Improving Cost Competitiveness of Small and Medium Enterprises by Using Participatory Lean Approach - A Case Study

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Amjad Hussain
Zia Ul Rehman Tahir
Farrukh Arslan Siddiqui
Muhammad Asim
Qasar W Ahmad

Abstract

Cost competitiveness of Small and Medium Enterprises (SMEs) in developing countries such as Pakistan can be improved using lean manufacturing premise. Benefit realization of lean implementation has been a challenge because of implementation cost and employees’ ownership. This study aims at developing a lean implementing methodology for SMEs that can help in designing and implementing low-cost interventions by involving stakeholders especially employees and management in the implementation process. The proposed methodology is a seven steps cyclic approach based on the concept of continuous improvement where lessons learned from the implementation process provide opportunities for organizational learning. These could help in developing sustainable organizational change. The proposed methodology has been validated through a case study. Different tools and techniques like process-flow analysis, line balancing, time study, fishbone diagram, TAKT time, Work-in-Process (WIP) have been used to quantify key Performance Indicators (KPIs). As mentioned that the implementation approach is based on the participation of stakeholders; so, KPIs have been quantified at pre and post-intervention phases where low-cost interventions suggested by the employees have been implemented and their effects in terms of performance improvements have been quantified. Results indicate that as a result of the implementation of interventions Work-in-Process (WIP) and Batch travel distance (BTD) is reduced by 64% and 86%, respectively. It is also found that the average production per day and line balancing efficiency is improved by 38% and 133%, respectively. Furthermore, the suggested interventions help in achieving higher labour productivity by reducing the number of workers 22%. It is concluded that the development and implementation of low-cost interventions through active participation of employees, during the process of lean implementation, can significantly improve the process performance, which ultimately leads to achieving cost competitiveness in SMEs.

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INDUSTRIAL ENGINEERING