organisations to self-assess against a quality model or framework to identify potential improvement areas (Evans, 1996; Ghobadian and Woo, 1996). Consequently, improvement actions can be planned to reach the desired (quality) position (Van der Wiele et al. 2000). Additionally, the self-assessment can be used to review and monitor the improvement process. The initial purpose of the quality awards was that the organisations that conducted them would put themselves forward for nomination. Currently, this is not the case for most organisations (Caffyn, 1999). Rather, they use the awards framework to assess their current and desired position for their own improvement purposes. The fact that companies use award programs solely for their internal improvement purposes demonstrates the value of self-assessment as an improvement tool.
Currently, the range self-assessment topics described by literature is not limited to quality assessments. In the past decades, self-assessments were developed for other areas such as product development (Knoblinger 2011), lean manufacturing (Shah and Ward 2003) and continuous improvement maturity (Caffyn, 1999). The definition of self-assessment changed as the new assessment areas came into being. Lawler et al. (1980: 9) provide an early definition that considers self-assessment in the context of the organisation:
“In the organizational context, assessment refers to the process of measuring the effectiveness of an organization from the behavioural or social-system perspective”.
This is not the most accurate definition because it only consider the measuring of effectiveness from the behavioural or social system perspective. As the use of the method became more professional, the definition of self-assessment needed to be adapted. For example, in an article about the European Foundation for Quality Management (EFQM), Hillman (1994) added, that the organisation is measured against a framework that highlights the areas that need improvement. In this definition, the outcome and framework are included but the purpose is not. The most all-embracing definition is that of Van der Wiele et al. (1995: 14):
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In general, a self-assessment is used to measure the current position of the organisation, determine the desired position and provide the organisation with sufficient information to prioritise and establish action plans to reach the desired position (Ford and Evans 2001). According to Van der Wiele et al. (2000), it is important to link the self-assessment to the central planning and reviewing process because it demands considerable time and attention.
There are three types of self-assessment (Ritchie and Dale 2000). The first is award based. This takes considerably the most effort for the organisation. It is common that long, in-depth analyses need to be provided. Furthermore, it involves the transcription of an extensive submission document. The questions are mostly open-ended. The second is the questionnaire. This occupies less time of the managers and is often tailor fitted to the organisation’s needs. A manager answers a series of multiple-choice questions and statements. The output is used to develop action plans. The questionnaire can have one or multiple respondents. The third is the workshop type. Here, managers gather data and present the evidence to shop floor employees. The goal of the questionnaire and workshop is to reach a consensus on the strengths and opportunities in order to develop improvement plans.
2.4.1 Benefits
According to literature, there are various benefits for organisational that use self-assessments, these are:
It provides insight in the organisation’s strengths, weaknesses, opportunities and constraints (Caffyn, 1999; Ritchie and Dale 2000; Van der Wiele et al. 2000);
Performance and improvements can be monitored (Caffyn, 1999; Ritchie and Dale 2000; Tennant and Roberts 2003; Van der Wiele et al. 2000);
It gives managers a feeling and awareness for the desired performance (Caffyn, 1999; Ritchie and Dale 2000; Van der Wiele et al. 2000);
It enables constructive dialogue between members of the organisation, which leads to organisational learning (Caffyn, 1999; Tennant and Roberts 2003; Van der Wiele et al. 2000);
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It gives managers an insight in the change process and, therefore, enables organisational change (Ford and Evans 2001; Ritchie and Dale 2000);
Managers become engaged because they become the owners of the problem (Van der Wiele et al. 2000);
It helps to align processes and activities (Van der Wiele et al. 2000);
Attention is focussed towards organisational performance (Van der Wiele et al. 2000);
It improves corporate culture by, involving teamwork and joint work projects and setting a uniform goal for employees to work toward (Ritchie and Dale 2000).
Various studies reported positive outcomes for organisations that make use of self-assessment. A study of van der Wiele (1995) found that organisations that use self-assessment achieve positive business results. Other research found that improved market share and profitability are more likely to be found in organisations that use self-assessment (Van der Wiele et al. 2000). Additionally, it was found that self-assessments are particularly effective in SMEs that wish to continuously improve performance because it effectively helps them to measure and benchmark against competition (Cassell et al. 2001; St-Pierre and Delisle 2006).
Even though the literature suggests positive business results because of the use of self-assessment, there is not a direct link (Caffyn, 1999). Change and the execution of the action plans are required. Managers tend to underestimate the benefits and effects of the self-assessment due to a lack of experience with the tool (Ritchie and Dale 2000).
2.4.2 Process
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1. Identify the purposes and the goals the organisation has with regard to the self-assessment’s outcome;
2. Define the unit of analysis of the self-assessment. This can be the organisation as a whole, a department or a particular project;
3. Select a facilitator who is responsible for the coordination, administration and self-assessment process;
4. Customise the self-assessment to the unique purpose, goals and unit of analysis of the organisation;
5. Pilot test the self-assessment with a group of employees;
6. Create an introductory statement as a preparation for the self-assessment’s execution;
7. Execute the self-assessment and let the results be reviewed by either a group of key employees or experts of certain topics within the organisation;
8. Have a meeting to interpret the results, identify, prioritise and communicate the opportunities. At the end of the meeting, it needs to be clear where to take action;
9. Implement the planned actions.
There are some similarities between the two descriptions. It can be noted that the steps ‘establish model and reporting system’, ‘conduct self-assessment’, ‘establish action plan’ and ‘implement action plan’ of Van der Wiele are mostly consistent with Knoblinger’s steps 4, 7, 8 and 9. Furthermore, the steps ‘develop commitment’, ‘plan self-assessment’ and ‘communicate plan’ are somewhat common with steps 1 2 and 3. Whereas, ‘educate staff’, ‘review progress’, step 3 and 5 seem to be unique steps in both processes. For the purpose of this research, the final three stages considered most important because the organisation develops a lean implementation strategy in these steps (i.e. ‘conduct self-assessment’, ‘establish action plan’ and ‘implement action plan’ of Van der Wiele). However, they do not stand alone from the other steps.
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Figure 2-2: Self-assessment process, adopted from van der Wiele et al. (2000)
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The literature does describe that the managers should have constructive dialogue during a group discussion. Performance gaps, opportunities and improvement actions, ideas and initiatives should be shared during the discussion (Caffyn, 1999; Knoblinger 2011). Every organisation has its own approach to going through this step. Ritchie and Dale (2000) found in their case studies that there is a little consensus amongst managers about the output of a self-assessment. However, they reported that as long as the output could be used to develop an improvement strategy, it was considered as a success. If consensus is reached during the discussion, the shared insight can be translated into action plans. According to literature, managers should use their experience and knowledge of the organisation to prioritise Key Process Indicators (KPIs) and improvement actions according to the organisations vision, strategic goal, market situation, core competencies and available resources (Ahmad and Alaskari 2014; Knoblinger 2011; Timans et
al. 2012).
2.4.3 Limitations
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3 Method
This chapter focusses on the method used to answer the research question. It is structured by the work of Saunders et al. (2009) Firstly, it will address the philosophy behind the research. Secondly, the research approach and purpose are discussed. Thirdly, the research strategy, method choice and time horizon are addressed. Thereafter, the validity and reliability are discussed. Subsequently, the case selection is discussed, and the cases are described. Lastly, the conceptual framework, data gathering and analysis are discussed.
3.1 Research philosophy
According to Saunders et al. (2009: 107), it is important to address the research philosophy because it is an “over-arching term [that] relates to the development of knowledge and the
nature of that knowledge”. The research philosophy of this research fits mostly with the
interpretivist views and somewhat with the pragmatist views as explained by Saunders et al. (2009). This is elaborated in the following paragraphs.
The ontological position of this research can be defined as that of a subjectivist. The manager’s feelings regarding self-assessment are a great influence in answering the research question. The managers are likely to feel different about the self-assessment, and their views might change. Furthermore, various contextual factors will influence the managers’ views the self-assessment. The managers can interpret these contextual factors differently. Therefore, they can have different reactions to the self-assessment. However, in order to answer the research question, this research will also have an objectivist view. For example, the self-assessment’s output was used in order to select the cases that were studied.
The epistemological position of this research is also best fitted with the interpretivist philosophy. The data needed to answer the research question is in the continuum of opinions, feelings and attitudes rather than measurable data and ‘facts’. This approach will also be used in analysing the self-assessments output. This implies that the assessment’s output might not reflect the world perfectly because complicated thoughts and opinions are captured in simple five or ten-point scales.
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subjective to the researcher’s views. However, the researcher’s personal views unbiased, as the researcher did not develop the lean self-assessment in question.
The goal of this research is not to change the current phenomenon. Rather, it is to understand and explain what is going on. In the framework of Burrell and Morgan (1982), this would fit best with the regulatory perspective. Due to the subjective nature of the research, this research could best be framed as interpretive in the framework of Burrell and Morgan (1982).
3.2 Research approach
Due to the limited theory on the use of lean self-assessments in SMEs, an inductive approach is most suitable to answer the research question. Therefore, this research keeps an open view to the benefits, limitations and consequences of the self-assessment. This research will follow a theory building view. However, the theory of self-assessment in general and strategy (formulation) in SMEs have some common ground with lean self-assessments in SMEs. This allows the research to be structured by the deductive research approach. Nevertheless, these aspects are not easily quantifiable. Therefore, the scope of this research is to determine how the self-assessment affects the lean implementations strategy and how this relation is substantiated.
3.3 Research purpose
Organisations, which conduct self-assessments, to identify opportunities for improving KPIs often have a positive business results (Van der Wiele et al. 1995), are more profitable and have an improved market share (Van der Wiele et al. 2000). More specifically, Self-assessment prove to be effectively helping SMEs to continuously improve performance (Cassell et al. 2001; St-Pierre and Delisle 2006). However, it is unclear how a self-assessment helps organisations in establishing an improvement strategy (Ahmad and Alaskari 2014; Ford and Evans 2001; Ford 2000). The purpose of this research to uncover how a lean self-assessment helps SMEs to establish a lean improvement strategy. This includes identifying the key variables that affect the strategy development process, identifying the link between the self-assessment output and the lean improvement strategy. Therefore, the research purpose can be described as descriptive (Saunders et al. 2009) or theory building (Voss 2009).
3.4 Research strategy
A strategy that fits well within the inductive approach and is able to accomplish the purpose of this study is the case study. A case study can be defined as: “a strategy for doing research which
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life context using multiple sources of evidence” (Robson 2002: 178). The case study method is
a qualitative research method that aims to “offer insights based on the meaning of the research
variables as seen by those participating in the research and as interpreted by the researcher”
(Stefanou and Revanoglou 2006: 120). Furthermore, a case study is most suitable to answer ‘how’ and ‘why’ questions (Yin 2003). No literature addressed how a lean implementation strategy is established with the help of a lean self-assessment. A case study lends itself as a powerful research method in this situation because there is not much known about the key factors, constructs and variables (Voss 2009). Additionally, this method was selected because it provided a more in-depth view of how a lean self-assessment affects the strategy development process. The use of the case study method allows investigating the development of a lean improvement strategy, whereby meaningful and relevant theory can be generated (Voss 2009).
Yin (2003) makes a distinction between a single and a multiple case study. The multiple case study is best fitted with the research question because it does not concern a unique situation. Furthermore, this strategy allows investigating whether the findings of the first case reoccur in other cases (Saunders et al. 2009). Yin (2003) also distinguished holistic and embedded case studies. In this research, the unit of analysis was Dutch SMEs. Firstly, this was because of the unique situation in which this research takes place. Namely, 25 SMEs had participated in the same lean self-assessment. This is further elaborated in section 3.8 Selecting samples. Secondly, since SMEs experience more difficulties in implementing lean as an improvement approach. Lastly, even though SMEs play a crucial part in the economy, not much literature is devoted to how self-assessments can help them implement lean practices. Since there is no distinction between the divisions within the SME’s organisation, the unit of analysis can be described as holistic.
3.5 Multiple methods choices
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choice is ‘mixed-method research’ where quantitative data is analysed quantitatively, and qualitative data is analysed qualitatively.
There are two main reasons for the use of the mixed methods research. Firstly, the use of triangulation. Multiple methods are used in order to corroborate the research results. Secondly, the facilitation of the case selection. The quantitative data is analysed and compared in order to select cases based on a literal and theoretical replication. This is further discussed in section 3.8.2.
3.6 Time horizon
In order to answer the research question, it is important that the SMEs, which were the cases, had conducted a lean self-assessment. Furthermore, it cannot be expected that SMEs immediately notice the potential changes in their lean implementation strategy. Especially if the lean implementation strategy was realised as a pattern. Therefore, sufficient time needs to have passed between the self-assessment and this research. In this case, a year and a half is sufficient.
3.7 Validity and reliability
According to Saunders (2009), it is important for research be reliable and valid. Yin (2003) describes how reliability and three types of validity can be assured in case study research.
Construct validity
The first ‘problem’ of case study research was that it is open to ‘subjective’ judgement of the researcher. This research overcomes this issue by firstly using multiple sources of evidence. These are semi-structured interviews, direct observations by means of company tours, archival records by means of the lean self-assessment data of the cases, and documentation by means of written (lean) strategy statements and goals. Secondly, the interviewees, their organisation and other organisations, which also participated in the lean self-assessment, reviewed and validated the results and conclusions.
Internal validity
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External Validity
External validity was assured firstly by the means of the use of theory in this study. By discussing general concepts of self-assessment, it is assured that it does not only apply to these particular cases. Secondly, replication logic is used by means of addressing the findings of one case in the following. Thirdly, the corresponding interviewees verified the within-case results and all interviewees verified the between-case results. This demonstrates that the conclusions are applicable to a larger number of cases and can be generalised outside of the scope of this research.
Reliability
Reliability was assured by utilising a standardised case study protocol. Furthermore, there are some specifics regarding case selection and comparison. First, the research was constructed for internal validity of the self-assessment. This implies that the same lean self-assessment was conducted in all the cases. Additionally, to construct for external factors, the selected cases participated in the self-assessment around the same time. In this case, the timeframe of a year is acceptable. In addition, the cases were given a comparable amount of time to develop and implement their lean implementation strategy. In this case, it was about one and a half to two years. Furthermore, the self-assessment had to be conducted in the same manner. It is acceptable that the employee setting would differ. However, one condition is that the assessment needs to have multiple participants from various departments within the same company. In order to be familiar with the self-assessment procedures the cases underwent, the researcher has attended an assessment in a SME. This company, ‘Case 0’, is excluded from the research results since not enough time has passed for them to develop a lean strategy.
3.8 Selecting samples
28 3.8.1 Self-assessment selection
The first stage can be described as exploratory because the only precondition was that it concerned a lean self-assessment. Therefore, the self-selection sampling technique was used (Saunders et al. 2009). By using this technique, the lean/QRM-centre from the University of Applied Science of Arnhem and Nijmegen (Dutch: Hogeschool van Arnhem en Nijmegen (HAN)) was selected.
The HAN lean/QRM-centre had developed a lean self-assessment tool. In the period of 2013-2014, they assessed 25 SMEs in the Netherlands. A list of the companies is presented in Appendix A. The participating companies’ purpose was to identify improvement opportunities in the area of lean manufacturing and find out to what extent lean principles are important for the organisation. Within the organisations, multiple managers participated in the self-assessment. The assessment can be described as the questionnaire type, conducted by an external party (Ritchie and Dale 2000).
One and a half to two years later, some participating SMEs were revisited to uncover how the self-assessment helped them to develop a lean improvement strategy. The lean self-assessment consists out of: strategy, lean, Continuous Improvement (CI) and enablers.
3.8.1.1 Strategy
In the first section, the SMEs employees were questioned about the whether certain competitive priorities are perceived important by the customer. Additionally, they were asked to what degree the organisation is able to meet their customer needs in comparison to their competitors. The combination of the two resulted in the weighted performance of the SME. The questions in this section are based on the performance indicators of Slack and Lewis (2008). These are price, quality, speed, delivery dependability, product-, volume- and delivery flexibility. Before this part of the assessment is filled out, the set of indicators is briefly discussed. If desired, additional indicators may be added. The results of this section were demonstrated in an importance-performance diagram (Slack and Lewis 2008). This reflects what indicators are important for customers (high importance) and which should be improved (relatively low performance). The respondents could indicate the importance on a scale from one to ten.
3.8.1.2 Lean
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These are (I) Supply Chain Management (SCM), (II) Just-in-Time production (JIT), (III) Total Quality Management (TQM) and (IV) Human Resource Management (HRM). Table 3-2 provides a brief overview of these ten elements and the four focus areas. The respondents could indicate the use and importance on a 5-point Likert-scale.
Table 3-1: Lean practices (Shah and Ward 2007)
3.8.1.3 Continuous improvement
Part three of the assessment tool concerns the embedment of CI in the company. The questions are based on the statements of Bessant et al. (2001). These statements relate to cultural and structural elements of a continuously improving organisation. The basic idea behind the statements is that five levels indicate to what extent a company has incorporated continuous improvement: (I) trying out the ideas, (II) structured and systematic, (III) strategically linked, (IV) autonomous Innovation, and (V) the learning organisation.
Bundle # Element Description
1 Feedback to suppliers Provide regular feedback to suppliers on their performance.
2 JIT delivery by suppliers
Make sure that suppliers deliver the right quantity, at the right time in the right place.
3 Involvement of suppliers
Develop suppliers so that they can be more involved in the production process of the organization.
4 Involvement of the customer
Involve customers in the improvement of products and production. Be focused on their needs.
5 Pull Stimulate JIT production, including kanban cards that serve as a signal to start or stop production. 6 Continue flow Structure products and equipment so that
continuous flow is facilitated.
7 Setup time reduction Reduce process downtime between product changes
8
Total
productive/preventive maintenance
Using principles of maintenance management to achieve a higher level of equipment availability.
9 Statistics process control
Ensure that each part of the process produces defect-free units to the following parts of the process.
HRM 10 Employee
involvement
Give employees a role in solving problems and strengthen their cross-functional look.
SCM
JIT
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3.8.1.4 Enablers
The last part of the assessment focusses on CSFs. The literature refers to a number of CSFs that are essential for achieving sustained success. A literature review performed in the context of RAAK Grafimedia lists 70 partly overlapping factors. These factors can be clustered into six main factors: (I) top-down management support, (II) clear vision, (III) good internal communications, (IV) an open and supportive culture, (V) a clear structure and (VI) an integrated focus.
3.8.2 Case selection
A case selection was made of the 25 companies that participated in the self-assessment since it is impractical to interview all the organisations. According to Eisenhardt (1989), four to ten cases should be studied in order to draw convincing and robust conclusions. For this research, five cases were selected. According to Saunders (2009), the best sampling technique is purposive sampling with a heterogeneous focus because there is no need for the sample to be representative and the sample to be selected is very small. This method enables data collection based on characteristics that can be described. According to Patton (2002), this method is particularly valuable for small samples because patterns are likely to emerge in the main themes due to the characteristics involved. Patton (2002) suggest that prior to the case selection the characteristics should be identified. This is elaborated in the next section.
3.8.3 Case selection criteria
Cases were selected using the criteria found in the literature. Firstly, the level of lean maturity is considered as an important variable. Managers might reflect differently on the self-assessment’s outcome if they have more experience with lean adaptation and implementation (Timans et al. 2012). For example, other flow practices might be easily adopted in a manufacturing facility where a flow already exists. Therefore, the composing of a lean implementation strategy might be different in firms with a higher lean maturity. The level of lean maturity is measured by comparing the organisation’s self-assessment scores regarding their lean maturity.
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disagreement and the proposed improvement actions will not succeed. The managers’ consensus regarding the KPIs is measured as the origination’s average standard deviation regarding their competitive priorities.
Thirdly, the sense of urge is an important variable from a change management perspective. According to Kotter (1996), the first action, a manager must take in starting a change process is creating a sense of urgency. This will demonstrate to the relevant employees that action needs to be taken. It is also applicable for initiating a lean improvement program. Managers are more likely to find the support they need if it is self-evident that the logical course of action is to implement certain lean practices (Bhasin 2012; Fullerton and Wempe 2009). Therefore, it might be that organisations, which experience a higher sense of urgency due to the self-assessment, are better able to develop an improvement strategy than organisations, which do not sense this. The sense of urgency is measured as the difference between the scores of the importance of competitive priorities for customers and the scores on those priorities compared to their competitor.
For the purpose of theoretical replication, the company’s characteristics were selected in such a way that they vary the most (Voss 2009). However, due to the sample size some cases have literal replication. This implies that they have comparable characteristics. Based on the selection criteria, five cases were selected. Their criteria are presented in Table 3-2.
Table 3-2: Selection criteria
3.9 Case description
An overview of the selected cases is provided in Table 3-3. An extended description of the selected case’s products, processes, business strategy, lean experience and interviewees are can be found in Appendix B.
Case Lean experience Consensus on KPIs Urgency of KPIs
A Low High Low
B Low High Medium
C Medium High Medium
D Low Medium High
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Table 3-3: Overview selected cases
3.10 Conceptual framework
With the use of literature, a conceptual framework is composed. The framework is displayed in Figure 3-1. An important conclusion based on the theory regarding strategy is that the strategy of SMEs is most likely recognisable in the form of strategy as a pattern. This implies that the management of the SMEs probably did not make formal plans regarding their lean implementations strategy. Rather, their strategy can be seen from hindsight. The most important aspects of lean strategy development in the context of this research are short and long-term planning, commitment to the lean practices, resource allocation, diversification decisions and strategy realisation. These aspects need to be in line with the company’s vision, strategic goals, market situation, core competencies and available resources.
In order to uncover how these aspects of lean strategy development are affected by the self-assessment, the assessment is split in various aspects. These aspects are the preparation, alignment with the company, self-assessment process, advantages, and disadvantages, criteria for success, monitoring of improvements and securing change. This research will attempt to uncover how the self-assessment aspects aid managers in developing a lean implementation strategy.
According to the literature, various characteristics might affect this relation. Companies have different aspirations for implementing lean, but also for the lean self-assessment. The expectations have an important role in these aspirations. Furthermore, a sense of urgency, the experience with lean, and the consensus regarding the KPIs might also affect the lean self-assessment’s effectiveness. These are, as explained in section 3.8.3, the case selection criteria.
Case Product / process No. of employees Interviewee Years with the company Function
A
manufacturing and trading equipment with high-pressure applications for industrial purposes
50 Manager A 7 Head engineer and
structural illustrator
B
manufacturer of semi-finished products for mechanical engineering
65 Manager B 7 Technical director
and co-owner
Manager C1 8 Manager Engineering
Manager C2 5 Department head
D
manufacturer and supplier of high-quality concrete products such as brick, tiles and paving.
150 Manager D 12 Plant manager
E manufacturer of glass in aluminium constructions
100 Manager E 17 Managing Director
and co-owner manufacturer of doors and
facades for technical rooms and transformer kiosks
C
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Figure 3-1: Conceptual framework
3.11 Data gathering
Before visiting the selected case companies, a lean self-assessment was attended at Case 0, with the purpose of getting familiar with the process of this lean self-assessment. At the end of the assessment, a focus group session was held to get an insight into the participants’ perceptions of the process. The assessment was carried out in a similar manner as it was conducted at the five selected cases two years ago.
Apart from the data provided by the HAN lean/QRM-centre, face-to-face interview were conducted. The interviews were constructed as semi-structured interviews. This type of interview was chosen because it enables the answering of ‘how’ and ‘what’ questions such as the research question (Saunders et al. 2009). Furthermore, they enable finding out why certain events occur and provide new insight into the topic. This type of interview is a good fit with exploratory research (Robson 2002). In order to structure the research, an interview protocol was constructed. This can be found in Appendix C. The protocol is based on the conceptual framework and the theoretical background.
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was designed to last an hour to an hour and a half. Additionally, the managers or directors provided a company tour. During the tours, the companies’ processes became apparent. Particular attention was paid to view the lean initiatives that were established during the last two years. On average, the company tours took an hour and a half. Before the interviews were conducted, the interviewees were presented with an information sheet and a consent form. These are presented in Appendix D
3.12 Data analysis
After the interviews were conducted, the interview recordings were transcribed. The researcher transcribed the interviews to increase the familiarity with the data. The transcriptions were analysed using computer-aided qualitative data analysis software (CAQDAS). The CAQDAS used was ATLAS.ti™.
The analysis of the transcripts was divided into three stages. In the first stage, the units of data were categorised. These were words or sentences, depending on the type of question and the answer of the interviewees. If possible, large units of data (e.g. paragraphs) were summarised to increase analysability. A combination of deductive and inductive coding was used. Deductive coding was based on the theoretical background, conceptual model and concepts of the interview protocol. Inductive coding was used when units of data were considered important but did not fit within a theme that was described in existing literature. Here, ‘in vivo’ coding was used to label the actual terms used by the interviewees.
In the second stage, the codes were reviewed. Due to increasing familiarity with the data, some could be merged, divided or relabelled. In other cases, additional codes were created. In this stage, the ATLAS.ti™ package was used to detect and record the relationships between the codes. Additionally, relationships were recognised using the narratives of the interviews and factory visits.
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Table 3-4: Coding tree
Theme Sub-theme Description Examples of codes
Enablers The aspects of the self-assessment that were perceived as helpful in developing a lean implementation strategy.
Reach consensus, awareness, guidance, starting point, focus. Barriers The aspects of the self-assessment that
were not helpful or obstructions for developing a lean implementation strategy
Specific subsequent steps, no direct change, unfit for SMEs, Limited organisational impact. Process The aspects of the process that were
perceived as helpful or counterproductive.
Alignment, monitoring, selection of participants, preparation.
Consequence The steps or actions the organisation took as a result of the self-assessment and the result that had on their leanness
Adopt efficient work methods, implement lean practices, create support, recognition. Strategy
realisation
The extent to which the organisation was able to realise their lean strategy with the help of the self-assessment
Prioritisation of KPIs, manufacturing
objectives, action plans Resource
allocation
The extent to which the self-assessment helped the organisation to allocate resources, time and money to the improvement projects
Resource time, resource management, resource means, project
prioritisation Expectation/
aspiration
The expectations and aspirations regarding lean and the self-assessment the organisation had prior to the self-assessment and the realisation of those aspirations and expectations
Expectations lean, aspiration lean, expectations self-assessment, aspiration self-assessment Sense of urgency The awareness of the organisation
regarding the need for change.
Need for change management, need for change employees. Experience with
lean
The lean maturity of the organisation and their experience with lean prior to the self-assessment.
Lean practices, implementation lean.
Consensus on KPIs
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4 Results
The research findings are presented in this chapter. Firstly, the within-case results of the cases are described separately. Secondly, the overlapping results are outlined in the between-case results section.
4.1 Within-case results
The within-case results of all cases are described according to the experienced consequences, encountered enablers, and barriers to developing a lean implementation strategy.
4.1.1 Case A
In general, the organisation was pleased with the process and outcome of the self-assessment. It helped them to focus on their most critical KPIs. By focussing on their KPIs, they were better able to set and accomplish lean goals. As a result, the company implemented continuous improvement cycles and 5S on the shop floor level. In addition, the company started working on a customer-orientated approach by picking up orders faster, providing better, and more feedback to the customer. Lean improvements were realised on the shop floor and in the back office.
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Working with the self-assessment tool enabled the company to recognise the improvement potential and provided an opportunity to discuss the various areas of improvement. “In a way,
the most valuable outcome of the self-assessment is that you get an idea of the improvement areas, what we want, and what we can improve” [Manager A].
The company felt guided in developing a lean implementation strategy due to the suggested improvements by the self-assessment’s output. Furthermore, it guided the discussion on the output. The discussion was described as very interesting. It helped the managers to understand each other‘s point of view. The managers were able to reach a consensus on the improvement areas. This was stimulated by the clear facts presented in the assessment report. As a result, the organisation took a supportive approach towards lean. The self-assessment accomplished a commitment to the lean practices. Furthermore, the guidance of the assessment enabled the company to do a planning with regard to the lean practices. The organisation viewed the self-assessment as a valuable tool to start the process of adopting lean practices. “It is the start for
a company to begin with; I think that's the most value aspect of the self-assessment” [Manager
A].
Besides the advantages, the company noted some disadvantages of the self-assessment. Mainly, that the self-assessment did not provide any specific subsequent steps. “What can we do with
this information, and how do we follow up on this, that was a difficult one for the organisation and me. (…) specific steps are particularly important for SMEs” [Manager A]. The company
solved this issue by approaching a lean consultant. The consultant enabled the company to make a significant change in their process within a days’ time. “That is what the self-assessment want
unable to accomplish, a big change in limited time” [Manager A]. Lastly, the manager
mentioned that the assessment was a bit too theoretical. It was sometimes difficult to understand the questions. Moreover, the gap between theory and practice was challenging to bridge. Consequently, it was difficult to take action.
4.1.2 Case B
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The company became aware of their current lean position as a consequence of the self-assessment. This aided them in planning and implementing lean practices and adopting efficient work methods such as 5Ss. Furthermore, they prioritised the implementation of a defects registration system in their ERP system. There used to be a large number of defects due to limited internal and external feedback. By implementing the defects registration system, the company was able to reduce the number of defects. However, it is still twice as high as they want it to be.
The manager indicated that there were various benefits of working with the self-assessment. The organisation became aware of the improvement potential. They used to be unfocussed in addressing improvement opportunities in the past. The self-assessment enabled the prioritisation of lean improvement projects in their strategy development. Furthermore, the assessment provided insights in the opinion of the managers and employees.
The self-assessment tool offered the organisation guidance by providing structure in the form of work methods and procedures. The organisation translated the result of the self-assessment into improvement plans. This enabled them to allocate resourced to the improvement plans. This occurred at their monthly board meetings. The improvement plans were communicated top-down. However, how the plans were executed was a bottom-up decision. The manager noted support and acceptance for the improvement plans because the self-assessment’s output created a consensus on the KPIs in the organisation. “When the facts are on the table, there is
a better understanding from everyone. It becomes clearer to everyone when the output is interpreted” [Manager B]. This enabled the organisation to communicate the sense of urgency,
which helped them improve their internal communication. Subsequently, a commitment to the lean practices was created.
Similar to Case A, the company was able to recognise themselves in the assessment output. Therefore, the output was accepted by the organisation. However, the output was so much recognisable that it contained few new information. “Bluntly said, it was a mess on the shop
floor, but we already knew this was a problem” [Manager B].
Another disadvantage was that the self-assessment used complicated jargon. It was considered difficult to communicate the output to the shop floor. “It is important to explain it plain and
39 4.1.3 Case C
This organisation conducted the self-assessment at the end of 2013. In contrast to Case A and B, they were not pleased with the assessment’s effectiveness. The report generated by the output was truthful. However, the organisation’s goal was to cause change. This did not occur on the level the organisation hoped it would.
Since 2010, the company was trying to increase their leanness. Initially, the improvement projects started out small. However, in the summer of 2013 the management participates in a LEGO training of a lean constancy company. This sparked the enthusiasm for lean throughout the top and middle management. As a result, the company shot a lean relay movie. The goal of the movie was to inform the shop floor employees about the benefits of lean. The movie was made with the help of the shop floor employees with the idea that this would involve them. According to the managers, this was a big success. They also established a lean team, which consists out of shop floor employees. Their goal was to reduce the lead time by half. At the same time, interns were given the assignment to introduce a pull system. All these actions resulted in the implementation of a ‘train’ system, one of their first steps of implementing Pull and Polka, in the aluminium department. Currently, all the other departments are assigned to improve their leanness, but the process is slow and not without setbacks. The biggest issue for management is how they can enable employees to take action. The current solution is to have KATA teams coach the shop floor employees. Everyone is involved in the KATA teams, even top management.
The company was able to improve their processes and turn themselves into a leaner organisation. However, this was not due to the self-assessment. The managers were seeking for methods to move the organisation in a lean direction. The self-assessment did not accomplish this because it did not put their employees in motion. This is according to the managers the first disadvantage of working with a self-assessment; it does not cause an immediate change. “Everyone knew that we had some critical KPIs, but the next day we just moved on. For me,
this is the main issue of the self-assessment, it does not matter how good the assessment is; it does nothing to get employees in motion” [Manager C1]. The second disadvantage is that the
assessment has limited impact on the organisation. ”I dare to say that if you would ask others;
name three conclusions of the assessment, you would not get an answer” [Manager C1]. The
self-40
assessment is not people oriented. The manager would feel better if there was some sort of human psychology involved. “Everyone can understand lean and 5S, but that does not mean
that people will implement it” [Manager C1].
Even though most aspects of the self-assessment were not perceived helpful in establishing a lean improvement strategy, the managers did acknowledge two minor advantages. Firstly, all the company’s managers were reminded of lean because they participated in the lean self-assessment. Albeit there were no immediate changes in the organisation’s mindset towards lean, the manager noted that the time spent on the self-assessment might have contributed. Secondly, the manager noted that it was difficult for some members of the organisation to answer KPI related questions. The company concluded that in some areas the knowledge of the KPIs is limited. Due to this, the company improved their communication regarding their KPIs.
4.1.4 Case D
Due to the poor economic climate, this company was urgently searching for means to increase their efficiency. At the end of 2013, top and middle management conducted the lean self-assessment. The assessment helped the company’s mindset change into a lean way of thinking. The company has adopted a supply chain focus and is effectively able to improve some of its supply chain KPIs. They were so much pleased with the results that they participated in another self-assessment in 2015. This was the same self-assessment with some added features. For reliability purposes, only the first assessment is described.
