The Lean Index: Operational "Lean" Metrics for the Wood Products Industry

Charles D. Ray, Xiaoqiu Zuo, Judd H. Michael, Janice K. Wiedenbeck

Abstract


No standard definition for lean production exists today, especially specific to the wood products industries. From a management point of view, even the more straightforward management issues surrounding the concept of "lean" are complex. This exploratory research seeks to develop a methodology for quantitative and objective assessment of the leanness of any wood products operation. Factor analysis is a statistical approach that describes the patterns of relationships among quantifiable predictor variables, with the goal of identifying variables that cannot be directly measured, such as the leanness of a company. Using this technique, a factor model was identified and a factor score, or "Lean Index," was developed. For the nine wood products companies included in this study, the average Lean Index is demonstrated to be 5.07, ranging from a low of 2.33 to a high of 12.00. Based on the quantified standards of lean production developed in this study, (1) primary wood products operations are inherently leaner than secondary wood products operations; (2) process throughput variables explain approximately twice the total variance of all consumed resources, compared to process support variables; and (3) energy consumption is shown to be the single most significant contributor to the leanness of any wood products company.

Keywords


Business metrics;factor analysis;lean production

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