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To cite this article: José Roberto Xavier Alves & João Murta Alves (2015): Production management model integrating the
principles of lean manufacturing and sustainability supported by the cultural transformation of a company, International
Journal of Production Research, DOI: 10.1080/00207543.2015.1033032
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International Journal of Production Research, 2015
http://dx.doi.org/10.1080/00207543.2015.1033032
Aeronautics and Mechanical Engineering – Production, Technological Institute of Aeronautics, São José dos Campos, Brazil
(Received 14 June 2014; accepted 1 March 2015)
The search for superior production performance has been used by companies to overcome competition in the current glo-
bal economic scenario. Efficient manufacturing connected to environmental initiatives provides a company with favour-
able conditions for maintaining uniform and continuous improvement in its competitive performance, while providing
operational versatility to respond quickly to volatile markets. As production is one of the most expensive areas for a
company, many organisations have sought a new management model for their production system that provides substan-
tial productivity gains, cost saving opportunities and higher customer satisfaction. This study proposes a model of pro-
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duction management and an implementation method integrating the principles of lean manufacturing and sustainability,
supported by cultural transformation at the company. Its objective was to achieve productivity gains and improvements
on customer satisfaction, as well as develop the ability to provide quick responses to market changes in a globalised
economy. The implementation of the proposed model should be gradual, initially addressing fundamental principles, and
should operate simultaneously with, and in the same environment as, workforce development and organisational
transformation initiatives, to create sustainable improvements.
Keywords: lean manufacturing; production management; cultural transformation; sustainability
1. Introduction
With the enlargement of markets in recent decades, through commercial agreements between economic trading blocks
and a large supply of products from so-called low-cost regions, nations have become part of a process of globalisation,
which has increased industry competition. Trade barriers have been reduced, facilitating the entry of new competitors in
the global scene that offers diversified products as well as price and quality differentials. This has forced companies to
rethink their strategies to survive in a market in which demanding consumers have greater bargaining power.
The search for greater operational efficiency has become a vital requirement for companies that want to remain
involved in the global economic scene, and performance improvement in the production process has been one of the
most common strategies used by organisations trying to address competition in this increasingly globalised economy.
According to Silva, Santos, and Castro (2012), a sound manufacturing strategy is one that makes a company more
competitive and provides a differential that is perceived by its customers in the market. Alves (2001) emphasises that
for a manufacturing company to develop and maintain a competitive advantage in an increasingly globalised market, it
should provide the production department with a strategic vision and continually seek to improve the management
model of the production process. Singh and Mahmood (2014) mention that a high-performance manufacturing process
can primarily be achieved through high-quality products, processing speed, cost, flexibility and reliability, with an aim
to enabling the company to leverage its business performance, increasing market share and accelerating sales growth.
One of the ways to incorporate such characteristics in manufacturing is through the adoption of a strategy focused
on the company’s production system. To this end, lean manufacturing is an alternative that has been widely adopted by
various segments of the industry (Ramesh and Kodali 2012). Lean manufacturing aims for productivity gains by com-
bating waste generated in the production environment. Additionally, Moori, Pescarmona, and Kimura (2013) demon-
strate that management systems based on the principles of lean manufacturing have a positive impact on business
performance.
Sustainability initiatives, which recommend a balance between operating results, respect for people and the preserva-
tion of the environment, are also important to, and valued by, the customers and should therefore be considered by the
company (Milne and Gray 2013). Furthermore, there is a positive correlation between lean manufacturing and
environmental management practices, which may lead to maximise waste reduction benefits through a combined and
cohesive approach of both initiatives (Chiarini 2014; Yang, Hong, and Modi 2011).
Having a strategy focused on manufacturing, encompassing the practices of continuous improvement and waste
reduction, is a key success factor in raising the level of a company’s competitiveness within an industry, considering
today’s globalised scenario (Lucato et al. 2012).
In the light of the above, it is pertinent to consider whether it is possible to develop a production management sys-
tem incorporating the principles of lean manufacturing and sustainability. In this context, this study aimed to propose a
model of production management and its method of implementation that incorporate the principles of lean manufactur-
ing and sustainability, supported by a cultural transformation at the organisation.
The research methodology adopted was qualitative, initially involving a literature review on lean manufacturing, pro-
duction management, sustainability and organisational culture, conducted through a review of scholarly books, academic
theses, journal papers and various online sources, followed by exploratory research that opened up possibilities for
future research. This paper is structured into four sections, in addition to this introduction. In Section 2, a brief biblio-
graphic review of organisational culture, sustainability and lean manufacturing is performed. In Section 3, the model for
managing production and its method of implementation is presented. Finally, in Section 4, the conclusions of this study
are presented.
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2. Theoretical reference
Considering that concepts involving organisational culture, sustainability and lean manufacturing have been widely
exploited in the academic environment and that a wide range of material on these subjects is available in books, articles,
conference proceedings, theses, dissertations and on line sources, we have chosen to focus on proposing a management
model and its method of implementation, integrating these referenced concepts.
organisational culture should change as a consequence of the company’s strategic efforts in placing primary focus on
the customer and sustaining this by developing the skills of employees and improving their motivation, accountability
and satisfaction.
Cultural change is fundamental to improving employees’ performance and competitiveness and helps achieve the
company’s strategic goals. It is also linked to the development of leadership and staff skills by means of a planned
learning process, aiming to provide knowledge and to change attitudes, values and behaviours in such a way that the
company can adapt better to new circumstances (Zangiski, Lima, and Costa 2013).
Therefore, we conclude that managing the process of cultural transformation is essential to ensure the necessary
changes in the organisation, to achieve successful and sustainable project deployment in the long term.
2.2 Sustainability
The concept of sustainable development has achieved great notoriety in recent decades, driven by environmental move-
ments and concerns about climate change that is presumably caused by human interference in ecosystems that impact
life and society. In 1987, the Brundtland Commission defined sustainable development as ‘development that meets the
needs of the present without compromising the ability of future generations to meet their own needs’ (WCED 1987).
According to Zaman (2014), the global population has been increasing along with economic expansion and greater
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consumption accompanied by rising demand for natural resources. Consequently, there has been a significant depletion
of global, non-renewable natural resources over the last few decades, with an increase in waste generation causing an
environmental impact.
Ji, Gunasekaran, and Yang (2014) demonstrate that regulatory agencies in several countries are still implementing
new environmental policies addressing the production, distribution, use and disposal of products. The most important
aspect of these policies is a focus on the dual impacts on the environment (i.e. atmosphere and soil). As examples, these
authors cite two policies – the ‘end of life vehicles directive’, enacted in the European Union (EU) in 2006, which
demands that manufacturers’ prevailing recycling rate of 85% of used raw material reach 95% by 2015, and the Waste
Electrical and Electronic Equipment policy, which is focused on recycling electronic products in the EU.
Another example cited is the European Union Emission Trade Scheme (EU ETS) launched in January 2005 by the
EU member countries to combat climate change by addressing the trade of carbon emissions. More than 11,000 compa-
nies from various sectors, regulated by the EU ETS, have their carbon emissions monitored and limited and, when the
set limit is reached, they can buy carbon credits or seek alternatives provided in the policy to compensate for surplus
emissions (Black et al. 2013; Falkner 2013).
Sustainability has been recognised by organisations as a competitive advantage. As a result, many actions or atti-
tudes that had been innovative in the past have today become fashionable and now form the basis of government laws
and regulations that have made the market progressively more restrictive. Further, there is a growing concern in society
about the degradation of the environment and therefore, companies that are prepared to meet government policies and
comply with international trade and consumer expectations have a competitive advantage over those that do not meet
these requirements (Black et al. 2013).
As part of the sustainable development strategy, Elkington (2000) introduced the triple bottom line (TBL) concept,
also known as people, planet and profit. The TBL provides a balanced relationship among economic, social and envi-
ronmental aspects of business management so that sustainability goals are included in business practices. It measures
the economic results of the company, taking the degree of social and environmental responsibility into account. Figure 1
illustrates the interactions among the three pillars of sustainability proposed by Elkington (2000).
The three pillars that support the concept include:
(1) Profit: focuses on the economic value generated by the company through viable enterprises to meet the expecta-
tions of shareholders or to provide economic benefit to the surrounding community and society;
(2) People: focuses on the establishment of fair practices for employees, partners and the community in which the
company develops its activities;
(3) Planet: focuses on the use of sustainable environmental practices and reducing the environmental impact by
decreasing the generation of pollutants and waste in production processes.
The intersection between the pillars of society (social responsibility) and the environment (environmental responsi-
bility) results in a ‘possible’ or bearable relationship, with increasing environmental awareness and appropriate practices
in internal processes resulting in the lowest possible impact on the surrounding community and region. There is a ‘feasi-
ble’ relationship between the environment and economic (generation of economic value) pillars, due to investments in
technologies aligned to the concepts of cleaner production and reduction of pollutants, recycling practices and
4 J.R.X. Alves and J.M. Alves
Generation of
Economic
Value
Fair Feasible
Sustaina-
bility
Social Environmental
Responsibility Responsibility
Possible
participation in the carbon credit programme. In terms of the social and economic pillars, the relationship is ‘fair’, where
there is profit sharing driven by a partnership with suppliers, dealers, employees, the community and others stake-
holders, and the establishment of a structure to support other activities in the region where the company activities are
focused. The intersection of all three pillars results in a sustainability relationship (Oliveira et al. 2012; Savitz and
Weber 2013).
Santos (2010) states that the opening of markets in the last decades, with the intensification of trade agreements
between countries and the removal of economic barriers, has caused industry to seek production system development in
a sustainable manner through several measures. These measures include reducing the use of materials, thereby minimis-
ing waste generation, reusing scrap raw materials in sub-products or adapting them for use as main raw materials, and
recycling practices that aim to reuse the waste in the production cycle from which it arose. In addition, materials that
become waste, or that are discarded, can be separated, collected and processed for the use as raw material for the manu-
facturing of new products. These are vital measures for manufacturing companies to thrive in this new market environ-
ment. Silva and Quelhas (2006) add that corporations have sought a balance between what is economically feasible and
what is ecologically sustainable and socially desirable. In this context, organisations adopting internal policies related to
sustainability have developed a competitive advantage for operating in markets that are difficult to enter and where
sustainable manufacturing is a critical factor.
eliminating whenever possible those steps that do not add value; (3) make the value-creating steps occur in a tight
sequence to ensure that the product flows smoothly towards the customer; (4) as flow is established, let customers pull
value from the next upstream activity; (5) once value is specified, value streams are identified, wasteful steps are elimi-
nated, and flow and pull are established (this process is performed iteratively until a state of perfection is reached, in
which perfect value is created with no waste).
Maskell and Baggaley (2006) warn that one of the most difficult changes to be made by the senior leadership of the
organisation when starting a lean transformation process is to cease viewing production improvements merely as a
means to obtain cost reduction in the short term. This is because such typical mass production thinking will limit the
progress that the company can make with lean initiatives.
According to Mann (2010), the typical conversion of a mass production system to a lean system, involving the usual
physical changes we see, such as layout changes to improve the flow, the implementation of lean tools, development of
ways to enable smooth production, inventory reduction and standardised methods does not represent more than 20% of
lean manufacturing system implementation measures in a company. The remaining 80% are less obvious and more diffi-
cult to implement and are linked to the cultural transformation of the organisation.
Lean manufacturing is a revolutionary set of techniques that are conceptually different from traditional production
systems. Its principles are simple and logical, focused on identifying and eliminating waste. However, it is based sub-
stantially on a new way of thinking and of executing daily work within a company, requiring a radical change in the
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way people look at the manufacturing process. Therefore, it requires a cultural change to achieve the discipline neces-
sary to apply these new concepts and principles, thereby increasing the chances of a successful implementation of the
lean manufacturing system (Alves 2010).
-Principles of
-Lean Thinking Productive
Operational Strategy Process of
-Tools to high
-Eliminate Waste
Performance
Sustainability:
- Environment
- Workplace Health & Safety
- Social Responsibility
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Figure 2 illustrates the basic structure of the proposed model, and the main objective of which is to develop a high-
performance production process aimed at improving a company’s competitiveness. Although this study’s concepts have
great relevance to business as a whole by being applicable to any area of the company, its focus is restricted to areas
related to the production sector. It promotes a comprehensive integration of such areas, generating sustainable results in
inventory reduction, production costs, product quality improvement, shorter production cycles, faster delivery to end
customers and improved worker safety.
In this model, the principles of lean manufacturing and the associated tools facilitate the elimination of waste in the
production environment, creating a mindset of continuous improvement. Sustainability introduces to the model the ele-
ments of environmental preservation, concern for the health and safety of workers, and social responsibility. A focus on
culture accelerates cultural transformation through a change in characteristics such as work routines, habits, values and
behaviours. Organisational development aims to reinforce cultural changes through identifying and solving critical prob-
lems within the organisational structure related to the roles and responsibilities of each organisation’s chart. It is a col-
lective long-term effort supported by senior management to promote the growth and development of the potential of
people by changing attitudes, values, behaviour and the structure of the organisation, so that the company can best adapt
to new situations.
Lean
Manufacturing
Productive
Process of
High
Performance
Organizational Sustainability
Culture
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Community Actions
Social Responsibility
well as lower waste generation. Consequently, there is also a reduction in the environmental impact arising from indus-
trial activities.
The effectiveness of this interaction can be measured by specific performance indicators, such as electricity con-
sumption per unit of output – kW/unit (kilowatt per unit), water consumption per unit produced – l/unit (litres per unit),
waste generated in the industrial process per unit produced – kg/unit (kg per unit) and the number of accidents at work
per hour worked, among others.
business a social function, through projects aimed at socially responsible management, investing in ethics, transparency
and quality in regard to all its relationships. Such a corporate culture also motivates employees to engage in social
actions and to provide services to society.
This interaction can be measured by specific indicators including the number of social action projects promoted by
the company, number of employees involved in volunteering and number of people impacted by social actions promoted
by the company.
organisational culture.
The implementation method presented in Section 3.5 describes specific actions in a logical sequence to bring
sustainable results as the implementation process progresses, developing employee skills through continuous and life-
long learning to promote the engagement of the whole team and bringing greater stability to the relevant processes.
This is mainly where the ISMA implementation method differs from the existing models, and it starts addressing
essential elements, building a solid foundation on Steps 1 and 2 and going forward through Steps 3–5 in a structured
manner fostering to keep working properly each one of the elements implemented. Another important difference to
mention is the level of details described in each step, which is useful to support the implementation by others lean
practitioners.
Notes: TPM, total productive maintenance; SMED, single minute to exchange of die (quick set-up); 5S, housekeeping method repre-
sented by Siri, Seiton, Seiso, Seiketsu and Shitsuke; ISO 14001, environmental management norms; OHSAS 18001, Occupational
Health and Safety Assessment Services norms; SA8000, Social Accountability norms.
Source: The Author.
(1) Lead time of the process: comprises the time between the input of a product into the first processing step and
the output of the finished product at the last step. This is a macro-indicator of the production system, which
represents the interaction among the three pillars of the proposed model.
(2) Generation of waste per unit produced: in a given period, this is a measure of the relative environmental
effectiveness by comparing the amount of items produced with the generation of industrial waste. This indicator
is expressed in kilogrammes per unit (kg/unit).
(3) Organisational culture: expressed in percentage (%), this is the result of the simple average of three sub-indica-
tors, which are obtained by means of internal and external research: (i) internal knowledge of the ISMA, (ii)
internal customer satisfaction and (iii) external customer satisfaction. These surveys are conducted periodically
by means of specific questionnaires and tabulated from 0 to 100% for each of their questions.
(4) Social responsibility: this concerns the number of people from the surrounding community who are affected by
social actions initiated by the company.
Step 6: Develop a pilot area for a map of the value stream of the current and future state
The value stream map (VSM) enables a complete understanding of the current condition of the process and exposes
opportunities for improvement at all stages. The VSM is an important tool for continuous improvement. Once the future
condition has been implemented, it becomes the current condition, allowing the elaboration of a new map for a future
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Step 8: Set a plan for certifying the standards ISO 14001/OHSAS 18001/SA8000
The implementation of the ISMA envisages the incorporation of the following standards: ISO 14001 for environmental
management, the reduction of waste and the consumption of natural resources; OHSAS 18001 to motivate the
elimination of production process interruptions caused by work accidents and the costs related to the loss of employees;
and SA8000 to enable productivity gains driven by respect for employees, avoiding excessive hours or employee abuse
that causes fatigue. A plan to attain these certifications must be created in parallel with the activities of model
implementation.
A plan for conducting monthly kaizen events, typically lasting one week, must be designed to reinforce the concepts
of the model, focusing on improvements regarding 5S, safety, ergonomics, productivity and waste reduction in a prede-
termined area. The one-week kaizen event is structured as follows: Day 1: team training concerning the concepts and
objectives of the event, Day 2: diagnosis of the current condition, Day 3: proposal for improvement, Day 4: imple-
mentation of improvements, and Day 5: standardisation and measurement of the results.
Step 10: Implement 5S, TPM and SMED by means of kaizen events
In order to create a clean, organised and safe working area, 5S is an important tool. It helps to identify waste and pro-
vides a basic foundation for the development of other elements of lean manufacturing.
TPM focuses on reducing waste associated with low equipment availability, resulting from unplanned interruptions
due to breakdowns or malfunctions; the goal is achieved through the involvement of the operators in maintaining their
own equipment.
The time elapsed between the last item of a batch produced and the first good item of the next batch is called equip-
ment changeover time or set-up time. This time does not add value; therefore, it is wasteful and needs to be minimised
in order to provide flexibility to the production system.
The implementation team must establish a working group to put these elements into practice in the pilot area by
means of a kaizen event, as mentioned in Step 9, with the direct involvement of the operators of the pilot area.
To ensure the proper functioning of these elements, a plan for periodic monitoring must be established through
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Step 13: Attain the accreditation of the standards ISO 14001/OHSAS 18001/SA8000
The implementation team has to identify a working team linked to the area of HSE (health, safety and environment) in
order to proceed with the implementation of the ISO 14001, OHSAS 18001 and SA8000 standards.
Step 14: Establish a verification audit of the elements implemented in the pilot area
The involvement and commitment of employees in the implementation of the ISMA is one of the key success factors.
Thus, in order to monitor and assess the evolution and maturity of the elements implemented in the third stage, imple-
mentation of the improvements, a method of auditing should be established, aiming to assess the behaviour, knowledge
and correct application of the tools of lean manufacturing.
The implementation team has to establish a working team in order to develop an audit methodology that serves this
purpose.
A methodology for fast troubleshooting must be developed to provide both a structured approach to the problems as
well as quick solutions that allow the processes to return to normal conditions.
The method adopted for rapid problem solving should be easy to understand and capable of generic application in
problems of varying natures in the production environment, allowing the solving of quality deviations, equipment break-
downs, accidents at work, abnormally long processing times, lack of supply and any other type of wastes. Its basic
structure should focus on: (i) understanding the facts, (ii) finding the failure mode, (iii) finding the root cause, (iv)
implementing corrective actions, (v) evaluating the corrective actions and (vi) standardising with the update of all
relevant documents.
Step 16: Evaluate results of the pilot area and take corrective actions if necessary
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After the complete implementation of the ISMA elements in the pilot area and a complete stabilisation of the processes,
demonstrated by improvements in the performance indicators defined in Step 5, the implementation team should conduct
a critical analysis of these results, together with the results of the audits implemented in Step 14, and assess further
opportunities for improvement. Corrections should be made for later reapplication of the critical analysis and so on, until
it reaches a satisfactory condition.
As an auxiliary action to assess the obtained results, the diagnosis performed in Step 1 can be repeated in order to
compare the conditions ‘before’ and ‘after’ the implementation.
Step 17: Update the VSM of the pilot area (current and future state)
The VSM of the future state, elaborated in Step 6 and now fully implemented, becomes the present condition. There-
fore, the execution of a new round is recommended to update the VSM of the present condition and to create a new
map of the future condition, thus applying the philosophy of continuous improvement in the pilot area.
Step 18: Reassess the organisational gaps and refresh the development plans
A review of the organisational development plan, prepared in Step 7, has to be conducted by the human resources
department with the support of the leadership, to analyse the skills and knowledge obtained by the employees. The gaps
identified have to be filled by new organisational development actions.
Step 19: Define next steps and plans to expand to other areas
Once the implementation cycle in the pilot area has been completed, with the evidence of substantial improvements and
process stability achieved through the application of the ISMA and demonstrated through the performance indicators, it
is necessary to share best practices and learning acquired in other areas in the company. Therefore, a new focus area
should be established for one more cycle of the practical application of the model.
4. Conclusion
Finding a way to improve the performance of the production process has been a challenge for many manufacturing
organisations that aim to address competition in an increasingly globalised economy. Incorporating environmental con-
siderations into manufacturing provides the company with favourable conditions for maintaining the continuous
improvement of its processes and its image in society. In response to the research question, this study proposes a model
of production management and its implementation methodology, integrating the principles of lean manufacturing and
sustainability, supported by a cultural transformation in the organisation. The model utilises the tools of lean manufac-
turing to eliminate waste in the production environment and to generate productivity gains. Integrating sustainability
International Journal of Production Research 13
concepts into the model allows further gains through initiatives that reduce both the use of natural resources and the
generation of industrial waste. Social responsibility policies provide a more humane image of the company through the
mechanism of community work. Cultural transformation is infused in the model by organisational actions that provide
knowledge and facilitate the development of employee potential, aiming to change attitudes, values, behaviours and out-
comes. The implementation methodology defines a logical sequence of events. It initially provides activities for analysis,
structure and planning and prepares the environment for the steps of implementation, stabilisation and the assessment of
the results.
The next step will be to test the model proposed in this paper in an actual application to validate its effectiveness.
Disclosure statement
No potential conflict of interest was reported by the authors.
ORCID
José Roberto Xavier Alves http://orcid.org/0000-0002-5523-1709
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