The development of shop floor management system in lubricating oil manufacturing industry

Abstract

Manufacturers across many sectors increasingly operate in make-to-order (MTO) environment which has a negative impact on performance. This paper aims to present lean & business process reengineering (BPR) model for effective shop floor management, with the flexibility to position the organisation in MTO environment. Lean & BPR model combines the most common lean production with BPR principles found in the literature. Four elements of the model which contribute to improve the company’s performance are cross-functional team, continuous improvement (kaizen), JIT production and supplier integration. The four phases of the model include identifying, analysing, implementing and evaluating. The new shop floor management system which was developed according to lean production principles was implemented in a case study company. Case results show significant decreases in the amount of drum delivery delays (94.25% decrease), reworks (96.73% decrease), overtime (95.06% decrease), as well as increases in inventory turnover rate (37.76% increase) and labour utilisation (68.14% increase). Lean & BPR model provides a comprehensive solution to a complex shop floor management problem in MTO environment where the company has to be able to respond to dynamically changing market conditions.