SUMMARY AND CONCLUSIONSshodhganga.inflibnet.ac.in/bitstream/10603/38771/15/15... · 2015-04-07 · 5.1.2 Evolution of “Lean Concept”: The historical evolution of Lean manufacturing

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CHAPTER 5

SUMMARY AND CONCLUSIONS

This chapter presents conclusion and recommendations drawn from quantitative

analysis. Conclusions are drawn on the basis of literature review and reference available in the

area, as well as statistical analysis .The framework concluded from hypotheses testing, is also

presented in this chapter. Observations and insight of the researcher is duly incorporated in this

chapter. Subsequently recommendations based on the same are listed below. At the end,

unique contributions of the research, managerial implications, limitations of the research and

some future research directions are given.

5.1 Conclusions drawn from study:

The present study utilizes literature review, instrument reliability using Chronbach’s

Alpha, factor analysis, descriptive statistics and inferential statistics to explore the dimension of

Lean manufacturing, its constructs, degree of association among constructs, their role and

relationship with firm performance specially in context to Indian manufacturing industry.

Exhaustive literature review was done through available secondary sources like books, journals,

monographs, reports, magazines, newspapers, online sources. The aim of the literature review is

to understand lean manufacturing, its origin, conceptual development, definition, its present

status and the practices adopted. The various tools or dimensions of lean manufacturing were

studied in detail to assess the dimensions that lead to effective implementation of lean

manufacturing and its relationship with firm performance. Each of the conclusions is discussed

in detail below.

5.1.1 Lean Production: Lean production is a dynamic system that requires fewer resources

(material, labor, overhead) and brings better outputs (quality, variety, cost & safety) to add

value. Most of the works that has been done in lean manufacturing was based on the these

approaches. Lean structure. (Shah & Ward, 2003) framework consists of four “bundles” of

interrelated and internally consistent practices; these are Just-in-Time, Total Quality

Management, Total Preventive Maintenance, and Human Resource Management.

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5.1.2 Evolution of “Lean Concept”:

The historical evolution of Lean manufacturing has taken place from TPS. Lean is the

westernization of a Japanese concept that has carried several names. It has variously been

known as the Toyota Production System, JIT (Just in Time), Pull manufacturing, TQM (Total

Quality Management), and by various other names. Each of these names incorporates some

aspects of lean, and vice versa. Lean should not be viewed in the narrow sense as merely a set of

tools, techniques and practices, but rather as a holistic approach that transcends the boundaries

of the shop floor thus affecting apart from the production itself almost to all the operational

aspects, e.g. design, development, quality, maintenance etc., as well as the entire organization

and management of the company and now a step ahead & moved even on the customer choice

of consumption also.

5.1.3 Definitions of Lean Manufacturing:

Numerous definitions have been given on Lean by management gurus, practitioners and

academicians. It can be holistically mentioned as an integrated philosophy as well as a strategic

tool, to gain competitive advantage. Lean manufacturing is viewed as a philosophy(Bhasin &

Burcher, 2006) && as a long term journey, which enhances business performance and is aimed

to harness the human and material resources of an organization, in the most effective way to,

achieve the objectives of the organization on one hand and customer satisfaction on the other

hand.

5.1.4 Lean Production System Guiding Principles

The lean production system guidelines include Just in time (pull production system),

Kanban production system, total quality control, total productive maintenance

(preventive maintenance, corrective maintenance & maintenance prevention), total

employee involvement.

5.1.5 Dimensions of Lean:

Lean manufacturing has been the symbol of efficiency and optimal performance since the

1980’s.It has been shown to outperform the traditional production model of large batches on

several occasions (Boyer, Leong, Ward, & Krajewski, 1997; Nakamura, Sakakibara, & Schroeder,

1998). Key elements of lean approach are Just-in-time, Kanban, setup time reduction, quality

circles, worker empowerment, effective communication, training etc

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Table 5.1: Dimensions of Lean

Variables Items

Just in Time

VMI

Pull production system

Kanban

lot size reduction

SMED

High inventory turnover

suppliers manage inventory; pull production is employed at shop floor using visual card; automatic replenishment of raw materials at workstation takes place through pull system; single piece flow; reduction of set up time; reducing inventory to avoid defects and highlights hidden issues which act as a bottleneck in the production system;

Employee Involvement

Quality circle

KAIZEN

Shop floor employees are involved in solving problems Shop floor employees are encouraged to provide their needful suggestion Shop floor employees are key to process improvement activities

Total Productive Maintenance

5S

proper maintenance strict adherence to compliance routine maintenance to avoid breakdown preventive maintenance to improve maintainability and improve service availability

Relationship Management with Partners

CRM

Customers feedbacks are analyzed & used for product offerings, product design & product development.

Human resource functions

HR planning

Recruitment and selection

Training and development

Performance appraisal

Compensation

management

Work and Jobs are carefully designed, organized and managed to provide opportunities for individual initiative and self –directed responsibility Compensation and recognition Employee well-being, satisfaction, and motivation Training programs are designed Formal training programs to teach new hires , for promotion, Everyone is given an opportunity to be trained. Training programs designed as per job requirements & also in order to increase promotability

Total Quality Management

HR focus

Relationship with

partners

Modularity

Reduction in variability

Benchmarking

Product quality

QFD

Empowering shop operators to rectify quality problems Quality is one of the most important criteria for supplier selection & evaluation over price Modularity is emphasized to reduce variability & increase standardization Continuous improvement Using statistical process control to reduce variability and improve product quality translating voice of the customer in product design/new product development..

Some of the important conclusions that can be drawn from the Table 5.1 are:

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The role of JIT is an important aspect for successful implementation of Lean. It

includes VMI, pull production system, kanban, lot size reduction, SMED &reducing

inventory to avoid defects and highlights hidden issues.

Employee are empowered to take decisions and encouraged to participate in problem

solving exercise.

Total productive maintenance is about strict compliance, corrective maintenance,

preventive maintenance and self discipline.

The relationship with partners is an important aspect for successful implementation of

Lean. Customers feedbacks are analyzed & used for product offerings, product

design & product development.

Human Resource Functions of an organization has an important role in successful

implementation of lean. It includes the planning function, recruitment and selection,

training and development, performance appraisal, compensation management and

communication.

The role of TQM is to improve product quality by reducing defects and variability by

involving employees, customers and suppliers.TQM is thus regarded as a philosophy

which involves each stakeholders in entire process right from sourcing to final

delivery of product or services so that customers or end users derives maximum

utility from product or services.

5.1.6 Lean Manufacturing and its Impact on firm performance:

The concept of firm performance hasevolved from traditional economic theory with an

emphasis on market power and industry structure as determinants of firm performance

(Chadwick 1999; Chandler, 1994; Knight, 1997; Wiklund, 1999). Earlier, performance

measurement is defined as the process of quantifying effectiveness and efficiency of economic

activities (Neely et al., 1995).

In modern business management, performance measurement assumes a far more significant

role than quantification and accounting (Chan and Qi, 2003). Performance may vary according to

whose viewpoint is taken (e.g., customers or stockholders), the time period observed, criteria

used, and so on. According to Hitt and Ireland (1985) different fields of study should use

different measures of firm performance because of the difference in their research questions.

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For measuring a firm’s performance, objective and subjective measures have been used. The

objective measures include measures such as return on investment, operating profit (EBIDTA),

Quality of product & services, Overstock reduction and waste reduction. Similar measures are

used by previous researcher (e.g. Hitt et al., 1982, 1985). Similarly, the subjective measures of

performance include management’s perceptions of productivity, profitability, market share, and

customer satisfaction relative to competitors. The possibility of using subjective performance

measures (the management perceptions) was suggested by Dess and Robinson (1984) if the

accurate objective measures are unavailable. Subjective measures of performance have been

used by several researchers (e.g. Li, 2000, Akimova, 2000).

Many study suggested that lean manufacturing implementation has positive effects on

employee satisfaction. Indeed many industry practitioners believe that implementing lean

manufacturing practices is an effective means of improving product quality, productivity,

profitability, removing waste etc. It is a way of managing to improve not only product quality,

but also the effectiveness, flexibility and competitiveness of a business as a whole. Recent

papers suggest that lean manufacturing implementation leads to quality conformance and

customer satisfaction & increasing profitability & productivity of the organization. Some scholars

also suggested that lean manufacturing implementation has also an impact on customer

satisfaction, product quality; firms’ accounting variables and stock returns have improved due to

adopting lean.

5.1.7 Indian Manufacturing industry:

Most of the large scale manufacturing industry in India has implemented lean

Management System completely or partially in plants. Indian manufacturing companies have

also adopted world class manufacturing practices like

JIT,TQM,TPM,BPR,5S,KAIZEN,GSCM,Benchmarking,Six-Sigma,VMI,CPFR and many more evolving

practices. In one of the interesting work carried out by Chandra and Sastry (2002) has identified

the status of the implementation of the world class manufacturing practices and its limitations,

suggest that there is tremendous scope for further development in Indian manufacturing sector

which has been the major contributor to the Indian GDP during post independence period (IBEF,

2010;Chandra and Sastry,2002).

5.2 Research framework and hypotheses:

Keeping the research objectives in mind a research model is proposed to study the role

of dimensions on successful implementation of Lean manufacturing which will be measured in

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terms of financial and non-financial benefits with reference to Indian manufacturing industry in

India, as shown below in Figure 5.1. The main components that constitute the conceptual

framework include the various dimensions for lean implementation which will be measured in

terms of firm performance variables.

Figure 5.1: Research framework

5.3 Conclusion from quantitative analysis:

In order to empirically validate the model quantitative analysis is carried out. Some of the

important conclusions for each of the identified variables are as follows:

Just in Time (JIT): It is regarded as a major driver which has significantinfluence on

implementation of Lean manufacturing. It refers to how JIT guides, supervises and controls

various dimension of a firm in an appropriate manner to achieve the objectives of Lean

manufacturing. The reliability test, Chronbach’s α value =0.804, which is more than 0.7. As the

value of α > 0.5, hence it can be concluded the items selected and the scale is reliable. After

reliability analysis the validity of construct items are checked using exploratory factor

analysis.The items of the JIT construct explain the structure validity as the value r>0.5. The

regression analysis further shows that JIT has a positive impact on firm performance.

Table 5.2: Summary of JIT focus and 9 models beta co-efficient

Scale ROI

Items having positive impact on ROI Items having negative impact on ROI

JIT Production is pulled by the current demand of the

next station (.201)

Supplier manage inventory

(-.058)

Use of Kanbans, squares, or containers as signals

(.145)

Pull production system (-.158)

Dimensions

Just in Time Employee

Involvement TPM Relationship with

partners Human Resource

Focus TQM

Lean

Implementation

Financial Indicators

for firm performance

Non-financial

Indicators for firm

performance

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Reduces lot sizes (.318) Production is "pulled" by the

shipment of finished goods

(-.034)

Reducing set up time (-.321)

Reducing inventory to expose

manufacturing and scheduling

problems (-.160)

Improving the Quality of the Product and Services

Items having positive impact on improving the

quality of the product and services

Items having negative impact

on improving the quality of

the product and services

Pull production system (.086) Supplier manage inventory

(-.064)

Production is pulled by the current demand of the

next station (.148)

Use of Kanbans, squares, or

containers as signals (-.109)

Reduces lot sizes (.168) Production is "pulled" by the


(-.160)




problems (-.005)

Defects management

Items having positive impact due to successful

Defects management


due to successful Defects

management


next station (.140)


(-.017)


(.022)


Reducing set up time (.043) Production is "pulled" by the


(-.004)

Reduces lot sizes (-.146)



problems (-.040)

Overstock management


overstock management


due to successful overstock

management

Pull production system (.179) Supplier manage inventory

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(-.017)


next station (.042)



Reducing set up time (.140) Production is "pulled" by the


(-.255)

Reducing inventory to expose manufacturing and

scheduling problems (.110)


Management of movement of products and services

Items having positive impact due to management

of movement of products and services


due to management of

movement of products and

services


next station (.089)


(-.198)

Production is "pulled" by the shipment of finished

goods

(.127)


Reducing set up time (.376) Use of Kanbans, squares, or





Employee turnover

Items having positive impact on employee

turnover


on employee turnover


(.025)



next station (.300)




goods

(.135)


Reducing set up time (.125)



Customer satisfaction level

Items having positive impact on customer

satisfaction level


on customer satisfaction level


(.038)



Pull production system (.187) Production is "pulled" by the

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(-.004)


next station (.065)





problems (-.280)

Productivity of the organization

Items having positive impact on productivity of

the organization


on productivity of the

organization


next station (.021)


(-.048)

Use of Kanbans, squares, or containers as signals (-

.084)



goods

(.114)

Reduces lot sizes (.138)

Reducing set up time (.050)



EBIDTA

Items having positive impact on EBIDTA Items having negative impact

on EBIDTA


(.030)



(.183)

Production is pulled by the

current demand of the next

station (-.193)


goods

(.191)





problems (-.225)

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It can be concluded that JIT is an important construct for successful implementation of Lean

which helps in improvement of ROI, QPS, Defects management, Overstock management,

Management of movement of products and services, Employee turnover, Customer satisfaction

level , Productivity of the organization & EBIDTA .

Where; ROI = return on investment, QPS= quality of products and services, EBIDTA= Earnings

before Interest, Depreciation, Taxation and Amortization.

Hypothesis 1: There is a positive relationship between the JIT and successful lean manufacturing

implementation.

The Table 4.41 shows that the beta co-efficient of JIT is 0.053 which is positive and statistically

significant. However the magnitude of beta co-efficient is weak.

Hence the hypothesis is supported

Employee Involvement: It refers to empower members of an organization tomake

decisions and to solve problems related to their level in the organization. The logic is that the

people closest to a problem or opportunity are in the best position to make decisions for

improvement, if they have control of the improvement of the process. As the value of

Chronbach’s α =0.669 and in case of inter item values of Chronbach’s α > 0, from which we

concludes that scale and selected items are reliable.. After reliability analysis the validity of

employee involvement items is checked using exploratory factor analysis (EFA).The

exploratory factor analysis shows that items of the employee involvement construct explain the

structure.

Table 5.3: Summary of Employee involvement focus and 9 models beta co-efficient

Scale ROI

Items having positive impact

on ROI


on ROI

Employee Involvement Shop floor employees key to

problem solving team(-.219)

Shop floor employees drive

suggestion program(-.047)

Shop floor employees lead

product/process improvement

efforts(-.012)






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the product and services the product and services


suggestion program(.063)

Shop floor employees key to




efforts(.053)

Defects management



management



management


problem solving team(.063)





efforts(.292)




management



management





efforts(-.005)







services




services







efforts(.395)

Employee turnover





Shop floor employees lead Shop floor employees key to

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efforts(.383)















efforts(.205)




organization



organization







efforts(-.053)

EBIDTA


on EBIDTA


on EBIDTA



efforts(.227)





The above table indicates that the employee involvement is very important dimension. It is

therefore concluded that hypothesis 2 is supported.

Hypothesis 2: There is a positive relationship between the employee involvement and successful

lean manufacturing implementation

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The Table 4.41 shows that the beta co-efficient of Employee involvement is 0.078 which is

positive and statistically significant. However the magnitude of beta co-efficient is weak.

Hence the hypothesis is supported.

Total Productive Maintenance (TPM): It refers that the machine operator is trained to perform

many of the day-to-day tasks of simple maintenance and fault-finding. Teams are created that

include a technical expert such as an engineer, maintenance technician as well as operators. In

this setting the operators are enabled to understand the machinery and identify potential

problems, righting them before they can impact production and by so doing, decrease

downtime and reduce costs of production As the value of Chronbach’s α =0.848 and in case of

inter item values of Chronbach’s α > 0, from which we concludes that scale and selected items

are reliable.. After reliability analysis the validity of employee involvement items is checked

using exploratory factor analysis (EFA).The exploratory factor analysis shows that items of the

total productive maintenance construct explain the structure.

Table 5.4: Summary of TPM focus and 9 models beta co-efficient

Scale ROI


on ROI


on ROI

Total Productive

Maintenance

Emphasis on good

maintenance for achieving

quality & schedule(.010)

Records of routine

maintenance are kept(-.012)

Emphasis to compliance(.150)

Preventive maintenance(.263)








Emphasis on good



Records of routine


Emphasis to compliance(.129) Preventive maintenance(-

.035)

Defects management





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management management

Emphasis on good




Records of routine

maintenance are kept(.217)





management



management

Emphasis on good



Emphasis to compliance(-

.266)

Preventive maintenance(.186) Records of routine






services




services

Emphasis on good




Records of routine



Employee turnover





Emphasis to compliance(.241) Emphasis on good


quality & schedule(-.113)

Records of routine


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Preventive maintenance (.005)





on customer satisfaction

level

Emphasis to compliance(.036) Emphasis on good



Preventive maintenance (.193) Records of routine

maintenance are kept (.-.216)




organization



organization

Emphasis on good




Records of routine

maintenance are kept (.055)

Preventive maintenance (.065)

EBIDTA


on EBIDTA


on EBIDTA

Records of routine

maintenance are kept (.452)

Emphasis on good



Preventive maintenance (.212) Emphasis to compliance(-

.057)

The above table indicates that the total productive maintenance is very important dimension. It

is therefore concluded that hypothesis 3 is supported.

Hypothesis 3: There is a positive relationship between the Total Productive Maintenance and

successful lean manufacturing implementation

The Table 4.41 shows that the beta co-efficient of Total Productive Maintenance is 0.139 which

is positive and statistically significant.

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Hence the hypothesis is supported.

Relationship with partners: It ishow the organization plans, manages and involves itsexternal as

well as internal partners, in order to support its Quality policy strategy and also in defining their

role for effective operation of the processes. As the values of Chronbach’s α =0.795 which is

more than 0.7 and in case of inter items the value of Chronbach’s α is more than 0.5 from

which we concludes that scale and selected items are reliable. The exploratory factor analysis

shows that items of the Relationship with partners construct explain the structure.

Table 5.5: Summary of Relationship with partners focus and 9 models beta co-efficient

Scale ROI


on ROI


on ROI

Relationship with partners Customers are involved in

current and future product

offerings(.235)

Customers share current &

future demand information

with marketing(-.210)

customers give feedback on

quality and delivery

performance (.135)








Customers are involved in


offerings(.007)






performance (-.175)

Defects management



management



management



offerings(.119)





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performance (-.091)




management



management



with marketing(.081)



offerings(-.208)



performance (-.076)





services




services



offerings(.357)






performance (-.264)

Employee turnover







offerings(.165)



performance (-.227)








on customer satisfaction

level





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offerings(.025) with marketing(-052)



performance (-.153)




organization



organization






offerings(-.064)



performance (-.323)

EBIDTA


on EBIDTA


on EBIDTA



performance (.095)



offerings(-.036)




The above table indicates that the construct of the Relationship with partners is not supported

Hypothesis 4: There is a positive relationship between the relationship with partners and


The Table 4.41 shows that the beta co-efficient of Relationship with partners is -.010 which is

negative and statistically not significant.

In this case hypothesis is not supported.

Human Resource Focus: An organization’s competitive advantage lies in the skills and abilities of

its employees as it is clearly visible from latest literature reviews. HR focus should be on

effective communication systems, well defined jobs and responsibilities, training and

development of employees for improved productivity and culture and also linking quality

performance with reward systems. Reliability and Validity analysis of the dimension HR focus is

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done. As the Chronbach’s α of Human Resource Focus is 0.822which is greater than 0.7 and

Chronbach’s α value of inter items is greater than 0.5, from which we can conclude that the

scale and selected items are reliable. The exploratory factor analysis shows that items of the

Human Resource Focus construct explain the structure.

Table 5.6: Summary of HR focus and 9 models beta co-efficient

Scale ROI


on ROI


on ROI

Human Resource Work and jobs are

designed, organized, and

managed to provide

opportunities for individual

initiative and self-directed

responsibility(.206)

Work and job are

designed to ensure

effective communications and

skill sharing (-.271)

Compensation and

recognition (.142)

Formal training programs

offered to employees for

promotability(-.080)

Education and training

activities structured to address

the knowledge and skills

employees need(.163)

Employees and their

manager give input in

designing education and

training activities(.141)


activities are systematically

evaluated and

improved(.134)








Work and jobs are


managed to provide



Work and job are

designed to ensure



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Compensation and

recognition (.006)

Employees and their



training activities(-.048)







evaluated and improved(-

.160)



promotability(.101)

Defects management



management



management

Work and jobs are


managed to provide




Compensation and

recognition (-.028)

Work and job are

designed to ensure


skill sharing (.140)




.316)








Employees and their







management



management

Work and job are

designed to ensure


Work and jobs are


managed to provide

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skill sharing (.407) opportunities for individual


responsibility(-.091)





Compensation and

recognition (-.077)



promotability(.306)

Employees and their







.240)





services




services

Work and jobs are


managed to provide




Work and job are

designed to ensure



Employees and their




Compensation and

recognition (-.052)



evaluated and

improved(.067)


activities structured to

address the knowledge and

skills employees need(-.441)




Employee turnover





Work and jobs are Work and job are

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managed to provide




designed to ensure



Compensation and

recognition (.002)





Employees and their






evaluated and

improved(.194)



promotability(.007)






Work and jobs are


managed to provide




Work and job are

designed to ensure







Compensation and

recognition (-.022)



promotability(.113)

Employees and their






Page | 156


.025)




organization



organization

Work and jobs are


managed to provide




Work and job are

designed to ensure



Employees and their




Compensation and

recognition (-.038)



promotability(.059)


activities structured to

address the knowledge and

skills employees need(-.161)




.126)

EBIDTA


on EBIDTA


on EBIDTA

Work and jobs are


managed to provide




Work and job are

designed to ensure







Compensation and

recognition (-.011)

Employees and their







.164)

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This clearly suggests that overall HR has positive impact on firm performance but most

of the HR aspects needed to be paid more attention. The recognition of employees and

compensations are important aspects that need to be focused upon. The Quality of Product &

Services and Successful Overstock Management are two important parameters which reflect the

level of motivation of employees engaged with CFAs and Wholesalers.

Hypothesis 5: There is a positive relationship between the Human Resource focus and


The Table 4.41 shows that the beta co-efficient of Employee involvement is 0.128 which is

positive and statistically significant.


Total Quality Management: It refers that the quality of products and processes is the

responsibility of everyone involved with the creation or consumption of the products or services

offered by an organization, requiring the involvement of management, workforce, suppliers, and

customers, to meet or exceed customer expectations. Cua, McKone, and Schroeder (2001)

identified nine common TQM practices as cross-functional product design, process

management, supplier quality management, customer involvement, information and feedback,

committed leadership, strategic planning, cross-functional training & employee involvement.

Reliability and Validity analysis of the dimension TQM focus is done. As the Chronbach’s α of

TQM Focus is 0.937which is greater than 0.7 and Chronbach’s α value of inter items is greater

than 0.5, from which we can conclude that the scale and selected items are reliable. The

exploratory factor analysis shows that items of the Total Quality Management construct explain

the structure. The regression analysis further shows that the human resource focus has positive

impact on ROI,EBIDTA,WR and has negative impact on QPS and OSM, as shown in the tabulated

form:

Table 5.7: Summary of TQM focus and 9 models beta co-efficient

Scale ROI

Items having positive impact on ROI Items having negative impact on

ROI

http://en.wikipedia.org/wiki/Process_management

http://en.wikipedia.org/wiki/Process_management

http://en.wikipedia.org/wiki/Feedback

http://en.wikipedia.org/wiki/Leadership

http://en.wikipedia.org/wiki/Strategic_planning

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Total Quality

Management

TQM brings manufacturability and assembly in

product design(.225)

TQM helps in modular design of

component parts(-.505)

Inspection rate per lot increases(.003) TQM brings designing quality

into the product(-.094)

Focuses on benchmark data(.227) TQM helps in process

improvement(-.285)

Helps in Simplifying the product(.362) TQM helps in employee training

in quality management and

control

(-.132)

TQM uses standard components(.170) Top management

communication of quality goals

to the organization (-.123)

TQM Empower shop operators to correct quality

problems(.316)

TQM emphasizing quality instead

of price in supplier selection(-

.077)

TQM uses Quality Function Deployment(.416) TQM considers quality in

supplier evaluation(-.178)

TQM considers commitment to continuous

improvement in supplier selection(.261)

TQM considers commitment to

quality in supplier selection(-

.199)

TQM considers process

capability in supplier selection(-

.018)


Items having positive impact on improving the

quality of the product and services

Items having negative impact on

improving the quality of the

product and services

Focuses on benchmark data(.249) TQM helps in modular design of


Helps in Simplifying the product(.507) TQM brings designing quality


TQM uses standard components(.066) TQM brings manufacturability

and assembly in product design

(-.044)


problems(.046)

Inspection rate per lot

increases(-.167)

TQM uses Quality Function Deployment(.352) TQM helps in process

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improvement(-.128)

TQM considers quality in supplier evaluation(.106) TQM helps in employee training

in quality management and

control

(-.082)

TQM considers commitment to quality in supplier

selection(.025)

Top management

communication of quality goals

to the organization (-.080)



TQM emphasizing quality instead

of price in supplier selection(-

.035)


capability in supplier selection(-

.221)

Defects management


Defects management



management


product design (.198)



Focuses on benchmark data(.411) TQM brings designing quality


TQM uses standard components(.090) Inspection rate per lot

increases(-.211)

TQM helps in employee training in quality

management and control

(.257)

Helps in Simplifying the

product(-.077)


problems(.029)

TQM helps in process

improvement(-.200)

Top management communication of quality goals

to the organization (.095)

TQM considers quality in


TQM emphasizing quality instead of price in

supplier selection(271)

TQM considers commitment to

continuous improvement in

supplier selection(-.332)

TQM uses Quality Function Deployment(.059))

TQM considers commitment to quality in supplier

selection(.040)

TQM considers process capability in supplier

selection(.139)


Items having positive impact due to successful Items having negative impact

Page | 160

overstock management due to successful overstock

management


product design (.085)



Helps in Simplifying the product(.000) TQM brings designing quality


TQM helps in process improvement(.088) Inspection rate per lot

increases(-.170)


management and control(.264)

Focuses on benchmark data

(-.053)


supplier selection(.255)

TQM uses standard

components(-.084)

TQM uses Quality Function Deployment(-.078) TQM Empower shop operators

to correct quality problems(-

.057)

TQM considers quality in supplier

evaluation(.357)

Top management

communication of quality

goals to the organization

(-.108)


selection(.317)

TQM considers commitment

to quality in supplier

selection(-.088)


to continuous improvement in



Items having positive impact due to

management of movement of products and

services




services

TQM brings designing quality into the

product(.363)

TQM helps in modular design

of component parts(-.469)

TQM brings manufacturability and assembly

in product design (.224)


increases(-.014)

Focuses on benchmark data(.264) Helps in Simplifying the

product(-.094)

TQM helps in process improvement(.068) TQM uses standard

components(-.025)

TQM Empower shop operators to correct TQM helps in employee

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quality problems(.130) training in quality


(-.145)

TQM considers commitment to quality in


Top management

communication of quality

goals to the organization

(-.064)


selection(.238)

TQM emphasizing quality

instead of price in supplier

selection(-.093)

TQM uses Quality Function

Deployment(-.204)

TQM considers quality in



to continuous improvement in


Employee Turnover

Items having positive impact on employee

turnover



TQM helps in modular design of component

parts(.000)


(-.102)


product(.222)

TQM uses standard

components(-.080)




improvement(-.736)

Inspection rate per lot increases(.027) TQM helps in employee

training in quality


(-.079)

Helps in Simplifying the product(.356) TQM Empower shop

operators to correct quality

problems(-.186)

Top management communication of quality

goals to the organization .030)



selection(-.493)



TQM considers commitment to quality in



Page | 162

selection(.037)




Items having positive impact on customer

satisfaction level



TQM helps in modular design of component

parts(.087)

TQM brings designing quality



(.090)

TQM brings

manufacturability and

assembly in product design

(-.101)

Helps in Simplifying the product(.095) Inspection rate per lot

increases(-.039)

TQM uses standard components(.203) TQM helps in process

improvement(-.141)



(.077)

TQM Empower shop


problems(-.185)





selection(-.014)

TQM uses Quality Function Deployment(.489) TQM considers commitment


selection(-.447)

TQM considers quality in supplier

evaluation(.337)


capability in supplier

selection(-.075)




Items having positive impact on productivity

of the organization



organization


product(.060)






increases(-.266)


(.387)


improvement(-.248)

Helps in Simplifying the product(.006) TQM Empower shop

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problems(-.085)

TQM uses standard components(.019) TQM considers quality in




(.625)



selection(-.075)




capability in supplier

selection(-.051)



TQM uses Quality Function Deployment(.077)



EBIDTA

Items having positive impact on EBIDTA Items having negative impact

on EBIDTA





Inspection rate per lot increases(.055) TQM brings designing quality



(.239)

Helps in Simplifying the

product(-.028)

TQM uses standard components(.137) TQM helps in process

improvement(-.345)


management and control(.015)

TQM Empower shop


problems(-.025)


goals to the organization (.046)



selection(-.243)




selection(.194)



selection(-.131)



This clearly suggests that TPM has positive impact on firm performance..

Page | 164

Hypothesis6: There is a positive relationship between TQM and successful lean manufacturing

implementation

The Table 4.41 shows that the beta co-efficient of Total quality management is 0.629 which is

positive and statistically significant.


5.4 Improvement Plan and Recommendations for Indian Manufacturing Companies:

A number of recommendations can be made out of the present study. These

recommendations would be insightful for the Indian manufacturing industries, not only those

who have successfully implemented lean but also to those who are in the process of

implementation. These recommendations are as follows:

Manufacturing firms in India must advocate JIT philosophy which helps to

minimize wastages and aims for continuous improvement. However JIT has

its own limitations which must be considered while implementing JIT as what

we can infer from regression output (refer Table ), that use of SMED or VMI

is not supported though literature suggest that SMED and VMI approach has

helped firms to achieve high performance. In India except automotive sector,

others are yet to implement VMI or implement JIT2 which is critical for firm

to achieve superior performance.

Employee involvement is one of the pillar of world class manufacturing firms

(Schonberger, 1986).However though Indian manufacturing firms has adopted

these practices but the survey findings suggest that empowerment which is

one of the important dimension of employee involvement is misunderstood by

Indian corporate. The employees though encouraged providing their

suggestions for improvement but findings suggest that there is lack of

transparency in the system which discourages employee to provide their true

feedbacks. Most of the Indian firms follow bureaucratic structure.

TPM is key to lean implementation in Indian manufacturing firms which

promotes self discipline and aims to minimize equipment failures and improve

Page | 165

reliability of the system. Strict adherence to compliance and routine

maintenance activities help to improve performance.

Relationship with partners in present study is not supported which suggest that

Indian manufacturing firms has failed to recognize the importance of

customers in product offerings, product development or product design.

Human resource focus is an important function to lean implementation.

Training & development, compensation, communication & reward are

regarded to be most important dimensions of human resource focus in

successful implementation of lean. Manufacturing companies must invest on

training & development activities & duly reward champions who produce

excellence.

The findings of study suggest that firms who have implemented TQM have

successfully implemented JIT. It is a philosophy which aims to reduce defects

and improve product quality.TQM is achieved through involvement of all

stakeholders from sourcing to supplier’s selection to delivery of raw materials

to final conversion and distribution of finished goods to the customers or end

users.

5.5 Research contributions:

In an attempt to achieve the four research objectives, this study has made two specific

contributions that resulted from meeting these four objectives are discussed in the following

sections.

5.6.1 To understand the level of awareness of the lean manufacturing practices in Indian

manufacturing sector

The present study integrates several dimensions of lean manufacturing and impacts of these

dimensions on successful implementation of Lean tools in Indian Manufacturing Industry. On

the basis of the discussion in the literature review section and the synthesis of the existing

literature, conceptual framework is proposed (refer to Figure 3.3). The two main components

that constitute the conceptual framework include the dimensions of Lean manufacturing and

implementation of Lean which will be measured in terms of firm performance variables.

5.6.2 To identify the dimensions that constitute lean manufacturing practices;

Page | 166

Based on discussions in the literature review section researcher identified the

dimensions and the items for each dimension are selected so that the existing gap in the

available literature can be effectively reduced.

5.6.3 To propose and validate a research model testing dimensions of lean

manufacturing and firm performance;

.

A research model is proposed showing the relationship between identified dimensions

of Lean viz. JIT, Employee involvement, Total Productive Maintenance, HR focus, relationship

with partners and Total Quality Management with firm performance.

The model is statistically significant.

Figure 5.2: Conclusive Research Framework

Here variable Relationship with partners does not support the model.

5.6.4 To provide recommendations to provide a checklist to help firms to implement

lean manufacturing practices

The variables like Just in Time, employee involvement, total productive maintenance, total

quality management positively support outcome variable, while relationship with partners is

not supported in present study. The firm should focus on strengthening their relationship with

partners to leverage maximum benefit from lean implementation. It is recommended that

Just in Time

Employee

Involvement

Total Productive

Maintenance

Relationship with

partner

Human Resource

Focus

Total Quality

Management

Lean

Implementation

Firm

Performance

Page | 167

Indian manufacturing firms must involve customers in product design and development phase.

The findings of the study reveals that JIT is not strongly supporting which is due to incomplete

understandings of JIT among Indian manufacturing firms.JIT has strong impact when supply and

demand uncertainty is low, however when supply or demand uncertainty is high then JIT is not

applicable which is the serious limitations of JIT manufacturing.

5.6 Limitations of the present study:

In the area of social science, research is considered more complex in comparison to

research in other areas due to the presence of uncontrolled environment where high

interaction of overlapping and interrelated variables, exists (Srivastava & Singh, 2010).So in

spite of putting every possible efforts a social science research is subject to certain limitations

which certainly paves the ground for future research. The present research also has its own

limitations which are as follows:

Studies on samples are seldom conducted without any intention to generalize the

results to the whole population to which the samples belong (Cooper and

Schindler, 2001). Generally, not all sampling techniques allow this generalization.

The most known, comprehensive and pervasive technique is perhaps the simple

random sampling in which each possible sample of a given size is equally like to

be the one selected (Newbold, 1999). Thus inherent limitation of the sampling

design exists.

Here in the present survey perceptual performance was used in the study instead

of objective measure. Although previous studies showed a positive association

between objective and perceptual performance (Geringer and Hebert, 1991;

Powell, 1992), the latter is not able to fully reflect the real firm performance.

The data collection was done within Indian manufacturing industry. Though care

was taken to define values as specific to Indian manufacturing industry, the

extrapolation of conclusion drawn within the Indian manufacturing industry

The validity of the findings regarding the relationship between six dimensions of

lean and firm performance may be limited by the fact that data on six dimensions

of lean and firm performance were collected at a particular time. Consequently,

the direction of causality between the two cannot be specified definitely.

However, causality cannot be established without longitudinal data. Future

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research effort is urged to collect longitudinal data to confirm the causal

relationship between six dimensions of lean and firm performance.

Firm performance may be affected by various other external variables not

accounted for in this study. It would be beneficial to examine firm performance

by taking external conditions like the economic and legal situation into account.

5.7 Managerial Implications:

The research provides an immense scope to Indian manufacturing industry to maximize

the benefit from lean implementation. Most of the time we find managers often complain that

company is wrongly investing without any return to the company, it is probably because

dimensions of lean which are primarily intangible components are ignored most of the time.

Lean will deliver result only when employees are given right direction, top authority takes deep

interest, employees are empowered, team members are recognized and rewarded for their

performance, culture of excellence and environment where every member are involved in

decision making process.

5.8 Future research directions:

While this study was able to provide additional insight into six dimensions of lean and its

relationship with firm performance, it also revealed areas that would benefit from further

research. First, this study focused only on six dimensions of lean in Indian manufacturing

industry. Future research could thus focus on the other dimensions such as ethics and values,

SCM..By doing so, a better and fuller understanding on the effects of lean on firm performance

may be achieved. Second, there is a strong need for longitudinal research. A longitudinal

analysis of companies over time would provide data to address at least two research questions:

(1) is there a time lag between investing in lean and achieving an expected performance, and (

2) is there a particular order in which these investments should be made. There is a need for

further study on the influence of different external variables on firm performance. It certainly

takes time to undertake any change from the past. So there is an important need to investigate

the differences in the future when managers had enough time to change their management

styles. Finally, to be able to generalize the results of this study future research might be

extended to other industries like service and to other countries both developing and

industrialized.

This chapter presented conclusion, recommendations and contributions of the research study.

Page | 169

Conclusions were drawn on the basis of findings derived with the analytical tools, and also in

reference to research questions concluded through literature review. The outcome framework is

presented. Observations and insight of the researcher were also duly included in the conclusion.

Subsequently recommendations were given and at the end research, contributions, limitations,

managerial implications and future scope of this study were elaborated.

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SUMMARY AND CONCLUSIONSshodhganga.inflibnet.ac.in/bitstream/10603/38771/15/15... · 2015-04-07 · 5.1.2 Evolution of “Lean Concept”: The historical evolution of Lean manufacturing