Dr. Anna Farberova’s research on Lean Manufacturing Principles took a different approach. Rather than blindly looking at technical considerations, the researcher assessed how these processes can be culturally integrated across the implementing organization. Dr Farberova explored the influence of employee values and beliefs, as embodied within the organizational culture of the North American commuter rail industry, on the effectiveness of implementing lean manufacturing processes.
The research findings are presented specifically for the railroad manufacturing organizations to enhance their transformation journey from the existing traditional business model to a more flexible business approach based on lean manufacturing principles that allow for better and faster decisions, a more efficient use of labor and resources, and more effective production runs. Based on the research data collected from employees in the industry, this qualitative study illustrated that cultural changes are inevitable with the introduction of new lean manufacturing processes into the workplace.
A combination of Old traditional business patterns and New technological-based lean manufacturing concepts initially result in chaos and ineffective production processes. The resulting internal conflicts make it difficult to embrace the change to a lean manufacturing posture. The study recommends steps that executive leaders can take to create real and sustainable value for their customers, their employees, and their sponsors when implementing a lean manufacturing approach. This sustainability acts as a catalyst for organizational change and over time, has a long-lasting, positive effect on an organization’s economics and financial performance.
Dr. Anna Farberova
Lean Manufacturing Principles and Opportunities
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Outside Japan, Porsche provides a noteworthy illustration of the adoption of lean manufacturing principles. Initially facing a sales decline from its peak of 50,000 cars in 1986 to 14,000 units in 1992, Porsche attributed this downturn to its traditional German approach, emphasizing engineering prowess and maintaining a complex and rigid management structure. The severity of the situation became evident with a $40 million loss in 1991, prompting the appointment of Wendelin Wiedeking, previously a leader in automotive parts manufacturing, as a change agent to steer Porsche towards lean manufacturing.
Wiedeking undertook extensive learning from Japanese manufacturers who had successfully captured the mid-price segment of the European market. Making four trips to Japan within two years, he engaged with specialists and immersed himself in the operational principles of leading automotive firms. Porsche subsequently partnered with the Japanese Kaizen Institute, renowned for its global expertise in lean manufacturing. Diagnostic studies revealed that significant losses stemmed from inflexible design and production systems, engineering conservatism, and weak integration across value stream stages. Surprisingly, a substantial proportion of product defects, rectified by service centers post-production, also contributed to Porsche’s crisis—a revelation counter to the brand’s German engineering legacy.
Challenged by entrenched organizational resistance to change, Wiedeking orchestrated intensive training in Japan for Porsche’s management, engineering, and production staff, supplemented by the guidance of Kaizen experts in Germany. His strategic initiatives included streamlining management levels from six to four, reorganizing production specialists into smaller teams under unified leadership, and implementing a visual quality control “board of shame” to highlight defects for prompt rectification at minimal cost stages. Moreover, he instituted a proposal system empowering employees to suggest and implement improvements in quality and productivity, a departure from the previously hostile reception of such initiatives.
In addition to these internal reforms, Porsche aligned its practices with Kaizen’s recommendations to reduce inventory and facilitate seamless part flow from raw materials processing to final assembly. Extending lean principles to its suppliers, Porsche catalyzed significant operational transformations in 30 out of 60 supplier plants within two years, emphasizing just-in-time delivery principles. Subsequently, from 1991 to 1997, Porsche achieved notable improvements:
- Concept to serial production time reduced from 7 to 3 years
- Welding start to car release time shortened from 6 weeks to 3 days
- Inventory levels decreased by a factor of 6
- Defects in supplied parts reduced by a factor of 100, and on the production line by 4 times
- Labor costs for manufacturing decreased by 3 times
These efforts restored Porsche’s profitability, preserved its independence, and reinforced its position in the luxury sports car market. The case underscores the transformative impact of lean manufacturing principles when adapted and implemented outside of their Japanese origins, illustrating their efficacy in enhancing operational efficiency, quality, and competitive advantage in global markets.
For more information, please visit: Industrial eras of production – Porsche Newsroom