Lean Management

Lean management is a thought process and a philosophy, not a tool, used to look at a business weather it is manufacturing, service or any other activity with a supplier and a customer relation with the goal of eliminating non-value added tasks (Womack, Jones, Ross, 1990). The principles of lean production include teamwork, communication, efficient use of resources and continuous improvement (Kaizen). It can be said that they pioneered the idea of applying the concepts outside of manufacturing environments. The objective of lean production is a system for organising and managing product development, operations, suppliers, and customer relation that requires less human effort, less space, less capital, less material and less time to make products with fewer defects to precise customer desires, compared with the previous system of mass production (Marchwinski & Shook, 2004). The concepts of both Ohno (1988) and Womack and Jones (2003) search for ways to reduce lead time by eliminating waste it can be said that the terms “Lean” and “Toyota Production System” are synonymous.

Lean management is not restricted to the actions that take place in the manufacturing function of a company, rather it relates to activities range from product development, procurement and manufacturing over to distribution. Together these areas create the lean enterprise. The ultimate goal of implementing lean production in an organization is to have the customer in focus when improving productivity, enhancing quality, shortening lead times, reducing costs etc. These are factors representing the performance of a lean production system. The determinants of a lean production system are the actions taken, the principles implemented and the changes made to the organization to achieve the desired performance (Karlsson & Ahlstrom, 1996)

There are multiple ways to combine the individual practices to represent the multi-dimensional nature of lean manufacturing. In combining these practices, the researcher has to compete with the technique used to combine and the actual content of the combinations. The dominant method in operations management literature has been to use exploratory or confirmatory factor analysis to combine individual practices in a multiplicative function to form orthogonal and unidimensional factors (Flynn et al., 1995; Cua et al., 2001; Shah & Goldstein, 2006). A review of research from organization theory, and labour and human resource management shows less reliance on factor analysis and offers multiple ways for combining individual practices and creating an index. One such method is the additive index used by Osterman (1994) and MacDuffie (1995) in developing “bundles” of interrelated human-resource management practices.