Production Management Model Based on Lean

Manufacturing Focused on the Human Factor to Improve

Productivity of Small Businesses in the Metalworking
Sector

1 1 2
Jonathan Huamán , José Llontop , Carlos Raymundo and Francisco Dominguez3
1
Ingeniería Industrial, Universidad Peruana de Ciencias Aplicadas (UPC) Lima-Perú
2
Dirección de Investigación, Universidad Peruana de Ciencias Aplicadas (UPC) Lima-Perú
3
Escuela Superior de Ingeniera Informática, Universidad Rey Juan Carlos, Madrid, Spain
{u201314536, pcapjllo, carlos.raymundo}@upc.edu.pe
francisco.dominguez@urjc.es

Abstract. Micro and small businesses in the metalworking sector present a high
percentage of informality, and the majority of their production processes are not
documented nor standardized. The production approach of Toyota, the
enterprise-resource-planning system, and the lean manufacturing system were
created for large organizations with sufficient financial resources to
successfully implement these models. However, the human factor is a critical
component in implementing these models. Therefore, a production management
model has been proposed, which is based on lean manufacturing and focuses on
the human factor, to increase productivity in the production area of a
metalworking company, a small business. The result was that the company’s
mentality changed, reaching a productivity of 70% through the use of lean
manufacturing tools in the production area.

Keywords: productivity · lean manufacturing · production management model

· human factor

1 Introduction
The majority of Peruvian manufacturing companies consists of micro and small
businesses, which make up approximately 99.6% of the total number of businesses.
The metalworking sector ranks third among manufacturing companies and represents
approximately 15% of operating companies, according to the Socio Economic Labor
Observatory [1]. The main problem of this sector is that informality is very high, and
its production processes are neither documented nor standardized, which affects their
productivity. The metalworking sector is very important to the country’s economy,
not only due to its contribution to added value and technological development but also
because it is a sector that supplies to other key industrial sectors, acting as a link in the
productive framework of different economic sectors [2]. Currently, the use of
production models such as the just-in-time manufacturing of the Toyota Production
System, materials requirements planning, or lean manufacturing need to be adapted
on the basis of the real situations of growing businesses [3]. According to Takami,
these models are based on the period, market need, country, level of research and
innovation, economy, policies, and cultural aspects different from that of the Peruvian
manufacturing reality.
The proposed production management model uses lean manufacturing; it focuses
on the human factor and, at the same time, employs additional elements to improve
the productivity of the production area of small businesses in the metalworking sector.
This study contributes to proposing a production model adapted to the Peruvian
reality, which is focused on the human factor and utilizes the lean manufacturing
model as a reference to increase small business productivity.

2 State of the Art

2.1 The Human Factor in Business

The effectiveness and efficiency of applying the lean model has been proven by many
successful cases around the world, such as Toyota and Nissan. However, according to
Budyunek [4], successful lessons from developed countries help to provide insight
into the fact that it is not possible to uniformly apply any business management
approach. Based on its situation, each company must find the proper management
approaches for its business and be flexible in their application. In his article, Ngyuyen
[5] mentions the fact that in Vietnam, a sustainable lean manufacturing model for
Vietnamese companies had to be adjusted to their reality and a model for his
country’s manufacturing companies was proposed. Valencia indicates that lean tools
are known, and there are people who are knowledgeable about their implementation,
but they have not worked out as expected [6]. The authors mention that the human
factor is important to successfully implement different production models. A
sustainable lean manufacturing model is proposed for business development, which
would recognize the importance of the role of human resources on the impact of
implementing the lean model in businesses.

2.2 Production Implementation Models

In their article, “A Conceptual Model of Lean Manufacturing in its Dimensions,”
Abdul, Mukhtar, and Sulaiman [7] state that there are seven main dimensions for lean
models, including the manufacturing process and equipment, manufacturing planning
and scheduling, visual information systems, supplier relationships, customer
relationships, workforce, and product development and technology. These dimensions
are important in contextualizing the model to a reality closer to that of small
businesses. Ajallim [8] also explains the relationships of these dimensions with their
residuals and the critical factors for their implementation. These authors explain that
the majority of companies that have put the lean model into practice and did not
achieve its implementation, failed in large part due to internal issues.
2.3 Implementation Strategies for the Lean Manufacturing Model
There are different production models of the lean manufacturing philosophy.
According to Mohammad [9] in his article “Lean Application Frameworks,
Challenges for Small Businesses,” there are a number of frameworks and road maps
to implement the lean model [10]. However, many companies have difficulties putting
the model into practice, given that using these frameworks does not guarantee correct
implementation. Shingo mentions that for the successful implementation of the lean
production model, there are critical factors within the organization that must also be
considered, such as the culture of the organization and ownership [11]. As such, the
application of a model for small businesses can be implemented by analyzing an
appropriate road map and adapting it to the reality of the business.

3 Contribution

3.1 Proposed Model

The proposed production management model for small businesses is based on lean
philosophy. To this effect, the human factor adapted to the organizational culture of
the proposed model is crucial. In general, small companies understand the concept, its
nature, and its implementation methods. However, they have problems normalizing
and sustaining the model over time. Therefore, the novelty of the model is in that it
focuses on creating added value for companies by using inputs from the employees to
continuously improve a sustainable production model. Figure 1 shows the diagram of
the proposed model. According to Abdul [11], the human factor is important; the
participation of every employee of an organization is important to the implementation
of the production model. It reinforces the concept of production management on the
basis of the lean manufacturing mentality of zero waste and the realization of process
standardization in small businesses to collaborators, leaders, external and internal
model specialists, and the manager being important to the success of the model.

Fig. 1. Production Management Model Diagram Overview

4 Validation

4.1 Company Description

Grupo Obregón SAC is a small metalworking business that is dedicated to the
manufacturing and reconstruction of metal pieces for the mining, textile, metallurgy,
and paper sectors. It is located on Calle San Andrés Mz G Lote 1, Urbanización Santa
Martha in the district of Ate- Lima, Perú. Current productivity of the production areas
is 60%. Similarly, the workers’ active participation and knowledge of the model
through training sessions and motivation policies were mediocre, scoring 50% for
each.

4.2 Model Implementation

4.2.1 Human Factor
Each person who plays a role in the organization is important for the implementation
of the proposed production model. The implementation of the change to the
production model is shown below.
 Knowledge of the model: The expert on the proposed production model
explains the importance of everybody involved to learn about the production
management model that is to be implemented. Education and training by the
managers, area leaders, and collaborators on the concepts of minimizing
waste and realizing standardization is proposed.
 Motivation policies: The human resources department and the production
manager hold meetings to develop motivation policies so that workers
implement the model and contribute their own ideas or improvements in their
work areas. The objective is that all collaborators feel that they benefit from
the implementation of the model.
4.2.2 Manufacturing Process and Equipment
According to Asgharizadesh [8], to ensure that a company’s many standards and
production methods are complied with, it is necessary to choose the most suitable
support tools to support production, in order to have a continuous flow, diminish
manufacturing times, and manage precise operation. Nguyen recommends the most
popular tools for SMEs such as 5S, kaizen, and visualization. The aim is to seek the
most suitable support tools for the type of production. It is important for the model to
promote the use of technology and innovation by small firms, to increase productivity,
and to become increasingly competent. Currently, there are many machines that can
make the production process more efficient and reduce future investment costs. The
company standardized the manufacturing of inserts and applied 5S at work stations, as
shown in Figure 2.
4.2.3 Visual Information System
An information system enables relevant decision-making for rapid feedback and to
carry out corrective action. The objective is to treat and administer data and
information for its subsequent use. To this end, the information system works on the
basis of information, people, and resources. Shared information is important to
monitor the proposed objectives and make decisions on the same. Likewise, visual
information in the production area makes it possible to visualize the current
production state of the work area and take immediate corrective action, as per
Mohamed [6]. In this case, an adapted Kanban card was used to display information
for the manufacturing staff, such as materials to be used, production time, and work
method, among others. This information was supplied by other areas and delivered to
the production area (Fig. 3).
The information conveyed to the production area is important. Therefore, the
implementation of the visual control tool was necessary for production. The quantity
to be produced, the collaborator executing the work, the description of the work,
quantity to be made, and production time are detailed on the Kanban card.

Fig. 2. Application of 5S at the heating area Fig. 3. Kanban production card

workstation

4.2.4 Indicator Results

The results of the indicators of the lean manufacturing production model
implementation focused on the human factor are shown below. Productivity increased
to 70% after the implementation of the proposed model. Worker participation to
reduce waste increased to 80%, and the knowledge of the model was imparted to all
employees in the production area reaching 100%. Likewise, employee satisfaction
with the improvements in motivation policies reached 80% due to their good quality
work being recognized.

Table 1. Indicator results

HUMAN FACTOR
Commitment from manage-
ment and collaborators
Active participation
Knowledge of the model
INDICATOR RESULT
Production productivity with the new
model/ Production productivity with the 70%
former model
Num. of collaborators that contributed
with suggestions or new methods/ total 80%
num. of collaborators
Num. of collaborators trained on the new
model/ Total num. of trained collabora- 100%
tors
 Num. of collaborators satisfied with the
Motivation policies new policies/ Total num. of collaborators 80%
in the company

5 Conclusions
In this case study, the proposed production model based on lean manufacturing
focused on the human factor for small companies, managed to increase productivity to
70% in the manufacturing of inserts through improved staff management. Support
from management and recognizing, educating, and providing training on the proposed
model and teaching a lean mentality to company employees was successfully
implemented, thereby achieving the benefits of the production system based on lean
manufacturing.
Despite the positive result shown for the application of the proposed model, it is
possible to reduce rework and waste within companies using the human factor for the
correct operation of other lean manufacturing tools such as kaizen and just-in-time
manufacturing.
Given the results obtained and the sound performance achieved in the
manufacturing of inserts, replicating the implemented production model in the
manufacturing of other company products is recommended.

References

1. Vilela V. (2014). Colección Investigación y Desarrollo. Estudio N° 03-2014 OSEL Lima

Norte. Recuperado el 20 de mayo de 2018 de
http://repositorio.ucss.edu.pe/bitstream/handle/UCSS/299/Victor_Vilela_OSEL_estudio_N3
_2014.pdf?sequence=1&isAllowed=y
2. Montañez J. (2016). Dinámica de la cadena priorizada del Sector metalmecánico del depar-
tamento de Santander. Recuperado el 10 de Setiembre de 2018.
http://revistas.ustabuca.edu.co/index.php/LEBRET/article/view/1693
3. Takami T. (2014). Production Engineering Strategies and Metalworking at Toyota Motor
Corporation. Revista Elsevier Ltd. Recuperado el 12 de Setiembre de 2018.
https://www.sciencedirect.com/science/article/pii/S1877705814012247
4. Budyunek, M. & Celinska, E. & Dybikowska, A. & Kozak, M. & Ratajczak Joanna & Ur-
bano j. (2016). Strategies of production control as tools of efficient management of produc-
tion enterprises. Universität Potsdam, GERMANY. Recuperado el 10 de abril de 2018 de
https://www.degruyter.com/downloadpdf/j/mspe.2016.21.issue-1/mspe-03-01-2016/mspe-
03-01-2016.pdf
5. Niguyen D. & Niguyen T. (2016). “Made in Vietnam” Lean Management Model for Sus-
tainable Development of Vietnamese Enterprises. Revista Elsevier Ltd. Recuperado el 20 de
Setiembre de 2018. https://www.sciencedirect.com/science/article/pii/S2212827116001566
6. Calderón G. & Valencia J. (2013). Perfil cultural de las empresas innovadoras. Un Estudio
de caso en empresas metalmecánicas. Red de Revistas Científicas de América Latina, el
Caribe, España y Portugal. Recuperado el 02 de mayo de 2018.
http://www.redalyc.org/articulo.oa?id=20503408
7. Abdul A. & Mukhtar M. & Sulaiman R. (2013). A Conceptual Model of Lean Manufactur-
ing Dimensions. Consultado el 15 de Octubre de 2018.
https://www.sciencedirect.com/science/article/pii/S2212017313004817
8. Asgharizadeh E. & Ajalli M. (2016). Identification and Ranking the Key Dimesnions of lean
manufacturing using New Approach in Gas Industry. Consultado el 19 de Octubre de 2018.
https://socrd.org/wpcontent/uploads/2016/08/7BKK141Identification-and-Ranking-the-Key-
Dimensions-of-Lean-Manufacturing-using-NEW-Approach-in-Gas-Industry.pdf
9. Mohamed A. & Konstantinos S. & Yuchum X. (2017). Lean Implementation frameworks:
the challenges for SMEs. Revista Elsevier Ltd. Recuperado el 28 de Setiembre de 2018.
https://www.sciencedirect.com/science/article/pii/S2212827117303529
10.Guillen K., Umasi K., Quispe G., Raymundo C. (2018), “Lean model for optimizing plastic
bag production in small and medium sized companies in the plastics sector”, International
Journal of Engineering Research and Technology 11(11), pp. 1713-1734.
11.Anvari A. & Zulkifli N. & Mohd R. & Mohammad S. Yusof I. (2011). A proposed dynamic
model for a lean roadmap. African Journal of Business management. Consultado el 17 de
Octubre de 2018.
https://pdfs.semanticscholar.org/4655/806e350849bacc9386a1804bffbf084bc0d3.pdf