Impact of Lean Strategy on Operational Performance: a Study of Apparel Manufacturing Companies
1. Introduction
The Apparel Industry in Sri Lanka plays a key role in shaping the country’s economy which has being plagued by a thirty year old civil war. With peace restored the country is focusing all its attention on economic and development activities to rebuild the country. The Apparel industry accounts for 15.7% of total GDP of the country (Cbsl.gov, 2011). It is also one of the main export industries of the country, with an industry growth rate of 5.2%. The Sri Lankan Economy is heavily dependent on the apparel export for both employment and foreign exchange earnings (Kelegama, 2005). The export market of Sri Lankan Clothes primarily consist of the US and Europe. However the industry is facing stiff competition in the region and it needs to improve its performance to compete with its larger rivals (Weerarantne, 2004). In order to counter this Government of Sri Lanka initiated Lean training workshops in order to improve the productivity of the Apparel industry as a whole (Charlesdagher, 2011)
Background of Study
Lean strategy involves eliminating waste from the production process, thus achieving higher level of quality, productivity and better customer competiveness (Nicholas, 1998). Formal writing on the concept of lean began in Toyota and was known as the Toyota Production System. The Toyota production system is not just a set of tools. It is the culture that was developed by Toyotas founders which is based on continuous improvement and elimination of waste. Tachii Ohno first started using TPS in the 1950’s where he focused on eliminating waste by reducing non-value adding expenditure in the value process (Liker, 2003). Since then many organization have adopted elements of Lean thinking into their own business process. The key difference between lean and other productivity techniques is that total cost simply doesn’t refer to individual cost like transport and warehousing but rather the total cost of delivering value to customers (Goldsby
The Apparel Industry in Sri Lanka plays a key role in shaping the country’s economy which has being plagued by a thirty year old civil war. With peace restored the country is focusing all its attention on economic and development activities to rebuild the country. The Apparel industry accounts for 15.7% of total GDP of the country (Cbsl.gov, 2011). It is also one of the main export industries of the country, with an industry growth rate of 5.2%. The Sri Lankan Economy is heavily dependent on the apparel export for both employment and foreign exchange earnings (Kelegama, 2005). The export market of Sri Lankan Clothes primarily consist of the US and Europe. However the industry is facing stiff competition in the region and it needs to improve its performance to compete with its larger rivals (Weerarantne, 2004). In order to counter this Government of Sri Lanka initiated Lean training workshops in order to improve the productivity of the Apparel industry as a whole (Charlesdagher, 2011)
Background of Study
Lean strategy involves eliminating waste from the production process, thus achieving higher level of quality, productivity and better customer competiveness (Nicholas, 1998). Formal writing on the concept of lean began in Toyota and was known as the Toyota Production System. The Toyota production system is not just a set of tools. It is the culture that was developed by Toyotas founders which is based on continuous improvement and elimination of waste. Tachii Ohno first started using TPS in the 1950’s where he focused on eliminating waste by reducing non-value adding expenditure in the value process (Liker, 2003). Since then many organization have adopted elements of Lean thinking into their own business process. The key difference between lean and other productivity techniques is that total cost simply doesn’t refer to individual cost like transport and warehousing but rather the total cost of delivering value to customers (Goldsby
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