L A VARIEDAD DEL ARBOLADO RIPÍCOLA Y OTRAS ESPECIES DISPERSAS

During the past century, production has improved significantly, mostly through technological advancements. The world of science contributed to our understanding of the world and numerous scientists are considered to have contributed ‘breakthroughs’ that enhanced

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productivity. Although this process has gone on for thousands of years, it is only recorded history that facilitates tracking contributions to productivity improvement; in fact, the printing press –facilitating historical record keeping and dissemination and thus indirectly innovation- represents one of many technological breakthroughs. Since the nineteenth’ century industrial revolution in the UK, productivity improved with most innovations being of a technological nature. Wells describes the period as if the world had been developing production equipment and saved deployment until just before the industrial revolution.

“The economic changes that have occurred during the last quarter of a century or during the present generation of living men have unquestionably been more important and varied than during any former corresponding period of the world's history.” (Wells, 1889, pv)

This technological drive has continued to develop at a continued acceleration, not seen before (Oram, 2012). The focus of this inquiry is however in the socio-technical field, a field that links people and technical knowledge and skills in order to manage supply variability, processing time and demand (Shah and Ward, 2007). It has a focus on how people and processes improve production.

2.3.1.1.The world of socio-technical and related production improvement

The early pioneers: An arbitrary point to start looking at manufacturing paradigms is the works of Gilbreth (1919) and Taylor (1919). Gilbreth and his wife, industrial engineers in the late 1800’s, studied the bricklaying process in order to improve bricklaying output. Their time and motion studies focussing on ‘flow’ (1911) helped make numerous process improvements and increased productivity.

Taylor studied production from an efficiency perspective. His focus was on finding the best way to do a job through analysing the process steps and recognising that workers would only do the minimum required to keep their jobs. His introduction of piece rates and ‘standard best practice’ changed productivity markedly. Although his work became known as scientific management, Taylor originally called his work ‘process management’ (Pryce, in Nelson, 1992)

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Since Gilbreth and Taylor, a number of socio-technical system have been developed. Henry Ford developed a moving assembly line in which he created ‘flow’ by aligning manufacturing equipment at each assembly step to produce needed parts at a set production speed (Arnold and Faurote, 1915). Ford’s multiple improvements in a time when mass consumption started to develop set the scene for years to come (Stamm et al, 2009). Mass production remained relevant until the 1970s, when the USA found that the Japanese were producing better products with more variety than the USA could produce (Vogel, 1979). It became the start of a mini avalanche of new production management systems, the most well-known of which are discussed briefly in the following section in a more or less chronological order.

Just-In-Time (JIT) and Toyota production System (TPS): During the 1950s, Ohno developed the Kanban system based on Toyoda’s idea of Just-In-Time (JIT). The Kanban system is a practical method to order stock as and when needed. Sugimori et al (1977), regard JIT and ‘Respect for Human’ as pivotal to the Toyota Production System (TPS). The lack of natural resources in Japan led to a system where stocks were kept low as principle, leading to delivery ‘just-in- time’ for production to remain uninterrupted. Allowing workers to run and improve their own workshops through active participation was another main principle of the TPS. TPS is

discussed in more detail later in this section. JIT was overtaken as approach by the more holistic Lean approach (which included JIT) which reflected the TPS.

Total Quality Management (TQM): The term Total Quality Management (TQM) has been attributed to Feigenbaum (1957, in Ishikawa, 1985) although Ishikawa (1985) makes the point that Feigenbaum adopts the western approach of having quality specialists, whereas in the Japanese philosophy all departments and all employees are involved to achieve an integration of quality control. TQM involves organisation-wide efforts to deliver high-quality outputs to customers (e.g. Deming, 1986) and became widely accepted as a production improvement paradigm in the early 1980s. Ishikawa makes the point that in broad terms, quality control means management control (1985). While there is no widely agre ed-upon definition, Bounds et al (1994) argue that TQM involves people, management systems in a total management approach, customer satisfaction, lower real costs and extends horizontally and vertically, forwards and backwards through the supply chain. TQM efforts typically draw heavily on the previously developed tools and techniques of quality control.

Theory Of Constraints (TOC): Theory of constraints focusses on enhancing production by removing constraints from production systems, based on the axiom that there is always one

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constraint to achieving the end-goal of making profit, otherwise production would be infinite. By removing the constraint, the system improves and exposes the next constraint to be addressed in an ongoing cycle of removing constraints (Goldratt & Cox, 1986).

Six Sigma: Six Sigma was the result of a 1986 initiated improvement drive by Bill Smith and Bob Galvin, both of Motorola. Six Sigma uses a set of quality management tools to reduce the number of defects to a theoretical 3.4 per one million. It is a quality improvement initiative with a focus on decision making processes based on measurements (e.g. Linderman et al, 2003). Six Sigma is seen by some as a progression from TQM considering a number of similarities between the two (Näslund, 2009). Gershon (2010) argues that all of the Fortune 500 companies have implemented Six Sigma. Comparing a number of process improvement methods, he believes that Six Sigma encompasses all that TQM does and removes some of the TQM weaknesses such as management not participating, group project work not being promoted and the lack of implementation methodology. He believes that most paradigms fall under the TQM/Six Sigma umbrella with the exception of Lean.

Benchmarking: Benchmarking compares business practices with other company’s business practices, often after comparing numerical measurements. Using a successful firm’s practices that have led to the success in that area, the benchmarking company then learns what these companies do that makes them successful and initiates improvement of its own processes (e.g. Camp, 1989).

Lean: Lean developed from Toyota’s inception as a car manufacturer in the late 1930s

because Toyota identified that the market for their vehicles was smaller and more demanding than the US market in which Ford manufactured, requiring production on demand to

customer variety. Lean developed as a management system where production was assisted by involving people, solving problems, introducing JIT, autonomation and supplier integration and many tools. Lean is doing more with less for the customer by focussing on waste

reduction at all levels of product manufacturing. Lean focusses on reduction of variation, flow, inventory reduction through Just-In-Time, continuous improvement through people

involvement and is people and process oriented (e.g. Womack and Jones, 2003).

Business Process Reengineering (BPR): In 1990, Hammer (1990) described how companies tend to use technology to mechanise old ways of doing business. Hammer believed that this was only speeding up outdated processes, based on unarticulated rules. He believed that

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processes had to be redesigned from scratch to improve production, ignoring the historical reasons for old processes because the environment has changed. Business Process Re- engineering (BPR) intended to make organisations re-think how they were doing things, simplify processes and reduce the waste in those processes. BPR soon became a ‘fad’ (Carson et al, 1999), used to reduce the number of employees, which was missing Hammer’s point.

Agile: Agile manufacturing, ‘the next logical step’ (Hormozi, 2001), recognises that reaction time is an important competitive factor in meeting customer demand in a fast changing environment, and Agile’s focus on manoeuvrability and responsiveness extends to the supply chain (Christopher, 2000).

Leagile or Leagility: A combination between Lean and Agile leads to the term ‘Leagile’ (e.g. Mason-Jones et al, 2000). Others, such as Ben Naylor et al (1999) make a case for the combination of Lean and Agile, using the strengths of each in a synergistic approach to a market environment: Agile Manufacturing is tailored to satisfy volatile markets, while Lean has a focus on eliminating waste and creating flow. Relevant in their discussion is the insertion of a decoupling point at the transition point between Lean and Agile.

Lean Six Sigma: Lean Six Sigma has been described as the latest improvement ‘fad’ to be discussed (Näslund, 2008), although Snee (2010) describes it as a natural evolution of business improvement methods. Schonberger (2007) discusses Lean Six Sigma without actually defining the concept while George and George (2003) summarise the use of Lean speed and Six Sigma quality in a combination of the two. Lean Six Sigma is said to provide the concept, methods and tools to change processes, many of which improve flow and involve human resources (Snee, 2010).

Material Requirement Planning (MRP) and Enterprise Resource Planning (ERP) : Material Requirement Planning (MRP) is a time-phased planning technique that calculates and prioritises material requirements and schedules the supply of materials to manufacture products on-time with low inventories (Orlicky, 1975). Orlicky’s system was re-developed into ‘Manufacturing Resource Planning’ (MRP-II) by Wright (1995) in order to include other concepts such as capacity planning and particularly to use software to assist businesses with their planning processes. A further development continued with Enterprise Resource Planning (ERP) software as a way to speed up the supply chain process, but the implementation of ERP as a system is complicated (Wang et al, 2014) and requires specialist involvement.

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2.3.1.2.Summarising productivity improvement initiatives

Table 2-2 provides a brief overview of several productivity improvement initiatives that emerged during the past century, referring to the driving factors leading to each initiative and the initiative’s attributes.

TABLE 2-2: HISTORICAL PRODUCTIVITY IMPROVE MENT INITIATIVES, DRIVERS AND ATTRIBUTES

Year Paradigm Driving Factors Attributes

1911 onwards

Scientific Management

Efficiency Piece rate, process steps, standard best practice 1910

onwards

Early Fordism Consumption increase, price

Line flow, produce parts in-line as needed (Highland Park only), reduce waste 1922 onwards Mass Production Mass Consumption, price

Line flow, batch and queue production 1940 onwards JIT, TPS, start of Lean Consumer variation demand pulls production

Toyota Production System including JIT, respect for people and continuous improvement at all levels 1980 onwards TQM Underperformance in the US Organisation wide implementation of quality tools/culture 1984 onwards

TOC Productivity through systematic constraint removal

Maximise effectiveness of constraint; adjust all else to the constraint

1986 onwards

Six Sigma Quality drive to improve Motorola’s performance

Tools/techniques for process improvement based on statistics 1989

onwards

Benchmarking Focus on best practice learning

Process improvement through comparison with best practices 1990 onwards Lean popularised Produce to customer demand, enabling product variation

Focus on customer, using flow, pull, waste removal through continuous improvement 1990 onwards BPR Importance of process re-generation as environment changes

Focus on completely re-designing processes to achieve the mission and rethink trend of buying technology

2000 onwards

Agile Response to rapid change in demand

Focus on quick adaptation in volatile environment 2000 onwards Lean and Agile (‘Leagility’) Respond to fluctuating demand, reducing waste

Quick adaptation to volatile environment and achieve stable production 2002 onwards Lean-Six Sigma Systematically reduce waste, using Six Sigma methods

Using Lean flow and speed combined with Six Sigma quality tools

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It is not in the interest of this inquiry to expand on the various production improvement initiatives, however some observations may be useful to share. As the pipfruit industry has a large human resource component (Grigg and Doevendans, 2011), any productivity

improvement initiative has to take this into account. This is exacerbated by the fact that the industry is not a mechanistic producer of goods; it is subject to natural, i.e. uncontrollable influences; standards such as Six Sigma have not been designed for this type of industry. Similarly, the Agile concept is less suitable because trees take years to grow fruit while Agile responds to volatile market demands; this may be useful for exporters. TOC is largely

unknown to the industry, as is BPR and some others such as Material Requirement/Resource Planning (MRP) and Enterprise Resource Planning (ERP), which span across the business and are not restricted to production. Some process reengineering takes place by individual companies, while others attend to some identified constraints; this happens organically and is not a focus on the paradigm or method. The intra-industry competition after deregulation prevented effective benchmarking. TQM had some intention in recent years (Doevendans, 2010) but remained ignored as paradigm by the industry.

Lean as a holistic approach to production improvement appears a reasonable fit for the industry considering its focus, its all-pervading approach and its wide application.

From the brief outline above, it is evident that there is no single best management or production paradigm. It appears more sensible to argue that although all improvement programmes share a number of common tools, it is the direction of the philosophy that leads the way for an organisation that intends to improve. Andersson et al (2006) agree that TQM, Six Sigma and Lean share many parallels, including methodologies, tools and effects. They opt for the simple suggestion that organisations could combine the thre e paradigms as they are partly overlapping and partly complementary.

There has been some discussion about ‘fashionable’ management methods. Carson et al (1999) comment on the life cycle of innovative management methods (fads) and discuss the transition point from ‘fad’ to permanent method. They discuss fifteen ‘fads’ ranging from the 1950s to the 1990s. Interestingly, neither JIT nor Lean are included in the list despite the fact that Lean was well established in the 1990s. In a different paper, Carson et al explore several psychogenic influences that drive leaders to move organisations into specific paradigms (Carson et al, 2002).

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Because New Zealand has been placed low on the productivity index of the OECD over the past twenty years (e.g. OECD, 2013), both government and industries have engaged in Lean to improve productivity (Goodyer et al, 2011). As the New Zealand NZTE has endorsed and supported development of Lean production systems (Wilson et al, 2008), and several pipfruit organisations demonstrated an interest in Lean, this inquiry will focus on Lean as a paradigm for improving the productivity of the pipfruit industry.