Chapter 1 Introduction Research Motivation Post world war II

Chapter 1
Introduction
Research Motivation
Post world war II, global manufacturing industry has gradually shifted from the conventional ‘buffered’ production system (large work-in-progress stocks and inventory) to Toyota’s ‘Lean’ approach (Womack and Jones, 2005). This ‘Lean’ approach or ‘Lean Production’ was, to begin with, called the Toyota Production System, or TPS for short (Krafcit, 1988). It was concieved by Toyota for the automotive industry (Shingo, 1989). It includes many vital tools and techniques (e.g., Feld, 2001; Pavnaskar et al., 2003) to uninterruptedly removal of waste during the production process to produce final products in an optimal way (Rooney and Rooney, 2005).

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Figure 1.1 The TPS House, a high-level view of the TPS, adopted from Sayer and Williams (2012, p21)
Continuous improvement is one of the key objectives of Lean Production (Handyside, 1997) and is part and parcel of the foundations of the ‘TPS House’ (Watanabe, 2000; Toshiko and Shook, 2007) (Figure 1.1). It has also been increasingly adopted by many companies seeking to improve performance (Prado, 1997; Robinson and Schroeder, 2009) using knowledge of employees (Terziovski and Sohal, 2000). In Japan, continuous improvement is called Kaizen (??) (Imai, 1986). Its implemented via a four-step method: the identification of problems; the development of solutions; the implementation of those solutions; and the standardisation of the improved results (Japan Human Relations Association, 1997a).

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In a cursory look, it appears very easy to implement Kaizen as a tool for the functioning of any organisation (Marin-Garcia et al., 2008), but in reality, it is easier said than done, and very very difficult to sustain it in the long-term (Bessant et al., 1994; Bodek, 2004; Veech, 2004; Burch, 2008). In Japan, Kaizen is more than a simple improvement system (Brunet and New, 2003; Herron, 2007; Herron and Braiden, 2007). Many studies have reported that numorous non-Japanese companies (Ghosh and Song, 1991; Sohal and Egglestone, 1994; Oliver et al., 2002; Herron and Hicks, 2008) and some Japanese overseas plants (Aoki, 2008) have faced difficulties in selecting the right methods to adopt and sustain Kaizen for Lean Production. In one study of Japanese and non-Japanese organisations that had implemented Kaizen, found that the non-Japanese organisations performed comparatively poorly according to various indicators: productivity, quality, changeover time, problem solving, and buyer-supplier relations (Oliver et al., 2002).

Thus, there is still a gap in adopting and implementing Kaizen between Japanese and non-Japanese companies. One of the persistent complaints is that many non-Japanese companies and Japanese overseas plants have experienced difficulties selecting the right practices to effectively collect and utilise improvement ideas (Oliver et al., 2002; Aoki, 2008; Herron and Hicks, 2008; Robinson and Schroeder, 2009).

For example, a number of studies have reported that Japanese companies were able to extract more improvement ideas from employees (e.g., Yasuda, 1989; Womack et al., 1990; Delbridge et al., 1995; Oliver et al., 1996a; Oliver et al., 1996b; Oliver et al., 1998; Takeda, 2006; Robinson and Schroeder, 2009). The difference between Japanese and non-Japanese companies on this front was shown to be dramatically high in the late 1990s (Figure 1.2). Surpriosingly, this gap was even greater in the automotive industry (Oliver et al., 2002). Japanese automotive companies obtained an average of 28.9 ideas per employee per year, whilst non-Japanese counterparts averaged 2 ideas per year (Oliver et al., 1998).

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Figure 1.2 Comparative statistics of average Kaizen suggestions per employee per year (Oliver et al., 1996b; Oliver et al., 1998; Oliver et al., 2002)
Other major problem is how to sustain improvements on a long-term basis (Bessant et al., 2005; Marin-Garcia et al., 2008). Most of the current practices designed for implementing Kaizen in non-Japanese companies are universal crash courses (Brunet and New, 2003). They are mainly based on the ideas or proposals of managers, technicians or consultants (Bodek, 2002; Marin-Garcia et al., 2008) rather than involvement of all members of company (Terziovski and Sohal, 2000); and aimed at producing breakthrough changes and reengineering on a short-term basis (Bessant et al., 2001) through using, e.g., ‘Kaizen blitz’ (Sheridan, 1997; Tillinghurst, 1997), ‘Kaizen event’ (Doolen et al., 2003), or ‘Kaizen burst’ (Liker and Meier, 2006). As such, These non-gradual methods do not sustain long-term improvements and achieve long-term targets (Imai, 1986; Dale, 1996; Imai, 1997).

Research Aims and Objectives
This research aims to bridge the knoledge gap by developing a better understanding of how to implement continuous improvement or Kaizen in organizations located outside of Japan. The findings should fulfil the needs of both academics and practising personnel in the available body of knowledge.

Kaizen, the Japanese system, is distinctly different from improvement systems that only aim to produce changes by offering monetary rewards (Japan Human Relations Association, 1997a; 1997b; Rapp and Eklund, 2002), or to achieve one-off dramatic innovations (Brunet and New, 2003; Herron, 2007; Herron and Braiden, 2007). The researches have identified three of the core characteristics of Kaizen:
Kaizen involves all members of company, and aims to produce small and incremental changes over the long-term (Imai, 1986; Sheridan, 1997; Laraia et al., 1999; McNichols et al., 1999; Bateman and David, 2002);
Kaizen consists of two important practices (QCCs and Teians) which are used to collect and implement all sizes of improvement ideas (Onglatco, 1985; Ghosh and Song, 1991; Tamura, 2006; Aoki, 2008; Liker and Hoseus, 2008; Marin- Garcia et al., 2008); and
Kaizen must be based on the support of shop floor management tools, (Malaise, 1995; Handyside, 1997).

This study hypothesises that there is a strong correlation between the application of shop floor management tools and the performance of Kaizen, measured in terms of the number of improvement ideas collected, implemented and the rate of long-term implementation.

The primary objective of this study was to provide an insight into the implementation of the Japanese Kaizen – to increase the understanding of the relationship between shop floor management tools and the two improvement practices (QCCs and Teians) and their long-term outcomes. The objectives of this research were:
To define the roles of QCCs and Teians in Kaizen;
To describe the implementation of the building block shop floor management tools;
To demonstrate the importance of shop floor management tools in supporting Kaizen;
To explore the relationships between the Kaizen practices, shop floor management tools, and their long-term outcomes;
To provide a better understanding of Kaizen implementation in companies located outside of Japan;
To provide an empirically tested model for studying and managing the Kaizen practices.

Research Questions
The research was conducted to address the following questions:
What is the Japanese Kaizen? How does it differ from other improvement systems?
What are QCCs and Teians? How do these two practices differ from each other in collecting improvement ideas?
What is the relationship between these two Kaizen practices? Are they mutually inclusive and supportive of each other? If not, how do they impact on each other?
How can the practices of the Japanese Kaizen be adopted and implemented to sustain long-term continuous improvement?
What are the building block shop floor management tools? In what sequence should they be implemented?
In what ways are the shop floor management tools inter-dependent with the Kaizen practices? Can they be implemented independently of each other to support the Kaizen practices?
What is the relationship between these two Kaizen practices and their outcomes? How do these practices produce better outcome measures as well as sustaining long- term continuous improvement?
The outcome of these research questions were obtained by empirical research. Structural equation modelling was used to explore and investigate the relationships between the shop floor management tools, Kaizen and their associated outcomes.

Research Model and Hypotheses
On the basis of the three underlying characteristics of Kaizen (as described in Section 1.2), a theoretical model was developed to support the study. This model represents the relationships between shop floor management tools, improvement implementation and improvement outcomes (Figure 1.3).

Figure 1.3 The preliminary theoretical model for the current study
Following this model, three hypotheses were investigated:
H1. The building block shop floor management tools have positive effects on the improvement practices.

H2. The two improvement practices are mutually supportive.

H3. The two improvement practices have positive effects on the long-term outcomes.

The Overview of the Research Method
The study was conducted in NCR Delhi region, India. A survey was done to collect data from ten Indo-Japanese automotive joint ventures. A questionnaire was developed from previous research (Lillrank and Kano, 1989; Farris, 2006). The questionnaire included questions that measured: the use of shop floor management tools; the implementation of Teians and QCCs; and improvement outcomes. These questions were later translated into Hindi. They were piloted with 10 shop floor workers and adapted to suite the Indian context. In total, 1000 copies of the questionnaires were distributed,100 copies to each organization, of which 488 samples were returned, giving a response rate of 48.8%.

After completing the data collection, Path Analysis (Wright, 1960), a subset of structural equation modelling (SEM) (Kline, 2005), was adopted to develop and analyse the structural path models from the quantitative data. AMOS (Analysis of Moment Structures) (Arbuckle, 2007), a package within the IBM SPSS family (IBM, 2010), was selected to perform these analyses and estimations.

Outline of the Dissertation
Chapter 2 reviews the different forms of process improvement that have been implemented in the automotive industry. It explains the implementation of the Japanese Kaizen, and compares and contrasts Kaizen to other improvement practices. It also goes to critically evaluate the previous researches concerning the problems, issues and challenges of sustaining continuous improvement.

Chapter 3 introduces Lean shop floor management and highlights its building block tools. Specifically, this chapter critically evaluates the relationship between each of these building block tools and their implementation procedures to facilitate and sustain long-term continuous improvement.

Chapter 4 describes the selection of the research sites. It provides a brief historical review of the Indian automotive industry and automotive joint ventures in NCR Delhi. The chapter also describes about the companies selected for this research and their selection criteria, and shows the development of the theoretical model and the research hypotheses.

Chapter 5 discusses the research design and research methodology. It discusses the choice of the survey strategy and the use of SEM for data analysis.

Chapter 6 discusses the data collection procedures, the process of data screening and explains the procedures for examining and validating the reliability of the factor constructs from the data set.

Chapter 7 introduces the use of the SEM path analysis for the hypotheses testing. It elaborates the steps to develop the SEM models, to generate model estimations, and to test the model’s reliability. It also lists the results eminating from the final models and the applications of these results to test the hypotheses.

Chapter 8 discusses threadbare analysis and interpretations of the findings. It lists the data obtained from the case companies and evaluates the relationships between the building block shop floor management tools, the two aforesaid improvement practices and the outcomes.

Chapter 9 discusses the conclusions of the research and provides answers to the research questions. It also lists the limitations of the current study and provides scope for future research.