Study of Lean Tools and Practices New Ze

SCHOOL OF ENGINEERING
MASTER OF ENGINEERING PROJECT MANAGEMENT
PROJECT REPORT
ON
STUDY OF LEAN TOOLS AND PRACTICES
IN NEW ZEALAND’S PROCESS INDUSTRIES
BY
AKSHAY ALAGUNDAGI
15876949
SUPERVISED BY
Dr. JAMES O. B. ROTIMI
DECLARATION
FACULTY OF DESIGN AND CREATIVE TECHNOLOGIES

AUCKLAND UNIVERSITY OF TECHNOLOGY
TE WANANGA ARONUI O TAMAKI MAKAU RAU
School of Engineering
Master of Engineering Project Management
Name AKSHAY ALAGUNDAGI
ID Number 15876949
Paper Name PROJECT IN ENGINEERING PROJECT MANAGEMENT
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Abstract
It is an aim of every organisation to excel in their work, make a best article, ensure
customer satisfaction and provide best service. It is challenging to identify the performance
status of any organisation in various forms during a constant momentum of trade or business.
This varies with different organisations whether they are keen to monitor and measure the
organisation’s operation methods and employee performance which interprets the value being
added to the end product.
Considering all the small scale and large scale organisations, irrespective of the sector, there
exist waste (Muda) in its various forms, unevenness in processes (Mura) and Overburden (Muri)
due to which, the organization fails in adding appropriate value to the end product or the article
they make. If these wastes are identified and eliminated by any organization, it ensures the best
use of resources, eventually adding more value to the end product for which, the customer is
eager to pay.
The approach of eliminating various forms and types of waste from a system is Lean
manufacturing. The lean manufacturing concept is considered to be the management morals of
Toyota production system (TPS). As per the history of lean, the Toyota production system and
other organizations that adopted lean and its principles, observed positive changes in various
forms. As the time evolved, more lean methods were identified and adopted for the
organisation’s advancement, irrespective of the operational sector.
Thus, this study is about lean and its principles that includes in lean tools family. The core
objective of this research approach encompasses the study of different Lean tools being used in
the process industries/organisations in New Zealand, to understand about the changes and
results the organization observed before and after.
Also the objective of the study is also to break the myth that lean is not only suitable to the
production/manufacturing sector, but it can be analysed and accordingly implemented to any
sector, reason being, Lean is not an activity, event or program, it is just a culture change within
the organization. This approach includes the study of published cases and survey cases to
understand and analyse the Lean tool methods adopted by different organisations along with
their consecutive results, to provide recommendation for improvement in the practices for the
same organisation and also for other organisations.
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Acknowledgement
I am especially thankful to God for granting me the opportunity to commence this

research work. I am grateful to my superiors, subordinates, and colleagues for the assistance
throughout the time span I was doing this Master Programme.
I am also grateful to my supervisor, Dr. James O. B. Rotimi, for the advices, and
corrections throughout this research work with persistence.
At last, I wish to state my thanks to my parents and all of my friends those who supported
me throughout the study and the Masters Programme.
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Table of Contents
DECLARATION I
ABSTRACT II
ACKNOWLEDGEMENT III
TABLE OF CONTENTS IV
LIST OF TABLES AND FIGURES VI
LIST OF ABBREVIATIONS VI
CHAPTER 1 - SCOPE AND PURPOSE 1
1.1 SCOPE – INTRODUCTION 1
1.2 PURPOSE 3
1.2.1 What is Lean? 3
1.3 RESEARCH OBJECTIVE 4
1.4 RESEARCH QUESTIONS 4
CHAPTER 2 – RESEARCH APPROACH 5
2.1 METHODOLOGY 5
2.1.1 Literature review 5
2.1.2 Published case studies 6
2.1.3 Case study NZ organisations 6
2.1.4 Discussion 6
2.1.5 Conclusion and Recommendation 7
CHAPTER 3 – FINDINGS 8
3.1 LITERATURE REVIEW 8
3.1.1 History of Lean - Early Development 8
3.1.2 Tools included in the Lean family 10
3.1.3 Summary of Literature 18
3.2 PUBLISHED CASE STUDIES 18
3.2.1 Case Study 1: Permark Industries 18
3.2.2 Case study 2: Pacific aerospace 22
3.3 SURVEY BASED CASE STUDIES 25
3.3.1 Case Study 1: Food Processing – Airline Catering 25
3.2.2 Case Study 2: Design & Manufacturing Industry – 28
3.2.3 Case Study 3: Food Processing – Supermarket 31
3.2.4 Case Study 4: Design & Manufacturing – Food Processing 34
CHAPTER 4 – DISCUSSION 36
4.1 PUBLISHED CASE STUDIES 36
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4.1.1 Permark industries 36
4.1.2 Pacific aerospace 37
4.1.3 Concluding Summary – published case studies 38
4.2 SURVEY BASED CASE STUDIES 39
4.2.1 Concluding Summary – Survey case studies 46
4.3 SUMMARY OF DISCUSSION 47
CHAPTER 5 - CONCLUSION AND RECOMMENDATIONS 49
5.1 CONCLUSION 49
5.2 RECOMMENDATIONS 51
REFERENCES 53
ANNEXURE – QUESTIONNAIRE USED FOR SURVEY 55
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List of tables and figures
Table 1: Tools implemented in Case study 1 27
Table 2: Organisational changes, Case study 1 27
Table 9: Perspectives of different organisations 43
Table 10: Results - Case study 1 44
Figure 1: Identify primary objective 02
Figure 2: The Benefits of ‘Lean’ 02
Figure 3: Methodology Process 05
Figure 4: Principles of Lean 10
Figure 5: The forces opposing and driving a change to ‘Lean’ 48
List of Abbreviations
SME – Subject Matter Experts
RCA – Root Cause Analysis
OFI – Opportunity for Improvement
WIP – Work in Progress
JIT – Just in Time
OEE – Overall Equipment Effectiveness
SMED – Single Minute Exchange of Die
TPM – Total Productive Maintenance
VSM – Value Stream Mapping
PAL – Pacific Aerospace Ltd
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Chapter 1 - Scope and Purpose
1.1 Scope – Introduction
Accomplishing my bachelors in automotive engineering, I began my career as trainee engineer

in design and manufacturing industry of automation machines. The company designed and
manufactured special purpose machines for component assembly line of automobile
manufacturing organisation. As I involved in the projects, I evolved and found the process
engineering of project more interesting. The process involved from R&D, planning, designing,
production, assembly, wiring, testing, dispatching, commissioning and servicing.
During the professional tenure of over two years, the incorrect approaches were noticeable in
different processes towards accomplishing the projects. The existence of wrong approaches
generated waste, primarily the time, and affected the project delivery dates and consecutively
the credibility of the industry. Along with the time, quality was also a challenging issue. This
was the initiation to think, what can be improved?
The process industries follow particular approaches in their operations to increase the quality
and productivity since centuries. These approaches are nothing but the Lean tools and its
principles. Lean is nothing but a method that adds value to the outcomes by any kind of
improvement.
To implement Lean, understanding of the key objective is essential. This also initiated me to
think about lean tools which can be implemented in an organisation to obtain overall
productivity. Sometimes, the organisation during the initiation of lean thinking will be paused
due to the dilemma in opting the appropriate tools
Figure 1: Identify primary objective (Davis, 2009).
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This report is the study of lean tools to identify a set of tools present in lean family, suitable for
the process industries. This study method helps in identifying and understanding the different
lean tools and its principles suitable for multiple organisations in different streams.
Each lean tools has its own approach and benefits for each different sector. They are
• Reduction in lead times for end users

• Lowered inventories for manufacturer
• Enhanced management knowledge
Figure 2: The Benefits of ‘Lean’ (Melton, 2005).
To understand about the actual benefits and changes of Lean and its practices within the
organisation, it requires qualitative and quantitative data collection. Thus, this study also
includes the qualitative and quantitative data collection of New Zealand organisations to
identify the set of tools they adopt, and obtain what results?
The combined study of lean principles and its outcomes assists in analysing the best tools an
organisation can consider and adopt to achieve desired results.
Thus, this research report analyses the tools in Lean family, how they graft together, what
results can be expected, and how the Lean practices can be improved.
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1.2 Purpose
1.2.1 What is Lean? (Lean Enterprise Institute, 2007)
What is lean?
 The meaning of Lean is building higher value for the end users with lesser resources.
 Lean is not only suitable to the manufacturing sector, but to all trades and processes.
 Lean is not an event, a strategy or a cost reduction method, it is all about people’s way
of thinking and acting for a whole organisation.
Why lean?
A lean thinking organisation knows the value of its customers and puts effort constantly in
increasing it. The ultimate aim is to serve ideal value to the end users through an excellent value
formation which has zero waste.
How it works?
To achieve the zero waste, the lean thinking creates a change in the organisation’s focus on its
assets, present technologies, and the way of the flow of material and services and over its
complete value stream flowing vertically and horizontally.
Waiving out the waste on the complete value stream, rather than on the confined points, initiates
the processes which require minimal human effort, lower space, lower capital and less time to
produce products and services with much lower cost with much reduced defects when compared
to traditional trade structures. The lean thinking makes the companies able to react to growing
customer needs with high variety and quality and minimal cost. Also, it helps in making the
information management more transparent and specific. The trade in all industries and services
including public service sectors, healthcare and governments are implementing lean thinking
and its principles on the way they think and act.
The revolution of an organisation from traditional thinking to lean thinking needs thorough
transformation on how the organisation runs the business.
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1.3 Research Objective
The purpose of this research is to study about the lean tools and principles and identify which
of them are being implemented and followed in the New Zealand’s process industries. Also the
aim is to find out the results after implementation which helps in examining the method, the
organisation is currently following, and analyse what can be improved.
The following research questions are derived to execute the objective of the research.
1.4 Research Questions
 Which tools are included in Lean tools family?

 Which Lean tools are being implemented in New Zealand’s process organisations and
with what changes and results?
 How can these organisations improve their lean practices?
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Chapter 2 – Research Approach
This chapter projects the approach method considered in achieving the results as per the research
objective and questions of the study.
2.1 Methodology
The methodology flow to accomplish the research objective is represented below into five parts.
Figure 3: Methodology Process
2.1.1 Literature review
The literature projects the Lean history and its principles since centuries. It is intended to
identify the set of tools included in the Lean family by the literature. The literature helps in
understanding the meaning and benefits of different lean tools along with their applicable
sector. The data collected is intended to be assessed, analysed and interpreted with a short
summary as a literature base for studying published and survey cases in the next bit of the
project approach.
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2.1.2 Published case studies
With the literature’s brief conclusion, as reference, the method is intended to approaches
towards the published case studies to investigate about an organisation and their motives behind
lean thinking, tools and practices which were implemented, and also examine the consecutive
short term and long term results of implementing lean tools and practices along with changes
in organisational culture. The results will be analysed and interpreted with a brief conclusion
as a set of data, which will be later compared with the survey based case study organisations.
2.1.3 Case study NZ organisations
With a set of data obtained from the Literature and published case studies, the method is aimed
to approach towards the practical case study of New Zealand’s process industries and firms.
The approach of practical case study follows the interview method. The interviews are intended
to be conducted with representatives of process industries of various organisations in New
Zealand, to investigate the organisation’s motives behind transforming to lean thinking, along
with current lean tools and practices followed. This method also examines the consecutive
changes, the organisation experienced before, and after implementing Lean, and thus aims to
collect sufficient quantitative and qualitative data from the organisation. A set of questions
seeking answers to the above required data will be provided to the representatives during the
interview. The results collected from various organisations is analysed and tabulated as a
reference for comparison and further discussion.
2.1.4 Discussion
The data obtained from the literature, published case studies, and the survey based case studies
are intended to be assessed and analysed. The method is then aimed approach towards
discussion part, which includes the discussion about:
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• The comparison of published and survey based case study organisations in terms of set
of lean tools and principles being implemented individually by each organisation, with
consecutive immediate and long term results.
• Different organisation’s method of implementing the Lean tools and their different
perspectives towards lean tools and practices with respect to culture change and results.
• Organisation’s thinking towards continual improvement methods and key aspects to
adapt in future.
2.1.5 Conclusion and Recommendation
The results of discussion are evaluated and interpreted to find out the most important tools
necessary in initiating the Lean thinking and executing for any organisation, also what can be
initiated in the NZ organisations to improve their Lean practices?
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Chapter 3 – Findings
This chapter of the report projects the findings by categorising in three sub sections i.e. the literature,
published case studies and survey case studies of NZ organisations. This section include the brief history
and evolution of lean and its tools, qualitative and quantitative data of the published and survey case
studies. By analysing the concluding summary of each section, the data obtained is then collaborated
and discussed, to understand different perspectives in the discussion part of this report.
3.1 Literature Review
3.1.1 History of Lean - Early Development
In 1980’s Frederick W. Taylor initiated the method of monitoring the work structure and
workers and it resulted to understand about standardized work and time study. Taylor applied
the concept of science to the management. Another industrialist Frank Gilbreth included the
concept of study of motion and developed process charting which monitored the elements of
work.
Lillian Gilbreth fetched the concept of including workers psychology and analysed how the
process outcomes affects by the employee’s motives and attitude. The awareness of eliminating
waste and Lean manufacturing was because of the vision of above industrialists.
Ford system 1910
Henry Ford and Charles Sorensen developed the first precise approach of manufacturing by
considering complete fundamentals of manufacturing system i.e. Man, Machine, instrument
and product and designed to organize the fundamentals within the continuous flow of
manufacturing (Lacey, 1986). The Ford happened to be the early pioneer in Lean
Manufacturing and Just in Time (Sorensen & Williams, 2006).
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Toyota Production System
Between 1949 and 1975, at Toyota Motors, Shigeo Shingo and Taichii Ohno initiated to
integrate the methodologies of Ford along with additional systems towards the movement of
Toyota Production System. This helped in understanding of central role of inventory in the
organization.
Additional discovery was regarding producing variety of products at Toyota. The suggestions
and ideologies of the visionaries resulted in achieving reduction in time for a process and
continuous flow. The initial challenges resulted a failure due to the incomplete integration of
the system and key moralities. This success was noticeable to other Japanese organisations and
when it spread to the world, executives from America visited Japan to analyse about it.
In 1990, Jim Womack’s team formed the term ‘Lean’ to describe Toyota’s proficiency during
International Motor Vehicle Program.
Evolution of Lean (Womack, Jones, & Roos, 1990).
The evolution began with a combination of Lean history in automotive manufacturing with the
Lean concepts of different country’s manufacturing organisations. In today’s world, Lean and
its principles are noticeable at common places.
Each different organisation of different sector has its individuality in history, product, people,
and process. The lean methods vary from the actual developed techniques depending upon the
organisation, operation and their requirement. The principles of Lean remain unchanged, but
the application method may differ.
Application of the below Lean principles as theory, the organisation can achieve entire
advantages of lean techniques and can upgrade their skills (Womack et al., 1990).
The key lean principles are (Nakajima, 1989) (Womack et al., 1990)
• Define value as characterized by the customer.

• Analyse the value stream – the main set of processes which gives value to the customer.
• Form the flow of process and value.
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• The work is executed to meet clear needs and requirements of the customer.
• Seek perfection through continual improvements.
Figure 4: Principles of Lean (Lean Enterprise Institute).
3.1.2 Tools included in the Lean family
Below are the tools of the Lean family. In today’s world, the organisations are accepting and
implementing the below mentioned tools for better productivity and to maintain
competitiveness. Some of the organisations also implement other techniques and systems
depending on their operation/process and requirement.
5S
The term 5S is the grouping of
 Sort,
 Set-in-order,
 Sweep and Shine,
 Standardise
 Sustain
This method helps in arranging the workplace and improvises housekeeping techniques. This
method avails in identifying and eliminating waste and develops a new healthy working
environment. This method is the creation for being organized. The implementation of below 5S
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techniques minimizes consecutive loss integrated with breakdowns and failures, enhances
safety and quality at work (Ho, 1996) (Karkoszka & Szewieczek, 2007).
Sort
This term expresses a method of sorting all the elements and assigning them a proper location
or place. This technique eliminates waste elements, unwanted products and the workplace
sustain well organized. This eliminates the searching time, minimizes the operation time and
improves efficiency (Michalska & Szewieczek, 2007).
Set in order
This method is about organizing the materials and elements in visual noticeable manner which
also benefits in eliminating search time by enabling quick identification of materials (Ho, 1996).
Sweep and Shine
This method involves periodic cleaning of the workplace and supports in maintaining
cleanliness of every portion that correlates to the process including the neatness of operator
(Ho, 1996).
Standardize
This method ensures regulating the process, operations to flow in a manner. These standards
are transparent and this method ensures involvement of all the workers in the organizational
activities. In order to identify the accessible methods for standardization, mandatory standards
have to be identified and visualized as per the nature of organisation (Peterson, Peterson, Smith,
& Smith, 2001).
Sustain
With the use of above S’s the organisation achieves a discipline in forming and following the
rules and guidelines. The sustain method assists in standardizing the activities of initial 4S and
ensures sustainability of the own within the organisation. This method also ensures periodic
inspection of 5S rule by a special team (Urbaniak, 2004).
Ultimately the 5S results in peoples morale and awareness, reduces human errors, eliminates
interdepartmental communication gaps by improving the relations (Osada, 1991) (Michalska &
Szewieczek, 2007).
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OFI – Opportunity for Improvement
This tools is more related to the culture change as this can be implemented as an additional tool
along with the primary tools in any organisation. This concept motivates the employees and
ensures their involvement in providing feedbacks regarding any kind of improvements in the
organisation.
JIT – Just in Time
Just in time is a supply chain related standard that eliminates the material flow and waiting time.
This method also results beneficial between the upstream and downstream supply chain bodies.
This method ensures appropriate quantity of material required on right time with the help of
planning process (Calvasina, Calvasina, & Calvasina, 1989).
Additionally, this tool is a value to the manufacturing process that enhances the perfection with
the values of continual improvement and elimination of waste (Fujita, Yanagisawa, & Sakuta).
Also it eases the production process, ensures continuous flow, reduces inventory and storage
space, and enhanced output time (Clode, 1993) (Milligan, 1999) (White, Pearson, & Wilson,
1999).
Kaizen
This is a structure for continual improvements in every element of the organisation. This is a
Japanese term which means Kai-continuous zen-improvements. This is method for improving
the processes. The process of continual improvement includes a set of tools with it, they are 5S,
standardized work, Kanban. The method of additional tool includes total involvement, critical
and analytical thinking towards improvements they seek. The use of this tool has resulted
beneficial for the organisation work places to in identifying appropriate manufacturing methods
to adopt. This tool helps in providing quick results, motivates the staff, and ongoing
organizational continual improvements (J. X. Wang, 2011).
Kanban
This is a visual noticeable technique which in early development, made use of card to indicate
the requirement. The cultural technique in the organisation need not to be the same and each
organisation make use of independent items like markers, golf balls, location on floor as per
their convenience. Kanban process manages the production flow, helps in minimizing handling
of waste, storage and ensures item delivery on time (J. X. Wang, 2011).
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Also by adopting this technique, the coordination is maintained in the production and assembly
activities and it ensures continuous flow in the in-house supply chain (Sugimori, Kusunoki,
Cho, & Uchikawa, 1977).
One-piece flow production system
This is advanced system in lean manufacturing for the organisations comprising with various
products with variable customer demand. In an effort of making or adding value to the products
which have less customer demand by considering methods of line flow into batch flow results
in single piece flow. this method helps in manufacturing various products in average volumes,
ensures quick identification of defects, eliminates operator waiting time and process waiting
cycle time, make the process flexible and creative (Miltenburg, 2001).
OEE - Overall Equipment Effectiveness
This technique is the key for TPM - Total Productive Manufacturing. This method analyses the
identical tool’s performance abilities during ideal manufacturing situations. This method
monitors overall manufacturing processes and analyses availability of equipment, efficiency of
production effectiveness during the availability and also loss of productiveness due to excess
material, waste and rework. The obtained outcomes benefits the management for analysing and
enhancing the operations (Pomorski, 1997).
Standardised Work
This is an early development technique for standardizing a place, work, process. The
standardization has evolved gradually with time through various models such as work
procedures, job instruction and typical operating procedures (Miller, Pawloski, & Standridge,
2010).
Presently this method in lean manufacturing is used as organizing the workplace and identify
continual improvements by the employees. With use of standardized work and kaizen, the
employees are motivated towards identifying opportunity for improvements (Marksberry,
Rammohan, & Vu, 2011).
SMED
This is technique used by many of the manufacturing organisations in eliminating waste of time
during interchanging of the die. This method delivers a quick way in interchangeability of
current product to the next one. This process keeps the operators engaged in next work during
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constant product runs. This technique ensures productivity of both man and machine. This
method ensures training for all the operators regarding exchange of die and faster changeovers
(Dave & Sohani, 2012).
Poka-Yoke
This method has evolved from its early development in various forms. Japanese engineer
formed the technique to attain zero defects and ultimately reduce inspections of quality control.
The concept behind this technique is to reduce the worker’s physical and thinking time to make
them involve in additional activities that adds value.
In simple, this is a fool proofing technique to prevent errors, consecutive damages, breakdowns
and process shutdowns. For an organisation to represent as global competitor, methods like
poka-yoke, six sigma must be implemented to attain zero waste. These tools are simple
perceptions in accomplishing the objectives (Shimbun & Magazine, 1988).
TPM
The total productive maintenance concentrates on efficient identification and removal of waste,
unproductive cycle time and rework in manufacturing (McCarthy & Rich, 2004). This
technique is based on human team work and involvement to attain global level of overall
effectiveness the combined outcomes of manpower and technology. This is method of maintain
an equipment by interaction and involvement of both production and maintenance team. As
Lean, the TPM is not an event or activity, but a culture concerning the maintenance. Training
program on TPM provides improved organizational potentials in different forms (F.-K. Wang,
2006).
The planned TPM adaptation factors like leadership, classic practices, involvement, adds value
in terms of manufacturing improvements (Ahuja & Khamba, 2008).
The literature about the TPM provides various explanations about Total Productive
Maintenance by different authors, as follows
TPM approach is creative in maintenance and improves efficiency of equipment, removes

breakdowns, provides autonomous opportunity to the workers in maintaining it periodically
(Nakajima, 1989).
TPM is a method of communication and maintaining partnership between production and

maintenance teams in regards to enhance quality, eliminate waste, minimize operation cost,
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ensure availability of equipment and enhance organisation’s culture towards maintenance
(Rhyne, 1990).
This technique is enhancing approach of maintenance schedule that engages all staff from top
to line employee and involves people from all department (Wireman, 1994).
This is a production-driven upgrading practice, developed to improve reliability of equipment

and also assure effective asset management of the plant (Robinson & Ginder, 1995).
This is an addressing program which communicates about equipment maintenance through a

monitoring system that comprises overall data records throughout the equipment’s life cycle
and provides decentralized responsibilities to all staff (McKone, Schroeder, & Cua, 1999).
TPM regards to interdepartmental communication and directs the maintenance team, operators
and engineers to effectively cooperate and realize each other’s perspectives (Witt, 2006).
Value Stream Mapping
With the evolution of Lean, this method emerged in 1995 with capability of pooling a set of
Lean tools to assist the lean facilitators to identify and categorise waste in each independent
value streams (Gosling, Naim, & Towill, 2013). This technique helps to examine the root cause
and eliminate the waste in each unique stream (Bates, Filippini, & Chiarini, 2012).
This methods needs in-depth analysis of impact of existence of waste, typically in supply chain,
selects and examines the outcomes of a group or set of tools in the form of comparison table
comprising with different streams and tools (Ramesh & Kodali, 2012). This approach analyses
and assists in opting the best tool, or a set of tools to be adopted to eliminate the waste. The
wastes identified in each stream can be categorized as per Ohno’s seven wastes (Kornfeld &
Kara, 2011).
This method evolved and had been recognised and adopted in over 30 various streams in
different organisations. The different streams include environment, automobile component
manufacturing company, and electrical distribution streams (Hines et al., 1998).
Visual Management
The pictorial representation about the work flow, process flow in a manufacturing, production
organization creates a mode of communication between management and workers. The main
motives of visual management is to involve, engage and educate all the employees about the
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various aspects of operational processes and its status and other information sharing signs. This
method eases the process understanding for the employees provide spontaneous feedback
regarding current status and visualizes the need of enabling process depending upon the
customer demand (Womack et al., 1990).
This tool eases the process of visualizing and communicating about the process during the time
of handling the process. The task lies in identifying a value stream when there is customer
demand for the product (Rother & Shook, 2003).
Takt Time
This method illustrates the approach of identifying the manufacturing cycle time for all
operations. The term Takt means beat. In simple, this is available time upon unit demand in a
particular production period. This method identifies the amount of time required to complete a
job, process, flow, transfer and ensures accomplishing targets (Kenneth & Dailey, 2003).
• Advantages of Takt Time

• Prevents over processing waste
• Allows precise scheduling
• Allows synchronized production process
• Ensures steady production rate
• Delivers spontaneous performance feedback
• minimizes the time of work in progress-WIP (Kenneth & Dailey, 2003).
Six Sigma
This method is a belief of undertaking business with a goal of removing defects with help of
essential process. This technique comprise values of engineering, statistics and business to
attain real outcomes. This approach is employed to enhance the quality of the product to meet
global standards in a company and applicable in different streams including design, planning,
production, marketing, sales, administration and services (J. X. Wang, 2011)r. The benefits of
adopting six sigma are:
• With the self-funded method, this tool minimizes the overall cost by 50 percent
• Eliminates the stream of chain
• Understands and acts accordingly to the customer and their demand
• Enhances quality and delivery of the product
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• Delivers critical procedure inputs depending on variable customer demand of a product
• Helps in making the processes and product robust
• Six sigma assists in attaining improvements spontaneously using core fundamental
resources (J. X. Wang, 2011).
Lean Six Sigma
Lean six sigma is the combined principles and practices of two Lean tools i.e. Lean
manufacturing and Six Sigma. These tools are two independent different methods used in the
industry for quality improvement practices. Six sigma delivers an integrated enhancing method
which improves quality by minimizing variations, reworks and costs (De Koning, Verver, van
den Heuvel, Bisgaard, & Does, 2006).
In today’s Hospital sector, continual improvements in the quality of care is the key the patients
seek. Healthcare sector have to maintain less waiting times to their patients. The method of
being rapid and elimination of defects lead to efficient approach. The implementation of Lean
six sigma enhances the healthcare sector and directs to attain the above goals. Therefore Lean
six sigma can be considered a best tool to manage present day challenges in Healthcare (De
Koning et al., 2006).
Lean Training
The organisations that implement and follow the six sigma or lean six sigma provide Lean
training to a group of employees and award with different level belts. Later the trained people
plans, and executes the implementation of lean tools and practices by providing training to sub
employees in the organisation (Hoerl, 2001).
Lean and its aspects in future
As the lean is all about strategies that an organisation adopts, its principles continue to evolve.
All the lean tools and methods assists in adding value to the product and as a result, it is suitable
to any kind of trade and organisation. Lean evolves in various sector like manufacturing,
healthcare, service as every customer seeks revolution. The Lean do not mean adopting a set of
methods or principles but a vision of understanding the customer and their requirement (Lean
Manufacturing Tools).
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3.1.3 Summary of Literature
The literature of lean illustrates this is not a new approach but it is century old technique. It is
all about identifying operational excellence within any sector. The Lean started to evolve from
early 19th century and today, there exist various lean tools implemented in various field.
In reality, the lean family comprises with more number of tools than that of mentioned in
literature. Each different lean approach has its own principles and benefits. As it is an
operational excellence, the organisations can identify the cause and adopt appropriate tools as
per their need and purpose. The use of lean tools upgrades the organizational culture and
behaviour, providing positive results in reducing wastes, workplace management, culture,
communication, quality, and productivity.
Lean six sigma being suitable to the healthcare industry is a best example to understand Lean
is not only for manufacturing sector, but can be implied in any value stream. This evolution of
development of tools and adoption by several organizational sectors will continue to grow in
future.
The data obtained from the literature articulates the meaning of tools and their benefits. These
are considered for comparison with the NZ organizations in the discussion part of this report.
3.2 Published Case Studies
3.2.1 Case Study 1: Permark Industries

(Anatomy of Lean Thinking in New Zealand Workplaces, 2015b)
Permark Industries is the published case study organisation, that is considered for qualitative
and quantitative analysis of the research. The company has its branches in Auckland, Sydney
and Melbourne with manufacturing plant in Auckland. The organisation is expertise in
precision screen printing, special design and manufacturing of special adhesives, metals and
plastics. On the basis of advanced production process, leading edge design, the company offers
a broader variety of solution. This organisation reside capability to understand its customer
requirements and recognise the specific solutions accordingly.
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The organisation avails a wide technical knowledge, broader design capability, and experienced
capability of precise manufacturing. Thus, it employs a broader range of skilled people.
Their customers are majorly New Zealand’s large and medium scale electronic product
manufacturers and top 20 of them possesses 80% of the organisation’s trade. The industry has
a workforce of 40 people in New Zealand with a small team in Australia. The industry exports
30% of the total production overseas.
A brief about organisation’s difficulties and cause for Lean motives
Due to the financial crisis, it affected the company’s orders causing recession. The operations
of the company follows a demanding quality system in which checking of product for its level
of meeting the standards is identified. This approach notified the employees in identifying
minute errors in process. But yet, there existed amount of expensive rework for a longer period
of time along with many uncovered errors being identified during quality inspection. The
unidentified and uncovered errors were found at the time of audit
This process emphasised the problems in conducting quality systems with issues like
inexperienced staff and coordination & communication between inter departments in spite of
constant meetings
Initial problems which motivated towards lean
When the interrelations between the departments were not coordinated, it resulted to be the
cause of frustration within the organisation.
Also the management lagged in production planner system which ultimately reduced the plant’s
production capacity.
Employees/workers used to pretend they understand the job in spite of repeated common errors
in production and also neglecting the job sheet
There arose overburden in the scheduling and lead time due to delayed orders by the customers,
and due to the demands before completion of the orders
As a result, the above factors forced the management to put initial efforts in enhancing the
quality system to make it equivalently valued to their training programs and health and safety
systems.
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Challenges and directional motives
Breaking down the defensive nature of the employees in regards to their work procedure and
analysing the things more precisely were the early stage challenges. Every person believed to
be expertise in commenting on other’s work despite, themselves being less productive.
As a result, this suggested the management to understand that the significance of lean is more
about organisational culture change, and it is important to involve in conversations and change
the way the people think in an organisation.
Lean thinking initiation
Management consulted the SME’s to identify and analyse bottle necks of production and
provide suggestions accordingly. Then the succeeding initiatives were in providing the training
to their staff which incorporated the tools which assists in identifying all type of wastes, value
stream mapping (VSM), root cause analysis (RCA), find opportunities for improvement (OFI),
and 5S. The objective was to educate the key leaders within the organisation about key concepts
and also in order to accomplish the 5S, confirming training majorly to the shop floor staff and
employees.
Lean tools implemented
The organisation finalised to concentrate on the 5S implementation over all the main process
areas along with VSM, RCA and OFI tools.
Management’s observations and results
As per the noticeable results, the management reports there exists neither minimisation in lead
times nor assessable rejections and also there exist still large amount of waste within the system.
However, the management confirms their achievements recorded after six months of initial
stage. They are:
• The organisation turned more organised

• The issues took less time to resolve
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• Reduced wastage of time on searching things
• Reduction in over production
• Improvised space for storage
• Made the production a smoother process and eliminated overburden
• Eliminated the interdepartmental communication gaps majorly among the trained
employees and other staff
• Motivation towards being operational across other managed areas
• Empowered and made to involve staff in all levels
• The implementing team agrees that their upstream teams have to be trained for lean
practices and they have to see the implementing team as customers and then there exist
room for actual gains for the organisation
Cultural change, training, and Future Aspects of the organisation
The trained people engaged in working on the obtained OFI’s. The team also started using the
tools like ‘5 whys’ and ‘fishbone diagram’ to identify the root cause of the problems highlighted
through OFI’s.
The priority for lean training was increased and was being associated with the competitive
manufacturing. The employees at different level got promoted to the level 2 training
qualifications. The organisation perceived the level of qualifications as their investment which
ensured in depth understanding and enhancing of skills for those being trained in lean.
The management leaders think, there will be expansion in departmental boundaries and culture
of employees due to increased motivation towards work.
Page | 21
3.2.2 Case study 2: Pacific aerospace
(Anatomy of Lean Thinking in New Zealand Workplaces, 2015a)
This organisation is an expertise in design and manufacturing of durable, reliable, custom

aircrafts with experience of more than 50 years.
The company have manufactured more than six hundred custom aircrafts in various range
which have succeeded in creating a benchmark globally in the roles like skydiving, utility and
aerial surveys.
The organisation’s is a portion of group of companies which comprises the early processes from
design and certification of aircraft, processing of composite materials and metals to till the
aircraft’s assembly and flight tests. This company has also grown in terms of their workforce
from 100 to 150 since 2006.
The group companies also provide broader services like support, maintenance, leasing and also
insurance.
The establishment in 190 involved production of small parts for aircrafts and in 1980, it formed
into corporation to craft complete manufacturing. The company was then vended to aero-motive
group of New Zealand in 1995.
A brief about organisation’s difficulties and cause for Lean motives
In 2006, the company started terminating their staff because of dropped orders and it was almost
an end. The production rate was considered high because of the decreased sales.
“It was almost terminal with no work and rock bottom morale.” (Alf McLaughlin, GM
Production)
The comments by the CE were “If you don’t like it, you know where the bus stop is.”
This caused terrible administration which resulted in negative individuality and deprived trust
among various managers, managers and staff. The culture within organisation had worsen,
where workplace was defined as caves and people used to hide workmate’s tools.
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Lean thinking initiation
The SME’s suggested some of the changes to the management and post approving, the initial
steps were making the senior leaders team involve in the SME’s training program which
included practical based introduction of lean tools and concepts. The training resulted useful in
identifying possible application of lean thinking in their organisation. The outcomes of training
resulted primarily in focusing on opportunities for improvement system – OFI and secondarily
to implement 5S gradually over the working areas.
Lean tools implemented
The management decided to initiate OFI to educate the staff about the identification of solution
against any kind of problem or for the reason of frustration. Also they considered implementing
5S to improvise the workplace along with OFI.
Management’s observations, motivation and Results
With initiation of lean tools and practices for more than two years, the staff at the workplace
are trained and educated with 5S process. The company conducts 5S audits to identify the
results by comparing to before and after stage of 5S. The management offered the production
manager the responsibility for ensuring the evolution of 5S. The 5S practice evolved in an
outstanding way as they considered including ‘safety’ and now they call it 6S.
Gradually, the management found the improvements in workplace effectiveness and

appearances. The production workers seek effective project improvements. The OFI system
obtained over 300 improvement suggestions and the number started decreasing as the
productivity enhanced. The management also found the OFI was the key motivational tool in
bringing the cultural change from employee’s ignoring attitude to listening, understanding
attitude.
The results of implementing were observed in various forms in PAL
Page | 23
• The results/suggestions obtained from the 5S and OFI were integrated to the
manufacturing capacity
• There was greater increase in productivity as production capacity increased from one
aircraft in five weeks to two aircrafts in a month with involvement of same amount of
workforce and capital investment as before.
• The approved plan of facilities expansion worth $350000 was no more needed due to
the upgraded way of utilising existing facilities.
• The property insurance premium of the plant reduced to 30% due to improvised plant.
• Improvement in the quality with customers and Civil Aviation Authority, NZ. Also the
time duration between warranty claims increased.
• Prior implementing, the complete workforce capacity used to be engaged only in
production and now, the organisation resulted to be capable in undertaking contracts for
maintenance.
• The management observed the wastage of staff time was reduced and being used much
productively
Cultural change, training, and Future Aspects of the organisation
The management initiated and fixed two programs i.e. employee training for level 2
qualifications, ultimately seeking competitive manufacturing and leadership training seeking
management ability skills for team leaders
The management gave freedom in autonomous leadership to employees to put efforts on lean
and identify improvements.
The combination of new start of leadership and effective use of lean tools to enable effective
change, resulted to be the two building blocks for continual improvement and innovations.
Additionally, the leaders think, by creating a skilled atmosphere in each department, the
potential skills can be identified and spread within the organisation to educate every employee.
The comments on this were “It used to be that skills were hoarded. Hidden knowledge is not
good, it has to be available to all.”
Page | 24
3.3 Survey Based Case Studies
By providing the questionnaire to the company representatives of NZ organisations (process

industries), the following case studies are carried out through conducting personal interviews.
The company name has not been highlighted in this report as per their request regarding
maintaining the organisation’s confidentiality.
3.3.1 Case Study 1: Food Processing – Airline Catering

Industry
Company overview
This organisation on which the next case is based is a catering industry for airlines. It has
established since 70 years and now, it avails to be as one of the leaders in providing the service
in this kind of food processing industry.
With the total workforce of 30000 employees, the organisation has spread across in 51 different
countries with 210 branches of the which, one is based in Auckland, New Zealand.
This company has around 300 airline associates spread over globally in 50 countries. Now the
company has grown to such an extent that it expanded business to offer greater product range
also to the retailers and train operators i.e. passengers.
The organisation provides regular challenges which maintains motivation of the company and
their employees, keeps them engaged in attaining their highest potential. The organisation is
encompassed with a set of values that are a part of its leadership principles and mission. The
organisation understands the way they work, and behave with their customers and also
recognises the dedication of an employee which is the key aspect behind a successful business.
Page | 25
A brief about organisation’s Lean motives and implementation
The company’s motives behind lean thinking was a roll out by its corporative office. This
organisation started using the lean tools since 2011 throughout its operation departments i.e.
warehouse, equipment, kitchen, assembly and transport. The management also monitors and
follows continual improvement methods by conducting Lean kaizen projects with involving
and engaging all the workers for a period of 2 weeks. After the project implementation process,
it is monitored by the Lean team for 3 months
Lean tools adopted in the organization
Lean Tools adopted What they understand

 5S A method to improve workplace organisation capability and managing
visual standards
 Bottleneck This is a tool under theory of constraint. The organisation uses this tool
Analysis to identify operational problems and then defines kaizen tool around
the problem
 Continuous Method of following one piece flow at a time, instead of batch flow
Flow
 Gemba (The A Japanese term and method followed generally before conducting
Real Place) kaizen project by going to the actual process place in a team, observing
and identifying 7 wastes
 Heijunka (Level Method of conducting time analysis for each individual operation and
Scheduling) define manning based on Takt time
 Hossain Kanri Defining mission and objectives at beginning of a year regarding lean
(Policy implementation and defining kaizen projects around
Deployment) the implementation place
 Just-In-Time A system of producing/procuring/delivering the exact amount of
(Fujita et al.) material at its requirement time for production
 Kaizen A Japanese term that explains the philosophy about continuous
(Continuous improvement
Improvement)
 KPI (Key Method to identify key performance indicators of any project. Mainly
Performance for Kaizen
Indicator)
 Muda (Waste) A lean process which adds value to a product or a service for which, a
customer will pay. This method adds value and eliminates waste by
categorising it within seven different wastes
 PDCA (Plan, A method used to control the Kaizen projects
Do, Check, Act)
 Poka-Yoke An error proofing method or a device which is used to prevent an error
(Error of defect from happening or being passed on to the successive
Proofing) operation
Page | 26
 Root Cause A systematic methodology to examine the root cause of a problem by
Analysis investigating the problem’s possible causes
 SMART Goals Method implemented for initiating strategic projects
 Standardized Defines a standard operating procedure for the operators. Explains the
Work working procedures step by step
 Takt Time It is the frequency/rate at which, a product or service has to be produced
or provided to meet the customer demand
 Value Stream A method of representing SOP – sequence of operations for the whole
Mapping process of a product or service.
 Visual Factory A method of visual management that orients towards visual control in
quality, workplace organisation and production processes. The
objective is spontaneous identification of any deviation within the
process
Table 1: Tools implemented in Case study 1
Observed changes in the organisation in terms of:
Operational Culture Policy/guidelines

 Functions, coordination  Motivation in regards to  Management procedures
and control implementation and
improvement
 Process time Focus on people/ team Power allocation within
building organisation
Decentralized
responsibilities
Autonomous leadership
Quality manufacturing  Empowering staff at all Procedure amendments
levels
Prevention of process Human behaviour Prioritise the continual
breakdowns and ensure improvement methods
continuous flow
Table 2: Changes in organisation, Case study 1
Brief explanation about the changes in organisation
As Lean is an operational technique, it favours a top-down and bottom-up approach. As a result,

the inter relationships in the organisation between workers and management which results
crucial for participation of workers in Lean workshops. The motivation and participation of the
workers improved to a higher level after conducting LPS workshops.
Page | 27
Key lean features, the organisation seeks to adapt in future:
As the implementation and practices of the Lean tools value stream mapping and six sigma are
not up to a certain extent the organisation aims to focus on those tools in the upcoming years
for much better improvements and eliminating non value added activities in the process.
As this organisation experiences high employee/labour turnover and provides opportunity for
part time workers, there exists lack of opportunity for uninterrupted trainings for all the staff.
This factor ultimately leads in lack of knowledge and shortage of skills of the staff in Lean and
its principles.
3.2.2 Case Study 2: Design & Manufacturing Industry –

Frequency Control Devices
Company overview
This is a high expertise company which designs and manufactures the frequency control
devices. It was founded in 1967 and since 2006, it has transformed itself as the largest providers
of frequency control devices worldwide. This company has 8 Research & Development centres,
6 manufacturing plants those of which 3 are joint venture plants. And also, this organisation
has 11 customer support centres located globally with Head office being situated in Auckland,
New Zealand.
The company has developed a global class design and manufacturing dais. The company
products are much advanced in providing connectivity, more reliable and faster. Today it offers
solutions and products designed for current and future generation technologies. The company
has achieved leadership in the market by the distinctive processes, continuous research and
development, continuous innovations and regular advancements in it technologies. The
company backs its originality with unquestionable quality control, attaining the highest
standards in international manufacturing.
Page | 28
The company understands its customers and thus, works on leading edge products and
technologies which persuades the way the people work in today’s generation. The company
also recognises the market requirements which facilitates it to lead the way in trending
specifications and drive the technology.
The organisation’s motives behind thinking and implementing Lean was to be competitive in
the global market, achieve productivity and reduce waste. It initiated lean tools and practices,
starting with Lean six sigma since 2013 throughout the organisational departments. The
management also follows the continual improvement methods like regular staff meetings and
provides training to its employees.
The following are the set of top lean tools which are being implemented in the organisation.
The data about what the organisation thinks about these tools and the way the tools help the
process are obtained through the interview

5S To improve the flow and reduce waste
Andon Indication method used to visualise the status of the machine in
production plants
Bottleneck Analysis Tool useful to identify the process capacity and allocate appropriate
resources.
Continuous Flow Tools used to identify the issue/fault easily in a process
Gemba (The Real Going to or being present in the place the activity is happening
Place)
Heijunka (Level The tool which interprets the adjustment of scheduling depending upon
Scheduling) capacity of each process
Hoshin Kanri Tool which helps in focusing on improvement of policy development
(Policy by top management
Deployment)
Jidoka A system through which machine automatically stops when any
(Automation) problem occurs
Just-In-Time Process of planning and getting the material on the day of processing
(Fujita et al.)
Page | 29
Kaizen Change for betterment
(Continuous
Improvement)
Kanban (Pull A method used to display signal in the process through the card system
System)
KPI (Key The tools which indicates the performance
Performance
Indicator)
Muda (Waste) Lean tool comprising with seven types of wastes which can be
identified and eliminated in any type of organisation
Overall Equipment Method to check the analyse the overall efficiency
Effectiveness
(OEE)
PDCA (Plan, Do, Method of following a sequential activity
Check, Act)
Poka-Yoke (Error Method of preventing error in any processes
Proofing)
Root Cause 6 M method i.e. Machine, Material, Methods, Measurement, Mother of
Analysis nature, & Man. This method involves team effort in individual category
Single Minute Method used to reduce wastage of time in exchanging of die’s during
Exchange of Die production process.
(SMED)
Six Big Losses The method is about maintaining a record data about machines and its
maintenance schedule
SMART Goals Lean thinking tool necessary to consider while initiating any project.
S-Specific M-Measurable A-Attainable R-Relevant T-Time bond
Standardized Work A visual method which makes the employees to follow a proper work
instruction/direction in a document form. Ex Sequence of Operations
chart for operators in production plant
Takt Time It is available time over customer demand. Also called as beat time,
which is a process which interprets a time in which an activity has to
be completed.
Total Productive A method of scheduling periodic maintenance for machines by
Maintenance identifying working span of machine elements and the process being
(TPM) carried out on it
Value Stream A method used to conduct analysis of an activity as per its cycle time,
Mapping takt time, setup time, labour time
Visual Factory The method of displaying the employees the operation procedure
sequences, targets, do and do nots, hazards, motivations in a
manufacturing/production plant
Page | 30

 Functions, coordination  Motivation in regards  Management
and control to implementation and procedures
improvement
 Process time  Focus on people/ team  Power allocation within
 Decentralized
responsibilities
 Autonomous leadership
 Quality manufacturing  Empowering staff at all  Procedure amendments
levels
 Prevention of process  Human behaviour  Prioritise the continual
continuous flow
Table 4: Organisational changes, Case study 2
The key lean aspects the management thinks to adapt in future are precise lean six sigma
implementation by providing yellow belt training to all staff and ensure they involve and engage
in continuous improvement processes.
3.2.3 Case Study 3: Food Processing – Supermarket
Company overview
The organisation on which the next case is based on a supermarket in New Zealand. The support
centre of the supermarket is based in Auckland, New Zealand and controls a group of
supermarket brands and their branches over entire North Island. The survey is conducted on a
particular branch of the supermarket group which is franchised independently. The supermarket
consists of 9 different departments such as Grocery, Produce, delicatessen, Bakery, Seafood,
Butchery, frozen, Liquor and checkouts. The supermarket comprises with workforce of
approximately 20 employees in each department to meet the customer demand.
The organisation avails total workforce of about 200 employees within a particular branch and
the supermarket group’s branches are spread with more than 300 branches across New Zealand.
Page | 31
This supermarket represents themselves as best providers for quality and fresh products. The
organisation understands the values of their customer and believes in providing excellent
customer service.
The organisation provides constant deals that keeps their customers happy, satisfied and also
motivates the employees. The organisation believes their work, provide training to employees
and educates about customer values and service, ultimately seeking the customer satisfaction.
The supermarket group’s motives behind lean thinking was a roll out by its support centre. This
organisation started using the lean principles from the beginning throughout the organisation
and majorly in process departments i.e. Produce, delicatessen, Bakery, Seafood and Butchery.
The management also recently enrolled in implementing SAP which can be considered as a
lean tool through which they wish to monitor the daily quantity requirement of food products,
regular rotation of raw materials for producing food products, customer demand and inventory
in such supermarkets.

5S Method used to organise the workplace
Continuous flow Method used to determine constant flow of products
Just-In-Time (Fujita et al.) Method of getting the products delivered on the required day
PDCA (Plan, Do, Check, Act) Method used for complete, effective operations
Standardised work Method used to display operation procedures/ workflow instructions

for the employees
SAP A new improvised working system
Page | 32

 Functions, coordination Motivation in regards to  Management procedures
and control implementation and
improvement
 Process time  Focus on people/ team Power allocation within
Decentralized
responsibilities
 Autonomous leadership
Quality manufacturing  Empowering staff at all Procedure amendments
levels
continuous flow
The organisation now has 9 departments and with successful implementation of SAP tool, it
seeks in increasing more number of departments in future as per the customer demand and
requirement.
Future plans to follow FNR – Forecasting and Replenishment, a module of SAP system which
identifies the appropriate requirement of products by focusing on product accuracy, proposes
the order quantity by analysing the product selling time and thus, helps in reducing inventory
and unproductiveness of manpower
Page | 33
3.2.4 Case Study 4: Design & Manufacturing – Food Processing
& Packaging Equipment
Company overview
This case study is about Hamilton based small scale organisation. This company manufactures
food processing and packaging equipment to their clients around the world. The company’s
core business involves contract manufacturing and in-house extensive design capability to
support the business. The company specialises in the process of designing, manufacturing,
machining, fabricating, assembling, testing, installing and commissioning of stainless steel
equipment. This organisation established in 1986 and has a workforce of 40 skilled staff.
This organisation has developed long standing relations with their customers and have an
embedded culture which speaks they are committed to understanding and delivering customer
requirements around the world. The management believes, the key to the organisation’s success
is not only understanding needs and requirements of their clients but needs and expectations of
client’s clients. The organisation also believes in encouraging, sourcing and training young
talent for the industry.
A brief about organisation’s understanding and implementation
The survey results show that the organisation have not undergone with any baseline lean thinking
initiative. This organisation imagines the motives of lean implementation would be improving the
quality and reduction in cost.

KPI (Key Performance (No comments received)
Indicator)
Root Cause Analysis (No comments received)
SMART Goals (No comments received)
Page | 34

Functions, coordination and Motivation in regards to  Management procedures
control implementation and
improvement
Process time  Focus on people/ team Power allocation within
Decentralized
responsibilities
Autonomous leadership
Quality manufacturing Empowering staff at all Procedure amendments
levels
continuous flow
Currently the organisation is not adopting any specific tools or methods, but anticipates to adopt in the
coming years for the workshop department of the industry.
Page | 35
Chapter 4 – Discussion
The information obtained from the qualitative and quantitative data from the published and survey case
study organisations are collaborated and discussed in this chapter. The discussion comprises with the
statements, comments, and thoughts of the employees about the change, and outcomes the organisation
experienced before and after lean. The published cases and survey cases are concluded with a short
summary.
4.1 Published case studies
Below are the comments and suggestions given by the employees of Permark Industries about
how the lean thinking and tools resulted helpful for the organizational processes. These
discussions assists in understanding each individual thoughts about the observed difference,
before and after initiation of lean thinking and its practices.
4.1.1 Permark industries (Anatomy of Lean Thinking in New

Zealand Workplaces, 2015b)
Outcomes of implementing the lean thinking and 5S:
“Everything is now labelled and has a place to close where it is most needed and everything is
in its place.” (Team member)
“We now maintain clear walkways all the time, there is no clutter anywhere to trip over,
potentially dangerous solvents are now stored safely every night, and there are no cables lying
around.” (Team leader)
‘The required materials were found quickly with no waste of time and it is always better to
organize a work place in such way.’ – Opinion of a recently joined young apprentice.
Page | 36
“The guys are keen to give it a go, especially the young ones. One or two older boys are bit
slow on the uptake. At the first session a few of them kept saying this is rubbish. By the second
or third session they had brought into it.” (Team leader)
Any new implementation has a challenge. The change has to be initiate within. Once the change
is found interesting, that itself motivates the employees
The observations from the owner states that the lean initiatives ensures overall staff
involvement in the processes.
4.1.2 Pacific aerospace
The below comment from a fabricator interprets the employees are nervous regarding the new initiation
and filled with negative thought during the initiation time.
“A lot of guys were nervous and quite resistant – they had always done it a certain way. Some
of them gave me hard time and said ‘it is not’ going to work. We have seen it all before.”
(Aircraft fabricator and member of implementation team)
After implementation:
“Getting involved, mixing it up, involving people, especially in the OFI’s, giving it out
information, training up, suddenly managers were real people you could communicate with.”
(Aircraft fabricator)
The below comments represent the observed experience of the workplace after the adoption of
5S and OFI lean tools:
“This has saved heaps of time and hassle, everything is within 1-2 meters of work and looks
good. Tools don’t go missing and are better maintained and the tool guy has been released to
work on the floor.” (Fuselage Aircraftsman)
The below comment by the aircraftsman is a good example to understand that the lean thinking
motivates the employees towards sustaining and continual improvements:
“The guys don’t want to let the good changes slip back. Keeping up with the 5S audits keeps
forcing you to sustain the effort.” (Aircraftsman)
Page | 37
The change has also involved, motivated and engaged the top management to identify the
improvements for continual improvements:
“I am always checking on notice boards to see how the OFI system is processing and there is
regular reference to PACE in all my communications. We also maintain our key leadership
focus on it. PACE is not going to go away.” (Chief Engineer)
Suggestions by lean facilitators
“It would be great to New Zealand if lean becomes mainstreamed at the top. If John Key started
talking about lean regularly it could transform a workplace productivity in this country.”
4.1.3 Concluding Summary – published case studies
By studying the published cases and their journey of Lean thinking, it can be summarised that:
Culture and Motivation:
Lean is all about cultural change. Identification of cause that motivates the employees is the
key for the involvement of whole staff for the change. The practice involves complete staff of
an organization and motivates towards betterment. Educating the negative individuals about the
tools and principles makes them to involve and motivates towards improvements.
The organisation’s motives of lean initiation towards concentrating on specialized skills,

applying lean practices and develop challenging and open culture, itself provides the best results
naturally.
The change in the culture resulted most beneficial and building block for other improvements.
Tools and methods:
As the 5S and OFI tools are all about organizing the workplace and identifying improvements
which exists within the comfort zone, these can be relatively a safe initiation to start by any
organization and it results to be the beginning of culture change.
Page | 38
Outcomes:
The observed results in both organisations are positive and of various forms in terms of
productivity, time utilization, employee satisfaction, potential strength of the company, cultural
change, motivation towards continuous improvements and economic growth.
Lean thinking initiation by identifying appropriate tools for any organization can be considered
and implemented. It is also logical to conclude, the organisations can consult SME’s to obtain
suggestions for lean thinking initiation and implementing the tools.
Suggestions:
The lean thinking provides opportunity for an organization in identifying pathway and vision
for continuous improvements
The management people also suggested if the New Zealand Government initiates and motivates
in Lean thinking, the New Zealand workplace productivity have the scope of transformation.
4.2 Survey Based Case Studies
Below are the tabulated results obtained from survey based case study organisations to analyse
the set of tools the organisations implement and their outcomes. The table also assists in
interpreting the changes, before and after lean to understand the benefits of tools observed by
different organisations.
Page | 39
Organisation’s perspective on the tools
Lean tools Case study 1 Case study 2 Case study 3 Case study 4
5S Improve space utilisation, Organises the workplace and Shapes the supermarket
reduce overheads reduces wastage of time in product layouts and
Improves productivity waiting and searching improves productivity
Andon The indication tower light on
the machine helps to attend
the machine during any fault
Bottleneck analysis Helps in identifying root It will help in allocating
cause of a problem resources or improve the
Improve productivity productivity
throughout
Continuous flow Helps in reducing partially- Helps in improving quality Helps in analysing proper
completed goods – work in and reduce inventory rotation of products like
progress (WIP) eatables
Space optimisation
Gemba (The Real Place) Helps in clear understanding Helps to understand the
of current situation and problems and opportunities
analyse before implementing for improvement
successive tools
Eases the comparison
process between pre and
post stage
Heijunka (Level Helps in improving Helps in keeping up with
Scheduling) throughout any operation customer demand and flow
Hoshin Kanri (Policy Enhances and motivates Will get support for
Deployment) focus by the management implementation
team
Jidoka (Automation) This will help in avoiding
consecutive problems and
minimise defects in the
process
Page | 40
Just-In-Time (JIT) Improves space utilisation. Makes availability of space Helps in fresh producing
Ensures freshness of for other purposes in Space utilisation
material warehouse, reduces Reduces inventory
inventory
Kaizen (Continuous Helps in improving the other This will improve the
Improvement) lean practices and ensures people’s engagement and
effective utilisation of tools enhance productivity
Kanban (Pull System) This will help in avoiding
consecutive problems and
process
KPI (Key Performance More focus on each project Makes availability of space
Indicator) and easier to compare the for other purposes in
observed improvement warehouse, reduces
inventory
Muda (Waste) To eliminate all categorised This will improve the
wastes people’s engagement and
improvise resource enhance productivity
utilisation
Overall Equipment This will help in avoiding
Effectiveness (OEE) consecutive problems and
process
PDCA (Plan, Do, Check, Ensures sustainability of Makes availability of space Helps in arrangement of
Act) kaizen projects for other purposes in excess products back to their
warehouse, reduces original racks in storeroom
inventory at the end of every shift
carried out by different
teams
Poka-Yoke (Error Ensures prevention of errors Prevents error and
Proofing) and consecutive breakdowns consecutively prevents
Eliminates mistakes breakdowns
Page | 41
Root Cause Analysis Identify real root cause for a A method used to identify
problem root cause of any issue by
Eliminate waste categorising it by the 6 M’s
Single Minute Exchange of Utilise operator’s waiting
Die (SMED) time
Ensures productivity of
machine and manpower
Six Big Losses This practice ensures
avoidance of machine
breakdowns and interruption
within the process
SMART Goals Improvises focus on project Helps in accomplishing the
project in an effective, smart
way
Standardized Work Eliminates waiting time in Helps in eliminating wastage Helps in understanding
operations of time appropriate work flow in
Educates operators Makes one realise what each department
constantly needs to be followed Eliminates operation waiting
Improves productivity time
SAP • Transparency in quantity
and cost of the raw
material required to
produce an article by
any of the process
department
• Monitors gross profit of
department articles
based on its ingredients
and total sales
• Forecasts product
requirement which
ensures to hold
sufficient amount of
Page | 42
stock based on previous
sales records
• Controls the inventory
Takt Time Helps in achieving targets Ensures rhythmic process for

and improves throughout all activity
Helps in achieving
Production target for a
particular time
Total Productive Ensures the machines work
Maintenance (TPM) effectively and eliminates
waste of time in breakdown
maintenance
Value Stream Mapping SOP guides people, work, by comparing value added
process and connections in a and non-value added aspects
project of an activity, this helps in
identifying whether it adds
value to the end product or
no
Visual Factory Helps in improvising Projects directional flow to
workplace organisation and the workers and reminds the
productivity house rules
Table 9: Perspectives of CS1, CS2, CS3, CS4
Page | 43
Results of Lean tools and practices in the case study 1 organisation
Factors Poor Below Average Above Good Extremely

(0-30%) average (50-60%) Average (70-85%) Good
(30-50%) (60-70%) (85-100%)
Waste Before Lean 
Minimisation After Lean 
Time Saving/ Before Lean 
Utilisation After Lean 
Productivity Before Lean 
After Lean 
Unevenness/ Before Lean 
Inaccuracy After Lean 
Workforce Before Lean 
Safety After Lean 
Overburden Before Lean 
After Lean 
Employee Before Lean 
Satisfaction After Lean 
Table 10: Results - Case study 1

(30-50%) (60-70%) (85-100%)
After Lean 
After Lean 
Page | 44

(30-50%) (60-70%) (85-100%)
After Lean 
After Lean 

(30-50%) (60-70%) (85-100%)
After Lean 
After Lean 
Page | 45
4.2.1 Concluding Summary – Survey case studies
Case study 1: Food Processing – Airline Catering Industry
This organisation is implementing and following over 20 different Lean tools and methods since
2011. The information provided by the representative of the organisation projects the
organisation as well adopted the lean thinking and methods throughout the operational
department. The table 10 above, interprets the changes the organisation observed after
implementation of Lean. The obtained results shows that the company has achieved positive
results in terms of various streams except unevenness and workforce safety. The only stream
which experienced negative results, as per the representative is overburden.
The organisation seeks the comprehensive implementation of VSM and six sigma in the coming
years for their betterment.
Case study 2: Design & Manufacturing Industry – Frequency Control Devices
This organisation started its Lean journey since 2013 and has evolved rapidly. It is currently
adopting and following all the top Lean tools and methods to be competitive in the market and
improve quality. The table 11 above, shows the result obtained regarding the observed changes
within the company. The obtained data interprets the existence of potentiality of the company
before and also the positive results obtained after the implementation. The organisation has
obtained positive improved results in all the streams. This shows the organisation has followed
appropriate methods of adopting and practicing of Lean. The representative suggest the Lean is
a culture change and it begins with identifying wastes and implementing 5S.
The organisation also seeks precise implementation of lean six sigma by providing training to
all the staff and ensuring their involvement in continuous improvements.
Case study 3: Food Processing – Supermarket
This organisation’s roll out of the lean practices was from their support centre and recently
implemented SAP system along with a small set of other tools. The table 12 above, shows the
obtained results after implementing of SAP system within the organisation. The table interprets,
the organisation has experienced a broad range of changes before and after in all the streams
expect in workforce safety.
Page | 46
Case study 4: Design & Manufacturing – Food Processing & Packaging Equipment
This organisation is an equipment manufacturing, small scale company with a limited

workforce. This organisation is currently not using any Lean methods or principles in their
operations. The data obtained in table 13 above, interprets, the organisation has experience no
much difference, majorly in all stream as they have not initiated lean thinking.
The organisation seeks in implementing the Lean in the coming years to improve the product’s
quality and reduce expenses.
4.3 Summary of Discussion

By analysing all the above discussions from published and survey case studies, it is logical to
conclude that the feedbacks and results obtained from each organisation regarding each tool
depends. The feedbacks and results of implementing different set of tools by different
organisations depends still more. The factors that makes the outcomes dependable are:
• Nature of organisational discipline

• Set of tools adopted
• Method of implementation
• Practices followed
• Employee skills
• Motivation of staff
• Availability of in house expertise to monitor involvement and identify continual
improvements
The common factors that support and oppose the Lean in an organisation is represented in the
following figure. With the best practices, the opposing forces can be reduced and lean can be
implemented and sustained within an organisation forever.
Page | 47
Figure 5: The forces opposing and driving a change to ‘Lean’ (Melton, 2005).
Page | 48
Chapter 5 - Conclusion and Recommendations
5.1 Conclusion
Literature
The data obtained in the literature about the lean, its history and evolution explains the
invention of lean and evolution. As it evolved, more tools were identified. As the Lean
approach is an operational excellence, there is no boundary in the invention of different new
tools and their applicable sector.
Any method or an idea that adds value to the end product becomes an approach method and a
tool of Lean. The present lean family comprises with over 25 tools, with unique benefits. The
benefits of current tools have the capability of transforming an organisation from organising
the workplace to attaining quality in world class manufacturing. The lean tools maintains the
basic principles and can be applied to various streams. One or more lean tools and practices can
be implemented on a single process to ensure effective implementation of the primary tool.
Thus, it can be concluded that the evolution of lean and its principles exist until the evolution
of process industries exist. Thus, this approach enabled to understand about the different lean
tools and their principles present in lean tool family, the way they individually evolved, and
how organisations are making best use of it.
Findings
The data obtained from the published and survey case studies resulted useful in understanding
about the current tools being used in New Zealand organisations. This approach of conducting
surveys facilitated to analyse the various organisations in depth and the tools they adopt.
Though the organisations have different operational sector, the tools like 5S, OFI, RCA,
continuous flow have been implemented majorly in all the organisations of the case study.
This is also practical example to understand, the tools can be implemented to any sector
depending upon the requirement.
Thus, with the analysis of the results of lean from case studies, it can be concluded that
implementation of set of tools, the NZ organisations have achieved encouraging outcomes. As
Page | 49
Lean is all about the organisational culture, the case study organisations have experienced
inspiring cultural change in terms of improved communication, interdepartmental relations,
and behaviour.
The cultural change is the key for the motivation. And motivation is the key for continual
improvements.
Limitations of the study
As this research is about study of lean tools and their benefits, the approach has its own
advantages and limitations. To analyse the different tools and their benefits, the results of
published cases is a value added advantage but, the results of survey case studies can be
considered a major limitation in this approach.
Reason being, the analysis requires exact figures of results and outcomes. This results barrier
as the exact values cannot be obtained from the surveyed organisations due to the
confidentiality issue. The results obtained from the survey studies are not precise but near to
actual results.
Thus it can be concluded that, the exact benefits of tools can only be analysed understood
through precise results with exact numbers or figures.
Future scope of study
With this research approach, it provided an opportunity to explore the NZ organisations. And
thus, with this experience, it can be concluded that the case study 2 organisation can be
signified as pioneer in adopting and following the different Lean tools among other
organisations of survey.
Thus, it can be recommended to conduct research study on case study 2 organisation to

practically understand the lean tools, methods of implementation, continual improvements,
lean training and method of collection of results to conduct in depth analysis and conduct
research on Lean.
Page | 50
5.2 Recommendations
By undertaking this research topic, the understanding of different tools and their practices is
obtained. The tools which builds the lean thinking in any organisation are identified. The
organisations using various tools with different benefits are analysed and compared to identify
the most important tools for process industries. The data obtained from published cases and
survey cases also assisted in knowing and understanding of the organisational trainings
provided regarding lean. Thus, with this data, below are the recommendations provided to the
companies for enhancing and improving their Lean practices.
Case study 1:
This organisation can consider prioritising of implementation of Value Stream Mapping and
Six sigma to attain upgraded productivity and eliminate waste or defect.
Along with, the management can consider to provide the training to all staff periodically
Case study 2:
This organisation can consider to give priority towards lean training to all employees. By this
approach, their future aspects of implementing lean six sigma can be accomplished and the
organisation can perform more efficiently, productively and achieve much improved results.
The training program develops the employee motivation and thus involves and engages all
staff in continual improvements
Case study 3:
This organisation can perform much better by precise implementation of basic Lean tools like
5S which makes the workplace more organised and eliminates loss of time in the in house
supply chain operations.
The management has to give priority to the OFI tool that ensures involvement of staff and
identify what can be improved. This approach involves receiving of numerous suggestions
seeking opportunity to implement to improve.
Page | 51
It can also be recommended to this organisation to implement more modules in their SAP
system that precisely forecasts the exact quality of required material, identify variation of
customer demand and assists in managing the man power accordingly. These factors helps the
organisation to maintain productivity and eliminate inventory gradually.
Case study 4:
As this company has their customers worldwide, it needs world class manufacturing. And as
this organisation is currently not using any of the lean tools and practices, it would be logical
to recommend that the organisation can excel in productivity and quality by undertaking has
to
• Initiate lean thinking by consulting SME’s

• Consider getting trained by the Lean consultants
• Consider implementing basic tools like OFI, 5S
• Consider motivating the employees and enable them to identify the opportunities for
improvement
These small initiations can result in transformation of organisational culture and operations
from traditional method to Lean thinking method.
Page | 52
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Page | 54
Annexure – Questionnaire used for survey
DISCLAIMER
The purpose of this work is to obtain necessary data for the quantitative study of the thesis. This
questionnaire will be used only for the academic purpose and not for any industrial purpose.
This questionnaire is a survey based study for the understanding of “Lean tools, Methods and the
Benefits of implementing in the organisation”.
This document is created by Mr Akshay Alagundagi, Post Graduate student at Auckland University of
Technology (AUT), Auckland, New Zealand.
You may choose to discontinue this survey at any point of time and no harm will occur to any of the
participants or to the data.
CONSENT
I have read and understood the information mentioned above. My participation in this
survey is voluntary and I wish to share the necessary information for this survey.
_________________
Signature/Stamp
Name :
Designation :
Organisation Name :
Date & Place :
__________________________________________________________________________________
QUESTIONNAIRE
1) Is lean principles being implemented in the organisation? Since when?
2) In which area/department of the organisation, the lean principles are being implemented?
Page | 55
3) Which of the following lean tool(s) is/are being implemented in the organisation? (Please tick and
explain in brief)
Lean Tool What Is It? How Does It Help?

 5S
 Andon
 Bottleneck
Analysis
 Continuous
Flow
 Gemba (The
Real Place)
 Heijunka
(Level
Scheduling)
 Hoshin Kanri
(Policy
Deployment)
 Jidoka
(Autonomatio
n)
 Just-In-Time
(JIT)
 Kaizen
(Continuous
Improvement)
 Kanban (Pull
System)
 KPI (Key
Performance
Indicator)
 Muda (Waste)
Page | 56
 Overall
Equipment
Effectiveness
(OEE)
 PDCA (Plan,
Do, Check,
Act)
 Poka-Yoke
(Error
Proofing)
 Root Cause
Analysis
 Single Minute
Exchange of
Die (SMED)
 Six Big Losses
 SMART
Goals
 Standardized
Work
 Takt Time
 Total
Productive
Maintenance
(TPM)
 Value Stream
Mapping
 Visual
Factory
Page | 57
Any other:
4) What were the changes, the organisation witnessed after implementing the lean?
Culture Policy Operational

Focus on people Management process Sustainability
Power within organisation
Decentralized
Motivation responsibilities Process
Autonomous
leadership
Functions,
Human behavior coordination and
control
Empowering staff at all
Values
levels
Explaination in brief:
Please tick the following
5) How have the lean practices helped the organisation in terms of:
5.a) Productivity
Extremely Below Above Extremely

Poor Average Good
poor average average good
Before lean
After lean
5.b) Time saving / utilization of time

Poor Average Good
Before lean
After lean
Page | 58
5.c) Workforce safety

Poor Average Good
Before lean
After lean
5.d) Employee satisfaction

Poor Average Good
Before lean
After lean
5.e) Waste minimization

Poor Average Good
Before lean
After lean
5.f) Unevenness / Inaccuracy

Poor Average Good
Before lean
After lean
5.g) Overburden / overload

Poor Average Good
Before lean
After lean
6) Why the organisation decided to implement lean? What were the motives?
7) Is continual improvement method adapted? If yes, how?
Page | 59
8) What are the lean key aspects the organisation thinks to adapt in the future?
9) Any comments and discussions of interest.
Thanking You,
Akshay Alagundagi
Student ID : 15876949
Master of Engineering Project Management
Auckland University of Technology, NZ.
Page | 60

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SCHOOL OF ENGINEERING

MASTER OF ENGINEERING PROJECT MANAGEMENT

STUDY OF LEAN TOOLS AND PRACTICES

IN NEW ZEALAND’S PROCESS INDUSTRIES

FACULTY OF DESIGN AND CREATIVE TECHNOLOGIES

Master of Engineering Project Management

Name AKSHAY ALAGUNDAGI

Paper Name PROJECT IN ENGINEERING PROJECT MANAGEMENT

Other than the above, this assignment

AKSHAY ALAGUNDAGI 23/10/2015

I am especially thankful to God for granting me the opportunity to commence this

Table 2: Organisational changes, Case study 1 27

Table 3: Tools implemented in Case study 2 30

Table 4: Organisational changes, Case study 2 31

Table 5: Tools implemented in Case study 3 32

Table 6: Organisational changes, Case study 3 33

Table 7: Tools implemented in Case study 4 34

Table 8: Organisational changes, Case study 4 35

Table 9: Perspectives of different organisations 43

Table 10: Results - Case study 1 44

Table 11: Results - Case study 2 44

Table 12: Results - Case study 3 45

Table 13: Results - Case study 4 45

Figure 1: Identify primary objective 02

Figure 2: The Benefits of ‘Lean’ 02

Figure 3: Methodology Process 05

Figure 4: Principles of Lean 10

Figure 5: The forces opposing and driving a change to ‘Lean’ 48

1.1 Scope – Introduction

Accomplishing my bachelors in automotive engineering, I began my career as trainee engineer

Figure 1: Identify primary objective (Davis, 2009).

• Reduction in lead times for end users

Figure 2: The Benefits of ‘Lean’ (Melton, 2005).

1.2.1 What is Lean? (Lean Enterprise Institute, 2007)

1.4 Research Questions

 Which tools are included in Lean tools family?

Figure 3: Methodology Process

2.1.1 Literature review

2.1.3 Case study NZ organisations

2.1.5 Conclusion and Recommendation

3.1 Literature Review

3.1.1 History of Lean - Early Development

Ford system 1910

Evolution of Lean (Womack, Jones, & Roos, 1990).

• Define value as characterized by the customer.

Figure 4: Principles of Lean (Lean Enterprise Institute).

3.1.2 Tools included in the Lean family

The term 5S is the grouping of

Sweep and Shine

JIT – Just in Time

One-piece flow production system

OEE - Overall Equipment Effectiveness

TPM approach is creative in maintenance and improves efficiency of equipment, removes

TPM is a method of communication and maintaining partnership between production and

This is a production-driven upgrading practice, developed to improve reliability of equipment

This is an addressing program which communicates about equipment maintenance through a

Value Stream Mapping

• Advantages of Takt Time

Lean Six Sigma

Lean and its aspects in future

3.2 Published Case Studies

3.2.1 Case Study 1: Permark Industries

A brief about organisation’s difficulties and cause for Lean motives

Initial problems which motivated towards lean