Lean Adoption in Small Manufacturing Shops: Attributes and Challenges

This study presents a practical framework for introducing lean principles in small manufacturing shops. These shops are characterized by low volume, large variety and one-of-a kind products, accounting for a significant portion of the U.S. manufacturing industry. The potential challenges for adopting a lean system in small manufacturing shops are reviewed. An implementation strategy encompassing the formation of diverse teams of employees, training by external consultants, and the exploration of process improvement opportunities are discussed. While the author’s observations point to the success of lean implementation in a local small manufacturing shop, they also reveal several potential barriers as impediments to introducing lean culture in these types of shops. INTRODUCTION Lean manufacturing principles are aimed at eliminating all forms of waste or non-value added activities, and improving production cost, quality, and delivery. While the principles of lean are relatively constant, there are many different practices that have been implemented in the quest for value creation in the manufacture of products, such as pull production, cellular flow, employee involvement, total productive maintenance, standardized work, and quality management (Doolen & Hacker, 2005). The successful application of various lean practices have been documented in many large manufacturing plants within various industries, such as electronics, aerospace, computer manufacturing, and automotive assembly (Doolen & Hacker, 2005; Waurzyniak, 2005; MacDuffie, Sethuraman & Fisher 1996). These plants are typically characterized by substantial capital investment, mass production and a repetitive manufacturing environment. In spite of various data sources pointing to the significance of small manufacturing shops to the overall economy (Baker & McInturff, 2007; National Association of Manufacturers, 2001), still relatively little is known about lean practices in these kinds of shops, which are characterized by low volume, small to medium batch sizes, and one-of-a kind products. In a study conducted by James-Moore and Gibbons (1997), the authors have pointed out the lack of published work to explicitly address the issue of whether lean methods are suitable and applicable in low-volume, low repetitive production environments. Shah and Ward (2003) conducted a survey of nearly 1800 plants in the US to investigate the effect of shop size on the likelihood of implementing 22 manufacturing practices including several lean practices. The findings of the study support the notion that large companies are more likely to possess the resources to implement lean practices than are smaller companies. The objectives of this study are to investigate how small and large manufacturing shops differ in introducing lean practices in their operations, and to offer an implementation plan suited for small manufacturing shops. First, the potential challenges and barriers of adopting lean practices in SMSs are discussed and compared with similar efforts in conventional large manufacturing facilities. Next, a three-phase implementation strategy comprising of the training of diverse teams of employees; the identification of improvement opportunities; and implementation of lean practices is outlined. Finally, based on six pilot projects, the author presents several observations, and managerial aspects of introducing lean process improvements in an SMS. BACKGROUND AND RELATED WORKS The characteristic of small manufacturing shops has been discussed in a few studies. In one such study, Baker and McIntuff (2007) presented their observations when visiting a number of industrial parks throughout the southern California region and randomly interviewing shop owners in these industrial parks. They found that among the shop owners, the perception of the number of employees in a small shop is generally somewhere under 50 employees. The authors also pointed out that, small shops appeared to have weathered global competition better than larger firms. However, small shops continue to confront competition, tax burden, environmental regulations, downward pressure on prices, and narrow margins. Under such circumstances, lean manufacturing can competitively position a small shop by lowering cost and increasing productivity. Golhar, Stamm & Smith (1990) stated that lack of power in negotiations restricts small firms from achieving equitable contract positions on price, quantity, and timing D r. M a n o c h e r Djassemi is a professor of Industrial Technology at California Polytechnic State University in San Luis Obispo, California with academic degrees in Industrial and Manufacturing Engineering from University of Wisconsin-Milwaukee. Dr. Djassemi has 20 years of teaching experience in industrial technology with specialty in manufacturing processes and systems, computer-aided manufacturing, computer-numerical control (CNC) and environmental impact of materials. He has been published numerous articles in peerreviewed journals and has been certified as a manufacturing engineer since 1997 by Society of Manufacturing Engineers.