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ABBREVIATION

BGMEA- Bangladesh Garments Manufacturers and Exporters Association

BEPZA – Bangladesh Export Processing Zone Authority

EPZ – Export Processing Zone

EU – European Union

JIT – Just-in-Time

LP – Lean Production

IMVP – International Motor Vehicle Program

RMG – Ready – Made Garments

SQC – Statistical Quality Control

TFC – Textiles, Footwear & Clothing

TPS – Toyota Production System

TQM – Total Quality Management

TSS – Toyota Sewing System

US EPA – United States Environmental Protection Agency

5S – Seri, Seiton, Seiso, Seiketsu, Shitsuki

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TABLE OF CONTENTS

CERTIFICATION i

ACKNOWLEDGEMENT ii

ABSTRACT iii

ABBREVIATION iv

Chapter One: Introduction

1.1 Background 1

1.2 Aims and Objectives 4

1.3 Methodology 5

1.4 Scope 6

1.5 Layout of Thesis 6

1.6 Chapter Conclusion 7

Chapter Two: Conceptual Framework of Lean and Literature Review

SECTION A: Conceptual Framework of Lean

2.1 Introduction 8

2.2 Core Characteristics of Lean Production Practice 15

2.3 The Building Blocks of Lean 16

2.4 Section A Conclusion 19

SECTION B: Review of Literature

2.5 Introduction 20

2.6 Background 20

2.7 Toyota Production System (TPS) 23

2.8 Lean Practices in Japan 26

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2.9 Lean and the West 27

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2.10 Lean Practices in the USA 31

2.11 Lean Practices in Other Countries and in Different Industries 32

1.12 Section B Counclusion 39

SECTION C: Footwear Industry: An Overview

2.13 Introduction 40
2.14 Background 40

2.15 Footwear Industry: A Global Perspectives 41

2.16 Footwear Industry in Bangladesh 43

2.17 Examples of Lean Practices in Footwear Industry 46

2.18 Chapter Conclusion 48

Chapter Three: Methodology of the Study

3.1 Introduction 49
3.2 Research Design 49

3.3 Research Hypotheses 53

3.4 Method and Procedure 54

3.4.1 Area of Investigation 54

3.4.2 The Questionnaire: Development and Administration 54

3.4.3 Features of the Questionnaire 55

3.4.4 The Selection of Samples 56

3.4.5 Data Collection 57

3.4.6 Processing the Data 58

3.5 Chapter Conclusion 58

Chapter 4: Profiles of Surveyed Companies, Data Analysis and Results

SECTION A: Profiles of Surveyed Companies

4.0 Introduction 59

4.1 Companies Under the Export Zone Vs. Companies Out of the EPZ 59

4.2 Company Profiles

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4.2.1 Company 1-Fashion Point Limited

4.2.2 Company 2-Texas Fashion Wear Limited
4.2.3 Company 3-Beximco Fashions Limited
4.2.4 Company 4-Shanta Industries Limited
4.2.5 Company 5-DADA(Saver) Limited
4.2.6 Company 6-Shanta Wash Works Limited
4.2.7 Com
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Chapter One

Introduction

1.1 Background

Maintaining a customer focus is one of the most important elements in today’s business
market. Other elements such as money, resources and labor etc. are clearly important but in
spite of the combination of all these factors, the wheels of an organization cannot move if
the customers are not satisfied (Karim, 2009). Customer requirements should get first
priority. Traditionally only getting orders and shipments were major concerns for firms. It is
stated by Skinner and Ivancevich (2002) that the evolution of marketing starts with only
order taking and production and ends with customer orientation. Firms are now more
concerned about customer satisfaction because they have now more options than before.
Customers are now demanding a wide variety of products at a lower cost but with fast
delivery. They also expect more innovative products at a competitive price (SAP AG, 2005)
as customers have more opportunities to choose from a variety of options.

Organizations have realized that survival is only possible through customer satisfaction, and
satisfaction will come through quality goods and services with the lowest possible price. In
today’s competitive and changing business world, lean production philosophy has brought
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changes in management practices to improve customer satisfaction as well as organizational

effectiveness and efficiency (Karim, 2009). The automotive and aerospace industries as well
as a growing number of other industry sectors (Aberdeen Group, 2006) are responding to
increased pressure by incorporating lean production strategies into their production
processes , allowing them to compete in global markets. This manufacturing approach is
opposite to the traditional approach which is characterized by economic order

Quantities, high capacity utilization and high inventory. According to Womack et al (1990),
lean would replace mass and craft production in all industrial sectors, and will become the
global standard for the production systems of the twenty-first century. However, companies
cannot just implement lean and achieve success overnight because it requires a structured
change program to reap the full benefits from this effort. Organizations introducing lean
manufacturing methods have both cost and quality advantages compared to traditional
organizations (Fleischer and Liker, 1997).

The goal of lean is to satisfy the customer by delivering the highest quality at the lowest cost
I the shortest time (Manufactured Housing Research Alliance, 2005). As stated by
Bartezzaghi (1999, p. 231), “Lean production is the end point of the process leading out of
the Fordist-Tailorist paradigm”. Lean production places emphasis on the elimination
indicates that in the industrially advanced countries, non-value added activity could
comprise more than 90 percent of a company’s total activity (Caulkin, 2002). Taiichi ohno,
the co-developer of the Toyota Production System suggests that non-value added activities
account for up to 95% of all costs in non-lean manufacturing environments (Kilpatrick,
2003). “Today lean may no longer be fashionable but its core principles (flow, value, pull,
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minimizing waste etc. have become the paradigm for many manufacturing and (service)
operations” (Lewis, 2000, p.959).

The major purposes of the use of lean production are to increase productivity, improve
product quality and manufacturing cycle time, reduce inventory, reduce lead time and
eliminate manufacturing waste. To achieve these, the lean production philosophy uses
several concepts such as one-piece flow, kaizen, cellular manufacturing, synchronous
manufacturing, inventory management, pokayoke, standardized work, work place
organization, and scrap reduction to reduce manufacturing waste (Russell and Taylor, 1999).
In lean production systems attempts are made to eliminate waste through continuous
improvement of processes of the entire value chain in the organization. Having nurtured a
lean manufacturing mindset among the employees, it facilitates achievement of continuous
product flow through physical rearrangement and control

Mechanisms. A study (Sohal, 1996. P.91) indicates that “most western manufacturers have
been aware of the need to improve their performance and competitiveness for nearly two
decades”. They were using lean production system for taking advantage of most of the
above benefits. Another study (EPA, 2003) summarized the main reasons for adopting a lean
system under three broad categories; reducing production resource requirements and costs,
increasing customer responsiveness, and improving product quality. It concluded that all of
these combine to boost company profits and competitiveness.

Lean production has received substantial interest internationally since the 1980s
(Papadopoulou and Ozbayrak, 2005). The same study also stated that this concept spread to
Japanese factories after it was first implemented in the Toyota Motor Company. Although
other countries have experimented with this program, its adoption in adopted lean
practices have experienced an overall improvement in corporate performance ( Mamun and
Afrin, 2001). Understandably, the firms that do not practice a lean production system have
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little knowledge about the experience of the lean-firms. A few inhibiting factors stand in the
way of reaping the full benefits, such as the scattered existence of suppliers, difficulty in
establishing long-lasting relationship with the suppliers, trade unions having political
backing, political turbulence and frequent disruptions in electricity supply, among others.
These factors have not been systematically identified through research. Informal discussions
with some senior managers of Footwear companies in Dhaka, Bangladesh have been
provided these information. All this warrants an investigation to explore the real causes for
the overall success of lean and the causes for refraining from practicing lean in firms in
Bangladesh Generalization is not possible in the absence of empirical evidence. Also, t is
important to see how lean practice improves quality, increases productivity and reduces
waste and lead-time in Bangladeshi manufacturing firms. Researchers must also analyze the
political unrest, inadequate infrastructure including transportation, labor union and labor
unrest, less flexible attitude of management towards the workers etc. While some

Analyses (Harun, 1990) based on anecdotal evidence have been done regarding JIT;
empirical studies in the area of lean practices in the Bangladeshi enterprises are still rare.

In Bangladesh, some companies across the Footwear industry sector have been practicing
lean production to remain globally competitive in the face of fierce competition resulting
from the rapid globalization of businesses. There is a dearth of research evidence regarding
the impact of lean practices on competitive regarding the impact of lean practices on
competitive performances in Bangladeshi Footwear firms. Researchers are mostly silent on
this very important area of production philosophy. The issues of implementation and impact
of lean practice in the Bangladeshi enterprises have not been extensively researched and
therefore provide an opportunity for further investigation. This research attempts to bridge
this gap. There is a general belief mostly remains undeveloped and that a strong supplier
partnership is often difficult to develop due to traffic problems and traditional corporate
culture. Conclusive evidence regarding this requires careful and systematic investigation.
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The present study deals with the emerging issues and investigates the lean practices in the
Bangladeshi firms and their impact on competitive performance.

1.2 Aims and Objectives

With many developed and developing countries adopting various lean tools and techniques
and reaping several benefits, this research aims to explore the adoption of lean practices in
the Bangladeshi Footwear firms and its impact on manufacturing performance
improvement. Based on the literature reviewed and problems persisting in Bangladeshi
Manufacturing firms, three primary research questions are developed:

i. To what extent do the samples of Bangladeshi garment firms apply lean production
practices for improving manufacturing performance?
ii. To what extent do the samples of Footwear firms have an ‘enabling environment’ for
practicing lean production?
iii. How do the results of the study compare with the similar studies globally?

These three questions can be brought together in the following statement:

iv. Can the Footwear manufacturing industry in Bangladesh successfully implement lean
production and achieve results that are comparable to other countries?

To identify comprehensive answers to the above research questions the following objectives
have been developed:

a. Review the literature

b. Examine the extent of lean production practices in the selected Bangladeshi firms;
c. Identify the benefits derived from lean practices in Bangladesh.
d. Evaluate the manufacturing performance in the Bangladeshi firms;
e. Explore the enabling environmental factors that support lean practices;
f. Compare the study results of selected Bangladeshi firms with that of the global firms
using the similar philosophies.
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1.3 Methodology

“Numerous companies of varying size across multiple industry sectors are implementing
lean production systems and the rate of lean adoption is increasing” (EPA, 2003, p. 18).

Several countries over the world are implementing lean successfully and reaping its full
benefits. This study will focus on how successful the lean philosophy is in Bangladesh. In
order to identify the extent of lean practices in Bangladesh, nine companies will be selected
from the Footwear industry. These companies will be selected to ensure the best possible
scenario of lean practice in Bangladesh. A field survey with a semi-structured questionnaire,
interviews and plant visits will be conducted to answer the research questions. The detail of
these approaches will be discussed in chapter three. By using the above mentioned
approaches, the study will examine how successful these selected companies are. This
study will provide an insight, if these selected companies can

Achieve success through lean implementation, then other companies of the garment
industry of Bangladesh can also experience similar success.

1.4 Scope

Due to time constraints and limited use of lean, purposively nine Footwear factories will be
selected. Among these nine companies seven companies are situated in the EPZ (Export
Processing Zone) and the remaining two are outside of the EPZ. These companies will be
selected on the basis of their success in the designated business field. A major reason for
not selecting a large number of companies is that the sample companies have provided very
similar answers to the questions during the initial approach. So, a large number of
companies have not been taken as sample. The results of the sample companies will be
compared to other similar companies of the world those who are using similar philosophies.
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1.5 Layout of Thesis

In outlining the focus and providing a context for this study, this chapter has the purpose of
establishing why the research is important. The following chapters will expand on the areas
of the study introduced in this chapter.

Chapter 2 will review the literature in the related fields. The review will be undertaken
under several categories: The first section of this chapter provides the conceptual

Framework for lean and the second section deals with the reviews of the literature on lean
practices in TPS, followed by lean practices in Japan, West, USA and finally lean practices in
other countries of the world. After that the third section of this chapter covers the
background of the global Footwear industry as well as the Bangladeshi Footwear industry.

Chapter 3 will outline and justify the methodology chosen to explore the purpose of this
study detailing the research approach. This chapter provides a discussion of the
methodological approaches through which the research has been conducted.

Chapter 4 will elaborate the profile of the nine surveyed companies and present the analysis
and discussion of the results based on the information available on website, interviews, field
study as well as published materials.

Chapter 5 will report on the findings of the research by interpreting the results reported in
chapter 4. Finally, chapter six will draw together the conclusions of the study, before
presenting a number of recommendations for future work.

1.6 Chapter Conclusion

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This chapter provided the context for this research. The aim and objectives, methodology,
scope and layout of thesis have also been presented. The next chapter deals with the
conceptual framework of lean, literature review and an overview of the Footwear industry.
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2.8 Lean Practices in Japan

It is said that Japan was the birthplace of lean production (Sohal and Egglestone, 1994). The
changes in the economic and competitive climate in Japan led the manufacturing
organizations to devise innovative and cost-effective production methods. And, this
encouraged the organizations to look for a revision of the production models as well as the
Japanese management system (Bartezzaghi, 1999). While the overall Japanese economy has
suffered, some well-organized Japanese manufacturing companies such as Toyota, Honda,
and Canon still remain competitive in the global market (Phan and Matsui, n. d.). This is
because of the Japanese own way of management such as JIT production, TQM and
concurrent engineering (Morita, Sakikibara, Matsui and Sata, 2001). These are considered as
the main strengths of the Japanese manufacturers, besides their technological advantage
(Sakakibara, Flynn and Schroeder, 1993; Morita et al, 2001; Matsui and Sato, 2002). After
World War II when Japanese manufacturers realized that they could not afford the expense
to build facilities like the USA, they concentrated on lean concept (Pavnaskar, Garshenson,
and Jambeka, 2003). They began the process of developing and refining the process of
manufacturing with a view to minimize waste (Thompson and Mintz, 1999).

Different factories of Japan have started to use this system after it has been implemented in
Toyota. After Japan, the US firms became interested to this concept followed by the
European countries. But now the Asian countries as well as other countries of the world are
also using this technique to meet their customer’s requirement (Mazany, 1995; Bruce, Daly
and Towers, 2004).

The last two decades have seen the top Japanese manufacturing firms have achieved
excellent international competitiveness in a number of industries such as auto, electronics
and machinery (Wu, 2003). They have achieved success due to their different ways of doing
business. Hall (1983) and Schonberger (1982) argued that the Japanese developed a new
approach to manufacturing management. The book by Womack et al. (1990), ‘The Machine
That Changed the World’, benchmarked manufacturing companies around the
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World and found, at the time, the Japanese manufacturers were typically more productive
and efficient than their Western counter parts. Taichii Ohno in his book ‘Toyota production
System’ explained the foundations of lean manufacturing and showed that these principles
guided the Japanese companies to be world class (Ohno, 1988). Literature revealed that
Japanese firms are superior in performance compared to the European firms because of the
introduction of lean in manufacturing sectors (Sohal, 1996). Due to the differences in the
strategies and practices, Japanese firms were highly focused on lean practices and followed
integrated single piece production flow, low inventories, small lot sizes, defect prevention
rather than rectification, pull production, team-based work and active involvement in
problem solving to eliminate all non-value added wastes. These practices helped them
become superior in performance compared to other countries. Manufacturers. As stated by
Sohal (1996), the main goals of Japanese manufacturers are improving quality, reducing
costs, and product development. Oliver et al. (1993) in their study of 18 auto component
plants (nine UK firms and nine Japanese firms) reported that five plants displayed high
performance on measures of productivity and quality. All of them are located in Japan.
These companies showed consistently superior performance on a number of measures, and
thus provided support for their lean production system. As stated by Morita et al. (2001),
Japanese could still be competitive because they have not yet lost their competitiveness.

2.9 Lean and the West

The lean production concept attracted the increasing attention of West during the 1970’s
(Simpson et al. 1998). “In the 1980’s a massive paradigm shift hit factories throughout the
US and Europe” (Poppendieck, 2002, p. l). This concept is popularized in many Western
industrial companies since the early 1990s (Sanchez and Perez, 2001). “Western companies
concentrated first on high levels of technology and then on slimming down production,
while the Japanese initially proceeded in organizational terms and subsequently used
technology, in particular to reduce stress and make work more comfortable and motivation”
(Bartezzaghi, 1999, p.235).
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The International Motor Vehicle Program (IMVP) was a 5-year (1985-1990) program into the
performance of the global motor industry (Womack et al. 1990). It is said that John Krafcik,
who was an IMVP researcher, originally coined the term “Lean Production” and it is a result
of the benchmarking of the IMVP (Dahlgarad and Dahlgarad Park, 2006). As Stated by Knuf
(2000), benchmarking helps the organization to gain knowledge by offering experiences that
is deemed to be the best practices. The study of IMVP reveals that there is a 2:1 productivity
difference between car assembly plants in Japan and Western countries. This performance
difference was shown as a result of lean production practice. As stated by Adler and Cole
(1993), “lean Production” model in the NUMMI plant (Toyota-General Motors’ Joint
Venture) is more effective model for organizational learning compared to Volvo’s Uddevella
plant which is based on the “human centered model”. The authors argued that the prime
reason in NUMMI’s productivity superiority is its effort to make constant improvements in
the production process. “The intense discipline created by NUMMI’s job design creates not
only world-class performance but also a highly motivation work environment” (Adler and
Cole, 1993, p.89).

Whybark and Vastag (1993), in the global manufacturing practices research project, indicate
in the significant differences in the eastern and western manufacturers in the machine tools
and textile industries. While there are many reports of the successful introduction of lean
programs by the Western organization, at the same time there are several reports of
failures (Sohal, 1996)

In a study in the UK, Hanson and Voss (1993) showed that adoption of a range of lean
production practices has a direct relationship with improvements in performance. Their
findings suggest that there is no short cut way for the low performance companies to
become world class. The success depends on the adoption of relevant practices. It is also
revealed from the study that the larger the company the more likely it is to have adopted
best practices. A study by Papadopoulou and Ozbayrk (2005) reported how implementation
of lean tools and technique had brought tremendous success for two UK-
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World and found, at the time, the Japanese manufacturers were typically more productive
and efficient than their Western counter parts. Taichii Ohno in his book ‘Toyota Production
System’ explained the foundations of lean manufacturing and showed that these principles
guided the Japanese companies to be world class (Ohno, 1988). Literature revealed that
Japanese firms are superior in performance compared to the European firms because of the
introduction of lean in manufacturing sectors (Sohal, 1996). Due to the differences in the
strategies and practices, Japanese firms were highly focused on lean practices and followed
integrated single piece production flow, low inventories, small lot sizes, defect prevention
rather than rectification, pull production, team-based work and active involvement in
problem solving to eliminate all non-value added wastes. These practices helped them
become superior in performance compared to other countries. Manufacturing priorities in
Japan are quite different from that of the USA and European manufacturers. As stated by
Sohal (1996), the main goals of Japanese manufacturers are improving quality, reducing
costs, and product development. Oliver et al. (1993) in their study of 18 auto component
plants (nine UK firms and nine Japanese firms) reported that five plants displayed high
performance on measures of productivity and quality. All of them are located in Japan.
These companies showed consistently superior performance on a number of measures, and
thus provided support for their lean production system. As stated by Morita et al. (2001),
Japanese could still be competitive because they have not yet lost their competitiveness.