Reconceptualizing the effects of lean on production costs with evidence from the F‐22 program

Abstract

A central tenet in the theory of lean production is that the implementation of lean practices will reduce waste and thereby decrease costs. However, not all lean implementations have produced such results. Apparently, this effect is moderated by several factors, potentially even to the point of reversal. It is important to increase our understanding of how this might occur. In this paper, we explore how novelty, complexity, instability, and buffering affect the relationship between lean implementation and production costs. An interest in these factors drew us to study the case of Lockheed Martin's production system for the F‐22, an extremely complex and innovative product. To build theory, we synthesize our empirical data from the case with other existing theory, such as theories of learning and complexity. Through this analysis, we develop a revised framework that reconceptualizes the effect of lean on production costs and use it to develop 11 propositions to direct further research. Included among these are propositions about how the timing, scale, and extent of lean implementation can regulate the benefits of lean. Furthermore, when the objective of lean is construed as the provision of value, we propose that this value is an emergent property of a complex process, different from the mere sum of the values provided by its constituent tasks. Therefore, the elimination of tasks will not guarantee cost reduction, and lean may provide even greater value by incorporating some aspects of agile manufacturing. Overall, we develop a fuller range of the effects of lean practices on production costs and illuminate how operations managers might control key variables to draw greater benefits from lean implementation.

Integration of management systems: A methodology for operational excellence and strategic flexibility

“…First, lean production is shown to consist of a bundle of practices (Browning and Heath 2009;Shah and Ward 2003); research has yet to focus on the integration of MSs among these bundles. One of the possible reasons may be that integration of MSs is still a developing topic (Asif et al 2009;Karapetrovic and Jonker 2003).…”

“…The institutionalisation of lean programs has become an increasingly important topic of research due to its widespread failures (Browning and Heath 2009;Safayeni et al1991;Shah and Ward 2003). The reasons for such failures remains a topic of research; however, experience with other performance improvement programs reveals that such programs are often not effectively embedded in organisations (Voss 1995).…”

Negative Side Effects of Lean Management Implementations – A Causal Analysis

“…A bold volume of Lean Management literature exposes advantages of this approach [2,3] and links improved plant performance to its implementation [4,5,6,7,8,9]. Some papers even suggest that "… the research question of primary interest in the literature is no longer whether lean can benefit performance …" [10].…”

Factors influencing employee perceptions in lean transformations

“…Despite the large number of firms in a variety of industries attempting to pursue lean production, only a few achieve the expected results (Bhasin and Burcher, 2006;Koenigsaecker, 2005; LEI, 2004). One key reason is the use of the 'set of practices' approach to lean manufacturing (Browning and Heath, 2009) rather than the integrated socio-technical system view (Macduffie, 1995;Shah and Ward, 2007). Today, the evolving lean concept highlights the underlying philosophy, including the human factor and its role in the implementation and "perfection" phases (Hines et al, 2004;Koenigsaecker, 2005).…”