An Evaluation of the applicability of lean methods in an engineer-to-order, high-mix-low-volume manufacturing environment - a case study in the heavy industry

Abstract

The study reviewed the applicability of Lean methodology in the engineer-to-order, high-mix-low-volume environment. It asked the question of whether Lean practices find applicability in an engineer-to-order environment in the same way as in a mass production or in low-mix-high-volume environments. Furthermore, it looked to explore whether Lean practices can be implemented in the classical way in an engineer-to-order operation or whether adaptations to Lean practices are necessary. As Lean methodology originated in the automotive industry it is well suited for serial productions in the low-mix-high-volume field. Therefore, the question arises how well Lean methodologies are suited to complex and dynamic environments in the high-mix-low-volume field. Lean concepts were reviewed followed by a literature review with a focus on the engineer-to-order, high-mix-low-volume applications. In particular, the approach of Lean bundles was examined and applied to the case study. The study showed that for Company A, the implementation of Lean practices in a holistic and integrative way across the organisation has led to tangible performance improvements. The Lean practices were adapted to suit the requirements of Company A. A considerable level of customisation was required to adjust classical Lean practices to fit the more flexible and dynamic needs of company A. In line with Lean philosophy expectations, the Lean restructuring programme did considerably reduce waste (muda) across the organisation and allow for a better production flow through smoothing of demand (mura), in turn reducing the overburdening of staff and of equipment (muri). It can therefore be concluded that the implementation of Lean practices can also lead to performance improvements in the more dynamic and less stable environment of engineer-to-order companies. The study’s limitation is that the research was only conducted on one single case study. Therefore, the findings may not be entirely generalisable, where other engineer-to-order companies producing different products and operating under different conditions may require a different approach. Also, the customisation of Lean practices may conceivably require customisation of different practices with a different focus.