Model of risk interactions hindering lean production implementation

Marodin, Giuliano Almeida; Saurin, Tarcisio Abreu; Tortorella, Guilherme Luz; Fettermann, Diego de Castro

doi:10.1590/0104-530X1214-18

Giuliano Almeida Marodin

Moore School of Business, University of South Carolina, 1014 Greene Street, 405L, 29208, Columbia, South Carolina, United States, e-mail: gmarodin@moore.sc.edu

Tarcisio Abreu Saurin

Programa de Pós-graduação em Engenharia de Produção e Transportes – PPGEP, Universidade Federal do Rio Grande do Sul – UFRGS, Av. Osvaldo Aranha, 99, 5° andar, CEP 90035-190, Porto Alegre, RS, Brasil, e-mail: saurin@ufrgs.br

Guilherme Luz Tortorella

Programa de Pós-graduação em Engenharia de Produção – PPGEP, Universidade Federal de Santa Catarina – UFSC, R. Eng. Agronômico Andrei Cristian Ferreira, s/n, Trindade, CEP 88040-900, Florianópolis, SC, Brasil, e-mail: gtortorella@bol.com.br; dcfettermann@gmail.com

Diego de Castro Fettermann

Programa de Pós-graduação em Engenharia de Produção – PPGEP, Universidade Federal de Santa Catarina – UFSC, R. Eng. Agronômico Andrei Cristian Ferreira, s/n, Trindade, CEP 88040-900, Florianópolis, SC, Brasil, e-mail: gtortorella@bol.com.br; dcfettermann@gmail.com

R1 - Demotivation of those involved after the first changes
Evidence: people's lack of interest in participating in activities related to the process after a few months or years

R2 - Lack of knowledge of the support areas (engineering, maintenance, and areas dedicated to LP) to guide the progress of LPI
Evidence: application of isolated LP practices without integration or vision of the systemic impacts of the implementation of each practice. Insecurity and fear of support areas in guiding and applying LP practices. Difficulty in identifying what practices are needed and how they should be implemented.

R3 - Lack of human or financial resources allocated to the process
Evidence: not enough time for people to do LP training and application activities. No allocation of enough financial resources to train employees in LP.

R4 - Lack of communication clarity for all employees about deployment, start, and progress
Evidence: no official dissemination of results achieved, activities carried out, participants in the process, or objectives

R5 - Difficulty proving the financial return of the actions performed
Evidence: adherence to traditional indicators that do not indicate results, such as customer service, excess inventory, or liberated area, among others. Prioritization of actions to impact short-term indicators, without valuing qualitative improvements or greater results in the medium and long term.

R6 - Lack of support from middle management
Evidence: Middle management does not control deadlines and results of the process, does not provide the time to clarify doubts and solve deployment problems, or has no commitment to the application of LP practices and their benefits.

R7 - Lack of support from upper management
Evidence: Upper management does not control and assist in the process, does not link actions to goals and objectives of the business, or prioritizes other actions to the detriment of those involving LPI.

R8 - The operational level does not support the implementation
Evidence: no interest from operators or supervisors in applying or using LP practices. Operators’ and supervisors’ fears of losing their jobs due to LPI leading to use of fewer resources (operators, inventory, or machines).

R9 - Operators’ insecurity in carrying out new tasks
Evidence: lack of support from supervisors and support areas in improvements, teamwork, standardization, use of production monitoring frameworks, calls from the aid chain, and production stoppages. Supervisors do not respect ideas and suggestions for improvements from operators and do not empower operators for these new assignments.

R10 - Dismissal of operators due to the excess of manpower generated by the improvements implemented
Evidence: After performing improvement activities (or kaizens) in the factory, operators who are no longer needed due to productivity gains achieved are dismissed. Operators are dismissed according to demand fluctuations.

R11 - Operators do not feel responsible for using LP practices and solving problems
Evidence: Operators are not involved in making improvements in the factory and in LPI practices. Lack of participation of operators in the deployment process.

R12 - Managers and directors do not have enough knowledge about LP
Evidence: Upper and middle management difficulty in setting goals for implementation, monitoring, and ensuring the use of LP principles and practices. Upper and middle management do not guide LPI.

R13 – Mid- and long-term improvements are not sustained
Evidence: Improvements made in applying practices or solving problems end up returning to the original state after a few months. There is no follow-up through audits, nor any standardization of improvements.

R14 - Difficulties in managing the deployment process
Evidence: Those responsible for the process do not collect deadlines or follow up on the planned activities. Lack of audits in the progress of the process. Lack of commitment to deadlines and objectives of the process.

External environment subsystem
- Located in a highly industrialized region - Plenty of unskilled labor and a shortage of skilled labor - Provides for approximately 100 distributors in various regions of the United States - Low sales concentration (sales sum for the 10 largest customers below 7% of the total) - Maintains few finished items in stock (only 5% of the total volume, with the remaining made on demand)
Technical subsystem
- Produces hydraulic valves. Each product has some 20 to 30 components, including metal and plastic parts, seals, and elastomers - Production operation involves machining, drilling, brazing, grinding, finishing, CNC, assembling, and testing, in addition to some external thermal treatment processes. - Physical arrangement by process means that there are a large variety of production sequences, which adds complexity to the operations management and generates waste. - Quality requirements are very strict for the products of this plant, since they are used in high-risk industries (e.g., oil and aerospace), in which small errors and defects can cause catastrophic outcomes. - Equipment maintenance is not simple, because some machines are old (e.g., automatic drills) and it is not easy to obtain spare parts and the necessary technical knowledge. - Equipment efficiency is low, around 65%. Shutdowns occur mainly during corrective maintenance and setup (it takes up to four hours in milling machinery).
Social subsystem
- Two hundred employees aged between 45 and 50 years, with a long experience in the company (25 to 30 years), since they started working when the plant started up - Predominance of men, mainly in the machining processes - About half of the operators had completed high school, and the other half had only completed primary school. - The plant operators were unionized until the early 1990s, and since then have been nonunionized. - Due to machine complexity, machining equipment operators require extensive training compared to those on the assembly line.
Work organization subsystem
- Production manager has three value flow managers below him, each responsible for specific product families. Value flow managers are responsible for all the processes through which some product families pass. Operators, manufacturing engineers, and buyers/planners of materials are subordinate to value flow managers. Manufacturing engineers and buyers/planners also play an additional role, called coaching. These employees, in addition to the assignments associated with their core functions (e.g., purchasing materials), have the role of managing the day-to-day problems of a group of operators, such as vacation scheduling, employee absences, and production programming rearrangements. - The main performance indicators are quality, cost, on-time delivery, security, and stock, all visually displayed in the plant. - There is a performance annual bonus through individual evaluations and with different criteria for operators versus other employees. Operators can receive a bonus of 9% over annual base salary, and other employees can receive 18% over annual base salary. - Most of the tasks performed by operators have standardized procedures, but not all of them. - The plant maintains an ISO 9001-based certification, and no formal employee-driven improvement program. However, some operators participate in weekly meetings with the value flow manager to monitor indicators and improvement actions.

Sources of evicence	Duration	Examples of data collected
Interview - lean plant manager	5 hours	Beginning of the LPI (the year when training sessions started, personnel involved, and motivations), current status of LPI (personnel involved, practices implemented, training, responsibilities, and next steps)
Interviews - sales and logistics supervisors	30 minutes each	Markets and suppliers (number, size and distance of major customers and suppliers, types of products manufactured, and materials purchased)
Interview - product engineer	30 minutes	Complexity of product models (average number of components, type of materials, and number of modifications per year)
Company website and reports	-	Markets, products, company and plant history
Interviews – LPM, production manager, two value flow managers, LP specialist, manufacturing engineer, and operator	30 minutes to 1 hour each	LPI history, risk analysis, and description.
Observation - Participation in two weekly meetings with members of one of the value flows	1 hour	The way the factory reported production problems, progress of improvement actions, and LPI management feedback on LPI
Observation – plant visit	4 hours	LP practices in use, the way they were being used, and the main waste (idleness and transportation)
Documents - training materials	-	Training methods and material
Documents - all reports and presentations of kaizen events made in the plant from 2001 to 2012	-	Improvements made, people involved in kaizens, number of kaizens conducted, results achieved

	R1	R2	R3	R4	R5	R6/7	R8	R9	R10	R11	R12	R13	R14
R1 - Demotivation of those involved after the first changes	1	0	0	0	0	0	0	0	0	0	0	1	1
R2 - Lack of knowledge of the support areas (engineering, maintenance, and areas dedicated to LP) to guide the progress of LPI	0	1	1	0	0	0	0	0	0	0	0	0	1
R3 - Lack of human or financial resources allocated to the process	0	0	1	0	0	0	0	0	0	0	0	1	1
R4 - Lack of communication clarity for all employees about deployment start and progress	0	0	0	1	0	0	1	0	0	0	0	0	0
R5 - Difficulty proving the financial return of the actions performed	1	0	0	0	1	0	0	0	0	0	0	0	0
R6/7 - Lack of support from upper and middle management	0	0	1	0	0	1	0	1	0	0	0	1	1
R8 - The operational level does not support deployment	0	0	0	0	0	0	1	0	0	0	0	1	1
R9 - Insecurity of operators in carrying out new tasks	0	0	0	0	0	0	1	1	0	0	0	0	0
R10 - The dismissal of operators due to the manpower excess generated by the improvements made	0	0	0	0	0	0	1	0	1	1	0	0	0
R11 - Operators do not feel responsible for using LP practices and solving problems	0	0	1	0	0	0	1	0	0	1	0	1	0
R12 - Managers and directors do not have enough knowledge about LP	0	1	0	0	0	0	1	1	0	0	1	0	1
R13 - Medium- and long-term improvements are not sustained	0	0	0	0	0	0	0	0	0	0	0	1	0
R14 - Difficulties in managing the deployment process	0	0	0	0	0	0	0	0	0	0	0	0	1

Risks to LPI	Reachability set	Antecedent set	Levels
R1- Demotivation of those involved after the first changes	R5	R13, R14	Level II
R2 - Lack of knowledge of the support areas (engineering, maintenance, and areas dedicated to LP) to guide the progress of LPI	R12	R3, R14	Level III
R3 - Lack of human or financial resources allocated to the process	R2, R6/7, R11	R13, R14	Level II
R4 - Lack of communication clarity for all employees about deployment start and progress		R8	Level III
R5 - Difficulty proving the financial return of the actions performed		R1	Level III
R6 /7 - Lack of support from upper and middle management		R3, R9, R13, R14	Level IV
R8 - The operational level does not support deployment	R4, R9, R10, R11, R12	R13, R14	Level II
R9 - Insecurity of operators in carrying out new tasks	R6/7, R12	R8	Level III
R10 - The dismissal of operators due to the manpower excess generated by the improvements made		R8, R11	Level IV
R11 - Operators do not feel responsible for using LP practices and solving problems	R10	R3, R8, R13	Level III
R12 - Managers and directors do not have enough knowledge about LP		R2, R8, R9, R14	Level IV
R13 – Medium- and long-term improvements are not sustained	R1, R3, R6/7, R8, R11		Level I
R14 - Difficulties in managing the deployment process	R1, R2, R3, R6/7, R8, R12		Level I

Suggested actions / Risks impacted	R3	R11	R9	R13	R8	R14	R2	R1	R4	R12
(a) Teamwork	X	X		X	X
(b) Training		X	X	X			X			X
(c) Definition of responsibilities		X	X	X		X
(d) Involvement of factory employees	X	X		X	X	X		X	X

[1] Source: based on Marodin & Saurin (2014) Marodin, G. A., & Saurin, T. A. (2013). Implementing lean production systems: research areas and opportunities for future studies. International Journal of Production Research, 51(22), 6663-6680. http://dx.doi.org/10.1080/00207543.2013.826831.
http://dx.doi.org/10.1080/00207543.2013... . LPI – Lean Production Implementation; LP – Lean Production.

Brasil

Brasil

Model of risk interactions hindering lean production implementation

Abstract