Lean manufacturing implementation in iron and steel industries: effect of wastes management on the production costs

Abstract

Purpose This study aims to improve the market competitiveness of iron and steel manufacturers in developing countries by reducing their production costs. Design/methodology/approach The research methodology relies on a case study-based approach. The study relies on six steps. The first is the preparation, then the five steps of the six-sigma – define, measure, analyze, improve, control. The qualitative and quantitative data were considered. The qualitative analysis relies on the experts’ judgment of internal status. The quantitative analysis uses the job floor data from three iron and steel manufacturers. After collecting, screening and analyzing the data, the root causes of the different wastes were identified that increase production costs. Consequently, lean manufacturing principles and tools are identified and prioritized using the decision-making trial and evaluation laboratory method, and then implemented to reduce the different types of waste. Findings The main wastes are related to inventory, time, quality and workforce. The lean tools were proposed with the implementation plan for the discovered root causes. The performance was monitored during and after the implementation of the lean initiatives in one of the three companies. The obtained results showed an increase in some performance indicators such as throughput (70.6%), revenue from by-products (459%), inventory turnover (54%), operation availability (45%), and plant availability (41%). On the other hand, results showed a decrease of time delay (78%), man-hour/ton (52.4%) and downgraded products (63.3%). Practical implications The current case study findings can be utilized by Iron and Steel factories at the developing countries. In addition, the proposed lean implementation methodology can be adopted for any other industries. Social implications The current work introduces an original and practical road map to implement the lean six-sigma body of knowledge in the iron and steel manufacturers. Originality/value This work introduces an effective and practical case study-based approach to implementing the lean six-sigma body of knowledge in the iron and steel manufacturers in one of the underdevelopment countries. The consideration of the opinion of the different engineers from different sectors shows significant identification of the major problems in the manufacturing and utility sectors that lead to significant performance improvement after solving them.