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European Management Journal Vol. 16, No. 3, pp. 327334, 1998

1998 Elsevier Science Ltd. All rights reserved
Printed in Great Britain
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Sequences in the
Implementation of Lean
Production
M, London Business School
R HLSTRO
PA
One question facing a company wanting to improve
manufacturing performance is whether to
implement improvement initiatives in parallel or
sequentially. This article examines whether any
sequences of manufacturing improvement initiatives exist and what these sequences are. For two
and a half years, the author participated in and
studied one companys implementation of lean production. The findings group the principles of lean
production into
four different
categories,
depending on when management devoted effort
and resources to the principles. The conclusions
indicate that there are sequences in which lean production principles are implemented, but management also need to devote effort and resources to a
set of principles in parallel. 1998 Elsevier Science
Ltd. All rights reserved

Parallel or Sequential Implementation

of Manufacturing Improvement
Initiatives?
One question facing a company wanting to improve
manufacturing performance is whether to implement
improvement initiatives in parallel or sequentially.
Implementing manufacturing management practices
such as just-in-time or lean production, requires simultaneous attention to different initiatives, like pull
scheduling systems and set-up time reduction. There
are systemic relationships between the elements of
such manufacturing management practices which
means that the elements cannot be implemented in
isolation (Hayes et al., 1988).
There is, however, also a case for implementing
manufacturing improvement initiatives sequentially.
Firstly, there may be a natural sequence to the attainment of lasting capabilities in manufacturing
(Ferdows and De Meyer, 1990). Second, the amount
European Management Journal Vol 16 No 3 June 1998

of effort and resources management can devote to the

implementation of manufacturing improvement
initiatives is often limited. Demands from other areas
of the business mean that managers often need to
choose between issues to which they devote effort
and resources. Improvement of manufacturing capabilities may therefore require the implementation of
certain improvement initiatives before others are
introduced. The focus in this article is on sequences
of manufacturing improvement initiatives.

Research on Manufacturing
Improvement Sequences
Existing research on the implementation of manufacturing improvement initiatives supports the idea
there are sequences of improvement initiatives in
manufacturing. According to Roos (1990), it is first
necessary to change employees attitudes to quality,
in order to attain a material flow containing only
value adding operations. When non-value adding
operations have been removed can just-in-time be
implemented, by emphasising the group instead of
the individual, through reward systems and quality
circles? Implementing just-in-time also requires the
implementation of techniques such as kanban and
reorganisation of the plant into flow layouts.
Storhagen (1993) suggested there is a need to start
implementing what he termed process factors, for
example job rotation and teamwork. The main purpose of process factors is to support continuous
improvement and change. After implementing process factors, a company can implement what was
termed structural factors and/or interaction factors:
Structural factors are techniques and methods that
alter the structural features of the manufacturing
system, such as layouts and set-up time reduction.
327

SEQUENCES IN THE IMPLEMENTATION OF LEAN PRODUCTION

Interaction factors increase the physical and

organisational interaction along the material flow,
for instance geographical proximity and quality
certification of suppliers.
Filippini et al. (1998) surveyed 125 companies in Italy,
Japan, and the United States and drew conclusions
regarding the relationship between the manufacturing context and the sequence of manufacturing
improvement initiatives:
Companies with a high level of variety, but less
exposed to international competition, concentrated mainly on technological initiatives, such as
design computerisation and flexible manufacturing systems.
Companies operating in stable conditions (little
variety, high levels of product standardisation,
and long product life cycles) launched initiatives
only with the aim of changing the manufacturing
organisation. Examples were employee involvement and reduction of the number of hierarchical levels.
There was also a relationship between the country of
origin and the sequence of initiatives. US plants
tended to implement more technologically-oriented
initiatives, such as CAD and FMS, prior to those
aimed more towards organisation and management.
Japanese plants, on the other hand, tended to first
implement initiatives aiming to change organisation
and management.

Studying the Process of Implementing

Lean Production
Although increasing our knowledge of sequences of
manufacturing improvement initiatives, existing
research on the subject shares one weakness: it does
not take a process view of implementation. A process
view implies studying implementation through
longitudinal research. Longitudinal research facilitates observing causal relationships and is particularly beneficial if we want to learn more about
whether to implement manufacturing improvement
initiatives in parallel or sequentially. This article
reports the results of a study designed to meet this
gap in our knowledge (hlstrom, 1997).
The present article focuses on lean production. The
main reason for this choice of manufacturing
improvement initiative is the widespread attention
the concept gained through the management bestseller The Machine that Changed the World (Womack et
al., 1990). Lean production is also ideally suited to
reflecting the full scope of the manufacturing management practices pioneered by Japanese manufacturing companies, but which now has become
328

implemented throughout Western industry (Voss,

1995).
Lean production consists of eight principles (see Figure 1), each concerned with a particular aspect of the
manufacturing system (Karlsson and hlstrom,
1996). The study was designed to determine the
sequence in which management devoted effort and
resources to the implementation of the different principles.
To study the sequence in which the different principles were implemented, the clinical methodology
was chosen. The main characteristic of the clinical
methodology is that researchers participate in and
study organisational change, with access to sources
of data not normally available for research. Given the
considerable time needed to study the implementation of lean production, a longitudinal case study
was carried out in Office Machines the fictitious
name of a Sweden-based company that implemented
lean production. A total of 130 days were spent at
various levels in the company over a period of two
and a half years, as the company implemented lean
production.

Implementing Lean Production At

Office Machines
Office Machiness manufacturing organisation prior
to the implementation of lean production was rather
traditional. A new production director arrived in
1990 and decided to improve the existing manufacturing organisation. Office Machiness situation was
similar to many other companies:
There were problems of lengthy transports, high
quality costs, excessive stock and work-in-progress, and long manufacturing and delivery lead
times.

Figure 1

Lean Production Principles

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SEQUENCES IN THE IMPLEMENTATION OF LEAN PRODUCTION

There was a need to respond to changes in the

market, which led to an increase in the importance
of delivering in small batches, with short notice.
There was a need to increase productivity and
cost efficiency.
Hiring new employees was envisioned to be a
bottleneck unless the work was made more
appealing.
To improve operational performance, the company
decided to implement lean production, using the
framework of Figure 1 as a guide for the changes.
From early 1993 to mid-1995, a number of actions
were taken to change the manufacturing organisation. The implementation was a success, as can be
seen from Table 1. The table illustrates changes in
operational performance measures, between the first
quarter of 1992 and the last quarter of 1996. It is
worth noting that this time-span accounts for any
delays between changes in manufacturing management practices and the effects on operational performance.
The path to improved operational performance was
not without problems. A number of issues arose in
the implementation process, which required management effort and resources. The following briefly
describes the content of the lean production framework and the major actions Office Machines took to
implement lean production principles. The actions
taken to implement lean production at Office
Machines are summarised in Figure 2.

Elimination of Waste
Lean productions most distinguishing principle is
the relentless pursuit of waste: everything that does
not add value to the product. The most important
source of waste is inventory. Inventory in the form of
work-in-progress is especially wasteful, since it hides
problems and keeps problems from getting solved.
However, since inventory exists for a reason, the
causes behind the existence of inventory must be
removed first. Important ways of reducing the need
Table 1 Changes in Operational Performance at
Office Machines: 199296
Operational performance measure

Percentage of
initial value

Quality levels (number of defects)

Scrap
Rework
Manufacturing lead time
Sales lead time
Work-in-progress
Stock turns excluding raw material
Produced value per hour consumed in
manufacturing

European Management Journal Vol 16 No 3 June 1998

15
73
20
6
50
43
238
128

for inventory are, to reduce set-up times, use preventive maintenance to reduce machine downtime, and
change layouts to reduce transportation distances
for parts.
The elimination of waste at Office Machines
especially took place through the creation of manufacturing cells. The cells contained both parts manufacturing and assembly and were built around families of similar products. Two manufacturing cells
were created as pilot projects in April 1993. Due to
the functional layout of the manufacturing process,
the change required the physical relocation of manufacturing tasks between and within the companys
two plants. The assembly task was also changed in
April 1993 and each operator was made responsible
for the assembly of a complete product. The larger
manufacturing cell was split in two in February 1994,
to simplify material flows. Machines permanently set
up to produce certain parts were installed in one of
the cells in mid-May 1994. The creation of manufacturing cells continued in February 1995 and 14 cells
were in place by June 1995.

Pull Scheduling
In a lean production system, material is scheduled
through a pull system. The starting point for manufacture in a pull system is a customer order, which
goes to final assembly, that orders parts from the
upstream manufacturing process. This manufacturing process orders parts from its upstream process,
and so on. The customer order is thus passed backwards through the manufacturing process. Two prerequisites for implementing pull scheduling are to
reduce batch sizes and to manufacture fault-free
parts.
At Office Machines the change-over to pull scheduling started in June 1993, as batch sizes in the MRP
system were reduced to better fit with the situation
in the manufacturing cells. In October 1993, all operations decisions within the manufacturing cells were
channelled to one planning point, for which capacity
planning was performed and to which jobs were
released. Batch sizes could thereby be reduced by a
factor six. From May 1994 onwards all parts manufacturing within the cells took place only when a customer order was received. In May 1995, a system simplifying material control was implemented. Kanban
cards were used to control the movements of the
more valuable parts. Re-order points utilising the
MRP system were used for less expensive parts.

Zero Defects
Quality is paradoxically both a prerequisite of a lean
production system and a by-product of a successful
implementation. To attain high productivity, all parts
and products need to be fault-free from the begin329

SEQUENCES IN THE IMPLEMENTATION OF LEAN PRODUCTION

Figure 2

Actions Taken to Adopt Lean Production at Office Machines

ning. The principle of zero defects includes the practices used to attain quality products in lean production. A salient feature of a lean production system
is the lack of employees dedicated to quality control.
Quality assurance is instead the responsibility of
everyone. A goal of the quality-related work is to
achieve a higher degree of process capability and
control. Instead of inspecting manufactured parts
after a potential problem has occurred, the manufacturing process is kept under control to prevent
defects from occurring in the first place.
An important impetus for the quality improvement
work at Office Machines was pressure from a large
customer. The customer audited Office Machiness
quality management system and found it unsatisfactory. Office Machines was presented with an action
list which led to the following major activities:
Forty hours of quality training for operators took
place in March and April of 1993.
A system for tracing parts in the operation was
installed in May 1993.
A computerised system for statistical process control was installed in June 1993.
A system for corrective action was installed starting in April 1993.
Most items on the action list were addressed by November 1993 and the new quality routines had become
part of the daily operation.
Multifunctional Teams
The use of teamwork is widespread in lean production. Teams are often organised around manufac330

turing cells and process flows. Each team is responsible for performing all tasks in their part of the
material flow. The teams are manned by multifunctional operators, who are able to perform several
tasks in the team. The development of multifunctional operators calls for broad job specifications and
appropriate reward systems. An individual oriented
piece-rate system is inappropriate in a lean production environment. The teams are also made
responsible for a number of indirect tasks, such as
maintenance, procurement, quality, and material
handling and control.
Office Machines created two multifunctional teams in
the manufacturing cells in April 1993. The teams
were made responsible for the manufacture of complete products and a number of previously indirect
responsibilities were transferred to the teams. Piecerates were replaced by a salary in April 1993, and a
new payment system was introduced in November
1993; consisting of a merit-based salary and a bonus
tied to the performance of the team. Finally, multifunctional teams were created for the manufacturing
cells around the summer of 1995.

Delayering
In a lean production system responsibility and authority are consistently pushed down to the lowest levels of the organisation. The number of hierarchical
levels in the organisation can be reduced as a consequence. Changes to the work organisation at Office
Machines started in January 1993, when one supervisor was transferred to a new job within the company. Other changes were made to the organisation
European Management Journal Vol 16 No 3 June 1998

SEQUENCES IN THE IMPLEMENTATION OF LEAN PRODUCTION

and two layers were removed: supervisors and preparatory workers.

Team Leaders
With responsibility pushed down the organisation
hierarchy in a lean production system, the multifunctional teams are made responsible for supervisory
tasks. An important way in which supervisory tasks
are transferred to the teams is through team leaders,
who take on the supervisory roles of advisers,
coaches, and providers of support, as opposed to the
more traditional roles of bosses, disciplinarians, and
givers of specific assignments. At Office Machines,
the team leader task rotated every fortnight among
suitably trained team members. Team leader training
started in September 1993 and team leaders assumed
responsibility for managing the teams in November
1993. To prepare for the creation of the new manufacturing cells, further team leader training took place
in October 1994 and February 1995.
Vertical Information Systems
Vertical information systems are simple information
systems relying on direct information flows to the
relevant decision-makers, which allows for rapid
feedback and corrective action. The information also
enables the multifunctional teams to perform according to the companys goals, which reduces the need
for managers to micromanage the manufacturing
process. The vertical information systems at Office
Machines were created in October 1993, consisting of
performance information displayed on notice boards
in the pilot multifunctional teams. The notice boards
were exported to other cells as further multifunctional teams were created around the summer of
1995.
Continuous Improvement
The final lean production principle is continuous
improvement: perfection is the only goal. Continuous
improvement involves operators in structured problem solving to improve the manufacturing process.
Office Machines launched a structured continuous
improvement initiative in January 1995. Each multifunctional team was divided into several continuous
improvement teams. The ideas for improvements
that the teams came up with were instantly rewarded
and the teams participated in implementing the
suggestions.

is the issues that arose during the implementation of

lean production at Office Machines. The issues are
indications of the effort and resources management
needed to devote to the implementation of the eight
different principles. The findings on sequences of
lean production principles are grouped below
according to when management devoted effort and
resources to different principles. Existing operations
management literature is used to explain the findings, which enhances the plausibility and generality
of the observed sequences.

Zero Defects and Delayering Important Early

On in the Implementation
Installing a system for zero defects and delayering
the organisation required management effort and
resources early on in the implementation of lean production. A new quality management system was seen
at Office Machines as being important to implement
from the start of the lean production project and the
system also received additional focus due to the
influence of a large customer. The amount of effort
and resources devoted to the quality management
system was higher than if this customer had not been
involved. What was important here, however, was
not the amount of effort, but the timing of the actions.
Management would have devoted effort and
resources to quality early on during implementation,
even without the large customers influence.
The importance of achieving zero defects early in the
implementation is supported by the idea that to
develop lasting improvements in manufacturing
capabilities, managers need to devote effort and
resources to quality first (Ferdows and De Meyer,
1990). Then, while efforts on quality improvement
continue and expand, effort can be devoted to other
capabilities, such as reaction speed and flexibility.
The quality literature helps us understand why quality is important early on in the implementation.
Achieving consistently high quality requires a high
degree of control over the manufacturing process,
which is the driver of subsequent improvements
(Corbett and Van Wassenhove, 1993). A lean production system will not work properly without the
elimination of as much scrap and rework as possible.
It is therefore important to start the work of achieving zero defects early during implementation
(Shingo, 1981).

Sequences in the Implementation of

Lean Production

Delayering also required management effort and

resources early in the implementation process at
Office Machines. The importance of delayering the
organisation early is supported by existing research
on sequences of manufacturing improvement initiatives:

The focus in the present article is on sequences of

lean production principles. The key to the sequences

Roos (1990) concluded that delayering helps elicit

operators participation and commitment.

European Management Journal Vol 16 No 3 June 1998

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SEQUENCES IN THE IMPLEMENTATION OF LEAN PRODUCTION

Storhagen (1993) saw flat organisation hierarchies

as an important organisational prerequisite for
lean production.
Filippini et al. (1998), likewise, found that companies removed organisational layers early during
manufacturing improvement, despite manufacturing context and country of origin.
The importance of delayering the organisation early
during implementation can be understood if we look
at the effects of delayering. Delayering improves
communication and co-ordination, which is
important in a lean production system due to the
gradual removal of inventories. If inventory cannot
be used for handling variability in the operation,
improved communication and co-ordination between
operations in the manufacturing process is needed to
avoid disruptions (Duimering and Safayeni, 1991).
Delayering also speeds up important decision processes (Flynn et al., 1989). Since a manufacturing system with low inventories lies close to customer
demand, changes in demand translates into a need
to change schedules rapidly. Delayering speeds up
the decision process, because relevant information on
demand, production scheduling, and resource acquisition exists at the lower levels of the organisation.
Delayering is, with these effects in mind, an
important part of laying the foundation for subsequent improvement of the manufacturing system.
Since a delayering exercise is more of a one-off action
than a continuous enterprise, delayering requires
management effort and resources early during
implementation.

A Set of Core Principles Important Throughout

the Implementation Process
The analysis of Office Machiness implementation
process revealed that three principles required management effort and resources throughout the whole
process: elimination of waste, multifunctional teams,
and pull scheduling. These findings are due to the
interdependencies between the three principles. In
Toyotas celebrated production system, the relationship between elimination of waste and multifunctional teams is exemplified by the concept called shojinka the increase of productivity through adjusting
and scheduling human resources (Monden, 1983).
Two factors are particularly important for realising
shojinka:
1. Proper design of the machine layout, preferably in
a U-form, to facilitate changing the number of jobs
each operator is responsible for.
2. Versatile and well-trained operators able to perform several jobs.
The relationship between elimination of waste and
multifunctional teams is also emphasised in the
332

literature on cellular manufacturing. Cellular manufacturing implies a wider task variety and a need for
higher skills. There is also an opportunity for teamwork and for operators to focus on the manufacturing process from raw material through to finished
parts (Hyer and Wemmerlov, 1984).
The relationship between elimination of waste and
pull scheduling is rather straightforward. A prerequisite for moving towards pull scheduling is to reduce
batch sizes. Batch size reduction, in turn, requires
reduced set-up times: an important part of the elimination of waste. A reduction of batch sizes is feasible
also through the creation of manufacturing cells
around family-like products (Hyer and Wemmerlov, 1984).
The relationship between multifunctional teams and
pull scheduling is illustrated by the way the multifunctional teams are made responsible for production
control in a manufacturing cell. Managers can simplify production planning and control by considering
the cell as one planning point, for which capacity
planning is performed and to which jobs are released.
However, it is the multifunctional teams task to balance the load in the cell (Hyer and Wemmerlov,
1984). The task of balancing the load is part of the
previously indirect planning and control responsibilities which are transferred to the multifunctional
team in lean production.

Supporting Principles Vertical Information

Systems and Team Leaders
Two other principles in the case were to various
degrees related to the three core principles: vertical
information systems and team leaders. Both principles required management effort and resources
throughout the whole implementation process, but
less than the core principles.
Existing operations management literature points to
why the supporting principles are important.
Regarding the role of team leaders, Oliver et al. (1994)
found that team leaders played a pivotal role in
manufacturing performance. In high-performing
plants, the team leader had significantly more
responsibilities than in plants that did not perform
well. This finding indicated that the contribution of
the team leader in the high-performing plants was a
crucial factor for performance.
Vertical information systems contribute to Japanese
manufacturing companies success at involving
employees in manufacturing improvement (Cole et
al., 1993). A high amount of business information is
distributed to employees, who receive training to
understand the information. Japanese managers then
empower employees to act on the information. By
considering employees as part of the improvement
process, fear of changing existing routines is reduced.
European Management Journal Vol 16 No 3 June 1998

SEQUENCES IN THE IMPLEMENTATION OF LEAN PRODUCTION

Information on performance is an important way of

improving the performance of a multifunctional team
(Flynn et al., 1989). Vertical information systems are
therefore related to work organisation in lean production.

scheduling and internal customer supplier relationships between multifunctional teams.

Conclusions and Managerial

Implications
Continuous Improvement When the Base Has
Been Laid
Finally, the analysis of the case revealed that management devoted effort and resources to the continuous
improvement initiative late during implementation.
The reason for the finding is that continuous
improvement benefits from other lean production
principles being implemented. Consider the following:
Well developed multifunctional teams, advanced
in terms of competence, flexibility, and ability to
assume responsibilities, prepare operators better
for suggesting improvements in the manufacturing process (Hart et al., 1996).
Decentralised responsibilities empower operators
to improve the manufacturing process towards the
companys overall goals.
Through working in a manufacturing cell, operators increase their knowledge of a well-defined
part of the manufacturing process. This knowledge, combined with training in several jobs,
increases the possibility of observing and eliminating waste (Robinson and Schroeder, 1992).
These three examples illustrate how a structured continuous improvement initiative involving employees
benefits from other lean production principles being
put in place. An important reason why Japanese
manufacturing companies have succeeded with the
involvement of their employees in quality improvement, is that the customers preferences are brought
into the organisation (Cole et al., 1993). The pressure
for change which the environment exerts on the
organisation is heightened, through for instance pull

The central problem investigated in this article was

whether management needed to devote effort and
resources to implementing lean production principles
in parallel or sequentially. Based on the experiences
of Office Machines, the answer to this question is that
there is a need to implement principles both in parallel and sequentially, see Figure 3.
Figure 3 illustrates how management effort and
resources need to shift between the different lean
production principles during implementation. The
horizontal dimension represents the time a company
spends implementing lean production and the vertical dimension represents management effort and
resources. Management effort and resources need
initially to be devoted to three parallel tasks:
1. Laying a foundation for subsequent improvement
through delayering the organisation and installing
a system for achieving zero defects.
2. Working with the core principles which includes
an elimination of waste, particularly through
manufacturing cells manned by multifunctional
teams, which work with a pull production scheduling system.
3. Making sure the core principles are supported by
vertical information systems and team leaders in
the multifunctional teams.
Figure 3 illustrates how management effort and
resources needs to be devoted to the core and supporting principles in parallel. As a foundation consisting of zero defects and delayering is laid, management effort and resources can shift to starting a

Figure 3 Sequences in the Implementation of Lean Production

European Management Journal Vol 16 No 3 June 1998

333

SEQUENCES IN THE IMPLEMENTATION OF LEAN PRODUCTION

continuous improvement initiative. The initiative

implies using multifunctional teams to solve problems as a natural part of their day-to-day work. To
function properly, the continuous improvement
initiative benefits from well-developed multifunctional teams with responsibilities transferred to them,
working with a variety of tasks in the manufacturing process.
Finally, it is important to point out that the height of
the block representing management effort and
resources in Figure 3 is not to be interpreted literally.
The height is a necessary simplification and not a precise representation of reality. The amount of management effort and resources that can be devoted to the
implementation of lean production may shift over
time. Neither is the size of the horizontal dimension
to be interpreted literally. Lean production does not
have a defined end point, but points to the direction
in which a company should continually move.
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M,
R
PA
HLSTRO
Centre for Operations
Management,
London
Business School, Sussex
Place, Regents Park,
London NW1 4SA, UK.
Par hlstrom holds a
PhD from Stockholm
School of Economics.
When writing this article, he was a Research
Officer at the Centre for Operations Management,
London Business School. In July 1998 he took up a
position as Assistant Professor of Industrial Production at Stockholm School of Economics. His
research interests are in the areas of manufacturing
strategy and operations management. He has previously published in Journal of Product Innovation Management and International Journal
of Operations and Production Management.

European Management Journal Vol 16 No 3 June 1998