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
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
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
implementing Lean Manufacturing since 2011. 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
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
TABLE OF CONTENTS Page ABSTRACT 4 CHAPTER 1 INTRODUCTION 12 1.1 Economic Growth of China 12 1.2 Hong Kong Manufacturing Firms in China 14 1.2.1 Key Challenges faced by Manufacturing Firms in China 15 1.2.2 Opportunities of Manufacturing Firms in China 17 1.3 Research Objective 20 1.4 Research Questions 23 1.5 Research Approach Overview 24 1.6 Research Contributions 27 1.7 Research Deliverables 29 1.8 Overview and Organization of the Thesis 31 CHAPTER 2 - LITERATURE REVIEW 33 2.1 Lean Manufacturing Practices 33 2.1.1 Setup Time Reduction Single Minute Exchange of Die (SMED) 36 2.1.2 Cellular Manufacturing 38 2.1.3 Just-in-time (JIT) Manufacturing - Pull Production System 39 2.2 Current Status of the Adoption of Lean Manufacturing in China 41 2.3 Problems with Lean Manufacturing Adoption in China 42 2.4 Factors Motivating Manufacturing Firms to Implement Lean Manufacturing 44 2.5 Prior Research on the Adoption of Manufacturing Practices 47 2.6 Technological Organizational Environmental (TOE) Framework 49 2.6.1 Technological Factors 50 2.6.2 Organizational Factors 52 2.6.3 Environmental Factors 54 2.7 Prior Research on the TOE Framework 57 2.8 Validity of the TOE framework for this Study 59 2.9 Summary and Gap Analysis of Previous Studies 62 CHAPTER 3 - RESEARCH APPROACH AND METHODOLOGY 66 3.1 Conceptual Framework 67 3.2 Research Approach 68 3.2.1 Qualitative Analysis Approach 71 8
3.2.2 Why a Qualitative Analysis Approach for this Research 71 3.3 Direct Observation Method 73 3.4 Qualitative Interview Method 75 3.4.1 Coding Scheme 76 3.4.2 Questionnaire Design 78 3.4.3 Qualitative Data Collection 79 3.5 Qualitative Analysis Techniques 83 3.6 Case Study Approach 84 CHAPTER 4 - CASE STUDY DESCRIPTION, MEASURES AND DATA ANALYSIS PROCEDURES 86 4.1 Case Description 86 4.1.1 Background of the Case Company 86 4.1.2 Lean Manufacturing Formation and Implementation 88 4.1.3 Single Minute Exchange of Die in the Production Section of Injection Moulding 89 4.1.4 Cellular Manufacturing in the Production Section of Pad Printing 90 4.1.5 Pull Production System in the section of Production and Material Control 91 4.2 Case Study Measures 92 4.2.1 Technological Factors 93 4.2.2 Organizational Factors 94 4.2.3 Environmental Factors 96 4.3 Data Analysis Procedures 98 4.3.1 Individual Interviews 100 4.3.2 Transcription of Interviews 101 4.3.3 Grouping and Organizing the Interview Data 102 4.3.4 Individual and Within-case Analysis 103 4.3.5 Cross-case Analysis 104 CHAPTER 5 RESULT 106 5.1 Case Company Background 107 5.2 Lean Manufacturing Practices in the Case Company 109 5.2.1 Plastic Injection Moulding Section 110 5.2.2 Production and Material Control Section 113 5.2.3 Pad Printing Section 114 5.3 Direct Observation Results 116 5.4 Interview Results 128 9
CHAPTER 6 - DISCUSSION OF RESULTS 153 6.1 Why Single Minute Exchange of Die Failed in the Section of Injection Moulding 154 6.2 Why Cellular Manufacturing Succeeded in the Section of Pad Printing 158 6.3 Why the Pull Production System succeeded in the Section of Production and Material Control 161 6.4 Discussion of the Main Results 165 6.4.1 Technology Characteristics Affecting the Adoption of Lean Manufacturing 166 6.4.2 Organizational Characteristics Affecting the Adoption of Lean Manufacturing 167 6.4.3 External Factors Affecting the Adoption of Lean Manufacturing 168 6.5 Limitations of the Study 170 6.5.1 Internal Validity 172 6.5.2 Construct Validity 172 6.5.3 External Validity 173 6.5.4 Summary of Limitations 174 6.6 Trustworthiness of the Results 175 CHAPTER 7 CONCLUSION 176 7.1 Contributions of the Research 176 7.1.1 Contributions to Academia 177 7.1.2 Contributions to Practice 180 7.2 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) 217 10