The application of lean principles to in-service support: A comparison between construction and the aerospace and defence sectors

Abstract

Lean principles have shaped the automotive sector’s success in reducing costs and improving performance. Other industry sectors such as aerospace and construction in the U.K. have pursued similar benefits by similar means with differing degrees of success. An acknowledged vein of research in the transaction cost economics and relational contracting fields, emphasises the importance of informal norms and formal, legal documents and doctrines in commercial relations. This research illustrates that written agreements are influenced by the parties’ past relations, each one’s perception of the other’s reputation, future business prospects, as well as influences from the external environment. This paper argues that a successful and thorough application of lean principles is predicated on establishing these relational contracting norms and formal contracts which, we argue, promote an environment for fully rendering lean principles. We present a comparison of the construction and aerospace and defence sectors which have attempted to follow the automotive lead and apply lean principles in somewhat different environments. Their experiences in aftermarket and in-service support operations provide preliminary evidence supporting the paper’s central hypothesis. In effect, the construction and aerospace and defence sectors have adopted different positions relating to the importance of contractual structures in the pursuit of business improvement and as a result, have had varying success in the implementation of ‘lean’ approaches.