Quantitative models for measuring degree of leanness and corporate sustainable performance of manufacturing companies

Date of Publication

2016

Document Type

Dissertation

Degree Name

Doctor of Philosophy in Industrial Engineering

Subject Categories

Industrial Engineering

College

Gokongwei College of Engineering

Department/Unit

Industrial and Systems Engineering

Thesis Adviser

Eppie E. Clark

Abstract/Summary

Lean manufacturing is a philosophy widely practiced in the industry and a subject broadly explored in the field of research. The aim of this study is to construct a quantitative means of assessing the degree of leanness of manufacturing companies and corporate sustainable performance as measured using the quadruple bottom line. Lean is a philosophy originally intended to eradicate manufacturing wastes on the factory floor however, it is believed by many authors to address the more important issue of sustainability. Majority of the previous studies failed to measure the adoption level of lean manufacturing practices using actual quantitative data. Moreover, authors attempting to address this shortcoming were unable to come up with a single value as indication of a company's degree of leanness. On the other hand, extant literature on gauging sustainable performance focused on the triple bottom line of economic, social, and environmental performance. An emerging paradigm suggests considering corporate governance as the fourth bottom line of sustainability. In order to assess lean implementation quantitatively, a composite lean index is first formulated using multi-attribute value theory to aggregate several performance indicators belonging to different categories into a single quantity. Similarly, a composite sustainability index is developed using MAVT to measure a firms sustainable performance in terms of the quadruple bottom line.

Next, 15 lean performance indicators categorized into process and equipment, manufacturing planning and control, human resources, and supplier and customer relationships are formulated. On the other hand, 16 sustainability indicators divided into economic performance, social performance, environmental performance, and corporate governance are put together. These indicators, along with 14 operational benefits of lean gathered from the literature, are compiled in a questionnaire which was examined for content validity by experts before being distributed to manufacturing firms. Using empirical data gathered from a study conducted on Philippine-based manufacturing firms, the MAVT models computed for the CLIs and CSIs of the respondent companies. The importance weights assigned to the lean and sustainability categories and indicators were extracted from analytic hierarchy process questionnaires administered to experts in the said fields. Numerical validation results indicated that actual values entered into these models yield a single quantity ranging from zero to unity as a measure of degree of leanness and corporate sustainable performance, respectively. AHP results revealed the following ranking for the importance weights assigned to the lean categories (in descending order): Process & Equipment, Supplier & Customer Relationships, Human Resources, and Manufacturing Planning & Control. With respect to the sustainability categories, AHP results indicated the following ranking for the assigned importance weights (in descending order): Economic Performance, Environmental Performance, Corporate Governance, and Social Performance.

Error-Proof Equipment, Customer Orders Delivered JIT, Worker Involvement in Continuous Quality Improvement Programs, and Visual Control of the Shop Floor obtained the highest importance weights among the lean performance indicators under their respective categories. On the other hand, Net Income, Energy Consumption, Percentage of Strategic Objectives Met, and Accident Rate received the highest importance weights among the sustainability indicators under their respective categories. Statistical test indicated that significant difference exists between CSI computed based on equal weights for each indicator and CSI computed based on importance weights solicited from sustainability experts. Moreover, Wilcoxon signed-rank test revealed that significant difference also exists between TBL-based and QBL-based CSIs. Sensitivity analyses revealed that increasing the weights assigned to Process and Equipment and Manufacturing Planning and Control resulted in increasing CLI values. In contrast, increasing the weights assigned to Human Resources and Supplier and Customer Relationships resulted in decreasing CLI values. Furthermore, assigning increasing weights to Economic Performance resulted in decreasing CSI values. On the other hand, assigning increasing weights to Social Performance, Environmental Performance, and Corporate Governance resulted in increasing CSI values. The findings of this study are beneficial to manufacturing companies implementing lean or even to those which are planning to adopt LM practices in their firms. The CLI can be used in monitoring the progress of lean implementation through the years as well as in benchmarking performance with other companies. Similarly, the CSI can also be utilized in assessing a company's sustainable performance through the years and in comparing performance with other firms.

Abstract Format

html

Language

English

Accession Number

CDTG006889

Shelf Location

Archives, The Learning Commons, 12F Henry Sy Sr. Hall

Physical Description

1 disc; 4 3/4 inches

Keywords

Lean manufacturing; Production management

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