lean management

183 Pages·2011·4.79 MB·English

LEAN MANAGEMENT: AWARENESS, IMPLEMENTATION STATUS, AND NEED FOR
IMPLEMENTATION SUPPORT IN VIRGINIA’S WOOD INDUSTRY
CHRISTIAN F. FRICKE

THESIS SUBMITTED TO
THE FACULTY OF THE VIRGINIA POLYTECHNIC INSTITUTE AND STATE UNIVERSITY
IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE DEGREE OF
MASTER OF SCIENCE
IN WOOD SCIENCE AND FOREST PRODUCTS: MANUFACTURING SYSTEMS

Urs Kurt Buehlmann
David Earl Kline
René Leendert Maria Catherine Aernoudts

December 8, 2010
Blacksburg, VA

Keywords: Lean Management, Lean awareness, Lean implementation, Lean support, wood
products industry, furniture manufacturing industry, small and medium enterprises, Virginia
Abstract ii
LEAN MANAGEMENT: AWARENESS, IMPLEMENTATION STATUS, AND NEED FOR
IMPLEMENTATION SUPPORT IN VIRGINIA’S WOOD INDUSTRY
CHRISTIAN F. FRICKE
Abstract
During the last decades, the U.S. wood products (NAICS 321) and furniture manufacturing
(NAICS 337) industries have been greatly affected by economic cycles, rising production and
transportation costs, changing buyer habits, and, arguably, most powerfully, increasing global
competition. As a result, tens of thousands of jobs were lost and a large number of companies
in the industry experienced bankruptcy, closed operations, or relocated to other countries.
However, theories exist stating that the use of management systems, such as, for example,
Lean management, allows companies to become more competitive and enhance the likelihood
of survival.
A mail survey was conducted to investigate companies in Virginia's wood products and
furniture manufacturing industries as to their awareness of Lean management, the
implementation of Lean practices, as well as the companies' need for support in Lean
implementation efforts.
Findings indicate that a majority of Virginia's wood products and furniture manufacturing
industries have heard about terms like, for example, Lean management, Lean manufacturing, or
Lean thinking, but are rarely aware of individual Lean elements of which Lean consists. Few
businesses thus have implemented Lean. However, findings show that Lean awareness and
Abstract iii
Lean implementation status differs between individual industry sub-segments. The group of
industry segments with the highest Lean awareness and Lean implementation status were
“engineered wood products”, “manufactured homes”, and “household furniture
manufacturing," as opposed to industry sub-segments such as “sawmill” and “wood container
and pallets," which had lower Lean awareness and Lean implementation status. The study also
revealed that smaller companies (less than 50 employees) have a lower level of Lean awareness
and implementation status than do larger companies (50-499 employees). Despite the low
level of Lean implementation across the wood products and furniture manufacturing industry in
Virginia, less than one-fourth of all respondents indicated a need for Lean implementation
support.
Acknowledgements iv
Acknowledgements
I would like to thank Dr. Urs Buehlmann, my friend and academic advisor, who has helped me
to grow personally and professionally. Also, I would like to recognize the encouragement of my
committee members Dr. Earl Kline and Dr. René Aernoudts.
I would like to show my appreciation to Omar Espinoza for his support and the members of the
LeanTeam@VirginiaTech for their fellowship and encouragement: Mathias Schmitt, Adrienn
Andersch, Chao Wang, Yu Zhou, Gavin Wherry, Rebecca Buck, and Kevin Knight. Most
importantly I would like to thank my wife Kristin Ann Fricke for her encouragement and advice
in all my endeavors. Also, I would like to thank my parents Erhard and Heidi Fricke for their
continuous support through endless Skype conversations as well as my parents-in-law Mark
and Ratih Johnson, who have continued to motivate me throughout my pursuit of this research.
Table of Contents v
Table of Contents
Table of Contents ....................................................................................................................... v
List of Tables ............................................................................................................................... x
List of Figures............................................................................................................................. xi
1. Introduction ........................................................................................................................1
1.1. INDUSTRY BACKGROUND ............................................................................................................................ 1
1.2. PROBLEM STATEMENT AND RESEARCH QUESTIONS ............................................................................................ 4
1.2.1. Lean Awareness ............................................................................................................................... 4
1.2.2. Lean Implementation ....................................................................................................................... 4
1.2.3. Need for Support ............................................................................................................................. 5
1.3. REFERENCES ............................................................................................................................................ 5
2. Literature Review ...............................................................................................................9
2.1. LEAN MANAGEMENT ................................................................................................................................. 9
2.1.1. What is Lean? .................................................................................................................................. 9
2.1.2. The Toyota Production System (TPS) .............................................................................................. 10
2.1.3. Principles of Lean ........................................................................................................................... 14
2.1.3.1. Womack and Jones’ 5 Lean Principles ........................................................................................ 14
2.1.3.2. Liker’s 14 Principles ................................................................................................................... 17
2.1.4. Seven Types of Waste .................................................................................................................... 21
2.1.5. Examples of Lean Implementation ................................................................................................. 23
2.1.6. Difficulties and Obstacles ............................................................................................................... 29
2.1.7. Summary ....................................................................................................................................... 30
2.2. THE U.S. WOOD PRODUCTS INDUSTRY ........................................................................................................ 30
Table of Contents vi
2.2.1. General Definition .......................................................................................................................... 30
2.2.2. Overview of the wood industry in North America ............................................................................ 32
2.2.3. Overview of the Wood Industry in Virginia ..................................................................................... 35
2.3. ECONOMIC OBSERVATIONS ........................................................................................................................ 38
2.3.1. Global Economy Affects the Wood Industry in the U.S. ................................................................... 38
2.3.2. Virginia’s Wood Industry ................................................................................................................ 45
2.4. SUPPORT ORGANIZATIONS ........................................................................................................................ 48
2.4.1. How Do Organizations Support Other Business Entities? ................................................................. 48
2.4.1.1. Training .................................................................................................................................... 49
2.4.1.2. Coaching and Consulting ........................................................................................................... 49
2.4.2. Examples of Activities Undertaken by Support Organizations .......................................................... 50
2.4.3. Examples of Lean Related Support Organizations ........................................................................... 52
2.5. REFERENCES .......................................................................................................................................... 57
3. Methodology ....................................................................................................................68
3.1. OVERVIEW ............................................................................................................................................ 68
3.2. DATA SOURCES ...................................................................................................................................... 68
3.2.1. Population ..................................................................................................................................... 68
3.2.2. Mailing List .................................................................................................................................... 69
3.2.3. Sample Size.................................................................................................................................... 70
3.3. DATA COLLECTION ................................................................................................................................... 71
3.3.1. Mail Questionnaire ........................................................................................................................ 71
3.3.2. Mail Questionnaire Pretest ............................................................................................................ 73
3.3.3. First Mail Questionnaire and Follow-up Contact ............................................................................. 74
3.3.4. Second Mailing and Follow-up Contact ........................................................................................... 75
3.4. DATA ANALYSIS ...................................................................................................................................... 76
3.4.1. Mail Questionnaire ........................................................................................................................ 76
Table of Contents vii
3.5. REFERENCES .......................................................................................................................................... 77
4. Lean Penetration in Virginia’s Wood Industry ..................................................................79
4.1. ABSTRACT ............................................................................................................................................. 79
4.2. INTRODUCTION ...................................................................................................................................... 80
Lean Awareness .......................................................................................................................................... 83
Lean Implementation .................................................................................................................................. 83
Need for Support ......................................................................................................................................... 84
4.3. METHODOLOGY ..................................................................................................................................... 84
4.3.1. Survey Population .......................................................................................................................... 84
4.3.2. Questionnaire Design ..................................................................................................................... 85
4.3.3. Data Collection .............................................................................................................................. 88
4.3.4. Data Analysis ................................................................................................................................. 89
4.3.5. Definitions ..................................................................................................................................... 90
4.3.6. Limitations..................................................................................................................................... 91
4.4. RESULTS AND DISCUSSIONS ....................................................................................................................... 92
4.4.1. Lean Awareness ............................................................................................................................. 92
4.4.2. Lean Implementation ..................................................................................................................... 99
4.4.3. Need for Lean Implementation Support ........................................................................................ 105
4.5. SUMMARY AND CONCLUSIONS ................................................................................................................. 108
4.6. REFERENCES ........................................................................................................................................ 111
5. Lean in Small and Medium Enterprises (SMEs) ............................................................... 115
5.1. ABSTRACT ........................................................................................................................................... 115
5.2. INTRODUCTION .................................................................................................................................... 115
5.2.1. Definition of SME ......................................................................................................................... 119
5.3. RESEARCH METHODS ............................................................................................................................. 120
Table of Contents viii
5.3.1. Survey Population ........................................................................................................................ 120
5.3.2. Questionnaire Design ................................................................................................................... 122
5.3.3. Data Collection ............................................................................................................................ 125
5.3.4. Data Analysis ............................................................................................................................... 125
5.3.5. Definitions ................................................................................................................................... 126
5.3.6. Limitations................................................................................................................................... 127
5.4. RESULTS AND DISCUSSION....................................................................................................................... 128
5.4.1. Respondent Profiles ..................................................................................................................... 128
5.4.2. Lean Awareness ........................................................................................................................... 131
5.4.3. Lean implementation status ......................................................................................................... 135
5.4.4. Need for Lean Implementation Support ........................................................................................ 139
5.5. SUMMARY AND CONCLUSIONS ................................................................................................................. 140
5.6. REFERENCES ........................................................................................................................................ 141
6. General Results, Discussions, Future Research ............................................................... 146
6.1. PERFORMANCE INDICATORS .................................................................................................................... 146
6.2. COMPANY SIZE AND INDUSTRY SUB-SEGMENTS ............................................................................................ 150
6.3. SUPPORT ORGANIZATIONS ...................................................................................................................... 151
6.4. FUTURE RESEARCH ................................................................................................................................ 152
6.5. REFERENCES ........................................................................................................................................ 153
7. Summary and Conclusions .............................................................................................. 154
7.1. PENETRATION OF LEAN IN THE WOOD PRODUCTS AND FURNITURE MANUFACTURING INDUSTRIES ............................ 155
7.2. PENETRATION OF LEAN IN SMALLER COMPANIES........................................................................................... 157
7.3. CONCLUSIONS ...................................................................................................................................... 157
7.4. REFERENCES ........................................................................................................................................ 158
Appendix A – Survey Letter .................................................................................................... 160
Table of Contents ix
Appendix B – Survey Questionnaire ....................................................................................... 161
Declaration ............................................................................................................................. 170
List of Tables x
List of Tables
Table 1: Liker’s 14 principles of the Toyota Way (adapted from Liker 2003) ........................................................ 18
Table 2: Data estimates of 2009 for selected sectors of the wood products (NAICS 321) and furniture (NAICS 337)
manufacturing industry in the U.S., sorted by sales (Adapted from (IBIS 2009b, IBIS 2010c, IBIS 2010a, IBIS
2009, IBIS 2010b, IBIS 2010b, IBIS 2010a, IBIS 2009a) ................................................................................. 35
Table 3: 29 Lean elements, categorized in Liker’s (2003) 4Ps ............................................................................... 72
Table 4: Non-Response Bias ................................................................................................................................. 77
Table 5: Twenty-nine Lean elements (Liker 2003) used as proxies to establish Lean awareness and Lean
implementation status in companies surveyed........................................................................................... 86
Table 6: Significance (Wilcoxon Rank-Sum) of pair-wise comparison of industry sub-segments regarding Lean
awareness as measured by knowledge of the 29 Lean elements. ............................................................... 98
Table 7: Significance (Wilcoxon rank-sum) of pair wise comparisons of industry sub-segments regarding Lean
implementation as measured by implementation of the 29 Lean elements (Liker 2003, Czabke et al. 2008,
Kirby and Greene 2003). ........................................................................................................................... 104
Table 8: The 29 Lean elements used as proxies to establish Lean awareness and Lean implementation status
(Liker 2003, Czabke et al. 2008, Kirby and Greene 2003). .......................................................................... 122
Table 9: Results of pair wise analysis (p-values) regarding awareness of Lean terms. ........................................ 133