FACTORS INFLUENCING THE ADOPTION OF LEAN MANUFACTURING: EVIDENCE FROM A CHINESE MANUFACTURING FIRM

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1 FACTORS INFLUENCING THE ADOPTION OF LEAN MANUFACTURING: EVIDENCE FROM A CHINESE MANUFACTURING FIRM SIU KWOK HUNG DOCTOR OF BUSINESS ADMINISTRATION CITY UNIVERSITY OF HONG KONG JULY 2014

2 CITY UNIVERSITY OF HONG KONG 香港城市大學 Factors Influencing the Adoption of Lean Manufacturing: Evidence from a Chinese Manufacturing Firm 影響精益生產之採用因素 : 以一間中國製造商為實證硏究 Submitted to College of Business 商學院 in Partial Fulfillment of the Requirements for the Degree of Doctor of Business Administration 工商管理學博士學位 by Siu Kwok Hung 邵國雄 July 2014 二零一四年七月 3

3 ABSTRACT Lean Manufacturing is a business philosophy that numerous manufacturing firms worldwide have adopted to improve their manufacturing processes and to remain competitive in the increasing intensity of competition in global market. However, a previous study determined that Lean Manufacturing was not prevalent in Chinese manufacturing firms. This study determined the major factors influencing the adoption of Lean Manufacturing in Chinese manufacturing firms. The literature on manufacturing practices seems to focus on certain aspects, such as management style and organizational culture to identify factors influencing the adoption of manufacturing practices, and has rarely explored the key factors in a holistic approach. Thus, few studies have provided practitioners with practical guides for successful implementation of manufacturing practices. This study is one of the first to explore and identify empirically the key factors influencing the adoption of Lean Manufacturing based on a multi dimensional conceptual model (TOE Framework). In the study, three exploratory case studies were conducted at a Chinese manufacturing firm located in Huizhou China that has been increasing efforts towards 4

4 implementing Lean Manufacturing since To be credible, we conducted the exploratory case study research based on a 1-year direct field observation and 22 in-depth interviews with employees who were participated in three Lean Manufacturing adoption programmes. Not all of the three Lean Manufacturing adoption programmes were successful; two of the programmes were successfully adopted, whereas the other failed. Thus, analyzing the data collected from the three cases and contrasting the different results are worthwhile. The results indicated that relative advantage and compatibility are two essential technology characteristics that facilitate the adoption of Lean Manufacturing practices. In addition, people do not prefer to perform complex work but complexity can be overcome by considering the positive factors of the availability of external resources. On the other hand, the study found that organizational support, quality of human resources and management involvement are three major organizational factors that facilitate the adoption of Lean Manufacturing practices. Finally, opinions collected from participants at the case company suggested that stakeholder pressure and the availability of external resources accelerate the adoption of Lean Manufacturing practices. In short, the study identified eight key factors that are considered to have significant influence on the adoption of Lean Manufacturing practices. This thesis also describes 5

5 how successful Lean Manufacturing practices can enhance manufacturing firms competitive advantage. Hence, these results should be of considerable interest to practitioners. It is, however, considered that the research s findings, which are based on the case study of a selected Chinese manufacturing firm, should not be interpreted as indicative of the characteristics of Chinese manufacturing firms in general. 6

6 TABLE OF CONTENTS Page ABSTRACT 4 CHAPTER 1 INTRODUCTION Economic Growth of China Hong Kong Manufacturing Firms in China Key Challenges faced by Manufacturing Firms in China Opportunities of Manufacturing Firms in China Research Objective Research Questions Research Approach Overview Research Contributions Research Deliverables Overview and Organization of the Thesis 31 CHAPTER 2 - LITERATURE REVIEW Lean Manufacturing Practices Setup Time Reduction Single Minute Exchange of Die (SMED) Cellular Manufacturing Just-in-time (JIT) Manufacturing - Pull Production System Current Status of the Adoption of Lean Manufacturing in China Problems with Lean Manufacturing Adoption in China Factors Motivating Manufacturing Firms to Implement Lean Manufacturing Prior Research on the Adoption of Manufacturing Practices Technological Organizational Environmental (TOE) Framework Technological Factors Organizational Factors Environmental Factors Prior Research on the TOE Framework Validity of the TOE framework for this Study Summary and Gap Analysis of Previous Studies 62 CHAPTER 3 - RESEARCH APPROACH AND METHODOLOGY Conceptual Framework Research Approach Qualitative Analysis Approach 71 8

7 3.2.2 Why a Qualitative Analysis Approach for this Research Direct Observation Method Qualitative Interview Method Coding Scheme Questionnaire Design Qualitative Data Collection Qualitative Analysis Techniques Case Study Approach 84 CHAPTER 4 - CASE STUDY DESCRIPTION, MEASURES AND DATA ANALYSIS PROCEDURES Case Description Background of the Case Company Lean Manufacturing Formation and Implementation Single Minute Exchange of Die in the Production Section of Injection Moulding Cellular Manufacturing in the Production Section of Pad Printing Pull Production System in the section of Production and Material Control Case Study Measures Technological Factors Organizational Factors Environmental Factors Data Analysis Procedures Individual Interviews Transcription of Interviews Grouping and Organizing the Interview Data Individual and Within-case Analysis Cross-case Analysis 104 CHAPTER 5 RESULT Case Company Background Lean Manufacturing Practices in the Case Company Plastic Injection Moulding Section Production and Material Control Section Pad Printing Section Direct Observation Results Interview Results 128 9

8 CHAPTER 6 - DISCUSSION OF RESULTS Why Single Minute Exchange of Die Failed in the Section of Injection Moulding Why Cellular Manufacturing Succeeded in the Section of Pad Printing Why the Pull Production System succeeded in the Section of Production and Material Control Discussion of the Main Results Technology Characteristics Affecting the Adoption of Lean Manufacturing Organizational Characteristics Affecting the Adoption of Lean Manufacturing External Factors Affecting the Adoption of Lean Manufacturing Limitations of the Study Internal Validity Construct Validity External Validity Summary of Limitations Trustworthiness of the Results 175 CHAPTER 7 CONCLUSION Contributions of the Research Contributions to Academia Contributions to Practice Future Research Direction 185 REFERENCES 189 APPENDIX 1.0 INTERVIEW WORKSHEET (PULL PRODUCTION SYSTEM) 213 APPENDIX 2.0 INTERVIEW WORKSHEET (SINGLE MINUTE EXCHANGE OF DIE) 215 APPENDIX 3.0 INTERVIEW WORKSHEET (CELLULAR MANUFACTURING)

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