Cultural Issues in Implementing Lean Production

by

Balu Rathinam

A Research Paper Submitted in Partial Fulfillment of the

Requirements for the Master of Science Degree

With a Major in

Technology Management

Approved: 2 Credits d.' ---I J5!L.v~.fj ,70--cJ vJ ~ v,,-

Thomas Lacksonen, Ph.D., Investigation Advisor

The Graduate School

University of Wisconsin-Stout

August 2010

1

The Graduate School

University of Wisconsin-Stout

Menomonie, WI

Author: Rathinam, Balu

Title: Cultural Issues in Implementing Lean Production

Graduate Degree/Major: MS Technology Management

Research Adviser: Thomas Lacksonen, Ph.D.

MonthNear: August 2010

Number of Pages: 45

Style Manual Used: American Psychological Association, 6th edition

ABSTRACT

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Lean production or lean manufacturing is a Japanese methodology to management that

focuses on simultaneously ensuring quality and eliminating waste. It was originally developed

for Toyota as a manufacturing strategy, and currently this approach can be applied to many

industries including software companies. After being successfully implemented in the east, Lean

production was imported to the west by many organizations. Companies in the west faced lots of

difficulties due to cultural differences that sometimes lead to the failure or delay in the

implementation of this methodology. This paper reports the findings of how cultural differences

are related to the success and performance of Lean manufacturing. This is accomplished by

identifying the dependence of different principles of Lean production on societal culture.

Specifically, in this model four categories of Lean manufacturing principles are mapped against

five cultural dimensions. This mapping will assist in identifying the easiness or complexity of

implementing Lean manufacturing in an organization. This model can be used as a

recommendation for the companies who are implementing Lean manufacturing in their facilities

where they can define a societal culture by its five dimensions and map the cultural dimensions

against the Lean principles.

3

4

The Graduate School

University of Wisconsin Stout

Menomonie, WI

Acknowledgements

I would like to express my sincere gratitude to the following individuals for their help,

contribution, effort, and encouragement in completion of my thesis work. I would like to thank

Dr. Thomas Lacksonen, for his tremendous contribution to my thesis completion by involving in

framing, editing the research, editing my thesis and for his constant encouragement. I would like

to thank my family members and friends, without their valuable support, advice and help I would

not have been successful in achieving my goal. Last but not least, I would like to thank God for

giving me the strength to overcome all the uphill battles I faced during my research work.

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Table of Contents

. .. .. .. . ............... . ... .... .. .. ............ .. .. .. .. . . ... .................................................. . Page

Abstract. ........ .... .. .. ................... ............. .... . ................... .. ..... .... .............. .... ... 2

List of Tables .............. .. ............. . .... . ... ...... .................. . .. . ......... . ........... .. .. ........ 7

List of Figures ........... . ............................................... .... . ... ............................... 8

Chapter 1: Introduction ...... ... . ............ . ... .. . . . . . ..... ... . . . ......... ...... .................. ... .. . .... 9

Problem Statement .............. . ............................ . ..... . .. .. . . ........... .. . .. ...... . ... l 0

Research Objectives ................... ... ..... . .................. . .......................... . ....... 10

Chapter 2: Literature Review ................. . ........ ... .... .. ........ . ..... . .................. .... ....... 11

Background of Lean Manufacturing and Formation ............................. . ............ . 11

Lean Manufacturing Business Principles by Toyota ................................ .. .. .. .... . 12

Organizational Culture and its role in Lean Manufacturing ................................... 16

Culture and Organization .................................................................. 16

Roles of Culture . ..... .............. .. . . .... . ... . ...... . ..... . . .. ........... . .. .......... . .. 17

Cultural Dimensions ............................................................ . .......... 18

Lean Transformation ...... . . . .............................................................. 20

U.S. Characteristics of Cultural Dimensions by Hofstede .................... ... .............. 21

Example of Lean Manufacturing in U.S ............................. ......... .......... 22

SUlTI1nary ........................ ..... ............................................... , ................ 23

Chapter 3: Methodology ................. .. ....... . ......................................... . ................ 25

Introduction ........................ . ................................................ . ................... 25

Instrumentation ... . ......... . . .. . . . . ..... ......... . . ...... . .. ... .. . . . ... . .......... . .................... 25

Data Collection Procedure ...... ... .. . . . ............. .. .. ... . .... ............. ..... .... .... ........ 26

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Data Analysis ............... . ............ . ..... . .......................................................... 26

Chapter 4: Results & Discussion ...... .. ........................... . .............. . ........................ 27

Organizational Cultural difference between U.S. and Japan .................................. 29

Example of using the Model .. .. . . ................................... .. ............................ 30

Turkey vs. Japan .. . ... ....... . . . ......... . ............... . . . ..... . .. . .. . ...... . ......... . .. 30

Example of Lean Implementation at Turkey ......... . ..... . . . .......... . ..... . ... . .. . . 31

Illustration with Case Studies ............................................ . ..... .. .................. 33

Case Study: Cedar Works ............ . ...................... .. .... . .... .. ................. 33

Case Study: Donnelly MilTors ........................... . ................................ 37

Case study: Gelman Sciences Inc ......................... .. .............................. 39

Chapter 5: Conclusion .................. .... . .. . .. .. . . ... . . .. .. ..... . . . .. . . . . .. . ... . .. ... ... ........... . .... . 42

References . .............................. .. ............................................... . . . ................... 43

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List of Tables

Table 1: Framework of relationships between Cultural Dimensions and Lean principles .. ... . ... 25

Table 2: Relationships between Cultural Dimensions and Lean principles ....... .. ................. 30

Table 3: Country Scores (and Ranks) for Cultural Dimensions ............... .. ........ .. ....... .... . 31

Table 4: Relationships between Cultural Dimensions and Lean principles in Turkey .. ... ........ 33

Table 5: Cedar Works- Relationship between Lean principles and Cultural Dimensions ........ 36

Table 6: DOImelly Mirrors- Relationship between Lean principles and Cultural Dimensions ... 39

Table 7: Gelman Sciences Inc- Relationship between Lean principles and Cultural

Dimensions ................ . ........ .. ........... . ... . ................... . .. .. . . ............... .. .............. 41

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List of Figures

Figure 1: Business Principles of Toyota Way ............................................................ 13

Figure 2: Cultural Dimension of U.S ...................................................................... 21

Figure 3: Lean problems solving and Cultural Dimensions ............................................ 27

Figure 4: Lean People and partners and Cultural Dimensions ......................................... 28

Figure 5: Lean Process and Cultural Dimensions ....................................................... 29

Figure 6: Lean Long term Philosophy and Cultural Dimensions ...................................... 30

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Chapter 1 - Introduction

Lean Manufacturing is an operational strategy with a main emphasis on eliminating waste

to achieve the shortest possible cycle time with reduced cost and quality. Lean originated from

Toyota Corporation where it is derived from the Toyota Production System (TPS) and just-in­

time. Toyota Corporation is a Japanese company and Toyota Way evolved in Japan under the

strong influence of eastern culture. Concepts of lean are easily understood, and relative to the

majority of technical engineering assignments, Lean designs are easily implemented. However

the majority of endeavors to implement Lean manufacturing end up in failures.

Implementing Lean is not only by using the tools and following the techniques but also

transforming processes and culture. Basically, culture is an idea arising from experience of a

place or organization. In this way, a corporate culture is a result of its management system. Each

and every organization follows a corporate culture that is blend of their societal and

organizational culture. The transformation to a Lean organization is as much about transforming

attitudes and behavior as it is about operations, processes and layouts .

Lean manufacturing was developed by Toyota Corporation, giving a clear indication that

it has unique blend of Japanese culture and their company's culture. During 1980's the United

States and other western countries had started implementing lean manufacturing techniques. The

fundamental difference in the way of thinking between east and west strongly influences the

ability of the United States to learn from Toyota Corporation. Companies from the western and

other regions like Latin, Eastern European, Middles Eastern, Asian and Indians have their own

societal and organizational cultures. Lean implementation in any organization is successful

when there is an acceptance of change in the organization process and culture. Managing change

is the hard part because it requires a change in corporate culture with an acceptance to make it

happen. This culture change will be different in different cultures - different for western and

other regions.

Problem statement

Each and every national culture is different than Japanese or other national cultures.

Companies in one particular national culture have cultural issues that need to be addressed for

adapting the lean manufacturing principles to the organizational culture.

Research Objectives

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1. To understand the different cultural dimensions (Hofstede, 2001) and it's relationship to

the principles of lean manufacturing (Liker, 2004).

2 . To validate the model by comparing it with three different case studies.

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Chapter II: Literature Review

The focus of this literature review is to define Lean Manufacturing and its cultural

dimensions . It will also review why change is difficult to implement and some ways change can

be implemented into a company .

Background of Lean Manufacturing and Formation

Lean is an idea of "delighting the customer through a continuous stream of value adding

activities" (Lucansky, Burke, & Ducharme, 2002, p. 1). Lean principles are derived from the

Toyota Production System to improve the value added activities in an organization by explicitly

defining the processes and emphasize using visual controls. There was a continual

transformation of manufacturing practices starting from Total Quality Management in the 1970's

that went through a process with Just-In-Time (lIT) and Reengineering by 1980 's (Lucansky,

Potapchuk, & Ducharme, 2002). Transformation continued with world class in the early 1990's

and Lean! Six Sigma in the later 1990's to the present day. Even though lean transformation is a

lengthy, gut-wrenching journey for any firm, the result derived is that people and process work

efficiently delivering value to the customer (Mann, 2005).

Management plays an impo11ant role in applying lean concepts into practice and it must

be fully dedicated to the "customer-first" attitude. Typically organizations view the customer

only in terms of the person who purchases the final product at the end of the process (Convis,

200 I). This is one of the fundamental concepts of Lean Manufacturing, which actually takes the

view that each succeeding process, workstation, or department is the customer. To accomplish

the fundamental concept of lean there must be no artificial barriers between departments.

Rather, the entire organization experiences similar problems and should work collectively to

make certain that a solution is found. Hence, it is significant for the successful implementation

12

ofTPS that all supervisors encourage this idea and assertively seek to solve problems, even if

they are not directly within their scope of control. Even the most matured lean system like TPS

might have a problem when it comes to making it completely lean. This is where the lean

management system comes into play. The lean management system consists of daily practices

and tools needed to establish and maintain a persistent, intensive focus on the process. It is the

process focus that sustains and extends lean implementation. Results that we obtain through a

lean system have a greater impact, but the approach in achieving them differs sharply from

conventional management methods. The difference in a lean management system is the addition

of a focus on process, as well as focus on- results (Mann, 2005).

For an organization to switch from its traditional functional system into a lean operational

model requires a lot of support, dedication, and trust in the procedure, thereby preventing the

return to "business as usual" (Lucansky, Potapchuk, & Ducharme, 2002). This is where the

prevailing culture and lean culture comes into existence (Lucansky, Burke, & Ducharme, 2002) .

Lean Manufacturing Business Principles by Toyota

As per Lilcer (2004), the business principles of Toyota way are described in Figure 1 as

follows

A. Philosophy is based on long-term management decisions, even at the expense of

short-term financial goals (Liker, 2004). Former Executive Vice President of Toyota

Motor Sales, Robert B .McCurry Says as cited by Liker (2004) "The most important

factors for success are patience, a focus on long-term rather than short-term results,

reinvestment in people, product and plant and an unforgiving commitment to quality" (p.

71).

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Business Principles of Toyota Way

,/ \ , , /~

I / Problem

I Solving 1/ (C0f10nooU' ,

/ ImproV1!ment and \.

// ~mlng) \

i / People and Partners "\ .. / (Respect:. Ch3l1enge. \.

and Grow Them) /

/ Proceas II (Eliminate WUt .. ) \

.. //----------\ / PhHosophy \

L/ (Lon~-Tann Thinking ) \

Figure 1: Business Principles of Toyota Way (Liker, 2004, p. 68)

B. Process is generally eliminating waste

i) Create continuous process flow to bring problems to the surface.

The best thing a firm could do to implement lean is to generate a continuous flow

wherever applicable in its core manufacturing and service process. Flow reduces the

elapsed time from raw materials to finished goods that will lead to lowest cost,

shortest delivery time and the best quality. The goal in a lean environment is to

create "one-piece flow" by consistently eliminating wasted effort and time that is not

adding value to the process (Liker, 2004).

Teruyuki Minoura, former President of Toyota Motor Manufacturing, North

America says that "if some problem occurs in one-piece flow manufacturing then the

whole production line stops . In the sense it a very bad system of manufacturing ... but

when production stops everyone is forced to solve the problem immediately. So,

team members have to think and through thinking team members grow and become

better team members and people" (Liker, 2004, p. 87).

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ii) Use pull systems to avoid overproduction

Taiichi Ohno says that " the more inventory a company has ... the less likely they

will have what they need" (Liker, 2004, p.1 04) . Generally in business often goods

and services are pushed to subsequent level like distributor or retailer without

understanding the necessity of having them, which results in the increase of the

inventory levels, consuming more space (LikeI', 2004). To avoid excess inventory the

system is changed where the goods and services are purchased when needed, thereby

reducing the inventory level to the actual demand required with no additional push

from one level to another. This is where the "pull" system comes into existence to

avoid overproduction (Liker, 2004).

iii) Level out the workload

Companies' focus on build-to-order production to satisfy the customers

sometimes ends up in piles of inventory, hidden problems resulting in poor quality

and increased lead times that lead to disorganized and chaotic situations (LikeI',

2004). To avoid this Toyota has found a system where they accumulate orders and

level the schedule to reduce lead times and inventory, ensuing in overall customer

satisfaction (LikeI', 2004).

iv) "Build a culture of stopping to fix problems, to get quality right the first time"

(Liker, 2004, p. 128).

v) "Standardized tasks and process are the foundation for continuous improvement

and employee empowerment" (Liker, 2004, p. 128).

vi) "Use only reliable, thoroughly tested technology that serves people and process"

(Liker, 2004, p. 128).

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vii) "Use visual control so no problem is hidden" (Liker, 2004, p. 128).

C. People and partners

i) Grow leaders who thoroughly understand the work, live the philosophy and teach

it to others

Alex Warren, former Senior Vice President of Toyota Motor Manufacturing,

Kentucky, as cited by LikeI' (2004) says that "Until senior management gets their

egos out of the way and goes to the whole team and leads them all together ... senior

management will continue to miss out on the brain power and extraordinary

capabilities of all their employees. At Toyota, we simple place the highest value on

our team members and do the best we can to listen to them and incorporate their ideas

into our planning process" (p. 171).

One of the critical elements that contribute for the success in an organization is

the culture termed as "genchi genbutsu", meaning deeply understand how work gets

done at a shop floor level (Liker, 2004). It is believed that outward perception of the

current situation in any division will lead to ineffective decision-making and

leadership. Leaders not only teach their subordinates the importance of

understanding but also live the philosophy. Leaders illustrate the importance of

understanding by their effort to support the culture year after year so it can create the

environment for a learning organization (Liker, 2004).

ii) Develop exceptional people and teams who follow your company's philosophy.

There are numerous systems which support team in doing the value-added work

but the individuals of the team are the one who are responsible and do the work

(Liker, 2004). In the workplace, teams coordinate, motivate and learn from each

other with innovative ideas and have control through p'eer pressure. Toyota has

established an excellent balance between individual excellence and group

effectiveness where it shows that excellent individual performers are required to

make up teams that excel (Liker, 2004).

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iii) Respect your extended network of partners and suppliers by challenging them and

helping them to improve (Liker, 2004, p. 216).

D. Problem Solving

i) Go see for yourself to thoroughly understand the situation (Liker, 2004, p. 223)

ii) Make decisions slowly by consensus, thoroughly considering all options,

implement rapidly (Liker, 2004, p. 241).

iii) Become a learning organization through reflection and continuous improvement

(p.221).

Organizational Culture and its role in Lean Manufacturing

Culture and organization. Culture plays an important role in any organization. "Culture

is an idea arising from experience. That is, our idea of the culture of a place or an organization is

a result of what we experience there" (Mann, 2005, p. 4). A company's culture is a result of its

management system. If the culture has to change, there will be a direct impact on changing the

management system. Martin (2002) defines culture as "a set of understandings or meanings

shared by a group of people" (p. 57).

Cameron & Quinn (2006) found the following: "Culture is often ignored because many

elements are often undetectable. People and organizations are unaware of the culture until it is

challenged, until they experience a new culture, or until it is made oveli and explicit through, a

framework or model" (p.16). Organizational culture refers to the presumed values, fundamental

17

assumptions, expectations, collective memories, and definition present in the organization

(Cameron & Quinn, 2006). It represents "how things are round here" (Cameron & Quin, 2006,

p. 16). Evidence of organizational culture is measured by its elements - the leadership styles, the

language and the symbols, procedures and routines, and the definitions of success that make the

organization unique (Cameron & Quinn, 2006).

Roles of culture. Culture can be differentiated by national and organization due to the

different roles played in each by the manifestations of culture. "Organizational cultures

distinguish organizations while holding their national environments constant; national cultures

distinguish nations while holding organizational contexts constant, or at least as constant as

possible" (Hofstede, 2001, p. 391). A research project conducted by the Institute for Research

on Intercultural Cooperation (IRIC), on how organizational cultures established the roles of

values versus practices to be exactly opposite with respect to the national level (Hofstede, 1997).

Values are collected at different stages in one's early life, mainly in the family and in the vicinity

and later at school. On the other side, organizational practices are acquired through socialization

at the workplace (Hofstede, 1997). Further, the IRIC concluded that national level cultural

differences exists mostly in values, less in practices where as in the organizational level, cultural

differences exist mostly in practices, less in values (Hofstede, 1997). This is where occupational

cultural level came to limelight suggesting that entering an operational field means the

acquisition of both values and practices (Hofstede, 1997).

Hofstede (1997) defined organizational culture as "the collective programming of the

mind which distinguishes the member of one organization from another" (p. 180). There are

many different perspectives in which a firm follows its own organizational culture. In

organizational cultures, there is a distinction between those who see culture as something an

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organization has and those who see it as something an organization is (Hofstede, 1997). The

former leads to an analytical approach and a concern with change. It predominates among

manager and management consultants (Hofstede, 1997). The latter supports a synthetic approach.

It has a concern with understanding and is almost exclusively found among pure academics

(Hofstede, 1997).

Cultural Dimensions. A research project focused on the differences in national culture

among the matched samples of International Business Machines (IBM) employees belonging to

more than 50 countries (Hofstede, 2001). This research project resulted in identifying the five

independent dimensions of the national culture. Each and every country covered in the IBM

study was given an index score on their cultural dimensions. Each of the dimensions is based on

a fundamental problem all societies have to deal with, but on which their answers differ

(Hofstede, 2001). Cultural theories of Hofstede are used to explore the influence of national

culture to show how the cultural dimensions interact with the business process.

"Power distance is the extent to which the less powerful members of organizations and

institutions (like the family) accept and expect that power is distributed unequally" (Hofstede,

2001, p. 98). In high power distance (PDI) cultures, individuals with positions in a hierarchy

inherit substantial power (Hofstede, 2001). Employees in these cultures tend to accept

centralized power and heavily depend on their superior for initiation (Rees & Porter, 1998).

When compared with lower power distance cultures, employees expect to be consulted in

decision-making and the individuals are less likely to accept centralized power (Rodrigues,

1998). Therefore, employee participation is more likely to be acceptable in lower power distance

cultures (Rees & POiter, 1998).

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Hofstede (2001) defines uncertainty avoidance (UAI) as" ... the extent to which a culture

programs its members to feel either uncomfortable or comfortable in unstructured situations" (p.

xix). Uncertainty avoidance index scores for the countries were based on the questions dealt with

rule orientation, employment stability, and stress. Usually in high uncertainty avoidance

cultures, organizations do not take potential risks about technology, and they have characteristics

of providing resistance to new technology (Hofstede, 2001). Resistance is also present at an

individual level, where his/her discontent with the new technology is shown by giving preference

to do the work in traditional way (Shore & Venkatachalam, 1996).

"The third dimension of national culture is called individualism (lDV). It describes the

relationship between the individual and the collectivity that prevails in a given society"

(Hofstede, 2001, p. 209). The individualism-collectivism dimension refers to how people value

themselves and their groups/organizations (Wu, 2006). High individualistic people tend to be

concerned about career advancement and self-actualization in the organization, whereas people

with low individualistic values tend to value team benefits more than their own interests (Wu,

2006).

Hofstede (2001) defined Masculinity (MAS) with its opposite pole femininity as "The

duality of the sexes is a fundamental fact with which different societies cope in different ways;

the issue is what implications the biological differences between the sexes should have for the

emotional and social roles of the genders" (p. 279). Masculinity (MAS), defines the gender roles

in organizations. In high masculinity organizations, very few women can get higher-level and

better-paying jobs whereas in low masculinity organizations, women can get more equitable

organizational status (Wu, 2006).

Long Term Orientation (L TO) is the last one to be added in Hofstede's cultural

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dimensions. Hofstede defines long-term orientation as "the fostering of viliues oriented towards

future rewards"(Hofstede, 2003, p. 210). Short-tenn orientation stands for "the fostering of

virtues related to the past and the present, in paJiicular respect for tradition, preservation of

'face', and fulfilling social obligations" (Hofstede, 1997, p. 210).

Lean transformation. When a lean transformation occurs, all levels are involved and

aspects of operations, organizational pattern and "break-through" thoughts need to be occupied

for the change to be a success (Lucansky, Potapchuk, & Burke, 2002). Providing the

organization with the insight into the cause for the change along with the requirements, methods

and tools to sustain the change is crucial to make sure an organization is equipped to function in

the lean environment (Lucansky, Potapchuk, & Burke, 2002). This transformation processjs

where the priority should be given to a "lean transformation program" that constitutes as the key

ingredient to success towards lean implementation (Lucansky, Potachuk and Burke, 2002).

Lean implementation will take place in the firm depending upon the employee

engagement and how far they are prepared to accept the change. Employee engagement is very

important during the implementation process as it is directly proportional to productivity,

retention, customer loyalty and profitability. Factors like workplace culture, organizational

communication and managerial styles influence employee engagement.

Practicing lean is not reading about lean or attending workshops on lean or participating

in simulations, it can be only be obtained with the hands-on experience of the employees and the

organization (Mann, 2005). There are different ways employers follow to attain perfection in

lean. In a lean implementation the sensei or "lean teacher" plays an important task where the

student leams over time, through experience from applying concepts to real existing situations

and carefully observing the consequences. Sensei or "lean teacher" adds more value in

21

transformation of knowledge and experience by giving individual attention to the student (Mann,

2005). Initially when introducing the basic concepts of lean or a pat1icular technique, or

approach the sensei's teaching is likely to be a typical classroom instruction (Mann,_200S). For

his training to be effective it has to be inunediately translated to observation and application on

the production floor where the lessons learned in the classroom will be encountered with

situations where people are actually doing their work (Mann, 2005).

U.S. Characteristics of Cultural Dimensions by Hofstede

United States is the world's third largest country both in size and population with a

unique cultural diversity (Gorrill, 2007). It is one of the politically and economically dominant

countries in the world with an Anglo majority (Doane, 2007). All through the years, U.S. has

experienced waves of immigration from almost every corner of the world shaping the country

into what it is today with a per capita GDP of $46,400. US being a market-oriented economy,

most of the decisions are been made by private individuals and business firms, and goods and

services are mostly bought in the private market place by the federal and state governments

(Central Intelligence Agency, 2010).

Figure 2 gives the description for each Hofstede's dimension.

The United States

100

80

'" GO 8 V>

40 • The United Sl~les

20

0

PDI IDV MAS UAI LSO

Dimension

Figure 2. Cultural Dimensions of U.S. (Hofstede, 2003)

22

Individualism (IDV) index of the United States is 91, indicating a society with more of an

individualistic attitude and comparatively loose bonds with others (Hofstede, 2003). This

indicates that employees perform best as individuals and also have a strong belief in individual

decisions.

Masculinity (MAS) index of United States is 62, indicating the country encounters

moderately higher degree of gender differentiation of roles (Hofstede, 2003). The male

dominates a considerable fraction of the society and power structure thereby at times generating

a situation where the female population becomes more confident and aggressive, with women

shifting towards the male role model and away from their female role.

One among the group of countries where Long Term Orientation (L TO) dimension was

added is The United States (Hofstede, 2003). LTO index for United States is at 29 and this low

LTO ranking of United States indicates a society with high expectancy of quick results.

Power Distance index (PDI) for United States is at 40, indicating better correspondence

between societal levels, including government and organizations (Hofstede, 2003). This

orientation reinforces cooperative relations across power levels and creates a more secure

cultural environment.

Uncertainty Avoidance index (UAI) for the United States is at 46. A low ranking in the

UAI indicates that U.S. has high tolerance for unceliainty and ambiguity with a belief in

accepting and encouraging new ideas (Hofstede, 2003). U.S. also has a high level of tolerance

for a mixture of feelings, and beliefs.

Example of Lean Manufacturing in U.S. Bent River Machine, located in Clarkdale,

Arizona, provides contract manufacturing services and designs and builds custom factory

automation (Chaneski, 2005). The firm built a brand new facility in a rural setting by 1997 and

23

redirected its business. Main purpose of the new facility is to more effectively respond the needs

of its customers.

Lean techniques were effectively used to improve its manufacturing performance.

Management is also planning to apply those lean techniques to the front office operation at the

new facility (Chaneski, 2005). They started implementing lean manufacturing techniques, when

the Arizona Manufacturing Extension Program (MEP) gave a presentation on Lean

Manufacturing to their tooling and machining association. After attending various lean-based

training workshops in the firm, the management started using the value stream mapping

technique to identify wastes in each office process. The changes that were made with lean have

reduced the signature block sign off on quotes from 4 days to only half a day thereby servicing

the customers quickly. Bar coding helped to track costs, job status for the customers eliminated

some of the repetitive and wasteful steps in the office process. By 5S concept (Sort, Set in

Order, Shine, Standardize, Sustain) the effort was focused on key documents and supply storage

areas that reduced the truckloads of material, which were not used. This also resulted in finding

more space that was utilized for other purposes. Even though change is tough, it has to be

accepted for the business to grow (Chaneski, 2005). As they started accepting the changes, an

incentive plan was created and shared in the profits of jobs shipped on time and made correctly.

Summary

Lean manufacturing is a strategic tool to improve the competitiveness of any

organization, and can be described by four groups of principles . As lean manufacturing

originated from Japanese culture, implementing lean manufacturing in other countries became

difficult due to the differences in organizational culture. In this chapter, the five cultural

dimensions are discussed to understand its impact on organizational culture. This chapter also

24

specifically addresses the cultural dimensions in U .S. and its main advantages and disadvantages

within an organization. The next step was to develop a model to show the relationships between

lean principles and the cultural dimensions that playa crucial role towards the success of the

organization.

25

Chapter III: Methodology

I n trod uction

Lean Manufacturing principles can be adopted in any manufacturing environment where

the key is to eliminate waste leading to an effective and efficient utilization of resources. Lean

implementation in any manufacturing environment is possible because these principles are

specified on a philosophic level, and are thus possible to vary and apply within different business

contexts (Hook & Stehn, 2008). The primalY objective of this work is to create a model that

maps the relationship between lean manufacturing principles and cultural dimensions.

Instrumentation

The method utilized in finding a solution for this problem involves creating a matrix that

illustrates the relationship between the cultural dimensions and lean principles. Resulting matrix

would have the structure as illustrated in Table 1. Correlation between the lean principles and

cultural dimensions are indicated by the values of "0", "+" and" -"where "0" indicates no

correlation and "+" value indicates a positive correlation and "-"value indicates negative

correlation.

Table 1

Framey!!ork of Relationships between Cultural Dimensions and Lean principles

Dimension Philosophy Process People Problem solving

-------........... ---_ .. _ _ .. __ ._--Power distance index (POI)

Individualism index (IND)

Masculinity index (MAS)

Uncertainty avoidance index (UAI)

Long-term vs. short-term (LSO)

26

Data Collection Procedure

Data utilized for this research was gathered from books on cultural dimensions and lean

manufacturing principles . Some of the data was gathered from Hofstede's books (1997,2001)

on cultural dimensions, and is in the form descriptions, qualities or traits of five cultural

dimensions in organizational perspective. The remaining data was gathered from Liker's book

(2004), where it is in the form of descriptions of the way four lean principles are implemented in

industry.

Data Analysis

In this study, data analysis identifies the existent relationship between lean principles and

Cultural Dimensions. Content analysis was done on the data gathered; looking for similarities

between Hofstede's cultural dimensions and Liker's lean manufacturing principles. These

similarities were put into tables and mapped to identify the lean principles that are likely to be

most difficult to implement in that organization. The created model was validated with three

different case studies.

27

Chapter 4 - Results & Discussion

Figures 3 to 6 give the details of how the lean principles are related to the cultural

consequences.

Problem solving Cultural Dimensions

i) Lean Problem solving follows slow i) Decision is based upon the group and

decision-making process and requires requires consensus resulting in Low

consensus (Liker, 2004). In Lean IDV and Low PDI (Hofstede, 2001)

Problem solving employees and ii) Involves either strategy (or) details to

managers give importance in "deeply" get a best decision that results in High

understanding the process offlow, UAI (Hofstede, 2001). Focused on

standardization etc. arriving at a best a solution without

i i) Lean Problem solving involves any compromise results in High UAI.

understanding, creativity with iii) Relentless effOli and high importance

discussion and feedback (Liker, 2004). is given to cooperation towards

Lean Problem solving is done with decision-making resulting in High

thorough understanding and leaders MAS (Hofstede, 2001).

know what's their role and process.

iii) Lean Problem solving involves

understanding, creativity with

discussion and feedback (Liker, 2004).

Lean Problem solving follows slow

decision-making process and requires

consensus. Lean problem solving

takes nothing for granted and the

leaders know what's the role and

process.

Figure 3: Lean problem solving and Cultural Dimensions

28

People and paltners Cultural Dimensions

i) People and partners focus on partial i) Importance is given on being more

relationship between many other cooperative resulting in Low POI

departments and executives (Liker, (Hofstede, 2001). Superiors admit the

2004). People and partners utilize work need of support in solving problems

group as the. focal point of solving the resulting in Low POI. Leaders are

problems. promoted inside in terms of seniority

ii) People and paltners establish excellent resulting in Low POI

balance between individual work and ii) Decision is based upon the group and

group work and between individual requires consensus resulting in Low

excellence and team effectiveness IDV

(Liker, 2004). People and partners find iii) Job security is given importance and

key leaders within the company where promotion to higher position happens

they have been working across the within the firm resulting in High MAS

enterprise. People and partners give (Hofstede, 2001). Importance is given

impOltance to team work. to cooperativeness at work place

iii) People and paltners follow giving resulting in High MAS.

importance to security of the job for

employees (Liker, 2004). People and

partners find key leaders within the

company where they have been

working across the enterprise. People

and paltners give importance to team

work.

Figure 4: Lean People and partners and Cultural Dimensions

29

Process Cultural Dimensions

i) Lean Process follows work to be i) Structuring of activities is increased in

organized into flow by employees the organization resulting High UAI

(likeI', 2004). Lean Process measures (Hofstede, 2001). Lower readiness to

achievement in terms of reducing waste compromise resulting in High UAI.

- quantitative. Lean Process follows ii) Importance is given to both training

thoroughly tested process . and skills resulting in Low IDV

i i) Lean Process gives importance to the (Hofstede, 2001) . Cohesiveness is

flow (Liker, 2004). Lean Process encouraged among employees resulting

emphasizes when a problem occurs in in Low IDV. Group decisions are

the flow, team members have to think considered better than individual

and through thinking team members decisions resulting in Low IDV.

grow and become effective team iii) Superiors admit a need of support

members. Superior discusses with resulting in Low PDI (Hofstede, 2001).

other departments in understanding the

need on how to co-ordinate the

activities.

iii) Lean Process believes in taking up the

responsibility of the task and doing it

(Liker,2004). Lean Process believes

that selecting an appropriate employee

for the task will give value added

service for continuous flow in the

organization.

Figure 5: Lean Process and Cultural Dimensions

30

Long Term Philosophy (L TP) Cultural Dimensions

i) The long-tenn philosophy in Lean i) Focuses on the long-term commitments

requires doing the right thing in the and respect for tradition (Hofstede,

long term for the company, its 2001). Supports strong worth ethic and

employees, the customer, and society, believes that today's hard work will

even at the expense of short-term result in long-term rewards (L TO).

financial goals (Liker, 2004).

Figure 6: Lean long term philosophy and Cultural Dimensions

From the results of Figures 3 to 6, the mapping of cultural dimensions and lean principles

is summarized in the Table 2.

Table 2

Relationships between Cultural Dimensions and Lean principles

Dimension Philosophy Process People Problem

solving

. "" _ _ ___ ._-___ 0.0"_ . _ _

Power distance index (PDI) 0

Individualism index (IND) 0

Masculinity index (MAS) 0 0 + +

Uncertainty avoidance index (UAI) 0 + 0 +

Long-term vs . short-term (LSO) + 0 0 0

Example of using the Model

Turkey vs. Japan. Every organizational culture is unique, and each country can be

suppOlted with the cultural dimensions that are scored along with their respective ranking

31

comparative to other countries. For example, Turkey and Japan are summarized in Table 3. For

the first four dimensions ranking is out of 53 and the long-telm orientation is out of 22.

Table 3

Country Scores (and Ranks) for Cultural Dimensions (Hofstede, 2001, p. 500)

Dimension Turkey Japan

Power distance index (PDI) 67 54

(181h/191h) (33 rd)

Individualism index (lDV) 37 46

(28 Ih) (22nd)

Masculinity index (MAS) 45 95

(32nd/33 rd) (1 SI)

Uncertainty avoidance index 85 92

(UAI) (16Ih/1 ih) (7lh)

Long-term vs. short-term (LSO) 80

( 41h/22)

Note. Index scores and ranking in order for all the countries

The above illustrations from both the countries shows differences in culture. From the

Table 3, it clearly indicates that masculinity index of Turkey is very low when compared with

Japan.

Example of Lean Implementation at Turkey. Vodafone Turkey began its Lean Six

Sigma journey in 2006 due to the Telsim's acquisition by Vodafone on May 2006 (Moore,

2009). Taking into consideration of the firm's transformation and change environment and its

size, selecting the most appropriate method to deploy Lean Six Sigma was crucial. Vodafone

32

Turkey made the complicated decision to move away from the traditional top-down and full-time

Black Belt Six Sigma deployment to riskier bottom-up and part-time Green Belt approach. The

deployment was planned like a project and business case, with a three-year plan with key dates

and milestones, defined resource requirements and projects that were integrated with the

strategic plan.

Initially the deployment was started with a pilot project where the activation process was

chosen due to its strategic importance, customer impact and financial implications (Moore,

2009). In this process, the problems had been solved with workarounds, and people were not

happy with the results . This pilot project was considered as an initiative and considered that it

would lead to identification of many improvement areas. It was also an end-to-end process that

statted and ended with the customer. Then the diffusion into depaltments started using the

success story from the activation process. As the deployment's focus was for the best customer

experience, "the Customer Operations and Network Departments" was the first departments to

enter into deployment. Once the dep31tment was chosen, the champions were selected from

these departments and given training involving theory and simulation of six-sigma system. Final

steps involved the selection of right projects and assignments for right people to deliver and

sustain results. Once the implementation was done, the results were appreciated and

benchmarked even by other Vodafone subsidiaries. The benefits were categorized as financial

benefits, customer delight, and employee engagement.

Comparing Table 2 and 3 for this example of Lean implementation in a company in

Turkey shows a relationship between Masculinity index and People as well as Problem solving.

Result of this relationship is shown in Table 4 indicating that most of the problems at Vodafone

were probably in the areas of People and Problem Solving.

Table 4

Relationships between Cultural Dimensions and Lean principles in Turkey

Dimension

Power distance index (PDI)

Individualism index (IND)

Masculinity index (MAS)

Uncertainty avoidance index (UAI)

Long-term vs. short-term (LSO)

Illustration with Case Studies

Philosophy Process People

+

33

Problem

solving

+

Case studies illustrated as follows provides an interesting window of how the

organization was successful in implementing lean by understanding the need and utilization of

lean tools and techniques through the transformation of process and culture. Case studies are

selected from the available resources to verify and support the results of mapping between lean

principles and cultural dimensions. The following case studies give specific details of the

mapping between the cultural dimensions and Lean principles.

Case Study: Cedar Works. Cedar Works is a small wood-processing firm that

manufactures mailboxes and bird feeders of aromatic Eastern red cedar (Costantino, 2004).

Cedar Works stalied with a five men operation and has grown to more than 200 employees with

2 manufacturing plants. They have a sister plant called "West Union" that handles final

assembly of more than 25 different bird feeders. Cedar Works manufactured mailboxes, posts,

decorative numbers and an extensive line of bird feeders and accessories. They are direct

34

suppliers of Wal-mart, Lowe's and other large retail chains. During this time, they encountered

difficulty with far more demand than they could possibly supply.

Cedar Works took a decision between Kanban and Material Requirement Planning

(MRP) as a group so that it could simplify the production scheduling process to its most essential

elements. As a long-term approach, the choice of Kanban relieved the material handling

supervisor from the burden of scheduling all component process and allowed production

operators to make moment-by-moment decisions (Costantino, 2004). This indicated existence of

a relationship between Lean Philosophy and Low MAS.

Cedar Works prepared one-page summary documents for the roles of supervisors, team

leader and team members that clearly defined their responsibilities regarding standardized work

and activity, so that they would not go back to old behaviors (Costantino, 2004). This indicated

existence of a relationship between Lean Process and high UAI.

It took great persistence to continue coaching and reinforcing the principles of the new

system to the employees, indicating the existence of a relationship between Lean Process and

high UAI (Costantino, 2004).

Initially, an operator would often seek opinions from other team members on the

difficulty of supporting the previous shift production. But during the process of lean

implementation, operators started to seek guidance from the team members and the assistant

supervisor to solve the problem as a team (Costantino, 2004). This indicated existence of a

relationship between Lean Problem Solving and high UAI.

Cedar Works took up the challenge of implementing the process of lean with one of their

facilities at Re-Saw and successfully implemented the same (Costantino, 2004). This indicated

the existence of relationship between Lean Problem Solving and high MAS.

35

Top management of Cedar works visibly demonstrated the need of support indicating the

existence of relationship of Lean People and partners and also Lean Process with low PDI

(Costantino, 2004).

Top management emphasized the need for change in the new production system by

reviewing the challenges faced the company where the leader looked into the details. This

indicated existence of a relationship between Lean Problem Solving and low PDI (Costantino,

2004).

Every salaried member and all hourly leadership personnel in the manufacturing

organization would receive the training at the same time (Costantino, 2004). Issues before

starting with implementation of Kanban indicated the need of support, as individual employee

pro blems existed such as work force shortages, poor coordination, and lack of training. This

indicated existence of relationship between Lean Process and low PDI.

Importance was given to improve the overall skill level of the team through job rotation

and the use of job instruction training (Costantino, 2004). This indicated existence of

relationship between Lean People and partners and low PDI.

Every salaried member and all hourly personal in the manufacturing organization would

receive the training at the same time indicated existence of the relationship between Lean People

and partners and low IDV (Costantino, 2004).

The teaching model of 50 percent of classroom time and 50 percent of on-the-floor time

was extremely effective (Costantino, 2004). This indicated existence of relationship between

Lean Process and low IDY.

The facts that line workers were not used to work as a coordinated team as they did not

understand the importance of small line stops and that wasted seconds and minutes (Costantino,

2004). This indicated existence of relationship of Lean People and partners and Lean Process

with low IDV.

36

Imp0l1ance was given to improve the overall skill level of the team through job rotation

and the use of job instruction training (Costantino, 2004). This indicated existence of the

relationship between Lean Process and low IDV.

From the top level to the plant manager all key members attended training in both Re­

Saw and Peebles plants respectively indicating the importance of training to others employees

(Costantino, 2004). This indicated existence of relationship between Lean Problem Solving and

low IDV.

President of the company attended 80% of the trainings conducted at the work place,

demonstrating clear sponsorship and active involvement (Costantino, 2004) . This indicated

existence of the relationship between Lean People and partners and low IDV.

Table 5 depicts the relationship between lean principles and cultural dimensions of Cedar

Works.

Table 5

Cedar Works- Relationship between Lean principles and Cultural Dimensions

Philosophy Process People Problem Solving

PDI 0

IND 0

MAS 0 0 +

UAI 0 + 0 +

LSO 0 0 0 0

37

Case Study: Donnelly Mirrors. Donnelly Mirror, which is the world's largest supplier

of automotive mirrors, is a family owned business that was founded in 1905 in Holland,

Michigan by Bernard Donnelly (Liker & Allman, 2004). Donnelly Mirrors was named among

the "Top Ten" in the book of "The 100 Best Companies to work for in America". In 1988,

Donnelly Mirrors launched Grand Haven plant to provide mirrors to Honda. The plant faced lots

of difficulty from the start to meet Honda's high quality expectations. Grand Haven plant tried

out different quality programs one after another that didn't satisfy Honda's quality expectations.

A good deal of planning took place prior to implementing the kaizen event, including

conference room simulations, focusing on making the system as simple as possible - with the

work instructions and training illustrating the trait of Lean Process (Liker & Allman, 2004). In

one of their facility at Grand Haven, they had a standardized procedure for improvement through

events and manual documentation, which includes timetable for planning, running the event,

preparation work, guidelines etc. The standardized procedure was focused on structuring of

activities that indicated existence of relationship between Lean Process and high UAI.

Detailed statistics on the event is collected and the information was given to the members

in advance for scheduling events. This indicated existence of relationship between Lean

Problem Solving and high UAI (Liker & Allman, 2004).

Top management and team member's support for the shift to lean manufacturing with an

understanding and long term perspective proved critical for the growth of the organization (LikeI'

& Allman, 2004). This indicated existence of the relationship between Lean Philosophy and low

MAS.

Management was inconsistent with an objective of dominance and control, which added

to the drop in productivity. Management realized the need of support from employees with a

commitment and understanding of the lean activity to be successful (Liker & Allman, 2004).

This indicated existence of the relationship of Lean People and partners and Lean Process with

low PDI.

Team of members from different departments were formed under a manufacturing

manager that contributed different perspectives with a common goal for providing the best

possible solution for the problem related with their inventory. This indicated existence of the

relationship between Lean People and pmtners and low PDI.

Management and employees looked thoroughly into the root causes to rectify an issue

indicates the existence of relationship between Lean Problem Solving and low PDI (Liker &

Allman, 2004).

A major goal of the Donnelly Mirrors for 1996 was to bring back the employee

involvement so that continuous improvement is done by and from the employee instead of

something done to the employee (LikeI' & Allman, 2004). This indicated existence of the

relationship between Lean Process and low PDI.

38

Training of the team members and managers with the appropriate skills was given utmost

importance thereby adding value to the continuous process indicates existence of the relationship

of Lean Process and Lean People and partners with low IDV (Liker & Allman, 2004).

Involvement among the team members and their idea's for the continuous flow are

considered important (Liker & Allman, 2004). This indicates existence of the relationship

between Lean Problem Solving and low IDV.

Table 6 depicts the relationship between Lean principles and cultural dimensions of

Donnelly Mirrors.

39

Table 6

Donnelly Mirrors- Relationship between Lean principles and Cultural Dimensions

Philosophy Process People Problem Solving

POI 0

INO 0

MAS 0 0 0

UAI 0 + 0 +

LSO 0 0 0 0

Case study: Gelman Sciences Inc. Gelman Sciences started in 1959 is a wholly owned

subsidiary of Pall Corporation by February 1997 (Zayko, Hancock, & Broughman, 2004). Pall

Corporation is the world leader in the field of microfiltration and separations, with sales of more

than $1 billion during the 1996 fiscal year. Gelman Sciences internally initiated transition from

mass production to lean production without an external crisis.

As a part of lean production implementation, the firm established dinner meetings where

employees from the plants involved in leading the change attended (Zayko, Hancock, &

Broughman, 2004) . This indicates existence of the relationship between Lean People and

partners and low POI.

Trainers met with each cell member to make sure that everyone who was attending the

training understood the previous day ' s concepts and had gathered the necessary information

(Zayko, Hancock, & Broughman, 2004). This indicated existence of the relationship between

Lean Problem Solving and low POI.

40

During the alignment of cells, the leaders took different roles to understand different

operations and also to get experienced in handling different roles (Zayko, Hancock, &

Broughman, 2004). This indicated existence of the relationship between Lean Process and low

POI.

Observations and presentations were made during the training; where the group discussed

ways to cut the wastes in their cell (Zayko, Hancock, & Broughman, 2004) . There was a group

meeting every two weeks and it focused on improving the bottleneck process by assigning

projects to individuals. This indicated existence of relationship between Lean Problem Solving

and low lOY.

Top management and the groups formed cross-functional steering committees including

finance, engineering, quality, planning and operations for Continuous Improvement team process

(Zayko, Hancock, & Broughman, 2004). This indicated existence of the relationship of Lean

People and partners and Lean Problem Solving with low lOY.

Continuous Improvement Process team scheduled core training for the hourly workers

where many aspects of business were taught (Zayko, Hancock, & Broughman, 2004). This

indicated existence of the relationship between Lean Process and low lOY.

Trainees were told up front that the main purpose of the production board was to keep

people motivated to help on the floor (Zayko, Hancock, & Broughman, 2004). This indicated

existence of the relationship between Lean Problem Solving and high MAS.

Many of the operators were long time employees and found it very difficult to change

their way of work (Zayko, Hancock, & Broughman, 2004). There was resistance to the efforts

invested by quality control department and manufacturing engineering group. This indicated

existence of relationship between Lean Process and high VAL

Table 7 depicts the relationship between Lean principles and cultural dimensions of

Gelman Sciences Inc.

Table 7

Gelman Sciences 1nc- Relationship bel1veen Lean principles and Cultural Dimensions

41

Philosophy Process People Problem Solving

PDI 0

IND 0

MAS 0 0 0 +

UAI 0 + 0 0

LSO 0 0 0 0

Comparing the Tables 5, 6 and 7 that are derived from the case studies to that of the

model created in Table 2 show that case study' results support the model. So, this model could

be used as an example for any organization while implementing Lean manufacturing in their

facility.

42

Chapter 5: ConcJusion

Lean production is much more than understanding the tools and techniques; it is about the

wayan individual and the whole organization thinks. Culture is evolved from the whole systems

approach where each and everyone in the organization continuosly improve both the processes

and the production. Japanese people are the ones who invented Lean manufacturing in the past

and they are the one's who either manage or own the leading companies in the world presently.

When it comes to implementing the lean of the way the Japanese people did, it becomes

difficult and sometimes results in failure, as there are national cultural differences that don't go

along with the lean culture. Hofstede's cultural dimensions are used to understand the issues in

organizational culture change. In this paper a model is created which shows the relationship

between lean manufacturing principles and cultural dimensions.

To analyze Lean implementation in a company, the created model should be utilized.

This is done by identifying the dimensions of Hofstede's culture that are significantly different

from Japan. The result of the model can be used to find out in advance to predict which groups

of Lean principles will be most difficult to implement. An exmple of using the model was given

for a Turkish company.

The model was validated through case studies that happened in U.S., supporting the

relationship between Lean and cultural dimensions. Through the case studies, the five

dimensions of culture by Hofstede can be used to analyze and identify issues while implementing

Lean that are based on organizational culture change. The case studies give a clear indication

that the lessons leamt are different for each and every case study due to their unique culture. The

model demonstrates that the Lean implementation in the U.S. would be different and would

require different training and management implementation details.

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