Lean Manufacturing: Selected Financial Performance Of Recognized Lean Manufacturers

Abstract

Since the Japanese development of lean manufacturing practices after World War II, American companies have slowly begun to embrace the concepts and results offered by the lean manufacturing concept. Companies in America did not fully embrace the value of the processes until the mid to late 1990’s and some firms are finding that financial results that should have been positively impacted immediately are not showing the results promised by Japanese practitioners. Two companies, Delphi and Johnson Controls, were selected for comparative analysis because of the numerous facilities that each have had selected for the Shingo Prize for Excellence in Manufacturing. Both companies have been engrained in the traditional mass-producing methods of American production from mother companies, customers, and suppliers. Both companies have adopted and implemented lean manufacturing into their organizations in the late 1990’s. Using targets set forth by the lean manufacturing leaders of Japan, a comparison will be made of both of these companies as well as comparisons of these two companies to other firms in their industry. The S&P 500 financial ratios will also be used along with those of two of the most recognized leaders in lean manufacturing, Wal-Mart and Toyota, in order to determine the effectiveness of implementation of lean practices by two of the newest leaders in manufacturing excellence. The financial ratios will be evaluated and compared along with reasons for variances that are found in the comparisons.