Lean manufacturing implementation in time of crisis: the case of Estaleiro Atlântico Sul

Abstract

The implementation of Lean Manufacturing (LM) philosophies in the 1980s and 1990s revolutionized manufacturing in high volume flow-oriented production processes. In project-oriented industries such as shipbuilding, long lead times, lumpy demand, and dependence on external and often international suppliers have made LM implementation challenging. This paper analyzes lean manufacturing implementation at Estaleiro Atlântico Sul (EAS) a shipyard located in an underdeveloped region in northeastern Brazil. EAS was the recipient of multiple oil tanker contracts from the Brazilian oil company Petrobras, but was unable to meet delivery deadlines and suffered cost overruns until a strong LM culture was introduced. From the EAS case, we make suggestions for a more appropriate lean manufacturing implementation in an emerging economy context. This is especially relevant in those situations associated with special project types of manufacturing initiatives such as shipbuilding, aviation, construction projects and other forms of low volume high complexity and other long-lead time production operations.

Keywords:

• Shipbuilding
• emerging economies
• lean manufacturing
• special projects
• productivity
• crisis management
• case study

Disclosure statement

No potential conflict of interest was reported by the author(s).

Notes

1 Note that Suezmax and Aframax refer to ship size. A Suezmax tanker can carry 800,000 to 1,000,000 barrels of oil, Aframax approximately 500 – 800,000 barrels.

2 Although launched to much fanfare, the first ship commissioned, the Joao Candido, had significant difficulties in passing required certifications to transport oil in international waters.

3 Because of their complexity, advanced technology and safety features, oil platforms may cost as much as $US 1 billion to produce.

4 The so-called Lava Jato scandal resulted in the house arrest of the President of Transpetro as well as the eventual incarceration of the President of Brazil, Lula Ignacio da Silva and the impeachment of his successor Dilma Rouseff.

5 See Dilworth (1992) for a review of the use of PERT and CPM to manage special projects.

6 Rather than building from the keel up, a ship is built in sections, or “blocks” next to the drydock – the “blocks” are then lifted and placed in the drydock in sequence and welded together. This allows for more efficient production and simplification of installation of the various systems that comprise the vessel. This also permits disaggregation of the production process insofar as “blocks” can be built anywhere in the world and then brought together at one site for final assembly. Once assembled, the drydock is flooded, the vessel is launched and space is made available for the next ship (Kang et al. 2015).

7 Gemba walk is a Japanese term for direct observation of the work by unit managers. The manager develops systems that allow for easy assessment as to how tasks are being done and the work that remains for a system goal to be reached. Managers are expected to ask questions and work side by side with line workers to develop ideas for process improvement.

Additional information

Notes on contributors

Marcos A. M. Primo

Marcos A. M. Primo: Ph.D. degree in Business Administration from Arizona State University (USA). He is a Professor of Operations Management with the Business Administration Department, Federal University of Pernambuco (UFPE), Brazil. His research interests are operational capabilities/practices in emerging countries, and start-up innovation processes, senior entrepreneurship. He has published in Journal of Operations Management, International Journal of Operations and Production Management, among others.

Frank L. DuBois

Frank L. DuBois: Associate Professor of Information Technology and Analytics at the Kogod School of Business, American University where his primary teaching responsibility is courses in the MBA and Undergraduate programme. He produces the yearly Kogod Made in America Auto Index which documents domestic content for all vehicles sold in the US. His research has appeared in The Journal of International Business Studies, International Marketing Review, Journal of Global Information Management, International Journal of Emerging Markets, the International Trade Journal, the Production and Inventory Management Journal, and numerous book chapters and conference proceedings.

Maria de L. M. C. de Oliveira

Maria de L. M. C. de Oliveira: Adjunct Professor of Business Administration at Universidade de Pernambuco – UPE and analyst at the Ministry of Infrastructure. Master’s and PhD in Adminstration from Universidade Federal de Pernambuco – UFPE. Develops research in: Public Management, Supply Chain and Naval Industry. 

Elidiane S. D. de M. Amaro

Elidiane S. D. de M. Amaro: Assistant Professor of Public Administration at Universidade Federal Rural de Pernambuco – UFRPE, Master’s and PhD in Adminstration from Universidade Federal de Pernambuco – UFPE. Develops research in: Public Management, Supply Chain and Naval Industry.

Daniela D. N. Moser

Daniela D. N. Moser: Assistant Professor of Business Administration at Centro Universitário UniFBV, Master’s and PhD in Administration from Universidade Federal de Pernambuco – UFPE. Develops research in: Management, Logistic, Supply Chain and Naval Industry.