Lean Production. Impact on the Financials of a Firm

Master's Thesis from the year 2012 in the subject Business economics - Business Management, Corporate Governance, grade: 1,0, Durham University, language: English, abstract: The starting point for this dissertation is the assumption that implementing lean production in an operation leads to an increase in productivity, enhances quality, shortens lead times, and reduces costs. As a result of these single improvements a superior competitive position is achieved. Based on a literature review that compares several approaches to define lean production, a two staged concept is developed that comprises ten different practices of lean production. These practices are linked with ten performance indicators, which are grouped into three different perspectives: shareholder, cost, and process perspective. The assumption that the lean production practices have an impact on the performance measures is tested with a questionnaire. In total 76 respondents delivered the data to test the 100 links between lean production and performance. The results show that lean production implementation has a measurable impact on the performance parameters and a weaker impact on the cost perspective measures. The results are supported by previous findings that show equivocal results regarding the impact on measures, like 'Return on Sales'.