Lean manufacturing at Volvo Truck Production Australia:
development of an implementation strategy

Abstract: The world’s globalization and consolidation of multinational companies
result in increased competition for manufacturing plants. A truck
manufacturer in Australia, like Volvo, feels the demand from global
shareholders as well as the local customers. A factory must always attempt
to achieve world class manufacturing to survive in the long run. Therefore
it is important for a local factory like Volvo’s Wacol plant to
continuously develop their way of working. In order to become more
productive and efficient, Volvo has decided to implement the Japanese
production philosophy Lean Production. With consideration to this, Volvo
wanted a comprehensive investigation of the current situation in the
production. Volvo’s desire was that this Master’s Thesis report should end
up in an implementation strategy that Volvo could use during the
implementation. The project was to be based on a theoretical framework
together with empirical studies in the factory. In consultation with Volvo
and tutors from Chalmers University of Technology and Luleå University of
Technology the report’s purpose was formed:

The purpose of the Master’s Thesis is to develop a strategy for the
implementation of lean production in the Wacol factory’s manufacturing area.

In order to fulfil the purpose a thorough literature study within lean
production was accomplished. This resulted in a theoretical framework that
together with an empirical study of Volvo’s organization was the foundation
of the report. In the empirical study a comprehensive questionary survey
was accomplished among both white collars and blue collars. The survey was
based on lean theories and the situation in the factory.

The analysis of the situation in the factory showed that the organization
has to change their way of working in some areas, in order to be prepared
for the implementation of lean. First of all the managers have to work with
the gap between white collars and blue collars. This gap has its root in
the Australian union culture and it will be a major obstacle if it is not
taken care of. It is important to have the support from the whole
organization when starting a large project like lean. The lean project
group which has been operational for a year has to focus on the project
plan and the project’s size. A large project needs a thorough and
comprehensive project plan that clearly marks all the milestones,
intermediate goals and external parameters that can have an impact on the
project.

A major area that has to be taken care of before the implementation is the
differences in the way of working in the factory. All the production teams
has to work in the same way regarding team meetings, continuous
improvements, missing parts, ordering parts etc. The development of
standardized procedures is mainly the production department’s
responsibility. The other departments have to contribute with their special
skills in order to get a functional production. When all this is done
the ‘real’ implementation of lean production with material distribution,
pull systems, multifunctional teams and continuous improvements can start.
Most important is to organize a functional continuous improvement system,
in order to preserve the changes towards lean. Secondly the team meetings
and job rotation has to be improved. When these basic work procedures have
been improved, the work with decentralizing responsibilities and developing
the material distribution system can start.

This implementation and change of the present work behaviour might take as
much as three to four years to accomplish. When the goals are reached the
organization will hopefully stand stronger and be more productive than it
is today. Lean production can never be fully accomplished: there are always
things to improve.