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2009

Lean production practices in Bangladesh: an

investigation into the extent of practices and the
existence of enabling environments for lean
implementation
Farhana Ferdousi

Recommended Citation
Ferdousi, Farhana, Lean production practices in Bangladesh: an investigation into the extent of practices and the existence of enabling
environments for lean implementation, Master of Management (Research) thesis, School of Marketing and Management, University
of Wollongong, 2009. http://ro.uow.edu.au/theses/3695

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Lean Production Practices in Bangladesh: A n Investigation into the
Extent of Practices and the Existence of Enabling Environments for
Lean Implementation

A thesis submitted in fulfillment of the requirements for the award of the degree

Master of Management (Research)

From

University of Wollongong

by

Farhana Ferdousi
School of Marketing and Management

2009
CERTIFICATION

I, Farhana Ferdousi declare that this thesis submitted in fulfillment of the requirements for
the award of Master of Management (Research), in the Faculty of Marketing and
Management, University of Wollongong, is wholly m y o w n work unless otherwise
referenced or acknowledged. The document has not been submitted for further
qualifications at any other academic institution.

Signature
Farhana Ferdousi
4/10/2009

i
 ACKNOWLEDGEMENT

The assistance I have received in all areas of this project defies adequate recognition. 1
would especially like to thank Professor Trevor Spedding and Dr. Matthew Pepper for their
sensitive and efficient supervision through the research, writing and preparation for this
thesis. I would also like to thank members of the library staff w h o shared their professional
knowledge, tireless energy and enthusiasm whenever called upon. I a m deeply indebted to
m y initial contact people and those w h o agreed to d o interviews. I would also like to
express m y gratitude to m y family for their practical help and encouragement, and
especially to m y father, mother and husband to w h o m this thesis is affectionately dedicated.

n
 ABSTRACT

Lean Production has overcome the perception of being another management fad. A n
increasing number of organizations in developing countries are implementing lean
production in order to generate improvements in performance and remain competitive. A
sample of nine garment companies (seven companies from the Export Processing Zone
(EPZ) and two companies from outside of the E P Z ) of Bangladesh was chosen to conduct
the study. A field survey with a semi-structured questionnaire, interviews and site visits
was conducted to gather necessary information from the companies. These companies were
selected purposively to ensure the best possible scenario of lean practices in Bangladesh.

The main thrust of this research is to examine the extent of lean practices in the
Bangladeshi garment industry to improve the manufacturing performance, and identify
factors for an enabling environment for practicing lean successfully. This study performs a
comparative analysis to explore the association between the results of the present study
with other global studies examining similar philosophies.

The research findings indicate that the selected companies have adopted a wide varie
lean tools and techniques and gained many improvements. Findings also identified several
supporting factors as well as factors that hindered the lean implementation initiatives. It
concludes with suggestions for further work.

111
 ABBREVIATION

B G M E A - Bangladesh Garments Manufacturers and Exporters Association

B E P Z A - Bangladesh Export Processing Zone Authority
EPZ -Export Processing Zone
EU- European Union
JIT- Just -in-Time
LP- Lean Production
IMVP-International Motor Vehicle Program
R M G - Ready-Made Garments
SQC- Statistical Quality Control
TFC-Textiles, Footwear and Clothing
TPS- Toyota Production System
T P M - Total Productive Maintenance
TQM-Total Quality Management
TSS- Toyota Sewing System
U S EPA- United States Environmental Protection Agency
5S- Seri, Seiton, Seiso, Seiketsu, Shitsuki

IV
 TABLE OF CONTENTS

CERTIFICATION i
ACKNOWLEDGEMENT ii
ABSTRACT iii
ABBREVIATION iv

Chapter One: Introduction

1.1 Background 1
1.2 Aims and Objectives 4
1.3 Methodology 5
1.4 Scope 6
1.5 Layout of Thesis 6
1.6 Chapter Conclusion 7

Chapter T w o : Conceptual Framework of Lean and Literature Review

S E C T I O N A: Conceptual Framework of Lean
2.1 Introduction 8
2.2 Core Characteristics of Lean Production Practice 15
2.3 The Building Blocks of Lean 16
2.4 Section A Conclusion 19

S E C T I O N B: Review of Literature
2.5 Introduction 20
2.6 Background 20
2.7 Toyota Production System (TPS) 23
2.8 Lean Practices in Japan 26

v
2.9 Lean and the West 27
2.10 Lean Practices in the U S A 31
2.11 Lean Practices in Other Countries and in Different Industries 32
2.12 Section B Conclusion 39

S E C T I O N C : Garment Industry: A n Overview

2.13 Introduction 40
2.14 Background 40
2.15 Garment Industry: A Global Perspectives 41
2.16 Garment Industry in Bangladesh 43
2.17 Examples of Lean Practices in Garment Industry 46
2.18 Chapter Conclusion 48

Chapter Three: Methodology of the Study

3.1 Introduction 49
3.2 Research Design 49
3.3 Research Hypotheses 53
3.4 Method and Procedure 54
3.4.1 Area of Investigation 54
3.4.2 The Questionnaire: Development and Administration 54
3.4.3 Features of the Questionnaire 55
3.4.4 The Selection of Samples 56
3.4.5 Data Collection 57
3.4.6 Processing the Data 58
3.5 Chapter Conclusion 58

Chapter 4: Profiles of Surveyed Companies, Data Analysis and Results

S E C T I O N A : Profiles of Surveyed Companies
4.0 Introduction 59
4.1 Companies Under the Export Zone Vs. Companies Out of the E P Z 59

vi
4.2 Company Profiles 61
4.2.1 Company 1-Fashion Point Limited 61
4.2.2 Company 2-Texas Fashion Wear Limited 63
4.2.3 Company 3- Beximco Fashions Limited 64
4.2.4 Company 4- Shanta Industries Limited 66
4.2.5 Company 5-DADA(Savar) Limited 68
4.2.6 Company 6-Shanta Wash Works Limited 70
4.2.7 Company 7-Armana Fashions Limited 71
4.2.8 Company 8-Shanta Denims Limited 73
4.2.9 Company 9-Paxar Bangladesh Limited 75
4.3 Section A Conclusion 79

S E C T I O N B: Data Analysis and Results

4.4 Introduction 80
4.5 Organizational Issues 80
4.6 Lean Implementation Issues 89
4.7 Benefits Derived from Lean Practices 98
4.8 Manufacturing Performance 99
4.9 Supporting Environmental Factors 104
4.10 Business Challenges that Derive the Companies to Practice Lean 108
4.11 Areas Where Changes Have Been M a d e 108
4.12 Resistance and the Resisters 109
4.13 Experiences of Organizations Before and After Lean Implementation 109
4.14 Factors Affecting the Success and Failure of Lean Management 110
Strategies in the Companies
4.15 Future Plans to M a k e Lean More Successful 111
4.16 Chapter Conclusion 111

Chapter 5: Discussion
5.1 Introduction 113

vii
5.2 Extent of Lean Production Practices 114
5.3 Benefits Derived from Lean Practices 119
5.4 Manufacturing Performance Improvement 120
5.5 Factors Affecting Lean Implementation 122
5.6 Supporting /Enabling Environmental Factors 127
5.7 Future Plan 129
5.8 Comparison of the Present Study Results to Other Similar Global Studies 131
5.8.1 Introduction 131
5.8.2 A Brief Overview of the Present Study 132
5.8.3 Comparison of the Results of the Studies 133
5.9 Chapter Conclusion 138

Chapter 6: Conclusions A n d R e c o m m e n d a t i o n s 139-144

References 145-164

Appendices:
A P P E N D I X 1 Questionnaire used in the Survey 165-173
A P P E N D I X 2 Interview Schedule 174-178
A P P E N D I X 3 Checklist used in the observation 179
A P P E N D I X 4 Statistical Tables 180-188

List of Figures
2.1 A Lean Production Model 10
2.2 Toyota Production System 25
2.3 Apparel Exports of Different Countries to U S in the First Half of 2006 45
4.1 Organization Chart of Fashion Point Limited 62
4.2 Organization Chart of Texas Fashion W e a r Limited 64
4.3 Organization Chart of Beximco Fashions Limited 65
4.4 Organization Chart of Shanta Industries Limited 67
4.5 Organization chart of D A D A (Savar) Limited 69
4.6 Organization Chart of Shanta W a s h W o r k s Limited 71

viii
4.7 Organization Chart of Armana Fashions Limited 73
4.8 Organization Chart of Shanta Denims Limited 75
4.9 Organization Chart of P A X A R Bangladesh Limited 77
List of Tables:
2.1 Core Concepts of Lean 11
2.2 Seven Wastes of Lean 15
2.3 The Building Blocks of Lean 17
3.1 Selected Information about the Sample Companies 57
4.1 Summary Information about the Surveyed Companies 78
5.1 Summary of Benefits, and Hindering and Supporting factors Related to 129
Lean Implementation in the Surveyed Firms
5.2 Three Phases of Improvement 134

IX
 Chapter One

Introduction

1.1 Background

Maintaining a customer focus is one of the most important elements in today's business
market. Other elements such as money, resources and labor etc. are clearly important but
in spite of the combination of all these factors, the wheels of an organization cannot m o v e
if the customers are not satisfied (Karim, 2009). Customer requirements should get first
priority. Traditionally, only getting orders and shipments were major concerns for firms.
It is stated by Skinner and Ivancevich (2002) that the evolution of marketing starts with
only order taking and production and ends with customer orientation. Firms are n o w
more concerned about customer satisfaction because they have n o w more options than
before. Customers are n o w demanding a wide variety of products at a lower cost but
with fast delivery. They also expect more innovative products at a competitive price
(SAP A G , 2005) as customers have more opportunities to choose from a variety of
options.

Organizations have realized that survival is only possible through customer satisfaction,
and satisfaction will come through quality goods and services with the lowest possible
price. In today's competitive and changing business world, lean production philosophy
has brought changes in management practices to improve customer satisfaction as well as
organizational effectiveness and efficiency (Karim, 2009). The automotive and aerospace
industries as well as a growing number of other industry sectors (Aberdeen Group, 2006)
are responding to increased pressure by incorporating lean production strategies into their
production processes, allowing them to compete in global markets. This manufacturing
approach is opposite to the traditional approach which is characterized by economic order
 2

quantities, high capacity utilization and high inventory. According to W o m a c k et al.

(1990), lean would replace mass and craft production in all industrial sectors, and will
become the global standard for the production systems of the twenty-first century.
However, companies cannot just implement lean and achieve success overnight because
it requires a structured change program to reap the full benefits from this effort.
Organizations introducing lean manufacturing methods have both cost and quality
advantages compared to traditional organizations (Fleischer and Liker, 1997).

The goal of lean is to satisfy the customer by delivering the highest quality at the lowest
cost in the shortest time (Manufactured Housing Research Alliance, 2005). A s stated by
Bartezzaghi (1999, p. 231), "Lean production is the end point of the process leading out
of the Fordist-Tailorist paradigm". Lean production places emphasis on the elimination
of non-value added activity as well as waste from the production process. Evidence
indicates that in the industrially advanced countries, non-value added activity could
comprise more than 90 percent of a company's total activity (Caulkin, 2002). Taiichi
Ohno, the co-developer of the Toyota Production System suggests that the non-value
added activities account for up to 9 5 % of all costs in non-lean manufacturing
environments (Kilpatrick, 2003). "Today lean may no longer be fashionable but its core
principles (flow, value, pull, minimizing waste etc.) have became the paradigm for many
manufacturing and (service) operations " ( Lewis, 2000, p.959).

The major purposes of the use of lean production are to increase productivity, improve
product quality and manufacturing cycle time, reduce inventory, reduce lead time and
eliminate manufacturing waste. T o achieve these, the lean production philosophy uses
several concepts such as one-piece flow, kaizen, cellular manufacturing, synchronous
manufacturing, inventory management, pokayoke, standardized work, work place
organization, and scrap reduction to reduce manufacturing waste (Russell and Taylor,
1999). In lean production systems attempts are made to eliminate waste through
continuous improvement of processes of the entire value chain in the organization.
Having nurtured a lean manufacturing mindset a m o n g the employees, it facilitates
achievement of continuous product flow through physical rearrangement and control
 3

mechanisms. A study (Sohal, 1996, p.91) indicates that "most western manufacturers
have been aware of the need to improve their performance and competitiveness for
nearly two decades ". They were using lean production system for taking advantage of
most of the above benefits. Another study (EPA, 2003) summarized the main reasons for
adopting a lean system under three broad categories: reducing production resource
requirements and costs, increasing customer responsiveness, and improving product
quality. It concluded that all of these combine to boost company profits and
competitiveness.

Lean production has received substantial interest internationally since the 1980s
(Papadopoulou and Ozbayrak, 2005). The same study also stated that this concept spread
to Japanese factories after it was first implemented in the Toyota Motor Company.
Although other countries have experimented with this program, its adoption in
Bangladesh was slow. Anecdotal evidence indicates that the few organizations that have
adopted lean practices have experienced an overall improvement in corporate
performance ( M a m u n and Afrin, 2001). Understandably, the firms that do not practice a
lean production system have little knowledge about the experience of the lean-firms. A
few inhibiting factors stand in the w a y of reaping the full benefits, such as the scattered
existence of suppliers, difficulty in establishing long-lasting relationship with the
suppliers, trade unions having political backing, political turbulence and frequent
disruptions in electricity supply, a m o n g others. These factors have not been
systematically identified through research. Informal discussions with some senior
managers of garment companies in Dhaka, Bangladesh have been provided these
information. All this warrants an investigation to explore the real causes for the overall
success of lean and the causes for refraining from practicing lean in firms in Bangladesh.
Generalization is not possible in the absence of empirical evidence. Also, it is important
to see h o w lean practice improves quality, increases productivity, and reduces waste and
lead-time in Bangladeshi manufacturing firms. Researchers must also analyze the
political unrest, inadequate infrastructure including transportation, labor union and labor
unrest, less flexible attitude of management towards the workers etc. While some
 4

analyses (Harun, 1990) based on anecdotal evidence have been done regarding JIT;
empirical studies in the area of lean practices in the Bangladeshi enterprises are still rare.

In Bangladesh, some companies across the garment industry sector have been practicing
lean production to remain globally competitive in the face of fierce competition resulting
from the rapid globalization of businesses. There is a dearth of research evidence
regarding the impact of lean practices on competitive performance in Bangladeshi
garment firms. Researchers are mostly silent on this very important area of production
philosophy. The issues of implementation and impact of lean practice in the Bangladeshi
enterprises have not been extensively researched and therefore provide an opportunity for
further investigation. This research attempts to bridge this gap. There is a general belief
that because of frequent political turbulence in Bangladesh, economic infrastructure
mostly remains undeveloped and that a strong supplier partnership is often difficult to
develop due to traffic problems and traditional corporate culture. Conclusive evidence
regarding this requires careful and systematic investigation. The present study deals with
the emerging issues and investigates the lean practices in the Bangladeshi firms and their
impact on competitive performance.

1.2 Aims and Objectives

With many developed and developing countries adopting various lean tools and
techniques and reaping several benefits, this research aims to explore the adoption of lean
practices in the Bangladeshi garment firms and its impact on manufacturing performance
improvement. Based on the literature reviewed and problems persisting in Bangladeshi
Manufacturing firms, three primary research questions are developed:

(i) T o what extent do the samples of Bangladeshi garment firms apply lean
production practices for improving manufacturing performance?
(ii) T o what extent do the samples of garment firms have an 'enabling
environment' for practicing lean production?
(iii) H o w do the results of the study compare with the similar studies globally?
 5

These three questions can be brought together in the following statement:

(iv) Can the garment manufacturing industry in Bangladesh successfully

implement lean production and achieve results that are comparable to other
countries?

To identify comprehensive answers to the above research questions the following

objectives have been developed:

(a) Review the literature

(b) Examine the extent of lean production practices in the selected Bangladeshi firms;
(c) Identify the benefits derived from lean practices in Bangladesh.
(d) Evaluate the manufacturing performance in the Bangladeshi firms;
(e) Explore the enabling environmental factors that support lean practices;
(f) Compare the study results of selected Bangladeshi firms with that of the global
firms using the similar philosophies.

1.3 Methodology

"Numerous companies of varying size across midtiple industry sectors are implementing
lean production systems and the rate of lean adoption is increasing" (EPA, 2003, p. 18).
Several countries over the world are implementing lean successfully and reaping its full
benefits. This study will focus on h o w successful the lean philosophy is in Bangladesh. In
order to identify the extent of lean practices in Bangladesh, nine companies will be
selected from the garment industry. These companies will be selected to ensure the best
possible scenario of lean practice in Bangladesh. A field survey with a semi-structured
questionnaire, interviews and plant visits will be conducted to answer the research
questions. The detail of these approaches will be discussed in chapter three. B y using the
above mentioned approaches, the study will examine h o w successful these selected
companies are. This study will provide an insight, if these selected companies can
 6

achieve success through lean implementation, then other companies of the garment

industry of Bangladesh can also experience similar success.

1.4 Scope

Due to time constraints and limited use of lean, purposively nine garment factories will
be selected. A m o n g these nine companies seven companies are situated in the E P Z
(Export Processing Zone) and the remaining two are outside of the E P Z . These
companies will be selected on the basis of their success in the designated business field.
A major reason for not selecting a large number of companies is that the sample
companies have provided very similar answers to the questions during the initial
approach. So, a large number of companies have not been taken as sample. The results of
the sample companies will be compared to other similar companies of the world those
w h o are using similar philosophies.

1.5 Layout of Thesis

In outlining the focus and providing a context for this study, this chapter has the purpo
of establishing w h y the research is important. The following chapters will expand on the
areas of the study introduced in this chapter.

Chapter 2 will review the literature in the related fields. The review will be undertaken
under several categories: The first section of this chapter provides the conceptual
framework for lean and the second section deals with the reviews of the literature on lean
practices in T P S , followed by lean practices in Japan, West, U S A and finally lean
practices in other countries of the world. After that the third section of this chapter covers
the background of the global garment industry as well as the Bangladeshi garment
industry.
 7

Chapter 3 will outline and justify the methodology chosen to explore the purpose of this
study detailing the research approach. This chapter provides a discussion of the
methodological approaches through which the research has been conducted.

Chapter 4 will elaborate the profile of the nine surveyed companies and present the
analysis and discussion of the results based on the information available on website,
interviews,fieldstudy as well as published materials.

Chapter 5 will report on the findings of the research by interpreting the results reported in
chapter 4. Finally, chapter six will draw together the conclusions of the study, before
presenting a number of recommendations for future work.

1.6 Chapter Conclusion

This chapter provided the context for this research. The aim and objectives, methodology,
scope and layout of thesis have also been presented. The next chapter deals with the
conceptual framework of lean, literature review and an overview of the garment industry.
 8

Chapter Two
Conceptual Framework of Lean and Literature Review

SECTION: A
Conceptual Framework of Lean

2.1 Introduction

The last chapter provided the context for this study. The purpose of this
investigate the adoption and practice of lean production methods in Bangladeshi
manufacturing industry. This study will discuss the contribution of lean to improve
quality, productivity and to reduce lead time, waste, inventory etc. within this
environment. It is important at the outset to define and discuss the framework of analysis
that will be used in the study. Since the term associated with lean practice pose problems
of definition and concept, it is therefore deemed necessary to outline the basic elements
connected with the lean production. This section of this chapter will present the
conceptual framework for lean.

Concept of Lean

In the late 1980s the term "Lean Production" was introduced in a book tit
Machine That Changed the World written by Womack, Jones & Roos (1990). "The idea
of lean thinking comprises complex cocktail of ideas including continuous imp
flattened organization structures, team work, elimination of waste, effic
resources and cooperative supply chain management" (Green, 2000, p.524). This is
Japanese concept applied in manufacturing firms. The Japanesefirms(firms in other
countries as well) have been using this concept to reduce the cost of any process (be it
 9

service or manufacturing) by removing waste. The basic elements of the concept include
waste elimination, continuous one piece workflow (EPA, 2003).

Lean production encompasses the total manufacturing chain from product design to
product development, and it even embraces distribution (Cooney, 2002). According to
the National Institute of Standards and Technology Manufacturing Extension
Partnerships Lean Network, lean refers to systematically identifying and eliminating
waste through continuous improvement using the pull production with a view to get
perfection (Kilpatrick, 2003). Lean shortens the lead time between a customer order and
the shipment of the products by elimination of all forms of waste in the production
processes. Simply said, "lean principles and methods focus on creating a continual
improvement of culture that engages employees in reducing the intensity of time,
materials and capital necessary for meeting customer's need" (EPA, 2003, p.l). This
operational strategy targets to achieve the shortest possible cycle time by eliminating
waste. This strategy aims to increase the value-added work by reducing incidental work.
This technique is used to increase profitability by reducing cost and by understanding the
meaning of value to the customer because value is the major determinants of lean
manufacturing. Companies are n o w convinced about the benefits of lean, and they are
using this technique in both production and service functions.

Even just a decade ago this production method was viewed as a counter-intuitive
alternative to traditional manufacturing models (Hayes, 1981). But as stated by Katayama
and Benett (1996), it is the paradigm for operations and its influence can be found in a
wide range of manufacturing and service strategies ( W o m a c k and Jones, 1994). "77/e
benefits of lean manufacturing are evident in factories across the world and companies
report improved product quality, reductions in cycle time, reduced work-in-progress
(WIP), improved on-time deliveries, improved net income, decreased costs, improved
utilization of labor, reduction in inventories, quicker return on inventory investment,
higher levels ofproduction, improvedflexibility,improved space utilization, reduction in
tool investment, a better utilization of machinery, stronger job focus, and better skills
enhancement" (Pavnaskar et al., 2003, p.3076).
 10

Lean Production is a conceptual framework based on a few established principles and

techniques (Sanchez and Perez, 2001) as depicted in Figure 2.1. The Figure shows that
several factors contribute towards achieving production and delivery just-in-time. These
factors - elimination of zero value activities, multifunctional teams, continuous
improvement efforts, and supplier integration - have influence on just-in-time production
and delivery to customers. All this in an integrated manner leads companies to achieving
competitiveness.

Flexible Information System

Elimination of zero value Production and delivery

activities just-in-time

Competitiveness

Figure 2.1: A Lean Production Model

Adopted from Sanchez and Perez (2001)

A s stated earlier, lean production (LP) focuses mainly on 'one piece flow'/continuous
flow. This means that the ideal batch size is always one unlike in the traditional
manufacturing environment where ideal batch size is determined on the basis of
individual manufacturing processes or material handling. O n e piece flow requires work
cells that are organized by product, rather than process (Mercado, 2007). "This shift
requires highly controlled processes operated in a well maintained, ordered and clean
operational setting that incorporates principles of Just-in-time production and employee
 11

involved, system wide, continual improvement" (EPA, 2003, p.8). Precisely, L P itself
encompasses, as identified by W o m a c k and Jones (1994), five core concepts, as
presented in Table 2.1.

Table 2.1: Core Concepts of Lean

Concepts Details
(a) Value specification in Need to specify what creates value from customer's
the eyes of the point of view.
customer

(b) Identifying the value Need to identify all the activities (value stream)
stream and eliminating necessary to produce a product and eliminate all non-
waste value added waste.

(c) Making theflowof the M a k e those actions that create value flow without
value at the pull of the interruptions at the pull of the customer.
customer

(d) Empowering and Need to empower and involve the employees at the
involving the decision making.
employees

(e) Continuously Need to focus on continuous improvement for the

improving for getting perfection
perfection

Sources: W o m a c k et al. (1990)

3 0009 03461992 9
 12

Concept of Inventory

As stated by Womack et al. (1996), the aim of lean production is to eliminate everything
that does not add value to the product or service. Inventories are symptoms of
inefficiency, because it does not add value to the products (Sanchez and Perez, 2001).
"Furthermore, inventories also hide other problems on many occasions, preventing their
solution like, for example, a defective maintenance that focuses the accumulation of
stocks to prevent bottlenecks in the machines which break down frequently" (Sanchez
and Perez, 2001, p. 1436). Lean manufacturing focuses on fewer inventories of raw
materials and finished goods kept in storage. Organizations maintain inventories of raw
materials; work in process and finished goods to maintain flexibility in their production
processes, smooth out periods of excess or under capacity. In a lean production system,
inventory is considered as a waste. This concept implies that excess of inventory incurs
more cost, which ultimately increases the cost of customer product.

Concept of JIT

Since the early 1980s, Just-in-Time production has received great interest internationa
(Phan and Matsui, n.d.). " In general, the JIT philosophy concentrates more on
improving manufacturing efficiency by eliminating non-value added activities and
minimizing inventory"(Lau, 2000, p.2037). Just-in-Time (JIT) practices have been used
by many manufacturers as a powerful tool for continuous manufacturing improvement
based on the significant reduction of inventory and work-in-progress in all phases of
manufacturing process. This philosophy emphasizes materials flow not on materials
storage (Kamoun and Yano, 1996). Originally JIT manufacturing concentrated more on
increasing manufacturing efficiency by eliminating all forms of waste and minimize
inventory (Lau, 2000). Today more and more North American firms and firms in many
other countries use it as an approach to produce the right part in the right place at the
right time. Traditionally, inventory has been viewed as an asset. But the JIT view is that
inventory does not add value but instead incurs costs. JIT views inventory as a symptom
 13

of inadequate management, a method of hiding inefficiencies and problems (Sanchez and

Perez, 2001). A s stated by Schroeder and Flynn (2001), JIT system reduces inventory,
lowers cost and improves quality. According to Hines (1996), many companies use JIT
delivery as a key element in lean production development. Ultimately, "JIT enables a
company to produce the products its customer's want, when they want them, in the
amount they want" (EPA, 2003, p. 12).

Concept of Kanban

Lean production greatly emphasizes Kanban system - use of physical inventory cues to
signal the need to move raw materials or produce new components from the previous
process (EPA, 2006). Same report stated that a kanban is a card, labeled container,
computer order or other device used to signal that more products or parts or other
materials are needed from the previous process. Anecdotal evidence indicates that
through this system, components are delivered to the production line when needed, so
that there is no storage in the production area. This is a system of delivery instructions
from downstream to upstream activities in which the upstream suppliers do not produce
until the downstream customer signals a need (Alukal and Manos, 2002). A s stated by
Phan and Matsui (n.d), the Kanban is a physical tool for operating the pull system and
this system helps the factory in the reduction of unnecessary production, minimizing the
work-in-process inventory.

Concept of Continuous Improvement/Kaizen

"Lean production is founded on the idea of Kaizen or continual improvement (EPA,

2003, p. 10). Continuous improvement is an ongoing program of improving quality, costs,
and lead time of processes and products through the cooperative efforts of all concerned.
According to Oakland (1993), the search for continuous improvement in the products and
processes is another feature of lean production. As defined by Sanchez and Perez (2001),
The process of continuous improvement requires all levels of employee involvement and
support of management. This process relates to the 'Jidoka' concept, which states that
 14

since people are not working for the machine, they have the ability to use their best
judgment to improve the process. This concept is often referred to as Kaizen which is
used by the Japanese. "This philosophy implies that small, incremental changes routinely
applied and sustained over a long period results in significant improvements " (EPA,
2003, p. 10). Kaizen is considered as the "building block" of all lean production methods.
In his book, Imai (1986) emphasized that the key to Japan's competitive success in the
face of fierce global competition is the adoption of 'kaizen' in the firms. H e focused on
the kaizen management practices that can be put to work for improvement of processes.
According to Imai, kaizen is a vital approach to problem solving, however, its application
requires change in the corporate culture.

Waste

The elimination of waste is the prime focus in lean production processes. Lean
production basically focuses on elimination of several types of waste. B y avoiding non-
value added activity, lean tries to increase the customer responsiveness. " In its most
basic form, lean manufacturing is the systematic elimination of waste from all aspects of
an organizations, operations, where waste is viewed as any use or loss of resources that
does not add directly to creating the product or service a customer wants, when they
want it" (EPA, 2003,p.l). O n e study (Suzaki, 2000), defined waste as anything beyond
the minimum needed by an organization in terms of equipment, materials, components,
space or worker time to give added value to the products. That means, anything that
increases cost without adding value to the product is a waste. Shingo (1992) strongly
emphasized the elimination of waste. H e advised the managers not to accept any waste as
unavoidable. Nicholas (1998) and Boeing (2000) identified several types of waste such as
waste of complexity, labor, space, overproduction, time, transport, energy, defect and
materials. Shingo (1992) identified seven different types of wastes as illustrated in Table
2.2.
 15

Table 2.2: Seven Wastes of Lean

Types of Waste Details
Over-Production Producing too m a n y products than the
required. This creates excess of inventory,
which ultimately leads to high product cost.

Excessive Transportation Transporting or moving products from one

place to another than the required.
Excessive movement causes both quality
and revenue issues because this creates
additional organizational cost.

Waiting Time Waste Long periods of inactivity for people,

information or goods, resulting in poor
flow and long lead times

Excessive Inventory Having excess of inventory or more

inventory than is minimally required,
results in inventory waste

Unnecessary Motion W h e n people involved in the production

process m o v e / walk unnecessarily, that
does not add any value to the end product.
This is called motion waste.

Inappropriate Processing Using the wrong set of tools, procedures or

systems in the work processes.

Waste in Defects Production of defective units involves

inspection and fixation of the defective
items. Defects that force reworks, or
products to be scrapped, exact a
tremendous cost on the organizations
through the infrastructure changes needed
to quarantine the defects, re-inspect the
reworked material, and re-scheduling the
reworked material back into the production
line.

Sources: Shingo (1992)

Table 2.2 presented the most basic forms of wastes involved in the production process.
Lean philosophy shortens the lead-time, reduces the manufacturing cycle time and
 16

improves the manufacturing performance by eliminating these wastes from the

production processes.

2.2 Core Characteristics of Lean Production Practice

Lean production has several characteristics as identified in researches. Oliver, Delbridge

Jones and L o w e (1993) identified seven core characteristics of lean production:

1. Organization with team that involves flexible, multi-skilled operators taking a

high degree of responsibility for work with their areas.
2. Shop-floor with problem solving structure which is central to kaizen or
continuous improvement activities.
3. Lean manufacturing operations: low inventories, small number of direct workers,
small batch size, just in time production.
4. High commitment h u m a n resource policies which encourage a sense of shared
destiny within a factory.
5. Close relationship with suppliers and smaller supplier base.
6. Cross-functional development teams.
7. Retailing and distribution channels which provide close links to the customer and
permit a m a k e to order strategy to operate.

Presence of these characteristics in a production system makes the system lean. It

suggests that a lean production system, in order to be really useful in eliminating waste,
requires team organization structure with cross-functional development teams, problem-
solving structure in the shopfloor, small quantity of inventories, small batch size, just-in-
time production and delivery, flexible and employee-oriented h u m a n resource policies,
integration with a small base of suppliers, and close links to the customers. Thus, lean
encompasses the entire enterprise: from the shop-floor to the executive suit and from the
supplier to customer value chain.
 17

2.3 T h e Building Blocks of Lean

Lean is established upon several building blocks. Alukal & Manos (2002) have identified
the building blocks presented in Table 2.3. These include 5S, visual control, streamlined
layout, standardized layout, teams, quality at source, point of use storage, quick
changeover, pull/kanban, cellular/flow, and total productive maintenance ( T P M ) . These
building blocks need to be in place in an organization in order to be successful with the
lean production system.

Table 2.3: Building Blocks of Lean

Building Blocks Descriptions
5S 5S is considered as an important building block of
lean. Its underlying philosophy is that efficient and
quality work requires a clean and safe environment.
The 5S activities refer to five Japanese terms such as
(i) Seri (sorting out unnecessary items in the
workplace and discard them), Seiton (arranging all
necessary items in good order so that they can be
easily picked for use), Seiso (cleaning the workplace
completely so that there is no dust on the floor,
machines or equipment), Seiketsu (maintaining a high
standard of housekeeping and workplace at all times),
and Shits uki (training people to follow good
housekeeping disciplines autonomously). Briefly, this
is a system for organizing the workplace and
housekeeping which is carried out gradually and
systematically. The goal of this technique is to create a
working environment that is organized, simple, clean
and safe.

Visual control Lean requires the placement of all tools, parts and
production activities in such a manner so that everyone
involved in the process can easily view and understand
the whole system at a glance. This visual control helps
people see what is happening in each stage and what
can be required.

Streamlined layout This focuses on designing the plant layout

sequentially. The layout design should follow the
optimum operational sequence.
 18

Lean requires consistency in the performance ol task.

Standardized work
This building block emphasizes on standard task
performance but with prescribed methods and without
any waste.

Lean highly emphasizes teamwork. T e a m s can

Teams
perform more effectively than the individual. In this
system teams can be an improvement team or daily
work-team.

Lean requires quality at the very beginning. Operators

Quality at the source
will inspect and use process control, so that they
become sure that the product that is passed on to the
next process is of acceptable quality.

Point of use storage R a w materials, parts, information, tooling, work

standards, procedures etc. are stored where needed.

Quick changeover The ability to change tooling and fixtures rapidly

(usually in minutes) so that multiple products in
smaller batches can be run on to the same equipment.

Pull /Kanban A system of cascading production and delivery

instructions from downstream to upstream activities in
which the upstream supplier does not produce until the
downstream customer signals a need.

Cellular/Flow Physically linking and arranging manual and machine

process steps into the most efficient combination to
maximize value added content while minimizing
waste. The aim is single piece flow.

Total Productive Maintenance A lean equipment maintenance strategy for

maximizing overall equipment effectiveness. T P M
empowers workers to maintain and improve operations
and equipment in their work areas, preventing
breakdowns, malfunctions and accidents.

Sources: Alukal & Manos (2002)

All these building blocks are keys to lean production. In order to be truly lean, a working
environment needs to be organized, clean and safe. These are necessary ingredients for an
efficient and quality work. W h e n employees can have a clear view of what is happening,
they can understand easily the whole system that results in higher productivity.
 19

Operationally sequential plant layout helps in reducing cycle time. Standardized work
facilitates consistency in the performance of employees. Well-organized work-teams
perform better in achieving higher productivity with less input and efforts. Ensuring
quality from the very beginning of the production process reduces the chance of having
unexpected scrap/defects in the subsequent stages of production. Storing necessary
materials and other things close to the place of work/use improves production efficiency.
Kanban reduces the inventory level through using systematic and timely signaling for 45
materials. A s a building block of lean, T P M focuses on overall equipment effectiveness
through regular, routine maintenance of equipments.

2.4 Section A Conclusion

The lean production system is important for improving a firm's competitiveness. Lean
practice, however, requires establishment of several building blocks as well as
consideration of a number of conceptual issues such as value specification, value stream,
waste elimination, empowerment of employees and continuous improvement. Against
this backdrop, evidence will be obtained through a literature review in the field of lean
production that will set the stage for developing a clear research framework. This section
dealt with the conceptual framework of lean. The next section of this chapter deals with
the literature review.
 SECTION: B
Review of Literature

2.5 Introduction

The process of reviewing the literature in the area of lean production uncovered a huge

range of study material. It is deemed necessary to investigate the literature in the area of

lean production practice of various industries in m a n y different countries to look into the

benefits achieved, problems encountered as well as improvement of performance attained

by implementing lean production in practice. This review therefore serves to see through

the study in terms of what has been researched over m a n y years in this particular domain.

The literature review has been presented in six sections. The first section provides a

general introduction. The second section briefly reviews the literature of lean practices in

TPS, followed by lean practices in Japan, lean practices in West, lean practices in U S A
andfinallylean practices in other countries of the world.

2.6 Background

"Businesses all over the world are now facing fierce competition because of

liberalization of trade and globalization. Foreign competition has penetrated into almost

all the industries, both in the production and service sectors. There prevails a view that

organizations in Europe, Japan and the several developing countries are seizing the

initiative in a dozen key technologies, including factory, automation, consumer

electronics, microchips and aerospace. Many countries are emerging as strong

competitors and challenges for those who have already been industrially developed"
(Mannan and Ferdousi, 2007, p.4)
 21

The literature ( W u , 2003, p. 1349) shows that "Top Japanese manufacturing firms have
achieved excellent international competitiveness in a number of industries such as
electronics and machinery in the past two decades ". "With pressure mounting to improve
operational performance while meeting escalation customers requirements, companies
across all industries are adopting lean techniques in manufacturing plants and lean
strategies in executive suites around the globe" (Aberdeen Group, 2006, p.l).
Researchers have identified and discussed the necessity of integrated approaches to
linking diverse manufacturing practices (Flynn, Sakakibara and Schroeder, 1995). The
strategies and practices adopted by Japanese and Western manufacturers have been
highlighted in a series of studies conducted in the 1980's (Sohal, 1996). Organizations
are striving for best practices to remain globally competitive. In order to stay competitive
in the face of global competition, companies need to improve their manufacturing
operations (Taz, 2008), which is possible through implementation of a lean system. The
same author argued that lean production improves operations as well as customer
satisfaction. In order to implement lean production or improve operations, companies
need to study the current state of operations. "With its focus on removing the waste in
current systems, concentrating on adding value that customers pay for and improving
product flow, to increase productivity and reduce lead-times, lean is seen as representing
a clearway forward, for all of those looking to effectively face the increasing challenges
posed by the low cost economics " (Mortimer, 2006, p.256). Available evidence indicates
that m a n y companies of different sizes across multiple industry sectors are implementing
lean production systems and that the rate of lean adoption is accelerating (EPA, 2003).
Lean philosophy has been the subject of an increasing amount of research (Bonavia,
2006; Birmingham, 2006; Alukal and Manos, 2002; Cooney, 2002) over recent years.
The Majority of research in this area is concerned with performance improvement
(Papadopoulou and Ozbayrk, 2005; Bonavia, 2006; Sohal, 1996), the lean
implementation process (Papadopoulou and Ozbayrk, 2005; Society of Manufacturing
Engineers, 2002; Society of Manufacturing Engineers, 2007, Bonavia, 2006) and the
pursuit of world class status (Sohal, 1996). The term world-class was introduced by
Hayes and Wheelright (1984) to describe the capabilities which had been developed by
Japanese and German companies in order to compete in export market. The context in
 22

which this term was introduced is that the manufacturing companies were having stiff
competition and they were bound to think about producing very high quality products
(world class products) that could exceed customer's expectations. "Understanding how
individual companies have gone about adopting the lean production concepts and
sustained their improvement efforts over a long period of time is important" (Sohal,
1996, p.92). A proper understanding of the concept can bring positive results for the
organization. Vast amount of literature is available and numerous studies are underway.
Numerous field studies, case studies and surveys (Sohal, 1996; Samson et al., 1993,
Dawson & Palmer, 1995; E P A , 2003; Bonavia, 2006; Simpson et al., 1998, Cooney,
2002) have been conducted in different organizations to understand its benefits, problems
as well as the relationship between lean practice and manufacturing performance. This
chapter deals with a review of those studies that have particular relevance to the present

study.

Womack and Jones (1994) reported that elimination of waste in every area of production
including customer relations, product design, supplier networks, and factory management
is the major aim of lean production system. They viewed that the major goal of lean
system is to eliminate everything that does not add value to the product or service.
According to Todd (2000), this manufacturing philosophy directly and indirectly helps in
reducing the waste in human effort, inventory, product delivery time and in production
space and, thus the organization can become highly responsive to customer demand by
producing world class quality products. A s stated by W o m a c k et al. (1990, p.7) the
principles of lean production "can be applied equally in every industry across the globe ".
According to Poppendieck (2002), n o w the concept of lean production spread to logistics,
and from there to the military, to construction and to the service industry. "Lean
production will supplant both mass production and the remaining outpost of craft
production in all areas of industrial endeavor to become the standard global production
system of the 21s' Century" ( W o m a c k et al., 1990, p.278). In mass production, narrowly
skilled professionals use expensive single purpose machine to design products
(Poppendieck, 2002). The same study showed that, these churn out standardized products
at high volume. The mass production system adds m a n y buffers such as extra suppliers,
 23

extra workers and extra space to assure smooth production. O n the other hand craft
production use highly skilled personnel but general purpose machineries ( W o m a c k et al.,
1990). The lean combines the benefits of both craft and mass production by avoiding the
high cost of craft production and rigidity of the mass production ( W o m a c k et al., 1990).

"Recent movement suggests that many automobile manufacturers are actively adopting
the lean concept and most auto manufacturers have now adopted at least some aspects of
this system" ( W u , 2003, p. 1349). Firms adopt lean production system primarily to
increase productivity, reduce lead times and cost, improve quality, etc. (Sriparavastu and
Gupta, 1997). Lean production system has a track record of facilitating organizations to
manufacture a large variety of products at lower costs and higher quality with less of
every input (Dankbaar, 1997). "Lean production is a culture that becomes ingrained in
the workforce of a company. It focuses on processes. It is not merely a management
technique based solely on results" (Manufacturing Housing Research Alliance, 2005,
p.3). W o m a c k and Jones (1994) viewed the lean production system as a way of thinking
and as a whole system-approach that creates a culture of continuously improving
operations in organizations. The authors refer to the organization as a system. Lean
thinking needs to understood and implemented from a holistic, systems level approach,
encompassing business processes at every level.

2.7 Toyota Production System (TPS)

The concept of lean manufacturing or lean production, as already stated, was first
introduced in Toyota (Sohal and Egglestone, 1994). Over a period of 20 years, this
system was popularly known as Toyota Production System. This is a manufacturing
methodology which involves activities that maximize value by reducing all forms of
waste.

Taichii Ohno, the vice president of manufacturing for Toyota is credited as being the
father of T P S and he was the driver behind the creation of the Toyota Production System
(Sohal and Eggelestone, 1994). Under this system the manufacturing processes are
 24

classified as adding value or waste. The most difficult task for a company is to define
value properly. Toyota Production System has focused on this issue with very elegant
solution. Value actually means any feature or item for which customers are willing to pay
(Vorne - n.d.). "The fierce competition imposed by mass production systems during and
after the world war II era led the Toyota Motor Company (TMC) to a thorough study of
the production system of the American automobile industry and in particular for the Ford
Production System (FPS) (Papadopoulou and Ozbayrak, 2005). The solution offered by
Toyota led to a complete reconstruction of the company and they developed an
alternative production system referred to as the T P S , which aimed at directly attacking
any form of waste in the production process (Ohno, 1988).

During 1949, EiJi Toyoda visited the world's largest automobile manufacturer (Ford) and
realized that, there was too much waste everywhere (Dahlgaard and Dahlgaard Park,
2006). "There were wasted manpower, efforts, materials, space and time, i.e., muda of
manpower, muda of transport, muda of inventories and excess processing, muda of
defects, muda of waiting, muda of facilities " (Dahlgaard and Dahlgaard Park, 2006, p.2).
"Inspired by the waste elimination concepts developed by Henry Ford in the early 1900s,
Toyota created an organizational culture focused on the systematic identification and
elimination of all wastes from the production process" (EPA, 2003, p.8). This innovation
pioneered at Toyota has been used in many other organizations and industries. Toyota's
market leadership in the industry m a y be, to a large extent, attributed to its ability to meet
the increasing challenges for survival through lean production system. It needs to be
noted that "Lean manufacturing, pioneered by Toyota, involves inventory and quality
control, industrial relations, labor management and supplier-manufacturer practices "
(Wu, 2003, p. 1349).

Toyota Production System (TPS) focuses on the reduction and elimination of waste
within the factory environs (Ohno, 1988). Figure 2.2 presents the T P S along with its
major components and the results for a sample year. The in-built ingredients of T P S
include 5S, suggestion system, visual control, defect warning, total preventive
maintenance, and standard operations. These are the building blocks of T P S . A s is
 25

evident from Figure 2.2, Toyota received in a sample year over 700,000 improvement
suggestions from the employees at all levels of which more than 99 percent were
implemented, and as a result, the company achieved unparallel global competitiveness
(Liker, 2004; Phan and Matsui, n d ; Ohno, 1988). Toyota's success in the lean practices
imbued hundreds of other companies across several industry sectors to replicate Toyota's
advanced production methods to address their operations (EPA, 2003). A recent book
about Toyota System by Liker (2004) describes the management principles of Toyota and
claims 'Toyota' as the world's greatest manufacturer.

Lean Manufacturing
Toyota Production System

Toyota Production System

Results for a sample year

More than 700,000

improvement
5S suggestions
7 Wastes That is an average
Just Iri Suggestion System of over 10
Visual Control Autonomation improvement
Time
Defect Warning suggestions per
(JIT) employee per year
Total Preventive Over 9 9 % of
Maintenance (TPM) suggestions were
Standard Operations implemented

Load Leveling

Figure 2.2: Toyota Production System

Source: 1000 Ventures-Lean Manufacturing Case Study (n.d.)
 26

2.8 Lean Practices in Japan

It is said that Japan was the birthplace of lean production (Sohal and Egglestone, 1994
The changes in the economic and competitive climate in Japan led the manufacturing
organizations to devise innovative and cost-effective production methods. And, this
encouraged the organizations to look for a revision of the production models as well as
the Japanese management system (Bartezzaghi, 1999). While the overall Japanese
economy has suffered, some well organized Japanese manufacturing companies such as
Toyota, Honda, and Canon still remain competitive in the global market (Phan and
Matsui, n.d.). This is because of the Japanese o w n w a y of management such as JIT
production, T Q M and concurrent engineering (Morita, Sakikibara, Matsui and Sata,
2001). These are considered as the main strengths of the Japanese manufacturers, besides
their technological advantages (Sakakibara, Flynn and Schroeder, 1993; Morita et al.,
2001; Matsui and Sato, 2002). After World W a r II when Japanese manufacturers realized
that they could not afford the expense to build facilities like the U S A , they concentrated
on lean concept (Pavnaskar, Garshenson, and Jambeka, 2003). They began the process of
developing and refining the process of manufacturing with a view to minimize waste
(Thompson and Mintz, 1999).

Different factories of Japan have started to use this system after it has been implem
in Toyota. After Japan, the U S firms became interested to this concept followed by the
European countries. But now the Asian countries as well as other countries of the world
are also using this technique to meet their customer's requirement (Mazany, 1995; Bruce,
Daly and Towers, 2004).

The last two decades have seen the top Japanese manufacturing firms have achieved
excellent international competitiveness in a number of industries such as auto, electronics
and machinery (Wu, 2003). They have achieved success due to their different ways of
doing business. Hall (1983) and Schonberger (1982) argued that the Japanese developed
a new approach to manufacturing management. The book by W o m a c k et al. (1990), 'The
Machine That Changed the World', benchmarked manufacturing companies around the
 27

world and found, at the time, the Japanese manufacturers were typically more productive
and efficient than their Western counter parts. Taichii O h n o in his book 'Toyota
Production System' explained the foundations of lean manufacturing and showed that
these principles guided the Japanese companies to be world class (Ohno, 1988).
Literature revealed that Japanese firms are superior in performance compared to the
European firms because of the introduction of lean in manufacturing sectors (Sohal,
1996). D u e to the differences in the strategies and practices, Japanese firms were highly
focused on lean practices and followed integrated single piece production flow, low
inventories, small lot sizes, defect prevention rather than rectification, pull production,
team-based work and active involvement in problem solving to eliminate all non-value
added wastes. These practices helped them become superior in performance compared to
other countries. Manufacturing priorities in Japan are quite different from that of the U S A
and European manufacturers. A s stated by Sohal (1996), the main goals of Japanese
manufacturers are improving quality, reducing costs, and product development. Oliver et
al. (1993) in their study of 18 auto component plants (nine U K firms and nine Japanese
firms) reported that five plants displayed high performance on measures of productivity
and quality. All of them are located in Japan. These companies showed consistently
superior performance on a number of measures, and thus provided support for their lean
production system. A s stated by Morita et al. (2001), Japanese could still be competitive
because they have not yet lost their competitiveness.

2.9 Lean and the West

The lean production concept attracted the increasing attention of West during the 1970's
(Simpson et al., 1998). "In the 1980's a massive paradigm shift hit factories throughout
the US and Europe" (Poppendieck, 2002, p.l). This concept is popularized in many
Western industrial companies since the early 1990s (Sanchez and Perez, 2001). "Western
companies concentratedfirston high levels of technology and then on slimming down
production, while the Japanese initially proceeded in organizational terms and
subsequently used technology, in particular to reduce stress and make work more
comfortable and motivating" (Bartezzaghi, 1999, p.235).
 28

The International Motor Vehicle Program ( I M V P ) was a 5-year (1985-1990) program

into the performance of the global motor industry ( W o m a c k et al., 1990). It is said that
John Krafcik, w h o was an I M V P researcher, originally coined the term "Lean
Production" and it is a result of the benchmarking of the I M V P (Dahlgarad and
Dahlgarad Park, 2006). A s stated by Knuf (2000), benchmarking helps the organization
to gain knowledge by offering experiences that is deemed to be the best practices. The
study of I M V P reveals that there is a 2:1 productivity difference between car assembly
plants in Japan and Western countries. This performance difference was shown as a result
of lean production practice. A s stated by Adler and Cole (1993), "lean Production" model
in the N U M M I plant (Toyota-General Motors' Joint Venture) is more effective model for
organizational learning compared to Volvo's Uddevella plant which is based on the
"human centered model". The authors argued that the prime reason in N U M M I ' s
productivity superiority is its effort to make constant improvements in the production
process. "The intense discipline created by NUMMI's job design creates not only world-
class performance but also a highly motivating work environment" (Adler and Cole,
1993, p.89).

Whybark and Vastag (1993), in the global manufacturing practices research project,
indicate the significant differences in the eastern and western manufacturers in the
machine tools and textile industries. While there are m a n y reports of the successful
introduction of lean programs by the Western organizations, at the same time there are
several reports of failures (Sohal, 1996).

In a study in the UK, Hanson and Voss (1993) showed that adoption of a range of lean
production practices has a direct relationship with improvements in performance. Their
findings suggest that there is no short cut w a y for the low performance companies to
become world class. The success depends on the adoption of relevant practices. It is also
revealed from the study that the larger the company the more likely it is to have adopted
best practices. A study by Papadopoulou and Ozbayrk (2005) reported how
implementation of lean tools and technique had brought tremendous success for two U K -
 29

based manufacturing companies. In this study, company A was the largest manufacturer
of Marine Electronics in the world. The main aim of the transition of the company was to
improve the customer satisfaction through the minimization of lead time. Before the
change initiatives, the company went through an efficiency assessment and then
developed a road m a p describing the necessary steps to the transition of leanness. After
the lean implementation, the company showed 4 6 % increase of productivity and 5 6 %
reduction in lead time. For achieving these improvements the company took initiative on
development of multi-skilled workforce, the improvement of workforce morale and team
work. The necessary steps taken by the company to become a lean firm were value
stream mapping, lean awareness training, review design for manufacturer ( D F M ) ,
Kanban, single piece flow, 5S and continued practicing of single minute exchange of dies
( S M E D ) process. O n the other hand, in the same study, the company B which is a
London-based engineering company introduced lean with a view to reduce the lead time
and manufacturing costs. Recent developments in the aerospace industry affected the
company adversely. This demands a need for improving its competitive advantage. Both
the companies adopted a considerable number of critical and most commonly utilized
lean tools and techniques with well-defined plan. B y following full tooling evaluation
and 5S review, updating shopfloor layout, practicing set up reduction, initiating 5S audit
process etc., company B gained 5 0 % improvement in productivity and 2 6 % improvement
in on-time delivery, among others. It is revealed from both cases that a successful
transition from a traditional manufacturing to a lean organization requires a review of
"change" and "change management".

A recent study by Bonavia (2006) focused on the degree of some of the most
representative lean production practices in the Spanish ceramic tile industry. This
Ceramic Tile Industry is a good example which indicates that all the practices are not
suitable for all the types of industries. Practices such as Kanban, set up time reductions
and multi-function employees play a very important role in performance improvement.
However, in the Ceramic Tile industry these tools had very limited implementation. But
standardization of operations, total productive maintenance and quality controls had a
very widespread use in this sector. By practicing the aforementioned lean tools the
 30

companies achieved nearly 9 0 K of prime quality goods as well as redueed the lead ttme.
Forza (1996) eondueted another study involving Italian lean and non-lean manufacturmg
companies. In mis study, the author focused on the extent to which teams were used ,n
problem-solving comparing lean and non-lean companies. Findings indicated mat lean
production companies use more teams in problem-solving than the non-lean compan.es.
The workers perform a higher variety of tasks in the lean production companies and that
the proportions of implemented suggestions were higher than in non-lean production

companies.

Australian manufacturing firms are also successfully adopting the lean production
concepts. A s stated by Sohal (1996), C o m p a n y like Trico Australia - a manufacturer of
windscreen wiper systems for the automotive industry in Australia, has experienced
significant success with lean production system. Trico's manufacturing identified
inefficiencies in production operation such as high level of inventory, poor quality and
inflexible manufacturing system. The company first started its lean journey with JIT
production system. It then gradually introduced other lean techniques such as Kanban,
check sheet system etc. After the adoption of lean a dramatic change has occurred in the
company structure. Compared to the pre-lean period it became more profitable,
competitive and successful. But Trico had to overcome several problems and difficulties
to get this success. This means that lean production brings obvious benefits for the firm
but it requires planned change program.

While Samson et al. (1993) and Dawson and Palmer (1995) described the successful
adoption of a variety of lean production programs in Australia, Sohal (1996) has given
evidence of failures. It is documented from several studies that organizations had to face
and overcome several problems and difficulties in implementing lean, such as increasing
realization about the better ways of performing task, changing the attitudes of shop-
floor personnel, and also developing and maintaining discipline on the shop-floor etc.
Another study by Sohal and Egglestone (1994) indicates that while senior and middle
managers are the main change drivers in lean practice, sometimes they become the
resisters. In their study they showed that some companies had faced resistance from 4 9 %
 31

middle managers, 3 1 % senior managers and 3 7 % shop-floor personnel. This resistance is

due to the fear of unforeseen environment. Careful education and training can change the

mind of the people in the organization.

2.10 Lean Practices in the USA

Lean manufacturing as well as the Just-in-Tine (JIT) system (Toyota, 1988; Womack et

al., 1990) have attracted much attention in the United States from both academia and

industry. Traditional American business practices differ from lean practice which

involves inventory and quality control, industrial relations, labor management and

supplier manufacturer practices (Wu, 2003). Due to high competition, U S firms are now

highly interested to move toward this Japanese concept. Many U S firms have adopted

this technique in their manufacturing plant and have achieved great success (Cusumano

and Takeishi, 1991; Liker, 1997). As stated by Maccoby (1997), one fourth of U S plants

have tried to adopt the entire system of lean. Several situations are available regarding

lean practices in the U S firms. "Lean Manufacturing is a leading manufacturing

paradigm being applied in many sectors of the U.S. economy, where improving product

quality, reducing production costs, and beingfirstto market' and quick to respond to

customer needs are critical to competitiveness and success. Lean principles and methods

focus on creating a continual improvement culture that engages employees in reducing

the intensity of time, materials and capital necessary for meeting a customer's needs.

(EPA, 2003, p.l). "In the case of the US auto industry, it is not uncommon that

automakers pay for the transportation. Therefore, if a supplier is armed with the lean

system, the suppliers can keep its inventory to a minimal level and lower its expected

stock out costs. Therefore suppliers who adopt internal lean production practices shoul

be more compatible with the buyers JIT logistics requirements " (Wu, 2003, p. 1351)

Two studies in the area of lean practice (Fullerton and McWatters, 2001; Oliver,

Delbridge, Jones and Lowe, 1993) have successfully shown that quality, productivity and

financial performance can be improved through practice of lean production. Fullerton

(2003) conducted a study on 253 U S manufacturing firms. From the study results the
 32

author concluded that thefirmsthat implement and maintain JIT (an important element of
lean production) manufacturing systems will reap sustainable rewards which were
measured by improved financial performance. Financial performance is directly related
with manufacturing performance. They have improved their performance through
changing their traditional business pattern. A s shown by Nakamura et al. (1998), the U S
and Japanese owned manufacturing firms have introduced lean in their plants. In the
United States in three different industries they have observed significant performance
improvement. Another study conducted by Germain and Droge (1997) on 200 U S firms
have also showed improved inventory,financialand market performance and adoption of
JTT purchasing techniques. The case studies (EPA, 2003) on Boeing C o m p a n y , supported
by E P A , observed several environmental benefits after implementing lean tools and
techniques. Boeing showed a 3 0 % to 7 0 % resource productivity improvement w h e n lean
production programs were implemented. Boeing Everett, Washington production facility
has implemented a lean chemical point of use technique which has contributed towards
reduction of machine movement and downtime. This technique has lowered chemical
usage by 1 2 % per place (EPA, 2003).

2.11 Lean Practices in Other Countries and in Different Industries

The lean concept is equally applicable to any industry. It was originally developed in
automotive production environment, but the principles and techniques are transferable to
any industry such as electronics, ceramic, steel, textiles as well as in service sectors. High
competition, increasing operation costs, and growing operational problems led m a n y
manufacturing companies around the world to understand Japanese manufacturing
practices. A s stated by Kilpatrick (2003), lean makes an organization more responsive to
market trends, deliver products and services faster and produces products and services
less expensively than non-lean organization. A s viewed by W o m a c k and Jones (1994),
firms in several industries in North America, Europe and Japan followed this path and
doubled their performance through reduction of inventories, throughout times and errors.
 33

A number of studies have been undertaken bearing upon the relationship between lean
practices and manufacturing performance of the firms (Papadopoulo and Ozbayrak, 2005;
Bonavia, 2006; Simpson et al., 1998, E P A , 2003; Oliver et al., 1993) and also have
showed the improvement in manufacturing through lean practice. Chihuahua (Society of
Manufacturing Engineers, 2007), the producer of world class power and signal
distribution system of Mexico, reviewed its existing manufacturing system and identified
the need for improvements. The company introduced lean with a view to improve the
current performance. It is documented from the study that implementation of lean
brought 3 4 % reduction in inventory over a 12 months period and 9 3 . 5 % uptime. The
study showed that the keys to achieving quality in manufacturing include the flexibility
of the production system, and involvement and commitment of employees.

Another study on DENSO Corp. in Maryville (Society of Manufacturing Engineers,

2007), which is the world's second largest manufacturer of advanced technology,
components and systems for major automakers, showed a dramatic change after the
introduction of lean production system. The company adopted a wide variety of lean tools
that brought several successes for the organization such as: T S 16949 and ISO 14001
certifications as well as D E N S O Global Presidents Award for Kaizen. The use of these
lean tools and techniques reduced 9 5 % of manufacturing waste, 3 2 % of defects rate, 3 2 %
of warranty cost, and brought multiple quality, delivery and service awards.

Application of lean can bring 'considerable' benefits for the organization which reflects
in the output andfinancialposition of thefirms.According to Alukal and Manons (2002),
a planned implementation of lean production system leads to improved quality, better
cash flow, increased sales, better productivity, improved morale and higher profits. They
further reported that companies earned greater benefits by implementing lean techniques
in the office functions in non-manufacturing organizations too, such as banks, hospitals,
restaurants etc. A study on a Novartis International A G - A Switzerland-based company
(Society of Manufacturing Engineers, 2002) reviewed their production process and
realized the need for some improvement. They introduced lean picking system for the
movement of the goods from the warehouse to the packing lines. This redesigned
 34

material supply is a kind of Kanban system. Through this picking system the company
reduced its waste to a good extent. B y using this system they were benefited in terms of
waste elimination from the redesigned material supply process. The study w a s anticipated
that this lean picking system would facilitate faster picking lines as well as would shorter

the run times.

As stated by Narain and Yadav (2004), "Since the advent of economic liberalization in
the early nineties the manufacturing scene in India has witnessed major upheavals.
Reeling under the heavy burden of stiff international competition, Indian manufacturers
throughout the country has now begun to place grater reliance on their own strengths to
harness the latest technologies available, and to pursue the best management practices
followed elsewhere in the world in an attempt to become lean and agile". The several
sectors of India were and are still facing relentless pressure on prices as a result of
heightened competition. In this crisis situation Indian firms have achieved positive results
through lean manufacturing. In India, three case studies indicate that lean manufacturing
practices helped the companies (in the engineering products industry) achieve
improvements to a significant extent, in such areas as turnover ( 3 6 % - 5 0 % ) , production
setup time (74%), machine d o w n time (60%-100%), production space ( 1 7 % - 4 5 % ) ,
delivery against schedule (21%), product rejection by customers (50%), productivity
awareness (increased dramatically), quality awareness increased steadily, scrap reduction
(75%), increase of workforce flexibility (57%-100%), and staff motivation improved
significantly (1000-Venture, 2007). Another case study was conducted by Simpson et al.
(1998) on a Malaysian automobile company, Proton, to develop an understanding of a
Malaysian version of JIT. Proton is the largest and modern automobile manufacturer of
South East Asia. The company use robots and automation in production processes. It
introduced Kanban - various types of containers for holding components or movement of
components. It also introduced several supporting mechanisms to complement the use of
JIT system and organized training program for the employees. All these reduced work in
progress from three months to one month of supply, 5 0 % of space required and brought
improvement in inventory turns from 15 to 31. Although several constraints had been
faced, the study showed the success of the company with m a n y benefits.
 35

The Japanese lean production concept has faced the same criticisms as those brought
against the Toyota model in the 1980's (Doshe, Jurgens and Maleh, 1985). While m a n y
studies reported positive results of practicing lean, at the same time few other studies also
indicated its problem of implementation. C u s u m a n o (1994) identified several limits of
lean production reflected in its undesirable effects. O f these, the noteworthy ones include
the excessive product variety, the extreme pressure on suppliers, the inability to find
funds for n e w product development, and the increase in traffic and congestion in the
cities. Keeping this kind of limitations in view, Berggen (1994) and Ellegard, Jonsson,
Engstorm, Johansson, Medio and Johansson (1992) advised not to consider lean
production as a break with the previous paradigm, rather they suggested to consider it as
a revamping of its typical features such as rigid standardization, the excessive division of
work, the definition of restricted roles, short work cycles and a hierarchical organization.

The number of those countries is very few where the principles and advantages of lean,
its strong influence and its related important methodologies such as JIT, T Q M , and T P M
have not been felt (Katayama and Bennett, 1996). Katayama and Bennett are of the view
that with the spreading of lean thinking to every country in the world, non-manufacturing
organizations are also adopting the lean tools and principles. These include logistics and
distribution, services, retail, healthcare, construction, maintenance, and even government.

Introducing lean is not an easy play. "Lean is not a system with universal applicability,
as its proponents claim " (Cooney, 2002). It is argued by the same author that existing
production systems have enduring value in their o w n right, because lean is not a suitable
production system for all firms in all circumstances. It requires several changes such as
multi-skilled workforce, organizational structural change, downsizing of the workforce
etc. which cause resistance from several quarters.

It is documented from a study (Sohal, 1996), that lean production practice requires
changes in several areas of the organization such as product design, inbound logistics,
manufacturing processes, and outbound logistics. Katayama and Bennett (1996)
 36

conducted a study on four manufacturing companies in Japan to examine the role and
significance of lean production within the context of current industrial and economic
environment. The overall message from the study was that lean production in its currently
defined form was proving to be deficient as a solution to m a n y of the problems faced by
the companies. A study by Swenseth and Buffa (1990) indicates that lean implementation
increased the total logistic costs of a manufacturer as well as its vendors. The cost-
increases took the form of increased transportation, inventory carrying etc. W h a t is
needed is the more versatile design of production system which allows for changing
circumstances, which m a y be called 'adaptable production.' Literature (Clare and Dennis,
2005) reveals that organizations achieved success by using lean through training and
involving the employees in different activities. Lean producers achieve competitive
advantages due to their ability to adopt strategies to reduce costs through waste
elimination (Clare and Dennis, 2005). It is suggested by Cooper (1996) that, to
successfully engage in capturing greater market share by using the competitive
advantages, a firm must become expert at developing low cost (and high quality)
products that customers demand.

As stated by Birmingham (2006), many companies often fail to become truly lean
because they do not have the appropriate corporate culture and internal environment to
implement and maintain a lean system. Benefits from lean practice require fundamental
changes in the organization's culture. Culture refers to people's w a y of life, the w a y they
do things. To some, it means the outlook or opinion of an entire society which can be
reflected in these words, books and writing, religion, music, clothes, cooking etc.
Different regions or countries have separate cultures.

Relationship with suppliers and JIT delivery are some important factors to get success
from lean implementation. Helper (1991), in his study, indicates that it is important to
encourage customers and suppliers to develop capabilities of JIT production as well as
JIT delivery to enhance long-term competitiveness. In the same study the author argues
that, according to the Japanese automakers, a skilled and loyal supplier base could be a
key source of competitive advantage.
 37

Studies indicate that a paradigm shift is difficult in companies where there are problems
of employee turnover, employee morale, product quality, product delivery, equipment
uptime, plant housekeeping etc. (Birmingham, 2006). If the employees cannot be shifted
to a n e w way of thinking, they will not be able to properly implement lean. The decisions
involved in whether or not to adopt lean production are part of a larger range of strategic
choices (Kochan, Lansbury and MacDuffie, 1997). Various studies also reveal that lean
implementation requires a series of efforts. These include: standardization of work
practices (Emiliani, 1998), visual factory and management (Hirano, 1995; Forza, 1996);
use of kanban (Ansari and Modaress, 1995), and application of total productive
maintenance approach (Al-Najjar, 1996; Bember, Sharp and Hides, 1999).

Enabling Environment for Lean Implementation

Existence of cross-functional teams throughout an organization is considered an essential

component of the implementation of lean production systems that contribute towards
effective implementation of T Q M , for 'team-work builds trust, improves communication
and develops independence' (Oakland, 1988). Murgatroyd and Morgan (1993) argued
that to implement T Q M , an organization has to be a learning organization, for which it is
necessary to build teams. They further argued that teams are self-managing and
autonomous, they learn to set their o w n goals, working methods, and means to assess
achievement or failure. The literature suggests that key staff members from the primary
organizational units involved in the process should be included in the teams (Achanga,
Shehab, Roy and Nelder, 2006). Research indicates that use of cross-functional teams
results in superior performance (Chutima and Kaewin, 2007).

Another lean enabling factor is quality supportive corporate culture. For any change
program like lean system, a supportive organizational culture works as an important
platform. Literature indicates that successful companies have a culture of sustainable
improvement (Achanga, Shehab, Roy and Nelder, 2006), although it is very difficult to
create an organizational culture in order to sustain a successful lean journey (Makeham,
2002; Koenigsaecker, 2005; Achanga et al., 2006). For successful implementation of JIT,
 38

a change in corporate culture has been regarded as one of the major c o m m o n

infrastructure supports (Lau, 2000). Manoochehri (1988) and MusselWhite, (1987) argue
that culture is the most critical element to the JIT implementation by the Japanese.

Empirical evidence suggests that employee empowerment and involvement are essential
for implementation of lean (and business process reengineering) practices, along with
gaining employees' trust and commitment (Chutima and Kaewin, 2007). Successful lean
implementation also requires a responsible trade union in organizations. Unionization
seems to be an important factor for implementation of innovative work practices although
the direction is not exactly clear. Also, it has not been widely investigated in association
with a wider set of lean manufacturing practices, with the exception of Shah and W a r d
(2002). Although there is evidence that unionization status does not have a significant
impact on extensive implementation of most lean practices than conventional wisdom
suggests (Shah and Ward, 2002), evidence is available about the impact of trade union on
lean practices (Karim, 2008; Mannan and Ferdousi, 2007). These authors argue that
responsible trade union plays a vital role in the implementation of lean production system
in the manufacturing organizations. There are instances in which unions have been
cooperative and helpful in the lean implementation process (Katz, 1985; Capelli and
Sherer, 1989).

Lean implementation is facilitated by top management commitment and leadership.

Evidence indicates the necessity of top management leadership and commitment/support
for successful implementation of lean techniques such as JIT (Mannan and Ferdousi,
2007). Top management commitment and support for an environmental sustainability
strategy must extend beyond providing the financial recourses necessary in order to
implement quality production process like JIT. A mission statement that clearly states an
organization's commitment to environmental sustainability decreases the likelihood that
managers will exhibit by dysfunctional behavior concerning the environment (Heard,
1992). Full support by top management is required to empower middle management to
overcome the inevitable road locks in implementation of JIT. Most authors put top
management support as the most important factor in achieving long term and complete
 39

implementation of JIT (Hall, 1983; Harber, Samson, Sohal and Writh, 1990; Hay, 1988;
Lee and Ebrahimpour, 1984; Sohal, 1993). Leadership for quality is considered as one of
the foundations of JIT/TQM and lean production (Flynn et al., 1994; Deming, 1986; and
Leonard and Sasser, 1982). Empirical research has supported the link between quality
leadership and improved quality (Dale and Duncalf, 1985).

Investment in training is another important lean enabling factor. To be successful in the

implementation of lean practices, organizations need to be ready to invest in training of
employees. A study on using lean and business process reengineering model for
improving agility suggests that "to gain awareness from both employees and staff, it is
extremely important to train and educate them in kaizen activities" (Chutima and
Kaewin, 2007), which is in congruence with the findings of other studies (e.g.,
Armistead, Harrison and Rowlands, 1995; Armistead and Machin, 1997; Fowler, 1998).

2.12: Section B Conclusion

Overall, literature review suggests that although lean practices in various countries have
resulted in a variety of production-related gains, they are susceptible to failure in
organizations and cultures where there is a lack of paradigm shift from the traditional
manufacturing patterns along with the incapability of the management to bring obligatory
changes in all areas of the organization.

In association with the above facts, an attempt would be made in the following section to
bring to light the situations of garment industries in a resource-poor developing country
of South Asia where the study was conducted to explore the extent of lean practices and
the existence of enabling environment for lean implementation.
 SECTION: C
Garment Industry: An Overview

2.13 Introduction

The garment industry is a very important sector and simultaneously contributing to the
national economy of different countries especially in the developing world (Dicken,
1998, Jones, 2002, Dickenson, 1995). This section reviews the literature surrounding the
area of the global garment industries, garment industry in Bangladesh and the practice of
lean in the garment industries of different countries of the world.

2.14 Background

The garment industry has been playing a crucial role in the economic development in
many countries in the world such as China, H o n g Kong, Sri Lanka, India, Vietnam,
Mexico, etc. In Bangladesh, in particular, this industry plays a very significant role in the
economic development in terms of employment generation and earning of foreign
exchange. It employs a large number of people, mostly dominated by w o m e n workforce.

The pressure placed on firms in the garment industry from international competition and
dynamic changes in the retail sector have been enormous. "The increase in competition
has led to an increasedfocus on customer satisfaction as a survival of the company in the
long run" (Kapuge and Smith, 2007, p.304). In today's competitive business world, firms
are fighting against each other just to ensure their survival. In this highly competitive
business market, the garment industry is also searching for ways and techniques to cut
cost and improve performance. W h e n other industries are facing high pressure from
competitors, the garment industry is also facing challenges such as- price, delivery time
and service offered etc. This industry has opportunities to improve, but requires some
 41

changes. Under the highly competitive environment, the garment industry has numerous
opportunities for improvement using lean principles (Mercado, 2007).

Through the implementation of lean the garment sector can reduce costs, as well as
increase customer responsiveness through reducing several types of waste from the
production process. Customers demand quality products and on-time delivery. Lean
practices can fulfill these requirements by reducing lead-time as well as manufacturing
cycle time. N o w , m a n y countries have started to practice lean tools in the garment
industry and observed tremendous improvement (Mazany, 1995; Bruce et al., 2004). This
practice has improved their productivity, quality and lead-time and also m a d e their
customer more responsive. In addition to this lean production involves, motivates and
develop employee skills through education and multi-skilling program (Mazany, 1995).

2.15 Garment Industry: A Global Perspective

The ready-made garment (RMG) is a labor intensive industry which generally use low
technology (Rashid, 2006). Due to foreign competition, the ready-made garment sector
is facing high demands for more styles, in smaller orders and shorter cycles of
production. The global business scenario of the R M G sector is changing rapidly, and is
heavily dependent on lead-time and price. The industry itself needs to be restructured and
repositioned (Spinanger, 2001). In this crucial situation, lean production aims to reduce
lead-time and price by reducing various types of waste from the manufacturing process.

Several countries are doing very well in garment manufacturing while others lag behind.
Until the early 1980's India and Sri Lanka were the major South Asian suppliers of
readymade garments to the U S A and Western Europe (Spinanger, 2001). India is
exploiting this industry for economic growth (Dicken, 1998; Jones, 2002; Dickenson,
1995). There are approximately 30,000 ready-made garment manufacturing units in
India. The Indian garment industry has become a major market internationally. "The USA
and Bangladesh continue to be the largest markets of Indian Cotton Textiles with a share
of over 10% in total exports " (Indian Apparel Portal,n.d). W h e n India has positioned
 42

itself in the international market, because of large scale textile industry, Pakistan has also
attained credible position in the world. In the production of cotton it ranks fourth while in
the consumption of cotton it ranks third in Asia (fibre2.fashion, 2006). But right n o w the
Pakistani garment industry is in a stagnant condition because of higher production costs.
Compared to Bangladesh, India and China, exports of Pakistan textiles are not praise
worthy. Currently the biggest exporter of textiles and garment products is China ( H K C I C ,
2004). The workforce is mainly made up of young w o m e n . The Chinese companies have
the ability to produce products at short notice which earns them a competitive advantage.

Research (Storey, n.d) has also shown the importance of the garment industry in the
economy of Fiji. It is revealed that, in Fiji, the garment industry became a critical part of
its economic structure. Immediately before 2000, it was exporting more than $F300
million in garment to Australia, the U S A , Europe and N e w Zealand (Storey, n.d). The
garment industry is contributing significantly to the Fiji economy.

While several countries are doing very well in this industry, literature (Bruce et al., 2
indicates that the clothing manufacturing industry of United Kingdom ( U K ) has been
facing major problems during recent years. According to Warner (2001), globalization is
a major factor affecting the U K manufacturing industry and threat from low labor cost
countries is the biggest problem. Labor, working conditions and wages are some critical
political issues in the worldwide garment sector.

In Australia, the garment industry has flourished based on outsourcing. Its contribution
the Australian economy is also significant, accounting for around ten percent of the
manufacturing sector ( A N Z , 2005).

Bangladesh always enjoys low wages because of labor surplus economy (Rashid, 2006).
The wage structure in Bangladesh R M G sector is not only lower in comparison to other
countries but almost other domestic industries such as leather, jute, food, beverage,
chemical, plastic etc. A s a result of inadequate production processes and methods,
productivity and thus efficiency is still relatively low. Compared to the other main
 43

competing countries where garments are being produced, Bangladesh scores well
(Spinanger, 2001). The global export of textile and apparels has substantially increased in
2005 (US$ 275.6 billion with a growth rate of 6.4 percent) (Rahman et al., 2007). D u e to
the phase out of the M F A (Multi-Fiber Arrangement-"MFA is a series of literally
negotiated quota restrictions on trade in textiles and clothing between individual
developed country importers and developing country exporters. Under the quota, the
exporter is allowed to supply a certain volume of textile and clothing products up to a
specified ceiling and it is up to the exporter to allocate the quota allowance among its
domestic producers" (Rahman et al., 2007, p.4). Bangladesh is n o w under great
competition. It becomes a constraint for Bangladesh because it opens free market for
other competitors also. The next section will provide an overview of the Bangladeshi
garments industry.

2.16 Garment Industry in Bangladesh

Previously, the jute and tea industries were the largest export oriented sectors of
Bangladesh (Rahman, 2004). The same study reported that gradually the manufacturing
sector, especially the garment industry, has received greater attention. "Among the top
two dozen major exporters of clothing products in 1998 none has grown faster than
Bangladesh since 1980's" (Spinanger, 2001, p.l). The garment Industries in Bangladesh
stand as an unique example of poor developing nations which has taken the advantage of
participating in the global economy for fast economic development facilitated by recent
trends in globalization (Quddus, n.d.).

Linking to the historical development of garment industries in Bangladesh an analysis of

Bair and Geriffi (2002) can be considered. They have described the migration of garment
production in four distinguished phases in their analysis. According to Bair and Geriffi,
(2002), the first migration took place in the 1950s and the early 1960s from North
America and Western Europe to Japan. In the second phase Japan transformed the same
to the Asian Tigers-South Korea, Taiwan, Hong-Kong, and Singapore in 1970's. These
Asian Tigers transform the production to other developing countries namely the
 44

Philippines, Malaysia, Thailand, Indonesia and China in the third phase of migration
( C A F O D , 1998). The fourth phase includes Bangladesh, Sri Lanka, Pakistan and

Vietnam in 1990's.

In respect of industrialization, Bangladesh historically lags behind even the major sub
continental countries such as India, Pakistan, and Sri Lanka (Mannan, 1993). The textile
sectors of Bangladesh are highly attractive for foreign investors. Since the late 1970s, the
fully export-oriented garment industry of Bangladesh has witnessed significant growth
(Rashid, 2006). Countries such as India, Pakistan, Sri Lanka, China etc. are n o w the main
competitors of Bangladesh in the garments sector. "This sector has weakness in some
areas such as lack of diversity in export market, high concentration in a few products,
and long-lead-time etc. " (Rahman, 2007, p.3). D u e to the strong competition, Bangladesh
has made tremendous development in professionalism, supplier network, shortening lead-
times, quality, human resource etc. (Rashid, 2006). Bangladesh has gained considerable
attention from developed countries due to the low labor cost and quality product. In terms
of export, the country is gaining a better place in the export sector. Its exports are
gradually increasing in a linear fashion. For example, Bangladesh's export of R M G
increased from U S $ 40 thousand in 1978-79 to U S $ 6.4 million in 2004-05 (Rashid,
2006). In terms of employment also, its contribution is substantial in that it employs over
3 million workers of w h o m 9 0 % are w o m e n (Begum, 2001).
 45

Apparel Export of Different Countries to US in the First Half of 2006

7000 * . ... ~-<-

Q 6000
10
=J 5000
c 4000
o
E 6618
3000 '- , ' .., . .;.__

_c
-e 2000
o 1000
D.
1819 ,______ 1324 h { 817
'j
| 623'i
X 0
UJ Pakistan China India Bangladesh Srilanka
Countries

Figure: 2.3 Apparel exports of different countries to U S in thefirsthalf of 2006

Source:fiber2fashion,2007

Before phasing out, the Multi -Fiber Arrangement ( M F A ) in the North American market
and preferential market access to European markets were dominant factors for the success
of the Bangladeshi garment industry (Rahman et al., 2007). L o w labor cost was/is another
factor of success. A s explained by Warner International (1998), when the hourly apparel
labor cost of Bangladesh is only $0.30, it is $ 10.12 in U S A . Bangladesh is in a strong
position in the global market. This is evident from the fact that the growth rate of garment
exports in Bangladesh is significantly higher (81.3%) than several strong competitors
such as Indonesia (31.2%), Mauritius (23.8%) and Dominican Republic (21.1%) (Rashid,
2006).

Bangladesh currently exports ready made garments with over 4 5 % to U S A , 5 0 % to the

countries in E U and 3 % to Canada and other countries of the world ( B G M E A , 1997).
This worldwide market situation substantially affects the business operations of the
companies under the present survey. These companies are also exporters to these
countries that prompted them to use lean techniques for improvement of quality and
delivery of the shipment.
 46

2.17 Examples of Lean Practices in G a r m e n t Industry

The apparel industry is truly global in nature. There are several examples in the litera
of lean practices in the garment industry (Taz, 2008; Mazany, 1995; Bruce et al., 2004).
For example, Textile Apparel Limited ( T A L ) is the major shirt manufacturer of the U S
market (Trade and Industry Department, 2000). A s on-time delivery becomes a
requirement, it has established a partnership with J.C. Penny to monitor the weekly stock
level. At the same time it has introduced a 'SPEED' program, to manufacture and ship its
product to U S within 48 hours. This ultimately reduced the inventory holding time as
well as increased the customer satisfaction with fast delivery. With a view to reduce the
high level of inventory, a Hong Kong based footwear manufacturer introduced Just-in-
Time system in its manufacturing process. It assisted Nike to source cheap but reliable
raw materials, manage inventories and deliver products on time (Wall Street Journal,
2000).

Mazany (1995) has conducted a study on a small knitwear manufacturer. The study
focused on how progressive implementation of Just-in-Time (JIT) can bring
improvements in performance. The company was a small knitwear manufacturer in N e w
Zealand producing approximately 90,000 garments per year both in local and foreign
markets (export markets). The company produces an extensive product range which is
seasonal in nature and annually revised with regard to styles, colors, patterns and yarns.
The company encountered several problems due to the traditional manufacturing
philosophy such as high level of inventory, long lead time, poor communication and
traditional layout. The initial objectives of the company were to reduce lead time and
inventory levels by 5 0 % without any compromise in quality.

The result showed that the company had significant productivity gain over the last three
years through implementing JIT. For implementing JIT successfully they introduced
kaizen, team work, multi-skilling etc. The company had achieved a 5 0 % reduction in lead
time according to the target. Although it reduced inventory levels, the desired level was
not reached.
 47

Another study was conducted by Bruce et al. (2004) on textiles and clothing industry of
U K . This study focused on h o w lean, agile and leagile (a combination of these) works on
supply chain management in the textile and clothing industry and improves lead-time as
well as help to achieve quick response. The study also shows the necessity of supplier's
relationship in the supply chain management.

The study indicated that, textile and apparel is a volatile market, where holding small
quantities of stock is not a viable option. Companies need to be very responsive to the
customers demand. The lean and agile approaches to supply chain effectively manage
the manufacturing process and in turn reduce lead times. This paper reported about four
case studies on four apparel manufacturers. In summary, all the four companies in the
textile and apparel sector used the aspects of both agile and lean to respond quickly to
changing markets. The leagility (lean and agile) approach helped the companies in the
reduction of lead time of supply as well as meeting the customer demand on time. The
companies also emphasized the supplier relationship as a key competitive tool.

A study on Fashion Incubator Marena Group (2006), a lean domestic manufacturer,

showed significant achievement through lean implementation. Marena Group, from
Lawrenceville G A ( U S A ) , was awarded the status of all-star lean manufacturer. It was a
producer of garments such as girdles to facial wear, vests and post surgical exercise
wears. It was a tiny company but was very fast as a service provider. It was regarded as a
good example of a lean company which offers same day shipping on all orders regardless
of styles, color or size. The company uses a mix of technology solutions. The
implementation of lean sewing via T S S (Toyota Sewing System) led it to become a lean
manufacturer. After implementing lean the company had experienced 5 0 % increase in
productivity comparing to the pre-lean period (Fashion Incubator Marena Group, 2006).

Chinese manufacturing started practicing lean since late 1970's (Taz, 2008). China first
introduced lean within the automotive industry. Taz (2008) conducted a study on 65
plants (garments, electronics, telecommunications, wireless, computer, food/beverage,
 48

chemical, printing, Air Condition and heating and a few others in china). T h e study
investigated the adaptation of lean production and assesses its current state of practice in
selected plants. The overall results indicate a rather large gap in terms of lean production

a m o n g plants.

2.18 Chapter Conclusion

The survival of the garment industry in Bangladesh, as in other garment-exporter

countries, hinges on the strong competitive capability of the garment firms. T h e global
customers' satisfaction with quality of products largely determines the sustainability of
the garments industry. Thus, competitiveness needs to be strengthened through
continuous quality improvement and the reduction of wastes by elimination of non-value
added elements in the production activities. Lean production is, therefore, the necessity of
the day.

Overall, Section A of this chapter discussed various concepts of lean. Section B

reviewed the literature surrounding the Toyota Production System (TPS), Lean Practices
in Japan, Western Countries, U S A and in other countries of the world across various
industries. Lastly, Section C reviewed the literature in the areas of garment industry from
a global perspective, in the context of Bangladesh as well as provided s o m e examples of
lean practices in garment industry of different countries.

The next chapter describes the methodology used to investigate the extent of lean
production practices for improving manufacturing performance in the sample
Bangladeshi garment factories as well as to identify the 'enabling environment' for
practicing lean production in the sample firms.
 49

Chapter Three

Methodology of the Study

3.1 Introduction

Lean production is no longer a choice; to remain competitive, manufacturing firms need

to consider its philosophy to maximize value creation. Both developed and developing
countries are n o w highly motivated to use this technique. Bangladesh is no exception to
this. "The benefits of lean manufacturing are evident in factories across the world"
(Pavnaskar et al., 2003, p.3076).

Despite the importance of the issue, very little research has been done in Bangladesh
concerning the extent of practices and the existence of an enabling environment for lean
implementation. The review of literature in chapter 2 established the need to investigate
these issues in the context of Bangladeshi Manufacturing firms.

The purpose of this chapter is to outline the research process. It is organized as follows:
Firstly, the research design of the study is outlined. This is then followed by a listing of
the hypotheses and a discussion of the methods and procedures of the research. The
subsequent subsections provide an outline to the development of the questionnaire, a
discussion of the features of the questionnaire; the selection of samples, and finally the
issues of processing of the data from the questionnaire is discussed.

3.2 Research Design

To examine the extent of lean production practices, a field study will be conducted
a m o n g nine garment manufacturing companies in Bangladesh. O f these nine companies,
 seven companies are located in the Export Processing Zone (EPZ) and the other two
companies are outside of the E P Z . Because of special infrastructural and other facilities
specifically provided to the enterprises in the E P Z , the E P Z companies receive m u c h help
from the government and have more opportunities to implement lean than those outside
of the E P Z . This study aims to investigate the best cases of Bangladeshi garment firms.

The research consists of four stages:

I. A review and analysis of literature to address lean production trends, case studies,
and results.

2. Interviews with 'lean implementers' to collect information and opinion during the
survey.

3. A field study to conduct in the garment industry in Bangladesh, using a

questionnaire.
4. Observation of the plants to be conducted by the researcher.

Firstly, the research will include an extensive review and analysis of the literature to
address lean manufacturing trends, methods, case studies and results.

Secondly, the survey will comprise of a semi-structured questionnaire followed by

interviews and observation. The questionnaire will be developed based on the framework
of Phan and Matsui, (n.d). This approach of questionnaire will be developed to get some
specific as well as detail views of respondent regarding the lean related issues. This
method of questionnaire is being used because it provides a comprehensive and holistic
view of the success of lean implementation. The questionnaire will mainly focus on the
relationship between lean production practices and manufacturing performance in the
selected Bangladeshi manufacturing firms. For the purpose of this study, lean production
pracces (LPP) have been construed to include the approaches used by a firm to achieve
certain types of performance outcomes. Nine lean production practices, drawn from the
results of previous research studies (Phan & Matsui, n.d; Sohal and Egglestone 1994-
Sohal, 1996) will be selected for use in this study. These are:
 51

physical rearrangement of equipment (equipment layout)

quick changeover of machines (less time needed between completion of one
production run and beginning of another production run)
small lot size (small-batch continuous work flow: products - one complete
product at a time - proceed through various operations in design,
order-taking and production without interruption, also k n o w n as 'single-piece
flow')

kanban system (cards or sheets used to authorize production or movement of an

item)
daily schedule adherence, just-in-time delivery by suppliers (partnership-oriented
relations with suppliers)
short order-to-ship cycle times (just-in-time link with customers)
pull production system (just-in-time processing driven by customer demand or
pull), and
application of preventive maintenance (regular system of repair and maintenance
of machines).

Similarly, the improvements in 'manufacturing performance' are indicated by such

measures as:
productivity (in terms of units per labor hour and/or savings through reduction of
labor content over a 12-month period)
product quality (in terms of the number of prime quality products compared to
the total manufactured)
manufacturing cycle time (amount of time to accomplish the standard work
sequence for one product, excluding queue time or wait time)

on-time delivery
inventory turnover (minimized inventory: little inventory on the shop-floor,
goods delivered just-in-time in small lots, and no buffer stocks)
manufacturing waste (in terms of overproduction, waiting time, materials
handling & transportation costs, motion, processing) and
 52

lead-time (total amount of time it takes to complete an order for a customer, i.e.,
the time between receiving of raw materials and manufacturing the final
product).

This questionnaire will also focus on the issues related to the firm's enabling
environment affecting the relationship between lean practices and the manufacturing
performance. The enabling environment, for the purpose of this study, includes:

quality-supportive corporate culture

employee empowerment & involvement
responsible trade union,

visible top management commitment & leadership,

investment in training and

the existence of cross-functional teams.

The enabling environmental factors are discussed in details in the literature review
section.

The questionnaire will combine the above mentioned issues which will cover major areas
of lean implementation, such as the adoption of various lean practices, supplier
relationships, duration of lean implementation, supporting and hindering factors of lean
implementation, improvement of manufacturing performance through lean practice, as
well as existence of an enabling environment to implement lean in the context of
Bangladeshi garment firms. The responses to these questions will provide a broad view to
the reader regarding the current status of lean practice in the selected Bangladeshi
garmentfirms.The questionnaire is appended in Appendix-1.

In conjunction with the questionnaire, thirdly, a short semi-structured interview will als
be carried out with the representatives of the nine companies to obtain a more detailed
msight concerning the companies' position in the lean journey. The responses to the
questionnaire and semi-structured interview will then be analyzed to provide profiles of
 53

the nine garment companies, and identify the supporting and hindering factors of lean
implementation within garment manufacturers in Bangladesh. The Interview Schedule is
presented in Annex-2.

In order to provide insight beyond the questionnaire research and interview, fourthly, a
site visit will also be performed by the researcher using a checklist adopted from Hayes
(1981). This checklist (Appendix-3) will provide information in regards to the differences
and similarities of Bangladeshi firms in management practices used by the Japanese firms
in lean implementation. Using the above mentioned research approaches, the results will
be analyzed to obtain an overview of the extent of practices of various lean tools, barriers
and supporting factors in the selected Bangladeshi garment companies. Finally, the
findings will be compared to the findings of similar studies using similar philosophies in
other part of the globe. The comparison will be m a d e to see the positive association of
results of the present study with the results of similar studies globally. This comparison
will further provide an overview of whether the improvements, supporting and hindering
factors of the present study are similar or different from other studies across different
countries of the world and provide possible suggestions for further implementation
efforts in the Bangladeshi firms.

3.3 Research Hypotheses

The study identifies eight hypotheses, using the results of previous studies and initial
discussions held before the investigation with the senior management of a number of the
garment firms. The hypotheses are developed to represent the best case scenario of
garment manufacturing companies because the companies under E P Z are enjoying the
best facilities to remain competitive and to explore the effectiveness of lean
implementation in a different cultural environment like Bangladesh.

The hypotheses of the study are:

Hypothesis 1: Lean practices decrease unit production cost in the Bangladeshi

garment firms.
 54

Hypothesis 2: Lean practices contribute towards higher quality of products in the

Bangladeshi garment firms.
Hypothesis 3: Lean practices reduce manufacturing waste in all forms in
Bangladeshi garment firms.
Hypothesis 4: Lean practices reduce lead-time in Bangladeshi garment firms.
Hypothesis 5: Lean practices reduce manufacturing cycle time in Bangladeshi
garment firms.
Hypothesis 6: Lean practices improve on-time delivery of products in
Bangladeshi garment firms.
Hypothesis 7: Lean practices reduce inventory of raw materials and finished
goods in Bangladeshi garment firms.
Hypothesis 8: Lean results in Bangladesh have a positive association with the
lean results in other countries using similar philosophies.

3.4 Method and Procedure

3.4.1 Area of Investigation

In the present study, organization will be the unit of analysis (i.e., garment manufactur
firm). The study will be conducted on plant managers/head of production or the
nominated officials of the garment manufacturing firms in Bangladesh. All the firms are
export-oriented companies.

3.4.2 The Questionnaire: Development and Administration

Based on the literature reviewed in chapter 2, a survey questionnaire will be developed

for the head of production or plant manager of each garment unit. Expert advice
(supervisors of the researcher, members of the ethics committee) will also be solicited
beforefinalizationof the questionnaire. Since personally administering questionnaires is
considered to be the best way to collect data, which helps researcher clarify on the spot
any doubts that the respondents might have regarding any question (Sekaran, 1984) the
researcher will personally administer the questionnaires of the present study
 55

3.4.3 Features of the Questionnaire

A total of five areas will be identified for the study. The responses on these areas will
provide a comprehensive detail of the research questions and objectives stated in chapter
1. These areas will best represent the extent of lean implementation in the Bangladeshi
garmentfirms.They are as follows:

Area-1: Organizational Issues

(a) Legal Status and Structure
(b) Quality certification
(c) Products, customers and markets
(d) Procurement of raw materials
(e) Inventory and supplier

Area-2: Lean Implementation Issues

(a) Duration of lean implementation in the companies
(b) Supply related information
(c) The lean techniques adopted by the companies
(d) Assistance received by companies for implementing lean practices
(e) Training provided and costs incurred on lean system
(f) Use of M R P , MRPII and E R P
(g) Factors supporting or hindering lean implementation

Area-3: Benefits Derived from Lean Practice

Area-4: Manufacturing Performance

(a) Reduction in unit production costs
(b) Total productivity improvement
(c) Reduction in lead time
(d) Reduction in manufacturing cycle time
(e) Waste minimization
(f) Quality improvement
 56

(g) Reduction in average days of inventory

Area-5: Supporting Environmental Factors

(a) Organizational culture
(b)Leadership patterns in the organization
(c) Investment in training and team environment in the organization

3.4.4 The Selection of Samples

The study will investigate the extent of lean production practices in the garment industr
in Bangladesh. A single industry has been selected to ensure compatibility of
information. A list of the garment factories will be collected from the Bangladesh
Garments Manufacturers and Exporters Association ( B G M E A ) and the Bangladesh
Export Processing Zones Authority ( B E P Z A ) . For study purposes and keeping in view
the resource constraints, nine firms will be selected using the purposive sampling
technique. These nine companies are selected to represent the best possible scenario of
garment manufacturing companies in Bangladesh. From each company the head of
production or the plant manager, or his nominated official is to be selected as a
respondent. The appointment date will be arranged by each respondent company over
telephone. The study will be limited to that part of the Bangladeshi garment
manufacturing industry involved in producing readymade garments only. Table 3.1
presents summary information about the sample companies.
 57

Table 3.1: Selected information about the sample companies

N a m e of Location Number of Person Interviewed
Company (EPZ/Outside E P Z Employees
Fashion Point EPZ 397 Plant Manager
Limited
Texas Fashion EPZ 205 Head of Production
Wear Limited
Beximco Outside of EPZ 2255 Head of Production
Fashions
Limited
Shanta Outside of EPZ 2143 Head of Production
Industries
Limited
D A D A (Savar) EPZ 1800 Plant Manager
Limited
Shanta EPZ 488 Plant Manager
WashWorks
Limited
Arm ana EPZ 786 Head of Production
Fashions
Limited
Shanta Denims EPZ 1276 Head of Production
Limited
PAXAR EPZ 754 Plant Manager
Bangladesh
Limited

3.4.5 Data Collection

Before visiting the garment firms appointment will be m a d e with at least one of the
management personnel of each enterprise. The researcher herself will attend the
respondents give a brief explanation about the research topic and will make each question
clear to them so that no ambiguity and/or confusion arises and thereby will ensure that
the respondents couldfillthe questionnaire with confidence from their o w n perspectives.

The study will be conducted by using three stages: questionnaires, interviews and
observation. A semi-structured questionnaire (open ended and close ended) will be
developed. The questions mostly deal with lean implementation issues. The questions are
structured to gauge the manufacturing performance improvements experienced by the
companies. A face to face interview will be carried out for approximately 30 minutes.
 58

The interview schedule will also be semi-structured. Additionally, a checklist based on

work by Hayes (1981) will be used to collect data while observing the plants. The plant
visit will be conducted for about one hour. The questionnaire will be administered at the

time of interviews.

3.4.6 Processing the Data

The data collected for the present study through questionnaires will be processed by
using Microsoft Excel. Since the sample size is small, other data will be processed
manually by the researcher. After collecting data from all of the nine companies, the
questionnaires will be checked to ensure relevancy and correctness of data. The
descriptive statistics such as the frequency distributions and percentages of the responses
to the general questions will be obtained. In the case of scale items, both percentages and
mean values will be calculated. Each stimulus item on the questionnaires will be followed
by five responses. The responses will indicate the degree of strength as follows: (01)
Strongly Disagree, (02) Disagree, (03) Neither Agree nor Disagree, (04) Agree and (05)
Strongly Agree. The percentages and mean values of results will comprehensively
represent the meaning to the reader.

3.5 Chapter Conclusion

Data collection methods are an integral part of research design. Through the literature
review the study was able to explore certain relevant issues in depth and also discover
new issues during thefieldwork.This chapter explained the methodological perspectives,
sampling, interview approach and site visits. It is through these techniques, combined
with a particular theoretical lens, that the data in the following chapters have been
collected and analyzed.
 59

Chapter Four

Profiles of Surveyed Companies, Data Analysis and Results

Section A: Profiles of Surveyed Companies

4.0 Introduction

The last chapter presented the methodology of the research based on which the present
study will be conducted. The overall aim of this study is to explore the extent of lean
practices and the existence of enabling environments for lean implementation. This
section of this chapter will firstly discuss about the basic features of the surveyed
companies with detailed organizational profiles. It will then present the data collected
from these nine companies and the themes that emerged from that data in the next
section.

4.1 Companies under the Export Processing Zone vs Companies out of the EPZ

In the present study, seven companies were selected from within the Bangladesh EPZ and
two from outside of the E P Z . A m o n g several garment companies, these nine companies
are selected based on the success of their designatedfield,similarities in the business
patterns and product categories etc. It is not the purpose of this study to make any
comparison between the E P Z companies and non-EPZ companies. Practice of lean
production system in their manufacturing operations, export-orientation and the ease of
data collection were the rationale for selection of the companies for study.

It will be worthwhile to provide an explanation of the concept of Export Processing Zone

(EPZ). A s stated by International Labor Organization (1999), E P Z is an industrial zone
which offers special incentives to attract foreign investors, in which imported materials
undergo some degree of processing before being re-exported. Bangladesh Export
 60

Processing Zone has emerged to attract capital investment in E P Z in late 1970s. The
prime motivations for establishing E P Z were rapid industrialization, employment of
human resources, transfer of technology and transfer of foreign exchange earning by
boosting up export (Hossain, n.d.). In the present study the companies under E P Z are
achieving several benefits over the companies out of the E P Z . E P Z differs from the
Domestic Tariff Area ( D T A ) by fiscal barriers. It also provides an internationally
competitive duty free environment for export production at low cost. Businesses within
the E P Z are open to a number of benefits over companies out of the E P Z :

1 Modern and efficient infrastructure

2 General fiscal and non-fiscal concessions to firms
3 Better governance due to single window facilities to ensure a business
environment free from corruption and red-tapism.

The Government of Bangladesh has established a special body to oversee the activities of
the export processing zones in the country, namely, Bangladesh Export Processing Zone
Authority ( B E P Z A ) . It is a statutory body but very distinctly different from other
autonomous organizations. It enjoys complete freedom of action in its decision making
process.

The two export-oriented companies outside of the EPZ are doing business through their
o w n initiatives which means they are privately owned and have self-designed policies
and strategies to operate the business. Governments have no restrictions over them. They
are not getting any tax facilities like the E P Z companies but have their o w n independent
decision making power. While these companies have the right to establish trade unions,
E P Z is highly restricted for any kind of trade union involvement.

The EPZ is located in an isolated area and have several facilities such as less political
interference, less disruption in power supply and less traffic problems compared to other
companies outside the E P Z . The modern infrastructure and better governance also
facilitate the activities of the E P Z companies. These facilities m a y provide E P Z
 61

companies more opportunities to implement lean successfully than the companies outside
the E P Z . This section deals with the data collected from the selected companies through
applying the methodology discussed in chapter three.

4.2 Company Profiles

The profiles of the surveyed companies have been prepared based on the data gathered
from the company websites, interviews with the company officials and published
materials of the companies. The organizational profiles of each of the companies include
establishment and operation, business orientation (export-oriented or local market-
oriented), h u m a n resources, products and production capacity, market/customers, and
relevant information on lean implementation.

4.2.1 COMPANY-1
Fashion Point Limited

The profile of Fashion Point Limited is prepared on the basis of the information obtained
from the Profile of Fashion Point Limited, 2007. Fashion Point Limited is a private
limited company registered under the Companies Act, 1994. It was established in June
2000 in Gazipur, about 30 kilometers from the capital city. It started its business in
BISCIC Industrial Estate, with eight brand n e w " F U K U U A M A " knitting machines, as an
export-oriented knit garment manufacturer and exporter. The company has its o w n dying,
screen-printing and sewing sections. Its vision is to satisfy the customers by providing
quality products with superior service.

The total number of employees, including machine workers, is 397 as of now, although it
started its operations with only 147 employees (see the organization chart of the company
in Figure 4.1). The main products of the company include Pique Polo, Basic Fancy T-
Shirt, Basic Tank Top, Fleece shirt with fancy design, Fleece Jacket, and Sweat shirt. The
company is specialized in basic as well as fashionable ready-made garments exports. The
production capacity per day is approximately 7600 pieces of various types of its products.
 Figure 4.1: Organization Chart of Fashion Point Limited
Chairman

Managing
Director

Head of Head of Head of Head of

1
Human
Finance Production Human Marketing Resource
Resources Department

Plant
Manager

Section
Supervisors

Quality
Control
Officers

Workers

Fashion Point Limited has no local sales - it is a 1 0 0 % export-oriented company. The

company mainly exports its products to Denmark (Best Seller), Italy (SA MA S.P.A).
Netherlands (Men's club) and Spain (Yu-Kom).

The plant manager of the company, indicated in his interview on 15 January, 2008 that
Fashion Point Limited introduced lean production system from the day it started its
production (Hossain, 2008). Lean implementation improved the company productivity,
quality as well as reduced lead-time and inventory level to some extent.
 63

4.2.2 C O M P A N Y - 2
Texas Fashion W e a r Limited

The profile of Texas Fashion Limited was prepared on the basis of the information
gathered from its w e b site and the company brochure. It was registered in 2002 as a
public limited company under the Companies Act, 1994. However, it started its business
operations in March 2005 due to delay in the construction of the factory buildings and
installation of machinery. It is located in Dhaka E P Z , about 20 kilometers away from the
capital city. It has state of the art technology and equipment from Vibemae (Italy), A M F
Reece (USA), Juki (Japan), Lectra Systems (France), Nagi Shing (HK), Cintex ( U K ) and
other world-class suppliers.

Texas Fashion Limited is a fully export-oriented garments manufacturer. Presently it

works for Espirit and Auchan. The main target customers are the world-renowned brands
like T o m m y Hilfiger, G A P , Marks and Spencer's, JC Penny etc. The company aims to
export mainly to Europe and U S A , Canada, Japan, and Mexico with the help of high-tech
fully computerized machines.

Texas Fashion Limited is one of the leading manufacturers of Jeans and Trousers (both
casual and formal). It also produces all sorts of bottom and tops in Denim, Twill, Dress
Pants and Denim Jackets. Its current production capacity is approximately 4,000 pieces
per day. Currently the company's total numbers of employees are 205 (see the
organization chart of the company in Figure 2). It mainly focuses on customer
satisfaction through quality products but at low cost.

The head of production of the company informed in his interview on 17 January 2008
that the company started its lean journey from the day of production (2005) (Chowdhury,
2008). A s viewed by him, the company experienced improvements in productivity,
quality as well as lead-time and timely delivery. It has a strong relationship with its
suppliers.
 64

Figure 4.2: Organization Chart of Texas Fashion W e a r Limited

Chairman

Managing
Director

Director-1 Director-2

1 1
' '
Accounts H R Manager Factory Storage Marketing
and Finance Manager Manager Managers
Manager

Trousers Section Denim Section Jeans Section

Workers

4.2.3 C O M P A N Y - 3
Beximco Fashions Limited

The sources of information for the preparation of the profile of Beximco Fashions
Limited are its website and a booklet provided by the company. It is understood from
information that Beximco Fashions Limited is a unit of Beximco Textiles Division. It was
established in 1997 in Dhaka Export Processing Zone and started its commercial
 65

production in the same year. Its vision is high customer satisfaction through improved
manufacturing performance.

It is a 100% export-oriented garment manufacturer. The company operates is business

with 2255 employees. The company is managed by a group of professionals including
expatriates and aims at producing high quality garments through an effective quality
control system right from sourcing of fabric to end product (see the organization chart of
the company in Figure 4.3).

Figure 4.3: Organization Chart of Beximco Fashions Limited

Chairman

Managing
Director

Director Director Director

Production Human
Resources
Accounts &
Marketing Finance
Safety
Merchandizing
Export &
Cutting Training Import

Packaging
Mis
Embroidery

This is a vertically integrated garment producing company that uses in-house fabrics for
manufacturing its products. The company is the producer of its o w n fabrics, and in this
sense it is a vertically integrated company with backward linkage/integration. It produces
men's dress and casual shirts and ladies blouses. Its daily production capacity is about
20,000 pieces.
 66

The major market of the company consists of the renowned retailers and brands in the

U S A and Europe including Polo Ralph, C H A P S , Texbo and Trez.

The head of production of the company indicated in his interview on 17 January 2008
that the company introduced lean in early 2000 with a view to compete with the global
competitors (Islam, 2008). In order to respond to the aggressive demands of customers
regarding the short delivery time and high quality products, the company is using
different lean tools and techniques to improve the overall performance. It maintains a
stable and better relationship with the suppliers than before the introduction of lean
system. Compared with the pre-lean period, its productivity and quality have improved

substantially.

4.2.4 C O M P A N Y - 4
Shanta Industries Limited

The researcher collected organizational information about Shanta Industries Limited

its website and the head of production during interview. A s evident from this
information, Shanta Industries Limited is a sister concern of Shanta Group, based in
Bangladesh with sustained goodwill and expertise in export-oriented, ready-made
garment manufacturing. It was established in Dhaka Export Processing Zone in 1999.

Shanta Industries Limited is 100% export-oriented garment manufacturer. The company

is operating its business with 2143 employees (see the organization chart of the company
in Figure 4.4).

It produces all types of woven Tops and Bottom. Its key specialty is its Denim Appare
with all types of special washes. The company is able to produce the full spectrum of
washes, all types of garment dyeing, hand scraping, chemical/dye spraying, resin
application, sand blasting and a variety of intricate details that mostly are required on
 67

denims. Its daily production capacity is approximately 20,000-24,000 pieces, depending

on the style.

It currently exports its products to the USA and Europe and the target customers are
T o m m y Hilfiger, Polo Ralph Lauren, American Eagle Outfitters, Gymbroee, C H A P S ,
M E X X , and S. Oliver (all European). Shanta Industries Limited was ISO 14001 certified
by the United Registrar of Systems and also received ISO 9000:2001 certification.

Figure 4.4: Organization Chart of Shanta Industries Limited

Chairman

x'
Managing
Director

Director

i' V
General Manager
Plant
ir Manager

^' ''
Shipping Accounts & Human Marketing Section
Finance Reso urces Managers

Production
Supervisors

Wor kers

The head of production of the company discussed in his interview on 20 January 2008
that Shanta Industries Limited introduced lean production system in 2004 (Azam, 2008).
Through lean practice, the company gained several improvements in productivity, quality
and lead-time. The company maintains both foreign and local suppliers. It produces
products as per specifications of the customer pull.
 68

4.2.5 C O M P A N Y - 5
D A D A (Savar) Limited

DADA (Savar) Ltd's website provides the background information about the company.
Lean-related information was collected through interviews with the Plant Manager of the
company. It appears from this information that the term " D A D A " comes from the idea,
'the more the better'. D A D A Corporation wasfirstestablished in Seoul, Korea in 1974. It
started with a small factory of headwear. The second D A D A concern D A D A (Savar)
Limited started its operation in Bangladesh in 1993 but went into production in 1994.
D A D A has its o w n factory building at Dhaka Export Processing Zone. The factory is also
having its laundry capacity to comply with the present style and fashion in the world
market. In addition, there is a child care center for the employees in the same building.
The facility is claimed to be the largest cap manufacturing unit in the world. The
company is a fully export-oriented garment producer with 1800 employees (see the
organization chart in Figure 4.5).

It is one of the largest companies who can produce embroidery work by using highly
computerized embroidery machines. D A D A makes all kinds of headwear of different
styles and designs from a large variety of materials (fabrics). The c o m m o n styles are all
American sports league caps (NBA, M L B , N F L , N H L , N C A A , College leagues, M L S
etc.), 5/6 panels basic base ball caps with or without embroidery, multi-panel caps, wrap
round caps, golf visor caps, 3-D embroidered (lofted) caps, caps with patches etc. The
production capacity is 25,000 pieces (approximately) of caps per day.

DADA has a world wide large market for its products. It is in very close business
relationship with almost all the big buyers throughout the world. S o m e of the big buyers
of D A D A are Nike Team Sports Inc.. A J D Cap Corporation, Reebok International
(USA), Wal-Mart, Stores Inc., T o m m y Hilfiger and Logo 7. The buyers from European
market include Nutmeg Limited, Oky Doky, Reebok International (Belgium). Other than
 69

these buyers, some of the regular buyers in the U S A , Japan and Europe are American
Needle and Novelty Inc., Headmaster Manufacturing Inc., Shinjin, Grossman Cap Co.
Inc., Chavin, D r e w Pearson, Twins Enterprises (USA); Otha, Kurihara, Sunrex Co.
(Japan) and M & B (Spain).

The production manager (head of production) of the company discussed in his interview
on 20 January 2008 that the company has been practicing lean production system since
2003 (Masud, 2008). He was of the view that the company achieved several benefits from
lean practice such as reduction of lead time, improvement in manufacturing efficiency
and reduction of production costs.

Figure 4.5: Organization Chart of DADA (Savar) Limited

Chairman

Managing
Director

Accounts
Manager
Production
Manager
Marketing
Manager
Shipping
Manager
Human
Resource
1
Quality
Assurance
Manager Manager

Storage Plant
Manager Manager

Machine Embroidery Cutting Stitching Finishing

Maintenance Section Section Section Section Section
 70

4.2.6 C O M P A N Y - 6
Shanta W a s h W o r k s Limited

The profile of this company is prepared on the basis of the analysis of website
information and interview records. The company was established in 2004 in Dhaka
Export Processing Zone. Shanta Wash Works Limited is a 1 0 0 % export-oriented,
readymade garments manufacturing firm with washing, dyeing and special finishing
divisions. The company has a total of 488 employees (see the organization chart in Figure
4.6).

It mainly produces children's/ladies'/men's woven tops and bottoms as well as overal

and short alls for infants and kids. It is also involved in washing, dyeing and special
finishing. Its daily production capacity is from 3000-20,000 pieces based on the styles
and product types.

With all the modern equipments, Shanta WashWorks Limited is producing products for
its customers in U S A (Gloria Venderbilt, C H A P S , Gymbroree, Polo Ralph Lauren,
T o m m y Hilfiger, Lauren, American Eagle Outfitters) and Europe (Trez, Mondial,
Texebo, Oldex, Echo, Urban, Marks and Spencer, M E X X , S. Oliver etc.).

The plant manager of the company reported in his interview on 22 January 2008 that wi
a view to satisfy the customers more, the company implemented lean concept in the year
2005 (Mamoon, 2008). Compared to pre-lean period, the company achieved significant
improvements in quality, productivity and reduction in lead- time.
 71

Figure 4.6: Organization Chart of Shanta WashWorks Limited

Chairman

Managing
Director

Director Director

Marketing Plant Accounts & Product Human Warehouse

Manager Manager Finance Development Resource Manager
Manager Manager Manager

Cutting and Stitching

Section

Finishing
Section

Washing
Division

Dyeing
Division

Dyeing
Division

4.2.7 C O M P A N Y - 7
A r m a n a Fashions Limited

The profile of Armana Fashions Limited is prepared from an analysis of the information
provided by the plant manager in the form of brochures and reports. The information
indicates that the company was established in 1992 at Dhaka Tejgaon Industrial Area as
an International Joint Venture Company (one partner from Bangladesh and one partner
from South Korea). It started its production operations in the same year. The company
 72

has a strong relationship with its suppliers as well as buyers. The aim of the company is
to satisfy its customers with quality goods at short delivery time. The company is
working toward creating more customer responsiveness

The company is a 1 0 0 % export-oriented garment manufacturer and exporter in

Bangladesh. It has modern and high-tech fully computerized machineries for producing
products for its target customers. It has its o w n generator,fireprotection system, water
reservoir etc. The total number of employees of this company is 786 (see the organization
chart in Figure 4.7).

Armana Fashions Limited is specialized in ready-made woven garments (men's, ladies,

and children's), woven bottoms, and Tops. It daily production capacity varies from 3200
to 4000 pieces, depending on the specifications of the products. It sells its products
mainly to the big buyers in U S A and Europe such as Gymbroee, J C Penny and Marks
and Spencer.

The head of production disclosed in his interview on 15 January 2008 that the company
introduced lean production system after two years of its establishment (Das, 2008). With
a view to improve manufacturing performance, the company started lean practices and
achieved satisfactory improvements in productivity, quality, lead-time, manufacturing
cycle time, on-time delivery as well as inventory holding time.
 73

Figure 4.7: Organization Chart of A r m a n a Fashions Limited

Chairman

Managing
Director

Director

Head of Production (in- Manager Manager Manager

charge of Factory) (Admin & (Marketing, (Human
Accounts) Storage & Resources)
Shipping)

Cutting Stitching Finishing and Quality

Section Section Packing Section Assurance
Section

Fabric
T
Cutting Final
Inspector Quality Quality
Controller Controller

4.2.8 C O M P A N Y - 8
Shanta Denims Limited

The Shanta Denims Limited's website was the main source of information regarding the
background of the company. Shanta Denims Limited is a sister concern of Shanta Group.
Established in 2006 at Dhaka Export Processing Zone, the company started its production
in the same year. Its relationship with suppliers and buyers is stable and strong.
 74

It is a fully export-oriented garment manufacturing company. The company has a

workforce of 1276 employees (see the organization char in Figure 4.8).

It mainly produces all types of woven trousers, pants, shirts, shorts, blouse dresses,
overalls. The daily production capacity of the company is about 14000 pieces. The
special 'Denim feature' of the company is to give more flexibility for denim production.
For the optimum use of the resources, it has planned to introduce the 'hanging system'
(one kind of material handling system usually used in garment factory for speedy moving
of products from one place to another place by using specially m a d e hangers). A s of now,
this is claimed by the company management to be the most advanced material handling
system in apparel industry.

The company aims to satisfy its customers according to their specifications by using
sophisticated imported machinery. Its major target customers are Marks and Spencer,
M E X X , Tema, Esprit, T o m m y Hilfiger, Polo Ralph, Lauren, American Eagle Outfitters,
S. Oliver and Gymbroee.

The head of production of the company told in his interview on 22 January 2008 that th
company introduced lean on the day of its inception (Quauime, 2008). With the qualified
personnel with lean training it started the lean journey. A s viewed by the head of
production, Shanta Denims Limited experienced improvements in quality, productivity as
well as lead time through the implementation of lean concept.
 75

Figure 4.8: Organization Chart of Shanta Denims Limited

Chairman

Managing
Director

Director

Commercial 1
Production Finance Accounts
I
Human
1
Computer
Department Department Department Department Resource Aided
Department Design
Department
Plant
Manager

Quality Section
Control Managers
Managers

Production
Supervisors

Workers

4.2.9 C O M P A N Y - 9
P A X A R Bangladesh Limited

The plant manager of the company provided information in his interview on 23 January
2008 regarding the background of the company. According to him, PAXAR Bangladesh
Limited was established in 2002 in Dhaka Export Processing Zone. It has imported state
of the art technology and equipment from foreign countries for using in production
processes.
 76

The company is a fully export-oriented garment manufacturer. It is operating its business

with a total of 754 employees (see the organization chart in Figure 4.9). The company is
managed by a group of efficient professionals and aims at producing quality products
through an effective quality control system.

It is a leading manufacturer and exporter of all sorts of labels (Tags) such as woven
labels, printed labels, Hang tags, sticker items etc. The daily production capacity of the
company isl 8000 pieces of labels. The major buyers of the company are Levi's, JC
Penny, Wal-Mart, and K-Mart,

According to the information provided by the company's plant manager, PAXAR

Bangladesh Limited started its lean journey in 2003 (Anwar, 2008). After implementation
of lean it has improved relationship with suppliers than before and it has significant raise
in performance, productivity, quality, lead time etc. The company is highly customer
oriented and it focuses mainly on quality products, low cost and less delivery time.

The relevant information about all the nine sample companies is summarized in the table
in the next page. This table contains information about each company's legal status, year
of establishment, year of lean implementation, types of products, daily production
capacity, number of employees and person interviewed.
 77

Figure 4.9: Organization Chart of P A X A R Bangladesh Limited

Chairman

Managing
Director

Director
Production & Product Director Director
Development Marketing & Shipping Administration and Finance

Plant Product Development Machinery

1
Accounts & Human
^t

Manager & Quality Assurance Maintenance Finance Resources

* Cutting

* Stitching
Purchasing, Shipping &
* Embroidery Sales and Clearance
Promotion
* Finishing

Packaging

In the next page, summary information is provided about the sample companies that
include information regarding name of the companies, types of the companies in terms of
legal status, year of establishment, year of lean implementation, type of products
produced by the companies, daily production capacity in each company, the number of
employees in the companies, and the persons interviewed.
 78

Table: 4.1 Summary Information about the Surveyed Companies

Types of Products Production Ho! Person
N a m e of Type of Year of Year of Lean
# Company Company Establishment Implementation capacity Employees interviewed
(pieces/day) (position)

1 Fashion Private 2000 2000 Pique Polo, 7600 397 Plant

Point Limited Basic Fancy T- Manager
Limited Shirt, Basic
Tank Top,
Fleece shirt with
fancy design,
Fleece Jacket,
and Sweat shirt
2 Texas Public 2005 2005 All sorts of 4400 205 Head of
Fashion Limited bottom & tops Production
Wear in Denim, Twill,
Limited Dress Pants &
Denim Jackets
3 Beximco Public 1997 2000 Men's dress and 20000 2255 Head of
Fashions Limited casual shirts and Production
Limited ladies blouses
4 Shanta International 1999 2004 All types of 20000- 2143 Head of
Industries Joint woven Tops and 24000 Production
Limited Venture Bottom
5 DADA International 1994 2003 All kinds of 25,000 1800 Plant
(Savar) Joint headwear of Manager
Limited Venture different styles
and designs
6 Shanta Public 2004 2005 Woven tops and 3000- 488 Plant
WashWorks Limited bottoms for 20000 Manager
Limited children/
ladies/men as
well as overalls
and shortalls for
infants and kids
7 Armana International 1992 2000 Woven 3200- 786 Head of
Fashions Joint garments 4000 Production
Limited Venture (men's, ladies,
and children's),
woven Bottoms,
and Tops
8 Shanta International 2006 2006 All types of 14000 1276 Head of
Denims Joint woven trousers, Production
Limited Venture pants, shirts,
shorts, blouse
dresses, and
overalls
y PAXAR Private 2002 2003 All sorts of 18000 754 Plant
Bangladesh Limited labels (Tags) Manager
Limited such as woven
labels, printed
labels. Hang
tags, sticker
items
Note: All of the surveyed companies are 100% export-oriented garment manufacture
 79

4.3 Section A Conclusion

This section of this chapter presented the basic features of the companies selected for the
purpose of the study. The profiles of the surveyed companies have also been presented.
Section B of this chapter deals with the data collected from these companies with the
analysis of the results.
 Section B: Data Analysis and Results

4.4 Introduction

The previous section of this chapter discussed the profiles of the nine surveyed
companies. This section will present the data collected by using the questionnaire,
observation and interviews and also the theme emerged from that data. A considerable
amount of the results are presented in tabular form in Appendix-4.

The frequency distributions and percentages of the responses to the general questions
were obtained. In the case of scale items, m e a n values were calculated. In the cases of
percentages, all fractions are rounded off to the nearest figure for convenience of
analysis. Furthermore, in some tables, there are multiple answers for an item resulting in
the total of more than 1 0 0 % . W h e n respondents provided more than one answers for an
item, this resulted in multiple responses. The data obtained were processed and then
analyzed under the following broad headings:

4.5 ORGANIZATIONAL ISSUES

A total of nine organizations (garment plants) were surveyed for the purpose of this
study. A n analysis of the organizational issues helps to appreciate the nature of the
organizations. Using the questionnaire approach described in chapter three, the following
data have been collected regarding the organizational issues. These issues are discussed
under five broad categories:
(a) Legal status and structure
(b) Quality certification
(c) Products , customers and markets
(d) Procurement of raw materials
(e) Inventory and supply
 81

4.5.1 Legal Status of Companies

Table A4.1 in Appendix-4 shows that nearly half of the companies are international joint
ventures. One-third of them were public limited and the rest were private limited
companies registered under the Companies Act, 1994 in Bangladesh. From the analysis
of data, no meaningful variations in lean implementation were found between the various
types of companies based on the legal status. It appears that legal status of companies has
little influence over lean practices. Not the legal status rather certain requirements dictate
the extent of lean implementation in the enterprises. Irrespective of the legal nature, the
companies seem to have moved forward with improving productivity and performance
through reduction of unit production cost. Discussions with the researcher with the
company officials support thisfinding.This will be discussed later in the next chapter.

The companies are of the view that the registration of a company under the government is
a prerequisite for obtaining legal entity. Business functions are performed by all
companies with the principal motive of profit maximization through improved
performance. Legal entity of companies has no direct impact on production systems or
any other organizational improvement programs.

4.5.2 Organization Structure of Companies

The proper use of an organizational structure and its accompanying integrating

mechanisms and controls can contribute to a company's competitiveness. The
organization structure needs to be such that it facilitates timely applications of company's
internal capabilities and core competencies. Because of the need for rapid changes in the
21st-century competitive landscape, organization structure has to be dynamic and capable
of responding to changing situations in the business environment of a company. The
present study examines the pattern of organization structure in the surveyed companies,
and its influence on the adoption of lean. Fifty six percent of the companies preferred a
flat, team-based organization structure, while others had tall functional structure (A4.2).
 82

It m a y be noted that team-based work organization is a core characteristic of the lean

production model which involves flexible, multi-skilled operators taking a high degree of
responsibility for work within their areas (Sohal, 1996). O n the other hand, functional
structure consists of the C E O with functional line managers in dominant organizational
areas and that allows for functional specialization thereby restricting knowledge sharing
and idea development (Mannan, 2000). However, as reported by the respondents, the
managers in the companies with a functional structure have a narrow span of supervision
that enables them to supervise their employees effectively. Perhaps because of this reason
(narrow span) no variations a m o n g the firms with different organizational structures were
found in respect of lean implementation. This also suggests that the functional structure is
not an obstacle to implementing a lean production system if the span of supervision
remains narrow allowing the managers to closely supervise and lead the work teams.
Discussions with the executives of the sample companies having functional structure
revealed that in order to reduce inflexibility in the structure, a strong coordination system
across departments (limited number of departments because of small size of the firms)
and an 'oversee by the C E O ' mechanism were developed. This helped them overcome
the pitfalls of the structure and achieve almost similar goals as in the other firms having a
team-based structure. A probing question, however, unveiled that the executives of the
companies were not aware of the fact that a functional hierarchical structure restricts
flexibility, and this lack of awareness prevented them from restructuring their
organizations by moving from the functional structure to team-based structure.

4.5.3 Quality Certification

Table A4.3 shows the responses to the question of "What quality certification they
availed of?" Only one company received ISO 9001:2000 certification and also had ISO
14000 certificate. The former relates to product-quality certification and the latter to
environmental management certification.
 83

Receiving ISO 9001:2000 certification implies that the company strictly follows quality
standards as specified by the International Organization for Standardization of which
Bangladesh is a m e m b e r country. However, obtaining ISO certification is not obligatory,
rather depends on the desire of the customers (especially big foreign buyers); many
garment manufacturers do not show interest in obtaining ISO Certificates. Company
products must maintain a prescribed quality system supplied by the buyers. The managers
of the companies observed that the buyers-prescribed quality systems, rather than the ISO
standards, could achieve and maintain the desired quality of products. Eight companies
are using various buyer-supplied quality systems. Their foreign buyers such as Wal-Mart,
Target, J.C.Penny, N E X T , P V H , Replay, Standpoint, G A P , M & S and Polo have advised
them to use specific quality systems that have been developed in-house by these global
retail giants. This will be discussed later in the next chapter.

4.5.4 Products, Customers and Markets

The surveyed companies manufacture various categories of garment products. Lists of

products produced by different companies are presented in Table 4.2. The list shows that
the companies in general produce such products as ready-made woven products (men's,
ladies', children's), woven bottoms, tops, trouser, woven shirts for kids, ladies skirt, T-
shirt, Polo shirts, Sweat shirt, Tank Top, Fleece Jacket, Caps and Hats, W o v e n levels,
Printed Levels, Hang tags, Sticker items etc.

Table 4.2: Products of the companies

No. Names of Companies Surveyed
1 Fashion Point Ltd.
2 Texas Fashion Wear Ltd.
3 Beximco Fashions Ltd.
4 Shanta Industries Ltd.
Products Produced by the Companies
Pique Polo, Basic Fancy T-Shirt, Basic Tank Top, Fleece
shirt with fancy design, Fleece Jacket, and Sweat shirt
All sorts of bottom and tops in Denim. Twill, Dress Pants
and Denim Jackets
Men's dress and casual shirts and ladies blouses
All types of woven Tops and Bottom

5 D A D A (Savar) Ltd. All kinds of headwear of different styles and designs

6 Shanta WashWorks Ltd.
7 Armana Fashions Ltd.
8 Shanta Denims Ltd.
9 P A X A R Bangladesh Ltd.
W o v e n tops and bottoms for children/ ladies/men as well
as overalls and shortalls for infants and kids
W o v e n garments (men's, ladies, and children's), woven
Bottoms, and Tops
All types of woven trousers, pants, shirts, shorts, blouse
dresses, and overalls
All sorts of labels (Tags) such as woven labels, printed
labels. Hang tags, sticker items
 84

A s evident from Table A4.4, no companies sell their products directly to consumers in
the domestic market; all of them are 1 0 0 % export-oriented. The Majority of the
companies have a distribution channel consisting of more than one channel-member such
as agents and wholesalers. S o m e of them ( l l % - 2 2 % ) sell their products to dealers,

distributors and retailers.

All customers are located in foreign countries, especially in the USA and the European
Union. It m a y be noted that agents are the intermediary firms that enter into an agreement
with the company to negotiate transactions with the buyers without taking title to the
goods. They receive commission for their services. The dealers/distributors are those
intermediaries w h o deal with the company's products for wide distribution in the foreign
countries. A company employs dealers/distributors to gain adequate market coverage and
sales. The wholesalers and retailers take title to the goods (i.e., purchase products directly
from the company) and sell to others either in big lots (wholesalers) or in small lots
(retailers). It m a y be noted that, involvement of several channel members are not adding
value to the product rather it is increasing the product price. A s lean do not support non-
value added activities, companies need to carefully focus on these issues.

The surveyed companies were originally established as fully export-oriented firms. Their
export-only focus has a direct bearing on their operations. Export-orientation requires full
compliance with the quality-requirements of the foreign buyers w h o are highly quality-
sensitive and cost-conscious. They are large buyers and their requirements must be
satisfied by the supplier of products in Bangladesh. These buyers also have access to the
wide-open global garment product market in China, Mexico, India, Sri Lanka, Vietnam
etc. Moreover; the phasing out of Multi-Fiber Arrangement from January 2005 has
compelled Bangladeshi garment manufacturers to compete openly with such big
competitor-countries as mentioned above. This is because of abolition of the quota
system that ensures the least-developed countries including Bangladesh which occupy a
guaranteed market in Europe and in U S A . This changed environmental scenario leaves
the surveyed companies (as well as others in the country) in a highly competitive
 85

situation in the global market. Thus, they cannot but comply with the quality
requirements of the buyers. The companies also have to rely on the intermediaries as
stated earlier, as they are highly professional and efficient in obtaining orders from the
large foreign buyers.

4.5.5 Sources and Procurement of Raw Materials and Number of Suppliers of Raw
Materials

Tables 4.3 contains the data related to sources of raw materials and components/parts, the
way of procurement and the number of suppliers of raw materials respectively.
According to Table 4.3, while all companies use imported raw materials, two-thirds of
them simultaneously purchase a portion of their required raw materials from local
suppliers. One company has, in addition, their o w n sources of raw materials (it produces
a portion of the required raw materials).

Table 4.3: Sources of raw materials and components, the ways company procures
raw materials/components, and n u m b e r of local and foreign suppliers (multiple
answers in some cases)
Sources of R a w Materials Percentages
(a) O w n sources 11
(b) Imported 100
(c) Supplied by Local Suppliers 67
Sources of Components /Parts
(a) Imported 89
(b) Supplied by Local Suppliers 56
T h e ways companies procure materials/components
(a) Direct purchase from suppliers (both local and foreign) 56
(b) Tender 33
(c) Headquarters 11
N u m b e r of local and foreign suppliers of raw materials
(a) 1-10 33
(b) 11-50 45
(c) >50 22

The major sources of components/parts are foreign countries (89%) as well as domestic
suppliers (56%). The advantage of using domestic sources for raw materials and
 86

components on the basis of as and when required relieves the companies of maintaining a
long time inventory. However, raw materials are not available in the required quantities
from the local sources. Therefore, the companies have to import a portion of the required
raw materials from abroad. O n e of the companies surveyed import entirely ( 1 0 0 % ) and
the rest import between 20 percent and 97 percent of raw materials and components from
abroad respectively.

The majority of the companies procure raw materials and components directly from both
local and foreign suppliers (56%) through L/C, while one-third of them use a tendering
system. O n e company was found procuring its materials and components from its
headquarters.

This is an international joint venture company which receives the materials/components

supply directly from the headquarters (Seoul, Korea). The tendering system is followed
by the companies that purchase from the local suppliers. However, the tendering system
is the 'anti-thesis' of a lean system. The tendering system establishes a short-term
relationship, not a long-term stable relationship with the suppliers which is an essential
element of total quality management. In such a case, it is revealed that although all the
companies intend to maintain long and stable relationship with the suppliers (Table:
A4.5) but they are turning against lean by following the tendering system.

Nearly half of the companies are dependent on suppliers ranging from 11 to 50, whereas
one third of them procure their raw materials from suppliers ranging from 1 to 10. T w o
companies have slightly more than 50 suppliers (Table 4.3).

For success, lean production requires a smaller supplier base, for smaller supplier base is
a necessity of JIT process. JIT system requires timely delivery of products which
becomes easier through smaller supplier base. In addition to this, establishing a good
relationship with a larger group of suppliers is really difficult. However, in the case of
the surveyed companies, a large proportion of them have a large supplier base, a clear
contrast with lean philosophy. It is noticeable from (Table: A4.5) that only 2 2 % of the
 87

companies could reduce the number of suppliers over the last five years. So it is really
questionable whether these companies are truly lean or not. T o improve this situation
companies m a y need to review and evaluate their suppliers and identify a small group of
the best suppliers. This m a y help them to establish a trust based relationship with small
group of suppliers. This will be discussed later in the next chapter

4.5.6 Reduction of inventory of raw materials and finished goods:

The ideal for any company is to maintain inventory as small as possible. Table (A4.6)
indicates that all the companies have small inventory on the shop floor with no buffer
stocks and have clearly marked inventory. Different companies provided different
responses with a view to reduce the inventory level such as (Table 4.4).

As it was an open question for everyone, 78% of the companies indicated that, with a
view to reduce high levels of inventory they emphasized JIT as a process for receiving
raw materials from suppliers. In addition to this, one company reduced the level of
inventory by maintaining a register book and special types of software. Those w h o keep a
record of the stocks follow a policy of adjusting remaining materials with other
production process. T w o companies (located in E P Z ) also reduced stock through
upgraded information regarding raw materials and weekly delivery report.

Table 4.4: Steps taken by the companies to reduce inventory of raw materials and
finished products
(Multiple responses)
No. Steps taken to reduce inventory of raw materials Percentages
1 Just in time receive of raw materials 78
2 Through register and data base (software) 11

3 Adjusting remaining materials with other production 11

process
4 Through weekly delivery report/ upgraded information
regarding raw materials 22
Steps taken to reduce inventory of finished goods
5 Just-in time delivery of finished goods 100
6 Through continuous study by the skilled worker 11
 88

In reality most surveyed companies obtain their raw materials (and required component
parts) from imported stock. Thus, although they claim that they follow the JIT system for
the reduction of inventory, this seems to be a misnomer. However, they can apply JIT
when they procure raw materials from the local suppliers w h o are located mostly in close

proximity of the companies (Table A4.5).

In practice, the surveyed companies can deliver finished goods just-in-time as they
produce the products on time. Ready availability of materials facilitates timely production
as per customer's order and consequent timely delivery to customers. The skilled workers
(trained by the companies) also provide continuous information regarding the inventory
of finished goods through continuous study. It is also questionable whether it is possible
for all the companies to deliver goods every time on a JIT basis.

Reduction in the average number of days of inventory of raw materials leads to reduction
in the manufacturing waste. The more reduction of inventory, the more gain in terms of
waste elimination. The data in Table 4.5 show that the average number of days of
inventory was reduced in all companies, ranging from 5 days to 30 days. Half of the
companies gained an improvement in terms of reduction in inventory days from 2 0 % to
3 0 % . The gain of the rest of the companies ranged between 3 3 % and 4 3 % . The evidence
thus indicates that the companies in the garments industry are able to reduce the period of
inventory holding that helps reduce inventory-related costs.

Table 4.5: Average numbers of days of inventory

Company Before Lean After Lean Reduction Reduction
(days) (%)
1. Fashion Point Ltd. 90 60 30 33
2. Texas Fashion Ltd. 25 20 05 20
3. Beximco Fashions Ltd. 90 75 20 22
4. Shanta Industries Ltd. 17 12 05 29
5. DADA(Savar) Ltd. 120 90 30 25
6. Shata WashWorks Ltd. 35 20 15 42
7. Armana Fashions Ltd. 37 24 13 35
8. Shanta Denims Ltd. - - - -
9. P A X A R Bangladesh Ltd. 90 60 30 33
Note:
(1) One company did not provide data on inventory
(2)20%-30% improvement in 4 companies and 33%-43% improvement in 4 companies.
 89

4.6 L E A N I M P L E M E N T A T I O N I S S U E S

This section provides an analysis of the lean implementation issues in general, which are
essential for an organization to set the stage for lean practices. The lean issues are
analyzed on the basis of the following:

1. Duration of lean implementation in the companies

2. Supply related information
3. The lean techniques adopted by the companies
4. Assistance received by companies for implementing lean practices
5. Training provided and costs incurred on lean system
6. U s e o f M R P , M R P I I & E R P
7. Factors supporting or hindering lean implementation

4.6.1 Duration of Lean Implementation in the Companies

Table A4.7 shows that three companies started lean production practices from the very
beginning of their establishment. This they did, as they reported, to comply with the
requirements of the foreign buyers w h o approved their production system before
production actually started. T w o companies implemented lean system after one year of
establishment. The remaining companies started practicing lean after 4 to 11 years of

establishment.

Since all companies have been successful in reducing cost and improving productivity,
the data regarding the duration of lean practices implies that the effectiveness of
implementation rather than length of time of practices determine the success of lean
system. This will be further discussed in the next chapter.

4.6.2 Supply-Related Information

Two important preconditions for implementing a JIT system in organizations are timely
delivery of raw materials and components as well as a long-term supplier partnership. It
is evident from Table A4.8 that 2 2 % of the companies have more than 50 suppliers. A s
 90

discussed earlier a larger supplier base is not ideal in lean practice. So it is questionable
h o w the companies could maintain long term relationships with the larger supplier base

and therefore maintain a lean system.

About half of the companies (44%) are of the view that the suppliers (local) operate their
business in close proximity to the companies, and that the local suppliers are punctual in
the delivery of materials (Table A4.5). Since all companies to a great extent depend on
imported raw materials and they bring materials before production begins, timely
availability of materials for production purpose is not a problem. The companies appear
to have few problems in terms of timely delivery of materials by the suppliers. Although
this is their contention, timely delivery hundred percent of the time m a y not be possible
when the political movement in the country sometimes paralyses the transport system.
During 'hartal' (a general strike called by political parties in Bangladesh which usually
exists in the entire country or a part of the country), curfew, blockade of roads by
political activists etc., suppliers cannot m o v e products from one place to another and this
situation sometimes exists for a long time. In such a situation, it m a y not be possible to
be punctual all the time. This will be further discussed in the next chapter.

4.6.3 Adoption of Lean Techniques

Lean production requires several types of practices. The respondents were asked whether
their organizations had adopted a range of lean production techniques. It is revealed that
the sample companies were practicing several lean tools (Table A4.9). It is evident from
Table 4.6 that all companies adopted the pull production system and two-thirds of the
companies used Kanban for movement of an item from one process in the production
system to another process. Kanban is a very important instrument of lean production
system. A m o n g the surveyed companies two-thirds of them had the Kanban system and
the remaining one-third had no such system. In the kanban process few companies ( 3 3 % )
were using electronic media (computerized instructions/order system; one process owner
is linked with other process owners by computer network). This is followed bv the use of
 91

container or sheet (Table 4.6). Discussion revealed that three companies having pull and
JIT but not Kanban were using oral instructions in the place of Kanban.

Table 4.6: Use pull production and K a n b a n systems (multiple responses)

No. Use of pull production system Percentages
1 C o m p a n y produce products based on 100
customer demand
2 The production processes have been 100
organized in such a w a y that can ensure
timely production based on customer
demand or pull
Use of Kanban system
3 System of use for movement of an item
from one process in the production system
to another process:
(a) Cards
(b) Electric media 33
(c) Container 33
4 Use of Kanban in the production system 66

JIT is a fundamental element of lean production. It is evident from Table A4.9 that all the
companies are using JIT. Kanban is also an important part of JIT that helps organization
to reduce the level of inventory through timely movement of products from one level to
another level on demand. Table 4.7 shows that all suppliers are highly dependable in
terms of timely delivery as well as frequent delivery of materials to the company.
Table 4.7: Just in time deliver by suppliers
No. Indicators of just in time delivery Percentage
1 Suppliers deliver materials to the company on a JIT basis 100

2 C o m p a n y receive daily shipments from most/all suppliers 56

3 Companies can depend on suppliers for on-time delivery 100

4 Suppliers linked with the company by pull system 78

5 Suppliers frequently deliver materials to the company 100

6 C o m p a n y has partnership oriented relations with the suppliers 78

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The companies get delivery of materials from both foreign and local suppliers and only
the local suppliers are involved in the frequent delivery of materials. A n analysis of data
also shows that 7 8 % of suppliers are linked with the c o m p a n y by pull systems and that
the companies have partnership-oriented relations with the suppliers. It is evident from
table (A4.8) that the majority of the companies are dependent on a larger supplier base
and one third of them procure raw materials through tendering. In the first case,
maintaining partnership oriented relations with a high number of suppliers is difficult. O n
the other hand, tendering for procurement of materials indicates a vulnerable relationship
with suppliers. While 5 6 % of the companies receive daily shipments from most suppliers
(local suppliers) which reflect use of JIT, the remaining companies have time-to-time
delivery because they receive foreign supplies. Since some suppliers can not produce
products on time it indicates a lack of a JIT system in some companies - although these
companies claim that they have JIT system. This will be discussed in the next chapter.

Table A4.9 presents the data related to different lean techniques adopted by the sample
companies. The data show that 7 8 % of the respondents claim to have been practicing
continuous improvement (Kaizen) and have built quality into design, which is an
essential practice of lean. This will be further discussed in the next chapter.

All the companies have Quality Control (QQ systems (Table A4.9). In 22% of the
companies the workers do the quality inspection and the remaining have separate quality-
inspection team. All the companies reported that management provides feedback to the
workforce in a timely fashion. In response to the question whether they adhere to daily
schedule, all respondents answered in the affirmative. It is essential for lean production
to adhere to a daily schedule (Phan and Matsui, n.d). The greater the adherence, the
greater is the ability of the company to keep to schedule in the production of parts/items.

The 5S program consists of such activities as seri (sorting out unnecessary items), seiton
(arranging all necessary items in good order), seiso (cleaning workplace completely),
seiketsu (maintaining a high standard of housekeeping), and shitsuki (training people to
follow good housekeeping disciplines). The present study investigated the use of 5S in
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the sample garment manufacturers. Less than half of the companies were found to use 5S
to some extent (Table A4.9). But during the personal observation by the researcher it was
found that all the companies have clean and orderly workplace. This indicates that the
remaining companies m a y have some elements of 5S but they do not have clear
understanding about the method. A m o n g a number of lean tools, 5S is one of the most
quick and easy to implement. This is because trained employees can help implement 5S
program organization-wide without additional resources. But when companies are
following other complex lean methods than 5S, this can be taken as an indication of lack
of truly lean environment in the companies under study. This particular point will be
further discussed in chapter five.

Table A4.10 shows that the sample companies are all successfully meeting the normal
production schedule every day. All companies claimed that they can meet the daily
production schedule and they are never behind the schedule. It is questionable whether it
is really possible or not. In the observation process the researcher identified that
companies indicated the target schedule through a visual management technique to
follow w h o are running behind that target. This m a y mean workers can meet the planned
schedule but occasionally fails to meet the target. This could be a short term problem
rather than a long term problem. The particular point will be discussed further in the next
chapter.

The respondents further reported that the daily production schedules in their companies
are prepared in such a w a y that the schedules allow sufficient time for machine
breakdowns and unexpected production stoppage. All of the companies have
arrangements for systematic and regular maintenance of machines which prevent frequent
malfunctioning of machines.

Lean production requires the consideration of the arrangement of equipment which

means the machine layout into manufacturing cells and installation of machines
according to JIT production flow (Table: A4.11).
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All but one company reported that they do not have proper arrangement of equipment
(Table A4.11). This company was of the view that due to lack of space it could not
arrange the equipments properly. But all the companies have well maintained modern
standard machinery as well as excellent material handling system. This point will be

further discussed in the next chapter.

The Application of Total Preventive Maintenance is an important technique of lean

production because it is a lean equipment maintenance strategy for maximizing overall
equipment effectiveness through empowering workers to maintain and improve
operations and equipment (Alukal and Manos, 2002). Most of the companies' claims to
(89%) have adopted Total Preventive Maintenance System and they have a regular
program of cleaning and servicing machines and a formal repair system (Table A4.12).

Compared to the pre-lean period, all the sample companies reported that they need less
time for one production run and beginning of next run. But the time that was reduced
varies from company to company which ranges from 20 minutes to 3 hours (Table
A4.13). This reveals that all the companies successfully reduced the changeovers time to
some extent. This point will be discussed in the next chapter.

The use of small lot sizes was emphasized by all of the companies with 77 % of them
reporting that they emphasize small lot sizes in order to increase manufacturing flexibility
(Table A4.14).

It is interesting that their understanding of small lot size varies from the actual mean
Each company has its o w n meaning of lot size. For example while one company
indicated small lot as ten pieces, another company viewed it as twenty pieces or more.
There is no specific or c o m m o n definition of lot size to all the companies. These
variations in the meaning are also a barrier to lean. This will be discussed later in the next
chapter.
 95

Effective lean manufacturing requires a just-in-time link with the customers of finished
products. W h e n a company is JIT-linked with the customers, that means, it has a short
order-to-ship cycle time, it can carry out the product delivery functions on a regular basis
without disruption. The data in Table A4.14 reveals that most companies (89%) can
deliver products to customers on time. It is also evident that all the surveyed companies
have a pull type link with the organization and that they adapt their production schedule
to sudden production stoppages. Before lean, the m a x i m u m order-to-ship cycle time was
120 days and m i n i m u m was 15 days. After implementing lean, the m a x i m u m cycle time
is currently 90 days and the m i n i m u m is 10 days. This reduction in cycle time is very
significant.

4.6.4 Assistance Received for Implementing Lean Systems

In Bangladesh the concept of lean manufacturing is not widely popular across the
industry sector. A s a result, companies in general experience difficulties in implementing
such systems. Keeping this fact in mind, the respondents of the sample companies were
asked to report whether they received any assistance from any third party while they
embarked on lean implementation.

Over half of the companies (55%) (Table A4.15) reported that they received technical
assistance (as well as training) from their parent companies. The rest of the companies
(45%) received similar assistance from their foreign customers such as Wal-Mart, J.C.
Penny, Index, Target, etc. The companies also received training assistance from the
B G M E A - t h e umbrella organization, which looks after the overall welfare of the garment
factories in Bangladesh. This will be discussed in the next chapter.

4.6.5 Training Provided and Costs Incurred on Lean System

Appropriate training on lean production system is critical for implementing and

sustaining lean practices. Training develops employees with the attitudes and skills
needed for effective implementation. In response to a question on the receiving of lean
related training, the respondents told that appropriate and adequate training was provided
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to the employees on lean production system. The training was arranged by the companies
and conducted by consultants as well as the B G M E A . O n e company reported that lean-
related training was also imparted to the suppliers of raw materials and components
including required accessories that are used in the garment factories (Table A4.15).

Respondents viewed training and education as important for lean implementation. These
m a y incur additional costs but in the long run they bring benefits. Lean Implementation
involves various costs, both direct and indirect. The costs include consultancy fees,
training costs, expenditures incurred for re-arrangement of the plant and machinery,
installation of computerized systems, etc. W h e n asked, the respondents said that they
incurred costs in terms of consultancy fees and training (Table A4.16). Other costs were
minimal, as they did the things with their o w n people and with the existing logistic
supports. As the benefits are greater than that of the expenditure, companies felt
motivated to work towards lean.

4.6.6 Use of ERP/MRP and Other Software

Use of appropriate software for lean practices is expected for the companies that intend
implement lean. In response to a question about the use of such software, 7 7 % of the
respondents reported that they were using their o w n customized software. A s reported,
their foreign buyers have approved the customized software for use in the companies.
One-third of the companies (3) were using Material Requirements Planning ( M R P )
software system (Table A4.17). N o n e of the companies use Enterprise Resource Planning
(ERP) or Manufacturing Resource Planning ( M R P II). In fact, M R P does not support the
pull production system rather it supports push production system. This will be discussed
much detail in chapter five.

4.6.7 Factors Affecting Lean Implementation

Lean implementation requires adequate support of various types. In this study, an attempt
was made to identify the supporting and hindering factors for lean implementation in the
Bangladeshi garmentsfirms.The data are presented in Table 4.8.
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Table 4.8: T h e factors that are supporting or hindering lean practices in the
companies (Multiple responses)
Supporting Factors Percentages
Assistance from customer/parent company 11
Customer suggestions 11
Positive attitudes of workers 22
Training provided by B G M E A 33
Pressure from govt, and buyer 11
Internal incentive system 11
Top management support 22
Pre awareness about the system 11
Hindering Factors
Resistance from workers 33
Political unrest 33
Port problem 11
Traffic problem 11
Transportation problem 11
Power supply 11
Migration of trained personnel 22
Inadequate knowledge 11

The data revealed that the type of supporting factors vary from company to company.
Perhaps lean is adopted in different ways by different companies, depending on the
culture and available resources. The companies benefited from a host of support facilities
such as training from B G M E A - t h e umbrella organization entrusted with the overall
welfare of the garment factories in Bangladesh (33%), positive attitude of workers (22%),
top management support (22%), assistance from customers or parent companies (11%),
customer suggestions (11%), pressure from government and buyer (11%), internal
motivation (11 % ) and pre-awareness about the lean system (11 % ) .

In addition to the supporting factors, views of respondents were also sought on the factors
that might have hindered lean implementation (Table: 4.8). The hindering factors, in
order of ranking are: resistance from workers, political unrest, migration of trained
personnel, port problem, traffic and transportation problems, disruption in the power
supply and inadequate knowledge of some employees about the lean system.
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During the interviewed, it was revealed that different companies undertook measures to
address the hindering factors. Although the steps varied from company to company in

general, these include:

(1) Introduction of incentive program for the workers to enlist their support and stop
migration. Companies assured the workers that no downsizing or retrenchment
would be made to drive fear out of the minds of workers. This certainly worked
successfully in stopping migration to a great extent.

(2) Rescheduling the supply /delivery of materials. The company that was facing
traffic problem re-scheduled the supply plan in such a w a y that the inbound
logistics and outbound logistics m o v e between midnight and d a w n w h e n the roads
remain free from traffic congestion. The company facing electric/power supply
problem has installed a gas generator in the plant. O n e company offered refresher
training programs on lean production system to help employees gain adequate
knowledge. The management of this company felt that this kind of intervention
also helped partly to reduce employee resistance to lean implementation.

4.7 BENEFITS DERIVED FROM LEAN PRACTICE

Lean production involves elimination of waste by reducing all sorts of non-value added
activities and can derive several benefits for a company. A s Table 4.9 reveals, in response
to a question about the gains/benefits from lean practices, 8 9 % of respondents reported
that they achieved an increase in sales and profits and 6 7 % of the companies reported the
reduction in order processing errors and paper work. This they did by introducing
computer and both internet and intranet in their office environment. Before that they had
manual system for processing an order as well as mailing other official paper works
which was a basic reason of mistakes and errors. It is also revealed that all the surveyed
companies (100%) had a reduction in manufacturing cost whereas only 4 5 % of them
were able to reduce the number of workers. These improvements m a y be achieved by
using some aspects of 5S but did not realize.
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Table 4.9: Benefits derived from the lean practices (multiple responses)
No. Benefits from lean practices Percentages
1 Reduction in order processing errors 67
2 Reduction of paper work in office areas 67
3 Reduced staff demands allowing the same number of 78
office staff to handle large number of orders
4 Increase in revenue with no increase in labor cost or 56
overhead cost
5 Increase in Sales 89
6 Increase in profits 89
7 Reduction in manufacturing cost 100
8 Reduction in other costs 89
9 Reduction in the number of workers 45

In addition to this, 7 8 % of the companies reduced staff demands allowing the same
number of office staff to handle large number of orders. The reason is that computer can
process several orders at a time without the involvement of additional staff. Over half of
the companies ( 5 6 % ) gained an increase in overall revenue without increasing labor or
overhead costs. This will be further discussed in the next chapter.

4.8 MANUFACTURING PERFORMANCE

4.8.1 Savings Resulting from Lean Practices

It is a usual expectation that lean practices would result in considerable savings. A n

attempt was m a d e to elicit information regarding the amount of savings that the
companies could achieve during the one year. The respondents in all companies did not
agree to provide actual data regarding amount of savings. However, an analysis of the
views of the respondents suggests that 4 4 % of the sample companies made significant
savings over 12 months period through the reduction of labor costs in the production
process (Table A4.18). A s reported by the senior managers, the companies could reduce
labor costs through reduction of the number of workers. The workers handled a larger
variety of works and this resulted in good savings. Over a long period of time the
accumulated savings would be very significant.
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4.8.2 Reduction in Production Costs

An attempt was made to get the opinion of the plant managers regarding the reduction of
production costs due to implementation of lean system. The respondents provided data
concerning the unit costs of production before lean and after lean. The results are
presented in Table 4.10.

Table 4.10: Reduction in unit production cost

Company Before Lean After Lean Reduction As a %
($) ($) ($)
1. Fashion Point Ltd. 8.50 7.00 1.50 17.6
2. Texas Fashion Ltd. 11.0 9.00 2.00 18.1
3. Beximco Fashions Ltd. 4.40 3.20 1.20 27.2
4. Shanta Industries Ltd. 10.0 8.00 2.00 20.0
5. DADA(Savar) Ltd. 1.40 1.30 0.10 7.1
6. Shata WashWorks Ltd.
3.50 3.00 0.50 14.2
7. Armana Fashions Ltd.
0.87 0.84 0.03 3.4
8. Shanta Denims Ltd.
9. P A X A R Bangladesh Ltd.
4.50 3.00 1.50 33.3
Notes:
(I) The unit production cost has been reduced through increasing the number of units produced with the
same labor hour.
(2) One company could not provide data.

The data indicates that the m a x i m u m per unit cost reduction was $2.00 and m i n i m u m was
$0.03. For five companies, the improvement in cost was fairly substantial while for others
the improvement was negligible (3.44% to 14.28%). Whatever cost reduction occurred, it
was achieved through an increase in the number of units of products with the same
workers as well as reduction in the inventory compared with the pre-lean period. This
point will be further discussed in the next chapter.

4.8.3 Total Productivity Improvement

In response to a question - "What is the average productivity increase in the company

after implementation of lean?"- the sample companies indicated that their productivity
improved by a m a x i m u m of 6 0 % and minimum of 1 0 % . The majority (67%) of the
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companies had 1 0 % to 2 0 % productivity improvement whereas the remaining had 4 0 % to

6 0 % improvement (Table A4.18).

No actual data on productivity could be obtained from the companies, as the companies
consider these data strictly confidential. Thus, no generalization is possible about
productivity based on the opinion of the respondents. This will be further discussed in the
next chapter.

4.8.4 Lead Time

Data were collected on the total amount of time taken to complete an order from the
procurement of raw materials tofinalmanufacturing of a product. The time taken is
expressed in terms of the average number of days, known as lead time. The shorter the
lead time, the more gain for a company and better the satisfaction of customers. The
collected data are tabulated in Table 4.11.

Table 4.11: Total amount of time (average n u m b e r of days) taken to complete an

order from raw materials to manufacturing

Company Before Lean After Lean % gain

due to
Reduction
1. Fashion Point Ltd. 30 15 50
2. Texas Fashion Ltd. 16 13 19
3. Beximco Fashions Ltd. 80 70 13
4. Shanta Industries Ltd. 120 90 25
5. DADA(Savar) Ltd. 40 25 38
6. Shata WashWorks Ltd. 42 28 33
7. Armana Fashions Ltd. 60 55 08
8. Shanta Denims Ltd. 120 105 13
9. P A X A R Bangladesh Ltd. 60-90 40-45 33-50

A n analysis of the tabulated data shows that the lead time in the companies ranged from
16 days to 120 days before implementation of the lean production system, while the
corresponding lead time reduced within the range of 13 days to 105 daysthe minimum
reduction being three days and m a x i m u m 30 days. The data also indicate that three
companies saved 8 % -12.5% , two companies saved 1 8 % - 2 5 % and four companies saved
from 3 3 % - 5 0 % . Through implementing lean, the companies focused on JIT delivery of
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raw materials, proper equipment layout etc. which ultimately reduced the overall lead

time to complete an order.

4.8.5 Quality Improvement

In response to a question-"What is the average quality improvements in the company due
to lean implementation?"- the surveyed companies reported that their quality improved to
a m a x i m u m of 8 0 % and minimum of 1 0 % . While 3 3 % of the companies had 1 0 % to 2 0 %
quality improvement, similar proportion of the companies achieved quality improvement
ranging from 4 1 % to 6 0 % (Table A4.18).

About one-fifth of the companies had 21% to 40% improvement in quality while only
one company showed 6 1 % to 8 0 % improvements. From the discussion it is revealed that
this was achieved by following the buyers' prescribed quality system as well as quality
control process. This will be further discussed in chapter five.

4.8.6 Manufacturing Cycle Time

In a lean production system, continuous endeavors need to be made for the reduction of
manufacturing cycle time. The higher the improvement in cycle time (i.e., reduction in
the time taken), the greater is the gain to the company in terms of lead time as well as
timely delivery of products. Because the company can make more product in a given time
and can make fast delivery. In the present study, the companies experienced some gains
in terms of reduction in manufacturing cycle time that ranged from 5 minutes to 20
minutes (Table 4.12), thereby indicating a time-savings of 12.5% to 33.33%.
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Table 4.12: T h e a m o u n t of time (hour/minutes) to accomplish standard w o r k

sequence for making a product
Company Before Lean After Lean Reduction % of reduction
(minutes) (minutes) (minutes)
1. Fashion Point Ltd. 60 40 20 33
2. Texas Fashion Ltd. 30 15 15 50
3. Beximco Fashions Ltd. 55 49 06 11
4. Shanta Industries Ltd. 75 60 15 20
5. DADA(Savar) Ltd. 50 39 11 22
6. Shata WashWorks Ltd. 60 40 20 33
7. Armana Fashions Ltd. 50 40 10 20
8. Shanta Denims Ltd. 60 40 20 33
9. P A X A R Bangladesh Ltd. 40 35 05 13

Note: The percentages have been rounded to nearest figure.

It is worth-mentioning that in a garment factory the sequence of work for making a

product is fixed up in terms of minutes. This is because many products require less than
an hour of time from the beginning to the end of the cycle. This will be discussed in the
next chapter.

4.8.7 Waste Minimization

Table A4.19 presents data regarding the minimization of the seven types of lean
manufacturing wastes.

A good number of companies reduced overproduction and unnecessary inventory by

following the pull production and JIT system. 2 2 % of them reduced the defects rate while
7 8 % minimized waste by a considerable extent. Inappropriate processing and excessive
transportation wastes were reduced in 8 9 % of the respondent companies. Two-thirds
(67%) of them could reduce unnecessary motion but due to interruption in the power
supply the remaining companies sometimes faced the motion problem. Around half
(44%) of the companies could reduce the waiting time problem but for power supply
interruption, the remaining companies sometimes faced waiting problem. Overall, the
data indicate a significant minimization of wastes in all forms. This point will be

discussed in the next chapter.

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4.9 S U P P O R T I N G E N V I R O N M E N T A L F A C T O R S

4.9.1 Factors Affecting Productivity

A n overwhelming majority of the respondents (89%) reported about the important impact
of leadership and team environment on productivity (Table A4.20). A s stated by Certo
(2002), leadership process dictates the behavior of others to accomplish the objective.
The same author defines team as a group whose members influence one another toward
the accomplishment of objectives. Respondents said that right instructions from leaders
and influence of team members have a great impact on productivity improvement.

As we know, culture is the set of characteristics of a given group of people and their
environment. This is the factor that contributes most to the increased complexity and
challenges. In this study more than half of the respondents reported that culture has an
impact on productivity. O n e of the most important prerequisites of lean implementation is
appropriate cultural transformation. Because traditional culture does not support workers
involvement, follows long hierarchy, less emphasis team work etc. Under this rigid
traditional environment workers do not feel motivated which ultimately lowers
productivity. That is why, transformation of a traditional and rigid culture to a lean-
supportive culture is considered essential.

In the present study an attempt was made to understand the role played by trade unions in
the implementation of a lean production system. It m a y be noted that in Bangladesh, an
organization having 50 or more workers is legally obliged to allow workers to organize
trade unions. However, an exception is that the enterprises in the Export Processing
Zones (EPZ) need not allow trade unions. In the present study, seven companies out of
nine were selected from Dhaka E P Z and two companies from outside of the Zone. It was,
therefore, not possible to study the impact of trade union on lean implementation. The
single company claimed to have trade union impact on lean implementation (Table
A4.20). This point will be discussed in the next chapter.
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4.9.2 Organizational Culture

Table 4.13 presents the score values and mean scores of each item that measures
organizational culture as well as overall mean score of all items.
Table: 4.13: Organizational Culture
Scores of Scale Value
Item N o . 1 2 3 4 5 Mean score
1 All employees in our company are 2 7 4.76
committed to achieving organizational
goals
2 Employees are generally supportive 1 6 2 4.11
when they are asked to work longer
hours
3 Management has a concern for the 6 4.33
employees
4 Most employees place priority on 2 4 4.11
organizational interests rather than on
individual interest
5 Managers generally encourage 1 2 4 2 3.78
subordinates to participate in making
decisions in areas of their concern
6 W e have a culture of communicating 7 2 4.22
with each other without fear
7 W e have job security in our company 1 5 3 2.88
8 Top management is supportive in the 4 5 4.56
implementation of quality related
programs in the company
9 In our company, people are considered 5 4 4.44
assets of the company
4.13

The overall mean score (4.13) indicates that the respondents fairly agree on the existence
of various aspects of corporate culture in their companies, although it does not suggest
strong agreement. A close analysis reveals that the overall mean score is adversely
affected by an extremely low score in two items (No. 5 & 7). In six companies,
respondents strongly agreed that employee commitment is an important measure of
organizational culture, and in three companies, respondents agreed about the employee
commitment in achieving organizational goal. The respondents of one company
disagreed with the statement "managers generally encourage subordinates to participate
in making decisions in areas of their concern." In one company the respondents feel that
they do not have job security. In all other items, the respondents either agreed or strongly
agreed (mean scores range from 4.11 to 4.76), thereby indicating a fairly dynamic
corporate culture in the companies. This will be further discussed in the next chapter.
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4.9.3 Leadership Patterns in the Organization

The role of the leaders within the organization is the fundamental element of sustaining
the progress of lean thinking (wikipedia, n.d). The leadership patterns, for the purpose of
this study, were measured in terms of six-item statements on a 5-point Likert-type scale

(Table 4.14).
Table 4.14: Leadership patterns and cooperation of trade union in the organization

Item N o . 1 2 3 4 5 M e a n score
1 Our senior managers provide 5 4 4.44
clear directions for achieving
goals
2 Most of our senior managers are 2 3 4 4.22
qualified enough to lead changes
3 Managers in general encourage 3 6 4.66
team work rather than
individualistic work
4 Our senior mangers encourage 5 4 4.44
learning; they disseminate
important information among the
employees
5 Our senior managers keep their 6 3 4.33
promises
6 Our senior managers are 4 5 4.55
concerned about the quality of
products
7 The trade union leaders 8 1 1.22
cooperate the management for
implementing any change
program

The respondents indicated their choice of statements which asked them to indicate
whether senior managers provide clear directions for achieving goals, whether they are
qualified to lead changes, whether they encourage team work and disseminate
information among employees, keep promises and whether they are concerned about the
quality of products. The score was quite high for the responses to the statement regarding
'team work' (4.66). The respondents also fairly agreed with the senior managers' concern
 107

about the quality of products, their clear directions for achieving goals, dissemination of
important information among employees as well as keeping promise. The respondents
scored low in responses to the statement regarding the "cooperation of trade union
leaders in the implementation of any change program". This is because of the non-
existence of trade union in the E P Z companies in Bangladesh. Both the individual
statement scores and the overall scores indicate that the top leaders in the companies have
appropriate qualities to implement lean. This point will be further discussed in the next
chapter.

4.9.4 Investment in Training and Team Environment in the Organization

The opinion of the respondents was solicited about the extent of commitment of the
managers for investing in training for lean implementation. The respondents fairly agreed
that management has a commitment to invest for training of employees (Table A4.21).

It is also evident from the same table that the companies have cross-functional teams
consisting of people from various departments. The existence of management
commitment for investment in training and team environment suggests that the
companies under study have an enabling environment for lean implementation.

4.10 BUSINESS CHALLENGES THAT DRIVE THE COMPANIES TO PRACTICE

LEAN

Table A4.22 shows the response to the question: "What business challenges have driven
the company to practice lean?" The majority (56%) of the companies showed high
competition as a major challenge to practice lean followed by the pressure from
customer-company (22%), cost reduction (22%), reduced order or losing market demand
(22%). In addition to these business challenges, the reasons to change to lean production
techniques arose from a number of different sources in a few companies, such as (Table

A4.23):

Desire to minimize costs by reducing inventory

Intention to satisfy customers

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. Encouragement of foreign buyers to introduce lean for cutting costs of production

motivation from promoters/employees

improving the current condition

searching for best practices

The reasons toward lean production practice were not common for all companies, except
a few. This is reflected in the spread of results shown in Table A4.23. The above changes
occurred for various reasons. Customer satisfaction is at the centre of all production
functions. A n d customers cannot be satisfied unless they can be given products with the
right quality with the competitive prices. So, the desire to maximize customer satisfaction
led the firms to implement lean practices. The buyers abroad as well as the owners also
encouraged the management of the companies to m o v e from traditional production
system to more improved system for reducing costs that would eventually reduce prices
of products. Management people also intended to improve the current, traditional system
of production in order to be more competitive in the market. O n e company also learned
about the lean system while they searched for best practices in other competitive

companies.

4.11 AREAS WHERE CHANGES HAVE BEEN MADE

Majority (78%) of the companies said that changes in product design and manufacturing
process occurred in their organization as a result of lean implementation; 4 4 %
respondents indicated a change in supplier networks and the remaining (22%) focused on
factory management followed by inbound logistics (11%) and outbound logistics (11%)
(Table: 4.15).
Table 4.15: Areas of organization where changes were m a d e
# Areas of changes Percentages
1 Product design 78
2 Inbound logistics 11
3 Outbound logistics 11
4 Manufacturing Processes 78
5 Supplier network 44
6 Factory management 22
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In addition, companies mentioned a variety of changes that took place within their
organizations (Table A4.24). These include:
cultural change

education of workers and suppliers

empowerment of employees
commitment of top level managers
relationship with suppliers
rearranging the manufacturing process
creating awareness
Managers need to address required changes for lean implementation. In this study
different companies have indicated and experienced different changes such as cultural
change, education of workers and suppliers, empowerment of employees, commitment of
top level managers, relationship with suppliers, rearranging the manufacturing process
and creating awareness.

4.12 RESISTANCE AND THE RESISTERS

Tables A4.25 present the responses to the questions: "What were the resistances faced by
organizations and w h o were the registers in lean implementation? Two-thirds of the
respondents indicated that they faced resistance while 2 2 % of the companies experienced
no resistance. Resistance was created in one company by the middle managers, in another
company by the lower level managers and infivecompanies by the shop-floor personnel.

4.13 EXPERIENCES OF ORGANIZATIONS BEFORE AND AFTER LEAN

IMPLEMENTATION

Although few organizations had introduced lean from the day of their inception, everyone
had shared there experiences in response to a question "What were/are the experiences of
your company before and after lean implementation?" It is revealed from their opinion
that each company experienced difficulties before and during lean implementation as
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well as experienced improvements. Compared with the pre-lean period the companies, in

varying degrees, achieved the following improvements (Table A4.26):

Improved productivity, quality and lead time

Developed strong relationship with suppliers

Improved on time delivery

More disciplined, systematic and committed than before

More satisfied customers

Improved manufacturing process
Improved performance

4.14 FACTORS AFFECTING THE SUCCESS AND FAILURE OF LEAN

MANAGEMENT STRATEGIES

The views of the respondents to a question with some specified factors, "What factors
affect the success and failure of lean management strategies in the company?" - are
presented in Table A4.27.

The majority of them (89%) indicated that political unrest had an impact on their lean
management strategies in the company. They reported that political turbulence in the
form of general strikes, curfew and street agitations de-motivate their foreign buyers to
invest here as well as increase the absenteeism of workers.

As lean is highly dependent on timely delivery, 44% of the surveyed companies reported
the adverse impact of interrupted power supply as an issue of decreased productivity and
increased cost. Installation of gas generator in the factory as a substitute for uninterrupted
power supply resulted an increased cost. T w o companies had no power supply problem
whereas three companies indicated power supply problem to some extent.

Two companies reported about the transportation problem that sometimes affected on-
time delivery. Because of o w n transportation arrangement, 3 3 % had showed no transport
problem whereas 4 4 % it as a lesser problem but had some sort of port problem. Different
 Ill

companies are using different route to m o v e their products from one place to another. A s
indicated by the respondent companies (33%) those w h o usually use the Dhaka City
(densely populated) routes for product movement, they face high traffic problem; 2 2 % of
them had indicated no traffic problem while 4 4 % of them had showed less traffic
problem due to the different route. This will be discussed later in the chapter five.

Views were taken on the necessity of quality human resources for successful lean
implementation. In response to a question, " D o you think quality human resource is a
problem for lean implementation?", all the companies agreed upon the necessity of
quality h u m a n resource for lean implementation. While few respondents provided
straight forward "yes" answer to this question, others provided detailed views. It is
revealed from the discussions that quality human resource can take improvement
initiatives, introduce n e w ideas and bring necessary changes that are important for lean
implementation and its success.

4.15 FUTURE PLANS TO MAKE LEAN MORE SUCCESSFUL

The views of the selected companies concerning future plans to make lea
successful were sought in the interview with the respondents. The interview responses
indicate that all the companies have plans regarding future improvement. Companies are
mostly interested in introducing other lean practices in addition to the existing practices
as well as undertake training and education programs for the suppliers and distributors
besides the employees. All the companies responded positively to the question of
benchmarking. If the resources and other facilities are available, then they are interested
in undertaking a benchmarking program. This point will be discussed further in the next

chapter.

4.16 Chapter Conclusion

The first section of this chapter discussed the profiles of nine surveyed companies. The
second section presented the data collected from nine selected companies through
questionnaire, interview and observation and also discussed the themes emerged from
these data. The selected Bangladeshi companies found to have practicing a variety of
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lean tools and techniques. Several supporting and hindering factors have also been
identified with several performance improvements. T h e next chapter looks at the
interpretation of this data.
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Chapter Five

Discussion

5.1 Introduction

The previous chapter presented the results from nine Bangladeshi companies concerning
their journey towards lean production. This chapter goes on to analyze these results
before exploring the similarities and differences between the implementation of lean in
Bangladesh and previous efforts of other important initiatives found in the literature.

The degree of 'leanness' of an organization can be measured by the use of various lean
practices. A m o n g a total of nine organizations, all nine claimed to have extensive lean
practices in their plants. Findings indicate that the surveyed companies have different
visions of lean. T h e companies customized the lean ideal according to their culture and
resources resulting in a number of different interpretations of lean. Perhaps for the
'ownership' of change this is essential, but the fundamental vision must not be changed
and the interpretation of the philosophy must not differ from the intended meaning. In the
present study, in some cases, the perceived results and the findings were not the same.
The questionnaire w a s structured in such a w a y that unveils to what extent the companies
are applying different lean tools, in addition to a number of related open questions in an
attempt to identify the company specific interpretation of lean. Thefirstset of questions
was general in nature and sought information regarding the practice of various lean tools
and achievement of results as well as environmental influences. The second set of related
questions w a s open-ended and the respondents' answers in some cases contradictory to
the actual results. This indicates the level of understanding about lean philosophy. It
appears that the understanding of the respondents can be construed as a barrier to lean
implementation as in some cases they had misinterpreted certain aspects of the lean
philosophy. T h e companies need to develop an action plan in order to raise awareness to
achieve further improvements during lean implementation.
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5.2 Extent of Lean Production Practices

The study attempted to analyze the extent of lean production practices in the garment
factories of Bangladesh. Successful lean implementation depends upon various issues.
The study results revealed (Table A4.7) that s o m e companies initiated lean
implementation from the beginning of the c o m m e n c e m e n t of production in their plants,
while others started lean implementation after a few years from the year of establishment.
However, the findings suggest that since all companies have been successful in reducing
cost and improving productivity, it is not the length of time of practices, but rather the
effectiveness of implementation that determines the success of lean implementation.
Table A4.1 of the previous chapter indicates that irrespective of the legal status such as
private, public or international joint venture, the companies achieved improvement in
productivity and performance. So, there is no direct impact of legal status of companies
on production systems or any organizational programs like lean production. While team
work is one of the core concepts of lean production, section 4.5.2, Table A4.2 of chapter
four showed that 5 6 % of the companies had team based structures and the remaining
companies had functional structures. This is in sharp contrast with the general notion that
a team structure is essential for lean implementation, or the successful implementation of
any kind of change initiative. Although it is revealed in the sample that variation among
the firms with different organizational structure is not an obstacle in lean implementation,
at the same time it is indicated that top management of the companies are not aware of
the fact that a functional structure restricts flexibility. The surveyed companies with
functional structures developed a cross-departmental coordination system (limited
number of departments because of the small size of the firms) and an "oversee/overall
monitoring by the C E O ' mechanism in order to reduce the inflexibility. Though they are
achieving similar results to the team based companies- this prevents reconfiguring
organizational structure from the functional to a team based-structure. If implemented
correctly, lean provides a set of visual management techniques to easily communicate
instructions, indicate inventory levels and process status and work flows.

A n important indicator of lean production is a smaller supplier base (Sohal and

Egglestone, 1994. In response to the question regarding "the number of suppliers of raw
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materials of the company"- the findings based on chapter four, Table A4.8, indicate that
the majority of the companies were dependent on a large supplier base which is in
contrast to the lean practice fundamentals. Although all of the companies intend to
maintain long-term relationships with suppliers (Table A4.5, section 4.6.2), maintaining
long and stable relationships with such a large supplier base is, in reality, difficult.
Having a large number of suppliers and not reducing the number, even after a long period
of lean implementation requires a long term strategy to reduce supplier numbers and
therefore realize more benefits such as a long term relationship with suppliers through
collaborative risk sharing, cost sharing and information sharing. A s is evident from Table
A4.5, about half of the companies have suppliers (local) within close proximity. The
respondents also indicated that they are always punctual in terms of timely delivery
which indicates their general response to the question.

The findings that can be discerned from Table A4.9 is that the sample companies had
adopted a large variety of lean tools and techniques such as Kanban, JIT, 5S, Pull
production, T P M , Kaizen etc. Pull production system and Just-in-Time are two very
important practices of lean. The primary focus of JIT centers on a pull approach where by
manufacturing activities of one level are linked and controlled by the activities of the next
level (Alukal & Manos, 2002. Usually, a Kanban system directs the signal from one level
to another in response to a need for product or service (Piciacchia, 2003). Finding
indicates that all the companies had both a pull production and a JIT system (Table 4.6 &
Table A4.9) but only 6 6 % of the companies had practiced Kanban (Table A4.9). From
the discussion in section 4.4.3 of chapter four it is revealed that the companies without
Kanban were using oral instructions in place of the Kanban. This oral instruction may
cause noisy environment, unreliability and possible miscommunication. If these
companies introduce a more structured visual tool such as a kanban system, it could make

lean more successful.

JIT is a fundamental element of lean production. The findings emanated from the analysis
of the responses to the questions in "whether suppliers can deliver materials to the
company on a JIT basis" and "Can the companies depend on suppliers for on-time-
delivery?" Table 4.7 indicates that all the companies claimed to have JIT systems, and
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their suppliers (local) are highly dependable in terms of frequent and timely delivery of
materials. However, the import of materials cannot fall under JIT, as JIT means
producing the right amount of product at the right time to the right place with a view to
reduce the inventory. In the present study, section 4.6.3, Table:4.7 of previous chapter
showed that the companies were found to have a JIT system while getting supplies of raw
materials from the local suppliers. In the case of imported materials the companies had a
delivery window of two months. This allowed the companies to develop availability of

products in the JIT process.

Kaizen is a basic and essential practice of lean. Findings from Table A4.9 show that a
good number of companies have been practicing continuous improvement or Kaizen and
have built quality in the design (Table A4.6) of their products. A s a part of the
improvement process the companies reported about the suggestions scheme, employee
involvement, reward to employees, spontaneous problem solving, management feedback
to workforce in a timely fashion etc. The suggestions were highly encouraged and
implemented by the companies with a view to continuous improvement.

As lean is a customer responsive production system, on-time delivery and adherence to a

daily planned schedule are essential for the companies to be responsive. In response to
the question "whether the company adheres to a daily schedule"- the findings based on
Table A4.10 of chapter four revealed that all the companies can meet the normal
production schedule. But in the existing socio-cultural and unstable political situations in
the country, companies cannot meet the schedule every time. The political situation in
Bangladesh is generally unstable. Clashes between different political groups, hartals
(stoppage of work in general in response to a call by political parties), strikes, curfew etc.
are very c o m m o n phenomena. Currently the country is under the control of Caretaker
Government. O n the other hand, although the companies overcame the problems to a
good extent but still the companies had some problems like power supply, transportation,
and traffic congestions etc. which sometimes delay the delivery process. Under the
circumstances described above, adherence to the planned schedule is difficult.
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Lean production requires considerable attention to the arrangement of equipment which

includes machine layout into manufacturing cells and installation of machines according
to JIT production flow. Respondents were also asked regarding the physical arrangement
of equipment. It is revealed from the results of Table A4.ll of the previous chapter that
all the companies except one had a proper arrangement of layout either in U or V shape.
Efficient arrangement of equipment reduced the need for factory facilities by driving
d o w n space required for product production. Observational evidence indicates (Table
A4.6) that the companies have well maintained modern and high-tech machinery as well
as good material handling systems.

The discussion in chapter four, Table A4.9, section 4.6.3 indicates that less than half of
the companies are using 5S. But in the process of continuous improvement of quality, 5S
is a quick and easy tool. W h e n the surveyed companies are using other complex methods
of lean but not 5S, it indicates the lack of a true lean environment in the companies under
study. Usually if the companies have adequate knowledge and awareness regarding lean
tools, they m a y first introduce the easy tools to observe benefits and then gradually the
complex methods. Personal observation also revealed that all the companies had a clean
and orderly workplace which means perhaps they are using some aspects of 5S but they
did not realize it. This suggests that the companies require a thorough understanding
about lean related methods to ensure success.

In response to the question of having Total Productive Maintenance (TPM), the majority
of the companies reported that they practiced T P M (Total Preventive Maintenance) and
they have regular program of cleaning and servicing (Table A4.12). However, regular
cleaning and servicing does not mean the true T P M . A s described by E P A , 2003, p.l 1),
"TPM seeks to engage all levels and functions in an organization to maximize the overall
effectiveness of production equipment". Although the companies claimed to have T P M ,
but they need more clear understanding regarding this technique to get the full benefits
from it. Discussion of Table A4.13 also shows that the surveyed companies minimized
machine changeover time ranging from 20 minutes to 3 hours. This is quite a good
achievement.
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In the previous chapter, analysis was m a d e of the responses to such queries as "whether
the company has small lot sizes in the plant" as well as "whether the company
emphasizes small lot sizes in order to increase manufacturing flexibility". It is evident
from the discussion of Table A4.14 that the use of small lot sizes was emphasized by all
the nine companies. But interestingly, there is no c o m m o n definition of lot size to the
companies. Although in lean production small lot means single piece flow, in the present
study a small lot varies from 10 to 20 pieces at a time. Even though the numbers of pieces
were quite high, this realignment substantially reduced the inventory level and
overproduction of the companies. Small lot size also allowed the companies to identify
defective products more quickly than before.

Every lean business needs an information management system to link all the activities.
The companies need to execute a pull decision. In response to the question of " D o you
practice E R P , M R P or MRPII?" findings (Table A4.17) indicate that none of the
companies are using E R P or MRPII. Three companies are using M R P (not M R P II) while
the remaining companies were using their o w n buyer approved customized software.
Research (Piciacchia, 2003), indicates that M R P does not support lean production rather
it encourages push production system. It is revealed from the discussion that the
companies inherited this software before implementation of lean. A s the replacement is a
very costly procedure, the companies were not able to change.

Lean is a customer responsive system and highly focuses on the reduction of delivery
time. From the discussion of Table A4.14 it is revealed that in order to deliver products
on time to customers the companies reportedly used several lean tools such as JIT,
Kanban, and kaizen etc. It appears from the data that by using these tools companies
could significantly reduce the order-to-ship-cycle time. This means companies have more
potential to gain from a fully comprehensive implementation of lean.

As is evident from the discussion chapter, to implement the above mentioned lean
practices, the companies received technical assistance as well as training from their
parent companies, foreign customers and from B G M E A (Table A4.15). The training was
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mainly on-the-job training so that the employees can perform a wide variety of tasks,
leadership development etc. For the overall success and to experience and sustain further
improvements, a fully comprehensive training program and an implementation strategy
according to the individual company's requirement are needed.

5.3 Benefits Derived From Lean Practice

All companies spoke about the benefits generated by the adoption of lean production in
their business. A s is evident from Table 4.9 and section 4.7 of chapter four, the following
benefits, in varying extent, were identified by the respondents in the present study:

# Areas of benefits Percentages

of responses
a Increase in sales and profits 89
b Reduction in order processing errors and paper works 67
c Reduction in manufacturing cost 100
d Reduction of staff demands allowing the same number of office staff 78
to handle large number of orders
e Increase in overall revenue without increasing labor or overhead costs 56

The data suggest that the surveyed companies derived benefits out of lean practices in
terms of increased sales and profits, reduced order processing errors, reduced paper work,
decreased manufacturing costs, reduced staff demands, and increased revenue.

In addition to these, all the companies claimed achievement in other areas such as:
(a) Improvement in productivity, 1 0 % - 6 0 % ,
(b) Improvement in quality, 1 0 % - 6 0 %
(c) Reduction in lead time, 26.7%,
(d) Reduction in manufacturing cycle time, 26.1%,
(e) Reduction in per unit cost, U S $1.10,
(f) Reduction in inventory holding time, 3 0 . 1 %
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5.4 Manufacturing Performance Improvement

B y practicing several lean tools the surveyed companies showed an overall improvement
in manufacturing performance. It is revealed from the discussion of Section 4.8 of
chapter four that the selected garment companies gained the following performance
improvements through implementation of lean:

Production Costs: From an analysis of data concerning the unit costs of production both
before and after lean, Table 4.10 indicates that for 5 companies the improvement in cost
was fairly substantial. For the other four companies, the improvement was negligible
($0.03-$0.50). The achievement was through an increase in the number of units of
products with the same workers as well as reduction in inventory compared with the pre-
lean period. The differences between the two groups of companies m a y be attributed to
such factors as differences in machinery and technology used in the production processes,
and possible differentials in different companies in the 'common causes' that arise from,
for example, inadequate raw materials, machines in need of repair, people in need of
training, machine breakdown etc.

Productivity: An attempt was made to get the opinion of the respondents regarding the
improvement in productivity. Table A4.18 presented data on productivity with the
intention of estimating only productivity gains. The respondents in all companies
declined to furnish year-wise actual data on productivity. N o data on actual productivity
could, therefore, be obtained from the companies as they consider such data as strictly
confidential. However, the companies provided data on average productivity. An
analysis of the average productivity data indicates an overall improvement in
productivity.

Lead Time: Long lead times indicate inefficiency of the production processes The
shorter the lead time, the more responsive the company, and better the satisfaction of
customers. In response to the question of "What is the total amount of time (average
number of days) taken to complete an order from raw materials to manufacturing,"-
Table 4.11 revealed that three companies saved 8%-l2.5%, two companies saved 1 8 % -
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2 5 % and four companies saved 3 3 % - 5 0 % . O n the whole, the companies improved 26.7%
in lead time. The companies achieved such improvement in lead time by rearranging their
machines in a planned way, reducing motion time of the workers from machine to
machine, and preventing frequent and sudden machine breakdowns through a program of
T P M . The variations in achievement among the companies occurred mainly due to
variations in using the above-mentioned strategies.

Manufacturing Cycle Time: It is evident from Table 4.12 that the companies
experienced some gains in terms of reduction in manufacturing cycle time that ranged
from 5 minutes to 20 minutes improvement, thereby indicating a time savings of 12.5%
to 33.33%. The higher the improvement in cycle time the higher the gain to the company
in terms of more unit production. The companies in the present study achieved 26.1%
improvement in manufacturing cycle time. This improvement brought more customer
satisfaction with fast delivery and also opens scope for getting more orders from new
customer.

Inventory: Table 4.5 of chapter four showed the average number of days of inventory
both before and after lean implementation. The garment plants achieved a substantial
improvement in terms of reducing the number of days of inventory. This was possible, as
indicated by the findings, through increasing communication, developing supplier's
relationship, training of suppliers, just-in-time delivery offinishedgoods, and the use of
specialized database and reporting systems. The data show that the plants under survey
achieved an average of 30.1% reduction in the number of days of inventory. The
individual rate of reduction of the number of days of inventory for the E P Z companies
was 2 0 % to 3 5 % and for companies outside of E P Z was 2 2 % to 4 3 % .

Quality Improvement: Maintaining high and consistent product quality is a key

dimension of competitiveness. A n attempt was made to get the opinion regarding the
average (%) quality increase in the company after lean implementation. Table A4.18
showed that all of the companies had substantial improvement in quality. While one-third
of the companies indicated a 1 0 % to 6 0 % quality improvement, 2 2 % of the companies
had 2 1 % to 4 0 % improvement. O n e company showed a very significant improvement
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which is 6 0 % to 8 0 % . It is revealed from the discussion that this was achieved through
following the buyers prescribed quality process, workers training, quality inspection and
continuous improvement of the manufacturing process. Finding (Table A4.3) indicates
that obtaining ISO certification is not obligatory and the company's product must
maintain a prescribed quality system supplied by the buyers. The specified quality system
was followed by the companies as they are serving the foreign buyers, w h o are the

dominant parties in the supply chain.

Manufacturing Waste: The main focus of lean production is to eliminate several types
of waste from the production process. It is evident from the discussion of Table A4.6 that
all of the surveyed companies reduced various forms of waste. All the companies reduced
the waste caused by overproduction through following a 'make to order' strategy which
means companies will produce a specified amount of product only w h e n they receive an
order from the customer. Moreover, the companies reduced the inventory through JIT
delivery, trained workers as well as good supplier relationship. Although they keep an
inventory of imported materials for some time before the production starts, in the case of
local materials they get products on a JIT basis. The defect rate was reduced by 2 2 % and
minimized to a good extent by the remaining through regular inspection. Eighty nine
percent of the firms reduced inappropriate processing by using modern high-tech
machineries and excellent material handling through the trained personnel. The excessive
transportation waste was also reduced by the majority (89%) of the companies by
reducing the unnecessary movement of products from one place to another. Two-thirds
(67%) of them could reduce the motion (unnecessary movement of workers during the
work time) problems and about half of them reduce the waiting time problem due to the
power supply problem. The companies could reduce the waiting time by introducing a
generator, reducing the possible stock-out and equipment downtime. Overall the result
indicated a significant reduction of wastes in all forms but there is still opportunity for
more gains, following a comprehensive strategy.

5.5 Factors Affecting Lean Implementation

Several factors have a bearing on the implementation of a lean production system in an

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organization. The present study identified a number of factors that supported the lean
implementation and also some factors that acted as hindrances to its implementation.
However, the supporting factors varied from company to company, depending on their
individual unique culture and available resources such as top management commitment,
trained personnel, technical assistance etc. The study findings regarding the support-and-
hindering factors are presented below:

Supporting Factors Identified:

An attempt was made to identify the supporting and hindering factors for lean
implementation. Table 4.8 showed that the surveyed companies were facilitated in lean
implementation by a good number of supporting factors. The findings reveal the
existence of several supporting factors as described below-

a. Training: The companies received training from BGMEA - the umbrella

organization entrusted with the overall welfare of the garment factories in
Bangladesh. Lean-related training is a bare necessity for successful implementation
of any of the lean techniques. B G M E A provided training concerning mainly: on-
the-job training which emphasizes theoretical training in performing other types of
tasks along the production process, leadership training to accept responsibility for
team leadership, and awareness development program in lean related issues.

b. Workers' Attitude: The positive attitude of workers played a significant role in

lean implementation. D u e to positive attitudes, the workers did not raise any voice
against its implementation. The managers of ail levels also extended their
cooperation in the implementation of the lean tools. Both in the team-based
organizations and the hierarchical organization, communication was key to this
cooperation.

c. Management Commitment: Another important enabling factor was the top

management commitment and support in each of the companies. This commitment
was spontaneous perhaps because of the fact that the top leaders could correctly
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appreciate the gravity of the competitive situations worldwide in the garments

sector.

d. Technical Assistance: Technical assistance from customers or parent companies

was another enabling factor that enabled the companies concerned to go with the
program of lean implementation. Findings show that several companies received
direct assistance from the parent companies or from their foreign buyers in terms of
technical know-how and computerized database preparation. These helped in the
lean implementation.

e. Customer Suggestions: Customer suggestions were another stimulus for some

companies to implement a lean system as reported by the respondents. Big
customers, especially foreign customers, insisted on a higher quality of products at
a reasonably cheaper price than the most major competitors particularly of South
and South East Asia including China.

f. Level of Awareness: A fair level of awareness among the management people in

the companies about the lean system helped them proceed with the idea of lean
implementation. This means training played a major role in the increase of
awareness.

Hindering Factors Identified

In general companies were experiencing obstacles to some extent in the implementation

of lean. In addition to the supporting factors discussed above, a number of obstacles
is were
also experienced by the companies. These are commonly:

(a) Resistance from workers: Evidence based on study results indicates that in the
change program the majority of the companies face resistance from different quarters
within the organization. While 2 2 % of the companies experienced no resistance, the
remaining companies faced resistance mainly by the shop floor personnel (55%), middle
managers (11%) and lower level managers (11-/.). This resistance was due to the lack of
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adequate knowledge, communication as well as fear about n e w system.

(b) Migration of trained personnel: Sometimes outside competitors hire the trained
personnel from the companies by offering attractive benefits and other facilities. This
migration of trained personnel is a real barrier to lean implementation as the companies
are unable to maintain a 'critical mass' of trained personnel to establish and sustain new
ideas, as well as train other employees.

(c) Occasional political turbulence: In Bangladesh political unrest is a common

phenomenon. Such circumstance increase the product lead time, increases the uncertainty
of timely receives of raw materials as well as timely delivery of order etc. These greatly
hinder the lean success.

(d) Port problem as well as traffic and transportation problems: From the discussion
of Table A4.27 it is revealed that regarding transportation problems different companies
provided different opinions. D u e to their o w n transportation arrangement three
companies showed no transport problems. T w o companies reported that transport
problems sometimes affected them, whereas four companies voiced less concerns but had
some sort of port problem. Usually those w h o use the city route for product movement,
face high traffic problem and therefore unreliable delivery times. T o meet their daily
schedule these companies started using alternative routes.

(e) Disruption in the power supply: Although all of the companies have their own
generator arrangement, the power supply problem is so frequent in Bangladesh, that still
a number of companies claimed to have this problem. Slightly less than half of the
companies reported about the adverse impact of power supply problems in the form of
decreased productivity and increased cost (Table A4.27).

(f) Inadequate knowledge: Inadequate knowledge among some employees resulted in

misconception and misinterpretation of the basic meaning of lean. Lack of education is

the key to this problem.

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Discussion of section 4.6.7 reveals that the companies undertook the following measures
to address the hindering factors, although the steps varied from company to company:

a. Introduction of incentive program for the workers to enlist their support and stop
migration. Companies assured the workers that no downsizing or retrenchment would
be made to drive fear out of the minds of workers. This step, along with appropriate
benefit program such as h o m e facilities, car facilities etc. worked to a great extent in
stopping migration of skilled personnel. Although these benefits added additional cost

but worked positively.

b. Rescheduling the supply /delivery of materials. The company that was facing traffic
problem re-scheduled the supply plan in such a w a y that the inbound logistics and
outbound logistics m o v e between midnight and d a w n w h e n the roads remain free
from traffic congestion. The company facing electric/power supply problem has
installed gas generator in the plant. O n e company offered refresher training programs
on lean production system to help employees gain adequate knowledge. The
management of this company felt that this kind of intervention also helped partly to
reduce employee resistance to lean implementation.

c. Creating awareness and educating workers regarding the beneficial impact of lean
system and the ways lean system would enhance the effectiveness of the workers in
performing their jobs.

d. Empowerment of employees that ensured their direct involvement in work-related

decision-making in their respective work-places.

e. Advocacy program among the top and mid-level managers to ensure their
commitment towards lean implementation.
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5.6 Supporting/ Enabling Environmental Factors

An attempt was made to obtain information regarding the existence of supporting or

enabling environmental factors to implement lean successfully. Based on the analysis of
data regarding enabling/supporting environmental factors the following findings are
discerned:

Table A4.20 showed that the majority of the companies (89%) emphasized the impact of
leadership and team environment. Respondents said that right instructions from leaders
and influence of team members have a great impact on productivity improvement.
Although all of these companies are emphasizing team work, findings indicate that 4 4 %
of the companies are following the hierarchical structure, where team environment is
absent. This means that they could realize the importance of team environment but
traditional mind-set restricted them to change the structure. This rigidity is a real barrier
in lean practice.

As the data in Table 4.13 indicate, an appropriate cultural transformation is important in

lean implementation. The rigid traditional culture does not allow employees' involvement
in decision making in their work-places. Organizations with traditional culture maintain
long hierarchical structures that ultimately lower employee motivation and in turn lower
productivity. Thus a cultural transformation from traditional to a lean supportive
environment is considered essential. Study results reveal that more than half of the
respondents were of the view that corporate culture has great impact on productivity, and
they were in favor of transforming the existing culture into lean-supportive culture. The
overall mean score (4.13) indicates the respondents fairly agree with the existence of
various aspects of corporate culture in the companies. O n the other hand, in Table 4.14,
both the individual and the overall score indicate that the top leaders in the companies
have appropriate qualities to implement lean. Table A4.21 also revealed that the
management of the companies are highly committed to invest in the training of
employees, and a number of companies have cross functional teams consisting of people
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from various departments. The existence of various aspects of corporate culture, quality
leadership, committed management as well as cross functional teams suggest that the
companies under study have enabling environments for lean implementation.

In Bangladesh, an organization outside the Export Processing Zones having 50 or more

workers is legally obliged to allow workers to organize a trade union. Therefore, the
surveyed companies located in the E P Z were not concerned with trade union interference
in lean implementation. O n e company located outside of E P Z that has a trade union in the
enterprise, claims that the impact of trade union has an impact on lean implementation.
From this data, no generalization is possible. However, it can be inferred from the study
that the enterprises in the E P Z were running without trade union interference and that
helped them implement lean with little obstacles from the workers. O n the other hand,
E P Z has the most modern and efficient infrastructure, tax freedom, and investment
friendly government policies. Thus, it can be said that E P Z enterprises are themselves an
enabler of change. Change management is also easier in the E P Z s due to lack of political
interference.

A summary of lean benefits derived by the lean firms, the factors that hindered
implementation of lean practices, and the supporting/enabling factors are summarized in
Table 5.1.
 129

Table 5.1: S u m m a r y of Benefits, and Hindering and Supporting Factors Related to

L e a n Implementation in the Surveyed Firms

Benefits Hindering Factors Supporting Factors

(a) Increase in sales and profits (a) Resistance from workers (a) Training from B G M E A
(b) Reduction in order processing (b) Migration of trained (b) Workers' attitude
errors and paper works employees (c) Management commitment
(c) Reduction in manufacturing (c) Occasional political (d) Technical assistance
cost turbulence (e) Customer suggestions
(e) Reduction of staff demands (d) Port problem as well as traffic (f) Level of awareness
allowing the same number of and transportation problems
office staff to handle large (e) Disruption in the power
number of orders supply
(f) Increase in overall revenue (f) Inadequate knowledge
without increasing labor or
overhead costs.
(g) Improvement in productivity
(h) Improvement in quality
(c) Reduction in lead time
(i) Reduction in manufacturing
cycle time
(j) Improvement in on-time
delivery
(k) Reduction in per unit cost
(1) Reduction in inventory
holding time

5.7 Future Plan

Section 4.15 of chapter four showed the opinion of the respondents regarding the future

plan to m a k e lean more successful. All the companies have plans regarding the future

improvement. Companies are mostly interested to introduce other lean practices in

addition to the existing practices as well as undertake training and education programs for

the suppliers and distributors besides the employees. However, from the findings it is
 130

revealed that the existing practices are not clear to the firms. They have several
misconceptions and misinterpretations regarding these issues. This suggests, before
turning to other n e w practices they should instead undertake extensive learning program.
If the resources and other facilities are available, companies are also interested to
undertake benchmarking programs.

Overall the results of the study reveal that all of the surveyed companies are using
various lean tools to some extent but are not truly on the path to achieving totally
comprehensive lean manufacturing infrastructure. They did not institute the philosophy
properly due to the lack of proper awareness and knowledge. This suggests a thorough
understanding regarding the methods of lean production which requires an effective
training program for managers, workers as well as suppliers is needed. The combined
knowledge of various groups can help in the successful implementation of lean. Perhaps
the next stage for these companies would be to look at their structure and change this
over time to be more aligned with a lean approach. For further improvement the firms
m a y take the following steps:

1. The firms need to increase the skill level of the implementation team through
training in the various lean tools. For this a change agent can be introduced. The
change agent m a y be an outside consultant or internal staff w h o can educate
employees and gain the energy to push these changes through.

2. An essential element of success in lean implementation is obtaining management

commitment and employee involvement through constant communication. Senior
management need to communicate plan and vision to the workforce.

3. To create a true bond, the number of suppliers should be reduced to a minimum

level. This can be done through a proper review of the existing suppliers and then
identify the best. A partnership of mutual interest need to be developed.

4. The garment firms are likely to be greatly benefited in terms of successful

implementation of lean if they develop partnership with the lean promoters to
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develop and modify lean tools, manuals, training and conference sessions to
address lean performance topics.

5. The fact that the understanding of the officials of the firms (respondents) of the
lean issues can be construed as a barrier to lean implementation suggests the need
for developing an action plan on the part of the firms to raise awareness level of
the officials to achieve further improvements during lean implementation.

6. The firms need to encourage the suppliers to adopt lean in the production process
to ensure desired quality at a lower cost.

5.8 COMPARISON OF THE PRESENT STUDY RESULTS TO OTHER GLOBAL

STUDIES

5.8.1 Introduction

The concept of lean production concept is still relatively new in Bangladesh. Some
companies across the industry sector have been practicing lean production to remain
competitive in global market. Having well established lean companies in U S A , Europe,
Japan etc., the performance gap between these companies and the companies of
developing countries such as Bangladesh will continue to grow, unless such philosophies
are embraced.

The purpose of this section is to highlight the differences and similarities of performance
between the companies of Bangladesh and other countries of the world using lean or
other similar philosophies such as lean production, JIT, T Q M and leagile (combination of
lean and agile) etc. M a n y elements of these philosophies are similar to each other such as
leadership, employee involvement, cultural transformation, team work etc. The following
section will provide an overview of the present study.
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5.8.2 A Brief Overview of the Present Study

The present study consisted of a survey and interview of the plant head or production
head of 9 garment factories in Bangladesh. Seven companies have been selected from the
E P Z (Export Processing Zone) while two are situated outside of the E P Z . These
companies are all ready-made garment manufacturers and 1 0 0 % export oriented. The
study focused on the extent of lean production practices in the selected garment factories
and manufacturing performance improvement as a result of lean implementation. This
study identified the enabling environment for implementing lean successfully. Findings
indicate that high competition and pressure from different sources such as parent
companies and buyer companies led the garment manufacturers to introduce lean. Before
lean the companies encountered problems such as long lead-times, long manufacturing
cycle times, long delivery times, long inventory holding times as well as several other
forms of wastes. With a view to improve, the companies have reported that they have
adopted a wide variety of lean techniques such as kanban, JIT, small lot size, equipment
layout, preventive maintenance, pull production system, kaizen, 5S, Q C etc. B y using
these techniques, the companies reported to have gained several benefits such as
improvement in productivity and quality, reduced lead time, reduced inventory holding
time, and reduced product delivery time etc. All the companies showed significant
improvement in performance after the implementation of lean.

In this improvement program, several factors supported the implementation effort. These
supporting factors mostly include:

(a) Training from BGMEA (Bangladesh Garments Manufacturers and Exporters

Association)-the umbrella organization entrusted with the overall welfare of the
garment factories in Bangladesh
(b) Positive attitude of workers
(c) Top management support
(d) Assistance from customers or parent companies
(e) Customer suggestions
(f) Pressure from government and buyer
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(g) Internal motivation and

(h) Pre-awareness about the lean system

However as with any programs of improvement or change a number of constraints were

also identified:

(a) Resistance from workers,

(b) Political unrest, migration of trained personnel,
(c) Port problem, traffic and transportation problems,
(d) Disruption in the power supply and
(e) Inadequate knowledge among some employees about the lean system.
(f) Cultural barriers and the like.

Findings based on the previous chapter indicate that although the organizations have
several misconceptions about lean production techniques, their initiatives toward this
technique brought several benefits for the companies, such as:

(a) Improvement in productivity 1 0 % - 6 0 % ,

(b) Improvement in quality 1 0 % - 6 0 %
(c) Reduction in lead time 26.7%,
(d) Reduction in manufacturing cycle time 26.1%,
(e) Reduction in per unit cost US$1.10,
(f) Reduction in inventory holding time 3 0 . 1 %

These results suggest that lean production can bring significant performance
improvement for garment manufacturers within the EPZ.

5.8.3 Comparison of the Results of the Studies

The results of the present study will be compared to the similar studies globally to
highlight the positive association of the results. This association can provide a view to
whether the Bangladeshi companies are experiencing similar barriers, enablers and

results to previous similar efforts.

 134

A study conducted by Mazany (1995), on a small knitwear manufacturer focused on h o w

progressive implementation of Just-in-Time (JIT) can bring improvements in
performance. It was a N e w Zealand based company producing approximately 90,000
garments per year both in local and foreign markets (export markets). The company
produces an extensive product range which is seasonal in nature and annually revised
with regard to styles, colors, patterns and yearns. The company encountered several
problems due to the traditional manufacturing philosophy and observed high levels of
inventory, long lead time, poor communication and traditional layout. The selected
garment manufacturers of the present study also encountered similar sort of problems
such as long lead-time, long inventory holding time, long delivery times, several kind of
manufacturing wastes etc. High competition and pressure from different sources such as
parent company, buyer companies, led the surveyed companies to introduce lean. But in
the study by Mazany (1995), the initial objectives of the company were to reduce lead
time and inventory levels by 5 0 % without any compromise in quality. These objectives
were approached through three phases. Table 5.2 shows the summary of the
improvements of the three phases:

Table 5.2: Three Stages of Improvement

Phase I: Phase II: Beginning of Phase III: A Team
The initial approach Kaizen Approach to Kaizen
Lead Time Ten weeks Six weeks Four weeks
Inventory Holding 3 0 % of sales W I P reduced total 3 0 % W I P reduced total 3 0 %
of sales of sales
Involvement of People 5 % of staff 1 0 % of staff 3 0 % of staff
Skill development None A d hoc Workshops
Benchmarking None None Two plant visits
conducted
Team Orientation None None Two cross functional
teams set up
Source: Mazany (1995)

Through gradual introduction of kaizen, multi-skilling and team approach, this company
reduced the lead-time from 10 weeks to 4 weeks, and increased employee involvement
 135

from 5 % to 3 0 % . The company also introduced workshop to develop skills of the

employees and conducted two plant visits for benchmarking. Under the present study the
companies also introduced several lean tools such as JIT, kaizen, pull production, T P M ,
5S etc and gained several benefits. These companies reduced lead-time, inventory
holding time, manufacturing cycle time etc. compared to pre-lean period. Overall, the
companies gained improvement in productivity and quality, reduction in lead time by
26.7%, inventory holding time by 30.1%, manufacturing cycle time by 2 6 . 1 % and also
reduced delivery time. The best company obtained a 5 0 % reduction in lead-time which is
consistent with this survey. While the companies under the present study introduced lean
production to overcome the problems, the company of this study introduced JIT. JIT is a
fundamental element of lean production. This indicates that in both the studies the
companies used a number of similar tools and experienced m a n y similar improvements.
It is revealed that not all but the supporting and hindering factors were also c o m m o n in
m a n y cases. Quality circle and awareness of employees are c o m m o n in both the cases. In
both the studies, the hindering factors showed similarities such as acceptance by the
organization, management approach and philosophy (culture and traditional autocratic
naturetop d o w n decision making), cultural barriers etc. This means that similar
methods across different countries can result in similar improvements.

Another study by Bruce et al. (2004) on the textiles and clothing industry of UK focused
on h o w lean, agile and leagile initiatives work on supply chain management in the textile
and clothing industry and improve lead-time as well as help to achieve quick response.
The study also shows the necessity of supplier's relationship in supply chain

management.

The study indicated that textile and apparel is a volatile market where holding small
quantities of stock is not a viable option and companies need to be very responsive to the
customers' demand. The lean and agile approaches to supply chain effectively manage
the manufacturing process and in turn reduce lead times. This paper reported about four
case studies on four apparel manufacturers. C o m p a n y 1, a fashion producer for the high
street, used a combination of lean and agile (leagile approach) approach. It invested in
 136

C A D / C A M and ICT, those served to shorten lead times. The company recognized that
good supplier relationships are essential to exploit this technology and to obtain premium

service from suppliers to meet the changing demands.

Company 2, a fiber producer worked to reduce long lead times and dealt with large
production runs which reflected lean perspective. O n the other hand in response to
competition and dynamic demand, the company was proactive in forming "pull" product
into market place quickly. This exhibited company's agile approach. C o m p a n y 3, the
producer of accessories to the sportswear, used a mixed supply base approach. A n d
company 4 focused on building relationships to achieve leagility in the supply chain. In
summary, all the four companies in the textile and apparel sector used the aspects of both
agile and lean to respond quickly to changing markets. The leagility approach helped the
companies in the reduction of lead time of supply, as well as meeting the customer
demand on time. In both the studies, the companies recognized that good supplier
relationships are essential to obtain premium service from suppliers to meet the changing
demands.

As a whole, all of the companies under this study had problems such as long-lead time,
long response times, large production runs etc. those are similar to the present study.
With a view to reduce the problems mentioned above, the companies under this study
introduced either lean, or agile or a combination of these two (leagile) and improved the
situation. The present study also showed substantial improvements in such areas through
implementing lean. In both the studies, the companies highly emphasized the supplier
relationship which indicates its importance in the garment industry. This comparison
shows the positive association of the present study to this study.

A study by Kapuge and Smith (2007) focused on implementation of TQM among apparel
companies in Sri Lanka and its impact on business strategy, management practices and
performance reporting. Like the previous studies the Sri Lankan apparel industries
encountered problems such as long lead-time, lack of product development, weak
marketing and low labor productivity partly due to out dated technology. This industry in
 137

Sri Lanka has advantages like cheap labor cost, high labor standards, a literate labor
force, investment friendly government policies and strategic shipping lanes. The
Bangladeshi garment companies under the present study are also enjoying many facilities
like the above. Cheap labor is always a plus point for Bangladeshi companies as in Sri
Lanka. In the present study the companies under E P Z are also performing under
investmentfriendlygovernment policies. The study by Kapuge and Smith (2007) showed
that the companies with T Q M philosophy have more developed quality practices than
n o n - T Q M apparel companies with significant differences in customer focus, process
improvement, supplier linkage and physical and financial quality measures than non-
T Q M firms. The Bangladeshi garment companies also showed more customer focus,
better supplier relations, improved process with lean philosophy. While employee
empowerment is the most important element of T Q M but this study indicates its lacking
in both T Q M and n o n - T Q M firms. In the present study the Bangladeshi firms highly
recognized the importance of employee empowerment.

From the above comparison, it is established that the performance results of the present
study have a positive association with other studies using similar philosophies. All of the
companies under comparison are either garment or textile in nature. These studies
showed m a n y similarities in problems and in the resulted performance. Different
approaches such as lean, JIT, leagile, T Q M etc. were used by the companies under
different studies to solve the similar types of problems. These philosophies have c o m m o n
characteristics such as team based work, employee involvement, importance of
leadership, cultural transformation etc. From this comparison Bangladeshi companies can
take lesson that due to these c o m m o n characteristics not only lean but also these
companies have the potential to implement the other approaches like T Q M and leagile. It
is not possible to quantify the significant improvement in these companies because the
studies were conducted under different organizational settings and conditions. A s found
in the comparison of the results of the present study to other studies, world class
improvements can happen in the Bangladeshi firms. But this requires the right
environment. If these selected Bangladeshi companies can achieve performance
improvement then other garment companies of Bangladesh can also get the same by
 138

giving the right environment. Therefore, work lies in extending this training to all
industries. It is important to create the right environment for all industries to realize these

improvements.

5.9 Chapter Conclusion

This chapter presented the major findings of the study based on the data analyzed in
chapter four. A comparison of the results of the present study with other similar studies
has also been presented in this chapter. The next chapter deals with the summary,
conclusion and recommendations for future development.
 139

Chapter Six

Conclusions and Recommendations

The main thrust of this thesis has been to examine the contribution that lean practices can
m a k e to the manufacturing operations in garment firms in Bangladesh culture. From the
analysis of the data collected, it appears that companies that adopt lean manufacturing as
a working philosophy within their organizations can m a k e significant improvement in
terms of their operational performance even if it is in a modified format that best suits
their particular business culture. It is obvious that there are strong benefits to be gained
from implementing a lean manufacturing culture, as demonstrated by the companies in

this study.

In order to obtain information about the extent of lean production practices and
manufacturing performance improvement in the selected Bangladeshi garmentfirms,the
study examined the adoption of various lean tools and the benefits derived from these
lean practices. T h e study also identified the supporting and hindering factors in lean

implementation.

An analysis of the available data indicate that, in the selected garment firms in
Bangladesh, lean practices have a significant relationship with a number of positive
outcomes. These outcomes include: decrease of unit production cost, up-scaling quality
of products, reduction of lead time in the production process, reduction of manufacturing
waste in all forms, reduction of manufacturing cycle time, reduction of inventory of raw
materials and finished goods. W h e n compared to similar studies, the results of the
present study demonstrates that the Bangladeshi garment firms are experiencing similar
barriers, benefits, as well as improvements etc. to the implementation of improvement
initiatives. This indicates that the companies in the E P Z represent the best possible
 140

environment for Bangladeshi companies and so represent the best case scenarios and a

benchmark for other companies in Bangladesh.

Based on thefindingsand with specific reference to the research questions, a number of

conclusions emerge with reference to selected Bangladeshi garment firms:

1. The sample Bangladeshi garment firms have adopted a wide variety of lean tools
and techniques although the implementers are not adequately aware of the lean-

features of these tools and techniques.

2. The sample firms have derived several benefits including improved
manufacturing performances from lean practices that have helped them achieve
competitive advantage in the industry.
3. Lean implementation in the selected garment firms was facilitated by several
supporting factors, although some hindrances were not u n c o m m o n .
4. The companies under study have enabling environment for successful lean
implementation.
5. If these selected Bangladeshi companies can achieve performance improvement
then other garment companies of Bangladesh can also get the same by giving the
right environment. It is important to create right environment for all industries to
realize these improvements.

Eight hypotheses were central to this investigation; all of these were supported by the
data collected.

Hypothesis 1: Lean practices decrease unit production cost in the Bangladeshi

garment firms.

Thefirsthypothesis, (that lean practices decrease unit production cost in the Bangladeshi
garment firms) was supported by the results of this study. After the implementation of
lean the companies showed substantial improvement in unit cost. This cost reduction was
achieved through producing more units with the same workers as well as reduction in the
inventory. These results suggest that lean practices have a significant and positive effect
on the performance improvement for these companies.
 141

Hypotheses 2: L e a n practices contribute towards higher quality of products in the

Bangladeshi garment firms.

The results of this investigation also supported the second hypothesis that lean practices
contribute towards the higher quality of products in the Bangladeshi garment firms. The
results reported that all of the selected companies gained substantial improvement in the
quality of products when comparing to the pre lean period. This improvement was
achieved through following the buyers-prescribed quality processes, worker training,
quality inspection and continuous improvement programs.

Hypothesis 3: Lean Practices reduce manufacturing waste in all forms in the

Bangladeshi garment firms.

The significance of the results was also found regarding the third hypothesis that lean
practices reduce manufacturing waste in all forms in the Bangladeshi garmentfirms.All
of the companies reduced seven types of wastes such as overproduction, inventory, defect
rates etc. to some extent. Results indicate that the companies have opportunities to reduce
waste through lean implementation which ultimately improves performance levels.

Hypothesis 4: Lean Practices reduce lead -time in Bangladeshi garment firms

The fourth hypothesis that lean practices reduce lead-time in the Bangladeshi garment
firms was also supported by the study results. Through implementing lean, the selected
companies showed significant reductions in lead-time when compared to the pre-lean
period. The time saving was achieved through rearranging the machines in a planned
way, reducing the motion time of the workers from machine to machine and preventing
frequent and sudden machine breakdown. This result also suggests the positive impact of
lean on performance improvement.
 142

Hypothesis 5: Lean Practices reduce manufacturing cycle time in Bangladeshi

garment firms.

The results of this investigation supported thefifthhypothesis that lean practices reduce
manufacturing cycle time in Bangladeshi garmentfirms.After implementation of lean the
surveyed companies reduced the cycle time of their processes. This improvement brought
more customer satisfaction with fast delivery and opens more scope for getting orders

from new customers.

Hypothesis 6: Lean practices improve on-time delivery of products in Bangladeshi

garment firms.

The analysis of results also supported the sixth hypothesis, that lean practices improve
on-time delivery of products in Bangladeshi garmentfirms.Before the implementation of
lean the order-to-ship-cycle time was very high. After lean implementation, the
companies significantly reduced the order-to -ship-cycle time through the use of lean
tools such as JIT, Kanban, and Kaizen etc. This suggests that garment companies in
Bangladesh can gain more from lean.

Hypothesis 7: Lean practices reduce inventory of raw materials and finished goods
in Bangladeshi garment firms.

The results of the investigation demonstrated that lean practices reduce inventory levels
of raw materials and finished goods in Bangladeshi garment firms which is the seventh
hypothesis of the study. W h e n compared to the pre-lean period, the companies reported
substantial reductions in the number of days of inventory. This they achieved through
increased communication, improved suppliers relationships, supplier training, JIT
delivery offinishedgoods and the use of specialized data base and reporting systems etc.
The result indicates the positive effect of lean in the reduction of organizational waste in
Bangladeshi garment industry.
 143

Hypothesis 8: L e a n results in Bangladesh have a positive association with the lean

results in other countries using similar philosophies.

The last hypothesis of this study was that lean results in Bangladesh have positive
association with the results in other countries using similar philosophies. The comparison
of studies indicated that the results of present study have quite similar sort of problems,
supporting and hindering factors, as well as performance improvement, when compared
to other global studies using similar philosophies such as lean, JIT, leagile, T Q M etc.
Companies in the E P Z of Bangladesh can experience similar results to those companies
in different countries with more mature lean awareness. Therefore, the challenge lies in
communicating and effective structured strategy development in order for all companies
across industry sectors to have the chance to remain competitive.

A few theoretical contributions of this research are: (a) Lean production system is not
only applicable to the developed countries, it could be applied in different degrees in the
developing countries too with several potential benefits, especially for achieving
international competitiveness; (b) A few, if not all, wastes can be eliminated in
companies having hindering factors; (c) T o remain globally competitive, companies have
to go for improving the manufacturing operations; and (d) At least some aspects of lean
production system can bring positive results in operations, and gradual introduction of
lean techniques (such as JIT, Kanban and Check Sheet) leads to benefits.

Recommendations for Future Work

The observations gained from this research indicate some recommendations for future
work. Although some meaningful conclusions can be m a d e with respect to the sample
used in this study, the sample size is too small to represent a significant subset of
manufacturing industry. Therefore, a more comprehensive survey is needed. This is the
first pilot study in this area and therefore a follow up study is needed. It would be more
illuminating to conduct a longitudinal study to understand the long-term effects and
benefits of lean in the Bangladeshi garment industry. Furthermore, the 'degree of
 144

leanness' in firms could in future research be measured by using/developing an index or

any other appropriate tool. Another issue that could be subject of further research is
developing a hierarchy of the factors (on the basis of degree of importance) identified in
chapter 5, especially those related to manufacturing performance improvement, and the
supporting and hindering factors concerning lean practice. In addition, relationship with
local suppliers and h o w to build strong and long-term relationship should be studied
further.

Overall, the present study indicates a positive relationship between lean production and
performance improvement. The selected garment companies represent the best case
scenarios and good example of organizations that adopted a variety of lean production
concepts. The companies are practicing lean to a fairly good extent and have become
more profitable, competitive and successful compared to the pre-lean period. While the
companies experienced many difficulties, they also received support from various
sources. The experience gained over the years and the lessons learned by the management
of the companies can be used as benchmark by other Bangladeshi organizations in their
endeavor to introduce lean production systems.

A meaningful recommendation that can be put forward for the Bangladesh Government is
that it can work for creating a level playingfieldfor the garment manufacturing firms, in
particular, to practice lean production systems mainly through making arrangement for
relevant training programs and development of necessary physical infrastructures. The
customers and the suppliers of the garment companies surveyed m a y also take lessons
from the results of this study to enjoy similar benefits.

However, the results and the recommendations need to be carefully interpreted because
of some inherent limitations of the study. The major limitation of this study is the small
sample size. The small sample size cannot represent significant subset of manufacturing
industry. Also, this study covered only management people for interview; perspectives of
employees were not obtained, although lean/JIT is all about employee empowerment and
involvement.
 145

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 165

APPENDICES
APPENDIX 1: QUESTIONNAIRE USED IN THE SURVEY
A Survey of
Lean Production Practices in Bangladesh

QUESTIONNAIRE
[Respondents: Head of Production, Plant Manager]

General Information:
1. N a m e of Ihe Company:

Telephone: Work: Mobile: E-mail:

N a m e of the Respondent:

Designation: (a)Head of Production (b) Plant Manger

Put Tick Marks for the Appropriate Answers:

2. Legal status of your company:
(a) Public Limited Company i

(b) Private Limited Company
(c) International Joint Venture Company ~
(d) Multinational Corporation 1_1
(e) Others (Please Specify)
3. Organization structure of the company :
a. Tall functional structure (long hierarchical) _
b. Flat structure (team based)

4. Status of ISO certification:

a. ISO 9000:2001 certified (quality certification) r-i

b. ISO 14000 certified (environmental certification)
c. ISO certification not availed of
d. Any other quality system followed . D
5. Sources of raw materials
a. O w n sources (backward linkage) PI
b. Imported materials
c. Supplied by local suppliers
6. Sources of components and parts _]
a. O w n sources
b. Imported ~\
c. Supplied by local suppliers
7. W h o are the customer of your company: _.
a. Dealers
 166

b. Agents
c. Distributors
d. Wholesalers
e. Retailers
I
3
Where did you market your product?
a. Sale in local markets
b. Fully export-oriented
c. Sale in both local markets and foreign markets:
(1) (%_of sale in local market)
D
(2) (% of sale in foreign market)
9. Number of Suppliers of raw materials of your company:
(a) 1-10
(b) 11-50
(c) > 50
(d) Other
List the name of the product families manufactured by your company.

11. H o w does your company procure raw materials/components?

12. What are the steps taken by your company to reduce inventory of raw materials and finished products?
a.
b.
c.
d.~ ~
e. ~~~ ~ "
13. Number of Employees by Category:
Category of Employees Number
Skilled workers
Unskilled workers
Supervisory personnel
Operating level managers
Middle level managers
Top level managers
Others:
Total
Please Tick the appropriate answer:
Yes No
 167

14. Does your company intend to maintain long, stable relationship with the suppliers?

15. Are the main suppliers of your company in close proximity?

16. Have your company reduced the number of suppliers over the lastfiveyears?

17. Are the suppliers dependable in terms of timely delivery?
Lean Related Information:
18. W h e n did you start implementing lean practices? Year Month

19. Tick the lean practices that your company is doing:

(a) Kanban System
(b) Daily schedule adherence
(c) Small lot size
(d) Just- in- Time
(e) Physical Arrangement of Equipment
(f) Application of Preventive Maintenance
(g) Pull production system
(h) Continuous improvement (Kaizen)
(i)5S
(j) 3P (Production Preparation Process)
(k) Value Stream Mapping
(m) Other quality practices (QC)
20. What other lean production related practices have your company adopt?

21. What assistance did your company receive for implementing lean practices?
(a) N o assistance
(a) help from government
(b) help from parent company
(c) help from Supplier Company
E
(d) help from Customer Company
(e) Other (Specify)

Tick the appropriate answer: 'Yes'/'No

22. D o you practice ERP, M R P or M R P 2 ?

23. Have you provided training on lean production system?
24. W h o have been given training?
(a) Employees

(b) Suppliers
(c) Distributors BB
 168

25. What were the training expenditures specifically for lean production system?

Investment in Human Resource Training during the Last Five Years

Year Training Expenditures (Tk) No. of Employees Trained

2002-2003
2003-2004
2004-2005
2005-2006
2006-2007
26. What are the various direct and indirect costs involved in the implementation of lean
manufacturing?
[Circle the appropriate ones]
a. consultancy fees
b. training costs
D
c. hiring of specially qualified staff
d. others (please specify)

27. What are the factors that are supporting or hindering lean practices in your company?

A. Supporting Factors:

B. Hindering Factors/Barriers:

Yes No
28 LEAN PRACTICES

Physical Arrangement of Equipment (Equipment Layout)

28.1 Are the production processes and machines in close proximity to each other?

28.2Have you organized your plant floor into manufacturing cells?

D D
D
28.3 Have your machines been grouped according to the product familv to which
they are dedicated?
D
28.4Have you installed your machines in a way that can support JIT production
D
 169
29 Quick Changeover~of Machines

g%x o^xtrrdwiththepre-ieanperiod'for ne ^
30
29.2 If yes, h o w much time have you been able to reduce?
Small Lot Size
hours

30.1 D o you have small lot sizes in your plant?

30.2 ta order to increase manufacturing flexibility, do you emphasize small lot

D
31 K a n b a n System
D
31.1 What do you use for movement of an item from one process to another process
in the production system?
(a)Cards
(b)electronic media( computer network)
(c)Container
31.2 Do you use kanban in your production system?

32 Daily Schedule Adherence

32.1 Can you normally meet the production schedule each day?
32.2 Can you usually complete your daily schedule as planned?
32.3 Have you built time into your daily schedule to allow for machine breakdowns
and unexpected production stoppages?
32.4 Does it seem to you like you are always behind schedule?

33 Just-in-Time Delivery by Suppliers

33.1 D o your suppliers deliver materials to you on a just-in-time basis?
33.2 D o you receive daily shipments from most/all suppliers?
33.3Can you depend on your suppliers for on-time deliver)?
33.4 Are your suppliers linked with you by a pull system?
33.5 D o your suppliers frequently deliver materials to you?
33.6 D o you have partnership-oriented relations with your suppliers?

34 Short Order-to-Ship Cycle Time (Just-in-time Link with Customers)

34.1 Do you always deliver on time to your customers?

34.2 Can you adapt your production schedule to sudden production stoppages by
your customers?
34.3 D o your customers have a pull-type link with your organization?
34.4 What was the order-to-ship cycle time before implementing lean? days
34.5 What has been the order-to-ship cycle time now after implementing lean? _days

35 Pull Production System

35.1 Does your company produce products based on customer demand?
35.2 Have the production processes been organized in such a way that can ensure
timely production based on customer demand or pull?
36 Application of Preventive Maintenance
36.1 Have you established a formal system for regular repair of machines in the CD
plant?
36.2 D o you have a program for regularly cleaning and servicing the machines?
 170

MOTIVATION FOR LEAN PRACTICES

37 What have motivated you for practicing lean production system? (Tick all
appropriate answers)
37.1 To make our products highly competitive in the market
37.2 To expand our market share in the industry
[
37.3 To reduce manufacturing cost CD
37.4To minimize waste through eliminating non-value-added activity in the
production process CD
37.50thers (please specify)

M A N U F A C T U R I N G P E R F O R M A N C E (Benefits derived from lean

practices)
38 What benefits have you derived from lean practices, in general?
38.1 reduction in order processing errors
38.2Reduction of paperwork in office areas
38,3Streamlining of customer service functions so that customers are no longer
placed on hold
38.4 Reduced staff demands, allowing the same number of office staff to handle
large number of orders
B
38.5 Increase in revenue with no increase in labor cost or overhead cost
38.6 Others (please specify)

39 Do you have any or all of the following gains from practicing lean?

a. Increase in sales
b. Increase in profits
c. Reduction in manufacturing cost
d. Reduction in other costs
e. Reduction in the number of workers
Productivity:
40 What are/were the numbers of units produced per labor hour? Before
Lean Present
Product families 1( name of the product item) - units units
Product families2(name of the product item) units -units
Product families3(name of the product item) units -units

Did your company make any savings over the last 12-month period through
41. reduction of labor content in the production process?

If yes, what is the amount of savings that your company could achieve through
42. reduction of labor content over the last 12-month period (Taka)?

43. What was/is the unit production cost (Taka)? Before lean
After lean

44 Quality Improvement
What is the average (%) quality increase in your company after lean
implementation? EJ
(a) 1 0 % - 2 0 %
(b) 2 0 % - 4 0 %
 171

(c) 40%- 6 0 %
(d) 60%- 8 0 %
(e)other

Manufacturing Waste
45 Lead Time
What is thetotalamount of time (average number of days) taken to complete an Before At
orderfromraw materials to manufacturing Lean Present

46 Manufacturing Cycle Time Before At

What is the amount of time (days/hours) to accomplish standard work sequence Lean Present
for making a product?

Before At
47 Inventory of R a w Materials
Lean Present
Please provide the following information regarding inventory:

Quantity of raw materials in the shop floor Before At

Lean Present

Quantity of buffer stock in the shopfloor

Before At
Lean Present
Before At
Quantity of raw materials delivered just-in-time for processing
Lean Present

48 Inventory of Finished Goods

Before At
Average number of days of inventory Lean Presem

SUPPORTING ENVIRONMENTAL FACTORS:

49. What environmental factors are affecting your productivity*;

a. cultural change
CD CD
b. leadership patterns
c. trade union
d. team environment
B B
e. Others (please specify) CD CD
 172

50. Please put an appropriate n u m b e r in the quadrant that best describes your opinion.
These statements are related to your organizational culture (1-9), leadership patterns (10-15), trade
union (16), investment in training (17), team environment (18), etc.

# Statements Strongly Disagree Neither Agree Strongly

Disagree Agree nor Agree
Disagree

1 2 3 4 5

1 All employees in our company are

committed to achieving organizational goals
2 Employees are generally supportive when
they are asked to work longer hours
3 Management has a concern for the
employees
4 Most employees place priority on
organizational interests rather than on
individual interest
5 Managers generally encourage subordinates
to participate in making decisions in areas
of their concern
6 W e have a culture of communicating with
each other without fear
7 W e have job security in our company
8 Top management is supportive in the
implementation of quality related programs
in the company
9 In our company, people are considered
assets of the company
10 Our senior managers provide clear
directions for achieving goals
11 Most of our senior managers are qualified
enough to lead changes
12 Managers in general encourage team work
rather than individualistic work
Our senior mangers encourage learning;
13 they disseminate important information
among the employees
14 Our senior managers keep their promises
15 Our senior managers are concerned about
the quality of products
16 The trade union leaders cooperate the
management for implementing any change
program
17 Management has a commitment to invest
for training of employees
18 Our company has several cross-functional
teams consisting of people from various
departments
 173

51. What are your suggestions for making lean practices more effective?

Signature of the Respondent N a m e of the Interviewer:

Date:

Thank you very m u c h for giving m e your valuable time.

 174

APPENDIX 2: INTERVIEW S C H E D U L E

A Survey of
Lean Production Practices in Bangladesh

Interview Schedule

[Respondent: Plant Manager/Head of Production]

C o m p a n y Information:

1. Name of the Respondent: Designation:

2. Name of the Company:

Address:

Telephone: W o r k : Mobile: E-mail:

3. What is your definition of lean manufacturing?

4. Give a short detail of your journey towards lean production practice.

 175

5. What business challenges have driven your company to practice lean?

5. What is the average productivity increase in your company after lean? %

6. What kind of changes is required to be addressed while implementing lean production

system, as you have experienced in your company?

7. What are the areas of your organization where you have made changes for
implementing lean?
Areas of organization where changes were made l=Yes 2= N o

Product design 1 2

Inbound logistics 1 2

Outbound logistics 1 2
Manufacturing processes 1 2
Supplier networks 1 2
Factory management 1 2
 176

8. Did you face any resistance while implementing lean-related measures'

9. W h o were the resisters? Yes No

a. Senior management 2
b. Middle management 2
c. Lower level management 2
d. Shopfloor personnel 2
e. Trade unions 2
f. Others (specify)

10. Tell something about your experience before and after lean implementation.

11. H o w are the following factors affecting the success and failure of lean management
strategies in your company?
a. Political inconsistency:
b. Trade Union:

c. Power Supply:

d. Infrastructural Problem (Transportation, Road):

e. Traffic Problem:

12. D o you think quality of human resource is a problem for lean implementation?
 178

13. Lean requires training and education- do you think is it a barrier?

14. In lean implementation which part of your company is/ is not committed?

15. If you see any particular company in your country or other countries of the world are
doing better than your company- are you interested to undertake benchmark survey?

16. D o you have any other future plan to make lean more successful?
 179

APPENDIX 3: CHECKLIST USED IN T H E OBSERVATION

Check List
M a n a g e m e n t Practices
Observation of Our
Hayes (1981) observations
Japanese owned
Factories
A. Practices reported by Hayes to be prime
factors of Japanese success

1.Clean orderly workplace Yes

2. Minimized Inventory Yes
Little inventory on the shop floor Yes
Goods delivered JIT in small lots Yes
N o buffer stocks Yes
Clearly marked inventory Yes
3. Problem prevention
Preventing machine overload Not observed
Monitoring systems Not observed
Capacity based on actual measure Yes
N o overload Yes
Minimizing changeovers Yes
4. "Pursuing the last grain of rice"-
All problems considered important Yes
strive for continuous incremental improvement Yes
5.Thinking quality in
Building quality into design Done in Japan
Training all the workforce Yes
Workforce do inspection (checking) Yes
Feedback to workforce Yes
6.Equipment
Well maintained standard machinery Yes
Excellent material handling Yes
7. Minimized Waste:
Overproduction
Defects
Unnecessary Inventory
Inappropriate processing
Excessive transportation
Unnecessary Motion
Waiting
 180

A P P E N D I X 4: STATISTICAL T A B L E S
(Based on the questionnaire and interview schedule)
Table: A 4.1: Legal Status of Companies

Legal status Percentage

(a) Public Limited C o m p a n y 22
(b) Private Limited C o m p a n y 33
(c) International joint venture company 45
Total 100

Table A 4.2: Organization Structure of the Companies

Nature of structure Percentage

(a) Tall functional structure (long hierarchy) 44
(b) Flat structure (team based) 56
(c)
Total 100
Table A4.3 : Status of I S O Certification (multiple answers)
Status of certification Percentages
(a) ISO 9001: 2001 Certified 11
(b) ISO 14000 Certified 11
(c) ISO Certification not availed of 89
A n y other quality system followed 89

Table A4.4: Customers of the companies (multiple responses)

No. Types of customers Percentages
Dealers/distributors 22
Agents 45
Wholesalers 22
Retailers 56

Note: All companies are 1 0 0 % export-oriented.

Table A 4.5: Supply related information
Particulars of supply Percentage
a) Company intends to maintain long stable relationship 100
with suppliers
b) The main suppliers are in close proximity 44

c) The company has reduced the number of suppliers 22

over the lastfiveyears
d) Suppliers are dependable in terms of timely delivery 100
 181

Table A4.6: Checklist on lean practices reported by Hayes to be prime factors of Japanese
success
Hayes' checklist Yes No Not Minimized Sometimes
Observed
1. Clean orderly workplace 100
2. Minimized Inventory:
(a) Little inventory on the shop 100
floor
(b) Goods delivered JIT in 67 33
small lot
(c) N o buffer stocks 100
(d) Clearly marked inventory 100
3.Problem Prevention
(a) Preventing machine overload 78 22
(b) Monitoring Systems 100 100
(c) Capacity based on actual
measure 100
(d) N o overload 100
(e) Minimizing Changeovers
4. "Pursuing the last grain of rice":
(a) All problems considered
100
important
(b) Strive for continuous 78
improvement

5.Thinking Quality in:

(a)Building quality into design 78
(b)Training all the workforce 44 22
(c) Workforce do inspection 22 56
(d)Feedback to workforce 100 78
6. Equipment:
(a) Well maintained standard 100
machinery
(b) Excellent material handling 100
7. Minimized Waste:
(a) Overproduction 100
(b) Defects 22
(c) Unnecessary inventory 100
(d) Inappropriate processing 89 1 1
(e) Excessive transportation 89 78 11
(f) Unnecessary motion 67 33
(g) Waiting 44 11 56
Adopted From Hayes (1981)
Yes= totally reduced
No= Not reduced
 182

Table A4.7: Year of starting lean based on the year of establishment of the
companies
Year N o . of companies Percentage
1st Year 3 55
4th Year 1 11
6th Year 1 11
9th Year 1 11
11th Year 1 11

Table: A4.8 N u m b e r of local and foreign suppliers and the ways company procures
raw materials/components (multiple answers in some cases)

N u m b e r of local and foreign suppliers of raw materials Percentages

(a) 1-10 33
(b) 11-50 45
(c) >50 22
The ways companies procure materials/components
(a) Direct purchase from suppliers (both local and foreign) 56
(b) Tender 33
(c) Headquarters 11

Table: A4.9 The different lean techniques the companies have adopted (Multiple
responses)
Lean techniques Percentage
(a) Kanban 66
(b) Daily schedule adherence 100
(c) Small lot size 100
(d) Just-in-Time 100
(e) Physical arrangement of equipment 89
(f> Application of preventive maintenance 89
(g) Pull production systems 100
(h) Continuous improvement 78
(0 5S 44
(i) Other quality practices (QC) 100

Table A4.10: Daily schedule adherence

Indicators of adherence to schedule Percentage
a) Company can meet the normal production schedule each day 100
b) Company can complete the daily schedule as planned 100
c) Daily schedule allow time for machine breakdowns and
unexpected production stoppage. 100
d)_ The company is always behind schedule
 183

Table A4.ll: Physical mrangement of equipment (multiple responses)

Activities of physical arrangement of equipment
The production process and machines are in close
proximity to each other

Organized plant floor into manufacturing cells

Machines are grouped according to the product family
Machines are installed in a way that can support JIT
production flow

Table A4.12: Application of preventive maintenance (Multiple responses)

Indicators of preventive maintenance Percentage
a) Companies has formal system for regular repair of 89
machines in the plant
b) Companies have a program for regularly cleaning and 89
servicing the machines
Table A4.13: Quick changeover of machines
Activities for changeover of machines % & time
a) Need less time, compared with the pre-lean period, for 100
one production run and beginning of next run
b) Time that has been reduced 20 Minutes to 3
hours
Table A4. 4: Small lot sizes and JIT link with customers
Elements related to small lot sizes Percentage
a) Small lot Sizes in the plant 100

b) Emphasizing small lot sizes, in order to increase 77

manufacturing flexibility
Indicators of short order to cycle time (JIT link) Percentage
a) Companies always deliver on time to the customers. 89

b) Companies can adopt their production schedule to

sudden production stoppage by your customers 100

c) Customers have a pull type link with the organization. 100

d) Order -to ship cycle time was: 120days, 35, 80, 90, Maximum was
110,15, 100, 120, and 30. 120 days
Minimum was
15 days
e) Order to ship cycle time now: 90, 25, 70, 70, 90, 10, 80, Maximum 90
45, and 15. days
Minimum 10
days
 184

Table A4.15: Assistance received for implementing lean system, and training on lean
(Multiple responses)
Types of Assistance Percentage
(a) Help from parent company 55
(b) Help from customer company 45
Total 100
Training provided on lean production systems Percentage
(a) Training provided to employees on lean system 100
(b) Training provided to suppliers 11

Table A4.16: Various direct and indirect costs involved in the implementation of
lean system
(Multiple responses;
Types of costs Percentage
(a) Consultancy fees 67
(b) Training costs 67

Table A4.17: Use of E R P / M R P / M R P 2 and customized software

Nature of use Percentage
(a) Use of ERP, M R P and M R P 2 33 (MRP)
(b) Use of Customized Software 77
Total 100

Table A4.18: Savings, productivity increase and quality improvements resulting

from lean practices
Nature of savings Percentage
a) Savings of the company over 12 months period 44
b) N o savings over 12 months period 56
Average productivity increase after implementation of lean Percentage
10%-20% 67%
40%- 6 0 % 33%
Views about quality increase Responses (%)
The average (%) quality increase in the company after lean
implementation
(a) 1 0 % - 2 0 % 33
(b)21%-40% 22
(c) 4 1 % - 6 0 % 33
(d) 6 1 % - 8 0 % 11
 185

Table A4.19: Checklist on lean practices reported by H a y e s to be prime factors of

Japanese success

Hayes' checklist Yes No Not Minimized Sometimes

Observed
1. Clean orderly workplace 100

2. Minimized Inventory:
(a) Little inventory on the shop floor 100
(b) Goods delivered JIT in small lot 67 33
(c) N o buffer stocks 100
(d) Clearly marked inventory 100

3. Problem Prevention
a. Preventing machine overload 78 22
b. Monitoring Systems 100 100
c. Capacity based on actual measure 100
d. N o overload 100
e. Minimizing Changeovers 100

4. " Pursuing the last grain of rice":

a. All problems considered important 78
b. Strive for continuous improvement 78

5. Thinking Quality in:

a. Building quality into design 44 22
b. Training all the workforce 22 56
c. Workforce do inspection 100 78
d. Feedback to workforce 100 -

6.Equipment:
a. Well maintained standard machinery 100
b. Excellent material handling 100

7. Minimized Waste:
a. Overproduction 100
b. Defects 22 78
c. Unnecessary inventory 100
d. Inappropriate processing 89 11
e. Excessive transportation 89 11
f Unnecessary motion 67 33
g. Waiting 44 56
Adopted From Hayes (1981)
Yes= Totally reduced
No= Not reduced
 186

Table A4.20: Environmental factors affecting productivity (multiple responses)

Environmental Factors Percentages

a. Cultural change 67
b. Leadership pattern 89
c. Trade Union 11
d. T e a m Environment 89

Table A4.21: Investment in Training, and team environment in the organization

Item N o . 1 2 3 4 5 Mean
score
1 Management has a commitment to 7 2 4.22
invest for training of employees

2 Our company has several cross-

functional teams consisting of 1 1 5 2 3.77
people from various departments

Table A4.22: Business challenges that have driven the companies to practice lean

# Types of challenges Percentage

1 Pressure from customer company 22
2 To beat the competitors 56
3 Cost reduction 22
4 Reduced order/ loosing market demand 22

Table A4.23: Reasons towards lean production practice

Element Percentage
Customer satisfaction 11
Minimization of cost by reducing inventory 22
Motivation from buyers 11
Motivation from customers 11
Motivation from promoters/employees 11
High Competition 22
To improve the current condition 11
Searching for best practices 11
 187

Table A4.24: T h e changes required to be addressed while implementing lean those

have been experienced by the companies
Required changes to be addressed Percentage
Cultural change 22
Education of workers and suppliers 22
Empowerment of employees
Commitment of top level managers
Relationship with suppliers
Rearranging the manufacturing process
Changes in the traditional work environment
Creating awareness

Table A 4[.25: Resistance and resisters in lean implementation in the companies

Resistance faced or not Percentage
Resistance faced 67
N o resistance faced 33
Total 100
Resistance by Percentage
Middle management 11
Lower level management 11
Shop floor personnel 56
None (no resistance) 22
Total 100

Table A4.26: Experience of organizations before and after lean implementation

Types of experiences Percentage
Productivity, quality and lead time improvement 67
than pre-lean period
Customers are more satisfied than before 44
Developed strong relationship with suppliers than
pre lean period 22
O n time delivery has improved than pre lean period 11
More disciplined and committed than before
Manufacturing process has been improved
Improved Performance
 188

Table A4.27: Factors affecting the success and failure of lean management strategies
in the companies

Factors Percentage
Political turbulence
3. Yes 89
4. No -
5. Less 11
Trade union
(a) Yes
(b)No 100
(c) Less
Power supply
(a) Yes 44
(b)No 22
(c) Less 33
Infrastructure problem
(a) Yes 22
(b)No 33
(c) Less 44
Traffic problem
(a) Yes 33
(b)No 22
(c) Less 44