How Does 5s Implementation Affect Company Performance? A Case Study Applied to a Subsidiary of a Rubber Goods Manufacturer from Serbia

Abstract

5S can be viewed as a system of workplace rules devised to create a safe and productive work environment and to provide efficient and effective realization of business tasks. Its implementation is expected to reduce defects, improve quality, increase safety and the morale of the employees, and improve employees' productivity. It helps company identify problems, create a culture of discipline and make opportunities for improvements more visible. In the present paper, over the period of seven years, we investigate the case of a rubber goods manufacturer from Serbia which has implemented 5S in one of its subsidiaries. To assess the effects of the 5S implementation we use operational and financial performance indicators. Our results suggest that the implementation of 5S can contribute to performance of an organization only in the short and medium term. Relatively limited effects of the 5S implementation could be due to the financial crisis and the fact that the footwear subsidiary invested heavily during the analyzed period. In addition, 5S usually contributes to stabilization and efficiency increase of the business processes in only certain segments of the organization. Subsidiary in our study implemented TDABC to make possible production of information and reports important for efficient decision making and control in the new business environment. This finding points to the importance of the management accounting system improvements after the CIPs implementation.DOI: http://dx.doi.org/10.5755/j01.ee.28.3.16115