The relationship between lean production and commercial performance of manufacturing companies in Gilan province

Dissertation for receiving a master's degree (M.A)

Business Management major: Internal

Abstract

The present research aims to examine the relationship between lean production and the business performance of manufacturing companies in Gilan province, in order to provide the possibility of helping the production sector of the country and the province in order to formulate appropriate strategies to improve performance, especially in the field of business, considering the principles of lean production. In terms of execution, the current research is descriptive type of correlation branch. Also, the statistical population is all the manufacturing companies of Gilan province (with more than 20 personnel), which were estimated to be around 340 based on the statistics. To estimate the sample size, the Morgan and Karjesi table was used, and based on this, the size of the sample population was calculated as 181 companies. The measurement tool in this research is a questionnaire and Cronbach's alpha test was used to check the reliability of the questionnaire. In addition, the validity of the questionnaire was also evaluated through consultation with professors and experts. In order to describe the research variables, descriptive indices such as frequency, percentage, mean, weighted mean, standard deviation, and variance were used, and Pearson's correlation coefficient test and univariate regression were used to prove or reject the hypotheses. The results of the research indicated that there is a significant positive relationship between the implementation of lean production and the commercial performance of manufacturing companies in Gilan province. At the same time, the relationship between the dimensions of lean production in the areas of continuous improvement, the amount of defects, timely production, multitasking teams, lack of concentration, integration of tasks and vertical information systems with the commercial performance of production companies in Gilan province is also significant. Also, there is no positive relationship between the dimensions of waste elimination and lean production stretch production system with the commercial performance of manufacturing companies in Gilan province.

Lead Vocabulary: Lean production, business performance, elimination of waste, continuous improvement, the amount of defects, just-in-time production, multitasking teams, lack of concentration, integration of tasks and vertical information systems.

Introduction

Two revolutions have occurred at the beginning and end of the 20th century. Now the world is on the threshold of a new era, an era in which the transformation of the methods of production of products and human creations will completely change the face of his life (Pettersen, 2009: 1).

The necessity of competition in the current world is to use all new techniques, tools and pure ideas[1]. In the second half of the 20th century, the world's producers faced new competitors who, with half the necessary capital and facilities, offered products with better quality, more variety and at a lower price to the world market. Lean production [2] is actually a production method that has been formed while using the benefits of mass production and manual production, with the aim of reducing waste [3] and eliminating any non-value-added activity [4]. Based on this, the lean technique with the help of its set of tools can play a fundamental role in the correction and improvement of processes (Esmaili Givi, 2012: 51). Lean production is a complete system, and the basis of this system's performance is a two-way win-win relationship for all the elements in the lean production cycle. In this chapter, the research problem statement will be discussed first, and while raising the main and secondary research questions, its importance and necessity will be examined. Then the objectives, theoretical framework and hypotheses of the research are stated, and at the end of the chapter, the conceptual and operational definitions of the variables are stated along with the scope of the research.

1-2) Statement of the problem

Performance improvement[5] is important for all companies during their annual activities. In the last decade, Iranian companies have not presented a fluctuating and acceptable trend in this field (Norpash, 2011: 16), this has reduced their competitive power. It should be kept in mind that the goal of production or service institutions can be growth, profitability or survival. Among the factors affecting the above goal, which are mentioned in all production and service organizations, are customer satisfaction [6], competitors, technology [7], skilled manpower, cost reduction and quality improvement. Among the mentioned factors, customer satisfaction is the most important concern of current companies. The main features must be present in the manufactured products to lead to customer satisfaction, some of these factors are consistently high quality, low cost, delivery of the product to the customer at the right time.. Achieving each of the mentioned features requires the implementation and application of a set of principles and different production techniques. In addition to the high complexity, the simultaneous implementation of these factors, as well as the conflicts and negative effects they have on each other, causes many institutions to refuse to implement them simultaneously. Collecting and integrating all the concepts of different approaches and principles in a production or service organization and effectively using the benefits of their integration requires a systematic approach. An approach that can create all these concepts and principles in a proper and integrated manner is the pure approach [8] (Nejad Mobsher, 1386: 11-12).  

Lean production is a complete system that uses the philosophy of continuous improvement and tries to find, analyze and eliminate the waste[10] in the production process by taking advantage of the teamwork culture. This system is designed in such a way that it can make maximum use of continuous measurement to improve production flow and eliminate waste. Lean production is actually a systematic approach that aims to eliminate waste and waste and to eliminate any additional process from raw material procurement to production and finally sales. The basis of the performance of the system in lean production is a two-way win-win relationship with all the components and stakeholders in the system, and all the elements in the lean production cycle, from the seller of raw materials to the seller of goods, should benefit in a favorable way. Lean production means eliminating waste and wastage, eliminating waiting and transportation and investing more than necessary, as well as eliminating defective products and also seeks to attract and attract more customers as much as possible (Jafaranjad, 1390: 166).

Production of a product with competitive characteristics and in accordance with the demands of customers requires the use of production processes, each step of which creates added value in the final product. In lean production, principles are used to improve production processes and create an organizational environment to achieve long-term goals. Identifying and applying these principles helps organizations in implementing lean production. The 9 identified principles of lean production are (Jaafranjad, 2010: 211-219):

elimination of waste [11]: the goal and philosophy of lean production is to reduce costs, this goal is realized through the elimination of waste (anything that does not add value to products). Anything that the customer is not willing to pay for is called waste, and as a result, it should be eliminated. Continuous improvement[12]: When a production system is continuously produced, its only goal can be called perfection. If the elimination of waste is considered as the most basic principle of lean production, continuous improvement can certainly be placed in the next place. It is necessary for our parts and products to be free of any defects from the very early stages of production.

Just-in-time production[15]: The ultimate goal in just-in-time production is to encounter a piece at any moment and at the exact time it is needed.

Punch production system[16]: In contrast to the push production system: The mass production system is in the form of pressure, which is planned months in advance and materials are ordered and sent to the line according to the schedule. This part production moves through a sequence of operations. When the operation is finished, the part is pushed to the next operation. This method requires sudden reactions and makes it difficult to change the production. In order to achieve the lean production system, the production must be changed in a stretching manner. A pull system does not mean that no one should produce a product or service unless the customer has already ordered it. In most common systems of this type, the customer removes the product and then the manufacturer fills the void of the removed product. Applying the concept of stretch is somewhat more complicated.

Multitasking teams[17]: The most visible characteristic of the work organization of the lean production system is the wide use of multitasking work teams.

Lack of concentration in responsibilities: decentralizing responsibilities and assigning them to multitasking work teams is another important characteristic in lean work organization.

Integration of tasks: integration of different tasks in the form of teams means that Tasks that were performed by indirect departments in the past are now included in the scope of team tasks, and as a result, the content of team tasks increases. Vertical information systems [18]: Information is very important in empowering multitasking teams to achieve organizational goals.