Performance Management in Lean Production

Abstract: Background: Lean production and performance management are very important aspect in the production process because when activities that do not add value to a product are not reduced or eliminated it would amount to waste which would eventually result to unnecessary cost for the organization. Thus it is vital to have the right performance management system in place to control of the organization. Objectives: The purpose of this thesis is to first identify the different types of production wastes evident in the production process of the case companies and how these waste have been reduced or eliminated. As the management of performance in lean production is very important, the second objective of this study is find out how these companies are currently managing performance in lean production in comparison with the performance management systems model Method: This is a multiple-case study with systematic combining approach as the orientation. Interview and documents are the instruments of data collection. Empirical data from each case has been analyzed based on cross and within case analysis. Construct validity, external validity, and reliability are the basis for scientific credibility of this thesis. Conclusions: Not all types of production wastes are evident in all the case companies studied due to one reason or the other. In reducing or eliminating these wastes, they have adopted different lean principles based on their product type. When it comes to managing performance in lean production it is clear that each of the case company adopts almost similar performance management systems although they have adopted different approach. Suggestions for future research: It would be interesting to undergo a similar research in the service sector to see if the findings arrived would be the same or if it will lead to contradictory results. Additionally, since the main focus was on performance in within the studied case companies, it would be interesting to see the outcome of how performance management between these companies and their external suppliers would turn out.