Key elements to ensure Lean implementation

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DEGREE PROJECT, IN PROJECT MANAGEMENT AND OPERATIONAL DEVELOPMENT, SECOND LEVEL STOCKHOLM, SWEDEN 2015

Title:

Key elements to ensure

Lean implementation

Author: Joachim Tshuma & Lizett Rivera Bernal

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Acknowledgments

This Master thesis has been performed at Kungliga Tekniska Högskolan (KTH) and is the final examining part of the Project Management and Operational Development Engineering and Management program. The study has been carried out during the spring semester 2015 and covers 30 credits.

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Abstract

This paper attempts to contribute to the better understanding of Lean strengths and challenges during implementation. The research aims to describe how key elements such as leadership, culture and measurements can be managed and controlled over time as well as the three levels of performance, in order to ensure a successful Lean implementation in Swedish companies. The key elements were identified through a pre-‐study and further similarly key elements were found written in different texts of significance in the scientific community and articles.

The report is written as a theoretical thesis with observations and interviews from real life individuals who partake in the use of Lean methods daily. The research strategy will include a study of three companies to identify if the same key elements could be found and how they were managed and controlled by the Swedish Industry. The technique will give answers to in-‐depth questions such as “How” and “Why”, to compile information that could support the actions required in implementation to Sandvik Mining.

The conclusions derived by the researchers found the importance of Lean influence and motivation throughout the organisations. Lean philosophy must be present in all three levels of a system. Additionally, leadership at all levels is critical in Lean, due to the fact that it thrives in a fragile system where problems cannot be hidden. The leaders must give firm advice and direction, helping in problem solving. Culture and measurement supports shaping and generating desired Lean behaviours. The paper will show how all the information is around and needs to be placed adequately to use it effectively. The paper finishes off by generating recommendations, checklist, for the company to adopt in future for higher levels of success.

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Introduction

1.1 Background

Improving performance has become imperative in the modern globalised competitive environment, and is now the reality of most companies today. One of the strategies for improving performance that has gained popularity in the past few decades is called Lean Production or just Lean. Lean is a philosophy that focuses on the customer and on eliminating waste in the value stream, (Liker, 2012). This definition is further supported by Rother, 2014 who states that the focus of Lean is on providing the customer with more value sooner. Lean is the manufacturing method developed by Toyota and others, which has evolved with time. Those who prosper with Lean proposals understand that success is highly dependent on employees. In principle it is not an incident; it is a culture revolution. (Anderson, 2011)

Insightful implementation of Lean is essential for high-‐value manufacturing and is corresponding to strategic choice making regarding manufacturing. According to Pearce et al., 2013 “… Lean can be difficult to implement in specific organisations. One of the difficulties is deciding which of the many Lean tools to apply and when to apply them.” A muddying influence is change management. They went on to say, “Lean implementation is a transformational process and needs to support organisational development alongside process improvement”.

Originally a manufacturing method developed by Toyota Motor Corporation, all types of industries from manufacturing, healthcare and government institutions have implemented Lean. Yet according to a survey performed by Industry Week in 2007 only 2% of companies that have implemented Lean achieved the anticipated results. The success of companies and managers depends on their ability to react, operate and adapt to change (Kotter, 2007). Also a recently Swedish study showed that 43 of 50 companies fail to implement Lean (Ivarsson et.al, 2013).

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being quite challenging to successfully implement. These challenges and concerns provoked the attention and interest to immerse in the subject. The work will have basis in theory in order to make observations to compare with. The main topic of the report was selected and formed, not given by the companies.

The preliminary study showed that companies such as Ericsson had significant challenges in these areas: “Following areas of concern when implementing the Lean way in international companies such as Ericsson; leadership, culture, engagement and time” (Sackerwalla, Ericsson Networks, 2015)

The pre-‐study provided several key elements to consider when it comes to successfully implementing Lean. Moreover, the experience highlighted by Ericsson was strong and similarly challenging elements were found written in different texts of significance in the scientific community and articles. Therefore, in order to limit the scope of this paper, our research will focus only on investigating how leadership, culture and measurement impact Lean implementations over time. Also how the levels of the organisation are essential for overcoming and avoiding Lean barriers and implementation failure. Measuring performance within the entire organization focuses on three levels of performance: strategic, process and operational

1.2 Research question

The research seeks to investigate how three key elements – leadership, culture and

measurement -‐ can be managed and controlled over time in order to ensure successful Lean implementation on all levels of performance within a

multinational Swedish company.

1. 3 Research goals

The aim will be achieved by understanding barriers, Lean strength and important elements to be aware, with emphasis on the adoption and transformation of Lean; this paper aims at answering the research question by:

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● Reviewing existing literature on the topic of Lean implementation and identify key elements that contribute to successful Lean implementations. ● Studying three different companies to identify if same key elements could be

found in Swedish industry and to understand how companies approach managing and control of key elements

● Comparing the outcome of the literature review with the practical experience of companies that implemented Lean and identify areas of overlap.

● Presenting a possible checklist for Sandvik Mining to be elaborated in a future implementation work.

1.4 Scope

1.4.1 In Scope

The scope of this report will include key elements of Lean implementations such as: leadership, culture and time measured at all three levels of an organisation. The interpretation is that engagement will be considered as part of the culture and that time is incorporated with measurement.

Furthermore the study will focus on Lean philosophy from late 20th century until today with a short history introduction on how Lean become known to the modern world and vastly sought-‐after.

Swedish industries, particularly international companies such as Ericsson, Scania and Sandvik have been picked out to be investigated closely. The main focus will settle on the Business Units in Sweden.

1.4.2 Out Scope

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1.5 Methodology

The research is written as a theoretical thesis with observations and interviews. The study will be carried out by utilising primarily data from company Intranet and interviews from real life individuals who play a part in Lean implementation as a daily function. Secondary data will be obtained in the form of literature review, data collecting and the company’s intranet.

The start of the research will begin looking at available topics, articles and journals from different fields in the subject. The best information is retrieved and brought into the research topic. This is followed by an in-‐depth interview to reflect these elements as well as criteria’s, which is more supportive of the aim of the research paper.

The end will bring in conclusions drawn from the research and different recommendations will be made in order to refine a checklist for Sandvik Mining. The aim is to learn from earlier efficient executions, what is possibly essential for the company.

1.6 Actual Plan

The aim of the actual plan is to give an overview of the project plan. The figure 1 describes the different steps in the process from start to finish.

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1.7 Limitations

This research will come with its limitations, which govern its scope, length, and other areas that will be defined in detail as we proceed. This comes at the back drop of a time limit to produce a clear document that is straight to the point.

The main limitation is the amount of access given by the companies to the researchers. That is quite narrow, as most companies do not like to publish the difficulties they face when implementing new ideas and processes because it will give their competitors an unfair advantage.

The financial effect of the implementation is not available to analyse and to weigh the benefits of the change. As finance is the biggest KPI that all major stakeholders observe and use to justify reasons for decisions being taken it is a significant setback to the research.

Another limitation is the time period that the research observed. Scania has had a long time to hone their Lean systems and changes, while Ericsson and Sandvik are in their early years of Lean executing.

The results of this study cannot be generalized to the wider research community as they are tailored to a specific company about to transition to a new Lean management system. This will mean strategic documentation referred to will only be relevant to this particular paper in some cases.

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2 Method and Tools

The research question focuses on investigating what important elements to consider for future Lean implementation, as well as applying accomplished knowledge to ensure future Lean realisation.

These are the steps that being planned to be undertaken to ensure that this research is impartial and as scientific as possible. In addition, the reader will be directed towards the thorny issue of potential limitations and problems with the chosen research strategy and its implementation. Saunders et al. (2000: 92) summarizes the use of research strategies thus: “what matters is not the label that is attached to a particular strategy, but whether it is appropriate for your particular research”.

2.1 Research Approach

This section – Research Methods and Tools – will provide the details of the research strategy adopted to address the research issues identified, together with the means of collecting data for analysis and the analysis approach to be adopted.

Collecting data will be gained through primary and secondary data in order to achieve a subjective interpretation and from a qualitative perspective. The method and tools to use in this report is inductive and through Interviews for comparison. The technique helps finding answer to in-‐depth questions such as “How” and "Why". In this report, the interview will be helpful when studying real situations to make valuations based on theoretical foundation.

The opportunity to study a way the different companies involved can help insure that lessons learned can be minimized and perhaps prepare a better path will require strategy and implementation in practice in a subject that, although generating much discussion and demand, needs to be understood fully for success and results to be achieved (Blackstone, 2012).

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2.1.2 Primary and Secondary data

Primary data, means that data picked out directly from individuals or groups, for example by interviews or through question templates. Secondary data is information collected from other sources (Jacobsen et al., 2002).

The research question will combine both primary and secondary information through: digital databases and library search. The aim is to confirm if the primary data and the secondary are inline to confirm the statement from pre-‐study. The primary data will be collected from interviews and company Intranet. Secondary data will be gathered through literature review, data collecting, company data and web of knowledge.

The study will explore current existing literature, which covers the topics on the research to shade light on what is involved in the area of Lean management systems as well as its benefits to the industry. The secondary data will be use to highlight the areas of focus on, each objective insures that they are fully understood and they’re the main focus of the research. This will also include understanding its origins briefly to stress the point of its significant impact to the world.

2.1.3 Qualitative and Quantitative

Picking the means by which to collect empirical data is just as important as choosing an appropriate research strategy (Biggam, 2013). A research work can be approached in two ways, from a qualitatively or quantitatively perspective (Olsson et al., 2011).

Qualitative research uses in the context of a subjective study where the researcher have had contact with the subject before. The quantitative perspective is often used when the study is objective and has it distance from the subject. (Olsson et al., 2011) According to Atlas, 2015 generally, qualitative research generates rich, detailed and valid process data that contribute to a good understanding of a context. Quantitative research, on the other hand, generates reliable population-‐based and generalizable data that is suited to establishing cause-‐and-‐effect relationships (Atlas, 2015)

Qualitative Quantitative Hypothesis Broad Narrow

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Type of Research Exploratory Conclusive

Table 1: Qualitative vs. Quantitative Research Source: Explorable.com

This investigation is attentive in seizing qualitative data. The use of qualitative data will help to assess a subjective conclusion of the research. Since the data would include participants in key areas in the Swedish industry it makes qualitative data analysis best suited for this task. This means quantitative won't really work at this stage due to the nature that it works well with a measurable reality.

Qualitative data will be gained predominantly within the Interview and secondary data, to get a broad god picture of the subject. This will grant the prospect to discuss, with the assorted stakeholders. The table 1 shows the comparison of the different methods and why one is better than the other for this particular paper

2.2 Method and Tools

2.2.1 Deductive and inductive

The research can be approached through a deductive or inductive technique (Eriksson et al., 2011). The deductive is often used when doing a quantitative study. The aim of deductive technique is to see how relation between different conditions is linked to reality. The inductive is associated with a qualitative technique, where the researchers have an empirical study as a starting point. Facts are collected from reality through Interviews or observation (Olsson et al., 2011)

Further more the inductive approach is described as being more “open-‐ended”, while the deductive is described as being narrower to test or confirm a hypothesis.

(Trochim, 2006)

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2.2.2 Interview technique

The use of open-‐ended questions is to encourage meaningful responses (Patton 1990). It can also be described as an informal and unstructured tool that allows the researcher to develop better understanding of the area of focus, which can generate meaningful semi-‐structured questions (Cohen et al., 2006)

Another interview technique is called semi-‐structure, gives clear and well instructed questions to the respondent. The benefit is that it can provide reliable, comparable qualitative data. The technique is many time based on a pre-‐study, observations or other identify information. (Crabtree et al., 2006)

The semi structure allows the interviewer to be well prepared, have questions ready in advance, and appear competent during the interview. The technique helps the researcher to express their views in own terms (Cohen et al, 2006). The technique is often used when the researcher wants to delve deeply into a topic (Margaret et al, 2009)

The researchers will use the semi-‐structure technique in order to get the most out off the subject, by investigating in-‐depth into the topic. This technique will help find answers such as “How” and “Why”.

2.3 Interview study

The interviews will be structured with questions prepared beforehand, associated leads depending on the responses and willingness of the interviewee (Biggam, 2013). The interview questionnaires will based on 8 standardised questions with follow-‐up questions (Appendix 2). The researchers will select topics from literature studies, which form the foundation, semi-‐structured questions. Same questions will be asked to all respondents. The respondent’s answers will create preconditions for processing and comparative analysis of responses against the literature and conclusions.

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2.3.1 Company Case

Criteria for selection:

● International Industry

● Swedish Industry founded company.

● Case1, one company with at least 20 years of experience in Lean execution and continuously improvement.

● Case2, a company with minimum 5 years of experience in Lean deployment. ● Case3, a company who recently, within 1 year, planned to rollout Lean

implementation and are at the start point. Company selection:

The companies that will be looked at were picked out due to the different levels of effects that Lean has had on them over the number of years as well as their significant presence in Swedish industry plus their need to be global super weights in the different fields of operation conducted by each respective company. This allowed the research to have a rich source of information to analyse and observe how the different objectives of the research are intertwined together. Establishing views on the interactions of global companies stakeholders and their perspective on the objectives.

Companies selected and fit in to answer the research question are; Scania AB, Ericsson AB and Sandvik AB.

Scania AB

Scania AB was founded in 1891 in Malmö, Sweden, and is today a leading manufacturer of heavy trucks, buses and industrial and marine engines. The company operates in 100 countries. The company’s main focus lies in their customers and products, but also in the company's policy, values and practices (Scania AB). Scania started Lean deployment in early 1990 (Osterman, 2015)

Ericsson AB

Ericsson was founded in Stockholm, Sweden, and has been in the telecoms market for more than 139 years. Ericsson is a world-‐leading provider of

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Ericsson has in total ten years of experience Lean (PLAN, 2015). Ericsson has experienced challenges since Lean Management system entered (Sackerwalla, 2015). This approach will help to capture experiences, gaps and missing elements in the adaption phase between the new and old system (Parsaee, 2015).

Sandvik AB

Sandvik is a highly technological engineering group, conducting operations in 130 Countries. Sandvik was founded 1862 in Sandviken, Sweden, for more than 150 years and has today a world-‐leading position in the following areas:

● Tooling and Tooling systems

● Equipment and Tools for the Mining and Construction Industries

● High value-‐added products in advanced stainless steels.

The Sandvik group operates within five business areas: Sandvik Mining, Sandvik Machining Solutions, Sandvik Materials Technology, Sandvik Construction and Sandvik Venture (Sandvik AB). The researchers have selected to concentrate the report in the Mining and Construction area.

Sandvik has since 2012 experienced a series changes with the new CEO, Olof Faxander, in the front. Sandvik has since the new strategy generated five areas of focus, where Lean is one important part. Lean deployment started 2015 (Eng, 2015)

2.3.2 Respondent

The respondents were selected beforehand and non-‐random. Criteria for selection: ● Holds Lean black belt

● Experienced in Lean deployment and implementation as project leader or executor

● Responsible for follow-‐up and tracking Lean performance

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Table 2: Selected respondent Source: Own developed

2.4 Validity and objectivity

Validity can be described as the ability (instrument) to measure the intended. There are two aspects to consider; inner and outer validity, independently from one another (Torsten Eriksson et al., 2001).

The inner validity measure the consistency between the concept and the definition. It does not require gathered empirical data. The outer validity measures between data from an operationally definition and reality. It cannot be validated without knowing the empirical approach and outcome (Torsten Eriksson et al., 2001).

There are literally hundreds of books and papers on Lean and it terms, not to mention thousands of media articles exploring the subject, and numerous other resources available to this growing audience (Faddoul et al., 2013). As a result, the inner validity indicates to be high, for the reason that several scientific papers could be found highlighting same elements. Also the inductive approach helped to identify similarities and observe new key elements. The scientific baseline (table 4) is supported by the respondents, and therefore largely inline with the theory. Therefore, it confirms that both inner (literature review) and outer validity (interview) has a high validity. But for further investigations work, one key element, measurement, can be highlighted to improve.

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Another concept related to reality is objectivity, which means the state or quality of being true even outside of a subject's individual biases, interpretations, feelings, and imaginings (Gaston, 2004). The focus of this study has taken measures to insure that Gaston's idea is preserved by keeping to scientific answers and a thorough look into both sides of the argument meaning both sides carry a substantial supporting theories.

2.5 Reliability

Intent to measure the dependability and stability of the result it is used to demonstrate that the research method or approach is independent and the researchers have no influence on the outcome (Torsten Eriksson et al., 2001).

The different level of expertise that could be assembled in the research is high and key to the result that was produced. The output (stability) is great as they are all high profile experts in the field of Lean management, holds Black belt in Lean. The unprecedented access to their skill set helped form an integral view in the research. Another influence is the stability from Scania who had a long time to hone their systems and changes, as for Ericsson and Sandvik who are in its beginning.

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3 Literature Review

3.1 Introduction to Lean

The Lean method has its beginning after the Second World War. This system in essence shifted the focus of the manufacturing engineer from individual machines and their utilisation, to the flow of the product through the total process. (Womack et al., 1990) Essentially, Lean is centred on making obvious what adds value by reducing everything else (Matthias, 2007).

This chapter will give a brief explanation of the Lean concept, as well as identifying the barriers and the strengths of Lean. The author, Standard, believes that the term ‘Lean’ can be divided in two parts; philosophy and principle. Lean philosophy stresses total system proficiency, persistent development, value-‐added action, and respect for people. Lean principles focus on streamlining the flow of production material throughout the entire enterprise (Standard, 2015).

The remaining part of this chapter will focus on key elements such as: three levels of a system, culture, leadership and measurement. A Swedish study on system implementation performed by Näslund, 2014, showed that critical success factors can be divided into two classifications: organisation structure and change management. Furthermore the three levels of performance were also recognised as an important success factor by Näslund, 2014 as well as the organisational culture.

An influential researcher into Lean supported this point by saying “I’m also certain that you’ll be the first to agree that you didn’t really make progress until you recognised the importance of changing your company’s culture as part of the implementation” these words we spoken by Liker as he presented the importance of lean high lighting its significances (Liker, 2012).

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3.1.1 The roots of Lean concept -History And Birth of an industrial

Revolution

The whole concept has had a start in places where it was unlikely to ever be established in the early years after the world wars that took part in early and mid-‐ 19th century. The fruition of production systems is held in the story of the birth of Toyota Motor Company (TMC) (Womack et al., 1990).

Sakichi Toyoda, who held a patent for an automatic loom that revolutionized the weaving industry, established his business (Tiech, 2013). After selling the patents in 1929, the establishment reinvented itself to a new revolution that's swiping japan which was vehicles that, at the time, was dominated in Japan by local subsidiaries of Ford and General Motors. Truck and car production began in 1935, and in 1937 TMC was formally incorporated (Sorin, 2013).

Lean production not only successfully challenged the accepted mass production practices in the automotive industry, significantly shifting the trade-‐off between productivity and quality, but it also led to a rethinking of a wide range of manufacturing and service operations beyond the high-‐volume repetitive manufacturing environment (Davood, 2013). However, the Lean approach has been criticised on many accounts, such as the lack of human integration or its limited applicability outside high-‐volume repetitive manufacturing environments (Hines, 2004). By the early 1980’s the west was beginning to realise that the Japanese were out competing them and companies started to take a long hard look at what they were doing (Earley, 2014). Numerous consultants instigated steps to initiate their varieties of the TPS in westernised labels such as Continuous Flow Manufacturing, Stockless production and World Class Manufacturing (ESAP, 2003).

3.1.2 The term Lean

Lean is a set of "tools" that assist in the identification and steady elimination of waste (Earley, 2014).

However, other authors describes Lean nor as methods or tools. According to Modig et al., 2013, the Lean term is divided into different levels; such as values, principles, methods and tools. Guided in everything. If these are well understood and accepted the organisation will take advantageous steps in the efficiency in their processes and services of Lean.

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● Setting principles defining how the organisation should think ● Methods, what the organisation should do

● Tools of what the organisation should have

Furthermore the authors illustrate that some organisations intend to focus on one or a few of the above-‐mentioned levels, while others choose to focus on all of them. The author goes on, by seeing all these levels as a means the organisation will benefit from and viewing how everything fits together that will be generated by everything. It is important to remember that all organisations have values, principles, methods, tools and on-‐going activities. But then again what are they consisting of, how clearly are they defined as well as utilised and how widely acknowledged are they within the organisation. It varies from organisation to organisation and the authors emphasises this question.

As Lean thinking continues to spread to every country in the world, leaders are also adapting the tools and principles beyond manufacturing, to logistics and distribution, services, retail, healthcare, construction, maintenance, and even government (Jones et al., 1996). This has made a significant impact both in academic and industrial circles over the last decade (Hines, 2004). Indeed, Lean consciousness and methods are only beginning to take root among senior managers and leaders in all sectors today (Womack et al., 1990).

3.1.3 Benefits of Lean

Lean manufacturing appears to hold considerable promise for adopting a range of simultaneous, competitive burdens incorporating extreme quantities of process and product quality, little cost and declines in lead times (Crute et al., 2003).

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Figure 2: The benefits of Lean

Source: UK chapter International Council on Systems Engineering

Often the benefits of Lean thinking are contemplated intangible and problematic to quantify. All of us agree that faster setup, shorter cycle time, and better visual management improve the operation of a factory. We also recognize that it is impossible to track, dollar for dollar, the financial benefits associated with these improvements (Standard, 2015).

Many studies have shown that we only add value for around 5% of the time within our operations; the remaining 95% is waste! Imagine if you could remove that 95% (Dutt, 2015) wasted time and effort; what would it do for your operations Lean practices support this by reducing production variability total product cycle time (apparel science, 2015).

The perception that a business process is already efficient is all too often an illusion. Functionally, many business processes may appear very efficient, however the application of Lean forces us to review the whole supply chain in which the business process sits, and this frequently reveals bottlenecks and pockets of inefficiency (Melton, 2005). According to Mckewen employing Lean operations requires focus from all team members. In many instances, utilising Lean techniques have allowed for a company-‐wide assessment of their manufacturing processes, which builds teamwork and cooperation (Mckewen, 2012).

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3.1.4 Barriers of Lean implementation

A recently published Swedish study shows that more than 4 out of 5 lean investments will turn unsuccessful and flop. The study shows that more than 9 out of 10 the company will then remain in the setback (Leadership Design Group AB, 2015). Many companies deciding to ‘go Lean’ have struggled to figure out what that means in their type of business (Parsons, 2015). It requires a complete transformation on how a company conducts business. This takes a long-‐term perspective and perseverance (Lean Enterprise Institute, 2014).

To execute Lean as an operation strategy it requires eliminating, reducing and managing variations with the intention of increased flow efficiency rather than resource efficiency, toward constantly improving environment. It is crucial to understand that this is a journey that will never end. The realisation of Lean must be seen as a constantly changing state and not as something static. Many organisations see Lean as something that can be implemented at each point and finished when they are “done with it”. Lean operational strategy focus on flow efficiency before focusing on resources. And going from a resource-‐efficient organisation into a flow-‐ efficient organisation requires changes on many different levels. Changing the organisation focus depends very much on leadership (Modig et al., 2013).

Modig et al., 2013, goes on describing Lean is as an operational strategy choice that in turn could create a series of difficulties, which can snowball into further crippling complications. It is important to understand that the Lean application needs to be customised into a ‘different environment and levels of abstraction’. There are three levels of performance to consider, see section 3.2.1. The first common misconception and belief is that the one solution that suits one specific organisation or environment would be suitable in other organisations or environments. Secondly, companies that fail to transfer Lean accompanied by successful integration are focused on the goal of flow efficiency and not on the means. Thirdly and final misconception and belief is the definition is non-‐trivial that leaves room for interpretations what Lean is and what Lean is not.

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some consider a successful implementation either achieving major strategic components of Lean, implementing practices to support operational aspects, or providing evidence that the improvements are sustainable in the long term a must when the idea is peached to their boards (Faddoul et al., 2013) Lean implementation is consequently dedicated on reaching the right things to the right destination at the precise occasion in the correct amount to accomplish faultless work flow, while diminishing excess and being elastic and able to transform (Liker et al., 2012)

3.2 Important elements for realization

3.2.1 Organisation, 3 levels

There are three levels of performance inside an organization that have a great influence on each and that determine the effectiveness and efficiency of an organization. In order to achieve a high level of performance, these three levels must be managed. One can categorize these into: organizational (strategic and business purpose), process (tactical) and the job level (operational, people). (Rummler et al., 2012.)

Figure 3: Three levels of performance

Source: Rummler, G. A., & Brache, A. P. (2012)

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However, one author indicates that if the three levels of performance are not associated, the vision and objection will not succeed. There are three types of failure (Manos et al., 2012):

1. System level failures 2. Process level failures 3. Human level failures

Additionally, the accomplishment on adapting depends on the effectiveness and speed to the new environment. However, if a good performance is put against a bad system. “The system will win almost every time”, it means that the system and process are causing problem and failing (Rummler et al, 2012).

A Swedish study on implementation of Supply Chain Management performed by D. Näslund, 2014, showed that critical success factors can be divided into two classification; 20% organization structure and 80% Change management. The three levels were further recognised and pointed out as critical success factors. Further reflection from the study was how organisations approached the change effort versus change method specific factors. Additional, management support and organisational culture are indicated to be highlighted critical. (Interview with D. Näslund IN PLAN conference, 2014-‐04-‐08)

3.2.2 Culture

Culture is a set of rules and standards shared by members of an organisation, which when acted upon by the members produce behaviour that falls within a range that the organisation considers proper and acceptable (Rubrich, 2015). Culture helps us survive in the environment in which we live and work. Without culture, everyone in an organisation would act or behave differently (Bohan, 2012). According to Globo force culture, in part because it is so difficult to measure or manage, is all-‐too-‐often overlooked (Darcy, 2012). The article went on to mention how it affected HP and Compaq’s future. This poor cultural fit resulted in years of bitter infighting in the new company, and resulted in a loss of an estimated 13 billion dollars in market capitalisation. The company has hung on, and has been able to make significant cultural and leadership changes that have resulted in long-‐term success. (Darcy, 2012)

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everyone is doing today just what they did yesterday, none of the Lean tools will be effective over time (Bohan, 2012). According to the manufacturing advisory consortium (MAC, 2015) some of the main barriers to culture change are:

● A lack of consistency ‘top-‐down’ and a lack of any meaningful rewards. Lack of communication.

● Complacency; Toyota describe creating a state of continual chaos to drive the need for change. Poor leadership in terms of a shared vision and strongly actioned values.

● Fear of change; perhaps based on a perceived threat to jobs.

● Lack of competence and knowledge in senior management of how to effect culture change.

A Swedish paper on Lean and its cultural effects asserts that many manufacturing companies have implemented Lean processes, techniques or tools, but without creating the underlying Lean mind and culture (Bicheno, 2004). The paper went on to elaborate Veech stating there is a difference between Lean organisations and conventional organisations doing Lean things (Veech, 2004), why some companies fail in applying Lean, and thus fails in approaching a Lean culture. The difference lies in the way the company treats its workers. A conventional organisation focuses on getting things from the employees, e.g. improved productivity, ideas and work, (Veech, 2004)

According to Manos et al., 2012, Lean culture can be defined as a sum of all Lean values, principles, methods and tools together with knowledge obtainable within the organization. A strong Lean culture holds two important factors:

1. An organization with strong Lean presence promotes key cultural aspects which include and permit the Lean culture to be present:

o Safety, to achieve a safe working environment, both equipment’s and environment. Focus on education and awareness in safety practices, everybody's responsibility.

o Standards, creating baselines and standardized work flow across the organization. Helps measure performance.

o Leadership, their ability will be crucial to establish and determine Lean as a culture.

o Empowerment. Empower employees to implement and enhance the Lean culture.

o Collaboration, including suppliers, contractors, competitors,

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2. The company core value builds on respect for individuals. Example of a strong Lean culture can be found in Toyota Production System.

3.2.3 Leadership

Lean leadership could be the missing link between toolbox Lean and a sustainable continuously improving organization. More and more enterprises realize that they have so far basically focused on the visible parts of Lean production systems. (Dombrowski, 2014) The journal goes on to mention how it provides a methodical system for the sustainable implementation and continuous improvement of Lean production systems. (Mielke, 2014) Therefore, some indicators for successful Lean leadership were deduced from literature, study results, and practical experiences of lean implementation. The indicators were found in advices given on successful Lean implementations, but particularly in mistakes and shortcomings. (Dombrowski, 2014).

Without top-‐level support from the beginning, those working at lower levels will become frustrated and far less effective if they have to do it alone. (Larry E. Fast 2013) Throughout Lean Leadership training, benchmark and coach leader values, thinking and behaviour. (Tussey, 2013)

It is important for Lean implementation that team leaders, supervisors and management exemplify the desired behaviour. Participants characterised this behaviour as ‘the support and commitment of senior management (Aij KH, 2013). It describes the cooperation of employees and leaders in their mutual striving for perfection (Mielke, 2014). Lean projects in other industries have shown that the application of Lean practices requires perseverance and top-‐down commitment combined with bottom-‐up implementation (Radnor, 2006).

Once more, it can be highlighted that without support from top leaders and executives the Lean implementation work cannot survive in an organisation. The leaders are crucial when to determine if Lean has been established as a culture. An important mission they have is to communicating a clear vision for Lean. Among other thing, great Lean leaders focus on system failures (“why”) and preventing these failures. They avoid focusing on the human failure (Manos et al., 2012).

Key elements to ensure Lean implementation