Anda di halaman 1dari 19

This article was downloaded by: [University of Arizona]

On: 23 November 2012, At: 01:41


Publisher: Taylor & Francis
Informa Ltd Registered in England and Wales Registered Number: 1072954 Registered
office: Mortimer House, 37-41 Mortimer Street, London W1T 3JH, UK

International Journal of Production


Research
Publication details, including instructions for authors and
subscription information:
http://www.tandfonline.com/loi/tprs20

A leanness measure of manufacturing


systems for quantifying impacts of lean
initiatives
a a
Hung-da Wan & F. Frank Chen
a
Centre for Advanced Manufacturing and Lean Systems and
Department of Mechanical Engineering, University of Texas at San
Antonio, San Antonio, Texas 78249
Version of record first published: 17 Oct 2008.

To cite this article: Hung-da Wan & F. Frank Chen (2008): A leanness measure of manufacturing
systems for quantifying impacts of lean initiatives, International Journal of Production Research,
46:23, 6567-6584

To link to this article: http://dx.doi.org/10.1080/00207540802230058

PLEASE SCROLL DOWN FOR ARTICLE

Full terms and conditions of use: http://www.tandfonline.com/page/terms-and-


conditions

This article may be used for research, teaching, and private study purposes. Any
substantial or systematic reproduction, redistribution, reselling, loan, sub-licensing,
systematic supply, or distribution in any form to anyone is expressly forbidden.
The publisher does not give any warranty express or implied or make any representation
that the contents will be complete or accurate or up to date. The accuracy of any
instructions, formulae, and drug doses should be independently verified with primary
sources. The publisher shall not be liable for any loss, actions, claims, proceedings,
demand, or costs or damages whatsoever or howsoever caused arising directly or
indirectly in connection with or arising out of the use of this material.
International Journal of Production Research,
Vol. 46, No. 23, 1 December 2008, 65676584

A leanness measure of manufacturing systems


for quantifying impacts of lean initiatives

HUNG-DA WAN* and F. FRANK CHEN

Centre for Advanced Manufacturing and Lean Systems and Department of Mechanical
Engineering, University of Texas at San Antonio, San Antonio, Texas 78249

(Revision received May 2008)


Downloaded by [University of Arizona] at 01:41 23 November 2012

Various lean tools and techniques have been developed for process improvement.
In order to track the progress, lean metrics were developed correspondingly.
However, an integrated and quantitative measure of overall leanness level has not
been established. This paper proposes a unit-invariant leanness measure with a
self-contained benchmark to quantify the leanness level of manufacturing
systems. Evolved from the concept of data envelopment analysis (DEA), the
leanness measure extracts the value-adding investments from a production
process to determine the leanness frontier as a benchmark. A linear program
based on slacks-based measure (SBM) derives the leanness score that indicates
how lean the system is and how much waste exists. Using the score, impacts of
various lean initiatives can be quantified as decision support information
complementing the existing lean metrics.

Keywords: Leanness measure; Data envelopment analysis; Slacks-based measure;


Lean manufacturing

1. Introduction

The waste-elimination concept of lean manufacturing has brought significant


impacts on various industries. Numerous tools and techniques have been developed
to tackle specific problems in order to eliminate non-value-added activities and
become lean. Compared with the efforts made to address how to become leaner, the
statement how lean the system is received less attention. Several lean metrics have
been developed for evaluating the performance and tracking the improvements of
lean systems. However, an individual metric focusing on a specific performance
aspect cannot represent the overall leanness level. On the other hand, lean
practitioners often use self-assessment tools to depict the current status of their
system. However, surveys have the nature of subjectivity, and the predefined lean
indicators of a questionnaire may not fit every system perfectly. An objective,
quantitative, and integrated measure of overall leanness has not been established for
lean practitioners to measure how lean a system is.
In this paper, a methodology is proposed to quantify the leanness level of
manufacturing systems based on the data envelopment analysis (DEA) technique.

*Corresponding author. Email: hungda.wan@utsa.edu

International Journal of Production Research


ISSN 00207543 print/ISSN 1366588X online 2008 Taylor & Francis
http://www.tandf.co.uk/journals
DOI: 10.1080/00207540802230058
6568 H.-D. Wan and F. F. Chen

Cost and time of production processes and the product value are the three variables
composing the decision making units (DMU) of the DEA model. Through a cost-
time-value analysis, the value-added portions of input variables are extracted to form
the ideal DMUs, which determine the leanness frontier as the benchmark for
leanness scores of actual DMUs. A fractional program is proposed to calculate the
leanness scores based on the slacks-based measure (SBM) model developed by Tone
(2001). An equivalent linear program and a weighted DEA-Leanness measure have
been derived from the fractional program. A computer-based solver has been
developed in this research to solve the proposed mathematical models.
The proposed DEA-leanness measure provides a unit-invariant score with a value
between 0 and 1, which is easily comprehensible. The self-contained benchmark
motivates the continuous improvement efforts in addition to the pressure of external
competition. The DEA-leanness measure is applicable to various scopes of a value
Downloaded by [University of Arizona] at 01:41 23 November 2012

stream, such as a cell, a production line, or the whole factory. Using the leanness
measure, the impacts of different lean initiatives can be quantified to provide the
supporting information for decision making. Furthermore, the weighted DEA-
leanness measure provides a performance indicator that aligns with the companys
strategic focus. A manufacturing system with different emphases, such as cost-
oriented or agility-oriented strategies, results in different leanness scores.
The next section reviews the previous research related to leanness measures of
manufacturing systems. Section 3 presents the DEA-leanness measure, including the
input and output variables, mathematical programs, and numerical examples.
Applications of the leanness measure are introduced in Section 4, followed by the
weighted DEA-leanness measure in Section 5. Finally, the contributions, limitations,
and future extensions of this research are concluded in the last section.

2. Literature review: leanness measures of manufacturing systems

The concept of producing products in a lean manner was first introduced by a


research group at MIT after studying the Japanese style of manufacturing, mainly
Toyota Production Systems (TPS), in the 1980s (Womack et al. 1990). The TPS was
first introduced in English to the academia by Sugimori et al. (1977). With the unique
culture of continuous improvement (Ohno 1988), Toyota put together numerous
tools and methodologies to eliminate wastes and enhance leanness of manufacturing
systems (Monden 1998). Although reportedly effective at Toyota, a large portion of
the TPS tools are problem-specific and difficult to follow precisely by practitioners.
Womack and Jones (1996) present the Lean Thinking in a systematic way and
summarize five critical elements of lean implementation, i.e. value, value stream,
flow, pull, and the pursuit of perfection. Using the lean thinking, the value stream
mapping (VSM) technique introduced by Rother and Shook (1998) provided a
practical guiding tool for lean implementation. With simplicity and effectiveness,
VSM becomes an essential activity for most lean practitioners. Beside the lean tools,
several performance metrics were developed to evaluate the improvements in lean
implementation. However, the need to evaluate the overall leanness has not been
fully addressed. An integrated leanness measure has not been established.
To begin with, the term leanness was interpreted diversely in the literature.
Naylor et al. (1999) use leanness to describe the process of realizing lean principles
A leanness measure of manufacturing systems 6569

while introducing the concept of leagility. This definition has been cited by many
following publications on leagility, including Mason-Jones et al. (2000). Comm and
Mathaisel (2000) describe leanness as a relative measure for whether a company is
lean or not. They also stated that leanness is a philosophy intended to significantly
reduce cost and cycle time throughout the entire value chain while continuing to
improve product performance. McIvor (2001) uses total leanness to imply a
perfectly lean state with several key dimensions of lean supply. Soriano-Meier and
Forrester (2002) evaluate the degree of leanness of manufacturing firms using nine
variables suggested by Karlsson and Ahlstrom (1996). Radnor and Boaden (2004)
summarize several interpretations of leanness, including an ideal state of lean,
a context-dependent process, an ideal to be pursued, a condition of being lean,
a particular state of the relationships between the facets of a system, and a journey to
the ideal. Although leanness has been used in a diverse manner, more and more
Downloaded by [University of Arizona] at 01:41 23 November 2012

practitioners aim for enhancing the leanness level of their system. In this paper,
leanness level refers to the performance level of a value stream compared with
perfection. Therefore, a leanness measure shows how lean the system is.
Most of the existing lean tools (e.g. Kanban system, quick changeover, etc.) focus
on how to become leaner instead of how lean it is. Only a few of them address the
latter. The value stream mapping techniques, lean assessment tools, and lean metrics
are three main categories that concern the level of leanness. The tools for value
stream mapping were developed based on the Lean Thinking, with its emphasis on
streamlining continuous value streams (Womack and Jones 1994, 1996). Hines and
Rich (1997) introduced a set of value stream mapping tools in 1995 for identifying
waste and appropriate routes to improvement. Seven tools and a five-stage approach
were proposed followed by some modifications after the methodology was applied
intensively within the lean processing programme (LEAP) in the UK (Hines et al.
1998, Brunt et al. 2001). However, the toolset has not drawn major attention due to
the complexity of the approach. On the other hand, the value stream mapping
technique developed by Rother and Shook (1998) becomes one of the most
commonly used lean tools. Current state and future state maps visually display the
flow of value streams together with time-based performance pressing a sense of
urgency and indicating improvement opportunities. The two sets of value stream
mapping tools both address the current leanness level of the mapped system.
However, an integrated measure of overall leanness is not in place. In contrast, the
lean assessment tools are more pertinent in terms of measuring leanness level.
Various lean assessment surveys, such as Feld (2000), Connor (2001), and Jordan
et al. (2001), have been proposed to guide users through the lean implementation.
For typical lean assessment tools, questionnaires are developed to survey the degree
of adoption of lean principles. The resulting scores represent the gaps between the
current state of the system and the ideal conditions of several lean indicators
predefined in the survey. Karlsson and Ahlstrom (1996) develop a model to assess
the changes of a system towards lean production using nine groups of measurable
determinants. Soriano-Meier and Forrester (2002) extend the model to assess the
degree of leanness of manufacturing firms, which is represented by the degree of
adoption of nine variables of leanness. Sanchez and Perez (2001) develop a check-list
of 36 lean indicators in six groups to assess the changes towards lean. Pavnaskar
et al. (2003) organize 101 lean tools and metrics to match manufacturing wastes with
appropriate tools; however this matrix provides only the problem-tool connection
6570 H.-D. Wan and F. F. Chen

without a measure of leanness. The lean enterprise self-assessment tool (LESAT)


developed by the lean aerospace initiative (LAI) at MIT is among the most popular.
Based on a maturity model, the LESAT assesses the leanness of an enterprise with
surveys to determine the degree to which their goals are being achieved (Nightingale
and Mize 2002).
Although the lean indicators of assessment tools are designed to cover critical
lean principles, a fixed set of indicators cannot fit every system. The resulting scores
may not represent the leanness level appropriately. A dynamic assessment approach
proposed by Wan and Chen (2006b) applies different templates of lean indicators
adaptively. However, realizing this approach requires a large amount of templates
for systems in various environments. Srinivasaraghavan and Allada (2006) propose
an alternative that evaluates the mahalanobis distance between the current state of
Downloaded by [University of Arizona] at 01:41 23 November 2012

the system and the benchmarking performance. The model delivers a quantitative
measure of leanness, but exemplar performance benchmark needs to be gathered
from peers and competitors. The outcome depends heavily on the quality of the
benchmark. Overall, the existing assessment approaches share a common weakness
that the surveys are inevitably subjective due to individual judgments.
Beside the assessment approaches, the quantitative lean metrics also concern the
leanness level. Lean metrics are the performance measures for tracking the
effectiveness of improvement efforts. Allen et al. (2001) categorize the metrics into
productivity, quality, cost, and safety. Detty and Yingling (2000) utilize simulation
models with several performance metrics to quantify potential benefits of lean
implementation. In general, a group of metrics are needed to outline the overall
leanness level since each metric contributes only partially. However, it is difficult to
synthesize the group of metrics into an integrated leanness measure due to the
different natures of the metrics. Some are more self-explaining, such as defect rates,
where zero defect is always the target. However, not all metrics are comprehensible
without benchmarking. For example, inventory turn is an important performance
index for just-in-time (JIT) practices. Toyota peaked at 22.9 in 1998; Wal-Mart
achieved 7.7 in 2003; Dell reached 88 in 2005 (Schonberger 2005). All three
companies are among the best practices in their field although the numbers differ
drastically. Alternatively, Swamidass (2007) use the ratio of total inventory to sales
as a general performance index to analyse over 14,000 firm-years of lean
practitioners. This ratio is easier to interpret (i.e. the lower the better), but it focuses
merely on inventory-related performance.
Among the existing lean metrics, manufacturing cycle efficiency (MCE), an index
for cycle time reduction, compares value-adding time with total cycle time to show the
efficiency of a manufacturing process (Levinson and Rerick 2002). The MCE
represents the leanness level in terms of time-based performance. Fogarty (1992)
argues that MCE overestimates manufacturing efficiency and proposes a value added
efficiency (VAE) index to address the weakness. However, neither of the two metrics
can fully represent overall leanness due to ignoring factors beside time. Katayama and
Bennett (1999) point out that labour productivity was once used as a measure of
leanness, but it ignores the other benefits of leanness and could mislead the decision
makers to over invest on automation. Leung and Lee (2004) identify operation
leanness and new-value creativeness as the two principal competencies of
manufacturing firms, but quantitative measures were not introduced.
A leanness measure of manufacturing systems 6571

In summary, an integrated measure that quantifies the level of leanness has not
been developed. A leanness measure is needed which can synthesize the various
aspects of the overall leanness into an integrated measure. Also, a benchmarking
methodology is needed to derive a meaningful value that represents the level of
leanness.

3. Quantifying leanness level of manufacturing systems

3.1 A leanness measure based on data envelopment analysis (DEA)


This paper proposes a methodology to measure the leanness level of manufacturing
systems based on the data envelopment analysis (DEA) techniques. Charnes et al.
Downloaded by [University of Arizona] at 01:41 23 November 2012

(1978) propose the concept of DEA for performance measurement using a


mathematical model. The original Charnes-Cooper-Rhodes (CCR) model is a
fractional program that compares the input/output variables of a set of decision
making units (DMU) to identify the best practices among them, which determine the
benchmark for the efficiency score.
CCR fractional program (Charnes et al. 1978)
Pt
ur yr0
Max h0 Pr1m 1
i1 vi xi0

Subject to
Pt
ur yrj
Pr1
m  1, j 1, 2, . . . , n 2
i1 vi xij
where u, v, x and y are all non-negative variables.
Notation:
h0 Efficiency score of DMU0
xij Input variable i of DMUj
yrj Output variable r of DMUj
n Number of DMUs
vi Weight for input variable i
ur Weight for output variable r
m Number of input variables
t Number of output variables
The CCR fractional program can be transformed into an equivalent linear
program (Charnes et al. 1978). Besides the CCR model, several mathematical models
have been developed for applying DEA in different conditions (Cooper et al. 2004).
The DEA approach is capable of analysing multiple input/output variables and
identifying a technical frontier based on existing data. The frontier envelops all
DMUs of the dataset and serves as the performance benchmark for scoring. The
resulting efficiency score is unit-invariant with a value between 0 (least efficient) and
1 (most efficient), which is clearly comprehensible. With the above-mentioned
features, DEA appears applicable for measuring leanness. Yet, modifications are
necessary, because DEA scores overestimate leanness. The DEA models take the
best practices (DMUs forming the frontier) as 100% efficient, but practically no
6572 H.-D. Wan and F. F. Chen

manufacturing system runs without waste involved. Therefore, leanness level of the
best practices can never reach 100%, and the DEA scores, if used directly, would
overestimate leanness level. To adapt the DEA approach into an appropriate
measure of leanness, a virtual frontier representing ideal leanness needs to be
identified. Before introducing the methodology, the DMU for leanness measure
needs to be defined first.
Ideally a lean manufacturing system runs with one-piece flow without
interruption. Using the ideal case as a benchmark, the leanness level of a system
can be measured based on the performance of the flow of each work piece.
Therefore, a DMU for leanness measure is a work piece flowing through the system.
To evaluate performance of the flow, the input/output variables of a DMU need to
cover various aspects and conditions. Input variables are quantitative representation
Downloaded by [University of Arizona] at 01:41 23 November 2012

of the resources and efforts required to process a work pieces. In order to make
DMUs comparable, the various investments (e.g. materials, labour hours, etc.) can
be generalized into two major factors, i.e. cost and time, which are selected as the two
input variables. On the other hand, the outcome of a production process includes
finished products (i.e. physical products and functionality) and customer satisfaction
(i.e. quality, on-time delivery, service level, etc.). In terms of lean thinking, these
factors represent the value added during production (Womack and Jones 2005).
The expected value of a product is mainly governed by design, while not all
production processes deliver full expected value. Therefore, comparing the values
added during the processes sheds light on leanness level. Thus, value is selected as the
output variable of the DMU. In order to make the output value comparable, the
variable is derived from multiplying the retail price by the satisfaction rate from
customers feedback. Any undesirable outcome (e.g. defects, delays, etc.) leading to a
discount, a lower satisfaction rate, or both would cause a deduction from the
expected output value. In summary, cost, time, and value are the input/output
variables of the DMU for leanness measure.
The DMUs representing the actual production processes contain wastes and
cannot achieve 100% lean. In order to obtain a viable benchmark for leanness, the
ideally lean DMUs (IDMU) are created to push the frontier towards ideal leanness.
In contrast to an actual DMU (ADMU) which consists of input/output variables of
actual data, IDMUs consist of only the value-added portions of the input variables
(table 1). By removing the non-value-added portions from the ADMUs, the
corresponding IDMUs are created to push the frontier (figure 1).
A cost-time-value analysis is developed to create ADMUs and IDMUs from
collected data. The procedure is illustrated in figure 2, with an example of a two-
station manufacturing system with three buffer areas. The production processes are
mapped in the cost-time diagram which differentiates value-added (VA) and non-
value-added (NVA) time spans according to the characteristics of the activities.

Table 1. Actual DMU versus ideally lean DMU.

DMU type Input Output

Actual DMU (ADMU) Total time, total cost Product value


Ideally lean DMU (IDMU) Value-added time, value-added cost Product value
A leanness measure of manufacturing systems 6573

Costs of each time span are identified and differentiated into VA and NVA costs.
Thus, the ADMUs and IDMUs are created through the following steps.
Cost-time-value analysis for creating DMUs
Step 1: Identify the scope to be analysed.
Step 2: Map the value stream.
Step 3: Collect cost and time data
Step 4: Identify VA and NVA activities.
Step 5: Separate VA time and NVA time.
Step 6: Identify VA and NVA costs for each time span.
Downloaded by [University of Arizona] at 01:41 23 November 2012

Step 7: Summarize total costs, total time, and created value to generate ADMUs.
Step 8: Summarize the VA cost and VA time to create IDMUs.
Step 9: Run DEA-leanness model with the created ADMUs and IDMUs.

Actual
Cost DMUs

(<100%)
Empirical Frontier
Remove
Non-Value-Added
Cost & Time
(100%)
Ideal DMUs Ideal Leanness Frontier
Time

Figure 1. Pushing the frontier towards ideal leanness by IDMUs.

Output Value
OP1 OP2 = Retail Price x Customer Satisfaction

Cost
OP1 OP2 VA Cost
Actual
Actual
DMU
DMU
VA Cost
Total Cost
NVA Cost Total Time
NVACost Value

Time
Ideal
Ideal
DMU
DMU
VA VA VA Time VA
VA Cost
Time 1 Time 2 VA
VA Time
Value
Value
NVA NVA NVA
Time 1 Time 2 Time 3 NVA Time

Figure 2. Cost-time-value analysis for creating the ADMUs and IDMUs (Wan 2006).
6574 H.-D. Wan and F. F. Chen

With the ADMU and IDMU clearly defined, the leanness level of a
manufacturing system can be measured with the DEA models. One may be
concerned that the IDMUs do not represent ideal leanness precisely. Indeed, the
IDMUs corresponding to actual productions may not be perfect, but they are close
enough to ideal leanness. Reviewing four exemplar value stream maps from the
literature shows that the VA time and VA cost typically have very limited
improvement after implementing lean projects (Rother and Shook 1998, Tapping
et al. 2002, Maskell and Baggaley 2004). Most wastes are found in the operational
transactions, while the optimal VA time and VA cost are constrained by technical
limitations. Unless the technology or management system suddenly improves
dramatically, the VA time and cost remain similar. Therefore, the IDMUs virtually
created from actual production data deliver a reasonable surrogate of the ideal
leanness.
Downloaded by [University of Arizona] at 01:41 23 November 2012

3.2 DEA-leanness measure


This paper proposes a DEA-Leanness measure to evaluate the leanness level of
manufacturing systems. In a preliminary research by the authors, the CCR model is
not suitable for the leanness measure (Wan and Chen 2006a). The scores derived
from CCR model ignore the inefficiency caused by slacks (i.e. input excesses and
output shortfalls) in the benchmarks. The slacks can be graphically represented by
the vertical and horizontal sections of a frontier in figure 1, where a different amount
of inputs results in the same level of output. Using the inefficient sections as a
benchmark, the scores derived by CCR model overestimates the leanness level.
Nevertheless, slacks are commonly found in manufacturing cases because the
IDMUs tend to cluster together and leave the frontier largely in its horizontal or
vertical sections. Instead of using CCR model, a slack-based measure (SBM) of
efficiency developed by Tone (2001) is adapted as the mathematical model of the
DEA-leanness measure.
The SBM is a DEA model that deals with the slacks in the input and output
variables directly. Using the input excesses and output shortfalls between a DMU
and its benchmark (Equations (4) and (5)), the SBM model determines the weights 
and gives an efficiency score  that is unit invariant and valued between 0 and 1.
Similar to the CCR model, the original SBM model is a fractional program. Using
the ADMUs and IDMUs defined in this paper, the efficiency score  represents the
leanness level.
SBM fractional program (Tone 2001)
P
1  1=m m s =x
Min  Psi1 i i0 3
1 1=s r1 sr =yr0

Subject to
x0 X s 4

y0 Y  s 5

where , s s  0
A leanness measure of manufacturing systems 6575

Notation:
 Efficiency score
x0 Inputs of DMU0
y0 Outputs of DMU0
 Weights for DMUs
s and s Slacks associated with inputs/outputs
m and s Numbers of input/output variables

X x1 , x2 , . . . , xm

Y y1 , y2 , . . . , ys
Downloaded by [University of Arizona] at 01:41 23 November 2012

An equivalent linear program can be derived from the fractional program by


transforming into a transitional nonlinear program and then the final linear program
as shown below.
SBM linear program (Tone 2001)
1X m
Min  t  S =xi0 6
m i1 i
Subject to
1 Xs
1t S =yr0
r1 r
7
s

tx0 X S 8

ty0 Y  S 9
where , S, S  0
t40
Tone (2001) claims that, for the optimal solution of the SBM linear program
(*, t*, *, S*, S*), the following relationships exist: * *, * */t*,
s* S*/t*, and s* S*/t*. However, this is not always true. The optimal
scores * and * are always equivalent, but the other equalities may not hold (pp.
8385 of Wan 2006). One more constraint is necessary to ensure all the equalities:
Xn
t i 10
i1

As a result, the finalized linear program of DEA-Leanness measure is presented as


follows.
DEA-leanness measure (linear program)
   
1 ST S
Min lean t  C 11
2 xT0 xC0
Subject to
S
V
1t 12
yV0
6576 H.-D. Wan and F. F. Chen

X
n
txT0 xTi i S
T 13
i1

X
n
txC0 xCi i S
C 14
i1

X
n
tyV0 yVi i  S
V 15
i1

X
n
t i 16
i1

where , S 
Downloaded by [University of Arizona] at 01:41 23 November 2012

T , SC , SV  0, t>0
Notation:
 lean Leanness score
xT0 Input time of DMU0
xC0 Input cost of DMU0
yV0 Output value of DMU0
n Number of DMUs
 SBM weights for DMUs


S 
T , SC and SV Slacks associated with input/output
t Multiplier
A software solver program is developed to solve this linear program using
Microsoft Excel with Visual Basic Applets (VBA). Several numerical examples have
been developed to demonstrate the applications of the DEA-leanness measure (Wan
2006). One of the examples of batch production with undesirable conditions is
presented in table 2. Due to limited space, the raw data is not included in this paper.
For the inputs, total time stands for the period between the part entering and
leaving the system. VA time is the sum of actually processing time of each
workstation. Total cost includes the cost of material, labour hour, machine hour,
inventory cost, etc. VA cost excludes the excessive material and the costs occurred
while the part is idle. Since SBM score is unit-invariant, the output value of a
perfect product is set to be 1, while a less-than-perfect product receives a deducted
value. The undesirable conditions are set as follows.
Condition 1: Machine was down for 20 minutes at WS2 while processing Part 4.
Condition 2: Part 7 and 8 are defective but acceptable. The value is discounted as
0.6.
Condition 3: Part 10 was reworked at WS3 after all parts were processed. Part 11
replaces Part 10 as the last unit of the second batch.
Condition 4: Part 13 is scrapped during the final inspection. The value is 0.
Condition 5: Part 15 used extra material which costs $20 more than regular parts.
The resulting leanness scores are listed in table 2 and graphically shown in figure 3.
The individual scores reveal the inefficiencies of undesirable conditions and the
waiting periods caused by batch production. The average leanness score represents
A leanness measure of manufacturing systems 6577

Table 2. Input/output variables and leanness scores of the hypothetical case with batch
production and undesirable conditions.

Inputs Output Result

DMU Total time VA time Total cost VA cost Value Leanness score

Part 1 163.46 56.41 46.02 43.45 1 0.637


Part 2 163.46 57.19 46.25 43.69 1 0.634
Part 3 163.46 61.89 47.63 45.12 1 0.621
Part 4 163.46 79.39 52.88 50.54 1 0.576
Part 5 163.46 59.86 47.11 44.58 1 0.626
Part 6 282.48 58.34 47.90 44.16 1 0.547
Part 7 282.48 56.69 47.27 43.52 0.6 0.332
Part 8 282.48 61.82 48.97 45.26 0.6 0.322
Part 9 282.48 55.28 46.81 43.04 1 0.558
Downloaded by [University of Arizona] at 01:41 23 November 2012

Part 10 504.96 76.48 54.07 50.53 1 0.453


Part 11 82.48 59.81 46.30 44.57 1 0.800
Part 12 188.02 60.55 47.62 44.85 1 0.599
Part 13 188.02 61.42 47.89 45.12 0 0.000
Part 14 188.02 64.99 48.95 46.22 1 0.587
Part 15 188.02 59.55 67.22 44.44 1 0.467
Part 16 188.02 62.63 48.24 45.48 1 0.593
Part 17 304.96 59.36 48.36 44.41 1 0.536
Part 18 304.96 58.66 48.18 44.22 1 0.537
Part 19 304.96 63.96 49.78 45.87 1 0.523
Part 20 304.96 57.36 47.70 43.72 1 0.542
Average 0.524

1
0.9
0.8
0.7
Leanness

0.6
0.5
0.4
0.3
0.2
0.1
0
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
DMU

Figure 3. Leanness scores of the hypothetical case with batch production and undesirable
conditions.

the overall leanness level of the manufacturing system while producing the batch of
20 parts.

4. Quantifying impacts of lean initiatives

To start an improvement cycle, lean practitioners identify applicable lean initiatives


based on lean assessment tools and/or value stream maps. Lean metrics are
6578 H.-D. Wan and F. F. Chen

employed to evaluate the effectiveness of these improvement initiatives during the


implementation. However, an individual lean metric monitors improvements only in
a focused area. Improvement initiatives often deliver positive impacts on some
performance areas with negative impacts on the others. The tradeoffs between
different lean initiatives are difficult to justify without an index of the impact on
overall leanness. The DEA-leanness measure offers an integrated measure to
quantify the overall leanness level of manufacturing systems. The resulting leanness
scores do not replace the function of the individual metrics. Instead, the measure
provides decision support information complementing the existing information
gathered from lean assessment tools, value stream mapping, and various lean
metrics.
Considering one dimension of improvement at a time, the results can be clearly
Downloaded by [University of Arizona] at 01:41 23 November 2012

identified as reduced cost, reduced time, or increased product value. When lean
initiatives show contrasting impacts on different dimensions, the tradeoffs become
less trivial. Table 3 demonstrates the required conditions on product value to ensure
an improvement in leanness when cost and/or time change(s).
The changes in cost, time, and value delivered by various lean initiatives can be
represented by different DMUs in cost-time-value space. As shown in figure 4, nine
DMUs are plotted in the cost-time space to emulate the changes in cost and time.
With three levels of product value (0.5, 0.75, and 1.0) assigned to each DMU, 27
DMUs are generated that represent the changes in the three dimensions. The results
are shown in figure 5.
Consider DMU 5 with value 0.75 as the current state of the system, the other 26
DMUs demonstrate the impacts of all types of change. The current state receives a
leanness score of 50% and is located at the middle of the chart. For the series with

Table 3. Requirements on product value to ensure an improvement in leanness.

Changes in
time and cost Examples Requirements on value

Time#, cost# . Use cheaper material with accep- Can decrease to an acceptable
table quality and fewer processes level
Time#, cost . Speed up some processes Can decrease to an acceptable
(e.g. heat treatment); decrease level
buffer size
Time, cost# . Use cheaper material with Can decrease to an acceptable
acceptable quality level
Time#, cost" . Invest in faster but more Must be large enough to justify
expensive equipment the increment in Cost
Time, cost" . Use expensive material, Must be large enough to justify
workforce, or equipment the increment in Cost
Time", cost# . Use one operator to run multiple Must be large enough to justify
machines in a production cell the increment in Time
Time", cost . Produce at cheaper but distant Must be large enough to justify the
facility increment in Time
Time", cost" . Use better material and compli- Must be increased to justify the
cated processes to enhance pro- increment in Cost and Time
duct value
", increased; #, decrease; , remain the same.
A leanness measure of manufacturing systems 6579

value 0.75, DMUs 6, 8, and 9 deteriorated since the increment in value is not
enough. For the series with value 1, the increment of value is large enough to
justify the changes in cost and time, even with increments in both dimensions
(DMU 9). As for the series with value 0.5, only DMU 1 sustains the leanness level,
implying that the reduction in value can be justified only if cost and time can be
further reduced beyond DMU 1.
In summary, the DEA-leanness measure provides a quantitative indication of the
impacts of improvement initiatives in terms of overall leanness level. Lean
practitioners can use the measure to compare the effectiveness of different initiatives
by simulating different versions of future state value stream map or gathering actual
Downloaded by [University of Arizona] at 01:41 23 November 2012

DMUs: Eight Directions of Changes


45
3 6 9
40
35
2 5 8
30
25
Cost

1 4 7 ADMUs
20
15
10
5
0
0 5 10 15 20 25 30 35 40 45
Time

Figure 4. Nine DMUs plotted in costtime space to represent changes (Wan 2006).

DEA-Leanness Score: Eight Directions of Changes

1.000 1.000

0.900
0.833 0.833
0.800
0.750 0.750 0.750
0.700 0.667
0.625 0.625
0.600
Leanness

0.562 0.583 0.562 0.583 Value = 1


0.500 0.500 0.500 0.500 Value = 0.75
0.417 0.417 0.438 0.437 Value = 0.5
0.400 0.375 0.375 0.375
0.333
0.300 0.292 0.292
0.250
0.200
0.100
0.000
1 2 3 4 5 6 7 8 9
DMU

Figure 5. 27 DMUs representing lean initiatives and impacts in three dimensions


(Wan 2006).
6580 H.-D. Wan and F. F. Chen

data from reduced-scale pilot studies. In some situations, cost, time and value may
not be taken as equally important due to different competitive strategies. A weighted
DEA-leanness measure is introduced in the following section to address the needs.

5. Weighing the lean scores for competitive strategies

Different competitive strategies for manufacturing systems, such as Lean, Six


Sigma or Agile, often emphasize partially on the three dimensions of the leanness
measure. Many lean initiatives focus on time-based competitiveness. However,
some JIT techniques actually incur additional costs while improving time-based
performance. Other initiatives which focus on the competitiveness of cost, quality
or customer satisfaction may also hinder the other performance factors. For
Downloaded by [University of Arizona] at 01:41 23 November 2012

example, Oliver et al. (2007) conclude that companies adhering too narrowly to
lean principles (waste-reduction) may be disadvantaged in premium-brand
markets. Consequently, companies often select the initiatives that align with
their competitive strategies. Some focus on reducing costs to grab the market
share, while others enhance functionality or quality of products to attract
customers who are willing to pay for the improvements. Tradeoffs are made in
every decision while improving the systems. The performance measures should be
aligned with the companys strategy. Therefore, if different weights can be applied
to the input/output variables, the leanness score can better reflect the companys
need.
The DEA-leanness measure can be weighted among cost, time and value
variables to provide decision support information aligned with the company
strategy. Given that the measure is a unit-invariant index, applying weights directly
to the input/output variables simply changes the scale of the numbers and has no
effect on the resulting scores. Since the SBM model calculates the leanness scores
based on input excesses and output shortfalls (i.e. slacks), the weights must be
applied directly to the slack variables in the model. Replacing equations (11) and (12)
of the original model with equations (17) and (18) makes the weighted DEA-leanness
measure.
Weighted DEA-leanness measure (linear program) (Wan 2006)
  
1 wT S T wC S
C
Min lean t  17
2 xT0 xC0
Subject to wV S
V
1t 18
yV0
X
n
txT0 xTi i S
T
i1

X
n
txC0 xCi i S
C
i1

X
n
tyV0 yVi   S
V
i1
A leanness measure of manufacturing systems 6581

X
n
t i
i1

where , S 
T , SC , SV  0, t > 0.
wT, wC, and wV are user defined weights for cost, time and value. In order to
maintain a leanness score between 0 and 1, the weights for input slacks (wT and wC)
must be summed up to 2 so that the perfect score will still be 1. The weight for output
slack (wV) must be adjusted accordingly. As a result, the weights cannot be assigned
arbitrarily. Instead, decision makers can rate the relative importance of the three
dimensions with three numbers PT, PC, and PV in any scale, and the actual weights
(w) applied to the model are derived from the ratings by the following formula:

2  PT
Downloaded by [University of Arizona] at 01:41 23 November 2012

wT 19
PT PC

2  PC
wC 20
PT PC

2  PV
wV 21
PT PC
The relative importance can be determined by surveys or individual judgments
considering the strategic competitiveness. Other approaches, such as the analytic
hierarchy process (AHP), can be used if necessary.
Using the DEA-leanness measure, the scores display the impact of initiatives on
the performance considering the company strategy. Revisiting the 27 DMUs in
figure 5, two examples of the changes in leanness scores under different weights are
shown in the following figures.
In summary, the weighted DEA-leanness measure aligns the leanness scores with
competitive strategies. It provides supporting information for decision makers to

Weighted DEA-Leanness Score


1.000 1.000

0.900 0.889
0.818 0.833
0.800 0.778
0.727
0.700 0.682 0.667 0.667
0.636
0.600 0.611
Leanness

0.600 Value = 1
0.533 0.545 0.545 0.556
0.500 0.500 0.500 0.500 Value = 0.75
0.467 0.455
0.400 0.400 0.409 Value = 0.5
0.400
0.367 0.333
0.300 0.300
0.200
0.100
0.000
1 2 3 4 5 6 7 8 9
DMU

Figure 6. Weighted leanness scores with PT 2, PC 1 and PV 1.


6582 H.-D. Wan and F. F. Chen

Weighted DEA-Leanness Score


1.000 1.000
0.900
0.833 0.833
0.800 0.750
0.750
0.700 0.667
0.600
Leanness

0.600 0.583 0.583 Value = 1


0.500 0.500 0.500 0.500 Value = 0.75
0.450 0.450 Value = 0.5
0.400 0.400
0.333 0.350 0.350
0.300 0.278 0.278 0.300
0.250 0.222 0.250
0.200 0.194 0.194
0.167
0.100
0.000
1 2 3 4 5 6 7 8 9
Downloaded by [University of Arizona] at 01:41 23 November 2012

DMU

Figure 7. Weighted leanness scores with PT 1, PC 1 and PV 2.

evaluate the applicability of improvement initiatives. When weights are properly


assigned, the leanness score can be adaptive to various manufacturing strategies.

6. Conclusions

The proposed DEA-Leanness measure provides a novel way to quantify the leanness
level of a manufacturing system based on a benchmark of ideal leanness obtained
from historical data. The leanness scores demonstrate how lean the system is.
Various scopes of a value stream, such as a cell, a production line, or the whole
factory, can be evaluated by the leanness measure. The impacts of different lean
initiatives can be quantified with or without weighted focus on the three dimensions
(i.e. cost, time, and value) to provide decision-supporting information aligned with
the companys strategic focus. Comparing to existing lean assessment approaches
and lean metrics, the proposed leanness measure delivers several features:
(1) integrated index of leanness covering three essential dimensions, (2) variable
scope of application, (3) self-contained benchmark, (4) up-to-date frontier, and (5)
tradeoffs between competitive strategies.
On the other hand, the effectiveness of the DEA-leanness measure is limited when
the data is inaccurate or hard to collect. While interpreting the results, the scope of
measurement must be clearly understand since wastes in all sections of the value
stream are included in the scores. The leanness score represents the leanness level of a
system, yet it does not imply how lean it should be by simply reading the results.
Besides, the score itself does not reveal how to become leaner from the current
status. Consequently, in the continuing research, the appropriate target of leanness
level should be identified based on the DEA-Leanness measure. The proposed
leanness measure use a novel concept which makes it unique and difficult to compare
with existing approaches, such as lean assessment, individual lean metrics, and
benchmarking processes. In order to further investigate the efficacy of the measure,
real-world case studies will be carried out to perform the leanness measure and
compare with other metrics. Another direction of future research is to link the
A leanness measure of manufacturing systems 6583

leanness score with the undesirable conditions in the actual production systems to
further pinpoint the potential improvement opportunities. Finally, as lean thinking
shows significant influence in various environments, revisions of the leanness
measure for different types of system need to be developed in the future.

References

Allen, J., Robinson, C. and Stewart, D., Lean manufacturing: a plant floor guide, 2001 (Society
of Manufacturing Engineers: Dearborn, MI).
Brunt, D., Hines, P. and Sullivan, J., The value analysis time profile an approach to value
stream costing. In Manufacturing Operations and Supply Chain Management, edited by
Downloaded by [University of Arizona] at 01:41 23 November 2012

D. Taylor and D. Brunt, 2001 (Thomson Learning: Cornwall, UK).


Charnes, A., Cooper, W.W. and Rhodes, E., Measuring the efficiency of decision making
units. Euro. J. Op. Res, 1978, 2(6), 429444.
Comm, C.L. and Mathaisel, D.F.X., A paradigm for benchmarking lean initiatives for quality
improvement. Benchmarking: An Int. J., 2000, 7(2), 118127.
Conner, G., Lean Manufacturing for the Small Shop, 2001 (Society of Manufacturing
Engineers: Dearborn, MI).
Cooper, W.W., Seiford, L.M. and Tone, K., Data Envelopment Analysis, 4th ed., 2004 (Kluwer
Academic Publishers: Boston, MA).
Detty, R.B. and Yingling, J.C., Quantifying benefits of conversion to lean manufacturing with
discrete event simulation: a case study. Int. J. Prod. Res, 2000, 38(2), 429445.
Feld, W.M., Lean Manufacturing: Tools, Techniques, and How to Use Them, 2000 (St. Lucie
Press: Alexandria, VA).
Fogarty, D.W., Work in process: performance measures. Int. J. Prod. Econ., 1992, 26,
169172.
Hines, P. and Rich, N., The seven value stream mapping tools. Int. J. Op. Prod. Man., 1997,
17(1), 4664.
Hines, P., et al., Value stream management. Int. J. Logist. Man, 1998, 9(1), 2542.
Jordan, J.A., Jordan Jr., J.A. Jr. and Michel, F.J., The Lean Company: Making the Right
Choices, 2001 (Society of Manufacturing Engineering: Dearborn, MI).
Karlsson, C. and Ahlstrom, P., Assessing changes towards lean production. Int. J. Op. Prod.
Man, 1996, 16(2), 2441.
Katayama, H. and Bennett, D., Agility, adaptability and leanness: a comparison of concepts
and a study of practice. Int. J. Prod. Econ, 1999, 60/61, 4351.
Leung, S. and Lee, W.B., Strategic manufacturing capability pursuance: a conceptual
framework. Benchmarking:An Int. J., 2004, 11(2), 156174.
Levinson, W.A. and Rerick, R.A., Lean Enterprise:A Synergistic Approach to Minimizing
Waste, 2002 (American Society for Quality: Milwaukee, WI).
Maskell, B. and Baggaley, B., Practical Lean Accounting, 2004 (Productivity Press:
New York).
Mason-Jones, R., Naylor, B. and Towill, D.R., Lean, agile or leagile? Matching your supply
chain to the marketplace. Int. J. Prod. Res, 2000, 38(17), 40614070.
McIvor, R., Lean supply: the design and cost reduction dimensions. Euro. J. Purch. Supply
Man, 2001, 7, 227242.
Monden, Y., Toyota Production System: an Integrated Approach to Just-in-Time, 3rd ed., 1998
(Institute of Industrial Engineers: Norcross, GA).
Naylor, J.B., Naim, M.M. and Berry, D., Leagility: integrating the lean and agile
manufacturing paradigms in the total supply chain. Int. J. Prod. Econ, 1999, 62,
107118.
Nightingale, D.J. and Mize, J.H., Development of a lean transformation maturity model.
Inform., Knowl., Syst. Man, 2002, 3, 1530.
Ohno, T., Toyota Production System, 1988 (Productivity Press: Portland, OR).
6584 H.-D. Wan and F. F. Chen

Oliver, N., Schab, L. and Holweg, M., Lean principles and premium brands: conflict or
complement? Int. J. Prod. Res., 2007, 45(16), 37233739.
Pavnaskar, S.J., Gershenson, J.K. and Jambekar, A.B., Classification scheme for lean
manufacturing tools. Int. J. Prod. Res., 2003, 41(13), 30753090.
Radnor, Z.J. and Boaden, R., Developing and understanding of corporate anorexia. Int. J.
Op. Prod. Man, 2004, 24(4), 424440.
Rother, M. and Shook, J., Learning to See Value Stream Mapping to Add Value and
Eliminate Muda, 1998 (The Lean Enterprise Institute: Brookline, MA).
Sanchez, A.M. and Perez, M.P., Lean indicators and manufacturing strategies. Int. J. Op.
Prod. Man, 2001, 21(11), 14331451.
Schonberger, R.J., Lean extended: its much more (and less) than you think. Indust. Eng.,
2005, 37(12), 2631.
Soriano-Meier, H. and Forrester, P.L., A model for evaluating the degree of leanness of
manufacturing firms. Integ. Manuf. Syst., 2002, 13(2), 104109.
Srinivasaraghavan, J. and Allada, V., Application of mahalanobis distance as a lean
Downloaded by [University of Arizona] at 01:41 23 November 2012

assessment metric. Int. J. Adv. Manuf. Tech., 2006, 29, 11591168.


Sugimori, Y., et al., Toyota production system and Kanban system: materialization of just-in-
time and respect-for-human system. Int. J. Prod. Res., 1977, 15(6), 553564.
Swamidass, P.M., The effect of TPS on US manufacturing during 19811998: inventory
increased or decreased as a function of plant performance. Int. J. Prod. Res., 2007,
45(16), 37633778.
Tapping, D., Luyster, T. and Shuker, T., Value Stream Management, 2002 (Productivity Press:
New York).
Tone, K., A slacks-based measure of efficiency in data envelopment analysis. Euro. J. Op. Res,
2001, 130, 498509.
Wan, H., 2006. Measuring leanness of manufacturing systems and identifying leanness target
by considering agility. PhD thesis, Virginia Polytechnic Institute and State University.
Wan, H., and Chen, F., 2006a. An application of slacks-based measure on quantifying
leanness, in Annual Industrial Engineering Research Conference, Orlando, FL.
Wan, H., and Chen, F., 2006b. A web-based tool for implementation of lean manufacturing,
in 16 th International Conference on Flexible Automation and Intelligent Manufacturing,
Limerick, Ireland, pp. 10851092.
Womack, J.P. and Jones, D.T., From lean production to the lean enterprise. Harv. Business
Rev, 1994, 72(2), 93103, March/April.
Womack, J.P. and Jones, D.T., Lean Thinking: Banish Waste and Create Wealth in Your
Corporation, 1996 (Simon and Schuster: New York).
Womack, J.P. and Jones, D.T., Lean Solutions, 2005 (Free Press: New York).
Womack, J.P., Jones, D.T. and Roos, D., The Machine that Changed the World, 1990
(Macmillan: New York).

Anda mungkin juga menyukai