PILOT STUDY ON LEAN MANUFACTURING

IMPLEMENTATION BETWEEN BUMIPUTERA

AND NON BUMIPUTERA SME AUTOMOTIVE

VENDORS

REDZA BIN AMIN SUGGUN

(2013633972)

BACHELOR ENGINEERING (HONS.) MECHANICAL

UNIVERSITI TEKNOLOGI MARA (UiTM)

JULY 2016

“I declared that this thesis is the result f my own work except the ideas and

summaries which I have clarified their sources. The thesis has not been accepted for

any degree and is not concurrently submitted in candidature of any degree”

Signed : ……………………

Date : ……………………

Redza Bin Amin Suggun

UiTM No: 2013633972

“I declared that I read this thesis and in our point of view this thesis is qualified in

term of scope and quality for the purpose of awarding the Bachelor Degree of

Mechanical Engineering”

Signed : ……………………

Date : ……………………

Supervisor or Project Advisor

Nurul Syuhadah Khusaini

Faculty of Mechanical Engineering

Universiti Teknologi MARA (UiTM)

40450 Shah Alam

Selangor

Accepted:

Signed : ……………………

Date : ……………………

Course Tutor

Dr. Wan Emri Wan Abdul Rahman

Faculty of Mechanical Engineering

Universiti Teknologi MARA (UiTM)

40450 Shah Alam

Selangor

i

PILOT STUDY ON LEAN MANUFACTURING IMPLEMENTATION

BETWEEN BUMIPUTERA AND NON BUMIPUTERA SME AUTOMOTIVE

VENDORS

REDZA BIN AMIN SUGGUN

(2013633972)

A thesis submitted in partial fulfillment of the requirements for the award of

Bachelor Engineering (Hons) (Mechanical)

Faculty of Mechanical Engineering

Universiti Teknologi MARA (UiTM)

JULY 2016

ii

ACKNOWLEDGEMENT

In the name of the Almighty, Allah SWT, I would like to express my gratitude

and appreciation to my supervisor, Puan Nurul Syuhadah Khusaini for her continuous

support, guidance, help and encouragement throughout the whole duration of the thesis

preparation until its completion. I would also like to thank my parents for their

undivided support and believe for the whole duration of my degree course. They also

inspired me to keep moving forward. Thank you to all Faculty of Mechanical

Engineering UiTM lecturers and my friends who guide me and help me throughout the

duration. Special mentions to Mr. Luqman Hadi Azahar and Perushaan Otomobil

Nasional, for their co-operation and generosity in helping me to gain every information

for this project.

iii

ABSTRACT

This project describes a study on the differences in implementation of lean

manufacturing among Bumiputera and Non-Bumiputera manufacturing companies.

We have chosen PROTON vendors as our point of reference for this project. Other

factors that give these international vendors major advantages when it comes to

producing goods and products are also being studied. Because there are cases where

Bumiputera small and medium enterprise (SMEs) companies that produced high

quality product and meet the standard required by Malaysian Automotive Industry to

compare to Non-Bumiputera vendors hired by Proton. Therefore, it is interesting to

see if there are any other factors that made them prime candidates and preferences for

Proton to become one of its vendor.

iv

TABLE OF CONTENTS

CONTENTS PAGE

PAGE TITLE

i.

ACKNOWLEDGEMENT ii.

ABSTRACT iii.

TABLE OF CONTENTS iv.

LIST OF TABLES viii.

LIST OF FIGURES ix.

LIST OF ABBREVIATIONS x.

CHAPTER 1 INTRODUCTION

1.1 Background Study 1

1.2 Brief Introduction 1

1.3 Problem Statement 2

1.4 Research Objectives 3

1.5 Research Questions 4

1.6 Scope of Works and Limitation of Study 5

1.7 Significance of Study 6

v

CHAPTER 2 LITERATURE REVIEW

2.1 Overview of the Small And Medium Enterprise SMEs 7

2.2 Bumiputera and Non Bumiputera Companies in SMEs 8

2.3 Manufacturing 10

2.4 Lean Manufacturing 11

2.5 Automotive Industries and Lean Manufacturing 12

2.6 Decision Making and Challenges in Implementing 13

Lean Manufacturing

2.7 Benefits of Lean Manufacturing 16

CHAPTER 3 RESEARCH METHODOLOGY

3.1 Introduction 18

3.2 Research Design 18

3.3 Sampling Frame and Population 22

3.4 Sample Size 23

3.5 Distribution of Questionnaire 24

3.6 Data Analysis 24

CHAPTER 4 RESULTS AND DISCUSSIONS

4.1 Pilot Study 25

4.2 Demographical Studies 26

4.2.1 Years of Establishment 26

vi

4.2.2 Company Ownership 27

4.2.3 Company Size 28

4.2.4 Company Nature of Business 28

4.3 Overall Analysis 29

4.3.1 Summary Analysis 29

4.3.2 Person-Item Distribution Map 31

4.3.3 Item Factor Analysis 33

4.4 Analysis by Construct 35

4.4.1 Lean Manufacturing Practices 35

4.4.2 Investment 39

4.5 Differential Item Functioning 42

4.5.1 Effect of Organizational Years of Establishment 43

4.5.2 Effect of Company Ownership 44

4.5.3 Effect of Company Size 45

4.5.4 Effect of Company Nature of Business 46

4.6 Proton’s View and Answer 49

4.6.1 On Bumiputera Vendors 49

4.6.2 On Lean Practices 49

CHAPTER 5 CONCLUSIONS AND FUTURE WORKS

5.1 Introduction 50

5.2 The Level of Lean Manufacturing Implementation 51

5.3 Lean Manufacturing Implementation Sequence 51

5.4 Limitation of Research 52

5.5 Future Works 52

vii

REFERENCES 54

APPENDICES 57

Appendix A Survey Questionnaire 58

viii

LIST OF TABLES

TABLE TITLE PAGE

1.1 Research Questions 4

3.1 Minimum Sample Size Range 23

4.1 Years of Establishment 27

4.2 Company Ownership 27

4.3 Company Size 28

4.4 Company Nature of Business 29

4.5 Summary of 25 Persons Measured 30

4.6 Summary of 11 Items Measured 30

4.7 Summary of Item Misfits 33

4.8 Summary of Six Items for Lean Manufacturing Practices 36

Construct

4.9 Item Validity for Lean Manufacturing Practices Construct 37

4.10 Summary of Five Items for Investment Construct 39

4.11 Item Validity for Investment Construct 40

4.12 Consolidated DIF: Organizational Years of Establishment 44

4.13 Consolidated DIF: Company Ownership 45

4.14 Consolidated DIF: Company Size 46

4.15 Consolidated DIF: Nature of Business 48

ix

LIST OF FIGURES

TABLE TITLE PAGE

1.1 PROTON and DRB HICOM Logo 3

2.1 Example of Manufacturing Process 11

2.2 Example of Assembly Line 12

2.3 List of Lean Tools 14

3.1 Research Methods Flowchart 20

3.2 Research Methods Flowchart 21

4.1 Person-Item Distribution Map (Overall) 32

4.2 Scalogram Analysis (Overall) 34

4.3 Scalogram Analysis (Lean Manufacturing Practices) 37

4.4 Person-Item Distribution Map (Lean Manufacturing Practices) 38

4.5 Scalogram Analysis (Investment) 41

4.6 Person-Item Distribution Map (Investment) 42

4.7 Consolidated DIF t-Value: Years of Establishment 44

4.8 Consolidated DIF t-Value: Company Ownership 45

4.9 Consolidated DIF t-Value: Company Size 46

4.10 Consolidated DIF t-Value: Company Nature of Business 48

x

LIST OF ABBREVIATIONS

LM - Lean Manufacturing

MnSq - Mean Squared

DIF - Differential Item Functioning

ZStd - Z Standard

1

CHAPTER 1

INTRODUCTION

1.1 BACKGROUND STUDY

This chapter give details about the pre study subject of the research including

problem statement, research objectives, scope of study, and significance of study.

1.2 BRIEF INTRODUCTION

Manufacturing is a process where raw materials (input) being converted into

products (output) which comply to design specifications. Manufacturing also can be

stated as transformation of materials and information into goods for the fulfilment of

2

human needs. The process of production depend upon the nature of the product and

customers need (Yusuff M, 2009). Type of process is determined by the size and

volume of products.

Several aspects that need to be considered to create a product are:

i. Resources

ii. Materials

iii. Information

iv. Customers

v. Finances

vi. Staffs

It is important to consider these aspects before we start to create a product.

Manufacturing industries has undergone several evolutions. Manual and conventional

process have been replaced by fully automated process nowadays. Revolution are

needed in manufacturing to reduce the risk and hazards for the employee, to increase

product variety, quality and productivity. This justification is aligned to the lean

manufacturing that has become one of the most important method in manufacturing

industry today.

Lean manufacturing is a method of eliminating waste within manufacturing

system. The aim of this method is reduce waste and cost production for a better

productivity. Basic types of waste in manufacturing are:

i. Transportation

ii. Inventory

iii. Movement

iv. Waiting

v. Overproduce

vi. Over-process

vii. Defects

These basic types of waste can be categorized into three categories, Muda, Muri

and Mura which means waste, waste created through overburden and waste created

through unevenness respectively.

3

1.3 PROBLEM STATEMENT

PROTON is one of Malaysia national automotive project and has become one of

household name in local automotive industries. Vendors from local and abroad have

been hired to supply and manufactured its parts. However, the likelihood for the

Bumiputera vendors to be hired by PROTON is lower to compare with Non-

Bumiputera vendors. Malaysian Automotive Industries (MAI) has set standards for

manufacturing in small and medium enterprise which includes the implementation of

lean manufacturing. Fellow candidates have to meet the standard set to be considered

or hired as vendors.

For this project, we would like to study the differences in implementation of

lean manufacturing between Bumiputera and Non-Bumiputera among PROTON

vendors. Also, we would like to know other factors that give these Non-Bumiputera

vendors major advantages when it comes to producing goods and products due to a

request from a Bumiputera vendors, as they are concerned for there are cases where

Bumiputera small and medium enterprise (SME) companies produced high quality

product and meet the standard required by MAI have been overlooked by PROTON.

Therefore, it is interesting to see if there are any other factors that made them prime

candidates and preferences for Proton to become one of its vendor.

Figure 1.1

4

1.4 RESEARCH OBJECTIVES:

The objectives for this study are:

i. To investigate the degree of Lean Manufacturing implementation among SMEs.

ii. To identify the implementation sequence of Lean Manufacturing elements among

SMEs.

iii. To provide a preliminary overview of differences of Lean Manufacturing

implementation between Bumiputera and Non-Bumiputera companies.

1.5 RESEARCH QUESTIONS

Table 1.1

Objectives Research Questions

To investigate the degree of Lean

Manufacturing implementation

among SMEs.

1) Lean implementation is important

for the manufacturing industries

2) Lean implementations are important

aspects and considerations for the

company productions and

productivity.

3) The company apply lean thinking

and lean tools.

4) The company leaders ensure

everyone are involved in lean

manufacturing implementation.

5

To identify the implementation

sequence of Lean Manufacturing

elements among SMEs.

5) The company apply lean thinking and

lean tools

6) The company uses lean tools such as

Kanban System, 5s and Kaizen as

guidelines in order to make decision

in lean manufacturing

7) The company uses concepts such as

Total Quality Management, Just in

Time, Six Sigma and etc. in order to

improve lean implementation and

productivity.

To provide a preliminary overview of

differences of Lean Manufacturing

implementation between Bumiputera

and Non-Bumiputera companies.

8) The company provides training for

the employee.

9) The company invests on employee

empowerment.

10) The company uses Human

Resources Management practices to

improve the standard, quality and

knowledge of the employee

11) The company provides sufficient

facilities for the employees.

12) The company invests on advanced

and up-to-date machineries for

production.

6

1.6 SCOPE OF WORK AND LIMITATIONS OF STUDY

Main purpose of the study is to determine lean implementation and practices

among PROTON Bumiputera and Non-Bumiputera companies. The origins of the

vendors is also one of the scopes for the study.

Manufacturers for smaller parts such as fastener, door hinge and absorbers are the

ones that have been the subject of the studies. However, the manufacturing process of

the companies does not affect the outcomes of the study.

1.7 SIGNIFICANCE OF STUDY

The study will highlight the traits that are important for a company to be

successful and achieve World Class status in terms on Lean Manufacturing

implementation. This study also can be theoretical guidance for organizations

recognize Lean Manufacturing practices, its technique and degree of implementation

to ensure an accomplished implementation. Although the explanation for this study

only in the general terms, it can give preliminary ideas and basic pictures to the

organizations who want to implement Lean Manufacturing. Ultimately, this study

provide an initial insight on differences between Bumiputera and Non-Bumiputera

companies in their working culture and lean implementation which is important if the

Bumiputera companies want to be more competitive in manufacturing industry and to

be able to sustain through time.

7

CHAPTER 2

LITERATURE REVIEW

2.1 OVERVIEW OF THE SMALL AND MEDIUM ENTERPRISE SMEs

According to the website www.thefsegroup.com, European Commission

defined a small or medium-sized enterprise or SME as a business or company:

i. That has less than 250 employee;

ii. Annual turnover not exceeding €50 million (approximately RM 229 million) or an

annual balance-sheet total not exceeding €43 million (approximately RM197 million);

iii. Those companies with capital or voting rights, 25 per cent or more is not owned by

one enterprise, or jointly by several enterprises, that fall outside this definition of an

SME. This threshold may be exceeded in the following two cases: (a) if the enterprise

is held by public investment corporations, venture capital companies or institutional

investors provided no control is exercised either individually or jointly, or (b) if the

capital is spread in such a way that it is not possible to determine by whom it is held

and if the enterprise declares that it can legitimately presume that it is not owned as to

8

25% or more by one enterprise, or jointly by several enterprises, falling outside the

definitions of an SME.

However, contrary to United States of America, any firm from a small-office

home-office (SOHO) to a huge corporation may be classified as SME. To be precise,

firms included in Russel indices such as Russel 2500 index and Russel Midcap index

are classified as SME.

In Malaysia, the definition of SMEs as approved by the National SME

Development Council for manufacturing sector is a company or enterprise that annual

turnover less than RM 50 Million and has 200 or less workers. SMEs companies and

ventures have several advantages to compare with big companies. According to

Rymaszewka A. D. (2013) manufacturing process are flexible for the small firms and

they can respond quicker to indifferent consumer’s needs by being able to address the

request for variety better. The fact that SMEs are often young companies with younger

staff, the willingness to become more innovative and take risk are increased.

2.2 BUMIPUTERA AND NON BUMIPUTERA COMPANIES IN SMEs.

Bumiputera is a word extract from Sanskrit word Bhumiputra, which means

the “Son of the Earth”. The official definition which is widely used in Malaysia

whereby it taking up ethnic Malays as well as other indigenous ethnic group. In

Malaysia, generally all Malays are considered as bumiputeras. A company can be

regarded as “Bumiputera-controlled-company” when either one of the following

criteria is fulfilled apart from 30 per cent equity ownership by bumiputeras in any

listed company in Malaysia. The criteria for Bumiputera companies are:

i. 50 percent of the equity must be owned by Bumiputera shareholders.

ii. Individual Bumiputera shareholder must own at least 35 percent of the equity.

The shareholding of the Bumiputera group is not related directly or indirectly with

any non-bumiputera group. Bumiputera group is the rightful owner and have total

control attached to its shareholding and free from any outside influence.

9

However, scenario in manufacturing industries in Malaysia today shows that

Non-Bumiputera companies are controlling and have major influence in the industry

to compare with Bumiputera companies. This scenario is by no means happens by

accident. Hamidon S. (2009), stated that one of the factor that are hindering the

development of Bumiputera entrepreneur is attitudes and mindsets. Negative attitudes

and mindsets are often associated with Bumiputera entrepreneur especially the Malay

ones. They are too greedy and eager to get rich fast and easy. They (Malays) always

look for a short cut in doing business rather than going through the process of creating

and establishing. Another negative attitude that can be observed is materialistic culture

of the Malay society. Material consumption is regarded as an absolute measure of

success amongst the Malay community which then will lead them to spend lavishly

for their personal pleasure rather than to develop their business.

While according to Kamal E. M and Flanagan R., (2014) one of the factors that

are hampering the progress of Malay entrepreneurship is method of approaching

business. Bumiputera entrepreneur and Non-Bumiputera have different business

approaches. In this case we use Chinese as our prime example, Dependent on

government project have been one of the traits that is popular among the Bumiputera

entrepreneurs. They refrain themselves to tender for private projects, in fact some of

the cases, they never tender for the private projects. Some suggested that the stiff

competition from the Chinese contractors makes it difficult for small Bumiputera

contractors to bid for private projects. The Chinese took full advantages in private

project sector as they cannot bid for government projects due to “Non-Bumiputera”

status. Another factor that Chinese contractors are competitive is they are more

commercially aware than the Bumiputera companies in their effort to gain new

information and knowledge to improve and increase their productivity. However, it

cannot be said that everything is different between Bumiputera and Non-Bumiputera

companies as they have similarities in working attitude where both are equally

hardworking and have same goals to survive and remain in the business for as long as

possible.

Another factors that is mentioned by Kamal E. M. and Flanagan R. (2014),

small number of employees might contributed to the lack of development. For SMEs,

they did not directly employ their own site labor, in fact they rely heavily on the use

of sub-contraction and often than not most laborers did not have any related skills. The

10

contractors suggested that it is not economical for them to hire their own labor because

of limited numbers of project and there is no guarantee in continuity of work and

projects. Foreign labors have been one of the preferences for the SMEs are as they

have wide availability and low on wages. Therefore, the contractors have little

motivation to increase their productivity. Another comparison that can be drawn

between Malay and Chinese companies is Malay company lack of co-operation and

networking. Disinclination among the Malays is preventing them to co-operate and

help one another to share their expertise and knowledge and further improve

themselves to be more competitive with Non-Bumiputera companies. Therefore, this

will create division and prevent Malays from being unite which then will only lead

them to undermine the business success of their own kind instead of supporting and

helping one another. To compare with the Chinese who will help and provide any kind

of supports to most of their own people rather than competing with one another.

These are some of the factors that differentiate between Bumiputera and Non-

Bumiputera companies regardless of sectors that they are involved in. However, we

need not to jump into conclusion too fast by saying that Bumiputera companies are all

bad, because there are several big names in the industry that are owned by Malay and

Bumiputera such as Sapura Group of Companies. But we must admit that there a lot

to be desired and improve in order to be competitive with non Bumiputera companies

2.3 MANUFACTURING

Manufacturing is a process of converting raw materials, components or parts

into a product that satisfy customer’s needs and expectations. Commonly consist of a

man-machine setup with section of labor in a large scale production. Common process

that are used in manufacturing such as casting, shaping, pressing and joining, to name

a few. Manufacturing process are widely used nowadays. Automotive industry is one

of those that is commonly associates with manufacturing, because manufacturing often

related with large scale or mass production. Furthermore, automotive manufacturing

industry can be considered as technological trend setter among manufacturing

11

industries. Manufacturing also often linked with frequent changes in demand thus it

is in line with the automotive industries that are evolving every day at a high pace.

Figure 2.1

2.4 LEAN MANUFACTURING

Before lean manufacturing was introduced, manufacturing sector were using

Cellular Manufacturing (CM) as one of the ways to reduce set-up time and material

handling cost. According to Kant R. et al. (2015), Cellular Manufacturing also referred

as group technology (GT) in manufacturing context, involves grouping of parts based

on similarities and formation of machine cells in such a way that a group of parts could

be processed in a machine cell. In 1990, lean production has been introduced and it is

proven that lean production produced higher productivity strategy.

Formal documentation about lean manufacturing was published in 1990.

However, Toyota Production System were practicing lean manufacturing long before

the formal documentation is published, after the World War II to be exact. The persons

responsible in introducing the strategy are Taiichi Ohno and Shigeo Shingo from

Japan. It focus on reducing the cost of production by reducing the unnecessary

activities. Main features of Lean Manufacturing are continuous flow, just in time,

standardization and synchronization. This strategy can be achieved through

eliminating waste within the manufacturing system, known as Muda. Mura and Muri,

12

terms which describe as waste created through overburden and unevenness are also

needs to be taken into account as afromentioned in the introduction.

2.5 AUTOMOTIVE INDUSTRIES AND LEAN MANUFACTURING

Today, automotive industries are growing rapidly with new technologies and

new cars being launched almost every day. Big names like Mercedes Benz,

Volkswagen and BMW are among the prime contributors towards the growth of the

industries and technologies revolved around it. Automotive product industry can be

defined as company that produced original equipment and “aftermarket” products for

motor vehicles. Original parts are products that go into the manufacture of a motor

vehicle or acquired by the assembler for its service network to be used as an

aftermarket part. Different from aftermarket parts, it is separated into two parts,

replacement products and accessories. Replacement products are built to replace OE

parts as they become worn out. As for accessories products, they are made for comfort,

convenience, safety, performance or customization and it is sole separately from the

original sale of the motor vehicle.

Figure 2.2

According to Goss J. in her article, Henry Ford and the Assembly Line, Henry

Ford began production of the Model T automobile in 1908. This creation has been the

13

pioneer of mass production assembly line. This idea was based on the concept of

simply assembling interchangeable components parts. During this time, Henry Ford

developed an assembly stands where the whole vehicle was built. However, he found

out that this method is time consuming. Ford soon realized that walking from stand to

stand are time wasting and in 1913, he found the solution to this problem by

introducing assembly line, a conveyor that move the vehicles to the assembly station.

This ideology and method can be declared as the first lean manufacturing method been

used in automotive industries. After the World War II, Taiichi Ohno and Shigeo

Shingo from Toyota Production System (TPS) became one of the first organization to

develop a method that reminiscence the lean manufacturing. According to Walton D.

et al. (2010), Lean manufacturing and Toyota Production System (TPS) are one and

the same. Toyota involved in automobiles industries in mid-1930s with parts are being

acquired from General Motors.

2.6 DECISION MAKING AND CHALLENGES IN IMPLEMENTING LEAN

MANUFACTURING

Implementation of lean manufacturing involves choosing appropriate tools

from the lean tools to achieve process fineness. However, do not over focus on the tool

benefit and striving for process excellence but overlooking the sustainability of the

lean tool within specific work culture. According to Bottani E. (2013), there are several

questions needs to be ask in order to select lean tools such as:

i. What is the benefit of the lean technique under consideration and how likely or difficult

is it to achieve? (Is it worth doing this?)

ii. How do the usage of the lean technique and its benefits relate to the sustainability of

the change intervention? (Would doing this have long-term benefits?)

Lean manufacturing comprises many set of tools and techniques. The tools and

technique are illustrates in the diagram below.

14

Figure 2.3

Work has been done on the classification and relevance of tool to specific waste, but

it is still not possible to identify which tools are most suitable in which situation. As a

result, those who implement the tools often lack the means to make informed decisions

about which tools they are using.

Kovacheva A. (2010) stated in her articles, Challenges in Lean Implementation,

there are five factors that are significant for lean implementation:

i. Change strategy targeted and holistic:

- Managers often implement lean tools or technique without better understanding as a

whole. On the other hand this more tentative approach is being used because

employees are not open to new ideas. Focused training needs to be provided in order

to educate among personnel of the key principles of waste elimination.

ii. Effects of company culture:

- In order to make the employees to think differently, changes of mindset are needed as

it gives people an aim in their working life and have the potential to change attitudes

and are more willing to contribute to company’s improvement initiatives. Difficulties

to change the existing ways of doing things is the result of stronger management

control makes the organization structure bureaucratic.

iii. Product focus:

- Lean changes need to be focused on the specific product value stream, so that the

control over resources to be dependent mainly on the improvement team.

15

iv. Senior management commitment:

- Consistency in management commitment is an important element in effective

implementation of changes in organizations (Kotter 2007)

v. Timing for performance improvements:

- Companies need to be prepared for the lean transformation along with reacts quickly

to the change and even taking a risk and later deal with consequences.

Kropf P. (n.d) stated that three common scenarios that are usually faced by

companies in implementing lean manufacturing are:

i. Challenges with employee empowerment,

ii. Other functional groups

iii. Past experience.

One of the most important aspects in lean manufacturing is to make decision

that are close to the customer. This means the decision are made by the people that

position at the bottom of the organizational chart that are as close to the manufacturing

process as possible. New senior manager may open to this idea only to discover that

those who are responsible to make the decision are not ready yet. This will leave no

choice for the new manager other than take the additional decision-making workload

while coaching the team to become empowered. As a result, this situation will slow

down the lean implementation progress.

A new senior manager may not expect the level of reliance of other functional

groups. Usually, this aspect have been taken for granted in previous jobs. For example,

an automotive supplier decided to switch from assembly-line-based system towards a

cellular layout. Previously, the employees performed a single job at a single

workstation. Although products were built on a assembly-line, the inventory will

eventually piled up between operations. Production could not run smoothly without

the presence of all employees which will results in complaints among some employees

who had to accept the unwanted behavior of “few minutes here or there did not matter”.

Finally, a new manager may find it difficult to implement lean manufacturing

with new employer that has less to do with the company itself and more with the

manager’s skill set. According to Kropf P. (n.d), “A lean professional's ability to

transform a traditional manufacturer into one that embraces the Kaizen philosophy is

greatly co-related with whether that person was part of a company's lean

transformation from the ground up as opposed to joining an already well-working

16

production system”. Therefore, it can be said that an individual who are more involved

with the lean culture will find it easy to implement it in another company.

In conclusions, to implement lean manufacturing and apply lean tools, it takes

a great team effort in order to make this method a success. It can only bring benefits

and increased the productivity of a company.

2.7 BENEFITS OF LEAN MANUFACTURING

The benefits that can be obtained by implementing lean manufacturing are well

documented:

i. Increased Efficiency

- This can be seen in the process line as line balancing will ensure every workers

involved is working in the most efficient way. The worker will follow the

standardization set by the company and it will leads to repeatability and increased

efficiencies as they just following the same method every time.

ii. Improve Quality

- Mistake proofing is put in place to prevent the occurrence of defects on the products

and further strengthen the process. This will result in improvement on the product

quality.

iii. Reduce Inventory Space

- As part of lean manufacturing, the products will be produced according to the number

of quantity desired. This will lead to reducing the inventory space for the excess

product as there are no overproduced products occurs.

iv. Problem Elimination

- Lean manufacturing emphasizes on eliminating problem and further investigate it to

prevent it from repetitive occurrence. Root cause analysis and cross functional teams

are used to pay attention to in correction of the problem.

According to Melton T (2005), by implementing lean manufacturing, business

process will be faster. For example the speed of response to a request for the business

process will be quicker, and as most business processes are linked to organizational

17

supply chains, then this can deliver significant financial benefits to a company. Melton

T (2005), also added that typical benefits of implementing lean manufacturing are less

process waste, reduced inventory, reduced lead-time, less reworks financial savings

and increased process understanding. Thus, it is why this strategy have become a

revelation and one of the most important aspects in manufacturing industries. To

implement lean manufacturing, one has to develop lean thinking. “Lean thinking

focuses on developing a process that provides more value to the client.”, Walton D et

al. (2010). However, despite all this, many companies are not able and struggle to

transform themselves to become world-class companies by adapting lean

manufacturing.

18

CHAPTER 3

RESEARCH METHODOLOGY

3.1 INTRODUCTION

This chapter explain the methodology used to find the solution for the

objectives of this study. All the activities carried out throughout the process are

explained in this chapter. Those activities are information prospecting (literature

review), survey (both pilot study and field study), survey and data analysis.

3.2 RESEARCH DESIGN

Method that have been chosen to conduct future survey has been decided. The

method chosen is to conduct Questionnaire type of survey. According

www.businessdictionary.com website, questionnaire is a list of research questions

asked to respondents in order to get specific information. The purpose of this method

is to collect appropriate data and make it comparable and amendable to analysis.

19

The advantages of this method are:

i. Practical

ii. Information can be collected from a large number of people in a short period of time

in a cost effective way.

iii. The results can be quickly and easily quantified manually or by a software.

iv. Respondent has time to consider questions

v. The answers given by the respondent has longer period of validity as the responses

given by the subjects are available in their own language and version. Therefore, it will

prevent any wrong interpretation by the researcher.

Figures below show the research design for the whole process of this study. It includes

Literature Review, Data Analysis and Results Findings.

20

START

- Project title are given and theprocess of study the subject isstarted.

PROBLEM IDENTIFICATION

- International and non bumivendors are among the majorityvemdors for Proton.

LITERATURE REVIEW

- Insight review about the projectand subject being study.Explaination of the studies beingmade.

DECISION

- Decision about which type ofresearch method should be usedfor this studies. Eitherquestionnaire, interview orsurvey.

PRELIMINARY OUTCOMES

- Questions for the researchmethod are being constructed inorder to collect data

- The origin of the vendors havebeen known.

21

Figure 3.1 & Figure 3.2

The project have been divided into two parts. The first part is the proposal,

where the topic of this project was proposed to the supervisor. The breakdown of the

proposal part is shown in Figure 3.1. After approval been given by the supervisor, then

the project can start. The first step taken to start the research study is problem

identification. For this topic, the problem identified is the number of Non-Bumiputera

vendors hired by PROTON is higher than Bumiputera vendors. Problem identification

process was followed by Literature Review. The purpose of this process is to have

RESEARCH

- Research are being conductedin order to collect all the dataneeded for the studies.

DATA CONVERSION

- Data collected will be convert intocoding by using SPSS analysissoftware and Winstep.

DATA ANALYSIS

- Converted data will beinterpret using Rasch Modelanalysis.

RESULTS

- Results outcomes from theRasch Model will be analyzed.

CONCLUSION

- Conclusion about the studycan be made if desired results isachieved however failure to doso, we have to re-analyzed thedata collected and repeat thecycles

22

insight review and further study about the project. Explanation on manufacturing, lean

manufacturing, differences of Bumiputera and Non-Bumiputera and definition of

Small Medium Enterprises are acquired through this process. This process is important

because it gave better understanding about the project and problem. Next, decision

regarding information gathering method and analyzing method are being discussed

and made. For this project, we used questionnaire technique to gather information

about PROTON and its vendors. For data interpretation and analysis, we used Rasch

Model Analysis.

For the second part as shown in Figure 3.2, the research for the project began

whereby numbers of questionnaires were distributed to PROTON and its vendors to

collect all the data needed to analyze. After all the data needed have been gathered and

collected, it will undergo conversion into coding using SPSS analysis software and

Winsteps before data interpretation process takes place. All the data will be cumulated

and interpret using Rasch Model Analysis to achieve the objectives. Next, result from

the analysis are analyzed and conclusion can be made if the results achieved satisfy

the objective of the project.

3.3 SAMPLING FRAME AND POPULATION

As mentioned earlier in the objectives, the population for this study was the

vendors from PROTON. As with other industries, the automotive vendors consists of

small, medium and large companies. The definition for respective industries have been

mentioned in Chapter 2, Literature Review. Total of 1500 numbers of PROTON

vendors have been identified. However, only selected amounts of vendors satisfy our

criteria for the questionnaire to be distributed.

23

3.4 SAMPLE SIZE

Before distributing the survey questionnaires, it is important to recognize the

sample size from total population. Since this study used the Rasch Model as the

method of analysis, the consideration for the sample size was different as compared to

other studies. According to Linacre M. (1994), the Rasch Model is capable of

analysing as low as sixteen (16) respondents for a 95 percent of confidence level, and

as low as twenty-seven (27) respondents for a 99% confidence level. The details are

shown in Table 3.1.

Table 3.1

Source: Linacre

Total of 50 sets of questionnaire have been distributed to various companies in

order to get the minimum amount required. This is due to lower response among SMEs

companies. The distribution of the questionnaire started on the 20th February 2016 and

ended on the 20th May 2016. The data was analyzed from then onwards.

24

3.5 DISTRIBUTION OF QUESTIONNAIRES

The survey questionnaires were distributed to the organizations among

PROTON vendors, specifically in the manufacturing sector.

3.6 DATA ANALYSIS

The type of analysis chosen to analyze the data for this study was by using the

Rasch Model. The Rasch Model provides empirical proof of the mutual latent trait on

what are the likelihoods of a person (based on his or her ability) to correctly responds

to given items at different levels of difficulty of an established unit named “Logit”.

According to Khusaini N.S (2014) the Rasch Model is one of the best method for data

analysis since it provides a reliability score for both items and respondents. It also

summarizes total score completely based on a person’s view on variable rises from a

more necessary requirement. For example, if we compare the performance of two

students exam sheets. By using Rasch Model, we can know how they behave towards

each questions and to know the degree of understanding of the students towards each

questions. This features makes the Rasch Model unique.

For this study, the analysis concentrated on the reliability of the item and the

respondent, person separation and item factor analysis.

25

CHAPTER 4

RESULTS AND DISCUSSIONS

4.1 PILOT STUDY

Pilot study is important process to conduct before any operation to ensure the

operation is successful. It allows the author to identify problems that needs to be faced

before distributing the field survey. It is also important for the instrument development,

where issues, such as item difficulty, internal consistency and unidimensionality play

an important role are relevant in line with the topic of this project.

With the reference to Table 3.1, number of respondents must be selected for

this project and total of ideal number of respondents should be at 16 to 36 respondents.

Thus, 50 survey questionnaires were distributed, with a response rate of 50 percent.

However, according to the respondent feedback, some of the questions need to be

rephrased and some are not clear. Suggestions and recommendations received helped

the author to improve the content.

26

In this study, Winstep software version 3.72.3 was used to conduct Rasch

Model Analysis. This software provided figures and tables of the data analysis for the

author to study the fitness of the data. Analysis of the summary statistics was

conducted for the pilot study. Important parameters, such as item and person

reliability, Cronbach Alpha value and person measurements were confirmed so that

the data were suitable for further analysis. Further information will be explained in the

following subsections.

4.2 DEMOGRAPHICAL STUDIES

The demographic studies in the survey consists of years of the company’s years

of establishment, company ownership, size of the company as well as company

business nature. This questions were asked to study the organizational background of

the company and to achieve the research objectives.

4.2.1 Years of Establishment

The first demographic question being asked to the participant is the year of

establishment for their respective companies. Three options were given to the

respondents as answers. The result was as per shown in Table 4.1. 12 percent of the

respondents stated that their companies established less than ten years. According to

the answer given, 28 percent of the respondents came from companies that were

established between 10 to 30 years. Majority of the respondents came from companies

that were established more than 30 years, with the percentage stand at 40 percent.

27

However, 20 percent of the respondent did not state the year of establishment of their

companies.

Table 4.1

Years of Establishment Frequency Percentage %

Below 10 years

10 to 30 years

More than 30 years

Did Not State

TOTAL

3

7

10

5

25

12

28

40

20

100

4.2.2 Company Ownership

For the type of company ownership, has two options Bumiputera and Non-

Bumiputera. The details are as per stated in Table 4.2. Majority of the companies were

Non-Bumiputera with the percentage of 64 percent. While the rest is from Bumiputera

company with percentage of 36 percent.

Table 4.2

Ownership Frequency Percentage %

Bumiputera

Non-Bumiputera

TOTAL

9

16

25

36

64

100

28

4.2.3 Company Size

For the company size, most of the respondents came from Large Industries.

The percentage for the respondents is 76 percent. Respondents from SMEs companies

had percentage of 24 percent. This results have been tabulated in Table 4.3.

Table 4.3

Industry Frequency Percentage %

SME

Large Industries

TOTAL

6

19

25

24

76

100

4.2.4 Company Nature of Business

Table 4.4 shown the nature of business for each respondent respective

companies. The respondents were given two choices of answers, Small Parts and Large

Parts. 56 percent of the respondents came from companies that manufactured small

parts. As for the companies that manufactured large part, the percentage stands at 36

percent. However, there are 8 percent of the respondents did not stated nature of

business of their companies.

29

Table 4.4

Nature of Business Frequency Percentage %

Small Parts

Large Parts

Did Not State

TOTAL

14

9

2

25

56

36

8

100

4.3 OVERALL ANALYSIS

Rasch Model analysis was performed to measure the invariance; by means the

trait which is not a norm amongst the PROTON vendors. Rasch Model was also

performed to perceive the overall item and person reliability, the person separation,

the order of the Lean Manufacturing tools and practices; as well investment made. On

the other hand, the item factor analysis and unidimensionality have also been analyzed.

4.3.1 Summary Statistic

All the data collected are analyzed by Rasch Model. Cronbach Alpha value is

the value to determine the reliability of this test. The Cronbach Alpha value should be

higher than 0.7 to be considered as reliable. The Cronbach Alpha obtained from the

analysis for this test is 0.8, therefore it can be classified as reliable test. For this test,

the value of item reliability is 0.46 which indicates more items needs to be added. Item

sufficiency is related to how much the items spread along the continuum. The value

can be seen in Table 4.6. It can be concluded that the amount of items was sufficient.

The maximum person measurement was high at +6.09 logit (S.E=1.85) than the

maximum item measurement at +0.91 logit (S.E=0.44). This indicates that the

30

respondents (person) of the survey are implementing lean manufacturing practices

successfully and more questions (items) should be added to know more in details about

their lean manufacturing practices. On the other hand, there were sufficient items since

the minimum item measurement was -1.00 logit, compared to the minimum person

measurement which was 0.33 logit. The instrument’s model error was at +/-0.27 logit,

but it was enough to give good person separation of 1.53 ≈ 1.59 (as shown in Table

4.5).

Table 4.5

Summary of 25 persons measured

Table 4.6

Summary of 11 items measured

31

4.3.2 Person-Item Distribution Map

In the Rasch Model, the Variable Map, also called Person-Item Distribution

Map, is a feature that explains the relationships between the respondents and items.

The measurement consists of three (3) criteria:

• Must be equal intervals (e.g. clock)

• Must have numbers and be ordered

• Must have a unit of measurement (e.g., minute, seconds, kilogram).

As shown in Figure 4.1, the Person Item Distribution Map consists of one

vertical dashed line which distinguished the data generated for persons (on the left)

and items (on the right). This vertical dashed line is represented by one established

unit, called “Log of odd units” or “Logit” and has equal intervals. Logit is a unit of

intangible measurement. The letter M in the map represents the mean for item and

person; whilst the letters S and T denotes one standard deviation and two standard

deviations away from the mean, respectively. The item mean has been standardized

(zero-set) by the Winstep software, and is always at zero (0) Logit. However, the mean

for person rely on the respondents, since there is 50:50 chance that these respondents

do implement Lean Manufacturing (LM) effectively.

As for the position of person and item along the continuum, the person and

item in Figure 4.1 have been arranged so that the highest Logit value is at the top;

whilst the lowest is at the bottom. The arrangement for the person section are set such

that the least LM implementer positioned at the bottom, whereas the most LM

implementer positioned at the top. For the item segment, it is arranged from the least

implementing/ agreeable (bottom) to the most implementing/ agreeable (top).

Overall, the items’ spread was about +2 logit, whilst the persons’ spread

broadened at about +5 logit. This indicate that more items need to be added to the

instrument. Also can be seen from figures, the items have been grouped to the domain.

There were 2 domains, Lean Practices and Investment respectively. This domain

represent the basic LM implementation of the companies or organizations. Therefore,

from Figure 4.1, we can see that most of the persons implement LM successfully since

majority of them are positioned above the items domains. However, there are two

32

persons or organizations positioned parallel to the items which indicate that they are

not implementing LM enough in their organizations. It can be seen that for Investment

domain, item I2 is the most difficult to implement by the respondent while many

respondent agreed that item I3 is the most easiest to implement. As for Lean Practices

domain, Figure 4.1 shows that item LP3 is the most difficult for the respondent to

implement whereas item LP2 is the most easiest to implement. This satisfy our first

objective to investigate the degree of implementation of Lean Manufacturing practices

among SMEs.

Figure 4.1

Person-Item Distribution Map

33

4.3.3 Item Factor Analysis

The first method in identifying a misfit item is by looking at the Point Measure

Correlation (PMC). The first sign of multidimensionality is negative value of PMC. In

general, all items have a positive PMC, and with error of Mean S.E at +0.38 logit.

Three (3) parameters should be considered for an item to be misfit.

The three parameters are:

• Point Measure Correlation ; 0.32 < x <0.8

• Outfit Mean Squared ; 0.5 < y < 1.5

• Outfit Z-Standard ; -2 < z < 2

Overall, the MnSq and ZStd for possible misfit items can be seen from the

“Outfit” column in Table 4.7 which ranged from 0.53 logit to 1.35 logit (MnSq) and

-1.8 to 1.1 (ZStd). A fit item should have values within specifications for all three

parameters above. As shown in Table 4.7, none of the items violated all three

parameters which indicates that the items are not misfits and relevant to the objective

of the project. However according to Donaldson, respondent tends to give feedback in

such a way as to look good when answering self-reporting questions (Donaldson &

Grant-Vallone, 2002). This actions will caused the statistical analysis inaccurate.

Table 4.7

Summary of Item Misfits

34

Gunttman scaling is also sometimes known as cumulative scaling or scalogram

analysis. The use of the scaling is to create a range for a concept you wish to measure

(Tochim W., 2008). In a simple term, it shows and indicates the total score or

performance of the respondents towards all questions. In Figure 4.2, it can be seen that

person who are best implementer of LM are positioned higher in the scalogram

(Orange Highlighted). Figure 4.2 shown that person number nine (9) is the best

implementer whereas person number seven (7) is the poor LM implementer. As for

item sequences, the simplest item is positioned at the left endd of the scalogram (Red

Highlighted). In Figure 4.2, item number two (2) is regarded as the simplest question

by the respondents and item number three (3) is the most difficult. This scalogram

have satisfy the second objective for the project which is to identify the

implementation sequence of LM among SMEs. Through the scalogram, the

implementation sequence have been identified as it already categorized from the

easisest implementation to the most difficult.

Figure 4.2

Scalogram for overall analysis

35

4.4 ANALYSIS BY CONSTRUCT

This section explains the findings further based on three bases; the item

reliability, the quality of the item and the validity of the item in each construct. The

constructs are Lean Manufacturing Practices and Investment. Findings based on the

response received, are also shown in this section. By doing construct analysis, the third

objective have been achieved as the differences of LM implementation between

Bumiputera and Non-Bumiputera can be identified.

4.4.1 Lean Manufacturing Practices

This construct consist of six (6) items:

LP1) Lean implementation is important for the manufacturing industries

LP2) Lean implementations are important aspects and considerations for the company

productions and productivity.

LP3) The company apply lean thinking and lean tools.

LP4) The company leaders ensure everyone are involved in lean manufacturing

implementation.

LP5) The company uses lean tools such as Kanban System, 5s and Kaizen as

guidelines in order to make decision in lean manufacturing.

LP6) The company uses concepts such as Total Quality Management, Just in Time,

Six Sigma and etc. in order to improve lean implementation and productivity.

From table 4.8 the item reliability for this construct is 0.70 and it shows the

sufficiency of the items. The model error is at a small 1,11 logit. Hence, it proves that

the construct have good and quality items.

36

Table 4.8

Summary of Six items for Lean Manufacturing Practices Construct

Item validity is used to ensure the item is measuring in the right direction. To

determine whether an item is measuring in the right direction; value of Point Measure

Correlation (PMC) in Table 4.9 is read. A negative value of Point Measure Correlation

indicates that there are respondents decide to disagree; when the respondents are

supposed to agree; or vice versa. An item is only valid when it is measuring in the right

direction according to expectation.

Rasch Model had sorted the items based on the responses from the easiest Lean

Manufacturing Practices to be implemented (bottom) to hardest Lean Manufacturing

Practices to implement (top). According to Table 4.9, LP2 is the easiest to implement

with logit -1.35, while LP3 is the most difficult to implement with logit +1.50. This

shows that companies and organizations among themselves are having difficulties to

apply lean thinking and lean tools. This may be caused by factors such as lack of

expertise, lack of awareness or lack of knowledge. However, according to the

response, most of respondents agree that lean implementation is important for

manufacturing industries.

The Rasch Model principle state that; an easy item will most likely to be

implemented by any person at any given ability. In theory, all the person will have

difficulties to apply LP3. However, looking at the scalogram, there are company that

found applying LP3 is easy, located at the bottom. For example, in Figure 4.3, we

compare person number fourteen (14) and number three (3). Person number 14 did

applied LP3 better than person number 3. This can be caused by the expertise or

37

services acquired by person 14 in applying lean thinking to compare with person 3

(blue highlighted).

Even though other items have positive Point Measure Correlation, but there is

other item with low Point Measure Correlation in LP4. These item is easy to moderate

items (-0.11 logit) yet there is organization that find it is hard to implement these items.

The response from the organizations can be seen from green highlighted column in

Figure 4.3.

Table 4.9

Item Validity for Lean Manufacturing Practices Construct

Figure 4.3

Scalogram for Lean Manufacturing Practices Construct

38

To see the sequence of items difficulty, the Person-Item Distribution Map for

this construct is generated from Winstep software. The logit value for this map is taken

from Table 4.9 from ‘Measure’ column. The easiest Lean Manufacturing practices

based on the response is LP2 at -1.35 logit, and the most difficult is LP3 at +1.50 logit.

The overall sequence for this construct can be seen from Figure 4.3.

The hypothesis for this section is that companies involved in large industries

does implement LM more efficiently and Figure 4.3 does reflect that as seven

companies that are involved in large industries sitting at the top of the scalogram.

(Yellow Highlighted). This can be due to maintaining their high rate of productivity

and meeting large demand of their customers, therefore efficient and proper

implementation of LM may help smoothen their process and increase productivity.

Figure 4.4

Person-Item Distribution Map for Lean Manufacturing Practices Construct

39

4.4.2 Investment

This construct consist of six (5) items:

I1) The company provides training for the employee

I2) The company invests on employee empowerment.

I3) The company uses Human Resources Management practices to improve the

standard, quality and knowledge of the employee.

I4) The company provides sufficient facilities for the employees.

I5) The company invests on advanced and up-to-date machineries for production

From table 4.9 the item reliability for this construct is 0.55 and the items are

deemed to be sufficient. Small error was identified with 1.07 logit. Therefore it can be

said that the construct have good and quality items.

Table 4.10

Summary of five items for Investment Construct

The PMC for the investment shows that the item is measured in the right

direction. According to Table 4.10, most organizations did invest on employee training

(I1) whereas many did not properly provide employee empowerment (I2).

40

Table 4.11

Item Validity for Investment Construct

Figure 4.5 also indicates that while I1 is the least difficult to implement, there

are person who did not implement it successfully however they did invest in other area.

For example, we take person number 7 to compare with person number 1 (blue

highlighted). While person number 1 did not invest heavily in employee training, they

did invest on other area such as facilities (I4) and utilized human resource management

(I3) better than person number 7. This may be due to the employment of highly skilled

worker that requires less training to operate for person number 1.

The hypothesis for this section is that Non-Bumiputera companies provide

investment for their company. Figure 4.5 does reflect and support the hypothesis as

the first four companies at the top are non bumiputera companies (Green Highlighted).

One of the possible reason for this is that they may have large financial aid and

resources to be spend on improving their productivity.

41

Figure 4.5

Scalogram for Investment Construct

According to Figure 4.6, there are thirteen (13) companies that are located in

+1.00 logit to +3.00 logit. This indicate the likelihood of the companies invested on

their organizations are high as the logit for the items are from approximately -0.5 logit

to +0.7 logit. There are also a company in which did not competent or apply any of the

investment as it located at -2.0 logit.

42

Figure 4.6

Person-Item Distribution Map for Investment Construct

4.5 DIFFERENTIAL ITEM FUNCTIONING

The purpose of Differential Item Functioning (DIF) is to see which items that

may create bias based on the respondents demographic details (e.g gender). However

for this study, DIF is used to identify which items are affected in terms of the

agreement and the implementation based on the organization background of the

respondents. The DIF size limit is +/- 0.5 and the ZStd; t > +/-2.

43

4.5.1 Effect of Organizational Years of Establishment

In terms of years of establishment, there are few items that show differences

with respect to the level of Lean Manufacturing implementation. For this demographic

aspect, there are three person class; representing the options given in the survey. Those

options are (1) Below 10 years, (2) 10 – 30 years and (3) More than 30 years. The DIF

size is as high as +1.37 and as low as -1.17 were found. The DIF t-value was recorded

as high as +1.93 logit and was at -1.13 logit on the opposite direction. Figure 4.7 shows

the DIF t-value and Table 4.10 shows the consolidated DIF size.

From the understanding of Chapter 2, hypothesis can be made that newly

assembled company did not implement LM and make investment as successful as older

established companies. From the analysis, items number 1,6,8,10 and 11 are those

which did not satisfy the range. For item 1, it represents item LP1. Although the

ownership of this company is not stated, it suggests that maybe a newly assembled

company also agreed and aware about the importance of LM. Next, for item LP6 (item

6), it shows that new company does used lean tools such as Six Sigma, Just in Time

and Total Quality Management in order to improve their productivity thus this is differ

from the hypothesis made and shows that small companies does applied LM. As for

item 8, it represent I2, in which investment on the employee empowerment being

asked. According to Table 4.10, there are a few in person class 2 did not agree with

item 8. It shows that not all established companies invest on employee empowerment.

As for item 10 (I4), it suggest that not only new companies did not provide sufficient

facilities for the employees, the same can be said for established companies as the

person class suggest that it can be both. For item 11 (I5), it is expected that small

companies did not invests on up to date technologies and machineries for their

companies, however data from Table 4.10 suggest otherwise. Small companies did

invests on new technologies for their companies.

44

Figure 4.7

Consolidate DIF t Value: Years of Establishment

Table 4.12

Consolidated DIF: Organizational Years of Establishment

4.5.2 Effect of Company Ownership

For this group (Company Ownership), there are two person class namely

Bumiputera (1) and Non-Bumiputera (2). As shown in Table 4.11 the highest DIF size

is -1.40 logit while the DIF t-value is -1.87. Figure 4.8 show the consolidated DIF t-

value and Table 4.11 shows the consolidated DIF size.

It is expected that Bumiputera companies did not uses Human Resource

Management practices to improve the standard, quality and knowledge of the

employee, however Table 4.11 suggests otherwise. It shows that Bumiputera

companies does utilize Human Resources Management to improve their employees.

-3

-2

-1

0

1

2

DIF

Measu

re (

dif

f.)

ITEMDIF t Value:

1

2

3

9

*

45

Figure 4.8

Consolidate DIF t Value: Company Ownership

Table 4.13

Consolidated DIF: Company Ownership

4.5.3 Effect of Company Size

For this demographic group, the person class is divided to two groups; SMEs

Companies (1) and Large Industries (2). All items show differences with respect to

company size. As shown in Table 4.12, the value of DIF size is -1.75. On the other

hand, the DIF t-value is -1.99 logit. Figure 4.9 show the graph of the consolidated DIF

t-value and and Table 4.12 for DIF size.

-1.5

-1

-0.5

0

0.5

1

1.5

DIF

Measu

re (

dif

f.)

ITEM

DIF t Value

1

2

*

46

The results suggest that SMEs companies utilized Human Resources

Management to improve their employee standard. Contrary to our understanding

whereby SMEs companies did not utilized Human Management Resources.

Figure 4.9

Consolidate DIF t Value: Company Size

Table 4.14

Consolidated DIF: Company Size

-2

-1.5

-1

-0.5

0

0.5

1

1.5

DIF

Mea

sure (

dif

f.)

ITEM

DIF t Value

1

2

*

47

4.5.4 Effect of Company Nature of Business

For this demographic group, the person class is divided to three groups; (1)

small parts, (2) large parts, and (3) not stated. However, items I3 and I4 does not satisfy

the requirement to analyze.

As shown in Table 4.13, the highest value of DIF size is +1.15 and the lowest

value is -1.95. On the other hand, the DIF t-value is as high as +1.74 logit and as low

as -1.18 logit. Figure 4.10 and Table 4.13 show the graph of the consolidated DIF t-

value and DIF size.

Items number 1, 4, 5, 9, 10 and 11 are those that are out of range for the DIF

values. For item 1 (LP1), it is expected that companies that produced small parts did

not agree that LM implementation is important for manufacturing industries, however

the results obtained suggest that it can go the other way round. For item 4 (LP4), it is

expected that companies that produces large parts have leaders that ensure everyone

involved in LM implementation. However the results in Table 4.13 shows otherwise.

Item 5 (LP5), results obtained shows that companies that producing small parts did

used lean tools as their guidelines in order to make decision in lean manufacturing

implementation and vice versa. Table 4.13 shows that person class (2) did not utilized

Human Resources utilized Human Resources Management to improve their employee

standard contrary to the expectation, where it is expected that person class (1) did not

utilized Human Resources Management (Item 9, I3). For Item 10 (I4), it is expected

that person class (1) did not provides sufficient facilities for the employees, however

results obtained show otherwise. There are class (2) person whom did not provide

sufficient facilities for the employees. Finally for item 11 (I5), the results shows that

person class (2) did not invests on advanced and up-to-date machineries for their

production.

48

Figure 4.10

Consolidate DIF T Value: Nature of Business

Table 4.15

Consolidated DIF: Nature of Business

-2

-1.5

-1

-0.5

0

0.5

1

1.5

2

DIF

Measu

re (

dif

f.)

ITEM

DIF t Value

1

2

9

*

49

4.6 PROTON’S VIEWS AND ANSWER

Proton have given answers on several questions that are being posed to them.

Their answers are only based on Components Vendors.

4.6.1 On Bumiputera Vendors

According to Proton, there are 25% of the vendors are from Bumiputera

vendors on their list (overall). These vendors are deemed to be competitive enough as

they need to undergo several assessments in Technical & Commercial before

appointment. Chances will be given to every competitive and qualified Bumiputera

vendors to be in Proton supply chain. However, with this being said, there are lack of

participation of Bumiputera vendors in Chassis and Powertrain area where majority of

the vendors comes from foreign vendors. Most Bumiputera vendors involved in less

technical manufacture and complexity supply such as interior parts.

4.6.2 On Lean Practices

For Proton, currently they are practicing Syncro supply for bulky and

different variants parts such as seat, instrument panel and tires. Kanban practices is

also being used in Proton. For the Syncro system, Proton hired Bumiputera vendors to

supply the system.

50

CHAPTER 5

CONCLUSIONS AND FUTURE WORKS

5.1 INTRODUCTION

This chapter explains the conclusion for all three research objectives and future

works recommendation, based on the results and discussion made in Chapter 4. In

Chapter 4, the findings were validated to confirm the relevancy of sequence generated

from the survey.

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5.2 THE LEVEL OF LEAN MANUFACTURING IMPLEMENTATION

The first research objective in this study is to investigate the degree of

implementation for Lean Manufacturing in among PROTON vendors in automotive

industry. Set of questionnaires have been distributed among PROTON vendors in

order to achieve the objective.

From the findings, the level of Lean Manufacturing implementation among

PROTON vendors in automotive industry is high at +6.09 logit. This indicates that all

of the vendors hired by PROTON implemented Lean Manufacturing successfully on

the surface basis. From the Person-Item distribution map in Figure 4.1, differences at

approximately ±4.00 logit shows that more items needs to be inserted in order to know

specific degree of Lean Manufacturing amongst the vendors, regardless of their origin.

However, there are vendors who found some of the practices are difficult to implement

as we can see in Figure 4.1, items LP3, LP5, LP6, I2, I3, and I5 are among the items

that are difficult for couple of vendors.

Looking at the demographic influences (years of establishment, company size,

company ownership and company nature of business) towards the implementation of

Lean Manufacturing, it can be deduced that the findings are consistent with the

conjunction used, based on previous study. Out of four demographic attributes, the

influence from Years of Establishment showed the highest DIF at +1.37. This shows

that the older organizations implement Lean Manufacturing the best. This can be said

due to their experience and reputation in manufacturing industries.

5.3 LEAN MANUFACTURING IMPLEMENTATION SEQUENCE

The second research objective in this study is to identify the implementation

sequence of Lean Manufacturing practices and Lean Manufacturing tools in PROTON

automotive vendors. The purpose of identifying the implementation sequences from

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the easiest item to the hardest item, for both Lean Manufacturing practices and

investment needed to assist the organizations in the PROTON automotive vendors.

Hence, the research questions are answered.

It has been found that, the most vendors agree Lean Manufacturing practice are

important aspects and considerations for the company production and productivity.

However, most vendors find it difficult to implement lean thinking and tools and as

for the investment part, most companies provide training for their employee but they

did not emphasize on employee empowerment.

5.4 LIMITATION OF RESEARCH

A drawback of this study has been its inability to obtain real-time data of

relevant parameters to indicate the progress of Lean Manufacturing. The practices

presented in the theoretical framework were developed using qualitative inputs.

However, the key areas included in the framework can act as a guide to measure the

implementation of lean manufacturing in companies.

5.5 FUTURE WORKS

This study opens another opportunity for researchers in Malaysia to explore

more on the Lean Manufacturing implementation amongst vendors in Automotive

Industry. Overall findings identified from this research allow further investigation as

suggested below;

1) To conduct intensive interview with those organizations in the ‘Leaders’ group to

identify the best practices in implementing Lean Manufacturing within this industry.

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2) To explore the common practices in Automotive vendors that are related to Product

Design, Supplier Relationship, Manufacturing Process and Control, as well as Lean

Manufacturing tools to fill in the gap (as shown in the Person-Item Distribution Map).

3) To conduct case studies that involve wider range and broader scope among

Automotive industry to investigate the implementation of Lean Manufacturing in their

companies.

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REFERENCES

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tid=42518

2. Becker, R. M. (2001). Learning to think lean: Lean manufacturing and the Toyota

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tid=42518

3. Definition of an SME - FSE. (n.d.). Retrieved December 2, 2015, from

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4. Donaldson, S. & Grant-Vallone, E., 2002. Understanding Self-Report Bias In

Organizational Behavior Research. Journal Of Business And Psychology, 17(2),

pp.245–260. Available at: http://link.springer.com/article/10.1023/A:1019637632584

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7. Ishar, N. & Masodi, M., 2012. Students’ perception towards quality library service

using Rasch Measurement Model. In Innovation Management and …. pp. 21–22.

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Universiti Sains Malaysia

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University of Aarhus.

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of Industrial Engineering and Management, 6(4), 996.

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the Process Industries, Glasgow, Institutions of Chemical Engineers

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implementation in Malaysian automotive industry. International Journal of Innovation,

Management and Technology, 1(4), 374.

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in SMEs, Department of Production, University of Vaasa.

16. Scott W. M. & Walton D. A. (2010) , Maximizing Case Efficiency: Lessons Learned

From Lean- A Process Management Philosophy Utilized In Automotive

Manufacturing, University of California-Berkeley

17. Syuhadah N. Khusaini (2014), Development Of Lean Iso 9001:2008 Theoretical

Framework Using Rasch Model In Malaysian Food And Beverages Industry,

Universiti Teknologi Mara (UiTM)

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Frameworks. International Journal of Lean Six Sigma, 5(4), 361. Retrieved from

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ntid=42518

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Kejuruteraan Mekanikal

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APPENDICES

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APPENDIX A – SURVEY QUESTIONNAIRE

Dear Sir / Madam,

I am requesting for a favor as I need your help in completing my survey questions.

This is a research project being conducted for my final year project at Universiti

Teknologi Mara, (UiTM) Shah Alam.

We will do our best to keep your information confidential. To help protect your

confidentiality, the surveys will not contain information that will personally

identify you. The results of this study will be used for scholarly purposes only and

may be shared with UiTM Shah Alam representatives.

Details about the project are attached together with this document. Thank you so

much for your co-operation.

Best Regards,

REDZA AMIN SUGGUN (2013633972)

Student of Faculty of Mechanical Engineering UiTM Shah Alam

PARTICIPANT CONSENT

Please tick the boxes before you start the survey.

1. I have read and understand the purpose of the study.

2. My answers are professional and does not influenced by any party.

3. I agree to participate in the survey.

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PROJECT ABSTRACT

Proton is one of Malaysia national automotive project and has become one of

a household name in local automotive industries. Proton hired local and international

vendors to supply and manufacture its mechanical parts. Recent studies shown that

majority of Proton vendors are from international and non-bumiputera manufacturers.

For this project, lean manufacturing implementation sector will be the main

focus to be dissected among the bumiputera, non-bumiputera and international

vendors, whether they applied it in their companies and the application of lean

manufacturing does give them advantages in Proton vendor selections. Also, other

factors and criteria that give selected vendors advantages when it comes to producing

goods and products will be studied.

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QUESTIONNAIRE

IMPLEMENTATION OF LEAN MANUFACTURING IN YOUR COMPANY

NATURE OF BUSINESS

NAME (optional):

COMPANY NAME*:

SECTION 1: DEMOGRAPHICAL SURVEY

1) Year of Establishment:

_________________________________________________________________

2) Please state whether your company involved in SME or Large industries:

_________________________________________________________________

3) Please state whether your company is Bumiputera or Non-Bumiputera company:

_________________________________________________________________

4) Please state your company nature of business (eg; small parts manufacturing,

hinge manufacturing) :

_________________________________________________________________

SECTION 2: LEAN PRACTICES

Direction: Please check (√) and rate your score honestly based on your company nature

of business and lean implementation manufacturing using the following scales:

5 – STRONGLY AGREE 4 – AGREE 3 – NEUTRAL 2 – DISAGREE 1 –

STRONGLY DISAGRE

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QUESTION 5 4 3 2 1

1) Lean implementation is important for the manufacturing

industries

2) Lean implementations are important aspects and

considerations for the company productions and

productivity.

3) The company apply lean thinking and lean tools.

4) The company leaders ensure everyone are involved in lean

manufacturing implementation.

5) The company uses lean tools such as Kanban System, 5s

and Kaizen as guidelines in order to make decision in lean

manufacturing.

6) The company uses concepts such as Total Quality

Management, Just in Time, Six Sigma and etc. in order to

improve lean implementation and productivity.

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SECTION 3: INVESTMENT

Direction: Please check (√) and rate your score honestly based on your company nature of business and lean implementation manufacturing using

the following scales:

5 – STRONGLY AGREE 4 – AGREE 3 – NEUTRAL 2 – DISAGREE 1 – STRONGLY DISAGREE

QUESTION 5 4 3 2 1

1) The company provides training for the employee.

2) The company invests on employee empowerment.

3) The company uses Human Resources Management

practices to improve the standard, quality and knowledge of

the employee

4) The company provides sufficient facilities for the

employees.

5) The company invests on advanced and up-to-date

machineries for production.

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SECTION D: SUGGESTIONS AND OPINIONS

1) What is your future plan regarding the investment that will be made by your

company in terms of investment on training, machineries and lean

manufacturing system :

_________________________________________________________________

_________________________________________________________________

_________________________________________________________________

_________________________________________________________________