LEAN MANUFACTURING THROUGH VSM FOR ETHIOPIAN LEATHER INDUSTRY

Abstract

Globalization has created numerous problems for industries worldwide. Its influence has grown over the last few decades, affecting manufacturing industries' competitiveness and rendering them highly vulnerable. In such times any business's survival depends on its capability of competitiveness. For this reason, they require adopting modern management philosophies to improve their competitiveness. Several researchers claimed that one of the comprehensive management philosophies for achieving competitiveness is the realization of lean manufacturing (LM). The Toyota Production System (TPS) is the foundation of LM. It is a philosophy that emphasizes eliminating production wastes to maximize customer value and increase productivity. Manufacturing industries strive to adopt lean concepts to maximize their resources like staff, facilities, materials, and schedules to be economically effective. To achieve the goal of LM, it uses various tools and techniques. Scholars mention value stream mapping (VSM), 5S, total productive maintenance (TPM), just in time, kaizen, total quality management (TQM), cellular manufacturing, etc. However, most previous scholars' focus was on manufacturing industries with well-developed manufacturing systems in developed nations. Integrating LM to not-well developed manufacturing systems in developing countries is not addressed. And also, managers face difficulty in selecting the appropriate lean tools out of the many available LM tools for successful lean implementation. The research described in this thesis aims to examine and generate knowledge on how manufacturing industries integrate LM into their manufacturing systems for their competitive advantages. Accordingly, the purpose was to contribute to understanding how manufacturing industries use LM to enhance their competitiveness. This research focused on the leather products manufacturing industry (LPMI) of Ethiopia. It is struggling with low performance. One way to facilitate the sector's performance is by studying how much the organizations are using their resources effectively and efficiently. It helps organizations identify their critical resources, wastes that consume these resources and identify potential improvement areas. This, in turn, contributes to improving organizational performances and meeting the challenges of global competition. To achieve the research objective, the research analysis was conducted in four phases. In phase I, the materials and information flow were studied to identify the wastes which consumes vi the critical resources of the organizations. Mainly VSM was used as a tool, and parameters like cycle time, lead time, & takt time were used. As a result, waiting, transportation and inventory are identified as the top three most critical waste that consumes the organizations' resource without adding value. The finding revealed that reduction in cycle time& lead time were obtained, confirming its application in low-level technology organizations to improve their performance and productivity. In phase II, a performance analysis of the organization was conducted. Mainly its focus was on the dynamics performance of the manufacturing assembly line. Data were gathered from the actual manufacturing assembly line using a stopwatch, observation, and interview. A discrete event simulation model is used to analyze precisely the manufacturing system's actual performance without disturbing the real system. Arena Simulation software were used for the analysis. And different alternative solutions have been experimented. The finding revealed that the combination of all options is the best alternative solution that improves output and line balance efficiency. In phase III, an integrated approach was applied in a multi-criteria decision-making process, i.e., selecting suitable lean tools to maximize the critical resources in a manufacturing organization. VSM and plant layout were used to identify the wastes. A systematic fuzzy QFD procedure was used to establish the priority of technical solutions to improve critical resources. Fuzzy process FMEA is used to select suitable lean tools for critical resources' prioritized lean failure modes. To illustrate its application, the model was demonstrated with data obtained from the manufacturing organization. The findings revealed that improvement of total cycle time, lead-time, materials transportation distance & transportation activities and manpower productivity were quantified. In phase IV, the relationship between QM practices and OP of manufacturing organizations were studied. A set of QM practices were taken into consideration that defines the characteristics of QM. These practices are the commitment of top management (TMC), continuous improvement (CI), employees’ participation (EP), teamwork (TW), and customer focus (CF). Data was gathered from the shop floor workers using a structured survey questionnaire and face-to-face interviews. Exploratory and confirmatory factor analysis was used to validate the survey instrument. Then, to test the proposed structural model, a structural equation modeling method was used, which shows the link between QM practices and OP. The findings revealed that TMC, EP, and CI have the strongest impact on OP. While CF and TW were found to have an insignificant effect on OP.