The role of lean in the application of information technology to manufacturing

John P.T. Mo*

RMIT University, School of Aerospace, Mechanical and Manufacturing Engineering, P.O. Box 71, Bundoora, Vic. 3083, Australia
1. Introduction
The application of information technology (IT) in manufactur-
ing for the purpose of increasing productivity is a complex exercise
in any enterprise. An early report by Steinhilper et al. [1]
summarized the development processes of 82 exible manufac-
turing system cases and concluded that innovative thinking was
the most important success factor. Konig et al. [2] discussed the
importance of developing intelligence in the process in conjunc-
tion with the advancement of manufacturing technologies.
Waterson et al. [3] conducted a survey on the most common
manufacturing practices in UK and listed soft issues such as total
quality management, team-based approach alongside with the use
IT. The survey by McGaughey and Roach [4] on the perception of
computer integrated manufacturing (CIM) in industry showed that
top management should address four sets of issues: strategic
concerns, resource commitment, organizational receptiveness, and
resistance to change. These researches did not mean that technical
issues were not important but rather pointing out that non-
technical issues were equally important and should be addressed
simultaneously, if not earlier. The question of what elements of
manufacturing technologies are required for improving the
efciency of manufacturing systems has attracted many different
schools of thoughts.
From the enterprise modelling point of view, any visionary
manufacturing system development should be implemented with
a coherent set of three architectures: physical, information,
human/organization [5]. In a similar argument, Didic et al. [6]
outlined an open engineering architecture with functional,
information, resources and organizational views. The generic
enterprise reference architecture and methodology has provided
specic direction that CIM implementation should contain
physical, information as well as decisional (non-technical)
elements [7]. Many of these non-technical elements for CIM
implementation were in fact adapted, if not identical, concepts of
lean manufacturing as classied by Pavnaskar et al. [8]. Shah and
Ward [9] bundled these elements in four key facets of inter-related
and internally consistent practices: just-in-time (JIT), total quality
management (TQM), total preventive maintenance (TPM) and
human resources management (HRM).
In conjunction with the lean concept, agile manufacturing
emerges as a complementary manufacturing concept to address
the demand for more exible manufacturing outcomes as the
enterprise becomes lean. Agility, which involves a high degree of IT
development, is usually more capital intensive. Unfortunately,
resources allocated to such projects are always limited. Manage-
ment needs to maximize the effectiveness of these investments.
However, there is very little research on the principles of howthese
manufacturing practices should be implemented with the support
of IT. Cua et al. [10] studied the compatibility of several lean
manufacturing implementations and found the performance of
some of these lean programs depended on both socially and
technically oriented practices in the workplace. Ahlstrom [11]
further pointed out that there were principles governing the
sequence of lean production implementations. A similar study was
conducted by Rho et al. [12] on the relationships between
Computers in Industry 60 (2009) 266276
A R T I C L E I N F O
Article history:
Available online 28 February 2009
Keywords:
Production efciency improvement
5S
Work cycle reduction
Layout planning
Furniture manufacturing showcases
A B S T R A C T
The Australian furnishing industry has been subject to severe competition from global suppliers in the
last decade. Supported by the governments Action Agenda, the Furnishing Industry Association of
Australia developed the Production Efciency Program to improve efciency of the industry. The core
of the program was three showcase projects demonstrating how return on investment can be achieved
with the application of advanced manufacturing technologies. Instead of committing large capital
expenditure in IT based manufacturing systems, the showcases started by applying lean manufacturing
principles and transformed the business practices to adopting latest IT systems for the planning and
control of manufacturing. This paper outlines the innovative aspects of the program, issues tackled and
techniques applied to the showcases. The paper also reports a case study of a small furniture company
that achieved 30% increase in productivity by implementing a new scheduling system that assisted
implementation of lean manufacturing.
2009 Elsevier B.V. All rights reserved.
* Tel.: +61 3 9925 6279 fax: +61 3 9925 6108.
E-mail address: john.mo@rmit.edu.au.
Contents lists available at ScienceDirect
Computers in Industry
j our nal homepage: www. el sevi er . com/ l ocat e/ compi nd
0166-3615/$ see front matter 2009 Elsevier B.V. All rights reserved.
doi:10.1016/j.compind.2009.01.002
manufacturing strategies, practices and performances in three
different nations. Ward and Zhou [13] reported how IT had an
impact on lead-time performance and that the primary drivers for
adopting new computer based manufacturing technologies was
competition and protability. These researches provided some
guidelines on how lean and agile could individually be imple-
mented but not on the combination of both, which had been
pointed out previously to be more effective.
Narasimhan et al. [14] found that agility could presume
leanness but leanness might not presume agility. Yusuf and
Adeleye [15] compared the effectiveness of lean and agile
manufacturing in UK. The conclusion was that agile companies
consistently outperformed their lean competitors on all business
performance measures studied. More recently, Prince and Kay [16]
combined agile manufacturing with lean concept to achieve better
production ow. Integrating lean and agile characteristics becomes
an important study on how these philosophies can assist business
to prosper [17]. It is clear that productivity improvement projects,
which are linked to some kind of investment in capital, resources
usage, commitment, opportunity loss, etc., should include the
application of both lean and agile manufacturing concepts. The
question is: howcan we maximize the benets of a combination of
lean and agility strategies in a manufacturing environment? This
paper uses a national productivity improvement program in
Australia as the research focus to illustrate that the successful
application IT in manufacturing should be preceded by a lean
manufacturing project that streamlines the operation of the
enterprise. A further case study of a small furniture company that
achieved 30% increase in productivity by implementing a new
scheduling system after executing a lean manufacturing program
is also reported.
2. The production efciency program
Furniture manufacturers in Australia were facing a challen-
ging future. Increasing competition from overseas suppliers,
declining international production efciency comparisons and
poor utilisation of technology indicated that the industry was at
the crossroads. Inaction could result in signicant risk of market
failure. Supported by the governments Furnishing Industry
Action Agenda Steering Committee, several industry studies
suggested that the solution could be the application of new
manufacturing technologies and processes, supplemented with
improved marketing strategies [1820]. The application of
computer-controlled systems has been the focus of development
for many furniture manufacturers, but the effect was mixed. The
issue was there were no guidelines on the best approach in
terms of:
which suite of technologies is suitable for the furnishing
industry,
timing of applying these technologies, and
how they should be implemented.
With reference to a project concept in Canada [21] and a
similar project reported in Brazil [22], the Furnishing Industry
Association of Australia (FIAA) developed a series of initiatives
to improve the industrys competitiveness. One of the key
programs was the Production Efciency Program (PEP) for
which the author was the project manager commissioned by
FIAA to oversee the execution and development of the project.
The idea was to promote clear insights to the problems and
understand the effect of applying different manufacturing
technologies on business performance by establishing examples
in the industry. The furnishing industry has been put under
signicant pressure and many companies were unwilling to
invest unless there were proven commercial advantages. Hence,
many companies took continuous improvement as its lowest
priority. The consequence was that they ran out of time for
improving their operations and the problem went out of control.
The PEP was designed to provide benchmarks and illustrative
pathways for companies to make correct decisions on such
investments.
To ensure the greatest impact on the culture of the industry, the
PEP focused on compelling issues, which affected most companies.
The program was managed in 5 stages.
2.1. Stage 1Identication of signicant production weaknesses
Stage 1 of the Program identied the production weaknesses in
the furnishing industry so that solutions and showcases could be
developed at later stages. The main tasks were:
Dene performance indicators to measure the success of the
Production Efciency Program.
Develop a structured questionnaire to collect quantitative
information on the manufacturing processes in the industry.
Conduct site visits to solicit qualitative information through
interviews. The study concentrated on exploring the rationale
behind decisions made by management.
The project team conducted 80 on-site factory visits
nationally covering timber, upholstery, metal, at panel,
mattress, and project-based sectors. During these site visits,
the project team looked specically at production scheduling,
factory layout, stock control, use of technology and sometimes
dust control issues.
2.2. Stage 2Analysis of causes of production weaknesses
To analyse causes of production weaknesses, the project team
used a process modelling method. Each of the sectors was
modelled as a series of tasks and workow taken by different
departments in a typical factory of the sector. Fig. 1 shows the
process model of the timber sector.
By analysing how the system worked in each sector, the
following weaknesses were identied [23]:
Inadequate production planning and control.
Insufcient information ow.
Unsatisfactory use of computer systems and equipment.
Poor materials handling and layout.
Trade practices instead of production ow systems.
Ineffective stock control strategies.
These ndings coincided with the general trend of Australian
manufacturing industry of using lean manufacturing strategies for
productivity improvement [24].
2.3. Stage 3Showcases
A series of information seminars were conducted around
Australia to provide feedback to the industry on the ndings. In
the seminars, members of the industry were asked to express for
their companies their interest to participate in showcase
projects. A total of 18 companies submitted their proposal to
FIAA. The proposals highlighted the vision of the companies on
how they saw future furniture manufacturing should be and
what problem area they were most interested to improve by the
application of modern manufacturing technologies. Three
companies were selected from the candidate companies.
Manufacturing experts were employed to help these companies
J.P.T. Mo / Computers in Industry 60 (2009) 266276 267
study ways of improving their production efciency. During the
showcase development, the project team collected information
about how the showcases were done and benchmarked the
improvement in production efciency.
2.4. Stage 4Development of IT tools
The accumulated showcase information needed to be dis-
seminated to the industry at large. Stage 4 of the PEP was to
package the information in such a way that non-expert users could
use the methods and tools [25]. This information, including
manufacturing data forms, process description, video, analysis
software, system design documents and benchmarking metrics,
were organised into an interactive CD. The CD package, entitled
Furnishing Industry Production Efciency Improvement Suite,
was distributed to the industry via FIAA.
2.5. Stage 5knowledge dissemination and continuous industry
support
Stage 5 of the PEP was to develop an on-going training and
industry support services within FIAA to support the industry
members who used the knowledge in the Furnishing Industry
Production Efciency Improvement Suite. Provision of the knowl-
edge and lean manufacturing methods became the focus of a series
of post showcase conferences. With assistance from the govern-
ment, the support service comprised a small group of 8 productivity
specialists and worked with companies on a fee for service scheme.
3. The showcases
The showcases were the most important element of the PEP.
Each of the showcases had its own characteristics and demon-
strated different techniques of production efciency improvement.
3.1. The Pine Factory showcase
The Pine Factory manufactured solid timber furniture and
employed approximately 60 staff in Brisbane. The Pine Factory
Showcase initially intended to introduce a new IT system that
would synchronize component delivery from machine shop to
assembly. There was also intention to study the spraying process
which had been a bottleneck for prompt order delivery for some
time.
In the rst few weeks, in a series of one-on-one interviews, the
project team and the factory management went through a process
known as manufacturing systems audit. The audit covered all
aspects of management strategy and manufacturing operations of
The Pine Factory. The manufacturing systems audit showed that
The Pine Factory had a strong business position in the market but
there were problems in meeting the customer demand. Two major
problems were particularly noted:
(1) The assembly shop did not have all the parts required to put the
furniture together. The machine shop was unable to supply
components to the assembly shop forcing assembly staff to
become idle. This happened on a daily basis.
Fig. 1. Process model of timber sector.
J.P.T. Mo / Computers in Industry 60 (2009) 266276 268
(2) The weekly job list was not completed. There were items in the
list that should be produced in the week were not delivered.
The machine shop was unable to fulll the expectation of the
scheduler.
The Pine Factory had a production scheduling system that was
at least 10 years old. Having done the initial manufacturing
systems audit, it was found that the biggest problem in the
machine shop was the lack of formal processes. The project team
decided to take several lean manufacturing actions instead of
specifying the new IT system.
Workow improvementThis action was based on the theory of
constraints [26]. It changed the dynamics of the workload among
the machines in the machine shop. It increased the total output
of machine shop by almost 15% by identifying the constraints
and designing the methods to achieve smoother processing
ows, no stop/starts and less setups.
Setup Time ReductionThe setup time reduction work in the
Pine Factory was an adapted process from SMED [27] for
furniture manufacturing [28]. As a starting point, the project
team carried out a series of study on the setup process. Activities
that could be done outside of the critical path of the task were
separated. The result was a substantial reduction in setup time
from 45 min down to 15 min.
HousekeepingThis action was based on the theory of 5S [29].
The action removed all unnecessary items, ensure all tools,
equipment and workspace were cleaned and maintained, and
that all necessary items were allocated an appropriate place and
stored in that place.
By focusing on the machine shop as clearly identied by the
manufacturing systems audit, the overall effect was a signicant
gain in efciency that brought 6.51% productivity improvement for
the whole factory [30]. The lean manufacturing process helped the
Pine Factory to externalise and standardise many previously
implicit workowand processes. Anumber of standard procedures
and forms were developed. With a better process of capturing data
for performance monitoring, the Pine Factory found it necessary to
implement new IT enhancements to support the changes in the
showcase. In particular, the production scheduling system, which
was originally stock driven, was enhanced to provide auto-
generated cutting slips as work orders (Fig. 2), which assisted the
manager to control the workow through the machine shop
automatically.
The Pine Factory Showcase illustrated that the new IT system
was developed on a set of dened manufacturing processes in the
machine and assembly shops. The application of lean manufactur-
ing practice played a crucial role in dening the manufacturing
processes and ensuring proper practices to be established prior to
the IT system was implemented.
3.2. Coringle showcase
Coringle made a wide variety of furniture products. Bedroom
furniture constituted 85% or the volume and the remaining 15%
was home ofce furniture of all kinds. The Coringle Showcase
focused on the design and development of an IT system that could
substantially reduce the lead time for processing bed orders in the
bed shop.
An initial process modelling study showed that most produc-
tion batches in the bed shop were either delayed or went to stock. It
also showed that the bed shop did not have a unied procedure for
assembling the products. Each worker assembled according to his
or her own understanding of the product and hence the production
time varied signicantly. Work times were inaccurate and
production output was unreliable. It was concluded that introdu-
cing new IT system in production control would not change the
situation due to discrepancy of data. Instead, a process mapping
analysis showed the potential of improvement by taking several
lean manufacturing actions:
Efcient layoutThrough the process mapping studies, poor
work and material ow were recognised as the main stumbling
block for efciency improvement. Five new layouts were
designed with a systematic process that aimed to maximise
space utilisation [31]. Extensive simulations on the operation of
the new layouts were carried out to evaluate the effectiveness of
each of the layouts in relation to reduced excessive operator
movements and improved workow. The layout selected had
approximately 30% space savings (Fig. 3).
Group technologyAfter the process map analysis, the 18 bed
products were divided into 6 families according to their
manufacturing features [32]. Three product families were
selected and three jigs were made for each of the product
families. A new process map was designed and an average 25%
manufacturing time reduction was achieved.
Stock reductionAt the start of the project, there were 18,000
components on 11 racks in the bed assembly shop. Only 3000
components were consumed per week. A desirable level was rst
determined from analysis of stock requirements [33]. By
improving communication with the machine shop and enforcing
the principle that only one weeks component should be stored,
the components carried by the bed assembly shop quickly
dropped to the desired level, saving signicant materials and
handling costs.
Fig. 2. An autogenerated component slip from the new schedule system.
J.P.T. Mo / Computers in Industry 60 (2009) 266276 269
In conjunction with the above actions, several other minor
changes were implemented including quality control between
manufacturing steps, specialized trolleys for transportation and
planned production orders prioritization. A massive 50% produc-
tivity improvement of the bed shop was reported [34].
Coringle had been trying to upgrade their scheduling system to
a full MRP system that included sales order entry, production
scheduling, bill of materials, work-in-progress tracking and
inventory control. The IT development followed closely with the
Showcase which streamlined the bed shop assembly processes and
signicantly improved the accuracy of production data. The new
MRP system made use of the component model that identied
howeach component should be congured in the MRP application.
It also specied what was required on an ongoing basis to ensure
the settings changed according to changing demands. The success
of the MRP implementation depended on the availability of reliable
manufacturing information through lean.
3.3. Moran showcase
Moran manufactured lounge suites for domestic and export
markets and employed over 250 staff. The Moran Showcase
focused on the design and development of a production ow
system that could integrate all manufacturing processes for a
family of lounge suites, the Brando family. This family of lounge
suites comprised about a quarter of the turnover of the company.
The objective was to reduce the production lead time from17 days
to less than 5 days. To achieve this objective, ve key lean
manufacturing decisions were made:
(1) Reduce planning cycle time from 5 days to 1 dayPlanning
cycles at Moran was altered as a result of the studies carried
out. Previously Moran worked on a weekly schedule. The week
long cycle was intended to minimize machine setup time and
operator learning time. However, the showcase study proved
the contrary. Changing to a daily planning cycle helped to
expose problems on the production schedule and rectied
immediately.
(2) Plan the capacity of all stagesComplying with the daily
production schedule in an integrated system did not come
automatically. To ensure everybody knew what they should do
and how to do it, a fabrication plan was developed to keep the
staff up-to-date. A fabrication plan was designed to provide a
detailed breakdown of the tasks at sub-component level for
each product to be produced on the day (Fig. 4). The operators
were assigned the tasks instead of components so that a team
Fig. 3. New layout was 30% more efcient and analysed with simulation.
J.P.T. Mo / Computers in Industry 60 (2009) 266276 270
of workers could cooperatively produce the required compo-
nents from bits and pieces within the day.
(3) Implement system performance feedbackA number of
measurements were implemented including:
(a) Departmental schedule adherence assessmentEach
department was given a daily target to nish 98% of the
production list given to them.
(b) Charting of number of leather rework per month.
(c) Lateness measured by the hours required to nish the
overnight work.
The feedback data enabled remedial actions to be taken and
provided a benchmark for improvement effort assessment. The
company was able to achieve an overall 90% schedule
adherence and reduced the rework rate signicantly.
(4) Quality control at sourceThe detailed planning strategy
ensured that staff at Moran produced at the time the company
wanted. However, if the outcomes of individual production
step could be defective, the plan could be disturbed. The
quality at the source policy was introduced to allow the
workers to inspect and report defects inherited from previous
steps. The rejects were brought back to the source and rectied
there.
(5) Cross skilling to increase versatility of work forceMoran was
well known to produce high quality and skilful products. The
work force was trained to do specic tasks and the staff was
difcult to move to different departments. The cross-skilling
policy was to train the operators in another task not in his/her
original skilful area. There was a cost involved in widening the
skill base, for example, production times were longer for staff
under learning mode. After a years consistent execution of this
policy, there was a large percentage of the Moran workforce
becoming multi-skilled and the skills shortage problem was
solved. The ability to move people where they were required
also helped reducing the production lead times because staff
had better understanding of what the other people were doing
and hence work outcomes at each steps were more in-tune
with the need of the next process.
Moran had a very well developed computer system that could
produce useful reports and production information instantly. The
daily scheduling and capacity planning decisions allowed Moran to
plan scientically according to stafng level and contractor work.
Changes to the IT system were then specied and implemented to
compute the feedback data automatically [35].
3.4. Summary of experience from the 3 showcases
The showcases adopted a unied investigative process as
shown in Fig. 5. In each of the showcases, signicant production
efciency gains were achieved by the application of lean
manufacturing. The use of a unied investigative process in the
showcases helped to isolate the technical from the non-technical
issues [36]. Using well-established tools such as value stream
mapping and process modelling, cause and effect charting, the
project team was able to identify the need for lean manufacturing
instead of the initial intention of developing IT systems. The
Fig. 4. A fabrication plan.
Fig. 5. Showcase development and implementation process.
J.P.T. Mo / Computers in Industry 60 (2009) 266276 271
importance of lean manufacturing concept in the creation of an
integrated manufacturing system should not be underestimated.
Onthe other hand, IT development can be used to investigate the
effect of leanmanufacturing onthe productionsystem. For example,
a simulation model has been used in the Coringle showcase to
analyse the effect of workow in the new layouts. A productivity
improvement project can have signicant long-term effect to a
company. There are risks involved and hence companies should aim
to examine the best strategy to maximise the effectiveness and
outcomes of the project. If resources and capabilities permit,
simulation models can be applied to explore the consequences of
changes [37]. The application of IT in the formof a simulation model
has enabled Coringle to make an informed decision thereby
minimising the risk of changing to a sub-optimal layout.
An important observation from these showcases is the
fundamental requirement for IT based productivity improvement
projects. Changes in the IT environment, irrespective of whether it
is a simple upgrade of MRP system (in the Moran case), or an
overhaul of scheduling system to a needs driven planning
environment (in The Pine Factory case), will lead to a change of
the manufacturing process or work ow. In the showcases, making
a change of manufacturing process before IT system changes has
several advantages:
The company can see improvements earlier so people are more
condent to make changes in the IT system later;
The IT change requirements are driven by the need of the new
manufacturing processes and hence it is easier to develop the
specication of the IT system;
Implementation of the new IT system becomes straight forward
since the staff is already familiar with the new process.
The manufacturing processes were adjusted through lean
manufacturing actions which added further advantage of a
systematic transformation of the culture of the production shop
oor. When the changes were proved to be successful, IT solutions
were developed to reinforce the changes. Therefore, the applica-
tion of IT is key to support lean manufacturing activities but it is
not the cause of productivity improvement.
4. Productivity improvement in a SME
Subsequent to the showcases, a small furniture company in
Melbourne approached the project team for assistance. Zuster
Furniture made custom-built furniture for architects, home
designers and display houses. Initially, the project teamconducted
a general manufacturing systems audit at Zuster Furniture. It was
found that the company was very successful with its design and
marketing strategy but had difculty meeting customer demand,
delivery deadline and quality requirements. Discussion with
Zuster management showed that Zuster did not have a process
that dened the planning and control of its manufacturing
activities. The challenge was to develop the process and at the
same time ensuring that it was manageable by the company.
The nature of Zusters business was to design and manufacture
furniture products for specially designed environment. A brief
analysis of the order bank showed that although there was some
level of generalisation in the product range, over 60% of the
products were customised to customer needs. The variation of
work content was difcult to predict. A conventional scheduling
method was unable to guarantee a customer order to be delivered
at a particular time. There were two issues to be addressed:
(a) The division of work in different parts of the manufacturing
systemwas not clear within the company. The responsibility of
progressing a piece of work through the production steps was
left to individuals who were responsible for his/her own
schedule and could only push through the process by nishing
his/her own part of production. The ambiguity of work
requirements induced uncertainty in the time of nishing a
customer order.
(b) There was no documentation on what to manufacture in the
factory. Workers received work orders from the group leaders
who in turned received such information from the factory
management verbally. Production ow was controlled from a
whiteboard which listed the customer orders and updated
irregularly. This resulted in serious synchronisation problemas
indicated by a large amount of work-in-progress on the shop
oor.
Hence, the rst step was to implement several key changes in
the business processes by lean manufacturing principles.
4.1. Pull scheduling
A change of production philosophy had to be made to cater for
the highly customized products in the company. Traditional batch
processing method was thought to have the advantage of savings
in setup time and bulk purchasing, but it could not meet customer
demand. Analysis of the products showed that the company
adapted customer requirements from some basic units. For
example, entertainment units could be made as 4-leg or 6-leg
units depending on the weight distribution and look-and-feel
expectation of the customer. Both products were derived from the
basic Zen low entertainment unit timber base. Reference to the
base unit was important but the time to make these variations
could vary signicantly due to other production parameters such
as size, nish and materials.
The project team carried out a process study of a number of
products (Fig. 6) and concluded that the responsibility could be
claried by dividing the manufacturing process into a number of
sequential departmental processes. Planning of workow within
the factory was then compartmentalized to the departmental
processes.
Having divided the work into small sections, it was then
possible to implement a pull scheduling method. The principle of
the method was to work backwards from the time of delivery of a
customer order to deduce the production milestones for that
customer order in each department. The responsibility of meeting
the milestone was then given to the leader of the department.
4.2. Visualisation
In order to assist Zuster in implementing the new system, the
project teamdeveloped a spreadsheet using Excel. The spreadsheet
helped Zuster to set up control due dates for each department on
each and every item in the order bank. Manufacturing control was
established at the exit point of each department with the ultimate
control date set to meet customer due dates. Each control date was
listed on a worksheet and could be printed out separately so that
the department leader was clear about what he/she had to produce
on that day.
To remove further ambiguity of production due dates and to
assist in the information ow, Zuster also made changes on the
shop oor with visible control measures. For each product going
through the factory, a printout of the control date worksheet was
attached. Different colour papers were used for different control
dates so that it was highly visible from a distance ensuring that
immediate attention could be given to the most urgent item. These
changes ensured that the initial system maintained a high level
of synchronisation between the shop oor activities and control
data in the management ofce.
J.P.T. Mo / Computers in Industry 60 (2009) 266276 272
4.3. Kaizen process
Work to reorganise the factory according to the newproduction
planning and control procedures took place over a fewweeks time.
The company management consulted the workforce on the design
of the new system and conducted a series of training sessions to
make sure that the staff understood the new forms that enabled
the process.
In addition, Zuster asked individual staff to record the time of
completion of the work items on the forms and these became a
feedback mechanism providing valuable information about when
and who were involved in the manufacturing processes. The bi-
directional information ow increased the transparency of the
production shop oor and enabled a vertical information ow
environment. The production manager could then use the data to
discuss with individual staff potential areas of improvements in
one-on-one performance appraisal meetings.
With full cooperation of the workforce, the company was able
to reduce their production lead time fromaround 6 weeks down to
4 weeks. The reduction was consistent without undue stress to the
production environment, that is, no overtime or time savings by
cutting corners. Ideas coming out of the performance meetings also
helped to sustain the result of system changes.
By taking a continuous improvement approach at the start of
the project, Zuster created a controllable process on the shop oor
aligning the information captured in the management ofce
(where planning was done) with the manufacturing activities
(where the plan was carried out). The outcome was signicant
improvement in efciency and the ability to manage the delivery
dates accurately. Zusters customers told the company that they
were the preferred supplier because of the ability to keep the
customer informed during manufacturing as well as delivering on
time all the time.
4.4. New production planning and scheduling system
The project team recognised the limitations of Excel for this
type of application. The initial spreadsheet was developed as a
quick tool (within a couple of weeks) for Zuster to manage a
transition fromno planning and control to a state with a number of
well-dened management processes in place. A more capable
system for managing a real manufacturing establishment was
required for the increase in production following the application of
lean manufacturing.
The company had thorough discussions with several software
suppliers and reviewed the functionality of commercial production
scheduling and control systems. It was concluded that none of the
demonstrated systems were suitable unless some signicant
changes were made to the fundamental way of managing customer
orders. Zusters customization process was unique in the way that
it was somewhere between total design and build and made to
established style. The project team decided to develop a next
generation system which could provide additional functionality
such as printing of documents, daily schedule, shop oor feedback
dockets, shipping note, and so on. The system, known as OnTrack,
was developed in Java supported by a database as shown in Fig. 7.
The order bank entry module of the OnTrack systemaccepted
customer order entries and functioned as the master repository for
all Zuster customer orders. Entry to the order bank only constituted
a record of a customer request for a product as described by the
parameters. An order was put to production schedule when it was
transferred to the schedule order module. During the transfer,
Fig. 6. Process study of a typical product.
J.P.T. Mo / Computers in Industry 60 (2009) 266276 273
OnTrack used product denition parameters to determine the
default production due dates of intermediate departments for that
order (Fig. 8). Any due date of the departmental schedule could be
changed if necessary. In other words, each order was scheduled
and controlled individually.
Once an order was placed to production schedule, control
sheets could then be printed in the same way as in the spreadsheet
environment but obviously, OnTrack handled the data formatting
in its systemalgorithmwhich saved signicant amount of time and
data transposing errors. Feedback dockets were also printed and
attached to each product. These dockets were returned to the
management ofce daily for updating the database. When the last
production milestone for an order was recorded, the systemplaced
the order to the delivery table from which the delivery manage-
ment module could integrate it with customer information and
printed out a shipping note.
The development of OnTrack was a major IT implementation for
Zuster. The resource commitment was signicant and basically
affected every staff in the company. Full cooperation on the use
of information generated from the system was essential to the
success of the IT project. The application of lean principles in
the pre-cursor tasks proved to be particularly relevant to prepare
the workforce and the company to a newlevel of management. The
introduction of OnTrack not only reinforced the individualized
order control manufacturing philosophy that the system was
designed for, it also automated the integration of information
across a number of sources (i.e. product, customer, order) and
helped the company to better serve their customers. A30%increase
in productivity was reported. Further reduction of production lead
time and an ultimate goal of delivery within two weeks
occasionally was anticipated.
Fig. 7. The structure of OnTrack production scheduling and control system.
Fig. 8. Master control schedule showing individual milestone changes for each order (highlighted rows).
J.P.T. Mo / Computers in Industry 60 (2009) 266276 274
The new software opened up potential paths for future
improvements. A wide variety of information could be extracted
from the database to provide useful data in different forms. For
example, as the company grew, the need to ensure a balanced
schedule in different departments became clear. OnTrack con-
trolled the workow by customer demand. It would be possible
that when the production volume was low, adjustment to the
schedule due to overloading of some departments or unexpected
delays in some tasks could be made easily. However, this would
require the development of a resource model that could represent
the companys resourcing practices.
5. Conclusion
The PEP has revealed the need to apply both lean and agile
manufacturing concepts to IT implementations. The showcases
adopted a standard process to develop, analyze and implement
productivity improvement plans that are most effective prior to IT
application. In all three showcases, the companies had been using a
decient scheduling system. The studies found that changes to the
IT system would lead to signicant changes to many other aspects
on the shop oor. Experience from the showcases and other
literature showed that these non-IT related issues should be
handled separately by a lean manufacturing project.
The showcases had the advantage of receiving technical support
from external professionals. These experts were catalysts to
changes and were able to involve staff at all levels. While the
lean manufacturing techniques employed in each showcase
differed somewhat, the ultimate goal was similar, viz., to
externalize and standardize the workplace operations and to
maintain the momentumof change. Typical techniques such as 5S,
theory of constraints, layout improvements, setup time reduction
and so on were successfully applied. Subsequent to the application
of lean manufacturing, the changes in the IT system became a
reinforcement of what had been improved, making the outcome of
productivity improvement sustainable.
When the same process was applied to a SME, the boundary of
lean and IT was not as clear cut. While SME would require lean
manufacturing projects to prepare for system changes, the
fundamental lack of data processing capability made it difcult
to introduce new ideas effectively. The use of simple tools such as
spreadsheet proved to be particularly useful to get the ball
rolling. Once the actual system (in the form of procedures, forms
and activities) was dened and implemented, a customized IT
system would further reinforce the outcomes and increase the
efciency by data automation and error reduction.
The experience in the cases described in this paper could form
the basis for further research to the question: is it necessary to
implement lean manufacturing as a pre-requisite for all IT
projects? The combined lean and IT approach is a slow process
because it has more steps and requires more time to complete.
However, if it is a sure way of achieving the desirable end result,
why should one take the risk of going down a different path?
Acknowledgements
The author would like to thank the FIAA for the opportunity to
lead and manage the national PEP. The author would also like to
thank the management and staff of the companies involved: The
Pine Factory, Coringle Furniture, Moran of Melbourne and Zuster.
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Dr. John P.T. Mo is Professor in Manufacturing and
Materials Engineering at RMIT University. Before join-
ing RMIT, he was Research Team Leader of Manufactur-
ing Systems at CSIRO. In the last decade, he led research
in global manufacturing, system integration, machine
diagnostics and optimisation. John is a Fellow of
Engineers Australia.
J.P.T. Mo / Computers in Industry 60 (2009) 266276 276