Performance value analysis for the justification of lean manufacturing systems

Lean Manufacturing Systems (LMS) have attracted the attention of industries all over the world. But how do managers make a decision of implementing a 'management based and people oriented philosophy and practice' like LMS or a technically sophisticated system like Computer Integrated Manufacturing Systems (CIMS)? Such a question remains unanswered till date. Managers willing to adopt such systems should convince the top management with necessary justification, as it involves huge investment and creates a longstanding impact on various resources. But such justification problems are quite complex. Traditional techniques cannot be applied, as they do not account for intangible factors and benefits offered, which necessitate the use of Multi-Attribute Decision Making (MADM) models. Hence in this paper, an attempt has been made to demonstrate the application of a MADM model, namely, the Performance Value Analysis (PVA) to analyze the alternatives based on performance measures. A detailed algorithm of the PVA model is demonstrated using a hypothetical case situation, which showed that LMS is the best, as it results in overall improvement in the performance of the organization.