The effect of the implementation of lean production principles on the financial performance of a rail refurbishing plant of a large South African company

Master Thesis


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University of Cape Town

The study emanated from the needs for (i) effective management systems in the currently changing South Africa, (ii) empirical, "real world" research in the operations management field as well as (iii) the requirement by local management to verify the effects of an implemented intervention. In terms of this background, the study investigates the effects of the implementation of lean Production principles in a South African Government-owned Rail Refurbishing Plant with a Job production system on financial performance as measured by Return On Investment (ROI). The research question formulated for the study investigates the possible differences in financial performance as measured by ROJ between the Transwerk (Bloemfontein) Rail Refurbishing plant, which implemented lean Production Principles, and three similar Transwerk Rail Refurbishing plants which had no lean implementation initiatives. The literature review discusses the constructs Lean Production and Return On Investment (ROI). Emphasis is placed on the elements and transferability of lean Production, as well as the proven and potential effects of lean Production principles on ROI. Despite cited criticism of lean Production, the overall conclusion was reached (on the basis of case studies, research and postulations) that the implementation of Lean Production principles in a South African, Government owned, Rail Refurbishing plant with a job production system can improve ROI The research design (a case study) is reviewed next. Data sources are identified to be financial statements and questionnaires, while data collection methods are listed as the documentary approach and the survey approach. Sampling is non-random, and the generalisation of results is listed as a potential weakness of the study. The richness of in-depth descriptions of lean Production principles as applied in the case study plant accompanied by descriptions of results and obstacles encountered, however, are listed as strong points of the study. A MANOVA is chosen as an appropriate statistical test to evaluate the collected data with α = 5% to answer the research question of the study, while two χ² tests are performed to answer the secondary questions.

Bibliography: leaves 170-174.