| Summary: | MSc (Enginnering), Faculty of Engineering and the Built Environment === In recent years companies have made increased use of Lean Manufacturing audits to measure the
degree of Lean Manufacturing implementation within their organizations. Thereafter, a gap analysis
highlights areas for improvement, which leads to increased Operational Performance. This approach
may be flawed. The audit may measure Lean Manufacturing characteristics that are not beneficial or
the Lean Manufacturing audit may be inaccurate due to auditor bias or inadequate scope. The result
is frustration and a lack of belief in the effectiveness of Lean Manufacturing as a competitive
strategy. This study tests the hypothesis that “Lean Manufacturing audits drive improvements in
Operational Performance.”
A sample company comprising sixty four organizations operating in a job shop and Batch operations
management environment is used as a case study. The organizations manufacture and service high
value added products for heavy industry. The Lean Manufacturing audit developed to assess the
effectiveness of Lean Manufacturing audits in driving Operational Performance uses Lean
Manufacturing characteristics commonly used in previous research. These characteristics include
policy deployment, standardized work, visual management and housekeeping, quick changeover
techniques, total preventative maintenance, continuous improvement, error proofing, cultural
awareness, material control and level production. Commonly used Operational Performance
measures such as On-Time-Delivery, Inventory turns and Direct Labour Utilization are used to assess
Operational Performance. A range of independent auditors were used to gather data on the extent
of implementation of Lean Manufacturing and Operational Performance measures.
Structural Equation Modelling is used to relate the results of the Lean Manufacturing audits to
Operational Performance. This is the first known paper to use Structural Equation Modelling in
measuring the extent of implementation of Lean Manufacturing to Operational Performance.
Lean Manufacturing audit results have a significant correlation to Operational Performance but with
a high degree of variation in Operational Performance not accounted for by the results of the Lean
Manufacturing audit. This variation is caused by the inadequate scope of the audit relative to
Operational Performance measures as well as auditor bias. Lean Manufacturing audits are effective
in driving improvements in Operational Performance provided that the scope of the audit is
expanded to include office functions, supplier networks and customer and branch distribution
networks. A recommended audit framework is suggested in this research.
A large scale study of a number of different companies should be conducted to verify the results of
this research using the audit framework developed.
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