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INTRODUCTION

Lean production is one of the approaches which has been used by many companies around the
world to achieve these competitive advantages. However, lean production was developed by
large companies and based on their characteristics. Both large , medium, and small sized
enterprises are important and have a large share in the world economy, For instance 55.5% of
all the added value in Europe comes from SMEs (European Commission, 2005).Therefore, it is
important to find out; whether or not SMEs can also enjoy the advantages caused by applying
lean production. Since lean production is not tailored for SMEs and their characteristics, these
companies may face some difficulties with implementation of it in their organizations.

The preamble and implementation of lean production principles since almost three decades had
a notable impact on many manufacturing enterprise because the micro, small and medium
enterprises are numerous and usually the backbone of the economy. SMEs was defined by
European commission as having less than 250 employed people. SME makeup 99.8% of all
enterprises in the Eu27, which represent about 20 million companies employing almost 65% of
total employees. In Italy, the percentage are higher of about 91.8% of the total are micro
enterprise with 10 employed people while 6.9% were small enterprises with 10 to 49% person
employed and 1.1% were medium sized enter with 50 to 249 persons employed and large
enterprises were about 0.2% with 250 employed person and even more (D.T. Matt, E. Rauch et
al 2013).

The term lean was first introduced by Krafcik (1988) where he stated that plants operating
with a lean production policy are able to manufacture a wide range of models, yet maintain high
levels of quality and productivity. Womack and Jones (2004) state the main purpose of Lean
production has the elimination of any waste, that is, all that does not add value to the product,
and /or prevents the process of receiving incremental improvements. In this sense, with the
waste elimination, there is an improvement in the flow of the processes and employees work,
decreasing the production lead time, making the company more flexible to meet its Market
demands.

Lean production was created by large companies and It was used by the large companies to
increase production productivity and performance since the beginning of the 1990s. Since then,
the many large companies around the globe, have been enjoying the advantages resulted by
implementation of lean production in their organizations. However, despite the possible
competitive advantages caused by lean production, SMEs have not implemented lean as
extensive as large companies. Few researchers have been investigating implementation of lean
in SMEs and tried to realize whether lean production suits this specific type of company. The
results from (Womack et al.1990) showed that lean production is applicable in every
organization. Some of the studies revealed that there are some hindrances to implementation of
lean by SMEs. In addition, some other studies showed that some of the contextual factors such
as culture, country of origin, and employees contract can also affect lean
implementation.(Pedram Mirzaei,2011).

This studies review want to reveal the impact of lean production on small, and medium sized
enterprise, the beneficial aspect of lean production and barriers that may occur during the
implementation of lean production in a small and medium sized enterprises in Europe.
Aims and Objectives

According to Womack et al.(1990), lean production is applicable in all companies despite their
size. An hypothesis was formulated ; Does Small MEs have the same tendency to apply lean
as the large companies?

Aim

The main purpose of this study is to review the available literature on lean production for small
and medium size enterprise in Europe.

Objectives

To identify the factors that hinder SMEs from applying lean production.
To identify the challenges which companies faces during implementation of lean
production in Europe.
To analyze the benefit of lean production in SMEs in Europe.

Research Questions

A research questions was therefore formulated ;

What are the challenges companies faces during the implementation of lean production?
What are the factors that hinder SMEs from applying lean production?
What are the benefits and importance of lean production in SMEs ?
RESEARCH METHODOLOGY

Search Strategy

A systematic search was conducted on Google scholar databases from 2010 to 2015,
using the combination search term like lean production in SMEs, challenges of lean
production in SMEs , and benefit of lean production in SMEs Europe.

The search yielded 398,000 articles from Google scholar and relevant journals were
critically appraise, In total 4 studies were collected and reviewed.

The variables used measures the barriers and the results in SMEs.

Inclusion and Exclusion

Studies presenting Implementation and challenges of lean production in SMEs, factors


that hinder SMEs from applying lean production, and importance of lean production in
SMEs in Europe were included in the studies.

Articles not in English were excluded and studies older than ten years were excluded
from the studies.

Statistical Test Methods


The main purpose of the review was to appraise the available data ,using Microsoft
excel table, bar chart to draw the results together the data on the implementation of lean
production in SMEs and barriers in implementing lean production in Europe.
RESULTS

A total of 4 publication on the implementation, barriers and factors that hinder SMEs from
applying lean production and importance and the benefits of lean production in SMEs in
Europe.

One of the study reviewed in Sweden, a cross sectional survey by the use of questionnaires
which accessed the current state of companies which has been using lean production and not
using lean production.

Table 1: Current state or situation concerning the organization structure and progress in
the implementation of various lean principle in the surveyed.

Management Owner/CEO 20% of the Management 80% %


type company group management
group
Implementation Opportunity - Variance is - Which -
Coordinator given on 1.36 ranges
Authority average is from 1 to 5.
3.82
Lean Average is - Variance - Ranges 0 -
importance 5.18 1.16 to 6.
Product variety Average - Variance - Ranges -
3.09 2.06 from 1 to 5
Push pull Pull which is - 63.64 Push 18.18
more concentrate
concentrated in the inner
on strength.
customers
satisfaction
Suppler yes 45.45 Have but not 36.36 Supplier 9.09
product working not want
development
Operator No chance 9.09 were Take care of 18.18 were Take care 72.73
manager given to allowed for machines allowed to of
operator maintenance take of machines
maintain and machines errors.
attend to and attends
fault. to minor
errors.

Barriers

The data and information obtained regarding the implementation barriers with SMEs shows that
lack of time, management support and financial problems are the most barriers in SMEs
especially in Sweden, because of the respondents announced that they have problem with
them. Employees resistance to change , reduction of work in process inventory and training
were the problems and issues concerning implementation of lean production.
Lean Implementation barriers for SMEs for the medium sized enterprises and small sized
Enterprises

Lean Implementation Barriers for Medium size Enterprises

Integration

Lack of skilled employees

Lack of time

Training

Resistance to change

finance

Management support

Change prices

0 10 20 30 40 50 60 70

Lean Introduction Barriers for Small Sized Enterprises

Lack of skilled employees

Lack of time

Training

Resistance to change

finance

Management support

Change prices

0 10 20 30 40 50 60 70
Table 2: Results on the success and benefits of lean production in SMEs

Authors Benefits of lean production in SMEs


Ahmad Nasser Mohd, Rose, baba Md, Mohd Inventory reduction
Nizam Abdul Rahman (2009); A review of lean Quality improvement in products
manufacturing practices in SMEs.
Improve efficiency in direct labour
Improvement in lead or cycle time
On time delivery
Smaller batches
Delivery time

Factors in Lean Implementation

The factors which hinder SMEs from applying lean production Based on the research
publication the author noticed that, most of the SMEs faced the same problem no matter where its
located (Lee 1997; Achanga 2006;White et al. 1999). Among the highlighted problems are:
Lack of top management commitment.
Lack or resources i.e. workforce and financial.
Lack of expertise and skills in any management system, lean tools and
techniques.
Lack of support from workers.
Lack of support from suppliers.
Unable to supply in smaller quantities.
Lack of knowledge on tangible and intangible benefits.
Lack of knowledge on selecting the relevant lean tools and ,Unstable demand.
DISCUSSION AND CONCLUSION

The research study concluded that almost all the lean production principles are applicable by
medium sized and large companies, But, Small companies do not have the tendency to
implement lean, due to introduction barriers like lack of skilled employees , lack of time and
unfamiliarity, which is the most hindering barrier for small companies. Since they are small, they
are not able to have or train a lean specialist in side their organization. On the other hand the
solution with external consultants; which is mostly used by medium sized companies, is not an
option for the small companies, since they cannot afford it. Moreover, many of the small
companies are producing customized products which make it hard for them to standardize their
products by creating product families. Hence implementing lean production may not really be
beneficial for them without other customized approaches.
SMEs faces a lot of problem in the implementation of lean production. A further statistical
research to evaluate the progress in implementation and challenges faced by SMEs is required.

REFERENCES
Baks, Ottar, Govaert, Tim, Van Landeghem, Hendrik(2015). challenges and success
factors for implementation of lean manufacturing in european smes . MITIP 2011,
Norwegian University of Science and Technology, Trondheim, Norway.
Pedram Mirzaei (2011). lean production: introduction and implementation barriers with
smes in sweden.
Ahmad Nasser Mohd. Rose, Baba Md. Deros and Mohd. Nizam Abdul Rahman(2009).
Department of Mechanical and Materials Engineering. A review on lean manufacturing
practices in small and medium enterprises.
D.T. Matt, E, Rauch (2013) : Implementation of lean production in small sized Enterprises. (2013) 420 -
425.