Lean Implementation in Singapore: A Survey in SMEs of the Precision and Electronics Manufacturing Industry

Abstract

This study examines how lean manufacturing practices are adopted in Singapore’s SME precision and electronics manufacturing industry. Its main goal is to assess the extent of lean manufacturing method adoption and the challenges involved. The study analyzed 36 responses from 150 surveys distributed online. The results show that about 50% of manufacturers find it difficult to implement lean manufacturing practices. Our research reveals that most SMEs face significant challenges when applying lean manufacturing techniques. The findings identify barriers such as a lack of experience, skills, and knowledge, which significantly slow progress. Additionally, the study emphasizes that management support is vital for successful lean implementation. Key factors include employee training, goal alignment, and the creation of a supportive environment. While tools and external expertise are helpful, internal resources and organizational culture are considered more critical.

1. Introduction

Lean manufacturing is often used to achieve a company’s operational or manufacturing excellence [1]. It originates in Japan and gains notable recognition through Womack’s publication The Machine That Changed the World [2]. Lean manufacturing depends on the core principles, methods, and tools of the Toyota Production System (TPS), developed by Japanese engineers Taiichi Ohno and Shigeo Shingo at Toyota Motor Company [3,4]. This approach to operational excellence is also commonly known as “The Toyota Way”.

In this article, lean manufacturing principles and methodologies are seen as tools for applying lean manufacturing methods. In contrast, lean thinking refers to an organization’s philosophical approach. This article will use lean manufacturing as the overall term for producing goods within an organization, rather than lean production.

In lean thinking, waste is “any human activity that consumes resources without producing value”. Conversely, value is “a capability delivered to a customer at the appropriate time and a reasonable price, as determined by the customer”. Furthermore, it embodies an organizational philosophy that systematically emphasizes value-adding activities for customers while persistently eliminating waste throughout the value chain [3,5].

The term “lean” was first introduced by John Krafcik [6,7], a member of the International Motor Vehicle Program (IMVP) at MIT who authored the paper “Triumph of the Lean Production System”. Since then, the lean concept has expanded from automotive manufacturing to various other industries and sectors [8], including healthcare [9], service [10], construction [11], and food manufacturing [12]. Its implementation has had a substantial impact on many organizations that adopt this methodology [13]. The importance and benefits of lean manufacturing practices have been acknowledged across multiple fields and sectors [14].

Companies must stay competitive in a tough global environment. To do this, they analyze costs, quality, delivery, service, and flexibility [15]. Organizations in Singapore face major challenges with costs, productivity, and the availability of skilled labor. However, our interactions with various institutions show, somewhat unexpectedly, that most do not use lean manufacturing methods and principles in their daily work. Some use these methods when needed, such as during audits or in response to customer demands, while others stop using them after a few years. Additionally, some organizations struggle to implement these methods, and many believe they do not deliver significant benefits to their operations.

It has come to our attention that many government initiatives focus on adopting digital technologies and artificial intelligence, often overlooking the need to ensure stable, organized operations before pursuing digitalization as a route to operational excellence. Numerous supporting institutions, consultancies, and training providers emphasize the tools and methodologies needed for implementation [16]. However, after completing training programs, there is frequently a lack of ongoing support for organizations. This creates a significant gap, explaining why many organizations encounter challenges. Additionally, there is a widespread misconception among companies that adopting technology alone will solve their problems [17]. Another key challenge these organizations face is their reluctance to let employees learn, adapt, and grow, which results in difficulties retaining skilled staff [18,19].

One of the most extensively studied manufacturing systems is lean manufacturing. Its implementation has been widely adopted, debated, and discussed among practitioners, academia, and both the public and private sectors across many industries [9,20,21,22,23,24,25]. Organizations, from small businesses to large corporations, have adopted lean manufacturing principles [26,27,28].

The research questions examined in this manuscript are as follows:

RQ1: Which lean manufacturing tools and methodologies are commonly used in Singapore’s manufacturing sector?

RQ2: What factors contribute to the low adoption of lean manufacturing tools and methods in Singapore’s manufacturing industries?

RQ3: To what extent are small and medium-sized enterprises (SMEs) in Singapore adopting this methodology?

RQ4: What factors limit the adoption of this approach in small and medium-sized enterprises (SMEs)?

2. Literature Review

Over the past decade, Singapore’s manufacturing sector has shifted from mass production to high-technology processes, leading to a move toward high-mix, low-volume production [29]. Many traditional manufacturing methods have undergone significant changes, with many companies relocating to regions with lower operational costs or entirely shutting down operations [30].

Although lean manufacturing has been widely adopted across various industries in Singapore, there is limited research evidence on its application and success [31,32]. The first recognized scientific paper on implementing lean practices in Singapore was published [33], focusing on the construction sector and examining prerequisites, barriers, and the partial adoption of lean manufacturing principles. The work by Xu [34] is the earliest empirical study of lean manufacturing implementation specifically within Singaporean small and medium enterprises (SMEs), identifying contextual barriers, enablers, and practical challenges, while noting common tools used by multinational corporations (MNCs) that significantly influence SMEs. The study highlighted the following lean tools: value stream mapping (VSM), 5S (Sort, Set in Order, Shine, Standardize, and Sustain), visual management (VM), and standardization. Numerous suggestions were offered to support lean manufacturing implementation, especially for SMEs.

A survey by Xu & Wang [35] examined how Lean manufacturing principles were applied in Singaporean SMEs, focusing on practical lessons learned from real-world industrial cases. The paper emphasizes that, although Lean is widely promoted in Singapore, SMEs face unique challenges compared to large firms, such as limited resources, a lack of internal expertise, and difficulties in maintaining improvements. According to the same paper, lean manufacturing can significantly boost productivity in Singaporean SMEs, but success heavily depends on ongoing management support and the development of internal lean skills. In line with this, consultants at the Singapore Institute of Manufacturing Technology (SIMTech) identified four key lessons from the study and stressed that top management’s commitment and involvement are essential for enabling teams to adopt these lean practices. Other important conclusions highlighted by the authors include (i) allocating enough time for an organization to implement necessary changes; (ii) understanding the problem-solving methods used to address operational issues is far more important than the A3 tool (a structured one-page problem-solving tool from the Toyota Production System); (iii) establishing a formal lean committee is vital for sustaining the entire lean program; (iv) empowering employees to participate in continuous improvement initiatives is critical; and [36] fostering an organization built on transparency and respect for all individuals should be a top priority.

A dedicated research paper on Singapore’s shipbuilding industry explores the challenges of implementing lean practices [31]. The study points out that a lack of knowledge is the main factor behind failures in this area. Additionally, it emphasizes that management support and organizational culture are key factors for successfully adopting lean manufacturing methods.

Singapore’s lean manufacturing ecosystem is mainly driven by government programs instead of academic research, as the latest scientific paper on lean practices in Singapore [31] was published over 5 years ago. However, many government initiatives have changed names as priorities shift to address current needs. Unlike most countries, where lean manufacturing naturally spreads within industries, Singapore takes a different approach—its government agencies, such as ASTAR and the Ministry of Manpower, actively guide the process by funding, promoting, and coordinating the development of lean manufacturing capabilities across sectors [37,38].

Some Singaporean policies, including the Productivity and Innovation Credit Scheme (PIC) and the Lean Enterprise Development Scheme (LEDS), promote lean manufacturing adoption and productivity improvements for organizations in the country. These policies encourage organizations to boost productivity by adopting lean manufacturing practices that reduce operating costs and optimize manufacturing processes. Although the PIC scheme expired in 2018, other schemes, especially for small and medium enterprises, remain available, such as the Enterprise Development Grant (EDG) and the Productivity Solutions Grant (PSG).

Due to the country’s high labor costs, the government has also emphasized adopting highly capital-intensive methods, such as digitization [39]. To remain competitive in challenging global markets, the government has introduced numerous support opportunities for companies in the manufacturing sector. Assistance for these businesses includes future employee training to upgrade skills, an enterprise financing scheme, and additional support for these organizations [40,41].

A major challenge for many firms, especially SMEs, is the high upfront costs of lean manufacturing transformation [42]. However, if SMEs opt for small-scale initiatives rather than fully adopting lean practices, the costs become easier to manage [43]. More importantly, resistance to change often arises, particularly among employees accustomed to traditional methods [34,44]. Additionally, Singapore’s multicultural workplace environment indicates that employees’ different cultural backgrounds can greatly influence their willingness to adopt lean manufacturing practices [31]. A senior manager from a larger SME noted, “We are unable to effectively train the operators due to their limited proficiency in the language”.

While larger organizations may have the resources needed for a complete implementation of lean manufacturing practices, SMEs often face challenges due to financial constraints, a smaller workforce, and a lack of specialized knowledge of lean manufacturing methodologies [27,45,46]. An earlier study shows that having qualified personnel who understand Lean manufacturing principles is crucial for a successful transformation. Although government initiatives can help address some of these issues, gaining the specific knowledge required to implement lean manufacturing practices effectively remains difficult. Additionally, research shows that successful lean manufacturing implementation requires ongoing commitment from management, which can be difficult when top executives focus on short-term financial gains [47,48].

Although many initiatives have been introduced, a significant gap still exists. There is a shortage of documented success stories, indicating that current support might be ineffective. Based on our review of the literature in Singapore’s manufacturing sector, we aim to analyze the tools and methods commonly used (RQ1), the challenges of implementation (RQ2), how much SMEs have adopted this approach (RQ3), and the specific obstacles they encounter (RQ4).

3. Methodology

This study adopts a quantitative approach by conducting a survey to evaluate the scope and characteristics of lean manufacturing implementation in Singapore’s precision and electronics manufacturing sector. A survey is appropriate because it efficiently collects data from a large sample, offering insights into common practices, challenges, and outcomes related to adopting Lean manufacturing methods.

A cross-sectional survey design will be used to gain a detailed overview of lean manufacturing practices at a specific point in time. This approach helps evaluate the current state of lean manufacturing adoption, identify emerging trends, and analyze relationships between different factors.

To ensure content validity, feasibility, and relevance, a pilot test was conducted with 8 industry experts and academicians. Participants were asked to provide feedback on question clarity, flow, and average completion time.

The target population consists of manufacturing businesses operating in Singapore. This includes companies from various sectors, such as electronics and precision engineering. A comprehensive list of manufacturing companies was obtained from the Singapore Manufacturing Federation (SMF) and the Singapore Precision Engineering and Trade Association (SPETA), which provide up-to-date, reliable directories of businesses in Singapore.

The research methodology involved distributing a survey to over 150 companies in the electronics and precision engineering manufacturing sectors. The survey consists of 22 questions about the company’s size, revenue, and primary business operations. It includes both closed-ended and open-ended questions designed to gather data on the following:

• Company demographics, such as size, sector, and other features.
• Awareness and understanding of lean manufacturing principles.
• Scope of lean manufacturing implementation (tools, techniques, and application areas)
• Drivers and barriers to lean manufacturing adoption.
• Outcomes and benefits of implementing lean manufacturing (e.g., increased productivity, decreased costs, improved quality).
• Key success factors for implementing lean manufacturing.

The survey was conducted online using Microsoft Forms and email. This method provides cost savings, a wider reach, and easier data analysis. We received 36 responses from 150 companies, resulting in a response rate of 24%.

Figure 1 illustrates the procedural flow of the methodological design related to the survey questions.

Participation in the survey was voluntary, and respondents received a clear explanation of the research goals along with assurances that their responses would remain confidential. All collected data were handled with strict confidentiality and used only for research purposes. Respondents’ anonymity was maintained when the findings were shared. Additionally, data were securely stored in accordance with ethical guidelines and data protection laws.

4. Results and Discussion

Most survey participants hold managerial-level or higher roles. More than two-thirds of these respondents are classified as owners, managers, or directors (refer to Figure 2).

As shown in Figure 3, the composition includes a balanced mix of small and medium-sized enterprises (SMEs) and larger SMEs. About one-third of the entities are larger corporations.

As shown in Figure 4, only 40% of respondents do not implement lean manufacturing methodologies within their organizations. The survey results reveal a significant reluctance among many SMEs to adopt lean manufacturing tools and techniques. This indicates that either awareness of lean manufacturing or its perceived importance is lacking, or that various barriers prevent adoption. Organizations with less than 1 year of lean manufacturing experience make up 12%, and 9% of respondents have 2 to 5 years of experience, showing a growing interest in lean manufacturing. These organizations may still be in the process of understanding and integrating lean principles into their operations. Among those implementing lean manufacturing for 5 to 10 years (18%) and 10 to 15 years (6%), 24% have reached a moderate level of lean maturity. These organizations likely benefit consistently from lean practices and tend to be larger local companies. A smaller percentage have maintained lean manufacturing practices for 15 to 20 years (6%) or more than 20 years (9%).

The survey highlights the main solutions and methods used in corporate operations, such as 3S (Sort, Sweep, and Standardize) and 5S, followed by a cause-and-effect (C & E) diagram and Failure Mode and Effects Analysis (FMEA). Other significant responses include Value Stream Mapping (VSM), Kaizen, and continuous improvement (see Figure 5). These tools are essential to lean manufacturing practices, emphasizing organization and process visualization to eliminate waste and boost efficiency. The prominence of 5S, VSM, and Kaizen underscores core lean tools that are easy to understand and quick to implement.

Our analysis shows that organizations with implementation durations longer than five to ten years are mostly larger SME companies. In contrast, small and medium-sized enterprises (SMEs) often lack implementation plans, are in the planning stages, or are unsure where to start. This accounts for nearly one-third of the responses (Figure 6).

The bar chart in Figure 7 displays the tools and methodologies that the surveyed organizations plan to adopt in the future. These data offer valuable insights into their strategic goals and focus areas. Many respondents intend to implement Kaizen, Continuous Improvement, and the 3S/5S methodologies. The preference for Kaizen/Continuous Improvement is the most popular for future adoption, highlighting a widespread desire to foster a culture of ongoing improvement and operational efficiency. The methodologies of 5S and Kanban are also quite popular, showing a commitment to maintaining workplace organization and managing workflow effectively. Tools such as Visual Management, Root Cause-and-Effect Analysis, Value Stream Mapping (VSM), and Problem-Solving Techniques are expected to be adopted at moderate levels. These tools are essential to lean practices, and their anticipated adoption indicates that organizations are eager to advance their lean initiatives.

Advanced methodologies, including Six Sigma, Hoshin Kanri, and Total Productive Maintenance [49], have relatively low adoption rates. This indicates that these approaches are perceived as requiring more expertise or being less effective.

Based on Figure 8, it can be inferred that organizations that do not plan to implement lean manufacturing tools and methodologies find their current systems satisfactory and see no reason to change. This situation creates a significant obstacle to transformation and indicates deep-rooted resistance to change, driven by their satisfaction with the status quo. Entities in this group may lack motivation to invest in lean manufacturing tools because they do not see an immediate need for improvement. An important decision involves management; this initiative is unlikely to move forward if management does not recognize potential benefits. Nonetheless, feedback from organizations that do not intend to adopt lean manufacturing practices shows some level of interest, though they face challenges in attracting personnel, tools, and applications needed. This highlights a skill gap or difficulty in accessing suitable talent for implementing lean manufacturing practices. Smaller SMEs may struggle to compete for skilled professionals or may lack proper internal training systems.

Another important factor is the benefits that companies see from implementing a lean manufacturing program. Figure 9 shows the main benefits reported by the surveyed organizations using lean manufacturing tools and techniques. They mainly experience improvements in productivity and quality as their primary benefits. This suggests that lean manufacturing practices have a significant impact on process optimization and waste reduction. Additionally, enhancing product and process quality is a key outcome, aligning with lean practices’ focus on reducing defects and maintaining high standards.

The survey results also highlight other important benefits, including increased profitability, shorter lead times, and higher revenue. These factors demonstrate that lean manufacturing methods can provide significant advantages to an organization. Implementing lean practices also yields financial gains, underscoring their role in boosting profitability. Focusing on reducing bottlenecks accelerates delivery and production cycles. By refining processes, companies can achieve better results that boost customer satisfaction.

The chart in Figure 10 indicates that the main challenges in implementing and maintaining a lean manufacturing program are “Inadequate Experienced Staff to Support” and “My Company Does Not Apply Lean”. These challenges reveal that resource shortages, a shortage of knowledgeable personnel, and widespread ignorance of lean manufacturing principles are significant obstacles.

Additional notable challenges identified in the survey include “Lack of Skills and Knowledge,” which highlights the need for training and upskilling to ensure effective implementation; “Employee Resistance,” where staff resistance or reluctance presents a significant obstacle; and “Inadequate Training,” which emphasizes skills and knowledge upgrades. “Communications Between Teams and Departments” and “Lack of Focus from Management” both emphasize the importance of internal alignment and strong leadership as key factors.

The survey results indicate that managerial support is the most crucial factor in successfully implementing lean manufacturing practices, followed by employee training and the establishment of clear objectives between management and staff (Figure 11). The significance of managerial support underscores the need for strong leadership commitment to drive lean manufacturing initiatives. Additionally, the importance of employee training, ranked second, underscores the need to equip employees with the skills and knowledge for success. Finally, establishing transparent objectives between management and staff, identified as the third most important factor, emphasizes the importance of aligning and clarifying organizational goals at all levels.

Recall the research questions that motivated this study:

RQ1: Which lean manufacturing tools and methodologies are frequently used in Singapore’s manufacturing sector?

RQ2: What factors lead to the low adoption of lean manufacturing tools and methods in Singapore’s manufacturing industries?

RQ3: To what extent are small and medium-sized enterprises (SMEs) in Singapore adopting this methodology?

RQ4: What factors hinder the adoption of this approach in small and medium-sized enterprises (SMEs)?

Based on our survey (RQ1), the most commonly used tools and methodologies are 3S, 5S, the cause-and-effect (C & E) diagram, and FMEA. The notable adoption of VSM and Kaizen is also prominent in the manufacturing sector. These tools and methods form the foundation of lean manufacturing and continuous improvement. Main challenges in skills and knowledge for implementation include resource limitations, a shortage of knowledgeable personnel, and a general lack of awareness or understanding of lean manufacturing principles, all of which pose significant barriers (RQ2). The survey shows that many organizations, especially SMEs, have not fully adopted lean manufacturing methodologies due to these challenges (RQ4). It is also notable that more than half of SMEs have yet to embrace lean manufacturing due to these challenges and a limited understanding of its benefits (RQ3). It is clear that SMEs that have adopted this approach credit their success to factors such as thorough training and supportive management.

5. Conclusions and Recommendations

Lean manufacturing has greatly influenced the world. Almost every region has researched and adopted lean manufacturing principles, applying them beyond manufacturing across various industries. The main aim is to improve organizational and business performance at all levels by eliminating waste and emphasizing processes that add value in delivering services or producing goods.

Each organization’s journey toward achieving and sustaining continuous improvement is unique. The main challenge is choosing the right timing and method to start. As this journey begins, attention shifts to strategies that support ongoing progress and ensure the long-term success of implementation. Additionally, many tools and methods are applicable for both application and execution. The challenges posed by diverse cultures, industries, and environments greatly enhance the uniqueness of these journeys. The primary goal remains the ongoing search for and evaluation of strategies tailored to each organization across a wide range of industries and countries.

Lean manufacturing is widely recognized as a key concept in the manufacturing industry. However, many people are skeptical about its benefits for organizations, especially for small and medium-sized businesses. While many organizations try to adopt this approach, various factors related to their size can hinder their success.

In conclusion, our study’s findings indicate that implementation challenges, particularly those related to experience, skill sets, and knowledge, remain significant barriers. Our research confirms that management support is essential for successfully implementing lean methodologies. Additionally, employee training, aligning objectives, and fostering a supportive environment are critical factors. While the use of tools and external expertise remains relevant, internal resources and organizational culture are even more vital.

Although lean manufacturing is not a popular research topic in this country, our literature review’s early findings suggest that few companies have adopted this methodology due to a lack of understanding and awareness from research institutions and their ecosystems [31,34]. This is particularly true for small and medium-sized companies. Even with additional research highlighting challenges and barriers to adoption, there were no plans to support these small and medium-sized firms [35]. There remains a lack of awareness and support. In this regard, our research will provide recommendations to assist these SMEs in their journey.

These organizations need guidance but often lack the resources to hire experts in their fields. Even when they seek advice from specialists, many struggle to understand the complexities of these entities’ goals. Most specialists believe that positive results will come if the right tools are used.

The following recommendations, based on our research, are offered for review.

Recommendation 1: It is vital to strengthen leadership commitment by ensuring active, visible management engagement in lean activities, thereby fostering a supportive environment throughout the organization.

Recommendation 2: Invest in employee development by offering training programs focused on lean principles and practices.

Recommendation 3: Leadership must define and align organizational goals by setting clear objectives that connect management and staff and ensure a unified approach to shared outcomes.

Recommendation 4: Management should work to improve employee morale by cultivating a culture that values staff contributions and encourages participation in lean initiatives.

Recommendation 5: Collaborating with external partners may be necessary to identify and choose appropriate tools for evaluating and applying lean methods that align with the company’s needs and goals.

Recommendation 6: Management should utilize internal expertise by promoting capacity-building through training and mentorship rather than relying solely on outside consultants.

Recommendation 7: A network of research institutions should be established to support the ongoing study of a specific country’s culture and its application.

One limitation of this study is its relatively small sample size. Most small and medium-sized enterprises (SMEs) surveyed chose not to participate due to time constraints. Additionally, the survey focuses solely on the manufacturing sector. Other challenges faced by SMEs in different industries may also exist.

6. Future Studies

It is recommended that the principles of lean manufacturing be integrated into Singapore’s higher education institutions. Educational institutions should collaborate to promote research initiatives within the industry. Singapore is a unique country, known for its diverse population from multiple cultural backgrounds. A significant number of multinational corporations, small and medium-sized enterprises, and startups from various cultures and regions have established operations in the country.

The government is promoting the digitalization of businesses; however, their structural integrity will remain at risk without establishing essential organizational standards. This failure is imminent if not addressed. Therefore, a solid foundation is vital for companies to thrive and succeed. The principles of waste elimination and value creation must be thoroughly integrated into the core framework of these enterprises through higher education, upstream workforce development, and downstream executive training.