Lean production and business process re-engineering in a South African context: a case study

D.Phil.The new millennium brought its own pressures to bear on organisations insofar as competitiveness and profitability is concerned. Globalisation required businesses to become more competitive through the elimination of waste, reducing costs and improving general business processes. The improvement of business processes has been around since the early 1990’s, but due to a number of factors organisations were wary of change. The major reasons were that the methodologies that were available were abused when business processes were investigated for possible improvement. Organisations utilised the available methodologies to achieve cost savings in the most obvious place, staff reductions. Before the advent of globalisation it was sufficient, but after globalisation more is expected from organisations. The security exchanges place undue pressure on organisations to perform with higher profit expectations. Customers were demanding better and cheaper products from organisations. Shareholders had higher expectations for the monies invested in an organisation. A consequence of the downsizing of organisations was that the value added by organisations was shrinking. Employees, shareholders and customers felt cheated. Business leaders were questioning the existing methods in which production were undertaken. The management of large conglomerates, multinationals and even small business was yearning for improvements. In the global economy organisations were looking to expand their market share. Many achieved it through mergers or takeovers. The organisations that were taken over were in some instances not on the same standards of performance as the parent company. Quick results were required to assure a reasonable return on investment for the parent organisation. Business leaders and consultants ran out of ideas how to achieve the return on investment required. Many of the organisations returned to the tried and trusted methodologies of improvement. The researcher was requested by ASSA ABLOY Southern Africa to assist them in achieving lean status through the implementation of recognised improvement methodologies. iii The research of the methodologies of BPR, lean production, lean techniques, Quality management six-sigma and associated methodologies were undertaken. The purpose was to determine whether the theories remained valid in the 21st century. The reason was that some of the methodologies were developed during the 1900’s and were improved upon during the 1990’s. The main thrust of the study was the need for improvements where processes were neglected for a long period of time. In instances as described, a need for radical interventions becomes necessary. The methodology of BPR was investigated to establish the relevancy of the methodology in the global environment. Even though the methodology was developed in the 1990’s it was still an authoritative methodology. The methodology delivered the necessary radical improvements that can aid an organisation in becoming more competitive. The correct application of the methodology by an organisation can produce the desired results. The study of the methodology produced clear procedures that had to be followed for the success of an improvement project. The conclusion from the study of the literature was that the methodology could be applied to ASSA ABLOY Southern Africa. To achieve it certain modifications had to be made to the methodology. As the study progressed it became apparent that the methodology of BPR will be insufficient to achieve lean status. Therefore the methodology of lean production was studied in combination with BPR. The methodology of lean production demands that an organisation eliminate waste and reduce cost. The single most important source of waste and cost is the holding of inventory. The holding of excess inventory masks the real reasons why an organisation is not performing well. It is that the organisations processes are dysfunctional. Different classes of waste were identified during the research as well as the costs that are incurred as a result. Different strategies were identified to prevent the wastes and cost to occur or at least minimise it. The lean methodology identified a number of other methodologies that could be utilised to achieve lean status. The methodologies of Kaizen, Kanban, standardisation, small batch production and many others were identified. iv The methodologies focussed on inventory, capacity, facilities and labour. The conclusion was arrived at that it was an authoritative set of methodologies. Most of the methodologies originated from Japan. It became apparent that the management of quality was very important to be competitive. Inferior quality was major contributors towards waste and cost. A number of methodologies were investigated. In some instances the research postulated the fact that a combination of the methodologies studied was better suited to the achievement of lean status. The researcher applied the methodologies to the case study of ASSA ABLOY South Africa and spectacular improvements were achieved. Even though lean status was not achieved by the organisation during 2006 and 2007 they are well on their way to do so. The only prerequisite is that ASSA ABLOY Southern Africa remains true to the methodologies and apply them diligently