Impact Of Lean Practices On Organizational Performance

The lean philosophy centers on the elimination of waste in all forms in an organisation (Shpak, 2016). Lean is usually implemented by initially

The implementation of lean operations is one the most popular ways to improve efficiency and productivity in operations. This strategy has afforded many businesses the opportunities to streamline processes that resulted in improved systems and efficiency. However, many businesses face obstacles with implementing lean practices for various reasons such as unclear directions, employees that are resistant to change, and poor planning. Businesses that encounter issues with lean implementation must identify performance metrics to improve operational strategies. This paper will examine the obstacles businesses experience with lean implementation.

Lean manufacturing is the production of goods using less of everything than in mass production: less human effort, less manufacturing space, less investment tools and less engineering time to develop a new product. A company becomes lean by continuously increasing its capacity to produce high-quality goods while

As the article mentioned: lean is not mean. It promotes respect for people (both staff and customers – patients) while ensuring that the best work is being done, utilizing the less resources at a lower costs. Can be argued that people are one of the main resources for a Lean implementation.

“Lean means creating more value for customers with less” (Krejewski, L., Ritzman, L.P., & Malhotra, M.K., 2013). Implementing this into a project can make the project very successful at a lower rate of cost and time. There are five steps in allowing the lean process to work successfully. This process is easy to remember but not always easy to achieve. Specifying the value from the customer’s point of view of the product that the customer is interested in purchasing is the first step. Identifying all the steps of value for the product the customer wants to purchase and eliminating the steps that are unnecessary is the second step. Creating a sequence of steps that flow in a consistent fashion and will flow smoothly toward the customer is the third step. Introducing the flow of the product that the customer is interested in purchasing and allowing the customer to pull value from the product is the fourth step. The fifth and final step in the lean technique process is “as value is specified, value streams are identified, wasted steps are removed, and flow and pull are introduced, begin the process again and continue it until a state of perfection is reached in which perfect value is created with no waste” (Lean Enterprises Institute, 2015).

The question currently being asked, are United States companies doing poorly with lean and is lean faltering? Studies over the past 10 years have shown that United States companies are not only doing poorly, but that they have become worse over the past five to seven years (Schonberger, 2007, p.22). Lean Manufacturing was a brilliant idea that achieved great success with car manufacturers like Toyota. However, these practices have actually hurt many organizations when companies attempt to apply them internally to certain practices. Too many companies have attempted to correct problems internally using certain lean methods that should only be applied to manufacturing. Companies have applied the Lean Six Sigma approach to cut waste within the organization by reducing raw materials, work-in-progress and finished goods inventory. Companies have also streamlined their own employees reducing headcount and hiring or retraining remaining staff that can perform many tasks instead of specific jobs. In-fact, organizations that have applied Lean Six Sigma and Lean Manufacturing internally are still seeing losses. Companies have neglected to look externally for waste instead of constantly focusing on internal processes and problems. Creating these reductions, companies are actually seeing two to 10 times more lead-time externally than internally (Schonberger, 2007, p.

The application and implementation of lean principles or thinking is a process that requires commitment from every stakeholder in the organization. This process entails commitment to the organization's workers and to the system itself in order to make changes towards improvement. Generally, the implementation of lean thinking is geared towards continuous improvement through the elimination of waste. However, lean management or implementation of the principles sometimes incorporate mistakes that are made by leaders in the execution process. This is mainly because lean leadership appears to be simple though its complex because of the costs associated with it. The mistakes usually occur because of intrinsic complexities of exploring deeply into organizational philosophies, business strategy, psychology, and macroeconomics.

The origins of lean thinking is actually created from the manufacturing industry. In the manufacturing or production industry, lean management design approach main objective is focusing on the elimination of waste and having a smooth workflow through a right process. Lean also enables the organization to improve performance.

Lean production, or lean manufacturing, is a philosophy adopted in the Japanese manufacturing industry to help the automobile industry improve its processes. Today, lean production has enlarged in many different repetitive manufacturing industries and other organizations (de Treville & Antonakis, 2006). For example, lean production is now common in the healthcare industry to improve the processes in hospitals. Since remaining competitive in the increasing global market is of upmost importance to many organizations, adopting a lean manufacturing philosophy could be the difference in obtaining a competitive advantage and surviving in a global changing economy (Abdulmalek & Rajgopal, 2006). Also, managers have come to view lean as a way to improve operation and organizational performance (Longoni, Pagell, Johnston, & Veltri, 2013). Therefore, the goal of lean production is to improve efficiency by getting rid of unnecessary processes or waste en route to delivering a service or product to the customer that is of great quality. Lean production attempts to add value to the customer by removing waste that does not add value. Since lean production is dependent on how well it is implemented in the organization, it will be important to see what effects, if any, lean production has on worker health and safety as

Lean is defines the manufacturing philosophy that reduces the time between the shipping and customer demand, which based on the systematic method by eliminating waste, that means giving the customer what they want when they want it, and don 't waste whatever. Rahmana, Sharif and Esa (2013) suggested lean production is mentioned to improve the company 's performance from the philosophy in reducing waste in order. That means, lean system destination is the decrease cost by removing the non-value activities, which they are applying a category of tools and techniques for checking and eliminating defective in the production process. In the Evenort Company should emulate the five overriding principles of lean thinking in terms of implementing lean that there is guarantee the company has been driving correctly in the lean manufacturing (Cardiff 2015) as can show in table 1.

The Lean equation consists of the sum of three important elements which include, purpose, process and people. Dr. Bahri’s purpose of running a dental clinic was to maximize profits along with maximizing customer satisfaction (maximizing perceived customer value) and elimination or minimization of all sorts of wastes. Therefore, he defined his processes such that they would create an efficient value stream. And this would only be possible with the help of the third element, people, who helped him continually evaluate the value stream in terms of

Authors of the book Lean Thinking: Banish Waste and Create Wealth in Your Corporation, James P. Womack and Daniel T. Jones, focus on Lean thinking, the five principles of Lean with details on how to implement these ideals in their text. Additionally it provides evidence as to how creating a Lean factory will boost productivity and reduce inventories.

e. Introduction of Gewald to the shop floor workers and office employees to clearly communicate the initiative and the lean implementation objectives

Organizational performance (OP) catches an important element in case of empirical research in business policy. Researchers often consider deliberately the performance of organizations on the basis of

Implementing lean into SMEs within Saudi Arabia manufacturing industries faces difficulties, while in larger companies, it is more likely to be implemented succesfully and gain the advantages of lean systems (Karim et al., 2011).