factors affecting the agility of firms implementing lean manufacturing

189 Pages·2016·1.4 MB·English

UNIVERSITY OF KWAZULU-NATAL

FACTORS AFFECTING THE AGILITY OF FIRMS
IMPLEMENTING LEAN MANUFACTURING

By:
Neeshal Gurahoo
204517970

A dissertation submitted in fulfilment of the requirements for the degree of
Master of Commerce

School of Management, IT and Governance
College of Law and Management Studies

Supervisor: Dr R.H. Salisbury

2015
DECLARATION
I, Neeshal Gurahoo, declare that
(i) The research reported in this dissertation, except where otherwise indicated,
is my original research.
(ii) This dissertation has not been submitted for any degree or examination at
any other university.
(iii) This dissertation does not contain other persons’ data, pictures, graphs or
other information, unless specifically acknowledged as being sourced from other
persons.
(iv) This dissertation does not contain other persons’ writing, unless specifically
acknowledged as being sourced from other researchers. Where other written
sources have been quoted, then:
a) their words have been re-written but the general information
attributed to them has been referenced;
b) where their exact words have been used, their writing has been
placed inside quotation marks, and referenced.
(v) Where I have reproduced a publication of which I am an author, co-author or
editor, I have indicated in detail which part of the publication was actually written
by myself alone and have fully referenced such publications.
(vi) This dissertation does not contain text, graphics or tables copied and pasted
from the Internet, unless specifically acknowledged, and the source being detailed
in the dissertation and in the References sections.

Signature:_______________
Date:________________

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ACKNOWLEDGEMENTS
I would like to extend my gratitude to my lectures Dr Hans Salisbury and Prof Micheline
Naude, I don’t know where to begin thanking the both of you. Thank you for all the
courtesy that you have extended to me since the first day I sat in your lectures. I have
learned so much from the time we have spent together. Thank you for all the field trips
and information that you guys have shared.
I thank God for giving me this opportunity to further my studies and giving me the
strength to persevere during these trying times. I would like to thank my family for
supporting me and motivating me when times were hard. Most of all I would like to thank
my wife for her support, love, care and all the sacrifices she has made to make our lives
better. Thank you for staying up with me for all the long hours at night and showing an
interest in my work.
To my brother up in the heavens this one is for you. Thank you for watching over me and
giving me the strength to persevere. Hopefully when it’s my time you will open up the
gates at heaven for me.

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ABSTRACT
Production methods lie on a continuum from mass production to Lean and or Agile. Agile
production represents an innovative supply chain strategy that shows promise in the
manufacturing sector. Many South African companies are not yet aware of Agility.
Currently, many manufacturers are implementing Lean and JIT principles. However,
Lean and JIT may not respond adequately to modern market demands and shortened
product lifecycles. The Agile paradigm focuses on speed, flexibility and response: critical
factors that enable companies to achieve a higher level of differentiation.
The aim of this research was to determine the influence of different levels of Lean
implementation on production Agility. This study was an innovative investigation into
whether Lean and JIT contribute to, or detract from, Agility in manufacturing. There is
little published research on this relationship. The study seeks to contribute to the body of
knowledge and to benefit manufacturing companies: particularly those in South Africa.
The research was exploratory in nature and consequently a case study approach was used.
A non-probability, purposive sampling design was used to select three companies
representing different categories on the spectrum of the Lean manufacturing continuum:
Company A – beginner, Company B – intermediate and Company C – expert. The
research was qualitative in nature.
A review of the literature tends to suggest that Lean and JIT restrict Agility by restricting
speed, flexibility and response. Contrary to expectations, the findings of the study
indicate that Agility tends to increase in companies that have undertaken the Lean
journey. The results of the study confirm that Lean contributes to Agility within the
manufacturing sector. As Lean levels increase from beginner to expert so too do the levels
of speed, flexibility and response (SFR). The conclusion drawn from this study is that
Lean is a pre-requisite for Agile and companies may need to implement Lean before
considering Agile systems. The results of this study have been used to construct a
conceptual framework and road map that may be used by firms wishing to undertake the
Agile journey. The strategy has been termed ParaLeagile and it may assist manufacturing
companies to make more informed and appropriate decisions, thus boosting the economy.

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TABLE OF CONTENTS
DECLARATION ii
ACKNOWLEDGEMENTS iii
ABSTRACT iv
TABLE OF CONTENTS v
LIST OF FIGURES xii
LIST OF TABLES xii
CHAPTER 1 : INTRODUCTION 1
1.1. Introduction 1
1.2. Motivation for study 1
1.3. Problem statement 2
1.4. Aim of the research 3
1.4.1. Research questions 3
1.4.2. Research objectives 3
1.5. Background information 3
CHAPTER 2 : REVIEW OF THE LITERATURE 5
2.1. Lean and JIT 5
2.1.1. Introduction 5
2.1.2. Lean thinking 7
2.1.3. Seven Areas of Waste in Lean and JIT 7
2.1.4. Building blocks of Lean and characteristics of JIT 8
2.1.5. Role of Lean practices 10
2.1.6. JIT partners: relationships and collaborations 11
2.1.7. JIT layout 12
2.1.7.1. Distance reduction 12
2.1.7.2. Increased flexibility 12
2.1.8. Impact of JIT on employees 12
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2.1.9. JIT inventory 13
2.1.10. Reduced batch sizes 13
2.1.11. Reduced set-up times 14
2.1.12. JIT scheduling 14
2.1.12.1. Level scheduling 14
2.1.12.2. Kanban 14
2.2. Agile 15
2.2.1. Introduction 15
2.2.2. Differences between Lean and Agile 16
2.2.3. Similarities between Lean and Agile 18
2.2.4. Theories of Lean and Agile 20
2.2.5. Implementation and preconditions of Agility 21
2.3. Agility drivers 23
2.3.1. Customer requirements 23
2.3.2. Classification and competition criteria 23
2.3.3. Market conditions 24
2.3.4. Technological innovations 25
2.4. Agile enterprise goals 26
2.5. Agility capabilities 27
2.5.1. Quickness / Lead time 27
2.5.2. Competency / quality and cost 27
2.5.3. Flexibility 28
2.5.4. Responsiveness / Service 28
2.5.5. Protective capacity and protective inventory 29
2.6. Agility providers / pillars /enablers 31
2.6.1. Collaborative relationships 31
2.6.2. Risks associated with networking 33
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2.6.3. Process integration / selection and production process 33
2.6.4. Information integration 35
2.6.5. Customer / market sensitivity 36
2.6.6. Employees as assets 37
2.6.7. Strategic outsourcing 37
2.6.8. Virtual organisations 38
2.6.9. Technology as a provider 39
2.6.10. Logistics as a catalyst for Agility 40
2.7. Leagility 40
2.7.1. Introduction 40
2.7.2. Market conditions 41
2.7.3. Time-based competition 41
2.7.4. The decoupling point 42
2.7.5. Implementing leagility 43
2.8. Conclusion 46
CHAPTER 3 : RESEARCH METHODOLOGY 47
3.1. Introduction 47
3.2. Problem statement 48
3.3. Research design/strategy 48
3.4. Research objectives 48
3.5. Study site 49
3.6. Target population 49
3.7. Data collection 49
3.8. Sample design 50
3.9. Interview Guide 50
3.10. Measurements 51
3.11. Data analysis 51
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3.12. Reliability and Validly 55
3.13. Ethical Considerations 55
3.14. Limitations 56
3.15. Conclusion 56
CHAPTER 4 : RESEARCH FINDINGS 58
4.1. Introduction 58
4.2. Overview of focal companies 58
4.3. Production processes in focal companies 60
4.4. Strategies of focal companies 63
4.5. Demand management in focal companies 65
4.6. Lean factors present in focal companies 66
4.6.1. Company A 66
4.6.2. Company B 68
4.6.3. Company C 70
4.7. Just-in-time capabilities in focal companies 74
4.7.1. Company A 74
4.7.2. Company B 76
4.7.3. Company C 78
4.8. Supplier relationship management 82
4.8.1. Company A 82
4.8.2. Company B 84
4.8.3. Company C 86
4.9. Customer relationship management 89
4.9.1. Company A 89
4.9.2. Company B 92
4.9.3. Company C 92
4.10. Organisational culture and personnel 96
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4.10.1. Company A 96
4.10.2. Company B 98
4.10.3. Company C 99
4.11. Conceptual model 102
4.12. Conclusion 103
CHAPTER 5 DISCUSSION 105
5.1. Introduction 105
5.2. Company strategies 106
5.2.1. Company A 106
5.2.2. Company B 107
5.2.3. Company C 107
5.3. Lean influences on agility 108
5.3.1. Inventory 108
5.3.2. Overproduction 109
5.3.3. Waiting time 110
5.3.4. Unnecessary transporting 112
5.3.5. Processing wastes 113
5.3.6. Inefficient work methods 113
5.3.7. Product defects 114
5.4. JIT influences on agility 115
5.4.1. Product design 115
5.4.2. Process design 118
5.4.3. Manufacturing Process Control 121
5.4.4. Capability for JIT supply 122
5.4.5. Minimum inventory 122
5.4.6. Minimum defects 124
5.5. Supplier relationship management 125
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5.5.1. Number of suppliers 125
5.5.2. Transactional vs collaborative relationships 125
5.5.3. MRP 126
5.5.4. New product development 126
5.5.5. Profit sharing 127
5.5.6. Communication channels 127
5.5.7. Transaction processing time 127
5.5.8. Supplier evaluation 128
5.5.9. Supplier location 128
5.5.10. JIT supplier collaboration 129
5.5.11. Seven rights of supplier performance 129
5.5.12. Service design 130
5.5.13. Number of customers 132
5.5.14. Returns 132
5.5.15. Communication with customers 132
5.5.16. Order fulfilment 133
5.5.17. Understanding of customer needs 133
5.5.18. Location 134
5.5.19. Product variety 134
5.5.20. Seven rights of customer relationship management 134
5.6. Organisational culture and personnel 135
5.6.1. Response to change 136
5.6.2. Team building 136
5.6.3. Employee integration 137
5.6.4. Learning organisation 138
5.6.5. Employee welfare 138
5.6.6. Workers as assets 139
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