Lean Transformation in the U.s. Aerospace Industry: Appreciating Interdependent Social and Technical Systems

Lean practices and principles build on a half-century of successive initiatives aimed at transforming social and technical systems in organizations. While they are seen as central to the revitalization of the U.S. aerospace industry, there is great variation in the degree to which lean initiatives emphasize just technical/manufacturing systems versus additional social and enterprise dimensions. Based on a national random sample survey of 362 U.S. aerospace facilities, this paper examines factors that account for the incidence of lean practices and the impact on outcomes relevant to key stakeholders. While structural factors such as industry sector, facility size and others have limited explanatory power, two process factors – organizational learning and the value placed on intellectual capital – do account for the increased presence of lean practices. In examining employment outcomes, facilities higher just on the technical/manufacturing aspects of lean have a significant and negative impact on job growth, while facilities higher around the social systems associated with lean have significant and positive employment growth. This finding is consistent with the views of critics of the more narrow technical, manufacturing-oriented approaches to lean as a threat to employment and it validate proponents of a broader value-creating approach to lean as a way of growing the enterprise. Enterprise dimensions of lean (including both social and technical aspects of lean) have a positive impact on productivity. Examining outcomes relevant to multiple stakeholders and various factor inputs produces a more complete understanding of the limitations and potential for lean transformation in the aerospace industry.