Beruflich Dokumente
Kultur Dokumente
DISSERTATION
of the University of St.Gallen,
School of Management,
Economics, Law, Social Sciences
and International Affairs
to obtain the title of
Doctor of Philosophy in Management
submitted by
Saskia Penelope Gtter
from
Germany
The President:
Prof. Dr. Thomas Bieger
Vorwort
Die vorliegende Dissertation entstand whrend meiner Ttigkeit als
wissenschaftliche Mitarbeiterin am Lehrstuhl fr Produktionsmanagement des
Instituts fr Technologiemanagement der Universitt St.Gallen. Von 2009 bis 2012
hatte ich die Gelegenheit, im Rahmen zahlreicher Beratungs- und
Forschungsprojekte Einblick in das Management produzierender Unternehmen
verschiedenster Industrien zu nehmen und so mein Wissen und meinen Horizont zu
erweitern.
Mein besonderer Dank gilt meinem Mann, Rudolf Gtter, und seiner unermdlichen
Geduld. Seine Motivation und Untersttzung haben mir den ntigen Rckhalt fr
die Beendigung dieser Arbeit gegeben.
Bedanken mchte ich mich auch bei meiner Familie, insbesondere meiner Mutter,
die mich whrend meiner gesamten Studienzeit untersttzt und ermutigt hat.
Mein weiterer Dank gebhrt meinem Doktorvater Prof. Dr. Thomas Friedli, der
mich mit seinen Ideen und seinem Fachwissen untersttzt und mir ein freies und
eigenstndiges Arbeiten in vielen interessanten Projekten ermglicht hat. Herrn
Prof. Dr. Oliver Gassmann danke ich fr die bernahme des Korreferates.
Franziska Ebert, Maria Fischl, Andreas Hinz, Andreas Mundt, Maike Scherrer,
Simone Thomas, Stefan Thomas und Caroline Ubieto sind neben Arbeitskollegen
und Diskussionspartnern gute Freunde geworden und haben die Jahre in St.Gallen
zu einer unvergesslichen Zeit gemacht. Dies gilt ebenso Roman Frick, Weini Zhang
und Renate Policzer. Meinen Kollegen am Lehrstuhl mchte ich fr inspirierende
Diskussionen und ein einzigartiges Arbeitsumfeld danken.
Saskia Gtter
Januar 2014
Abstract
In recent years pharmaceutical companies faced a lot of changes in their business
environment. Especially the newly arisen cost pressure forces them to focus more
on manufacturing than they were used to. They are in the good position that other
industries already had the same experience. Adequate tools have been developed
which they can adapt to their own environment. A lot of studies exist which explain
and analyse these tools mainly under the term lean production. Lean production is
composed of different lean practices and their implementation supports a plants
success in manufacturing. Even if a lot of research has been done, researchers do
not have a common understanding of the topic and different models and approaches
exist. Especially the relations between the single lean practices are not analysed in
detail. Further, their interaction with different production strategies is unclear.
Therefore, identifying production strategies in pharmaceutical manufacturing and
based thereon analysing the level of lean implementation and the relations between
single lean practices is the subject of this research.
Based on literature a map of relations between lean practices is drawn. It serves as a
foundation for identifying the influence of single lean practices on each other. A
quantitative analysis with a sample of 208 sites identifies 17 lean practices used in
pharmaceutical manufacturing. Further, four strategic groups are developed each
focusing on a different set of the competitive priorities delivery, flexibility, costs,
and quality. These strategic groups are empirically analysed to understand how they
differ concerning the 17 lean practices. The general level of implementation is
investigated per group. Within the groups the practices are tested for differences in
implementation level to find those practices that are most relevant. In a last step, the
correlations between the practices in a group are calculated and filled into the map
of relations.
The results show that the implementation of lean practices depends on the strategic
goals of a production site. Independent from the strategic group, lean practices are
highly related and therefore should not be implemented separately. This research
contributes to theory by linking production strategy to the process of lean
implementation in pharmaceutical manufacturing. It provides a comprehensive
overview of relations between lean practices and offers an approach on how to
decide which practices to implement. These findings provide guidance for managers
facing lean implementation.
Zusammenfassung
Das Umfeld pharmazeutischer Unternehmen hat sich stark verndert. Vor allem der
entstandene Kostendruck zwingt sie, sich mehr als bisher auf den
Produktionsbereich zu fokussieren. Sie knnen dabei auf Erfahrungen anderer
Branchen zurckgreifen und mssen dort entwickelte Tools nur anpassen. Viele
Studien erklren und analysieren diese Tools unter dem Begriff Lean Production. Er
vereint verschiedene Lean Praktiken, deren Umsetzung den Produktionserfolg
frdert. Trotz intensiver Forschung auf dem Gebiet der Lean Production gibt es kein
einheitliches Verstndnis welche Lean Praktiken zu unterscheiden sind,
verschiedene Modelle und Anstze existieren. Die Beziehungen zwischen den
einzelnen Praktiken sind nicht im Detail analysiert und das Zusammenspiel mit
verschiedenen Produktionsstrategien ist unklar. Daher ist es das Ziel dieser Arbeit
Produktionsstrategien in der pharmazeutischen Produktion zu identifizieren und
darauf aufbauend den Grad an Lean Implementierung sowie die Beziehungen
zwischen den einzelnen Lean Praktiken zu analysieren.
Literaturbasiert wird ein Beziehungsnetz zwischen Lean Praktiken gezeichnet. Es
dient als Grundlage fr die Identifizierung des Einflusses der einzelnen Praktiken
aufeinander. Eine quantitative Analyse mit einer Stichprobe von 208 Standorten
identifiziert 17 Lean Praktiken, die in der pharmazeutischen Produktion eingesetzt
werden. Zudem werden vier strategische Gruppen entwickelt, die sich jeweils auf
ein anderes Set der Wettbewerbsvorteile Lieferung, Flexibilitt, Kosten und Qualitt
fokussieren. Die strategischen Gruppen werden empirisch auf Unterschiede
bezglich der 17 Lean Praktiken untersucht. Es wird das allgemeine
Implementierungsniveau pro Gruppe untersucht sowie Unterschiede im
Implementierungsniveau der Praktiken innerhalb der Gruppen. In einem letzten
Schritt werden innerhalb der Gruppen die Korrelationen zwischen den Praktiken
berechnet und in das Beziehungsnetz eingetragen.
Die Ergebnisse zeigen, dass die Lean Implementierung von den strategischen Zielen
eines Produktionsstandortes abhngt. Unabhngig von der strategischen Gruppe
lsst sich feststellen, dass einzelne Lean Praktiken stark mit einander verbunden
sind und daher gemeinsam implementiert werden sollten. Die Verknpfung der
Produktionsstrategie mit dem Prozess der Lean Implementierung ermglicht einen
umfassenden berblick ber die Beziehungen zwischen Lean Praktiken und bietet
einen Entscheidungsansatz fr Managern, welche Praktiken zu implementieren sind.
Table of Contents
Table of Contents
List of Abbreviations ............................................................................................... V
List of Figures........................................................................................................ VII
List of Tables ........................................................................................................... IX
1
Introduction ...................................................................................................... 1
1.1 Research motivation .................................................................................. 1
1.1.1
1.1.2
1.1.3
1.3.2
1.3.3
2.1.2
2.2.2
Table of Contents
II
3.2.2
3.2.3
4.2.2
4.2.3
4.2.4
4.2.3.1
4.2.3.2
4.2.3.3
4.2.3.4
4.4.2
4.4.3
Table of Contents
III
4.4.4
4.4.5
4.4.5.2
4.4.5.3
4.4.5.4
4.5.2
4.5.3
Do all ........................................................................... 59
4.5.1.2
Flexible deliverers....................................................... 59
4.5.1.3
4.5.1.4
4.5.1.5
Summary ..................................................................... 61
Do all ........................................................................... 63
4.5.2.2
Flexible deliverers....................................................... 65
4.5.2.3
4.5.2.4
4.5.2.5
Summary ..................................................................... 69
Do all ........................................................................... 71
4.5.3.2
Flexible deliverers....................................................... 74
4.5.3.3
4.5.3.4
4.5.3.5
Table of Contents
IV
4.5.3.6
Summary ..................................................................... 87
Conclusion ...................................................................................................... 92
5.1 Contributions to theory ........................................................................... 92
5.2 Contributions to practice ......................................................................... 92
5.3 Limitation and future research ................................................................ 93
References ................................................................................................................ 95
Appendix A: Overview lean practices and bundles........................................... 106
Appendix B: OPEX questionnaire (excerpt of questions) ................................ 115
Appendix C: Details cluster analysis .................................................................. 122
Curriculum Vitae .................................................................................................. 125
List of Abbreviations
List of Abbreviations
ANOVA
Analysis of variance
Bn
Billion
CFA
CITC
CLD
CP
Competitive Priority
DOH
ed.
Edition
Ed(s).
Editor(s)
EFA
e.g.
EI
Employee Involvement
EMS
et al.
etc.
Et cetera
FTE
JIT
Just-in Time
KMO
Kaiser-Meyer-Olkin- criterion
MSA
No.
Number
n.s.
Not significant
OEE
OPEX
PCA
List of Abbreviations
VI
p. / pp.
Page / Pages
SCM
SD
System Dynamics
SE
Standard Error
SPC
TPM
TPS
TQM
List of Figures
VII
List of Figures
Figure 1: Research process ......................................................................................... 5
Figure 2: Research approach....................................................................................... 6
Figure 3: Example Causal Loop Diagram .................................................................. 7
Figure 4: Research structure ....................................................................................... 9
Figure 5: Research framework.................................................................................. 18
Figure 6: CLD of lean practices................................................................................ 22
Figure 7: Procedure used for factor analysis ............................................................ 28
Figure 8: Lean practices identified in pharmaceutical manufacturing ..................... 43
Figure 9: Adapted map of relations between lean practices ..................................... 46
Figure 10: Procedure used for cluster analysis ......................................................... 47
Figure 11: Implementation levels for do all-cluster ................................................. 59
Figure 12: Implementation levels for flexible deliverers-cluster ............................. 60
Figure 13: Implementation levels for flexible starters-cluster.................................. 60
Figure 14: Implementation levels for efficient conformers-cluster .......................... 61
Figure 15: Correlations for do all-cluster ................................................................. 71
Figure 16: Correlations for flexible deliverers-cluster ............................................. 74
Figure 17: Correlations for flexible starters-cluster.................................................. 78
Figure 18: Correlations for efficient conformers-cluster .......................................... 82
Figure 19: Influence - importance do all-cluster ...................................................... 88
Figure 20: Influence - importance flexible deliverers-cluster .................................. 89
Figure 21: Influence - importance flexible starters-cluster ...................................... 90
Figure 22: Influence - importance efficient conformers-cluster ............................... 90
Figure B- 1: General information and competitive priorities ................................. 115
Figure B- 2: Four categories of lean practices ........................................................ 120
Figure B- 3: Key performance indicators for the goals of lean bundles................. 121
Figure C- 1: Dendrogram outlier analysis ........................................................... 122
VIII
List of Figures
List of Tables
IX
List of Tables
Table 1: Taxonomies in production strategy ............................................................ 17
Table 2: Attribution of lean practices to lean bundles .............................................. 21
Table 3: Direction of relations between lean practices............................................. 23
Table 4: Lean practices according to their influence ................................................ 23
Table 5: Size of pharmaceutical production sites ..................................................... 27
Table 6: Total productive maintenance Initial items ............................................. 33
Table 7: Total productive maintenance Scale reliability scores ............................ 33
Table 8: Total productive maintenance EFA category level ................................. 34
Table 9: Total quality management Initial items ................................................... 34
Table 10: Total quality management Scale reliability scores ................................ 35
Table 11: Total quality management EFA category level ..................................... 36
Table 12: Just-in time Initial items ........................................................................ 37
Table 13: Just-in time Scale reliability scores ....................................................... 38
Table 14: Just-in time EFA category level ............................................................ 39
Table 15: Effective management system Initial items........................................... 40
Table 16: Effective management system Scale reliability scores.......................... 41
Table 17: Effective management system EFA category level ............................... 42
Table 18: Implementation of lean practices.............................................................. 44
Table 19: Assignement of the lean practices ............................................................ 45
Table 20: Measures for the goals of lean bundles .................................................... 46
Table 21: Competitive priorities used....................................................................... 48
Table 22: Competitive priorities EFA ................................................................... 49
Table 23: Analysis of agglomeration coefficient - Ward's method .......................... 50
Table 24: Final cluster results - K-means method .................................................... 51
Table 25: Competitive priorities emphasised by strategic groups............................ 52
Table 26: Implementation of lean practices by competitive priority clusters .......... 58
List of Tables
Introduction
1 Introduction
1.1 Research motivation
1.1.1
Research interest
Over the last years markets became more competitive and global. The changing
environment forces companies to be more flexible (Dreyer & Grnhaug, 2004) in
order to face this challenge. The importance of aligning production to customer
needs while still being able to efficiently manufacture good quality is rising. The
perception of manufacturings strategic role is increasing (Ward et al., 2007) and
companies start to improve their production system in terms of efficiency and
effectiveness to develop competitive advantages (Grichnik et al., 2008; Voss, 2005).
A popular approach to reach this aim is the concept of lean production which allows
a company to on the one hand improve productivity of processes and assets and on
the other hand to boost flexibility. It can be understood as "(...) an integrated
manufacturing system that is intended to maximize the capacity utilization and
minimize the buffer inventories of a given operation through minimizing system
variability (related to arrival rates, processing times, and process conformance to
specifications)" (de Treville & Antonakis, 2006, p. 102). Over the last decades lean
has become an often used term in operations management and several studies have
shown that the implementation and use of lean practices leads to superior
performance compared to competitors that do not implement such practices (Cua et
al., 2001; de Menezes et al., 2010). Consequently, the adoption of lean production is
a central challenge for manufacturing firms. Although there is quite a number of
comprehensive literature on lean and its elements (see Appendix A) every company
has its own idea of how to get started. When discussing with representatives from
the industry it becomes obvious that not all managers have a holistic view of lean
and that they rely on single elements without seeing the whole. Therefore, they are
not able to use the full potential lean is able to provide (Scherrer-Rathje et al.,
2009). Another point is the often missing consistency of the implemented practices
with a plants business strategy (Flynn & Flynn, 2004).
A lot of companies already implemented elements of lean years ago whereas others
are still on their way to implement them. Particular industries, like the
pharmaceutical industry and process industries in general, are lacking behind in
Introduction
adopting lean (Melton, 2005). On the other hand, having started to introduce lean
later than other industries they now have the chance to learn from others and the
problems they were confronted with on their journey to lean.
To be able to fully capture these learning possibilities it is necessary to deeper
analyse the lean concept. This analysis includes on the one hand the relations that
exist between single lean practices and on the other hand the manufacturing strategy
a company is pursuing that might have an influence on the success or failure of lean
implementation.
The influence of the manufacturing strategy pursued on the implementation level of
some lean practices as well as the relations between lean practices on a higher level
are identified in theory. In contrast, the influences that exist on a lower level are not
fully captured yet. But it might be that exactly these influences are the reason for
the failure of companies to fully and successfully implement lean and therewith to
achieve perfection as proclaimed by Womack and Jones (1996). Therefore, this
research should help to promote companies in being more successful while
implementing lean.
1.1.2
Practical relevance
Introduction
pharmaceutical production sites, results are until now not as good as they might be
e.g. the average Overall Equipment Effectiveness (OEE) in pharma is 30%, good
companies reach 74% but in other industries the average is at 92% (Benson, 2004).
This shows that pharmaceutical companies are still struggling with the
implementation of lean maybe because of simply copying the standardised tools of
other industries or companies. But to be successful, the initiatives need to be aligned
to the particularities of the industry as well as the business strategy of the single
manufacturing plants (Dean & Snell, 1996). In literature and practice; there is a
variety of programs available under the term lean production. Analysing the
relations between the single elements of these programs can help to better
understand the impact of implementing specific lean practices and to choose the
right ones according to the own strategy. Therefore it is vital for pharmaceutical
manufacturing sites to envision their production strategy and the competitive
priorities they pursue.
1.1.3
Theoretical gaps
Introduction
different
manufacturing
strategies
exist
in
pharmaceutical
Introduction
Research process
Differentiation,
abstraction
Literature
review
(Preliminary)
theoretical
knowledge
First findings
from practice
Critical
reflection
Research as an
iterative learning
process
Practical
problems
Data collection
Practical
phenomena
Questions
addressed to
reality
Theory
Field work
Introduction
literature is reviewed and relevant theories are identified. Further, this specific
problem is reflected in practice and questions are raised. To answer these questions
empirical data is collected and critically reflected. This reflection leads to
differentiation, abstraction and changes in perspective of the original problem and
new questions are raised. Thus, theoretical knowledge is incrementally generated
and added to the existing knowledge base.
1.3.2
Research methodology
Introduction
omitted. Anyway, this approach called Causal Loop Diagram (CLD) gives good
insights and learning possibilities as shown by Senge (1990). A CLD consists of the
crucial variables of a system which are in relationship to each other. This
relationship is displayed by using arrows, each having a positive or negative causal
link. A positive causal link implies that the variables are changing in the same
direction; accordingly a negative causal link means that the variables are changing
in opposite directions, when one increases the other decreases. When all linkages
are displayed feedback loops can be identified. Two kinds of feedback loops exist:
loops with a positive polarity - reinforcing loops (R) - and loops with a negative
polarity - balancing loops (B) (Meadows, 2008). An example is illustrated in Figure
3 below.
Birth rate
+
+
Population
-
+
Death rate
Research theory
Introduction
Introduction
Chapter 1
Research motivation
Research objective
Research design
Layout of the
dissertation
Theoretical framework
Chapter 2
Lean manufacturing
Production strategy
Summary and
framework
development
CLD of relations
Summary mapping of
relations
Empirical analysis
Chapter 4
Identification of lean
practices
Development of
strategic groups
Comparison of
strategic groups
Summary empirical
analysis
Conclusion
Chapter 5
Contribution to theory
Contribution to practice
Limitations and
future research
Theoretical framework
10
2 Theoretical framework
The research at hand is based on operations management literature, especially from
the areas production management methods and production strategy. In the following
chapter first the three related research streams, which form the basis for the actual
discussion on lean, are reviewed. Further, the single elements normally included in
lean studies are identified. Second, a short review of content-related manufacturing
and production strategy literature is conducted and the relationship between lean
manufacturing and production strategy is suggested.
When analysing the evolution of lean manufacturing three related research streams
have to be considered. Starting point is the Toyota Production System (TPS)
described by Ohno in the late 1970ies in Japan. Ohno, who was responsible for the
development of the Toyota Production System (TPS) since the 50ies first published
his book "Toyota Production System: Beyond Large Scale Production" in English in
1988 (publication in Japan 1978). He defines TPS and describes its main underlying
components as elimination of waste, zero defects and continuous improvement.
Almost simultaneously, in 1984, Hayes and Wheelwright start studies under the
term World Class Manufacturing aiming to analyse which factors are able to
explain the extraordinary success of some manufacturing companies. They found
out two central dimensions: the effectiveness of the production system and the
efficiency of the applied practices used in production.
Hereby effectiveness stands for the role of manufacturing in a company and its
ability to support the company's strategy and to develop a unique position. This
unique position or competitive advantage is reached via the so called competitive
priorities, those factors manufacturing has to aim for (for details see 2.2).
Efficiency is measured by a unique combination of practices coming from the six
dimensions workforce skills and capabilities, management technical competence,
competing trough quality, workforce participation, rebuilding manufacturing
engineering, and incremental improvement approaches (Hayes & Wheelwright,
1984). These dimensions which should lead to a superior operational performance
Theoretical framework
11
have been discussed and expanded by others (e.g. Hall, 1987; Schonberger, 1986).
At the beginning of the 90ies the International Motor Vehicle Program started a
detailed study to examine new Japanese techniques in production (mainly the
Toyota Production System) which they named "lean production". This term was
first used by Krafcik in 1988.
Some of the conclusions drawn are published in "The Machine that Changed the
World" by Womack et al. (1990). The book was the first attempt to gather all
practices discussed under lean manufacturing in one holistic consideration
(Karlsson & Ahlstrm, 1996). It does not only focus on analysing production but
also on product development, procurement and distribution. In their second book
"Lean Thinking" (1996) Womack and Jones define the central practices which lead
to lean production as follows: specify value, identify the value stream, create flow,
establish pull and seek for perfection. The book can be understood as a guide on
how to practically apply lean in any organization and achieve the lean production
system they described in 1990 (Garnett et al., 1998).
In 1995, Voss stated an already high level of research into lean which even was
increasing in the following years. Nevertheless, the three related research streams
have in common that they all propose certain practices which should be
implemented to reach a better performance. These practices will be discussed in
detail in the following section.
2.1.2
Since these first academic publications about lean there has been a big boom
concerning this topic and a lot of theoretic papers and studies were published. In
contrast to the early publications about lean these works see lean from a practical
perspective, focussing more on practices, tools, and techniques that are directly
observable (Hines et al., 2004; Liker & Meier, 2006; Pettersen, 2009; Shah & Ward,
2007). As there is no general agreement under researchers on how to define the
dimensions of lean a lot of different approaches and understandings of lean exist;
concepts are changing over time, the same item is used to display different concepts
or, the other way round, different items are used to display the same concept (Shah
& Ward, 2007). Furthermore Sousa & Voss (2002) stress the fact that studies on
lean are using different levels (principle, practices or techniques) of the single
concepts without showing clearly which level they are addressing. Even more
problematic from their point of view is the use of the terms themselves; "practices",
12
Theoretical framework
"factors", and "implementation constructs" are standing for the same level of a
concept.
In this research lean practices are understood as "... the observable facet (...), and it
is through them that managers work to realize organizational improvements."
(Sousa & Voss, 2002, p. 92).
Generally, papers dealing with lean practices build bundles grouping different
aspects of the lean concept (e.g. Cua et al., 2001; Kickuth, 2005; McKone et al.,
2001; Shah & Ward, 2003). Comparing various authors shows that no common
understanding exists, which practices belong to which bundles. An illustrative
example is the paper of Dow et al. (1999) which provides insight into the different
number of dimensions of quality management practices perceived by different
authors. In the different models displaying lean the bundles are mostly
differentiated between Total Productive Maintenance (TPM), Total Quality
Management (TQM), Just-in Time (JIT), and Effective Management System
(EMS). Some papers also include Supply Chain Management (SCM) and Employee
Involvement (EI).
Unlike the work of Womack et al. (1990) the studies mainly focus on single aspects
of lean and their influence on (manufacturing) performance figures. Kannan and
Tan (2005) find that commitment to quality and understanding of supply chain
dynamics have the greatest effect on manufacturing performance. McKone et al.
(2001) investigate the effect of Total Productive Maintenance (TPM) on
manufacturing performance by also considering Total Quality Management (TQM)
and Just-in Time (JIT) practices. They find that multiple manufacturing practices in
a plant are mutually supportive and cannot be seen as independent. Higher levels of
TPM implementation are associated with higher levels of JIT and TQM
implementation.
On the other hand there are also some studies that focus explicitly on lean
manufacturing as an integrated system. Cua et al. (2001), as one of the first, show
that the joint implementation of lean manufacturing practices has an influence on
the manufacturing performance. Depending on the strategic importance of single
performance dimensions different configurations of the practices are useful. De
Menezes et al. (2010) investigate in their paper if early implementers of lean
practices really have an advantage with regard to productivity. The outcome is that
integration, early adoption and continuous improvement may be linked to
Theoretical framework
13
Theoretical framework
14
Theoretical framework
15
Theoretical framework
16
Configurations can be divided into typologies and taxonomies. They describe the
production strategy and can be built based on competitive priorities. Typologies are
ideal types each representing a unique combination of criteria whereas taxonomies
are classifications of real organizations which form representative and mutually
exclusive groups (Bozarth & McDermott, 1998). Often, the results are analysed
using cluster or factor analysis. Table 1 provides a short overview of competitive
priority based taxonomies in production strategy literature.
The single studies use different dimensions and the database is varying by size,
country, and industry. Nevertheless, the strategic types proposed resemble each
other. These strategic types will serve as references for interpreting and naming the
taxonomies that will be developed for pharmaceutical production sites in this
research.
I 5:
Competitive priorities are the basis for developing taxonomies of strategic
types which help to identify similarities between plants.
I 6:
Competitive priorities and improvement actions like lean production are
linked to each other.
Theoretical framework
17
Classification variables
Author
Strategic types
de Meyer
(1992)
cost
flexibility
manufacturing innovators
delivery
quality
marketing-oriented group
delivery network
after-sales service
caretakers
low price
design flexibility
marketeers
dependability
conformance
broad distribution
innovators
speed
performance
broad line
volume flexibility
efficiency
after-sales service
Avella et al.
(1996, 1999)
Kathuria
(2000)
Christiansen et al.
(2003)
Sum et al.
(2004)
Zhao et al.
(2006)
Deflorin
(2007)
Kathuria et al.
(2010)
advertising
delivery deadlines
flexibility
quality
cost
quality
in-time delivery
product performance
mass producers
quick delivery
mass customizers
starters
cost
efficient conformers
delivery
speedy conformers
flexibility
do all
quality
designers
low price
specialists
caretakers
delivery speed
idlers
volume flexibility
servers
design flexibility
performance quality
broad product line
mass customizers
conformance quality
low pricers
price
customization
quality deliverers
delivery reliability
design/ innovation
speedy deliverers
delivery speed
product features
aesthetic designers
quality conformance
product variety
all-rounders
cost
quality
efficient innovators
delivery
differentiators
flexibility
quality customizers
cost
low emphasizers
delivery
mass servers
flexibility
time to market
after-sales service
specialized contractors
quality
experts
price
logisticians
classics
faster deliveries
product range
service provider
speedy conformers
cost
starters
delivery
efficient conformers
flexibility
agile
quality
Theoretical framework
18
Strategic type
JIT
quality
costs
delivery
fit
supplier quality
management TQM
pull systemJIT
housekeeping
TPM
fit
19
webofknowledge.com
20
In the following, the single bundles are explained. Table 2 depicts the classification
made by Cua et al. (2001), Kickuth (2005), and the classification derived from the
literature review.
The practices in the TPM bundle are focusing on the maximisation of equipment
effectiveness (Nakajima, 1988) which is defined as stable running machines with a
high availability rate. Three lean practices are assigned to the TPM bundle:
preventive maintenance, according to Cua et al. (2001), technology assessment and
usage following Kickuth (2005) which includes Cuas technology emphasis and
proprietary equipment, and housekeeping as stated by McKone et al. (2001) and
Kickuth (2005).
The TQM bundle reflects a holistic quality management approach (Powell, 1995)
that involves supplier, workforce, customers, and management into the continuous
improvement of quality. The lean practices included in the bundle are almost the
same as in the frameworks of Cua et al. (2001) and Kickuth (2005). To stress the
importance of variance reduction in processes the practice statistical process control
(SPC) is included as in Shah and Ward (2007).
The reduction and finally the elimination of waste (Ohno, 1988) is the goal of the
JIT practice bundle. Compared to the framework of Cua et al. (2001), which
includes five lean practices, most of the practices stayed the same, only with
different names. In addition, three practices have been added following Shah and
Ward (2003). These practices are: lot size reduction, cycle time reduction, and
continuous product flow.
The lean bundles defined so far are all more technically focused. They are
supported by management and strategy focused lean practices gathered in the
bundle EMS. According to Shah and Ward (2003) lower level lean practices can be
grouped into two main factors. One factor is named flexible, cross-functional work
force and consists of job rotation, job design, and formal, cross-functional training.
The second factor, self-directed work teams, includes organization in work teams
and employee involvement in problem solving groups. As a third practice
management commitment and support was included to not only stress the role of
employees but also the role of management.
21
Kickuth 2005
Preventive maintenance
Effective technology usage
Housekeeping
Literature review
Preventive maintenance
Housekeeping
Technology assessment and usage
Committed leadership
Strategic planning
Cross-functional training
Employee involvement
Information and feedback
Direction setting
Mgmt. commitment & company culture
Employee involvement & continuous
improvement
Functional integration& qualification
22
planning adherence
+
+
SPC
customer
involvement
+
process management
and variance reduction
+
++
cross-functional
product design
++
+ quality improvement
and stable processes
+ +
+
+
supplier quality
management
+
JIT delivery by
suppliers
pull system
+ continuous
+
+ product flow
++++
+
+
cycle time
reduction
+
+
+
+
+
elimination of
excess inventories +
+
setup time
reduction
+
lot size reduction
management support
and commitment
+
improved equipment
performance
+
+
+
preventive
maintenance
++
housekeeping
technology
assesment and usage
+
+ self-directed +
+ working teams
equipment layout
optimization
+
flexible, cross-functional
workforce
A high number of linkages can be observed between the single lean practices
themselves and the goals of the bundles TPM, TQM, and JIT. It is obvious that
some practices show more direct as well as indirect relations than others. Besides
the number of relations also the direction of the relations are interesting, as the
implementation of a practice that has a positive influence on another practice
supports the overall implementation of lean in a plant. There are, on the one hand,
lean practices that are only or mainly influencing others and on the other hand there
are lean practices that are only or mainly being influenced. Table 3 structures the
lean practices following this approach.
23
Mainly influencing
Balanced
JIT delivery by suppliers Preventive maintenance
Lot size reduction
Cycle time reduction
Flexible, cross-functional
workforce
Number of
influences
11
thereof
direct
4
10
10
4
3
9
9
5
2
7
7
7
7
7
7
7
7
7
7
7
4
3
2
2
2
2
2
1
1
1
1
Planning adherence
Practice
24
eight lean practices seem worth to focus on. These eight lean practices have a lot of
direct and/ or indirect relations with others: management support and commitment
(EMS), flexible, cross-functional workforce (EMS), setup time reduction (JIT), lot
size reduction (JIT), equipment layout optimization (JIT), supplier quality
management (TQM), continuous product flow (JIT), and self-directed working
teams (EMS). Interestingly, all practices coming from the bundle Effective
Management System (EMS) are among these practices with a lot of relations. It
shows how important these people and culture oriented lean practices are for the
overall implementation of the more technical practices of TPM, TQM, and JIT.
3.2.2
When looking at the goals of the single lean bundles it becomes obvious that the
lean practices stemming from the relevant bundle have the most influences.
Nevertheless, they are also influenced by lean practices from other bundles. The
goals are also influencing each other; the JIT goal is influenced by the TPM as well
as the TQM goal. Further, the TQM goal is also influenced by the JIT goal. The
assumption of Kickuth (2005), that practices assigned to the JIT bundle are the last
to implement because they are facilitated by the other bundles, is supported. Also
the finding of Shah and Ward (2007) can be confirmed, stating that practices
associated with the TPM bundle have least direct relations to other lean practices.
3.2.3
Feedback loops
As explained in chapter 1.3.2 two kinds of feedback loops exist. For the relations
between lean practices five reinforced feedback loops were identified. They are
marked with bold arrows in Figure 6. All of the feedback loops include the goals of
the bundles TPM, TQM, and JIT. Hence, the conclusion of e.g. McKone et al.
(2001), that multiple manufacturing practices in a plant are mutually supportive and
therewith not independent, is supported.
An example for a direct feedback loop can be found between the TQM goal quality
improvement and stable processes and the JIT goal elimination of excess
inventories. Ahmad et al. (2003) stated that lower inventories, which lead to a
higher number of turns, ease the detection of quality problems. This helps to
improve the internal quality. A higher level of quality enables a plant to have a
lower level of inventory as the reliability of the process output is better.
25
26
Empirical analysis
4 Empirical analysis
This chapter is divided into 6 parts. First, the data set is described. Then, the lean
practices used in pharmaceutical manufacturing are identified and the map derived
from literature is adapted accordingly. After that, strategic groups are developed and
characterized. Subsequently, the relationships between the strategic groups and their
use of lean practices are analysed based on the adapted map from chapter 3. Finally,
the sequence of adopting lean practices to positively impact manufacturing
performance is discussed.
Empirical analysis
27
correctly. This test included on the one hand a discussion with seven experts and on
the other hand nine production plants filling in the questionnaire (Kickuth, 2005). In
case of unclear questions these were adapted. The measurement items used in this
work can be found in Appendix B.
The questionnaire was sent to pharmaceutical production sites all over the world.
Nevertheless, the location of St.Gallen leaded to an emphasis of the data on Europe
due to accessibility of production sites on other continents. The sample of target
firms is partly taken from the institutes industry data base. In addition, existing
personal contacts and publicly available information (websites, industry
associations etc.) complemented the sample to avoid convenience sampling. In total
about 1050 production sites were identified and contacted by telephone or email
from which 208 responses returned. This makes a return rate of approximately 20%.
The respondents are managers from the area quality, production, operational
excellence, or site leaders.
From the 208 questionnaires returned, data from three sites was not used due to
missing values. Thus, the final sample consists of 205 pharmaceutical production
sites. Most of the participating plants are from European countries (89%), but some
questionnaires were also returned by plants located outside of Europe. Thereof, 7%
are from American countries and 4% from Asian countries. The participating
pharmaceutical production sites are of different size, measured with the number of
FTEs (full time equivalents).
Number of FTEs
1 to 49
50 to 99
100 to 249
250 to 499
500 to 999
1000 or more
Sample
3%
12%
31%
35%
14%
5%
Empirical analysis
28
Number of factors
Rotation of factors
Interpretation
Empirical analysis
29
Figure 7 shows the procedure used for the factor analysis in this research. Before
starting with the actual factor extraction in steps two to four, the underlying
variables have to be defined and checked for their usability in the analysis. After
extracting the factors the results need to be interpreted. The following sections
describe each of the steps in greater detail.
4.2.1
Identification of variables
The items related to the four categories of lean practices, as asked in the
questionnaire discussed in chapter 4.1, were the basis for the factor analysis. Some
tests had to be performed to ensure their usability for a factor analysis. Descriptive
statistics and missing item analysis were conducted for each of those 105 items. The
missing item analysis did not show any problems. Nevertheless, two items from the
category EMS were excluded from further analysis as they were only provided in 31
respectively 76 of the cases. In the following, the terms item and variable will
be used interchangeably.
With these 103 items the suggested number of at least five observations per variable
(Hair et al., 2006) cannot be reached for an analysis across multiple categories.
Therefore the factor analysis is conducted separately per category of lean practices.
Generally, there have to be more observations than variables with a minimum
number of 50 observations in total.
A first overview of the variables in the single categories can be obtained by
calculating the correlation matrix. It contains the bivariate correlations between the
single variables but does not yet give evidence if connected variables can be
explained by a common factor. This correlation matrix is the basis for performing
the factor analysis. Therefore, it has to be tested if the correlation matrix is suitable
for such an analysis.
One common criterion for testing the correlation matrix is the Measure of Sampling
Adequacy (MSA) proposed by Kaiser, Meyer and Olkin. It ranges on a scale from 0
to 1 and shows how well each variable is predicted by the other variables without
error. Aim is a value of above 0.80 but a value of 0.50 is still acceptable for a factor
analysis (Backhaus, 2006). The anti-image correlation matrix shows these values
per variable and indicates if variables should be excluded from further analysis. If
there are unacceptable values the variable with the lowest MSA should be deleted
first and then the correlation matrix should be recalculated. This procedure should
be performed until no unacceptable values are left.
Empirical analysis
30
The Bartlett test of sphericity is another possibility to test for correlations among the
variables. However, a higher number of observations leads to a higher chance of
detecting correlations among the variables.
As well, scale reliability can be ensured by calculating the Corrected Item to Total
Correlation (CITC) and Cronbachs alpha if item deleted. According to Kerlinger
(1978) an item should not be used if the items correlation with its corrected item
total is less than 0.30. If the item is regarded to be essential for the category a
slightly lower CITC can be accepted. Cronbachs alpha is a measure for internal
consistency that varies between 0 and 1. A value of above 0.70 is regarded as
essential for existing scales (Nunnally, 1978).
Using these criteria in total 16 (2 TPM, 6 TQM, 4 JIT, 4 EMS) items were deleted
thereof six (1 TPM, 1 TQM, 1 JIT, 3 EMS) were revers-coded. Previous research
has also indicated lower item reliability with reverse-coded items (Flynn et al.,
1990). For the following factor extraction 87 items can be used. Further details
concerning the items can be found in chapter 4.2.3.1 to chapter 4.2.3.4.
4.2.2
As the variables are specified, the next step is the selection of the factor extraction
method. There are two basic methods available, the Common Factor Analysis and
the (Principle) Component Analysis. The difference is the variance that is
considered in each method. The variance of a variable is composed of three parts.
First, there is the common variance that is shared with all other variables. It is
estimated by the so called communality. The second form of variance is the specific
or unique variance that cannot be explained by other variables and is only
associated to one specific variable. The third form of variance is the error variance
that is caused during data gathering or based on measurement errors or random
components (Hair et al., 2006). The Component Analysis considers the total
variance and is best used when having the primary goal of reducing data. The
interpretation focuses on finding a collective term for the variables assigned to one
factor. The Common Factor Analysis considers only the common variance and has
the primary goal of identifying the latent dimensions. The interpretation focuses on
finding a name for the reason for which the variables load on a factor. As the aim of
this research is to reduce data for further analysis the Principle Component Analysis
(PCA) is chosen.
Empirical analysis
4.2.3
31
After identifying the variables and choosing the factor extraction method the actual
factor analysis can be performed. Aim of the factor analysis is to find as little
factors as possible that represent the data as good as possible in terms of explaining
more variance than another factor structure would do. Preferably, these factors
should be independent. There is no formal mathematical rule to decide on the
number of factors that should be extracted. However, some stopping criteria exist
(Hair et al., 2006):
Latent Root criterion/ Kaiser criterion: Only factors which explain more
variance than a single variable should be extracted. For component analysis
the variance explained by one variable is 1, therefore all factors with an
eigenvalue >1 are regarded as significant. The results for this method are best
when the number of variables ranges between 20 and 50. Otherwise too few
(<20) or too many (>50) factors might be extracted.
A Priori criterion: The exact number of factors is known before starting the
analysis.
Percentage of Variance criterion: A specific amount of variance should be
explained by the factors extracted. In social science normally 60% of the
variance should be explained by the factor solution.
Scree Test criterion: The latent roots are plotted against the number of
factors in the order of their extraction. This graph is used to determine the
appropriate number of factors by searching the point at which the curve first
starts to straighten. Generally, the Scree Test results in suggesting more
factors than the Latent Root criterion.
In practice, several criteria are used to extract factors and the results are compared
to find the best solution. Also the conceptual foundation is considered. This
approach is also chosen to extract the right number of lean practices.
After deciding on the number of factors to extract it has to be defined which
variables load on which factor. To ease the assignment a simple factor pattern is the
aim, meaning that each variable only has significant loadings on one factor. A
loading is regarded as significant if it is bigger than 0.50. From practical
considerations also smaller loadings can be added to the interpretation (Hair et al.,
2006). If variables load on more than one factor they are cross-loading and the
interpretation is more difficult. Rotation methods are used to eliminate these cross-
Empirical analysis
32
loadings. Two different types of factor rotation exist: orthogonal factor rotation and
oblique factor rotation. With orthogonal rotation the factors remain uncorrelated
whereas oblique rotation leads to correlated factors. Orthogonal rotation methods
are preferred when data reduction and the use in further statistical analysis is the
research goal. One commonly used orthogonal rotation method is VARIMAX
rotation which is also used in this research.
Following these two decisions the factors are extracted for the four categories of
lean. To assess the appropriate number of factors to retain multiple factor analyses
were run, specifying three to six factors for each category. After a VARIMAX
rotation the item loading tables were compared and the one with the cleanest factor
structure was chosen (Costello & Osborne, 2005). Also managerial interpretation
was considered in the selection process. Results suggested that for the category
TPM a 3-factor solution, for the category TQM a 4-factor solution, and for the
category JIT and the category EMS a 5-factor solution was best. All items had
loadings higher than 0.50 on their respective factor or could be confirmed by using
the Frntratt criteria (Frntratt, 1969). Eigen values lay above 2, and the percentage
of variance explained ranged from 58% to 65% (TPM 2.4/58.2%, TQM 2.6/ 60.5%,
JIT 2.3/ 65.2%, EMS 2.2/ 63.1%). The factor structure shows similarities to past
research. The internal consistency of each factor was examined using Cronbachs
alpha. As all scales are above or approaching 0.70, internal consistency is indicated.
The detailed results for each of the four categories and their interpretation are
presented in the following sections (4.2.3.1 through 4.2.3.4) by using three tables.
The tables are: 1) items used for the construct, 2) scale reliability scores, and 3)
construct level EFA results and Cronbachs alpha. Definitions for the theoretically
expected lean practices can be found in Kickuth (2005); only changes in the
definition are commented.
4.2.3.1
Originally, 17 items grouped to three practices were meant to establish the category
total productive maintenance (TPM). The three practices are: preventive
maintenance, technology assessment and usage, and housekeeping. The practices
and the items theoretically related to each of the practices are shown in Table 6.
Empirical analysis
Practice
Preventive
maintenance
Technology
assesment
and usage
Housekeeping
Item name
TPM1
TPM2
TPM3
TPM4
TPM5
TPM6
TPM7
TPM8
TPM9
TPM10
TPM11
TPM12
TPM13
TPM14
TPM15
TPM16
TPM17
33
Item label
We have a formal program for maintaining our machines and equipment.
Maintenance plans and checklists are posted closely to our machines and maintenance jobs are documented.
We emphasize good maintenance as a strategy for increasing quality and planning for compliance.
All potential bottleneck machines are identified and supplied with additional spare parts.
We continuously optimize our maintenance program based on a dedicated failure analysis.
Our maintenance department focuses on assisting machine operators perform their own preventive maintenance.
Our machine operators are actively involved into the decision making process when we decide to buy new machines.
Our machines are mainly maintained internally. We try to avoid external maintenance service as far as possible.
Our plant is situated at the leading edge of technology in our industry.
We are constantly screening the market for new production technology and assess new technology concerning its technical and financial benefit.
We are using new technology very effectively.
We rely on vendors for all of our equipment.
Part of our equipment is protected by the firm`s patents.
Proprietary process technology and equipment help us gain a competitive advantage.
Our employees strive to keep our plant neat and clean.
Our plant procedures emphasize putting all tools and fixtures in their place.
We have a housekeeping checklist to continuously monitor the condition and cleanness of our machines and equipment.
Initial CITC
TPM1
TPM2
TPM3
TPM4
TPM5
TPM6
TPM7
TPM8
TPM9
TPM10
TPM11
TPM12
TPM13
TPM14
TPM15
TPM16
TPM17
.336
.455
.576
.561
.616
.670
.710
.165
.553
.565
.497
.050
.414
.390
.568
.523
.386
Cronbach's
alpha if item
deleted
.853
.849
.844
.844
.841
.838
.834
.861
.843
.843
.846
.866
.850
.854
.844
.845
.852
Initial
Cronbach's
alpha (scale)
.855
Final CITC
.386
.493
.592
.544
.602
.566
.486
Item dropped
.569
.557
.609
Item dropped
.371
.380
.522
.487
.429
Empirical analysis
34
Practice
Preventive
maintenance
Technology
assesment
and usage
Housekeeping
Item name
Factor
loading
TPM 1
TPM 2
TPM 3
.702
.777
.648
TPM 4
TPM 5
TPM 6
TPM 7
.636
.636
.586
.595
TPM 9
TPM 10
TPM 11
.760
.734
.715
TPM 13
TPM 14
.625
.734
TPM 15
TPM 16
TPM 17
.801
.832
.771
Eigen value
Cronbach's
alpha
3.561
.819
2.810
.790
2.352
.783
Originally, 26 items grouped to four practices were meant to establish the category
total quality management (TQM). The four practices are: process management,
cross functional product development, customer involvement, and supplier quality
management. The practices and the items theoretically related to each of the
practices are shown in Table 9.
Practice
Process
management
Cross
functional
product
development
Customer
involvement
Supplier
quality
management
Item name
TQM1
TQM2
TQM3
TQM4
TQM5
TQM6
TQM7
TQM8
TQM9
TQM10
TQM11
TQM12
TQM13
TQM14
TQM15
TQM16
TQM17
TQM18
TQM19
TQM20
TQM21
TQM22
TQM23
TQM24
TQM25
TQM26
Item label
In our company direct and indirect processes are well documented.
We continuously measure the quality of our processes by using process measures (e.g. On-time-in-full delivery rate).
Our process measures are directly linked to our plant objectives.
In our company there are dedicated process owners who are responsible for planning, management and improvement of their processes.
A large percentage of equipment on the shop floor is currently under statistical process control (SPC).
We make use of statistical process control to reduce variances in processes.
For root cause analysis we have standardized tools to get a deeper understanding of the influencing factors (e.g. DMAIC).
We operate with a high level of PAT implementation for real time process monitoring and controlling.
Manufacturing engineers are involved to a great extent in the development of a new drug formulation and the development of the necessary production processes.
In our company product and process development are closely linked to each other.
Due to close collaboration between the R&D and the manufacturing department, we could significantly shorten our time for product launches in our plant.
For the last couple of years we have not had any delays in product launches at our plant.
For product and process transfers between different units or sites standardized procedures exist, which ensure a fast, stable and complied knowledge transfer.
We are frequently in close contact with our customers.
Our customers frequently give us feedback on quality and delivery performance.
We regularly survey our customer`s requirements.
We regularly conduct customer satisfaction surveys.
On time delivery is our philosophy.
We jointly have improvement programs with our customers to increase our performance.
Quality is our number one criterion in selecting suppliers.
We rank our suppliers, therefore we conduct supplier qualification and audits.
We use mostly suppliers that we have validated.
For a large percentage of suppliers we do not perform any inspections of the incoming parts/ materials.
Inspections of incoming materials are usually performed in proportion to the past quality performance or type of supplier.
Basically, we inspect 100% of our incoming shipments.
We jointly have improvement programs with our suppliers to increase our performance.
Empirical analysis
35
for seven items. The CITC scores for TQM17, TQM19, TQM20, TQM23, and
TQM25 as well as the scores for Cronbachs alpha if item deleted indicated their
removal. After a second reliability analysis also TQM24 was dropped. A third
reliability analysis was conducted and each of the remaining items reached a CITC
score of above 0.30. TQM21 and TQM22 only reached a score close to 0.30. As
their scores for Cronbachs alpha if item deleted were suitable and as they were
essential for the practice they were assigned to, those two items were kept.
Item name
Initial CITC
TQM1
TQM2
TQM3
TQM4
TQM5
TQM6
TQM7
TQM8
TQM9
TQM10
TQM11
TQM12
TQM13
TQM14
TQM15
TQM16
TQM17
TQM18
TQM19
TQM20
TQM21
TQM22
TQM23
TQM24
TQM25
TQM26
.432
.623
.493
.623
.488
.391
.514
.322
.657
.608
.655
.388
.587
.407
.498
.446
.136
.369
.205
.083
.305
.228
.075
.251
.085
.411
Cronbach's
alpha if item
deleted
.841
.835
.839
.834
.838
.841
.836
.844
.831
.833
.832
.841
.834
.841
.838
.839
.853
.842
.848
.850
.844
.846
.852
.847
.853
.841
Initial
Cronbach's
alpha (scale)
.847
Final CITC
nd
(2 loop)
.473
.627
.527
.659
.527
.466
.537
.353
.690
.628
.700
.418
.613
.374
.472
.376
Item dropped
.319
Item dropped
Item dropped
.288
.271
Item dropped
Item dropped
Item dropped
.356
Empirical analysis
36
Practice
Item name
Factor
loading
Crossfunctional
process
development
and process
control
TQM 5
TQM 6
TQM 8
TQM 9
TQM 10
TQM 11
TQM 2
TQM 3
TQM 7
TQM 12
TQM 13
TQM 18
Supplier
management
and
development
Customer
focus and
satisfaction
Process
measurement
and reliability
Eigen value
Cronbach's
alpha
.766
.769
.648
.566
.652
.518
.494
.448
.685
.768
.585
.527
3.658
.824
3.070
.758
TQM 1
TQM 4
TQM 21
TQM 22
TQM 26
.545
.620
.762
.591
.725
2.703
.711
TQM 14
TQM 15
TQM 16
.779
.840
.490
2.664
.654
Originally, 30 items grouped to four practices were meant to establish the category
just-in time (JIT). The four practices are: set-up time reduction, pull production,
Empirical analysis
37
layout optimization, and planning adherence. The practices and the items
theoretically related to each of the practices are shown in Table 12.
Practice
Set-up time
reduction
Pull
production
Layout
optimization
Planning
adherence
Item name
JIT1
JIT2
JIT3
JIT4
JIT5
JIT6
JIT7
JIT8
JIT9
JIT10
JIT11
JIT12
JIT13
JIT14
JIT15
JIT16
JIT17
JIT18
JIT19
JIT20
JIT21
JIT22
JIT23
JIT24
JIT25
JIT26
JIT27
JIT28
JIT29
JIT30
Item label
We are continuously working to lower set-up and cleaning times in our plant.
We have low set-up times for equipment in our plant.
Our crews practice set-ups regularly to reduce the time required.
To increase the flexibility, we put high priority on reducing batch sizes in our plant.
We have managed to schedule a big portion of our set-ups so that the regular up-time of our machines is usually not effected.
Optimized set-up and cleaning procedures are documented as best-practice process and rolled-out throughout the whole plant.
Our production schedule is designed to allow for catching up, due to production stoppings because of problems (e.g. quality problems).
We use a pull system (kanban squares, containers or signals) for production control.
We mainly produce according to forecasts.
Suppliers are integrated and vendors fill our kanban containers, rather than filling our purchasing orders.
We value long-term associations with suppliers more than frequent changes in suppliers.
We depend on on-time delivery from our suppliers.
We deliver to our customers in a demand-oriented JIT way instead of a stock-oriented approach.
We mainly produce one unit when the customer orders one. We normally do not produce to stock.
Our processes are located close together so that material handling and part storage are minimized.
Products are classified into groups with similar processing requirements to reduce set-up times.
Products are classified into groups with similar routing requirements to reduce transportation time.
The layout of the shop floor facilitates low inventories and fast throughput.
As we have classified our products based on their specific requirements our shop floor lay-out can be characterized as separated into "mini-plants".
Currently our manufacturing processes are highly synchronized over all steps by one tact.
Currently our manufacturing processes from raw material to finished goods involve almost no interruptions and can be described as a full continuous flow.
At the moment we are strongly working to reach the status of a full continuous flow with no interruption between raw material to finished goods.
We use "Value Stream Mapping" as a methodology to visualize and optimize processes.
We have laid out the shop floor so that processes and machines are in close proximity to each other
We usually meet our production plans every day.
We know the root causes of variance in our production schedule and are continuously trying to eliminate them.
To increase our planning adherence we share data with customers and suppliers based on a rolling production plan.
We have smoothly leveled our production capacity throughout the whole production process.
Our plant has flexible working shift models so that we can easily adjust our production capacity according to current demand changes.
A smoothly leveled production schedule is preferred to a high level of capacity utilization.
Empirical analysis
38
Item
name
Initial
CITC
JIT1
JIT2
JIT3
JIT4
JIT5
JIT6
JIT7
JIT8
JIT9
JIT10
JIT11
JIT12
JIT13
JIT14
JIT15
JIT16
JIT17
JIT18
JIT19
JIT20
JIT21
JIT22
JIT23
JIT24
JIT25
JIT26
JIT27
JIT28
JIT29
JIT30
.447
.583
.838
.096
.682
.578
.492
.686
.194
.581
.108
.164
.397
.567
.564
.372
.777
.787
.486
.737
.782
.412
.677
.529
.560
.617
.342
.707
.388
.431
Cronbach's
Initial
alpha if item Cronbach's
deleted
alpha (scale)
.923
.924
.921
.917
.928
.920
.921
.922
.919
.926
.922
.926
.926
.924
.921
.922
.923
.917
.917
.922
.918
.918
.924
.919
.922
.921
.921
.924
.920
.923
.923
Final CITC
.916
.916
.913
Item dropped
.916
.918
.918
.916
Item dropped
.918
Item dropped
Item dropped
.919
.920
.918
.919
.915
.913
.919
.914
.913
.920
.919
.919
.919
.915
.920
.915
.920
.918
Empirical analysis
39
Practice
Item name
Factor
loading
Eigen
value
Cronbach's
alpha
.757
.540
.643
.555
.590
.763
4.009
.762
Optimization
of set-up times
and layout
JIT1
JIT3
JIT5
JIT10
JIT17
JIT23
.488
.503
.533
.591
.652
.649
.857
3.825
.783
Optimized
production
planning and
controll
JIT2
JIT6
JIT8
JIT19
JIT25
JIT26
JIT27
.712
.732
.675
.714
.581
3.628
.813
Process driven
organisation
JIT15
JIT16
JIT18
JIT24
JIT29
.721
.496
.748
.562
.611
3.155
.720
Pull
production
JIT7
JIT13
JIT14
JIT28
JIT30
JIT20
.427
2.330
.758
JIT21
JIT22
.610
.861
Continuous
flow
production
Empirical analysis
40
4.2.3.4
Originally, 30 items grouped to four practices were meant to establish the category
effective management system (EMS). The four practices are: direction setting,
management commitment and company culture, employee involvement and
continuous improvement, and functional integration and qualification. The practices
and the items theoretically related to each of the practices are shown in Table 15.
Practice
Direction
setting
Management
commitment
and company
culture
Employee
involvement
and
continuous
improvement
Functional
integration
and
qualification
Item name
Item label
EMS1
Our production site has an exposed site vision and strategy that is closely related to our corporate mission statement.
EMS2
Our vision, mission and strategy is broadly communicated and lived by our employees.
EMS3
Goals and objectives of the manufacturing unit are closely linked and consistent with corporate objectives. The production site has a clear focus.
EMS4
The overall objectives of the production site are closely linked to the team or personal objectives of our shop-floor teams and employees.
EMS5
Our manufacturing managers (Head of manufacturing, Site-leader etc.) have a good understanding of how the corporate/ divisional strategy is formed.
EMS6
Our manufacturing managers know exactly what the most important criteria for manufacturing jobs are (i.e. low costs, delivery, quality etc.).
EMS7
Plant management empowers employees to continuously improve the processes and to reduce failure and scrap rates.
EMS8
EMS9
There is too much competition and too little cooperation between the departments.
EMS10
EMS11
The company has an open communication culture. There is a good flow of information between the departments and the different management levels.
EMS12
EMS13
Problems (e.g. reclamations etc.) are always traced back to their origin to identify root causes and to prevent doing the same mistakes twice.
EMS14
The achievement of high quality standards is primarily the task of our QA/ QC departments.
EMS15
Our employees continuously strive to reduce any kind of waste in every process (e.g. waste of time, waste of production space etc.).
EMS16
Command and control is seen as the most effective leadership style rather than open culture.
EMS17
EMS18
Our employees are involved in writing policies and procedures (concerning Site Vision down to Standard Operating Procedures)
EMS19
EMS20
Our work teams cannot take significant actions without supervisors or middle managers approval.
EMS21
Our employees have the authority to correct problems when they occur.
EMS22
EMS23
EMS24
EMS25
EMS26
Each of our employees within our work teams is cross-trained so that they can fill-in for others when necessary.
EMS27
At our plant we have implemented a formal program to increase the flexibility of our production workers. Employees rotate to maintain their qualification.
EMS28
EMS29
The information of these official feedback meetings is used systematically in further training.
EMS30
We continuously invest in training and qualification of our workers. We have a dedicated development and qualification program for our production workers.
Empirical analysis
41
Item name
Initial CITC
EMS1
.565
Cronbach's
alpha if item
deleted
.901
Initial
Cronbach's
alpha (scale)
.906
EMS2
.703
.898
.690
EMS3
.670
.900
.670
EMS4
.655
.899
.654
EMS5
.506
.903
.499
EMS6
.549
.902
.548
EMS7
.568
.902
.539
EMS8
.645
.901
.634
EMS9
.309
.906
Item dropped
EMS10
.259
.907
Item dropped
EMS11
.685
.900
.656
EMS13
.263
.906
Item dropped
EMS14
.229
.910
Item dropped
EMS15
.634
.900
.908
EMS17
.487
.903
.911
EMS18
.406
.904
.912
EMS19
.423
.904
.912
EMS20
.373
.905
.914
EMS21
.573
.901
.909
EMS22
.533
.902
.911
EMS23
.492
.903
.911
EMS24
.568
.902
.910
EMS25
.524
.903
.911
EMS26
.430
.904
.912
EMS27
.355
.905
.914
EMS28
.529
.902
.911
EMS29
.574
.901
.909
EMS30
.474
.903
.911
Final CITC
nd
(2 loop)
.562
Empirical analysis
42
Practice
Shared vision
and culture
M anagement
commitment
Functional
integration and
qualification
Employee
involvement
and continuous
improvement
Employee
empowerment
Item name
Factor
loading
Eigen value
Cronbach's
alpha
EM S1
.847
4.222
.866
EM S2
.842
EM S3
.715
3.267
.818
3.011
.789
2.407
.731
2.230
.762
EM S5
.618
EM S11
.540
EM S25
.513
EM S4
.534
EM S6
.719
EM S7
.551
EM S8
.597
EM S23
.721
EM S18
.438
EM S26
.654
EM S27
.778
EM S28
.643
EM S29
.664
EM S30
.567
EM S15
.491
EM S17
.512
EM S19
.719
EM S24
.607
EM S20
.834
EM S21
.720
EM S22
.668
The factor analysis identified 17 lean practices assigned to four categories that are
actually used in the pharmaceutical industry. These practices are for TPM:
Empirical analysis
43
TQM
Preventive maintenance
Housekeeping
JIT
EMS
Management commitment
Pull production
Employee empowerment
Empirical analysis
44
Practice
Preventive maintenance
Technology assessment and usage
Housekeeping
Cross-functional process development and process control
Process measurement and reliability
Supplier management and development
Customer focus and satisfaction
Optimization of set-up times and layout
Optimized production planning and control
Process driven organisation
Pull production
Continuous flow production
Shared vision and culture
Management commitment
Functional integration and qualification
Employee involvement and continuous improvement
Employee empowerment
Mean
3.59
2.91
3.98
2.94
3.69
3.68
3.76
2.71
3.11
3.40
3.13
2.48
3.99
4.13
3.29
3.50
2.86
SE
0.05
0.06
0.06
0.06
0.05
0.05
0.06
0.05
0.05
0.06
0.05
0.12
0.05
0.04
0.06
0.06
0.09
Rank
7
14
3
13
5
6
4
16
12
9
11
17
2
1
10
8
15
Empirical analysis
45
preventive maintenance
preventive maintenance
housekeeping
housekeeping
customer involvement
planning adherence
pull system
pull production
Empirical analysis
46
optimized production
planning and control
+
+
customer focus and
satisfaction
process
mmeasurement and
reliability
++
supplier management
and development +
cross-functional
process
development
+
++
and process
control
+ quality improvement
and stable processes+
+
+
management commitment
& shared vision and culture
+
pull production
+
+
+
elimination of +
excess inventories +
+ +continuous flow
production
+
+ ++
++
+
optimization of set-up
times and layout
+
improved equipment
performance
+
+
+
preventive
maintenance
++
+
employee
+ empowerment
+
housekeeping
technology
assesment and usage
process driven
organization
functional integration
and qualification
of
in
to
to
Empirical analysis
47
Outlier analysis
Hierarchical clustering:
Wards method
Non-hierarchical clustering:
K-means
Validation
Empirical analysis
48
Figure 10 shows the procedure used for the cluster analysis in this research. Before
starting with clustering, the underlying variables have to be identified and outliers
have to be excluded. The exclusion of outliers ensures that there is no distortion of
results. The next two steps include the actual clustering. First, the appropriate
number of clusters is defined using Wards method and second, the results are used
to define the final clusters. Finally, the results are validated. The following sections
describe each of the steps in greater detail.
4.4.1
A set of competitive priorities should be the basis for clustering of sites into
strategic groups. In the OPEX questionnaire it was asked for competitive priorities
the respondents planned to pursue (see Appendix B). The competitive priorities
used and the single variables, assigned to them in the OPEX questionnaire, are
shown in Table 21. Their content has been discussed in chapter 2.2.
Competitive
priority
Flexibility
Quality
Service level
Costs
Item name
Item label
CP1
CP2
CP3
CP4
CP5
CP6
CP7
CP8
CP9
CP10
Reduction of stock
CP11
CP12
CP13
Empirical analysis
49
Competitive
priority
Delivery
Costs
Flexibility
Quality
Item name
Factor
loading
Eigen value
Cronbach's
alpha
CP1
.742
2.726
.819
CP2
.716
CP8
.727
CP9
.596
CP10
.635
2.008
.790
1.587
.790
1.490
.783
CP11
.843
CP12
.662
CP13
.728
CP3
.809
CP4
.857
CP5
.860
CP6
.589
CP7
.431
Outlier analysis
Hierarchical clustering
Empirical analysis
50
Based on Lehmann (1979) the number of clusters should be limited to between n/30
and n/60, where n is the sample size. With 200 cases the final number of clusters
should be between three and seven.
Visual inspection of the dendrogram indicated a four cluster solution (see Appendix
C).
The agglomeration coefficient was used to create an elbow-diagram. An elbow in
the graph suggests that dissimilar clusters were combined and therewith indicates
the appropriate number of clusters. The interpretation of the graph may be difficult
as there can be no real elbow or several elbows (Ketchen & Shook, 1996). The data
slightly pointed to a four cluster solution (see Appendix C).
Finally, the incremental and percentage change in the agglomeration coefficient
were calculated. A large increase indicates the appropriate number of clusters as it
implies that dissimilar clusters were merged. It might be the case that no jumps or
several jumps can be observed. Table 23 shows the results for a seven to a one
cluster solution.
Number of Agglomeration Incremental change Percentage change in
clusters
coefficient
in coefficient
coefficient
7
6
5
4
3
2
1
263.64
282.92
304.76
337.90
421.73
506.76
712.53
19.29
21.84
33.14
83.83
85.03
205.77
-
7.3%
7.7%
10.9%
24.8%
20.2%
40.6%
-
Empirical analysis
4.4.4
51
Non-hierarchical clustering
To adjust and optimize the results from Wards method K-means clustering
algorithm was used. The cluster centres obtained during hierarchical clustering were
used as initials for non-hierarchical clustering (Jensen, 2008 (in Herman); Shah,
2002). The final results are displayed in Table 24 showing the number of sites per
group and the cluster means of the clustering variables for each of the groups. A
positive value indicates a higher emphasis on the clustering variable than the
average; a negative value indicates a lower emphasis on the respective clustering
variable.
Final Cluster Centers
Cluster
1
49.000
70.000
Delivery
.92048
.22568
-.80923
-.29485
48.000
Flexibility
.79559
.32749
-.12338
-1.59837
33.000
Costs
1.01978
.00914
-.89295
.08479
Valid
Quality
1.00309
-.02818
-.99145
.24227
M issing
200.000
.000
Empirical analysis
52
Competitive
priority
2
Flexible deliverers
n = 70
3
Flexible starters
n = 48
4
Efficient conformers F = Chi square
n = 33
p = Symp. sig.
Delivery
Cluster mean
SE
Rank
4.69 (2, 3, 4)
0.05
2
4.19 (1, 3, 4)
0.06
2
3.46 (1, 2, 4)
0.07
3
3.82 (1, 2, 3)
0.10
3
F = 103.047
p = 0.000
Flexibility
Cluster mean
SE
Rank
4.65 (2, 3, 4)
0.06
3
4.21 (1, 3, 4)
0.06
1
3.79 (1, 2, 4)
0.10
1
2.41 (1, 2, 3)
0.07
4
F = 109.093
p = 0.000
Costs
Cluster mean
SE
Rank
4.74 (2, 3, 4)
0.05
1
4.09 (1, 3)
0.06
3
3.51 (1, 2, 4)
0.07
2
4.14 (1, 3)
0.08
1
F = 99.789
p = 0.000
Quality
Cluster mean
SE
Rank
4.43 (2, 3, 4)
0.06
4
3.71 (1, 3)
0.05
4
3.03 (1, 2, 4)
0.07
4
3.90 (1, 3)
0.08
2
F = 105.972
p = 0.000
Empirical analysis
53
would be 5.0, the lowest 1.0. Further, the standard error of the average value per
group and the rank are included. The rank shows the relevance of a factor in a
group. The numbers in parentheses mark those factors which differ between groups
at a significance level of =0.05.
Building on these results the single groups can be described and named.
4.4.5.1
Cluster 1: Do all
The first group of 49 production sites has the highest emphasis on all competitive
priorities compared to the other three groups. The groups emphasis on all four
priorities is simultaneously high and exceeds 4.4, which leads to the name do all
analogue to Kathuria (2000). Further, the emphasis on all competitive priorities is
significantly different from that in the other three groups and therewith separates
this group from the rest. This group represents about 25% of all cases in the four
clusters.
4.4.5.2
The second group, being with 70 production sites the largest, has the highest
emphasis on both delivery and flexibility. Compared to the other groups it has the
second highest emphasis and values are significantly different. This group is similar
to Deflorins (2007) logisticians that have a focus on fast and punctual delivery as
well as high volume flexibility combined with a broad range of products. Some
similarities also exist with Christiansen et al.s speedy deliverers and Kathurias
speedy conformers. This group, reflecting 35% of all cases in the four clusters, is
therefore named flexible deliverers. Concerning costs and quality there is no
significant difference in emphasis compared to group four.
4.4.5.3
Empirical analysis
54
The final group of 33 production sites has a high emphasis on costs and also on
quality. It is the only group for which quality does not have the lowest emphasis.
Nevertheless, the values are not significantly different from the second group. It
resembles almost completely the efficient conformers from Kathuria (2000) and is
therefore equally named. It consists of 16% of all cases.
Pharmaceutical production sites can be divided into the four strategic groups do all,
flexible deliverers, flexible starters, and efficient conformers, which are focusing on
different sets of competitive priorities. The strategic groups could be verified by
existing literature; this strengthens their validity.
In the next chapter the relation between the strategic groups and the implementation
of the 17 lean practices identified in chapter 4.2.4 and structured in chapter 4.3 are
investigated. This should show if different strategic groups demand a different
implementation of lean practices.
Empirical analysis
55
56
Empirical analysis
Empirical analysis
57
Tamhane-T2 and Games-Howell are chosen. The single tests are shortly explained
in the next paragraph. In addition, the factors with non-normal distribution are
analysed by applying the Mann-Whitney U-test (see 4.4.5).
Bonferroni is based on the single t-test between group means but it corrects the
error that occurs from multiple testing. The results are also exact for peer groups of
different size. The Scheff test is based on the F-distribution and is relatively
conservative as it only reports bigger differences in means as significant. The results
are also exact for peer groups of different size. Besides pairwise comparisons it also
offers homogeneous subsets. Turkeys test is also conducting pairwise comparisons
based on the Student distribution. It is the most common and robust method as it is
not strongly influenced by violations of its assumptions.
The Waller-Duncan test is comparing means based on the t-statistic by using a
Bayesian approach; output is a set of homogeneous subgroups. The speciality of this
test is the possibility to control the Type II Error.
Tamhane-T2 test is based on the t-statistic and offers rather conservative estimates.
For equal variances the results are identical to those of Bonferroni. Games-Howell
is used for pairwise comparisons if variances are not equal. It can also be used in
case of non-normality of the variables.
The results from the one-way ANOVA, Kruskal-Wallis test, and the post-hoc tests
are summarised in Table 26. The average values of the implementation level of the
single lean practices per group are calculated. Further, the standard error of the
average value per group and the rank are included. The rank shows the relevance of
a lean practice in a group measured by its level of implementation. The numbers in
parentheses mark those factors which differ between groups at a significance level
of =0.05.
Empirical analysis
58
Lean practice
1
Do All
n = 49
2
Flexible deliverers
n = 70
3
Flexible starters
n = 48
4
Efficient conformers F = value
n = 33
p = propability
Preventive maintenance
Cluster mean
3.77
SE
0.08
Rank
7
3.53
0.09
6
3.44
0.11
6
3.75
0.11
4
F = 2.629
p = 0.051
2.93
0.10
13
2.80
0.11
12
2.70
0.16
14
F = 1.968
p = 0.120
Housekeeping
Cluster mean
SE
Rank
3.95
0.10
2
3.85
0.12
2
3.95
0.16
3
F =1.316
p = 0.270
2.76 (1)
0.11
13
2.63 (1)
0.19
15
F = 4.319
p = 0.006
3.67 (1)
0.09
5
3.54 (1)
0.10
4
3.39 (1)
0.14
7
F = 6.436
p = 0.000
3.69
0.08
4
3.45 (1)
0.11
5
3.55 (1)
0.13
5
F = 5.433
p = 0.001
3.81
0.11
3
3.54 (1)
0.12
4
3.53 (1)
0.11
6
F = 4.133
p = 0.007
2.71
0.09
16
2.57 (1)
0.09
15
2.48 (1)
0.15
16
F = 5.636
p = 0.001
3.00
0.08
11
2.98 (1)
0.13
12
F = 3.027
p = 0.031
3.43
0.09
8
3.42
0.10
7
3.11
0.16
10
F = 2.201
p = 0.089
Pull production
Cluster mean
SE
Rank
3.12
0.09
10
3.08
0.10
10
2.99
0.13
11
F = 1.298
p = 0.277
2.85 (3, 4)
0.21
15
2.12 (2)
0.21
16
2.23 (2)
0.20
17
F = 2.963
p = 0.037
3.95 (1)
0.07
2
3.78 (1)
0.10
3
3.99
0.12
2
F = 5.520
p = 0.001
Management commitment
Cluster mean
4.52 (2, 3, 4)
SE
0.07
Rank
1
4.08 (1)
0.07
1
3.93 (1)
0.08
1
4.01 (1)
0.11
1
F = 10.870
p = 0.000
3.19
0.09
9
3.20
0.13
9
3.20
0.15
9
F = 2.153
p = 0.095
3.29 (1)
0.11
8
3.33 (1)
0.11
8
F = 5.594
p = 0.001
Employee empowerment
Cluster mean
3.19
SE
0.24
Rank
13
2.65
0.16
14
2.86
0.19
13
F = 1.129
p = 0.343
4.18
0.12
3
3.30
0.11
11
2.91
0.18
14
Empirical analysis
59
The plants belonging to the do all group have for all except one lean practice the
highest level of implementation. Only the flexible deliverers put higher emphasize
on continuous flow production. In nine of ten cases where lean practices are
significantly different from each other in one or more groups, the do all group is
involved.
4.5.1.1
Do all
Implementation levels for the do all group range on a scale of one to five between
4.52 for management commitment and 2.81 for continuous flow production. For the
do all group the five (due to equal values six) highest implemented lean practices
are: management commitment (4.52), shared vision and culture (4.29),
housekeeping (4.18), process measurement and reliability and customer focus and
satisfaction (both 4.05), and supplier management and development (3.99).
4,52
Management commitment
4,29
4,18
Housekeeping
4,05
4,05
3,99
3,87
3,77
Preventive maintenance
Process driven organisation
3,57
3,54
3,34
Pull production
3,30
3,25
Employee empowerment
3,19
3,13
3,05
2,81
Flexible deliverers
The group flexible deliverers puts its focus on the implementation of the following
lean practices: management commitment (4.08), housekeeping and shared vision
and culture (both 3.95), customer focus and satisfaction (3.81), supplier
management and development (3.69), and process measurement and reliability
(3.67).
Empirical analysis
60
4,08
Management commitment
3,95
Housekeeping
3,95
3,81
3,69
3,67
Preventive maintenance
3,53
3,52
3,43
3,19
3,12
3,08
3,00
2,93
Employee empowerment
2,91
2,85
2,71
Flexible starters
The flexible starters have the highest implementation levels for: management
commitment (3.93), housekeeping (3.85), shared vision and culture (3.78), process
measurement and reliability and customer focus and satisfaction (both 3.54), and
supplier management and development (3.45).
3,93
Management commitment
Housekeeping
3,85
3,78
3,54
3,54
3,45
Preventive maintenance
3,44
3,42
3,29
3,20
Pull production
3,08
3,00
2,80
2,76
Employee empowerment
2,65
2,57
2,12
Empirical analysis
4.5.1.4
61
Efficient conformers
For the group efficient conformers the implementation of the following five lean
practices is rated highest: management commitment (4.01), shared vision and
culture (3.99), housekeeping (3.95), preventive maintenance (3.75), and supplier
management and development (3.55).
4,01
Management commitment
Shared vision and culture
3,99
Housekeeping
3,95
3,75
Preventive maintenance
3,55
3,53
3,39
3,33
3,20
3,11
2,99
2,98
Employee empowerment
Technology assessment and usage
Cross-functional process development and process control
Optimization of set-up times and layout
Continuous flow production
2,86
2,70
2,63
2,48
2,23
Summary
For all four groups the implementation of the lean practice management
commitment is the highest. The do all group significantly differs in the
implementation from the other three groups, which have similar implementation
levels. Except for the flexible starters all groups have the second highest
implementation level for shared vision and culture another lean practice coming
from the category EMS. The group do all also significantly differs from the flexible
deliverers and the flexible starters in the implementation of this lean practice.
Housekeeping is implemented third respectively second highest with no significant
difference between groups. Supplier management and development is also among
the highest implemented practices for all groups with significant differences
between the groups do all, flexible starters, and efficient conformers. All groups
except the efficient conformers have high implementation levels for the practices
process measurement and reliability and customer focus and satisfaction. For the
first practice the do all group significantly differs from all other groups, for the
Empirical analysis
62
second practice only from the flexible starters and the efficient conformers. The
efficient conformers are the only group that has preventive maintenance among the
five highest implemented lean practices.
A similar picture can be seen for the five lean practices that are implemented lowest
in the single groups. The lean practice continuous flow production has the lowest
implementation except for the flexible deliverers which significantly differ from the
flexible starters and the efficient conformers. It is the only lean practice where the
implementation level of the do all group is not higher than that of the other three
groups. The second lowest implementation level, respectively the lowest for flexible
deliverers, can be found with the lean practice optimization of set-up times and
layout. The do all group significantly differs from the flexible starters and the
efficient conformers. There are also low implementation levels for the lean practices
employee empowerment, technology assessment and usage, as well as crossfunctional process development and process control. For the last practice the values
from the groups do all, flexible starters, and efficient conformers significantly
differ.
The remaining lean practices show significant differences between groups in two
cases. For optimized production planning and control the do all and the efficient
conformers groups differ; for employee involvement and continuous improvement
the groups do all, flexible starters, and efficient conformers show significant
differences.
This shows that independent from the strategic group the same lean practices are
regarded as important and are therefore implemented but partly with varying levels
between groups. The same holds true for those lean practices regarded as least
important and therewith lowest implemented.
To better understand the importance of single lean practices for the competitive
priority groups, their implementation levels in a specific group are compared in
detail. For this comparison within-cluster paired-sample t-tests are conducted.
4.5.2
Empirical analysis
63
and it is assumed that the implementation of the single lean practices is connected
(Brosius, 2011). An assumption for the use of a paired-sample t-test is the normal
distribution of the difference values. For samples larger than 30 pairs of
observations the central limit theorem is applicable and it can be assumed that they
are normally distributed (Bortz & Schuster, 2010). Again, it is tested whether there
is a difference between the means of single lean practices. In line with the results
for the paired-sample tests also paired sample correlations are provided. If the
correlation of the list of measurements is not positive, but instead negative, the
paired-sample t-test loses power. This means that the probability that existing
differences are identified as significant is declining. In this case the non-parametric
Wilcoxon test can be used. Only if the difference value is very high the reduced test
power has no influence.
For the paired samples examined 29 out of 544 have a negative correlation from
which two are significant at the 0.05 level or less and two on the 0.10 level or less.
Those being significant on the 0.05 level or less show a difference value of 0.224
and 0.097and those at the 0.10 level or less of 0.881 and 0.667. The last two values
are high enough to assume that even with a lower power the results are right, the
first two values indicate, that a Wilcoxon test should be calculated. The Wilcoxon
test leads to the same results as the paired-sample t-test; therefor in the following
the results from the t-test will be reported. All combinations shown in Table 27 to
Table 30 are significantly different at the 0.05 level or less, except those marked "*"
which are significantly different at the 0.10 level or less. The results for the single
strategic groups are described in detail always considering the level of
implementation measured for each lean practice (see Table 26).
4.5.2.1
Do all
Empirical analysis
64
10
11
12
13
14
15
+*
+*
+*
-
-*
16
17
-*
-*
8
9
10
11
12
13
14
15
16
17
1 Preventive maintenance, 2 Technology assessment and usage, 3 Housekeeping, 4 Cross-functional process development and process control,
5 Process measurement and reliability, 6 Supplier management and development, 7 Customer focus and satisfaction, 8 Optimization of set-up times and
layout, 9 Optimized production planning and control, 10 Process driven organisation, 11 Pull production, 12 Continuous flow production, 13 Shared vision
and culture, 14 Management commitment, 15 Functional integration and qualification, 16 Employee involvement and continuous improvement,
17 Employee empowerment
+ (-) practice on the right side is significantly higher (lower) implemented than practice on top
Empirical analysis
65
the two practices coming after. This picture is continued until the lean practice of
preventive maintenance. It can be regarded as a splitting point for the most
important lean practices in the do all group. The do all group has the strongest focus
on management commitment from all groups. This strong focus may be necessary as
they concentrate on a lot of different competitive priorities and therefore need a
committed management even more than others.
4.5.2.2
Flexible deliverers
Empirical analysis
66
significantly different from process measurement and reliability, ranked fifth. Its
implementation is also equal to preventive maintenance and process driven
organization. All practices implemented lower than process driven organization
significantly differ from the practices named so far.
In contrast to the do all group the flexible deliverers do not have a significantly
higher implementation of one outstanding practice. Instead management
commitment, housekeeping, and shared vision and culture form a triad. Following
their strategic focus on fast and punctual delivery the flexible deliverers have
implemented customer focus and satisfaction on an equal level to housekeeping and
shared vision and culture. Like for the do all group there can be found a splitting
point for the most important lean practices. In this case process driven organization
is the last practice to be included, which corresponds to the strategic focus of the
group.
Lean
Practice
1
2
3
4
2
+
10
-*
11
12
13
14
15
16
-*
+*
8
9
10
11
12
13
17
+
+
+
+*
+
+
+
-*
14
15
16
+
+
17
1 Preventive maintenance, 2 Technology assessment and usage, 3 Housekeeping, 4 Cross-functional process development and process control,
5 Process measurement and reliability, 6 Supplier management and development, 7 Customer focus and satisfaction, 8 Optimization of set-up times and
layout, 9 Optimized production planning and control, 10 Process driven organisation, 11 Pull production, 12 Continuous flow production, 13 Shared vision
and culture, 14 Management commitment, 15 Functional integration and qualification, 16 Employee involvement and continuous improvement,
17 Employee empowerment
+ (-) practice on the right side is significantly higher (lower) implemented than practice on top
Flexible starters
Empirical analysis
67
equal to management commitment and shared vision and culture. Shared vision and
culture is implemented significantly higher than fourteen other lean practices. It
shows the same implementation level as housekeeping but a significantly lower
implementation than management commitment. In contrast to the two clusters
analysed before the following practices are significantly different to those three lean
practices. As the name flexible starters indicates this group has a low emphasis on
the development of competitive priorities and therefore apparently has not
implemented as much lean practices as the other clusters. In their implementation
process they seem to focus on some practices only. Customer focus and satisfaction
as well as process measurement and reliability are implemented significantly higher
than nine other lean practices but show a lower level of implementation than
management commitment, housekeeping, and vision and culture. Their
implementation level is equal to those of supplier management and development,
preventive maintenance, and process driven organization. Supplier management
and development has a significantly higher implementation level than seven other
practices and is implemented significantly lower than the top three practices. Its
implementation level is equal to customer focus and satisfaction, process
measurement and reliability, preventive maintenance, process driven organization,
employee involvement and continuous improvement, and functional integration and
qualification.
This large number of equally implemented practices on an intermediate level
reflects again the starting position of the flexible starters. All practices following are
implemented equally to at least one other practice without the splitting point that
could be found in the other two clusters.
Empirical analysis
68
Lean
Practice
+*
+*
+*
1
2
3
4
2
+
10
11
+
-*
-*
+*
10
11
12
12
13
13
14
15
16
+*
17
+
+
+
+
+
+
+
-*
14
-*
15
16
17
1 Preventive maintenance, 2 Technology assessment and usage, 3 Housekeeping, 4 Cross-functional process development and process control,
5 Process measurement and reliability, 6 Supplier management and development, 7 Customer focus and satisfaction, 8 Optimization of set-up times and
layout, 9 Optimized production planning and control, 10 Process driven organisation, 11 Pull production, 12 Continuous flow production, 13 Shared vision
and culture, 14 Management commitment, 15 Functional integration and qualification, 16 Employee involvement and continuous improvement,
17 Employee empowerment
+ (-) practice on the right side is significantly higher (lower) implemented than practice on top
Efficient conformers
Empirical analysis
69
lean practices following which have equal implementation levels and no splitting
point can be found. Only the lowest implemented lean practice continuous flow
production can be separated from the others.
In contrast to all other groups examined before the efficient conformers do neither
have outstanding practices nor do they have a splitting point which separates higher
implemented practices from those that are lower implemented. The strategic focus
on costs and quality is not clearly reflected in the implementation of the different
lean practises.
Lean
Practice
1
2
+
-
+
-
3
4
10
11
12
13
14
15
16
17
-*
-*
-*
-*
+*
-*
-*
+
+
+
+*
-*
10
11
13
14
12
15
+*
16
17
1 Preventive maintenance, 2 Technology assessment and usage, 3 Housekeeping, 4 Cross-functional process development and process control,
5 Process measurement and reliability, 6 Supplier management and development, 7 Customer focus and satisfaction, 8 Optimization of set-up times and
layout, 9 Optimized production planning and control, 10 Process driven organisation, 11 Pull production, 12 Continuous flow production, 13 Shared vision
and culture, 14 Management commitment, 15 Functional integration and qualification, 16 Employee involvement and continuous improvement,
17 Employee empowerment
+ (-) practice on the right side is significantly higher (lower) implemented than practice on top
Summary
This analysis shows that even if the strategic groups focus more or less on the same
lean practices, there are differences in the emphasis on the practices within the
groups. Especially the do all group has a focus on one practice, management
commitment, so that its implementation level is clearly above other practices.
Further, a splitting point, separating the most important lean practices from the
others, could be identified. A contrast is the efficient conformers-cluster where no
clear separation of the practices could be observed.
Empirical analysis
70
For each of the four clusters the correlations between the single lean practices
derived from the paired-sample t-test (see page 62) are analysed. Further, the
correlations between the lean practices and the goals of the single lean bundles are
calculated. They are then filled into the map developed in chapter 3 and adapted in
chapter 4.3. If there is no significant correlation the arrows are deleted, otherwise
the level of correlation is added to the arrow. In case of management commitment &
shared vision and culture the arrow is not deleted but instead n.s. (not significant) is
added if only one correlation could be confirmed. The use of the map helps to not
only display the strength of correlations but also their direction. As the correlation
coefficient itself does not contain any direction of influence, the direction is
obtained by the literature analysis the map is based on. All correlations shown are
linear and significant at the 0.05 level or less. They are based on Pearsons
correlation coefficient which demands interval-scaled data. As mentioned before the
five-point Likert scale can be treated as interval level (Bortz & Schuster, 2010)
The different clusters show different correlations between the lean practices and
between lean practices and the goals of the single lean bundles. Also the strength of
the single correlations is different. Table 31 shows a guideline for interpretation
according to Brosius (2011).
Value of the correlation coefficient
0
0 - 0,2
0,2 - 0,4
0,4 - 0,6
0,6 - 0,8
0,8 - under 1
1
Possible interpretation
no correlation
poor correlation
weak correlation
moderate correlation
strong correlation
very strong correlation
perfect correlation
0.515
0.475
functional integration
and qualification
3.54
0.630 / 0.380
+
n.s. / 0.388
3.57
process driven
organization
+
+
elimination of +
excess inventories +
-0.372 / 0.351
3.19
employee
empowerment
0.341
0.562 / n.s
-0.392
(supplier
complaint rate)
+
quality improvement
and stable processes +
(supplier
complaint rate)
-0.399
4.52 / 4.29
management commitment
& shared vision and culture
3.25
cross-functional
process
development and
process control
process measurement
and reliability
4.05
0.889
2.81
continuous flow
production
preventive 0.311
(unplanned
maintenance maintenance)
+ 3.77
3.05
optimization of set-up
and layout
0.351 / 0.520
(No. of turns)
0.532
4.05
3.99
customer focus and
satisfaction
supplier management
0.624
3.30
and development + pull production +
0.310
0.491
4.18
unplanned maintenance
technology
assesment and usage
3.13
+
0.442 / 0.439 / 0.373
housekeeping (TPM-level / maintenance cost /
improved equipment
performance
4.5.3.1
3.34
optimized production
planning and control
Empirical analysis
71
Do all
72
Empirical analysis
For the do all-cluster there are some correlations in all categories but also four
practices that do not show any of the correlations presumed by literature. Especially
in the EMS category less correlations are observable than presumed.
The strongest correlation can be seen for continuous flow production and
elimination of excess inventories (number of turns) which explains almost 80% of
the variance. Further continuous flow production also has a strong positive
correlation with pull production. Both correlations are intuitive as a smoothly
flowing production enables a higher number of turns and therewith a lower
inventory. Furthermore it fosters the implementation of a pull system as a tact is
established in production. Pull production has a strong positive correlation with
optimized production planning and control and explains 28.30% of the variance.
The latest two correlations can be observed in each cluster (see below). There are
also strong positive correlations between management commitment and functional
integration and qualification respectively employee empowerment.
Surprisingly, the correlations between supplier management and development and
quality improvement and stable processes (supplier complaint rate) respectively
elimination of excess inventories (flexibility) are negative with values of -0.392 and
-0.372. The implementation of supplier management and development does not
seem to lower the level of supplier complaints but instead they increase. As the
implementation level of this lean practice is rather high with 3.99 this cannot be
seen as teething troubles. Maybe the expectations towards suppliers are higher when
they are integrated closer into a plants production and therewith more complaints
are reported due to another level of tolerance. This also seems to be the case for
process measurement and reliability where a higher implementation leads to a
higher level of supplier complaints. The production flexibility upside is also lower
with a higher implementation of supplier management and development. This might
be due to the fact that a stronger collaboration with suppliers including on time
delivery is preventing short hand changes in the production schedule as materials
for a change are not available. This dilemma can be solved by having a shorter tact
of delivery, which until now does not seem to be common in pharmaceutical
manufacturing.
In total 22 correlations can be observed in the do all-cluster. Looking at the amount
of direct linkages between the single practices it can be assumed that the order of
the mostly direct influencing lean practices is supplier management and
development (3), continuous flow production (2), optimization of set-up times and
Empirical analysis
73
layout (2), management commitment & shared vision and culture (2), functional
integration and qualification (2), housekeeping (1), pull production (1), process
measurement and reliability (1), employee involvement and continuous
improvement (1), and preventive maintenance(1). Only influenced are optimized
production planning and control and employee empowerment. The following table
contrasts the level of implementation of the single lean practices with their direct
and indirect influence on other lean practices.
Lean practice
Management commitment
4.52 (1)
4.29 (2)
Housekeeping
4.18 (3)
4.05 (4)
3.99 (5)
3.87 (6)
Preventive maintenance
3.77 (7)
3.54 (9)
3.34 (10)
Pull production
3.30 (11)
Employee empowerment
3.19 (13)
3.05 (15)
2.81 (16)
0.469
(quality cost)
-0.363
0.426
functional integration
and qualification
3.19
0.380
0.317
0.554
0.686
0.304 / 0.295
preventive
maintenance
++ 3.53
0.746
2.85
continuous flow
production
+ ++
+
+
optimization of set-up
times and layout
2.71
0.507
(JIT-level)
elimination of
excess inventories
0.615
3.12
+0.567
pull production
0.490
process
driven
+
n.s. / 0.464 +
employee
organization
+ empowerment 0.632 3.43
2.91
+
0.487
0.270
0.363 / 0.419
+
4.08 / 3.95
management commitment
& shared vision and culture
0.612
cross-functional
(quality cost)
process
+
development and
process control quality improvement
3.00
and stable processes +
process measurement
and reliability
3.67
0.513
3.95
housekeeping
technology
assesment and usage
2.93
+
0.359 / 0.305
improved equipment
performance
4.5.3.2
3.81
customer focus and
3.69
satisfaction
supplier management
and development
3.08
optimized production
planning and control
+
+
0.660
74
Empirical analysis
Flexible deliverers
Empirical analysis
75
For the flexible deliverers-cluster almost all correlations between the lean practices
in the JIT category could be confirmed. Additionally, there are a lot of correlations
between lean practices from the EMS category. On the other hand almost no
correlations are observable in the categories TPM and TQM where in total five
practices are not linked. As the competitive aim of the flexible deliverers is a fast
and punctual delivery with high volume flexibility it seems to be favourable that
there are stronger relations between the JIT practices which promise to reach this
aim.
The flexible deliverers are the only strategic group in which reinforced feedback
loops between the practices can be observed. All feedback loops include the JIT
practice continuous flow production which also shows a number of strong
correlations. One reinforced feedback loop exists between continuous flow
production and improved equipment performance. A higher performance of the
equipment leads to a better flow in production which again supports the TPM goal.
Possibly, due to a constant and balanced utilisation of the equipment the
maintenance costs and the share of unplanned maintenance are lower.
A second reinforced feedback loop exists between continuous flow production,
improved equipment performance, elimination of excess inventories, and quality
improvement and stable processes. Like stated above, a continuous flow in
production helps to reach the goal of TPM. The improved equipment performance
itself has a positive influence on the elimination of excess inventories. With reliably
running machines it is not necessary to produce more stock than needed because of
the lower risk of machine failures. This leads to an improved quality and stable
processes. With an improved quality and processes that are stable it is again easier
to establish and maintain a continuous flow production.
The third reinforced feedback loop can be found for continuous flow production,
pull production, elimination of excess inventories, and quality improvement and
stable processes. To have a continuous flow in production eases the implementation
of pull production which again supports the elimination of excess inventories.
Again, the same elements as in the second reinforced feedback loop follow.
The strongest correlation can be seen for preventive maintenance and continuous
flow production with 0.746. There is also a strong correlation between continuous
flow production and improved equipment performance, namely the TPM-level in
general as well as maintenance cost and unplanned maintenance (see first
76
Empirical analysis
Empirical analysis
Lean practice
77
Management commitment
4.08 (1)
10
3.95 (2)
10
3.67 (5)
Preventive maintenance
3.53 (6)
3.52 (7)
3.43 (8)
3.19 (9)
Pull production
3.12 (10)
3.08 (11)
Employee empowerment
2.91 (14)
2.85 (15)
2.71 (16)
Table 33: Lean practices and their influence for flexible deliverers-cluster
It is obvious that for the flexible deliverers-cluster the practices that have the highest
level of implementation also have the highest number of direct and indirect
influences on other practices. Like in the do all-cluster the plants can benefit from
the high implementation of management commitment and shared vision and culture
as they therewith enable the implementation of other practices and finally influence
the goals of the single lean bundles. Therefore when starting to implement lean as a
plant with competitive priorities on a fast and punctual delivery with a high volume
flexibility the first practices to implement should be those two.
Other very potent practices are employee involvement and continuous improvement
and functional integration and qualification with eight influences in total. Thus far
the level of implementation of these practices is not very high with rank number
seven and nine. To achieve better results in the overall manufacturing performance
more effort should be put in implementing these practices. This is especially crucial
for functional integration and qualification as this practice has four direct
influences which is the highest number for this cluster. The same holds true for
process driven organization and optimization of set-up times and layout that have
influence on seven other practices but show a low respectively very low level of
implementation with rank eight and rank 16. Compared to the do all-cluster in total
more direct and indirect influences could be observed. Especially those lean
practices coming from the category EMS have a lot of direct as well as indirect
influences. This shows that in this cluster an effective management system can even
better accelerate a lean implementation than in the do all-cluster.
(supplier
complaint rate)
n.s. / -0.328
functional integration
and qualification
3.20
0.371 / 0.529
+
0.383
0.389 / 0.340
employee
empowerment
2.65
0.556
0.411
(accuracy)
-0.489
0.545
3.08
+
pull production
0.495
0.656
process driven
organization
3.42
0.597
preventive
maintenance
+ 3.44
0.512
2.12
continuous flow
production
++
+
optimization of set-up
+
+
times and layout
elimination of
2.57
excess inventories +
(setup times)
(TQM-level / customer
complaint rate / quality cost)
+ +
quality improvement
and stable processes +
3.93 / 3.78
management commitment
& shared vision and culture
cross-functional
process
development and
process control
2.76
(supplier
complaint rate)
-0.419
-0.372 / -0.448 /
-0.409
supplier management
and development
3.45
technology
assesment and usage
2.80
housekeeping
3.85
improved equipment
performance
4.5.3.3
process measurement
and reliability
3.54
3.54
customer focus and
satisfaction
3.00
optimized production
planning and control
+
+
0.642
78
Empirical analysis
Flexible starters
For the flexible starters-cluster not as much correlations are observable as for the
other clusters. There are some correlations between practices in the JIT category
Empirical analysis
79
with starting links to TPM and TQM practices. EMS practices are almost not
involved. In total four practices are not linked to others. The flexible starters
generally have a low emphasis on competitive priorities with the highest value for
flexibility. This demand for flexibility is explaining why there are mostly
correlations found in practices related to process optimization.
The strongest correlation can be seen for optimization of set-up times and layout and
continuous flow production. Low set-up times and an optimized layout allow for
fast changes in products and therewith augment flexibility. Nevertheless, this
correlation is with 43% of variance explained much weaker than the strongest
correlation in the two clusters analysed thus far. Another strong correlation can be
found for continuous flow production and optimized production planning and
control with 0.642. The other correlations are only moderate at maximum.
Besides the positive correlations also negative ones can be observed. There is a
moderate negative correlation between pull production and elimination of excess
inventories (production schedule accuracy in the freezing period). It seems that a
higher implementation level of the lean practice pull production is leading to a
lower production schedule accuracy in the freezing period for plants in the flexible
starters-cluster. Theoretically the opposite should be the case. A possible
explanation might be that the pull system is not yet fully implemented (3.08 of 5.00)
and that in this status of implementation the positive aspects could not be observed
yet. There are also negative correlations between customer focus and satisfaction
and quality improvement and stable processes (TQM-level, customer complaint
rate, quality cost) as well as between process measurement and reliability and
quality improvement and stable processes (supplier complaint rate). Apparently, the
focus on customers is hindering a good performance in the TQM-area. The
customer complaint rate is higher which might be due to the reason that more
complaints are regarded as justified to better satisfy the single customer. Further, a
more severe control of customer complaints and requirements leads to a higher
quality cost. The same can be assumed for the correlation between process
measurement and reliability and the supplier complaint rate. A more rigorous
control of ones own and the suppliers processes leads to a higher supplier
complaint rate. As the plants in this cluster have rather low levels of lean
implementation it can be stated that they are only starting to focus on this topic.
Therefore they might still struggle with the implementation process and problems
occurring from the changes.
Empirical analysis
80
Management commitment
3.93 (1)
3.78 (3)
3.54 (4)
3.54 (4)
3.45 (5)
Preventive maintenance
Process driven organisation
3.44 (6)
3.42 (7)
3.20 (9)
Pull production
3.08 (10)
3.00 (11)
Employee empowerment
2.65 (14)
2.57 (15)
2.12 (16)
Table 34: Lean practices and their influence for flexible starters-cluster
Also for the flexible starters-cluster the practices that have the highest level of
implementation have the highest number of direct and indirect influences on other
practices. Like in the other clusters the plants can benefit from the high
implementation of management commitment and shared vision and culture as they
therewith enable the implementation of other practices and finally influence the
goals of the single lean bundles. Therefore, being at the beginning of implementing
lean as a plant with competitive priorities on flexibility of volume and products as
well as fast changes, the first practices to implement should be the aforementioned.
Almost as influencing, especially regarding the direct influences, is the practice
optimization of set-up times and layout but its implementation level is with 2.57 and
therewith rank 15 rather low. Other potent practices are preventive maintenance and
process driven organization each having five direct and indirect influences from
which only one is direct. Their implementation is with rank 6 and 7 on an average
Empirical analysis
81
Efficient conformers
-0.461
0.391
0.434
n.s. / 0.406
0.515 / -0.375
0.583 / 0.569
1*
0.542
0.645
0.419
0.816
0.484
1*
technology
assesment and usage
2.70
3*
0.692 JIT level
0.750 schedule accuracy
0.710 setup times
0.527 number of turns
housekeeping
3.95
2*
improved equipment
performance
+
+ +
0.428 / 0.588 /
0.408
0.396
preventive (loading)
(TPM level / loading /
maintenance
OEE availability)
+ 3.75
0.353 / 0.414
2.23
+continuous flow
production
+ ++
+
optimization of set-up
times and layout
3*
2.48
+
+
2*
0.611
process driven
+
employee
organization
+
0.561
3.11
+ empowerment
2.86
+
(rejected batches /
supplier complaint
rate)
0.463 / -0.428
0.487
2.98
optimized production
planning and control
+
+
0.476
0.594
2.99
+
pull production
+
+
elimination of
excess inventories
(schedule accuracy /
production flexibility)
0.535
0.763
functional integration
and qualification
3.20
0.702
employee involvement and
continuous improvement
3.33
0.563 / 0.435
4.01 / 3.99
management commitment
& shared vision and culture
0.472 / -0.500
3.55
supplier management
and development
0.628
+
+ quality improvement
(rejected batches /
and stable processes
supplier complaint rate)
+
+
n.s./-0.481 n.s./-0.515 n.s./-0.506
(supplier
2.63
cross-functional process complaint rate)
development and process
control
+
3.39
process measurement
and reliability
3.53
customer focus and
satisfaction
0.618
82
Empirical analysis
Empirical analysis
83
Also for functional integration and qualification high correlations can be observed
with employee empowerment on the one hand and continuous flow production on
the other hand. Both practices are positively influenced and 58% respectively 49%
of their variance is explained.
All other strong correlations can be observed in relation to elimination of excess
inventories, the goal of the JIT bundle. The implementation of a pull system has a
strong positive influence on the inventory days on hand (DOH), the production
schedule accuracy in the freezing period, and set-up times. Further, implementing a
continuous product flow positively influences the overall JIT level, the production
schedule accuracy in the freezing period, set-up times, and the number of turns. In
addition, shorter set-up times and an optimized layout positively correlate with the
JIT level, the production schedule accuracy in the freezing period, and set-up times.
In this cluster, the practices belonging to the JIT bundle clearly show a strong
influence on the goal of this bundle.
Also in this cluster some weak to moderate negative correlations can be found.
They are especially associated with quality improvement and stable processes, the
goal of the TQM bundle. The supplier complaint rate is negatively correlated to all
five lean practices that have an influence on quality improvement and stable
processes. Also TQM level and quality cost are negatively correlated with two lean
practices. As the competitive aims of this cluster are costs and quality it is
surprising to see that two relatively high implemented lean practices negatively
influence the quality cost as well as the overall TQM level.
Another weak correlation can be found between supplier management and
development and production flexibility upside, one of the goals of the JIT bundle.
In total 53 correlations can be observed in the efficient conformers-cluster. Besides
being the highest number of correlations that can be observed in the four clusters,
these correlations involve the goals of the single lean bundles to a greater extent
than in all other clusters. Looking at the amount of direct linkages between the
single practices it can be assumed that the order of the mostly direct influencing
lean practices is shared vision and culture (4), optimization of set-up times and
layout (4), employee involvement and continuous improvement (3), functional
integration and qualification (3), employee empowerment (3), continuous flow
production (3), management commitment (2), supplier management and
development (2), process measurement and reliability (2), process driven
Empirical analysis
84
organization (2), pull production (2), housekeeping (1), preventive maintenance (1),
technology assessment and usage (1), and cross-functional process development
and process control (1). Only influenced is optimized production planning and
control. The following table contrasts the level of implementation of the single lean
practices with their direct and indirect influence on other lean practices.
Lean practice
Management commitment
4.01 (1)
3.99 (2)
10
3.95 (3)
Preventive maintenance
Supplier management and development
3.75 (4)
3.55 (5)
3.39 (7)
3.33 (8)
3.20 (9)
3.11 (10)
Pull production
2.99 (11)
2.98 (12)
Employee empowerment
Technology assessment and usage
Cross-functional process development and process
control
Optimization of set-up times and layout
Continuous flow production
2.86 (13)
2.70 (14)
2.63 (15)
2.48 (16)
2.23 (17)
Table 35: Lean practices and their influence for efficient conformers-cluster
In the efficient conformers-cluster the two practices that have the highest level of
implementation also have the highest number of direct and indirect influences on
other practices. Like in the other clusters the plants in the efficient conformerscluster can benefit from the high implementation of management commitment and
shared vision and culture as they therewith enable the implementation of other
practices and finally influence the goals of the single lean bundles. This shows that
also plants with the competitive priorities of low costs and a high quality should
focus on those two management related practices first.
Other very potent practices are employee involvement and continuous improvement,
functional integration and qualification, process driven organization, and
optimization of set-up times and layout with seven influences in total. Until now,
these practices are not on a high implementation level with rank number eight, nine,
ten, and sixteen. As these four lean practices could positively influence so many
others there should be put more effort into their implementation. Also the number of
direct influences is high for all four practices, especially optimization of set-up times
and layout with four direct influences has a high relevance. The same holds true for
Empirical analysis
85
continuous flow production and employee empowerment that have direct influence
on three and direct and indirect influences on four respectively six other practices.
Nevertheless they show a very low level of implementation with rank thirteen and
rank seventeen. Plants should include these practices to a bigger extend into their
implementation efforts.
Compared to the other clusters there are more direct and indirect influences
observable which involve almost all lean practices. Like mentioned before also the
goals of the single lean bundles are integrated to a higher extend. Apparently, for
plants aiming for low costs and a high quality the interaction of all lean practices is
vital. Especially management and process related practices play an important role.
4.5.3.5
General view
Despite all the differences there are some correlations that can be observed in each
of the four clusters. They are listed in the following table including the strength of
the correlation. The first variable of a pair is always the one that is influencing the
other one according to literature.
1
Do all
Flexible deliverers
Flexible starters
Efficient conformers
n = 49
n = 70
n = 48
n = 33
0.532
0.513
0.495
0.487
0.624
0.567
0.545
0.594
0.491
0.380
0.411
0.628
-0.419
-0.461
Correlation
-0.399
-0.363
(quality cost)
Management commitment & Shared vision and culture Functional integration and qualification
0.630 / 0.380
0.363 / 0.419
0.371 / 0.529
0.563 / 0.435
n.s. / 0.388
0.304 / 0.295
0.389 / 0.340
n.s. / 0.406
86
Empirical analysis
For continuous flow production and pull production higher correlation coefficients
are observed that already can be interpreted as positive strong correlation, especially
the first cluster shows with 0.624 a high value. Between 29.70% and 38.94% of the
variance is explained.
For optimization of set-up times and layout and process measurement and reliability
the single clusters show very different levels of positive correlation. With 0.628 the
correlation coefficient in the efficient conformers-cluster is rather high, 0.491for the
do all-cluster is still moderate whereas the values for the flexible deliverers and the
flexible starters with around 0.4 are already weak. This means that in the efficient
conformers-cluster 39.44% of the variance is explained and in the flexible
deliverers-cluster with the lowest value only 14.44% of the variance is explained.
Obviously, the efficient conformers with the aim of high quality and low costs can
benefit more from the positive impact of the implementation of optimization of setup times and layout than plants from the other clusters.
For process measurement and reliability and quality improvement and stable
processes, the goal of the lean bundle TQM, only negative weak to moderate
correlations can be observed. In three cases there is a negative correlation with
supplier complaint rate and for the cluster flexible deliverers with the quality cost.
It seems that a high implementation of process measurement and reliability is not
favourable for a low complaint rate towards a plants suppliers. There are two
possible explanations; one might be that the standardized and continuous
measurement of processes helps the plants to identify more incorrect deliveries than
the methods used by those plants that do not employ process measurement tools. A
second explanation might be that with process measurement the level of tolerance is
lower and therewith more complaints occur. Also the cost of quality is not lower
with a higher implementation of process measurement and reliability. A reason
might be that statistical process measurement and its tools are rather new to
pharmaceutical manufacturing (FDA, 2004) and therefore extra quality tests are
made which lead to higher costs. In general, it can be seen that in contrast to
literature where process measurement and reliability is positively associated with
the goal of the lean bundle TQM, a negative correlation exists in pharmaceutical
manufacturing which explains 13.18% to 21.25% of the variance.
For management commitment & shared vision and culture and functional
integration and qualification the correlation coefficients also vary but are all
positive. Especially management commitment has varying influence ranging from
Empirical analysis
87
13.18% to 39.69% of variance explained. Shared vision and culture is a little more
stable throughout the clusters and explains between 14.44% to 27.98% of the
variance in functional integration and qualification. In general it can be stated that
an engaged management and a common culture foster the integration and
qualification of employees in a plant independent from the competitive aims.
For management commitment & shared vision and culture and preventive
maintenance the values of the correlation coefficients are rather low with a variance
explained of 8.70% to 16.48%. In some cases the correlation is even not significant
(n.s) for management commitment. Nevertheless, a weak correlation exists between
a committed management and the implementation of preventive maintenance in a
plant for the clusters flexible deliverers and flexible starters. For all clusters a weak
correlation exists between shared vision and culture and preventive maintenance.
Obviously, the implementation of a preventive approach for maintenance is at least
lightly influenced by the commitment and mind-set of management and employees
in a plant.
4.5.3.6
Summary
Within the strategic groups different numbers of correlations in the theoretical map
could be confirmed. In total, the efficient conformers have 53 correlations and
therewith almost twice as much as the flexible deliverers with 28 correlations. Even
less correlations are observable in the do all-cluster with 22 and the flexible
starters-cluster with 19 correlations. Besides the number of correlations also their
strength varies in the single groups. The do all-cluster has one very strong
correlation and two strong correlations, being 14% of the correlations observed. The
flexible deliverers-cluster has nine strong correlations (32%), the flexible starterscluster has two strong correlations (11%), and the efficient conformers-cluster has
one very strong correlation and 16 strong correlations (32%). With more and higher
correlations it is easier for plants to positively influence the overall lean
implementation. Therefore, especially plants from the clusters efficient conformers
and flexible deliverers have the possibility to use the positive effects between the
practices. This effect is particularly interesting for practices with an already high
level of implementation.
Empirical analysis
88
Management commitment
Continuous flow production
Influence
5
Supplier management and development
Preventive maintenance
3
Employee involvement and continuous improvement
Housekeeping
Pull production
Employee empowerment
0
2,0
2,5
3,0
3,5
4,0
4,5
5,0
Importance
Empirical analysis
89
qualification, and supplier management and development should be the first focus.
In a second step, the practices continuous flow production, employee involvement
and continuous improvement, preventive maintenance, and optimization of set-up
times and layout should be implemented (Figure 19).
10
Shared vision and culture
Management commitment
Preventive maintenance
Influence
Employee empowerment
Pull production
Continuous flow production
4
3
2
1
Optimized production planning and control
0
2,0
2,5
3,0
3,5
4,0
4,5
5,0
Importance
Empirical analysis
90
10
9
8
Management commitment
Influence
5
4
Employee empowerment
0
2,0
2,5
3,0
3,5
4,0
4,5
5,0
Importance
Influence
Management commitment
Employee empowerment
3
2
Housekeeping
Supplier management and development
1
Optimized production planning and control
0
2,0
2,5
3,0
3,5
4,0
4,5
5,0
Importance
Empirical analysis
91
qualification should be the first focus. In a second step, the practices process driven
organization, optimization of set-up times and layout, employee empowerment, and
process measurement and reliability should be implemented (Figure 22).
Overall, it is obvious that independent from the strategic group a focus should be on
the practices management commitment and shared vision and culture. This has also
been stated by Harrison and Storey (1996) that stress the importance of a change of
the company culture. Hines et al. (2008) also point out that a positive organizational
culture is the basis for strong leadership which leads to an effective strategy.
Further, Zayko et al. (1997) find that the first obstacle and main issue when
implementing lean is the lack of management conviction in the benefits it provides.
In the next chapter the overall contributions of this research will be stated.
92
Conclusion
5 Conclusion
This chapter summarises the contributions of the research at hand to theory and
practice. Further, it discusses limitations and directions for future research.
Conclusion
93
94
Conclusion
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106
Category
Practice
Sakakibara et al.
(1993)
Management of people
and schedules in a JIT
system
Equipment layout
Small-lot sizes
Product design simplicity
Kanban
Pull system support
Supplier management
Flynn et al.
(1995a)
TQM
Customer focus
Product design
Statistical process control
JIT
Kanban
Lot size reduction
Setup time reduction
JIT scheduling
Common infrastructure
practices
Information feedback
Management support
Plant environment
Workforce management
Supplier relationship
Flynn et al.
(1995b)
Quality management
infrastructure practices
Customer relationship
Supplier relationship
Work attitudes
Workforce management
Top management support
Powell
(1995)
TQM
Committed leadership
Adoption and communication of TQM
107
Closer customer relationships
Closer supplier relationships
Benchmarking
Increased training
Open organisation
Employee empowerment
Zero-defects mentality
Flexible manufacturing
Process improvement
Measurement
Sakakibara et al.
(1997)
Quality Management
Process control
Feedback
Rewards for Quality
Top management quality leadership
Supplier quality involvement
JIT
Product Design
Workforce Management
Supervisory leadership
Incentives for group performance
Labor flexibility
Small group problem solving
Recruiting and selection
Supervisors as team leaders
Koufteros et al.
(1998)
TBC
Reengineering set-ups
Cellular manufacturing
Quality improvement efforts
Preventive maintenance
Dependable suppliers
Pull production
108
Koufteros &
Vonderembse
(1998)
JIT
Re-engineering setup
Cellular manufacturing
Preventive maintenance
Pull production
Quality assurance
Dow et al.
(1999)
TQM
Workforce commitment
Shared vision
Customer focus
Use of teams
Personnel training
Co-operative supplier relations
Use of benchmarking
Advanced manufacturing systems
Use of just-in-time principles
Flynn et al.
(1999)
WCM practices
Employee development
Management technical competence
Design for customer needs
Worker participation
Proprietary equipment
Continuous improvement
Process control
Feedback of information
Pull system
JIT supplier relations
McKone et al.
(1999)
TPM
Housekeeping
Cross-training
Teams
Operator involvement
Disciplined planning
Information tracking
Schedule compliance
TQM
Customer involvement
Rewards for quality
Supplier quality management
Top management leadership for quality
JIT
109
Pull system support
Repetitive nature of master schedule
Setup reduction
Cua et al.
(2001)
EI
Centralization of authority
TPM
TQM
JIT
Common Practices
Committed leadership
Strategic planning
Cross-functional training
Employee involvement
Information and feedback
Sila &
Ebrahimpour
(2002)
TQM
110
Supplier management
Continuous improvement and innovation
Quality assurance
Zero defects
Quality culture
Communication
Quality systems
Just in time
Flexibility
Ahmad et al.
(2003)
Quality Management
Customer focus
Feedback
Process control
Supplier involvement
JIT
Product Technology
Interaction facilitation
Coordination of decision making
Job rotation
Management presence on the shop floor
HRM
Training
Compensation for breadth of skill
Multifunctional employees
Recruiting and selection
TPM
TQM
Competitive benchmarking
Quality management programs
Total quality management
111
Process capability measurement
Formal continuous improvement program
JIT
HRM
TQM
Product design
Strategic commitment to quality
Supplier capability
JIT
Material flow
Commitment to JIT
Supply management
SCM
Kickuth
(2005)
TPM
Preventive maintenance
Housekeeping
Effective technology usage
TQM
Process management
Customer integration
Cross-functional product development
Supplier quality management
JIT
EMS
Direction setting
Management commitment and company culture
112
Employee
i
Shah & Ward
(2007)
Supplier related
involvement
and
continuous
Customer related
Customer involvement
Internally related
Pull
Continuous flow
Set up time reduction
Total productive/preventive maintenance
Statistical process control
Employee involvement
Sila
(2007)
TQM
Leadership
Strategic planning
Customer focus
Information and analysis
Human resource management
Process management
Supplier management
Zu et al.
(2008)
QM
Six Sigma
Mackelprang &
Nair
(2010)
Matsui
(2007)
JIT
113
Pull system
Repetitive nature of master schedule
Menezes et al.
(2010)
HRM
Empowerment
Learning culture
Team-based work
OM
Rahman et al.
(2010)
JIT
Reduction of inventory
Preventive maintenance
Cycle time reduction
Use of new process technology
Use of quick change-over techniques
Reducing set-up time
Waste minimization
Eliminate waste
Use of error proofing techniques (Pokeyoke)
Using pull-based production system (Kanban)
Removing bottlenecks
Flow management
Angelis et al.
(2011)
Lean
Set-up reduction
Inventory and waste reduction
Kanban pull signals
Supplier partnerships
Continuous improvement programs
mixed-model production
TQM
Foolproof or design for assembly systems
TPM
SOPs
Hofer et al.
(2011)
Internal-technical
Pull
Flow
Setup time reduction
Statistical process control
Total productive maintenance
114
Internal-relational
Employee involvement
Supply chain
Supplier JIT
Supplier feedback
Supplier development
Customer involvement
115
116
117
118
119
120
121
122
123
124
800.000
700.000
600.000
500.000
400.000
300.000
200.000
100.000
.000
0
250.000
10
15
Number of Clusters
20
25
20
25
200.000
150.000
100.000
50.000
.000
0
10
15
Number of Clusters
Curriculum Vitae
125
Curriculum Vitae
Name:
Saskia Gtter
Date of birth:
Place of birth:
Usingen/ Germany
Practical Experience:
2009 2012
University of St.Gallen, St.Gallen/ Switzerland
Institute of Technology Management
Research Associate
2008
2007
Education
2009 2014
2007
2003 2009
1994 2003