Measuring the leanness of manufacturing systems-A case study of Ford Motor Company and General Motors

TL;DR: In this paper, the authors define manufacturing leanness as a strategy to incur less input to better achieve the organization's goals through producing better output and develop a systematic, long-term measure of leanness.

Abstract: In spite of the vast research published on lean manufacturing systems in several disciplines in the last decade, the concept remains underdeveloped for two reasons. First, it lacks a generally accepted definition. Different authors define lean in terms of its objectives, which vary, overlap and differ in different firms. Second, no study has developed a systematic and relative measure of lean production systems. With the lack of such a measure, two companies cannot be rated objectively on their progress toward becoming lean. This paper has two goals: first, to define manufacturing leanness as a unifying concept, and, second, to develop a systematic, long-term measure of leanness. Manufacturing leanness is a strategy to incur less input to better achieve the organization's goals through producing better output. The systematic measure of leanness has seven characteristics: relative, dynamic, long-term fuzzy logical, objective, integrative and comprehensive. The leanness measure utilizes the fuzzy-logic methodology since lean is a matter of degree. Applying the measure to compare the production leanness of Ford Motor Company and General Motors, the paper selects Honda Motor Company as the benchmarking firm. Selecting just-in-time (JIT), Kaizen, and quality controls as lean attributes, the paper uses surrogates for these attributes extracted from audited financial statements over the years 2001-2003. The results show that Ford's system is more than 17% leaner than GM's system vis-a-vis the benchmarked company's system.