Lean Manufacturing in China

Lean Manufacturing in China

Blog for week 3

Yvonne Zhang

Lean manufacturing is proved to be a success to eliminate the waste and improve operation efficiency. It relies on integrated technology, well-trained employees and revolutionary company culture. Toyota is a perfect example of implementing lean, and other industries, even the public sectors, also try to learn from it.

China’s rapid growth in the past three decades mainly benefited from the development of manufacturing industry. However, the operation of manufacturing in China was not efficient enough and the growth started to slow down. One of Toyota’s master trainers stated that China was the easiest place in the world to teach Toyota’s Production System, because Japan and China shared the similar culture.

The concept of lean manufacturing and six-sigma are not unfamiliar in China. With the opening of market and absorbing foreign investment, managers of domestic and multinational companies brought manufacturing tools and techniques to China. In 1978, forty members of First Automobile Works, one state-owned automobile company in China, visited Toyota, which was the first time Chinese company to study lean manufacturing. However, with thirty years development, most Chinese companies failed in implementing lean. Why was that?

Based on the study from Process Excellence Network, there are seven challenges for Chinese companies to implement lean.

• Cultural norms can get in the way of addressing wasteful practices
• Hierarchical organizational structures prevent employee engagement
• Lack of reward systems/incentives
• Reliance on low-skilled migrant workers drives short term thinking about the workforce
• Manufacturers encourage a batch and queue organization
• Automation comes before process improvement
• Lack of focus on efficiency

Question is some of problems in China can’t be solved in short time, such as the large population and highly relies on the low-skilled labor force in manufacturing industry. Does it mean lean manufacturing can’t work in China? How could Chinese companies implement the lean manufacturing to adapt the national condition and regain the market competitiveness?

Reference:

• BCG 2014, Enhance the competitiveness of “made in China”: implementing lean production, BCG, http://www.bcg.com.cn/export/sites/default/en/files/publications/reports_pdf/BCG_Enhancing_the_Competitiveness_of_Made_in_China_Apr_2014_ENG.pdf
• Ingram, David n.d., Key Issues for the Implementation of a Lean Manufacturing System, Chron, http://smallbusiness.chron.com/key-issues-implementation-lean-manufacturing-system-75390.html
• Liker, Jeff 2013, Lean Manufacturing in China: Opportunities and Challenges, Gray, http://www.gray.com/news/blog/2013/11/22/lean-manufacturing-china-opportunities-and-challenges
• McKinsey & Company 2013, A new era for manufacturing in China, McKinsey & Company, http://www.mckinsey.com/insights/manufacturing/a_new_era_for_manufacturing_in_china
• Safty, Shady El 2013, Chinese Manufacturing: Can the Dragon get Lean?, PEX, http://www.processexcellencenetwork.com/lean-six-sigma-business-transformation/articles/7-challenges-for-lean-transformation-in-chin/