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SYNERGISTIC MODEL DEVELOPMENT FOR LEAN MANUFACTURING IMPLEMENTATION AT SMALL AND MEDIUM
ENTERPRISES IN MALAYSIA
IMPLEMENTATION AT SMALL AND MEDIUM ENTERPRISES IN
MALAYSIA
By
MOHD SHAHRIZAN BIN YUSOFF
Thesis Submitted to the School of Graduate Studies, Universiti Putra Malaysia,
in Fulfillment of the Requirements for the Degree of Doctor of Philosophy
August 2018
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All material contained within the thesis, including without limitation text, logos, icons,
photographs, and all other artwork, is copyright material of Universiti Putra Malaysia
unless otherwise stated. Use may be made of any material contained within the thesis
for non-commercial purposes from the copyright holder. Commercial use of material
may only be made with the express, prior, written permission of Universiti Putra
Malaysia.
i
Abstract of thesis presented to the Senate of Universiti Putra Malaysia in fulfillment
of the requirement for the degree of Doctor of Philosophy
SYNERGISTIC MODEL DEVELOPMENT FOR LEAN MANUFACTURING
IMPLEMENTATION AT SMALL AND MEDIUM ENTERPRISES IN
MALAYSIA
By
Faculty : Engineering
Historically Lean Manufacturing (LM) is originally derived from Toyota Production
System (TPS). The core functions of LM practices are to create high-quality products
and to minimise non-value added (NVA) activities in a company. Although LM had
successfully implemented in various large corporations around the world since the
1980s, however, the evidence of LM’s adoption in Malaysian Small and Medium
Enterprise (SMEs) were rarely documented. Malaysian SMEs predominantly
characterised by low volume, highly mixed product yield as well as limited shop floor
management and human control processes. Therefore, the focal objective of this study
was to develop a model based on LM’s philosophy to help Malaysian SMEs improving
their competitiveness in manufacturing operations management by synergising or
cooperation of the LM critical successful factors including the efficiency of production
management and human resource development to create more positive impact on the
sustainability of effective business management system. To achieve the objective of
the study, three different research phases were integrated. The approaches cover
methods of, research review, exploring the LM implementation in Malaysia using
statistical inference and construction of Structural Equation Modelling (SEM) and
industrial research in the real industry involving two SMEs in northern of peninsular
Malaysia. The research review methods conducted by collecting qualitative research
data, including observations and examination of documents to assess the impact of the
implementation of the LM among the SMEs organisation. Then, for exploring the LM
implementation among Malaysian SMEs, surveys with 250 sets of questionnaires were
distributed. Quantitative data obtained with a response rate of 40% then was analysed
by using descriptive and inferential statistics. Results of the descriptive statistical
analysis show that most Malaysian SMEs provide positive feedback with the mean
score above 3.00 against the proposed implementation of LM variables comprising
elements of operations management efficiency, human resource development, and
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ii
preservation of the business. The findings from SEM results also confirmed that the
LM variables did affect the performance of SMEs significantly. Then, the final model
called as Synergistic LM for Malaysian SMEs (SyncLM) was developed using SEM.
Lastly, the SyncLM model has verified its reliability through the implementation
framework in two case studies of SMEs show a high tendency for them to implement
and incorporate elements of the concept of LM that this synergy concept. The results
showed that SyncLM model has managed to reduce 6.85% production time and
18.25% product defects for the first case study. Positive results are also obtained from
second case study where the SyncLM model has successfully reduced 9.7%
production time and 4.2% of product defects. Additionally, over 80% of the
satisfaction scores have been achieved by respondents comprising management and
employees from both companies with the implementation capability and effectiveness
of benefits derived from the implementation of this SyncLM model. Therefore, it can
be concluded that the SyncLM was able to improve the sustainability of the business
functions of Malaysian SMEs.
Abstrak tesis yang dikemukan kepada Senat Universiti Putra Malaysia sebagai
memenuhi keperluan untuk ijazah Doktor Falsafah
PEMBANGUNAN MODEL SINERGI BAGI PELAKSANAAN PEMBUATAN
LEAN BAGI SEKTOR INDUSTRI KECIL DAN SEDERHANA DI
MALAYSIA
Oleh
Fakulti : Kejuruteraan
Toyota (TPS). Teras kepada LM adalah untuk mewujudkan produk-produk berkualiti
tinggi dan meminimumkan aktiviti pembaziran dalam proses pembuatan (NVA)
didalam sesebuah organisasi. Walaupun LM telah berjaya dilaksanakan sejak tahun
1980-an di pelbagai syarikat gergasi dunia, namun penerimaannya dalam sektor
industri kecil dan sederhana (PKS) Malaysia jarang didokumenkan. Halangan utama
pelaksanaan LM di kalangan PKS Malaysia adalah kerana kebanyakannya
mempunyai jumlah pengeluaran yang terhad serta hasil produk yang pelbagai.
Keadaan ini semakin rumit apabila organisasi dalam PKS ini turut mengalami masalah
pengurusan pengeluaran dan sumber manusia yang terhad. Oleh yang demikian,
objektif utama kajian ini adalah membina satu model rangka kerja berasaskan falsafah
LM untuk membantu PKS Malaysia meningkatkan daya saing mereka dalam
pengurusan operasi pembuatan dengan memberi tumpuan kepada mensinergikan
faktor serta faedah pelaksanaan LM. Sinergi dalam kajian ini adalah bermaksud
mencantumkan elemen- elemen dari faktor kecekapan pengurusan operasi,
pembangunan sumber manusia yang berkesan bagi mewujudkan kesan yang lebih
positif pada kelestarian pada sistem pengurusan perniagaan. Bagi merealisasikan
objektif kajian ini, tiga kaedah penyelidikan yang berbeza telah diintegrasikan. Ia
meliputi kaedah kajian kepustakaan, kajian tinjauan pelaksanaan aktiviti LM di
Malaysia menerusi taburan statistik dan pembinaan model berstruktur (SEM) serta
kajian industri di dua buah syarikat berstatus SMEs di Malaysia. Menerusi kaedah
kajian kepustakaan, beberapa kaedah pengumpulan data penyelidikan secara
pemerhatian dan semakan dokumen dilaksanakan untuk menilai impak pelaksanaan
kerangka kerja ke atas prestasi pembuatan organisasi PKS. Dalam kajian tinjauan
pelaksanaan aktiviti LM di kalangan PKS Malaysia, sebanyak 250 keping borang soal
selidik telah diedarkan dengan kadar maklum balas sebanyak 40% telah dianalisis
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secara statistik deskriptif dan inferensi. Keputusan analisis statistik deskriptif
mendapati, kebanyakan PKS memberikan maklum balas yang positif dengan nilai skor
min melebihi 3.00 terhadap cadangan pemboleh ubah pelaksanaan LM yang terdiri
daripada elemen kecekapan pengurusan operasi, pembangunan sumber manusia dan
kelestarian fungsi perniagaan. Manakala dapatan analisis statistik inferensi
menunjukkan, keputusan yang signifikan bagi kebanyakan pemboleh ubah
pelaksanaan LM dan prestasi PKS. Keputusan analisis SEM mengesahkan pembinaan
model terakhir kajian ini yang turut dikenali sebagai model SyncLM. Manakala data
pengesahan kebolehlaksanaan model telah dijalankan pada dua buah syarikat PKS di
lapangan industri. Keputusan daripada kajian kes telah menunjukkan menunjukkan
bahawa model SyncLM telah berjaya mengurangkan masa pengeluaran 6.85% dan
kecacatan produk 18.25% untuk kajian kes pertama. Hasil positif turut diperolehi dari
kajian kes kedua dimana model SyncLM telah berhasil mengurangi 9.7% waktu
produksi dan 4.2% kecacatan produk. Di samping itu, lebih daripada 80% skor
kepuasan telah dicapai oleh responden yang terdiri daripada pengurusan dan pekerja
dari kedua-dua syarikat dengan keupayaan pelaksanaan dan keberkesanan manfaat
yang diperoleh daripada pelaksanaan model SyncLM ini. Oleh itu, dapat disimpulkan
bahawa SyncLM mampu meningkatkan kelangsungan fungsi perniagaan PKS
Malaysia.
v
ACKNOWLEDGEMENTS
IN THE NAME OF ALLAH, THE MOST GRACEFUL AND THE MOST
MERCIFUL
This thesis is dedicated to my beloved parents Haji Yusoff bin Abdullah and Hajah
Tom binti Hj. Abdullah who have never failed to give me moral support since the
beginning of the study. It is also dedicated to lovely wife Hasliza binti Jali and my
sons and daughter Muhammad Haikal bin Mohd Shahrizan, Nurshifa Azzarra binti
Mohd Shahrizan and Muhammad Haziq Iman bin Mohd Shahrizan, who has been a
source of motivation and inspiration. And not forgotten for my siblings, Norain
Liyana, Muizzuddin, Diyana and Syazani for being supportive.
The author would also like to take this opportunity to express his appreciation to
Assoc. Prof. Dr Zulkiflle Bin Leman as the chairman of supervisory committee in
order to set up this thesis, he has given a lot of moral support and guidance to the
completion of this thesis. Also to Prof. Dr Shamsuddin Bin Sulaiman, Prof. Ir. Dr
Mohd Yusof Bin Ismail and Dr Mohd Idris Shah bin Ismail, co-supervisors who have
provided many views, comments, advice, encouragement and motivation to strengthen
the spirit of the author of the study.
A big thank you also goes to the sponsors, namely Majlis Amanah Rakyat (MARA),
Universiti Kuala Lumpur (UniKL), Universiti Putra Malaysia (UPM) to finance
research expenditures and other financial assistance. The Resource Center of
Malaysian Productivity Center (MPC), for cooperation and guidance given by them.
The author hopes this thesis provides benefits to readers and provides an overview as
well as a better understanding of the implementation of lean manufacturing in the
industrial sector of small and medium enterprises (SMEs) in Malaysia and lean
manufacturing impact on manufacturing performance, especially.
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vii
This thesis was submitted to the Senate of the Universiti Putra Malaysia and has been
accepted as fulfillment of the requirement for the degree of Doctor of Philosophy. The
members of the Supervisory Committee were as follows:
Zulkiflle Bin Leman, PhD
Senior Lecturer
Professor, Ir
quotations, illustrations and citations have been duly referenced;
this thesis has not been submitted previously or concurrently for any other degree
at any institutions;
intellectual property from the thesis and copyright of thesis are fully-owned by
Universiti Putra Malaysia, as according to the Universiti Putra Malaysia
(Research) Rules 2012;
written permission must be obtained from supervisor and the office of Deputy
Vice-Chancellor (Research and innovation) before thesis is published (in the form
of written, printed or in electronic form) including books, journals, modules,
proceedings, popular writings, seminar papers, manuscripts, posters, reports,
lecture notes, learning modules or any other materials as stated in the Universiti
Putra Malaysia (Research) Rules 2012;
there is no plagiarism or data falsification/fabrication in the thesis, and scholarly
integrity is upheld as according to the Universiti Putra Malaysia (Graduate
Studies) Rules 2003 (Revision 2012-2013) and the Universiti Putra Malaysia
(Research) Rules 2012. The thesis has undergone plagiarism detection software
Signature: Date:
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This is to confirm that:
the research conducted and the writing of this thesis was under our supervision;
supervision responsibilities as stated in the Universiti Putra Malaysia (Graduate
Studies) Rules 2003 (Revision 2012-2013) were adhered to.
Signature:
Signature:
Signature:
Signature:
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1.4 Scope and Limitations 5
1.5 Research Questions 6
1.6 Thesis Outline 6
2 LITERATURE REVIEW 8
Management Level 8
SMEs 11
2.4 Characterising the Operation Management Influences From
SMEs Perspective 14
Management 155
2.7 Synergistic Lean Manufacturing to Solve Internal Operation
Management Problems 19
Efficiency of Operation Production 20
2.7.2 People Development of an Efficient Operation
Management System 23
2.8 Synergistic Needs for Efficient and Sustainable Lean
Manufacturing Practice 25
the Malaysian SMEs 26
Model (SEM) Study Method 30
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2.10.2 The SEM Model by Laohavichien & Wanarat 33
2.10.3 The SEM Model by Fullerton & Wempe 35
2.10.4 The SEM Model by Fadly Habidin & Mohd Yusof 36
2.10.5 The SEM Model by Chavez 37
2.10.6 The SEM Model by Khanchanapong 38
2.10.7 The SEM Model by Moori 39
2.10.8 The SEM Model by Filho 40
2.10.9 Application of Human Resource Management and
Production Management Elements in SyncLM Model
Framework 41
Lean Manufacturing 43
2.12.1 Triangulation Technique 46
using UML Technique 46
Technique 49
Validation Process 52
Technique 55
3.4 Method of Quantitative Data Collection for Exploratory Study 56
3.4.1 Developing Survey Question as Research Instrument 56
3.4.2 Population of Focus Group 57
3.4.3 Validation Procedure for Questionnaire Instrument 58
3.4.3.1 Content Validity Analysis Through the
Delphi Technique 59
3.5.1 Multiple Regression Analysis Procedure Using SEM
Approach 61
Measurement Model 62
Procedure 64
PHASE 66
4.2 Analysis of Validity and Reliability of Research Instruments 70
4.2.1 Construct Reliability Analysis 70
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4.4 Feedback and Demographic Analysis 73
4.5 Analysis of Lean Manufacturing Implementation Among
Malaysian SMEs 75
Elements of Human Resource Management 75
4.5.2 Analysis of Results Identification of Priorities of
Production Operation Strategies 76
Improvement Activities Priority 77
SMEs 79
Successful Waste Reduction 79
Business Performance Analysis 80
Modelling (SEM) 81
4.7.2 Phase two: Assessing PLS-SEM results 84
4.7.2.1 Internal Reability Measurement 84
4.7.2.2 Convergent Validity Measurement 84
4.7.2.3 Outer (Indicator) Loading of Reflective
Items 85
Measurement 88
Measurement Model 90
4.7.3.1 Priority Elements in The Implementation
of The SyncLM Model 92
4.7.3.2 Assessing Important Performance Matrix
Analysis (IPMA) 93
5.1 Background of the Companies in the Case Studies 99
5.1.1 Background of Company A 99
5.1.2 Background Of Company B 100
5.2 Discussion and Analysis of SyncLean Framework of the First
Case Study 100
Mapping 103
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Improvement Activities 116
Effectiveness 121
5.3 Discussion and Analysis of SyncLean for the Second Case
Study 123
5.3.1 Phase One: Observation at company of case study 123
5.3.2 Phase Two: Waste Visualisation With Value Stream
Mapping 129
Analysis 135
Improvement Activities 140
effectiveness 142
Both Companies 145
5.4.2 Identifying and Analysing the Stream of Activities 146
5.4.3 Creating information flow 146
5.4.4 Pull Production 147
5.4.5 Continuous Improvement 148
5.5 Chapter Summary 148
FOR FUTURE RESEARCH 149
6.2 Contribution to the Body of Knowledge 152
6.3 Implications and Contribution to Industry 152
6.4 Research Limitations 153
6.6 Concluding Remarks 154
(SMEs) 1
SMEs 5
2.1 TQM, Lean and Six Sigma definition and criticism 10
2.2 Eight productions deadly waste and its definition 12
2.3 The Characteristics of the main dimensions of "value" for operational
management and their impact on SMEs 16
2.4 Summaries of research questions and methodology of the study 28
2.5 Research approach classifications of publications on LM 29
2.6 Summary comparison of PLS-SEM and CB-SEM approaches 31
2.7 Variable indicator for the model Laohavichien & Wanarat (2013) 34
2.8 Variable indicator for the model Chavez et al., (2015) 38
2.9 Summaries of previous framework 42
2.10 Construct and items used in this study 45
2.11 The strength of the correlation coefficient 48
3.1 The list and detail of questionnaire contents 56
3.2 The population and number of samples which includes the construction
of SEM study for the implementation of LM in previous studies 58
3.3 Suggested sample size used for PLS-SEM research 58
3.4 General background of the expert panels 60
3.5 Reflective model assessment criterion 63
3.6 Formative model assessment 64
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4.1 Main content and questions for the four categories of framework
assessment 66
4.2 Comments by expert panels for the first stage 67
4.3 Result of round three Delphi technique 69
4.4 Statistics reliability instruments review 71
4.5 The construct validity test results 72
4.6 The response rate survey 73
4.7 Demographics of survey respondents 74
4.8 Demographics respondent companies 74
4.9 The Cronbach alpha value 84
4.10 Results of the analysis of convergent validity for WI and PR construct 85
4.11 Outer loading of reflective items (before items deleted) 85
4.12 Results of assessment of reflective measurement model (after deleting
some variable) 86
4.14 The result of measurement model for formative constructs 89
4.15 Results of assessment of the second-order construct of SyncLean 90
4.16 Hypotheses to study the relationship between SyncLean construct 92
4.17 Colleration result for SyncLean framework 93
5.1 The results of the discussions and surveys to determine the
characteristics of operations management, human resource, and
business of Company A 102
5.2 Schedule cycle time calculations and findings of the study 105
5.3 Cycle time for the completion of the jig by Company A 105
5.4 Waste matrix for problems that occur in Company A 109
5.5 The results of brainstorming activities on the frequent causes of a
problem 112
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5.7 Strategies, and activities implemented at the Company A 117
5.8 New space calculation for Company A shop floor 118
5.9 Time savings earned by Company A 121
5.10 The Company B production planning for next five years (in units of
vehicle) 125
5.12 The results of observations in Company B 128
5.13 Average number of hours allocated is assigned to staff company B 132
5.14 Statistics attendant of operator at Company B 132
5.15 Waste matrix for problems that occur in Company B 134
5.16 The results of brainstorming activities on frequent causes a problem
occurs 136
5.17 Items and activities implemented under the SyncLean framework 140
5.18 Result of satisfaction on the implementation of the SyncLean
framework 144
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2.1 History and evolution of lean manufacturing concept 14
2.2 The internal and external factors influence on the pace of SMEs
business 14
2.3 The elements in Lean Manufacturing philosophy (Singh et al., 2010) 19
2.4 The list of effective operation strategy 20
2.5 The composition of a rope to imagine the power of synergistic LM 26
2.6 Ideas of Synergistic LM approach suggested in this research 26
2.7 Percentage of publications based on research approaches in LM
research 29
2.8 Research procedure using SEM approach (Hair et al., 2012) 31
2.9 Structural equation model studied by Laohavichien & Wanarat (2013) 33
2.10 Structural equation model proposed by Fullerton & Wempe (2009) 35
2.11 The model that have been reviewed by Fadly H. & Yusof M. (2013) 36
2.12 Structural equation model proposed by Chavez et al. (2015) 37
2.13 Structural equation model proposed by Khanchanapong et al. (2014) 39
2.14 Structural model proposed by Moori et al. (2013) 40
2.15 Structural equation model proposed by Filho et al. (2016) 41
2.16 The proposed framework for the relationship between the concept of
"enabler factor" for the implementation of SyncLean 43
3.1 The triangulation methodologies used in this study 52
3.2 Flow chart of research methodology 53
3.3 The modification of UML class diagram for the basic SyncLM model 55
3.4 Framework validation using Delphi Technique (a modification from
Nordin, (2012)) 59
3.5 A systematic procedure for applying PLS-SEM (Hair et al., 2014) 61
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3.6 Reflective measurement model proposed by Hair et al., (2013) 62
3.7 Formative measurement model proposed by Hair et al. (2013) 63
4.1 The results of the enhancer SyncLean framework for Malaysian SMEs
68
4.2 The mean scores for the elements of human resource management
(HRM) 75
4.3 The mean score of the elements selection of operational strategy 76
4.4 The average score of continuous improvement implementation
priorities 78
4.5 Mean score success reduce operation waste 79
4.6 Mean scores of LM implementation fruitful and benefits to the
organisation 80
4.7 The initial SyncLean Model modelled by the SmartPLS software 83
4.8 The reflective model result 87
4.9 Assessment of second-order construct of OP, HRM and CI 91
4.10 Results IPMA for WI variable 94
4.11 Results IPMA for variable of sustainable business function 94
4.12 Results IPMA for comparison of all the variables to the sustainable
business function variable (PR) 96
4.13 The final arrangement of SyncLM Model 98
5.1 Result for define current delivery statistic 103
5.2 Result for define current quality statistic 104
5.3 The VSM for total value stream process 107
5.4 The process of the work done in the third step of the analysis of the
cause of the problem 110
5.5 The fish bone diagram for Company A 114
5.6 The floor plan in Company A 116
5.7 New layout suggestion to Company A 119
5.8 On time delivery statistic 122
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5.10 Lean Manufacturing philosophy adopted by the Company B 124
5.11 The floor plan and the installation process in Company B 130
5.12 Cycle time from Station 1 to Station 5 Trim Shop 130
5.13 Percentage reject part by the division in the installation section 131
5.14 The ratio between VA and NVA for station one trim shop 137
5.15 Spaghetti diagram of movement at the workstation operators one trim
shop 138
5.17 Discomfort frequency among the operators in Company B 139
5.18 Trolley move for the implementation for shopping activities 142
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Small and medium enterprise
CHAPTER 1
1 INTRODUCTION
This chapter is divided into six sections. The first section gives an overview of the
research background. The following section discusses on research problem statement.
The third section deal with the research aims…