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A multisite field study of lean thinking in U.S. and German secondary wood products manufacturers.

Abstract

Due to growing global competition, especially in the last decade, the U.S. and German wood and wood-based industries have suffered significant market share losses. To stay competitive in an increasingly global marketplace, many wood manufacturers are adopting new management approaches. Lean thinking is one management approach that has been widely accepted and adopted by other manufacturing and service industries.

Lean thinking is a holistic management approach incorporating lean practices and principles. This study documents field studies of four cases of lean implementations in both U.S. and German secondary wood products companies. Two companies considered "lean leaders" from each country were studied to identify the challenges of implementation as well as the subsequent successes. An embedded, multiple-case study design method was used.

Findings from the study suggest that lean thinking can help secondary wood products manufacturers be more profitable. In the organizations studied the implementation of lean manufacturing practices and principles resulted in more efficient and cost-effective operations. The study also found that the application of lean thinking to marketing processes can improve customer service, new product development processes, and customer satisfaction.

The key challenges faced by the case sites during lean implementation were related to communication. All case companies found that it was critical to communicate the vision and values of lean thinking to all employees. Leaders felt that it was extremely important to have all employees understand and accept lean thinking and its benefits.

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As a result of growing global competition over the last decade, the U.S. wood and wood-based industries have suffered significant losses of market share. The import of furniture and fixtures (NAICS 337) increased by 151 percent between 1997 and 2004. During the same time period, exports only grew by 15 percent, resulting in a U.S. foreign furniture trade deficit. This deficit reached 19.8 billion dollars in 2004.

Germany has faced similar challenges. In 2003, Germany produced 25 percent of the total EU15 (1) value in furniture, making the German furniture industry the second largest in the EU (after Italy, which accounts for 26%). The German foreign furniture trade deficit reached 1.95 billion euros in 2003.

By far the largest furniture importer to the United States has been China, accounting for nearly half of all furniture imports in 2004. Imports of Chinese furniture grew 555 percent between 1997 and 2004. The biggest share of imports (44%) that entered Germany were from Eastern Europe. Poland accounted for more than 50 percent of these imports. U.S. and German manufacturers are at a competitive disadvantage since production costs, especially wages, are lower in China and Eastern Europe. To be competitive, wood manufacturers have been forced to adopt new manufacturing and management approaches to reduce costs and increase quality.

Lean thinking is one potential approach for improving organization performance. The automotive, aerospace and pharmaceutical industries have used lean thinking to improve their competitive position (Mintz Testa 2003). Womack et al. (1990) described the significant competitive advantage of Japanese car manufacturers over their competitors as a result of the unique manufacturing system, coined, lean production. Lean production, also called the Toyota Production System, was developed and first implemented at the Toyota production plant in Japan after World War II. Other authors suggested that this complex, highly integrated system is the reason for Japan's manufacturing effectiveness (Schonberger 1982, Chan et al. 1989, Womack et al. 1990, 1996; Liker 1998, 2004).

To gain the full benefit of this management approach, management must be fully engaged (Chappell 2002). Lean thinking is applicable to all aspects of a business and can be used to positively impact not just production operations, but the whole range of business processes including product development, design, and sales (Chappell 2002).

Study objectives

This research was focused on gaining a better understanding of the challenges and benefits that wood products companies faced in implementing lean thinking. In particular, three research objectives are summarized within this paper:

1. Identify the common and individual pitfalls and challenges faced by wood products manufacturers in implementing lean thinking.

2. Identify the key resources used to support a successful lean implementation.

3. Identify the key benefits to the organization, including marketing, realized by wood product manufacturers following a lean implementation.

Theoretical background

There is no simple definition for lean thinking. Lean thinking can be broadly defined as a multidimensional approach to doing business with the primary focus on waste reduction (Womack et al. 1996). Womack et al. (1996) defined eight primary types of waste. Any non value-creating human activity, which absorbs resources, is considered waste. The eight wastes include:

* Mistakes

* Rectification (of mistakes)

* Production of items no one wants

* Unnecessary production steps

* Unnecessary movement or transport of employees

* Unnecessary movement or transport of goods

* People waiting downstream

* Goods or services that do not meet the customers needs

Liker (2004) also added unused employee creativity as a major type of waste. Emiliani (1998) defined "repeated mistakes" as another primary type of waste and argued that a business that is unable to learn and change its behavior will jeopardize its future existence. The learning process associated with lean thinking is ongoing and lean thinking is a continuum of states and not an end state (Liker 1998).

[FIGURE 1 OMITTED]

A successful implementation of lean thinking can only be reached if employees are well aligned with the lean strategy. Gagnon and Michael's (2003) work suggested that employees in the wood industry who are not well-aligned will show lower levels of job commitment. Since the implementation of lean requires a high level of employee involvement and changes in attitudes and behaviors (Gagnon and Michael 2003), employee alignment plays an important role in the creation of a lean thinking organization. Open and honest communication and the delegation of authority have been identified by previous researchers as crucial to creating employee alignment (Lewis et al. 2006).

A conceptual framework for lean thinking was developed to guide the development of the research instruments used for this study. The framework, shown in Figure 1, was based on the work of Liker (2004), Shah and Ward (2003), and the Shingo business prize guidelines (2005). The framework highlights the enablers of lean thinking within an organization and highlights the relationship between these enablers and business results. It is not, however, a roadmap for lean implementation.

The conceptual framework incorporates the processes, practices, and principles that are needed to create lean thinking within an organization. For this study lean thinking was operationalized as more than a set of tools or practices. Rather, lean thinking was operationalized as an integrated management approach, with the potential to impact an entire organization and of being extended to include suppliers and other business partners (Womack and Jones 1994). An organization that has applied lean principles and practices only within the borders of the organization is called a lean organization (Womack and Jones 1994). When lean thinking is applied to value-creating activities from the raw material to the finished product, in a joint effort by more than just one organization, Womack and Jones (1994) suggests that the term "Lean Enterprise" be used. In a lean enterprise, lean practices and principles related to supply chain management (SCM) and customer relationship management (CRM) must be added (Liker 2004).

Lean thinking does not prescribe a specific set of individual lean practices that must be implemented, rather lean thinking will be created when an appropriate set of foundational processes, practices, and principles are put in place. In addition, lean thinking must be accepted and understood by all employees within the organization (Liker 2004). The framework is shaped like a house to emphasize the dependency of success on all supporting components of the framework. If any part of the house is removed, it will collapse. Similarly if any one of the supporting components is not in place, organizations will fail to reap the full benefits.

The most important component of the house is the base upon which it is built. The base consists of the enablers that are necessary for successful lean thinking. The first layer of the enablers is the lean philosophy, which should be reflected in the leadership style and must be embraced by top management (Cua et al. 2001). Lean philosophy was defined for this study as: "Pursuing perfection to meet or exceed internal and external customer requirements by focusing on the entire value stream and a dedication to continuous improvement, learning, and waste reduction." The second layer of the conceptual framework is human resource management (HRM) and specifically employee empowerment. In a lean organization employees are the key to success and a "people first" attitude with a strong emphasis on teamwork and employee empowerment is essential (Liker 2004).

The lean house is supported by two columns of processes and practices. This portion of the conceptual framework highlights the need for an organization to focus on improving core operations with a primary goal of waste reduction. Within manufacturing, practices such as just-in-time (JIT), total productive maintenance (TPM), and total quality management (TQM) can be used to eliminate various types of waste. On the nonmanufacturing side, there are processes such as marketing, new product development, partnering with suppliers/ customers and environmental practices, and many other support functions that should be influenced and improved by the implementation of practices which eliminate all types of waste (Shingo Prize for Excellence in Manufacturing 2005).

The ceiling of the lean house is a lean culture, which supports the roof of lean goals and results, but also ties the core columns together. The lean culture is a problem solving culture and is based on the concepts of continuous improvement and learning. Culture is both a result and an enabler for a sustainable and successful lean operation (Liker 2004). The lean culture must be pervasive and management must role model the values of lean thinking to all employees (Cua et al. 2001).

The roof, which forms the top of the house, encompasses the goals and results of lean thinking within an organization. In order to achieve high levels of performance, all components, from the base to the ceiling, must be intact. Results related to quality, lead times, cost, safety, employee morale can only be reached if the organization has created a sound and robust foundation. These results can then provide organizations with a competitive advantage (Womack et al. 1990). A lean organization is not an end state (Liker 1998). No matter how good the organization becomes, a culture of continuous improvement and learning will create new opportunities for improvement.

Methodology

This study used case-based, qualitative research methods. According to Miles and Huberman (1994), a case study focuses on a phenomenon within a bounded context. Yin (1994) argues that case studies can contribute in a unique way to our knowledge of individual, organizational, social, and political phenomena. Case studies typically combine data collection methods such as archival searches, interviews, questionnaires, and observation (Eisenhardt 1989). Case studies allow for detailed and in-depth investigations of complex relations between data that can be of either qualitative or quantitative nature (Yin 1994).

Study design

Case study site selection

The approach chosen for this study was a multiple-case study design using four extreme cases. Two of the cases were located in the U.S., and two were located in Germany. The extreme case method is commonly used in case study research and enables learning from highly unusual manifestations of the phenomenon of interest, such as outstanding successes or notable failures (Patton 1990). For this study, case sites were selected because of their documented position as lean leaders in the secondary wood products industry.

The two case study sites in the United States had previously won the prestigious "Shingo Prize for Excellence in Manufacturing." The evaluation for this award is based on an organization's ability to successfully implement lean thinking practices and principles. Only a small group of lean companies in the United States have won this manufacturing award. No similar award was found in Germany to identify potential case study sites. Instead, two German companies were targeted using the past experience of the researcher, reports about the lean successes of these organizations in trade journals and shows, conferences, as well as recommendations from faculty members at the University of Applied Sciences in Rosenheim, Germany. The University of Applied Sciences in Rosenheim has one of the leading wood technology and advanced wood processing departments in the world. The four case study sites are referred to as Company A and Company B (U.S.), and Company C and Company D (Germany) in the remainder of this paper.

Once identified, these four companies were contacted by telephone and e-mail to request participation in the study. The initial organizational contacts were high-level managers with responsibility for lean implementation. All four case study sites initially targeted for study agreed to participate.

Questionnaire and protocol development

Data were collected at each case site through a questionnaire and three different interview protocols, one each for executive personnel, marketing managers, and work-force employees. The conceptual framework was used in developing items for the questionnaire and interview protocols used for this study. A questionnaire was created based on a survey developed by Panizzolo (1998). Managers rated the extent to which various lean practices and principles had been implemented within their production organizations.

The interview protocols developed were identical for each case study site in the study, but still allowed for exploration in areas that seemed especially interesting at each case site. The protocol for marketing managers was partly based on the problem areas that Piercy and Rich (2004) identified in a study of strategic marketing in a lean enterprise.

Before collecting data at the actual case sites, a secondary wood products organization with some lean implementation experience was chosen to pilot test the questionnaire and interview protocols. The pilot test resulted in only minor changes to the questionnaire and interview protocols.

For the two case study sites located in Germany the questionnaire and interview protocols were translated into German. An initial translation from English to German was completed by the principle investigator. To assure consistency between the documents, a bilingual person not involved in the study, translated the documents back into English. This translation was then compared to the original English version. Language use was fine tuned based on this comparison in an effort to eliminate potential bias resulting from use of research instruments written in two languages.

Data collection

Data were collected using the questionnaire, completed by the interviewed manager, and through personal interviews conducted by the principal investigator. Archival documents and on site observations were also used. To enable cross-case comparability, the same questionnaire and interview protocols were used at each case site (Miles and Huberman 1994). During the interviews and observations, notes were taken by the principal investigator.

The first step in the data collection was to send the target manager, who was responsible for the organization's lean implementation, the questionnaire. The manager was asked to fill out the questionnaire and send it back to the researcher prior to the interview. The completed questionnaire was carefully evaluated before each case study site visit to assist the researcher in developing additional questions on areas that seemed especially interesting at each case site.

Interviews were conducted with the manager who completed the questionnaire and an attempt was made to interview a high level marketing manager at each case site. Interviews of approximately four shop floor workers within each case study site were also conducted.

Data analysis

Data analysis was based on Miles and Huberman's (1994) three-stage technique. The first step was data coding (data reduction), which helped to create an analysis structure. A code may be a complex model of themes, a list of themes/ indicators, or qualifications that can be causally related. For example "challenges faced during lean implementation" was one code. Given the approach utilized in this study the structure was largely predetermined via the interview protocols and questionnaire. The second step was data display, which required displaying the data in a structured summary to support drawing conclusions, cross-case analysis, and comparisons to the theoretical background. Conclusion drawing and verification was the third step. This meant analyzing and identifying links and connections between theme clusters and assuring their validity.

Since the researcher is the main measuring device, researcher bias is a risk associated with analysis of qualitative data from case studies (Miles and Huberman 1994). The most common technique used to prevent researcher bias is triangulation. "Triangulation occurs when multiple sources from different data collection methods support the same conclusion or, at least, do not contradict it (Miles and Huberman 1994)." There are four commonly identified types of triangulation: Data triangulation, investigator triangulation, theory triangulation, and methodological triangulation (Miles and Huberman 1994). This study used data triangulation as the primary method of minimizing researcher bias.

The quality of qualitative research can be evaluated, in part, by assessing construct validity, external validity, and reliability (Yin 1994). Various steps were taken in both the design of the study and the analysis of study data to ensure that the results of this research were valid and reliable. These steps are summarized in Table 1.

Findings and discussion

Details on the organizational members participating in the interviews, as well as descriptive information about each of the four case study sites are summarized in Table 2. One case study site in each country was part of a much larger multinational corporation; whereas, the other two case study sites had fewer than 400 employees each. In total, seven managers responsible for lean implementation, three marketing managers, and 11 work-force employees were interviewed. Additional data were received for the U.S. based case organizations (company A and company B) from the Shingo Prize Achievement Report, as well as PowerPoint[R] presentations, charts, and documents about lean implementation obtained from the organizations.

Lean implementation

The case study sites included in this study began implementing lean thinking between 1998 and 2005. Managers at companies A, B, and C stated that lean thinking had been implemented as a result of a minor crisis, such as the loss of market share, decreasing profitability, and growing competition. The case study sites were forced to react to these challenges before they became major crises and threatened the existence of the organization. In addition companies A and C, which were part of larger multinational corporations, were pressed by their parent corporations to implement lean as a means toward becoming more efficient. Due to the size and structure of companies A and C, managers reported that there was still a disconnect between manufacturing operations and corporate headquarters in what lean thinking meant. The interviewed managers felt that leaders at the corporate headquarters viewed lean thinking as relevant only to manufacturing, rather than viewing lean thinking as an overall management approach. The manager at company B said that lean thinking was applied to all areas of the organization, resulting in benefits for marketing as well as manufacturing.

The manager at company D reported that lean thinking was implemented, not because of a crisis, but because leaders felt that lean thinking would allow the organization to stay ahead of most competitors. At company D, employees were heavily involved in the design of special lean practices and principles resulting in an implementation that mixed a top-down approach and a bottom-up approach. Company D implemented lean in all areas of the operation, seeing benefits not only in manufacturing, but also in marketing operations.

A connection between organization size and the level of lean implementation in different areas was identified in the four case study organizations. The smaller case study sites in each country implemented lean thinking as a total business strategy, resulting in purported benefits in all areas of the operation. Whereas the two larger case study sites implemented lean primarily within manufacturing operations and did not see substantial gains in other areas of the organization.

Employee focus

Each of the four case study sites had a strong focus on employees, which is one of the key enablers to successful lean thinking (Fig. 1). Employees were seen as the most important asset and treated accordingly. This was stressed by all managers during the interviews. Safety was another area upon which managers at all four case study sites focused. All interviewed managers reported a decrease in accidents following the lean implementation. All case companies offered extensive training for new employees and various on-going training for existing employees. The way employees were trained differed among the case companies, but all managers agreed that training was a critical factor in their success. Each case study site had active suggestion systems in place, providing another indicator of the value placed on both employees and their ideas. Teamwork and empowerment of employees were also identified as important by all managers. To show appreciation for employees, all case study sites sponsored social events and had employee reward systems in place. These efforts were also acknowledged by the employees during the interviews.

Plant layout

Plant layout is a key element of the core operations (see Fig. 1) and is essential in supporting the implementation of lean tools such as JIT, TPM, and TQM. The manufacturing facilities of the case study sites were laid out primarily using flow-lines. This was due, in part to large equipment. Where hand work and smaller machines were used, manufacturing cells were established. The shop floors were clean and organized, as a result of rigorous 5s programs in the case study sites. 5s is a process helping to create a clean and well-organized work environment. Company B was slightly different. The level of cleanliness was not as high as the other three facilities. In addition, the manufacturing floor was laid out using manufacturing cells. This was due to the high level of craftsmanship required to manufacture antique replica furniture, the primary end product at company B.

Performance measures and production data were displayed on specially designed bulletin boards in three of the four case study sites. The information on the boards was up-to-date and allowed all employees to determine whether manufacturing stations were running on schedule. Company D utilized proprietary software and computer terminals to supply all employees with the real-time production and performance information. Overall, the case study sites supplied employees with information where and when it was needed. According to the interviewed managers, the visual and clean work places allowed problems and mistakes to be detected visually and to be detected as soon as they happened.

Key resources and assistance

Most interviewed managers had read extensively about lean thinking and had taken several lean manufacturing courses. What managers believed was most beneficial to them however, was benchmarking other organizations. Benchmarked organizations were from a variety of manufacturing industries. Benchmarking was also conducted among sister plants within companies A, C, and D. It was noted that managers found it very helpful to observe, in person, how other organizations were implementing similar practices and principles. Managers found that the interaction with other managers and the examples presented at other plants and in courses were the most valuable. The managers at company B were the only case study site to identify a consultant as the most beneficial resource in their lean journey. The manager at company D reported that "tough, but fair discussions with management and employees" seemed most beneficial, and that employee feedback was highly valued.

Pitfalls and challenges

Many employees reported that it was a culture shock when their organization started to implement lean processes, practices and principles. Employees worried about their jobs, and it took them time to realize the benefits resulting from a lean implementation. After understanding and accepting lean thinking, most employees had positive feelings toward the new practices. Interviewed employees shared that they felt that improving profitability would help keep their jobs secure. In addition employees noted that their daily work became easier and less strenuous as a result of improved work conditions.

Based on the interviews with managers at all four case study sites, effectively communicating the vision and plan for lean implementation to the workforce was challenging. Shop floor employees also perceived that communication was a significant challenge. Communicating, understanding, and believing in the new vision proved to be difficult, not only for employees, but also for management. According to the interviewed managers, the hardest individuals to convince of the need for lean thinking were the older, experienced, and highly skilled employees. Some of the managers indicated that their organizations had to let go of employees that would not adopt lean processes, practices and principles that were part of their lean implementation efforts.

A variety of additional challenges were noted by the case study site managers. The manager at company C, for example, reported that it was hard, at times, to adhere to the new practices and principles. One difficulty company B faced was the change in manufacturing layout from a flow line into manufacturing cells. In particular, employees did not understand how the cells were supposed to operate. In hindsight, management felt that they could have conducted additional lean training for everyone, but especially for the shop floor employees. A summary of the challenges identified can be found in Table 3.

Key benefits

As illustrated in the conceptual model, if the appropriate components are established on a strong foundation, organizations should realize a variety of benefits (Fig. 1). Consistent with previous research findings, manufacturing was the function that benefited the most from lean thinking. A direct comparison of the benefits realized by each case study site was difficult in this study, as each case study site measured performance somewhat differently. However, there were some notable similarities. For example, all managers reported that their organizations were able to reduce defects dramatically. Company A was able to reduce defects by 84 percent. Case study sites were also able to reduce inventory and work in process between 10 percent and 97 percent, freeing up valuable manufacturing floor space. By reducing work in process and redesigning manufacturing processes, company A freed up 70,000 [ft.sup.2] of floor space. Companies A, C, and D reported that they were able to reduce lead times from several days down to a few hours. Company B was able to reduce lead time from 16 weeks to 6 weeks. Productivity increased between 100 percent and 200 percent, except for company C, where productivity only increased by 10 percent. Company C began its lean implementation in 2005 and had not been engaged in lean thinking as long as the other three companies. All of these dramatic productivity increases were possible without major capital investments.

All case study sites also became more cost effective and turned from barely, or negatively profitable to being highly profitable. Profitability gains between 10 percent and 20 percent were reported. These benefits were supported by both statements made by the interviewed managers, as well as from the organizational documents that were gathered.

Safety is another area where significant improvements were identified by the managers at the case study sites. Improvements were most dramatic for the U.S. companies. As a result of lean implementation, factories became visual, organized, and clean which allowed for the timely detection of manufacturing problems. Another important benefit was the improved cooperation between management and employees. This cooperation was noted by both employees and managers during the data collection.

The final significant benefit that was identified in the data analysis was the creation of a culture that was better able to solve problems. In particular, the case study organizations found that through the use of lean thinking, there was a stronger emphasis on continuous improvement at all levels in the organization. This new culture was supported through the implementation of programs such as suggestion systems, as well as making lean training available for all employees.

In addition to the benefits realized within the manufacturing function, this study also explored the impact of lean thinking on the marketing function. Marketing function benefits were noted primarily in companies B and D, where lean thinking was implemented across multiple business processes. All companies in this study were able to reap the full benefit of the productivity gains in manufacturing (as a result of lean thinking). All four case study sites had sufficient demand for their products, so that they were able to sell the additional product that resulted from the increased capacity utilization.

The specific marketing benefits noted by the managers at companies B and D included more robust product lines, more reliable processes, and more efficient new product development processes. These improvements helped increase customer satisfaction and subsequently lead to sales growth. Company B was able to introduce 150 new products a year, compared to only 12 new product introductions a year prior to lean implementation. Company B's sales grew by an average of 35 percent every year between 1998 and 2001, and 98 percent of the sales value was from repeat customers, highlighting customer satisfaction. Companies B and D saw themselves as being closer to the customer as a result of lean. The lean implementation also enabled company D to start a mass customization program. By doing so, company D gained a competitive advantage over many other bathroom furniture manufacturers in the market. The primary benefits, in both manufacturing and marketing, realized by each of the four case study sites have been summarized in Table 3.

Differences between countries

Because the four case study sites were located in two different countries, differences between countries were also explored in the data analysis. The two German case study sites appeared to operate at higher levels of efficiency prior to their lean implementation than the two U.S. case study sites. The two German case study sites had previously invested and utilized more state-of-the-art, high-tech, CNC operated machinery. Both German sites had also installed and used enterprise resource planning software. Findings from this study suggest that German case study sites did not experience the same levels of improvements in quality, cost, productivity, and delivery. They did, however, experience similar levels of profitability as their U.S. counterparts. It was also noted that the German companies appeared to modify lean to better fit their special needs associated with higher levels of automation and existing efficiencies.

Germany has a comprehensive apprentice system that requires employees in most positions to fulfill two to 4 years of training and education. It was expected that this might influence German case study sites in terms of lean implementation. When it comes to lean implementation the interviewed managers agreed that the single most important skill an employee must bring, was the ability to engage in teamwork and a willingness to adopt lean practices. Managers agreed that the technical skills an employee needed for the job can be taught and learned easily, but it was difficult to change the attitude of employees. The adoption of lean practices was often easier for less skilled employees with less exposure to the traditional way of manufacturing prior to lean implementation. In conclusion, the higher education and skill level of German employees did not make lean implementation easier for the German case companies. However, it helped German case study sites to reach higher levels of manufacturing efficiency prior to the lean implementation.

Implications

The findings of this study suggest that successful lean implementation can bring a wide array of benefits to companies in the secondary wood products industry. Although, there were some differences between case study sites and between countries, key factors for successful lean implementation were found to be consistent. The identified types of assistance, such as benchmarking, lean courses, and lean literature can be recommended to any organization planning to implement lean thinking within its operations. Furthermore, these research findings support the idea that employees are the simple most important resource for a company in a successful lean implementation.

The biggest challenge experienced by all four case study sites was adequate communication. Communication is a key issue in organizations undergoing any major change (Lewis et al. 2006). For any organization contemplating the use of lean thinking as a management approach, the general strategies offered by Lewis to mitigate these challenges are relevant. The findings from this study confirm these challenges and also provide organizational leaders with more specific ideas about how communication challenges can be addressed in a lean transformation. Table 4 summarizes Lewis' findings and also provides more specific examples of strategies used by the four case study sites.

The similarity of the results from this study with previous research on change management and lean implementation, provide some evidence to suggest that the findings from this study may be more broadly applicable to a larger population of wood products companies. Further research, however, is still warranted. In particular, the inclusion of additional case study sites from the secondary wood products industry that failed in their attempts to use lean thinking might shed additional light on the challenges/pitfalls of lean thinking. Additional data collection to compare the performance of case study sites that have been successful in lean with case study organizations that have not would also be of interest. This could help quantify the level of efficiency and profitability gains that might be expected to result from a successful lean implementation. Lean thinking in the secondary wood products industry has been largely unexplored in the scholarly literature. Findings from this study suggest that lean thinking can help to increase the competitiveness of both U.S. and German secondary wood products industries in an increasingly global marketplace. Thus, additional attention by both practitioners and academic researchers is needed.

Literature cited

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Emiliani, M.L. 1998. Lean behaviors. Manage. Decis. 36(9):615-631.

Gagnon, M.A. and J.H. Michael. 2003. Employee strategic alignment at a wood manufacturer: An exploratory analysis using lean manufacturing. Forest Prod. J. 53(10):24-29.

Lewis, L.K., A.M. Schmisseur, K.K. Stephens, and K.E. Weir. 2006. Advice on communicating during organizational change: The content of popular press books. J. of Business Communication 43(2): 113-137.

Liker, J.K. 1998. Becoming lean: Inside stories of U.S. manufacturers. Productivity Press, Portland, Oregon. 535 pp.

--. 2004. The Toyota Way: 14 Management Principles from the World's Greatest Manufacturer. McGraw-Hill, New York. 330 pp.

Miles, M.B. and A.M. Huberman. 1994. Qualitative Data Analysis, 2nd ed. Sage Publications, Thousand Oaks, California. 338 pp.

Mintz Testa, B. 2003. Lean manufacturing: Processing buzzword or operational lifesaver? Engineered Wood J. 6(1): 12-15.

Panizzolo, R. 1998. Applying the lessons learned from 27 lean manufacturers, the relevance of relationships management. Inter. J. of Production Economics 55(3):223-240.

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Schonberger, R.J. 1982. Japanese Manufacturing Techniques: Nine Lessons in Simplicity. Free Press, New York. 260 pp.

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(1) Austria, Belgium, Denmark, Finland, France, Germany, Greece, Ireland (Republic of), Italy, Luxembourg, The Netherlands, Portugal, Spain, Sweden, and United Kingdom.

Eric N. Hansen, Forest Products Society Member.

The authors are, respectively, Automobile Development Management Consultant, [bu:st] Automotive GmbH, Munich, Germany (Jochen.Czabke@bu-st-automotive.de); Professor, Dept. of Wood Sci. and Engineering, Oregon State Univ., Corvallis, Oregon (Eric.Hansen2@oregonstate.edu); and Associate Professor, School of Mechanical, Industrial and Manufacturing Engineering, Oregon State Univ., Corvallis, Oregon (doolen@engr.orst.edu). This paper was received for publication in March 2007. Article No. 10332.
Table 1.--Actions taken in the study design to improve validity and
reliability.

 Actions taken in this study

Construct validity * Different data sources were
 (assuring correct operational used (data triangulation)
 measures for the phenomena
 studied)
Applied during data collection * Chains of evidence were
 and data analysis. constructed
 * Feedback about final findings
 was collected from interviewed
 managers (all four primary
 contacts provided feedback
 assuring the accuracy of the
 findings)
 * Techniques and methodology are
 well documented and described
External validity * Multiple case study design
 (generalizability) (replication logic, and
 cross-case analysis)
Applied during study design and * Similar findings for all four
 data analysis. case companies
 * Findings are consistent with
 previous research and literature
 * Purposive sampling
Reliability (possibility to * Use of case study protocol and
 replicate case study) database
Applied during study design, data * Use of established qualitative
 collection, and data analysis. methodology as the basis for
 research design
 * Well documented research
 methodology

Table 2.--Case study site data sources and details.

 United States

 Company A Company B

Data sources Interviews with: Interviews with:
 * 1 lean manager * 3 lean managers
 * 1 marketing manager * 1 marketing manager
 * 4 work-force employees * 4 work-force employees
 Plus additional data. * Plus additional data.
Organizational 8 production sites in 1 production site in the
 structure the U.S., part of a U.S., and 1 in Mexico
 multinational
 corporation
Organizational 590 employees at case 143 employees at case
 size site, 3,320 employees site, 180 employees
 total total
Product details Cabinet doors and drawer Case goods/ antique
 fronts reproductions
Start of lean 1998 1998
 implementation
Reasons for lean * Minor crisis * Minor crisis
 implementation * Headquarters request

 Germany

 Company C Company D

Data sources Interviews with: Interviews with:
 * 1 lean manager * 1 lean manager
 * 1 work-force employee * 1 marketing manager
 * 2 work-force employees

Organizational 2 production sites in 2 production sites in
 structure Germany, part of a Germany, part of a
 multinational multinational
 corporation corporation
Organizational 250 employees at case 261 employees at case
 size site, 13,000 employees site, 400 employees
 total total
Product details Office furniture Bathroom furniture

Start of lean 2005 1998
 implementation
Reasons for lean * Minor crisis * Desire to be ahead of
 implementation * Headquarters request most companies

Table 3.--Challenges and benefits associated with implementation of
lean thinking for each case study site.

 Company A

Main challenges * Culture shock
 * Communication

Main benefits * 84 % defect reduction
 * 80 % inventory reduction
 * Lead time reduction from 6 days to 13
 hours
 * 70,000 [ft.sup.2] of floor space gained
 * Plant capacity doubled with no
 investment
 * From negative profit to highly
 profitable
 * Safety increased
 * Very visual, organized, and clean
 production
 * Better cooperation between
 work-force and management
 * Problem solving culture

Marketing benefits * Unable to rate, still disconnect
 between manufacturing and marketing

 Company B

Main challenges * Culture shock
 * Communication
 * Change in layout

Main benefits * Areas with efficiency increases of 100
 % after just one kaizen event
 * Lead time reduction from 16 to 6
 weeks
 * Cycle time reduction from 45 to 4
 days
 * Gained floor space
 * Productivity increased from 16 items
 to 60 items per day
 * From barely profitable to highly
 profitable
 * Safety increased
 * Problem solving culture

Marketing benefits * NPD more efficient and reliable
 * From 12 new products a year to 150
 new products a year
 * Improved manufacturability of new
 products
 * Increased customer satisfaction
 * Sales growth
 * 98 % of sales value with repeat
 customers

 Company C

Main challenges * Communication
 * Consequently following the new
 practices and principles

Main benefits * Reduced number of defects
 * Inventory turns increased 10%
 * Batch size reduction from 80* pieces
 to 152 pieces
 * Machine availability increased 1* to
 15%
 * Productivity increased 10%
 * Profitability increased
 * Very visual, organized, and clean
 production
 * Problem solving culture

Marketing benefits * Unable to rate, still disconnect
 between manufacturing and marketing

 Company D

Main challenges * Communication

Main benefits * Inventory turns increased from 1.5
 times a year to once a week
 * Lead time reduction down to 48 hours
 * Productivity increased 20* % with
 little capital investment
 * Profitability increased 20%
 * Enabled mass customization
 * Special in-house developed lean ERP
 software helped manufacturing in
 many ways
 * Very visual, organized, and clean
 production
 * Problem solving culture

Marketing benefits * Closer to the customer
 * Special, in-house designed lean ERP
 software helped marketing in many
 ways
 * Enhanced ability to respond to market
 needs
 * Enabled implementation of mass
 customization

Table 4.--Strategies for successful change management (Lewis et al.
2006) and case study site examples.

 Theme Description

"Emphasize participation By creating a sense of ownership among as
 and empowerment" many stakeholders as possible, employees
 will be more likely to enthusiastically
 participate and internalize the suggested
 changes. "Leaders need to encourage
 members to take ownership and be
 autonomous independent thinkers."

"Create a change "Use culture as a tool or anchor to enable
 culture" change to occur." Encouraging thoughtful
 preparation and dissemination of ideas
 will help.

"Emphasize purpose and "Leaders should provide a consistent and
 vision" strong justification for implementing
 the change."

"Emphasize communication" "Communicating is key to working through
 problems and successfully implementing
 change." It should be open and honest,
 utilizing all means and vehicles of
 communication.

 Theme Examples

"Emphasize participation Employees were seen as the most important
 and empowerment" asset and treated accordingly in all case
 companies. For example all companies had
 suggestion systems in place to allow all
 employees to fully participate, and have
 a sense of ownership. Employee awards and
 company wide social gatherings are also
 good examples.

"Create a change By implementing continuous improvement
 culture" systems and suggestion systems, all case
 companies created a culture of change,
 trying to involve everyone in the ongoing
 process.

"Emphasize purpose and By sharing business data and having an
 vision" open and honest dialogue about the
 reasons for lean implementation, case
 companies justified the change.

"Emphasize communication" Communication was seen as one of the most
 important enabler for successful lean
 implementation by all case companies,
 but also proved to be a main challenge.
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Article Details
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Author:Czabke, Jochen; Hansen, Eric N.; Doolen, Toni L.
Publication:Forest Products Journal
Geographic Code:4EUGE
Date:Sep 1, 2008
Words:7058
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