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Article in T?p chí phát tri?n Khoa h?c và Công ngh? · October 2013
DOI: 10.32508/stdj.v16i2.1470
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ABSTRACT:
This study is conducted to assess the Lean operations in terms of awareness revolution, the
performances of 10 Vietnamese manufacturing 5S’s, multi-process operations, labor cost
companies in terms of 13 factors proposed by reduction, visual control, quality assurance,
Hirano (2009). Managers of 6 large companies standard operations, maintenance and safety.
and 4 small and medium ones are invited to These companies have to effort much more in
participate in semi-structured interviews to assess flow production, Kanban, leveled production,
their own company’s Lean performances and change-over, and human automation. To survive
raise the ideas for their assessments. The in the context of today Vietnam economy, these
research results show that large companies companies should focus on long-term strategies
perform better than the small and medium ones in to take advantages of Lean philosophy for their
all 13 factors. As a whole, the studied companies future development.
apply Lean at acceptable levels for their
Keywords: Lean performance, manufacturing company, Vietnam.
INTRODUCTION
Lean systems are implemented to achieve long- efficiency (Smart et al., 2003). This kind of Lean
term strategic gains as the case of Toyota in the approach has raised questions about
automotive industry (Smart et al., 2003). Other sustainability within enterprises applying Lean to
examples, including such iconic names as: reduce costs while losing sight of their mission
Boeing, Daimler AG and Hershey, apply Lean to and integrity (Smart et al., 2003).
attain high performance as Toyota (Sonntag et Ransom (2007), chairman of American Lean
al., 2009). However, the existing paradox is that Horizons Consulting LLC., mentions that 95% of
Lean has been used in most companies not for its the Lean implementation efforts have failed,
advantage to attain strategic competitiveness, but while only 5% have been successful. Wooley
to gain short-term cost reductions. The Lean (2008), a strategic program manager of Intel
utilization of many organizations is often Corp, states that about 60% of Lean
unplanned rather than a systems approach transformation efforts fail. According to the Lean
(Chong et al., 2001). This misuse of Lean has Enterprise Institute (2008), these high rates of
caused the decrease in the overall organizational failure are the results of following top five
performance (Naslund, 2008) and made factors: (1) Backsliding, (2) Middle management
companies a thought of seeking short-term resistance, (3) Lack of implementation know-
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SCIENCE & TECHNOLOGY DEVELOPMENT, Vol 16, No.Q2- 2013
how, (4) Lack of crisis, (5) Employee resistance. useful advices for companies in Lean
In Vietnam, Lean has been applied to more and implementation to gain their competitive
more companies and it is not still a really new advantages in the context of today Vietnam
concept. However, as to an expert of Vietnam economy.
Lean Symposium, the first International LITERATURE REVIEW
Conference of Lean implementation in all
industries of Vietnam, around 75% Vietnamese Lean production and Lean culture
companies know and apply Lean for their Lean manufacturing is applied in firms to
operations; yet, only 2% of these companies identify wasteful practices, reduce costs, and
achieve the successes (FBNC Vietnam, 2013). increase quality. Lean is concluded to benefit
The causes of Vietnamese companies’ failures companies with shorter cycle time, shorter lead
in applying Lean are not mentioned officially in times, lower WIP, faster response time, lower
previous studies. Nguyen and Bui (2010) suggest cost, greater production flexibility, higher
that Vietnamese companies should focus on quality, better customer service, higher revenue,
creating a strong corporate Lean culture to be higher throughput; and increased profit (Womak
successful, in which they believe that the & Jones, 2005). It is believed that Lean is neither
commitments of top managers and the a method nor a tool, but it is a philosophy; thus,
participation of all employees are two factors the success of Lean implementation is strictly
making the success of Lean implementation for related to corporate culture. Bhasin (2013)
Vietnamese organizations. However, there is a reveals that a triumphant implementation of Lean
lack of study which assesses the Lean adoption as requires a systematic and controlled strategy to
well as Lean performance of Vietnamese look at the prevailing culture. Lean failures are
companies. It is believed that Vietnamese attributable to different causes in which the
companies really need practical advices for Lean fundamental issues of corporate culture and
adoption (Nguyen & Bui, 2010) through realistic change are ones of the most important issues. It is
experiences. Thus, this study is conducted with proposed that a Lean culture can be defined as
the cases of manufacturing companies in assimilating the following elements: ensuring
Vietnam to assess their Lean performances in decisions are made at the lowest level (Corbett,
multi criteria that cover all aspects of Lean 2011); a shared vision amongst all employees to
philosophy such as: awareness revolution, the be evident (Wan & Chen, 2008); evidence of a
5S’s, flow production, multi-process operations, participative leadership style with greater
labor cost reduction, Kanban, visual control, collaboration (Atkinson, 2010); the culture
level production, changeover, quality assurance, promoting the existence of a continuous pursuit
standard operations, human automation, for perfection (Hines et al., 2008); teamwork
maintenance and safety (Hirano, 2009). through total involvement and committed
Besides, Elbert (2013) and Harrison (1994) personnel (Eisenhardt & Martin, 2010);
believe that Lean manufacturing is more suitable appropriate communications about the overall
for small and medium than the large ones while goals and performance (Shook, 2010); the work
Janet and Will (2007) insist that greater business provides personal and professional satisfaction
scale and business scope enhance long-term for the employees (Ransom, 2008); collaboration
survival and profitability. For this reason, the between the highly skilled workers and
study also focuses on the differences in Lean management (Singh et al., 2010); the total
performances between the two groups of workforce sharing the gains (Vinodh & Balaji,
Vietnamese manufacturing companies: the large 2011); and existence of few or no boundaries
ones and the SME (small and medium between functions (Shook, 2010).
enterprises) to have a comparative conclusion of Relevant studies of Lean performance
their abilities in Lean implementation. The
Quantifying the benefits of Lean is not an easy
research results draw a picture of Lean adoption
task (Womack & Jones, 2005). Lean philosophy
levels at these manufacturing firms and give
focuses on total system efficiency (Standard &
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TAÏP CHÍ PHAÙT TRIEÅN KH&CN, TAÄP 16, SOÁ Q2- 2013
Davis, 2000). Therefore, the best criterion to only the overall effectiveness of using
assess a lean progress is total product cycle time equipment, but they ignore evaluating the
since long cycle times also cause high-production efficiency as well as overall performance. Wan
costs; in the converse, short cycle times also and Chen (2008) also appreciates the role of
result lower production costs. However, no single VSM when addressing this one together with
performance criterion can cover the lean assessment tools and lean metrics as the
organizational complexity. It is understandable to three pillars of lean measurement. Agus and
state that measuring lean performance of an Hajinoor (2012) believe that the adoption of lean
organization is a real challenge for both tools place a very important role in improving the
managers and researchers (Bhasin, 2008). lean performance. These authors utilize structural
Many companies use the balanced scorecard as equation modeling (SEM) to recognize the
a measurement for their lean performances relationship between lean tools and lean
(Kaplan & Norton, 2005). However, the the performance in production companies.
balanced scorecard has recently considered as Measurement of Lean performance in this study
inadequate in some circumstances (Bhasin,
One of the limitations of above measurements
2008). Therefore, the dynamic multi-dimensional
of Lean performance is that they do not cover all
performance (DMP) framework proposed by
aspects of Lean adoption in manufacturing
Maltz et al. (2003) is used as an appropriate
companies. Moreover, in comparison of
framework for lean performance. DMP is a
qualitative surveys, quantitative metrics provide a
dynamic and multi-dimensional framework
better lean score (Karim & Zaman, 2013). Thus,
which captures many aspects of an organization
in this study, the Lean measurements of Hirano
and represents multiple stakeholders. DMP is
(2009) are used with 13 factors. They are:
consisted of 12 potential “baseline measures”
awareness revolution, the 5S’s, flow production,
which are attributed to 5 dimensions: financial,
multi-process operations, labor cost reduction,
market, process, people, and future. Yet, Bhasin
kanban, visual control, level production,
(2008) states that not all the measures proposed
changeover, quality assurance, standard
in DMP framework may be appropriate at any
operations, human automation, maintenance and
time. Instead, each company should learn how to
safety. Awareness revolution measures the level
use the components of the framework in different
of customer orientation of employees in the
ways with different levels of importance. The
whole factory. The 5S assesses the level of 5S
suitable package of measures should be chosen
implementation in the firm. Flow production is
based on the firm’s size, technology, strategy,
the factor that helps the managers to know how
together with the natures of the relevant industry
far the firm is from the one-piece flow
and environment in which the firm runs. This
production. Multi-process operations measure
means that DMP is not a good choice for all
the ability of operators in handling all processes
companies to measure their lean performances,
in their working cells. Labor cost reduction
but they are required to base on the experiences
assesses the lean level in utilizing labor in terms
and abilities of the top managers to determine
of both quantity and quality. Kanban is the
which measures are appropriate for their
criterion that evaluates the useful level of Kanban
companies.
in the production systems. Visial control
In manufacturing companies, the lean
measures the ability of employees to recognize
performance is measured through VSM (Value
and respond to abnormalities. Leveled
stream mapping) by some researchers (Wan et
production focuses on the establishment of fully-
al., 2007; Wu & Wee, 2009). Wan et al. (2007)
leveled schedule for the production in the firm
use VSM to measure the overall lean
and the level of the cycle time to set the rhythm
performance in which cost, time and output
for entire the factory. Change-over presents the
values are considered but the effectiveness of
ability of change-over teams in improving
production compared to company objective is not
change-over cycle time. Quality assurance
concluded; whereas, Wu and Wee (2009) gauge
assesses the ability of the firm in using Lean
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SCIENCE & TECHNOLOGY DEVELOPMENT, Vol 16, No.Q2- 2013
tools to build quality standard in each process Varsity: Companies at this level are doing just
and detect defects at their source to prevent well enough to not be ashamed to host factory
occurrence. Standard operations measure the tours.
ability of the firm to define standard operations Minor league pro: At this level, companies are
well, and follow as well as improve these doing well enough to take pride in being able to
operations. Human automation assesses the teach other companies a thing or two.
separation between workers and machines and Major league pro: These top-ranking
the ability of employees to stop the machines companies truly have what it takes to survive into
which release defective goods. Finally, the 21st century.
maintenance and safety measure the ability of RESEARCH METHODOLOGY
the firm in company-wide maintenance as well as
focus on the machine breakdowns and accidents In this study the enterprises are chosen based
occurred in the company. on the convenient sampling with 6 large
These 13 factors are considered to cover all the companies and 4 small and medium ones to
principles of Lean implementation in a assess and compare the Lean performances of
production firm. These factors are quantified these two kinds of companies. According to
through 5 levels of lean adoption: little league Vietnamese Government (2009), enterprises
(level 1), junior varsity (level 2), varsity (level 3), which have the average labor amount of less than
minor league pro (level 4), and major league pro 300 are considered as small and medium ones
(level 5). The Hirano’s measures and levels are while enterprises which have more than 300
shown in the figure 1. employees are classified as large ones. These
companies, both large and SME companies, run
their businesses in different industries such as
daily products, cigarette, petroleum, electricity,
mechanics, and plastic. These ten companies
have already applied Lean for over than 1 year
and used multiple Lean tools such as 5S, Kanban,
Jidoka, Poka-yoke, leveled production, visual
controls, and so on for their operations. Large
companies in Vietnam have more sufficient
resources such as finance and human to approach
the Lean philosophy and apply it for their
production sooner than the small and medium
ones. Thus, it is believed that the number of large
Figure 1: Lean Production Radar Chart
Vietnamese companies applying Lean is greater
(Source: Hirano, 2009)
than the small and medium ones. For this reason,
As shown in the figure 1, a manufacturing in this study, the quantity of large ones chosen is
company can be classified into 5 levels of Lean 6 being greater than the number of small and
performance in accordance with 13 mentioned medium ones with 4.Ten managers including
factors. This company can get high scores for production managers, lines managers, and
some factors and low scores for the others. The general managers of the ten companies are
results of its performance depend on the chosen as respondents for this study. The
company’s efforts for each factor. In general, managers chosen in this study are ones who
Hirano (2009) distinguishes these 5 levels as the directly manage or control the Lean action plans
following: so that they have sufficient experiences and
Little league: This level is typical of abilities to assess the Lean performances of the
struggling, money-losing company whose firms. The information about these managers is
survival is in doubt presented in the Table 1.
Junior varsity: Companies at this level are
managing to survive, for the time being at least
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TAÏP CHÍ PHAÙT TRIEÅN KH&CN, TAÄP 16, SOÁ Q2- 2013
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SCIENCE & TECHNOLOGY DEVELOPMENT, Vol 16, No.Q2- 2013
Large companies also attain very good manufacturing director of company B, claims
performances in Lean application in terms of: that Lean philosophy is practically useful for the
Labor cost reduction (4.3), Quality assurance firm to reduce the costs related to labor and
(4.0), and Standard operations (4.3). These large production. The company already employed
companies achieve the level 4 (minor league pro) Jidoka and poka-yoke to build quality standards
for the three factors. This means that these large at each process and prevent the occurrence of
companies utilize Lean to reduce the labor cost of potential defects. Mr. B., the factory manager of
the processes in which job duties are adaptable to company E, states that “our company is quite big;
changes in required outputs. Besides, these thus, we would like to focus on the continuous
companies reach the status that defects are improvement of operations for sustainable
detected before being passed to the next process development, and Lean theories help us a lot in
by operators who perform independent operational standardization and improvement”.
inspections and improvements. Moreover, these Among the large enterprises, company F is not
large companies also benefit from Lean for the successful in Lean implementation for labor cost
fact that systematic production standards are reduction as well as quality assurance. The same
followed at each process. Mr. T, the results as company F are the cases of the small
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TAÏP CHÍ PHAÙT TRIEÅN KH&CN, TAÄP 16, SOÁ Q2- 2013
and medium companies when they just get the system. The employees in these companies may
scores for labor cost reduction and quality not know how to do the jobs of other processes.
assurance as 2.8 (between level 2: junior varsity Besides, push production still prevails in these
and level 3: varsity) and 1.8 (between level 1: companies, but things are generally organized
little league and level 2: junior league) into specified temporary storage areas. Visual
respectively. That means, in these companies, the control is not well deployed in these companies
balance between job duties and number of since no one can tell when an abnormality
employees is basically poor and lots of defective occurs, although, they are eventually discovered
products are delivered and cause a lot of and corrected. Mr. P, the production manager of
customer complaints. Mr. P, the production company J, also blames that “I do not think that
manager of company J, blames that “We applied the idea of one-piece flow is practically feasible
Lean two years ago. We know that we need to in our company. Besides, we encourage the
make our staff lean for both quality and quantity, employees to specialize their jobs so that multi-
but now we still do not have a good policy for process operations are not necessary here. We
labor utilization. Overstaffing occurs usually”. already employed some visual controls but there
In terms of Flow production, Multi-process are many things to do with a Kanban system.
operations, Kanban, and Visual control, the Similarly, we know we also have many things to
large companies get the acceptable scores for the do with Lean”.
four factors with 3.2, 3.5, 3.2, and 3.5 Both kinds of companies have low scores for
respectively. These companies are categorized in the three factors: Leveled production,
the range between level 3 (Varsity) and level 4 Changeover, and Human automation. The
(Minor league pro) for these factors. These large scores of these three factors for the large
firms have arranged the equipment for in-line companies are 2.5, 2.7, and 2.8 respectively
layout, but production flow is limited to the while these cores for the small and medium firms
single-process and small-lot method. The are 2.3, 2.4, and 2.4. With these cores, the
companies also use Kanban and other Visual companies belong to the range between level 2
control to manage the number of Work-In- (junior varsity) and level 3 (varsity) for these
Process items as well as control the abnormalities three factors. This shows that in the companies,
in manufacturing processes. However, the each product model has only some runs per
implementation of these tools is just in an month, and each process moves at its own pitch.
acceptable level. Mr. S, the lines manager of Besides, people in the companies are conscious
company C, responds that “We know about one- of the need to orient change-overs toward serving
piece flow, Kanban as well as Visual control in customer needs. However, they do not have a
Lean. Yet, we cannot reach the one-piece flow plan for change-over improvement as well as
now; it is far away for our company to attain this reduce the change-over time. In these companies,
criterion. We are applying Kanban and other it is seen that operations are done by machines
visual control such as different uniforms for but always with human assistance. Mr. N, the
different kinds of employees, dangerous caution, manager of company H, answers that the firm
and so on. We are on the way to switch push does not have a good schedule of leveled
production to pull production”. For these four production and it needs more efforts for leveled
factors, small and medium companies have even production to reduce wastes related to non-added
lower scores than large ones with flow value time. The company also takes some
production (1.5), multi-process operations (2.5), change-overs to meet the customer requirements;
Kanban (2.3), and Visual control (2.5). With yet, no one in the firm thinks of ways for change-
these cores, these companies can be classified over improvements. Mr. N also states that the
into the level 2 (junior varsity) for these factors. company really needs more automation of
This means that the equipment layout in these machines and delivers more rights for the
firms is still in the job-shop style, and the workers to stop the machines at any time when
production relies heavily on the conveyance defective products are seen.
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SCIENCE & TECHNOLOGY DEVELOPMENT, Vol 16, No.Q2- 2013
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TAÏP CHÍ PHAÙT TRIEÅN KH&CN, TAÄP 16, SOÁ Q2- 2013
chart proposed by Hirano (2009). That means abilities in Lean adoption. This is considered as
they have to gain much more efforts to survive one of the most practical way for them to
into 21st century and need more directions to strengthen their competitive advantages in long
have good Lean action plans, especially small term. However, the greatest limitation of this
and medium enterprises (SME). According to a study is that just ten companies are examined and
forecast of Vietnam Ministry of Planning and the study results may not be suitable to generalize
Investment (2013), SMEs will attribute to 40% of for all Vietnamese manufacturing companies
total Vietnam GDP in the following year; which have been applied Lean philosophy.
however, these enterprises have a lot of limits in Therefore, it is suggested that the further
resources for their future development. For this researches should focus on this topic with higher
reason, this study suggests that Vietnam number of companies. The further researches can
government should release special supportive also be conducted to assess Lean performances in
policies for SMEs to help them enhance their other sections such as service or banking.
TÓM TT:
Nghiên cứu này ñược thực hiện nhằm ñánh chấp nhận ñược cho các tiêu chí: cải tiến về nhận
giá thành quả thực hiện Lean của 10 công ty sản thức, thực hiện 5S, vận hành ña quá trình, giảm
xuất Việt Nam, với 13 tiêu chí ñược ñề xuất bởi chi phí lao ñộng, kiểm soát trực quan, ñảm bảo
Hirano (2009). Các nhà quản lý thuộc 6 doanh chất lượng, vận hành chuẩn, bảo trì và an toàn.
nghiệp lớn và 4 doanh nghiệp vừa và nhỏ ñược Các công ty này phải nỗ lực nhiều hơn cho các
mời ñể tham gia vào các buổi phỏng vấn bán cấu tiêu chí: dòng sản xuất, Kanban, sản xuất theo kế
trúc nhằm ñánh giá thành quả Lean của chính hoạch, chuyển ñổi, con người và tự ñộng hóa. ðể
công ty họ và ñưa ra ý kiến về việc ñánh giá này. tồn tại trong bối cảnh nền kinh tế Việt Nam hiện
Kết quả nghiên cứu cho thấy các công ty lớn có nay, các công ty này nên tập trung vào các chiến
kết quả ñạt ñược tốt hơn các công ty vừa và nhỏ lược lâu dài nhằm phát huy các thế mạnh của
trên tất cả 13 yếu tố. Một cách tổng thể, các công Lean cho việc phát triển của họ.
ty trong nghiên cứu này ñạt ñược kết quả có thể
T khóa: Thành quả Lean, công ty sản xuất, Việt Nam.
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TAÏP CHÍ PHAÙT TRIEÅN KH&CN, TAÄP 16, SOÁ Q2- 2013
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