Lean, Agile, and Six Sigma: Efficiency and the Challenges of Today’s World: Is It Time for a Change?

Abstract

The article presents the results of research on the resilience of companies using management concepts such as Lean Management, Agile, and Six Sigma to the crises that companies have had to face in recent years: the COVID-19 pandemic, rising energy prices, and the war in Ukraine. The implementation of these management concepts should lead to process improvements and a reduction in the consumption of production resources, including energy. The aim of the study was to determine how these crises have affected the efficiency of companies and to determine whether the solutions used so far are sufficient or require modification. The authors used three research methods. Firstly, they analyzed the literature—scientific publications, studies, and expert reports. Secondly, they analyzed the financial results (net profits and share of Costs of Goods Sold in the value of Revenues) in the period before (2016–2019) and after the outbreak of the COVID-19 pandemic (2020–2023) of companies using Lean Management, Agile, and Six Sigma strategies and their combinations. To compare the effectiveness of these management methods, they also analyzed the financial results of international corporations and Polish companies. Third, they conducted a survey among Polish companies applying the Lean Management concept. The results of this research show that the crises of recent years, even if they caused a deterioration in financial performance, were short-lived as companies were able to adapt to the new conditions. Japanese companies using Lean Management increased their profits by an average of 55.56% between 2020 and 2023, and “Lean” American organizations even more (71.64%). Polish companies have been steadily increasing their profits for years (134.14% before the pandemic and 143.27% after the outbreak). The share of COGS will remain at a similar (high) level for many years to come. There are no significant increases in these costs due to crises in the companies’ environment (e.g., increase in energy prices), and, on the other hand, there is no tendency for them to decrease in a large proportion of companies. In the years 2020–2023, the largest decreases in the share of these costs occurred in companies combining Lean and Six Sigma (−11.85%). In companies that use the Agile strategy, there was an increase of 8.05%. However, these are average data, and the analysis of the results of companies from individual groups leads to the conclusion that it is not only the management concept that is important, but also how it is implemented in a given company. In addition, streamlining processes only by eliminating waste is not enough these days. It is necessary to use modern technologies (digital technologies, Industry 4.0). Increasing the efficiency of production or logistics processes leads to a reduction in energy consumption and external costs. However, new, specialized solutions are needed. The issue of energy efficiency is indeed gaining more and more importance in companies and is included in management concepts, e.g., in Lean Management.

1. Introduction

In recent years, companies have had to deal with various challenges: the economic crisis of 2007, the COVID-19 pandemic, rising energy prices, and inflation. In addition, there are phenomena that are long-term trends: an aging population, new generations (“Generation Z”), and new technologies, which impact process efficiency.

The concepts of management of a company and its processes have a significant impact on the consumption of resources (materials, raw materials, energy, people, machinery, equipment, time, space). The implementation of management concepts, such as Lean Management, Agile, and Six Sigma, has a substantial impact on the costs of the production and logistics processes, and consequently on the financial performance. The consumption of these resources also has an indirect impact on energy consumption.

Energy consumption costs account for a significant share of companies’ total costs and revenues. Energy wastage, therefore, increases the costs of doing business. The benefits of reducing energy consumption are not only lower costs for companies, but also a reduction in the negative impact on the environment.

Significant energy savings can also be achieved by eliminating production waste, unnecessary processing, and transport. Energy is needed for basic processes, such as powering equipment, lighting, and cooling, as well as for auxiliary processes, such as administrative processes.

The impact of specific solutions is not clear-cut. In general, solutions aimed at eliminating waste and using production resources more efficiently undoubtedly have a positive impact on energy efficiency as well. However, some solutions may result in a higher demand for energy. For example, companies using the Just-In-Time system in logistics may benefit financially, but increasing the frequency of deliveries may increase energy consumption and have a negative impact on the environment (increased number of transports, worse utilization of transport capacity, and mileage).

By shortening the flow path of materials and components, the efficiency of production processes is increased, which undoubtedly helps increase energy efficiency. However, the pandemic situation forced a move away from some solutions, which may result in increased energy demand. Perhaps the best example of this is a problem with the “Cell Layout”, which is popular in Lean organizations. The close location of the workers, however, created a risk during the pandemic period.

Moreover, crisis situations may lead to even more radical solutions and, for example, to a move away from Lean Management to Agile. Such solutions have been advocated for many years (even before the pandemic) by the authors of various studies.

The aim of the article is to present the impact of the crises of recent years and long-term trends on the efficiency of companies applying selected management strategies and concepts (Lean Management, Agile, Six Sigma), and to determine whether the solutions used so far are sufficient or require modification in terms of the effectiveness of these strategies.

According to the authors, there is a lack of research on this topic, so they identified this as a research gap.

2. Materials and Methods

The authors conducted a literature analysis—academic publications, studies, expert reports, analyzed financial results of companies from recent years, and conducted a survey in Polish companies that apply the Lean Management concept.

The authors of this article have tried to find answers to these questions:

• Have the crises of recent years (COVID-19 pandemic, energy crisis, the war in Ukraine) had a significant impact on the economic situation of companies?
• Did the strategies and concepts used by companies to manage their processes, such as Lean Management, Agile, and Six Sigma, help them navigate through these crises?
• Does combining these strategies, e.g., Lean and Agile, have a positive impact on companies’ efficiency?
• Do these management concepts also have a positive impact on energy efficiency, which is extremely important in view of rising energy prices, or are new solutions needed?
• Are companies changing their existing methods of managing their processes and resources?

To find answers to these questions, the authors conducted a literature review of scientific publications, research, and expert reports. They then analyzed the financial results of companies from recent years, as contained in their financial reports, and calculated changes in profits and costs. Reports of 12 Japanese and American companies applying Lean Management, 5 applying Six Sigma, 4 companies applying the Agile concept, 4 companies combining Lean and Six Sigma strategies, and 2 companies combining Lean and Agile strategies were analyzed. The next step was to conduct an interview with Polish companies applying the Lean Management concept.

The results of the research are divided into three sections:

Section 3.1 presents the results of a literature review on the issue of energy consumption in companies from the point of view of companies’ economic efficiency. The aim was to identify factors influencing energy consumption and ways to reduce it. These methods include methods and tools used in management concepts—primarily Lean Management, which can be useful for saving energy. The authors wanted to find out whether the methods for eliminating waste that have been known and used for years can also contribute to increasing energy efficiency, or whether there is a need to develop new tools aimed at analyzing and improving this efficiency.

Section 3.2 presents the results of an analysis of companies’ financial reports from recent years. The profits and the share of the so-called “Own Costs of Sales” were analyzed. These analyses were carried out in order to determine how Polish and foreign companies, including those applying Lean Management, Six Sigma, and Agile concepts, managed in crisis conditions.

The authors sought to answer these questions by interviewing employees of Polish companies applying Lean Management. The interviews were conducted in June and July 2024. The results of these interviews are presented in Section 3.3.

3. Results

3.1. Analysis of the Literature

According to a survey of the U.S. hardwood industry, the average share of energy consumption costs in total costs is 7.90% (9.70%—primary producers, 7.10% secondary producers—from 5.90% to 7.80%) [1,2]. Studies conducted in 11 European countries—including Austria, Belgium, Germany, Italy, Luxembourg, Spain, France, Croatia, Italy, Poland, Portugal, and Slovakia—have shown that energy consumption accounts for a significant share of many companies’ total costs, with significant differences between industries and between countries [3]. On average, energy consumption accounted for about 5% of the costs of goods, materials, and consumables sold, and about 12% of the costs of external supplies and services. Energy price levels began to rise in 2021. In 2022, as a result of the war in Ukraine, gas prices rose by 400% and electricity prices by up to 200%. An additional factor was the increase in consumption and production following the COVID-19 pandemic.

Rising energy prices are having an increasing impact on companies’ financial performance, according to another study covering 1342 companies in 22 European countries in 2022 [4]. Similar results were obtained in studies conducted in other parts of the world. The results of an analysis of the financial performance of large manufacturing industries (textile, cement, sugar, auto assembly and pharmaceutical) listed on the Pakistan Stock Exchange from 2007 to 2016 show that energy prices are an important factor in companies’ financial performance [5]. Also, according to the study conducted in China, industrial companies that achieved their energy savings targets have an advantage in terms of profitability [6]. However, companies may show positive productivity growth in the medium term, especially in less energy-intensive sectors [7].

Bamiatzi et al. [8] analyzed the 2008 economic crisis and concluded that a company’s profitability is less influenced by industry characteristics and more influenced by how a company and its processes are managed.

“Lean Manufacturing” is considered one of the most effective management methods, also the method of managing the consumption of energy, by identifying and eliminating wastes. According to the results of some studies, in most cases where tools like TPM—Total Productive Maintenance and 6R have been applied, there has been a positive impact on both economic but also and environmental efficiency [9].

Numerous studies conducted in different industries and in different parts of the world confirm the benefits of Lean Management for energy and environmental efficiency [10]. Below are some illustrative examples of this.

The types of waste and associated energy consumption often identified in the literature (EPA) are presented in

Table 1. Energy used hidden in Lean waste.

Waste Type	Energy Use
Overproduction	Energy consumed in operating equipment to make unnecessary products
Inventory	Energy used to heat, cool, and light inventory storage and warehousing space
Transportation and Motion	More energy used for transportation and delivery More space required for work-in-process (WIP) movement, increasing lighting, heating, and cooling demand, and energy consumption
Defects	Energy consumed for making defective products; space required for rework and repair; increasing energy use for heating, cooling, and lighting
Over processing	Energy consumed in operating equipment related to unnecessary processing
Waiting	Wasted energy from heating, cooling, and lighting during production downtime

Source: [11].

.

The first example is a manufacturing company that, in the midst of an energy crisis, achieved greater energy efficiency by using Lean tools and a Kaizen approach [12]. Energy consumption was reduced by up to 7.5% on the production line, by 3.5% at the extruder stage, and by up to 20% at the injection stage of the manufacturing process.

Using a process map (VSM) and process improvement in a company that produces valve regulators for liquefied petroleum gas (LPG) cylinders, a 25% reduction in energy consumption was achieved [13]. Reducing the WIP at this company from 21,300 to 6240 parts per day and reducing space utilization on the production floor led to a 15.6% reduction in energy consumption. One of the solutions in this company was the implementation of a work cell on the assembly line, which reduced transportation between assembly, painting, and inspection stations, resulting in lower consumption of energy, water, and carbon emissions.

Very similar results were achieved by a company from a completely different industry, namely the food industry. In this company, thanks to the application of Lean Management, it was possible to reduce waste, including changeover time and manual processes. As a result, SEC (the specific energy consumption) improved by 15.1% due to the reduction in wastage on the production line [14].

A company, which produced electrical components, achieved even better results—the introduction of work cells, a pull system, and increased fault tolerance resulted in a 72.37% reduction in energy consumption [15].

In one of the studies conducted in the building (construction) industry with the use of the life cycle assessment (LCA) methodology outlined in the ISO 14040 [16], it was proved that four Lean techniques—value stream mapping (VSM), Just-In-Time (JIT), continuous flow, and total productive maintenance (TPM)—led to a reduction in energy consumption by 9.2% and CO₂ emissions by 4.4% [17].

Very similar results are also reported in other studies. For example, Gonce and Somers [18] conducted studies in various manufacturing companies. The conclusion of these studies is that streamlining processes, even without capital expenditure, would reduce energy consumption by 15%. Especially in companies that implement Lean, there is a basis for increasing energy efficiency through process integration and improvements in quality, productivity, and flexibility. Many Lean Management techniques allow for energy efficiency as a side effect—reducing waste in the form of, for example, overproduction, unnecessary transportation, and quality errors results in a decrease in energy consumption.

Although there are many Lean tools identified in the literature, there are six that can be used to reduce energy consumption: Standard Work, Visual Workplace, Error Proofing, TPM, Quick Changeover, and Right-Sized Equipment [19].

Phong and Minh [20] identified “classic” tools and solutions that can be used to reduce energy consumption:

• 5S and Visual Workplace, which provide visual indicators that make it easy to identify energy use targets, which can help employees and managers to be aware of energy consumption and opportunities for reduction;
• Standardized work: workplace procedures that take into account the best practices for reducing energy consumption in training materials, standard operation and maintenance of equipment, and 5S checklists;
• Poka-yoke—not making mistakes also reduces energy consumption;
• Total Productive Maintenance (TPM): by systematically maintaining equipment, plants can reduce defects in the production process and reduce energy costs by over 20%;
• Train employees to identify energy losses and increase equipment efficiency through maintenance and operation;
• Kaizen—to increase equipment performance;
• SMED—to reduce set-up and changeover times;
• VSM helps to understand how energy is used throughout the process;
• Selecting equipment with the right (optimal) parameters (performance, speed): e.g., an outdated machine has a much higher performance than required.

The authors cited here demonstrated the effectiveness of these solutions using the example of Case, one of the largest wooden furniture manufacturers in northern Vietnam (known as WL). The company faced pressure to reduce costs in the context of COVID-19 and a customer-enforced requirement to reduce energy consumption for export products. Using the methods mentioned above, unit energy consumption (SEC = Energy used/Product amount) dropped by as much as 67.88% in 2021 (from 46.83 to 31.75 kWh/m³).

Table 2. Percentage of energy reductions by applying different Lean tools for the main equipment (Case—furniture manufacturer).

Equipment	Quantity	Waste (Problems)	Lean Tool Application	% Energy Reduction
Drying oven	20	Over-heat, over-time drying	SW, right-size equipment, TPM	39.1
Sanding machine	37	Defect, no-load running	SMED, SW, Poka-yoke	25.2
Vacuum machine	49	No-load running	SW, 5S, TPM	18.3
Conveyor	144	No-load running	Visual, 5S, TPM.	14.9
Drill machine	125	Long cutting journey	SW, Poka-yoke, TPM	13.7
Cutting machine	35	No-load running, long cutting journey	SW, Poka-yoke, TPM	9
Compress machine	4	Defective	SMED, SW, Poka-yoke	3.7
CNC machine	12	-	TMP	2

Source: [20].

shows the solutions used by this company and the energy savings they have brought about.

The conclusion that emerges from the analysis of these case studies is that the energy crisis has not discouraged companies from applying the Lean Management concept. On the contrary, it has further mobilized them to seek savings. However, the authors of other studies caution against drawing too hasty conclusions about which solutions should be applied to design a resilient system.

In addition to Lean Management, other factors such as a smart environment relying on digitization and the Industry 4.0 tools and technologies can support the development of a company toward higher levels of operational and Lean-Green performance [21,22]. Similar initiatives are also underway in companies that have implemented concepts that “compete” with Lean Management, such as Six Sigma or Agile. For example, the U.S.-based Dow Company (Midland, MI, USA) has improved energy intensity (energy consumption per pound of product) by 22% through Six Sigma and employee engagement [23].

The goal of “Agile Project Management (APM)” [24] is to foster innovation and energy-efficient solutions in the heating, ventilation, and air conditioning (HVAC) industry, which is at the forefront of addressing environmental challenges with innovative technologies. The main tenets of the project are iterative development, adaptive planning, collaboration with customers, flexibility, and responsiveness to change. HVAC enables rapid adaptation to changing customer needs and technological advances.

The “Agile approach” can be used to improve processes (and consequently increase energy efficiency) not only in production, but also in transportation, for example, to optimize processes in urban logistics [25].

Even greater benefits can be achieved by combining these concepts and using hybrid solutions [26]. The search for solutions combining different competing concepts is necessary if high efficiency in terms of disruptions, crises, and energy consumption is to be achieved [27]. Companies can be LARG—Lean, Agile, Resilient, and Green [28]. The integration of Lean and Six Sigma in different areas of manufacturing and services is required to increase the resilience of systems [29] and enables the increase in process efficiency, as well as overall economic, energy, and environmental performance [30,31,32,33,34,35].

Research at a major multinational aerospace and defense company has shown that Lean practices foster anticipation, adaptation, and increase flexibility and resilience [21]. However, the authors state that if standardization is too high, “Lean” practices can also undermine organizational resilience. In addition, although Lean Manufacturing is regarded as an energy-efficient management concept, new tools and methods are needed to analyze and reduce the energy consumption.

Baysan et al. [15] developed a holistic methodology, which integrates Energy Value Stream Mapping, experimental design, and simulation, with the aim of analyzing and reducing the energy consumption by reducing unevenness (mura) and overburden (muri) as root causes of energy consumption—waste (muda). The proposed methodology applied to a cable ladder manufacturing system yielded an approximately 72.37% reduction in energy consumption.

A novel Lean method, which takes into account also the environmental concerns, is the Energy Cost Deployment (ECD), whose objective is to classify, analyze, and eliminate energy losses within a factory [36]. The effectiveness of the ECD method was illustrated using an industrial case study concerning a tissue paper mill.

The Leanergy method, developed by the Okavango-energy consulting firm [37], represents a structured Lean Manufacturing approach that extends savings to processes and operations. The rationale for this new concept is that not all Lean tools are tools that help reduce energy consumption [38].

The goal of the Lean Energy Management concept [39] is to optimize the energy efficiency of enterprises by continuously reducing energy costs, which, in turn, is achieved by reducing energy consumption on the one hand and reducing energy procurement costs on the other. As the authors state, many of the classic tools of Lean Manufacturing methods are used to achieve this goal. However, to achieve higher energy efficiency to a greater extent, they propose a specialized “energy flow map” (EVM) method that shows how specific the problem is. The classic VSM method is, therefore, insufficient, and there is a need to develop new tools. The usefulness of this method was demonstrated in a case study of die casting [40]—total energy demand in the process chain was reduced by 6.17%.

This raises another question: Is process optimization alone enough without investment and technological development? The energy efficiency of manufacturing processes is heavily influenced by the technologies of Industry 4.0. Four groups of technologies (artificial vision and artificial intelligence, incremental manufacturing and robotics, Big Data and advanced analytics, and the Internet of Things) are helping to improve the energy efficiency of these processes by an average of 15–25% [41]. For example, integration of Green Lean Six Sigma (GLSS) and Industry 4.0 (I4.0) helped improve hospital care through better safety, hygiene, and real-time diagnostics [42]. Lean Manufacturing can be supported by Quick Response Manufacturing, especially in environments with high variation and small volumes [43]. Other authors are also developing similar models. For example, Costa et al. [44] developed a model that integrates 4.0 and LM practices and facilitates companies’ transition toward environmental sustainability. The model was validated through an interview with a sample company. Studies conducted in 30 Chinese provinces between 2006 and 2019 have shown that smart technology, productivity effects, economies of scale, and resource allocation effects of smart manufacturing can improve energy efficiency [45]. A study also conducted in China by Chu et al. [46] among A-listed companies in Shanghai and Shenzhen between 2011 and 2021 found that AI can drive corporate energy transformation, and artificial intelligence can help corporations achieve energy transformation. Similar studies are being conducted by other authors—Song et al. [47], for example, showed in their study that the digital economy can promote better energy use efficiency.

For supply chains as well, the use of modern technologies is advocated to support these concepts: digitization through mobile apps, artificial intelligence systems, Big Data, and machine learning, as well as new concepts such as Lean omnichannel [48]. The Lean omnichannel approach is an effective practice to maintain production costs, SC visibility, SC inventory availability, and sales. Companies can achieve high levels of sustainability through resilience if they are committed to a sustainable return on investment. Integrating supply chain resilience with quality management leads to more sustainable and better organizational performance. This integration provides synergistic benefits, contributing to increased operational efficiency [49]. A conceptual Lean supply chain reference model (LSCP 4.0) has been developed that combines Industry 4.0 (I4.0) digital technologies with Lean Manufacturing tools to reduce waste and minimize costs [50]. The model has been applied and verified in the case of a large shoe company.

A manifestation of the recognition of the relevance of the problem of energy consumption and its peculiarities is the Department of Energy Reduction established at Toyota SA in April 2010 [51]. Its task is to focus on the implementation of an energy management system in line with the company’s goals and based on Toyota’s philosophy of continuous improvement (see also: [52]). The establishment of such a department in a company that is a symbol of “Lean Management” shows that achieving energy efficiency goals requires deeper changes in companies that apply this concept.

The issue of integrating energy aspects into Lean Management has been the subject of research by McKinsey and related experts. Below are the results of one of the studies [53].

According to the authors, over the years, manufacturers have made tremendous gains in increasing labor and capital productivity by implementing Lean Manufacturing principles. To a lesser extent, however, there have been efforts to increase energy efficiency. As the authors of the report cited here state:

“The waste of energy and resources is typically overlooked or excluded from lean problem solving on the grounds that it is too complex for the front line to address, cuts across too many functions, or both”.

Meanwhile, energy consumption can account for a significant portion of production costs. The authors give an example of a manufacturer of LCD TVs, where energy consumption costs accounted for 45% of production costs. Considering the share of production costs in the value of sales and the profitability of large manufacturers, this is indeed a significant share. The share of energy consumption costs in the production costs of steel or chemical products can be 15% or more (e.g., 30%). The authors estimate that these costs can be reduced by up to 30 percent, in part by applying Lean principles. The savings achieved by the surveyed companies amount to millions of euros in savings per year (as much as EUR 50 million in savings per year in one of the surveyed companies). It was necessary to map the value stream of raw materials and move away from the traditional assumption that benefits could be achieved without expense, only by eliminating waste and streamlining processes.

3.2. Analysis and Comparison of Companies’ Financial Performance

In order to determine the impact of an increase in the cost of energy consumption on financial performance, the authors analyzed the financial results from recent years of Polish and multinational companies, and companies that apply Lean Management, Agile, and Six Sigma strategies.

The authors took the data for the calculations from the financial reports of the companies, which apply:

• Lean Management:
  • Japanese companies (Toyota Motor Corporation, Toyota, Japan; Honda, Minato City, Japan; Nissan, Yokohama, Japan; Suzuki, Hamamatsu, Japan; Mitsubishi Motors Corporation, Minato City, Japan).
  • American companies (General Motors Company, Detroit, MI, USA; Parker Hannifin, Hong Kong; Illinois Tool Works, Glenview, IL, USA; Kimberley-Clark Corporation, Irving, TX, USA; Textron, Providence, RI, USA; General Electric, Hong Kong; 3M, Saint Paul, MI, USA).
• Six Sigma (Motorola, Chicago, IL, USA; BAE Systems, London, UK; Denso Corporation, Kariya, Japan; Eastman Kodak Company, Rochester, NY, USA; Xerox, Norwalk, CT, USA; Boeing, Arlington County, VA, USA).
• Agile (Sony, Minato City, Japan; Lego, Billund, Denmark; Siemens, Munich, Germany; Koninklijke Philips, Amsterdam, The Netherlands).
• Combining these concepts:
  • LeanSixSigma (John Deere, Moline, IL, USA; Ford Motor Company, Dearborn, MI, USA; Caterpillar Inc., Irving, TX, USA; Textron, Providence, RI, USA).
  • LeanAgile (Intel Corp., Santa Clara, CA, USA; Nike, Inc., Beaverton, OR, USA).

And for comparison:

• A total of 15 Global corporations—the world’s largest manufacturing companies (Bayer, Leverkusen, Germany; IKEA, Delft, The Netherlands; Thyssenkrupp, Essen, Germany; Siemens, Munich, Germany; ABB, Zürich, Switzerland; Schneider Electric, Rueil-Malmaison, France; Continental, Hanover, Germany; BMW, Munich, Germany; Bosh, Stuttgart, Germany; Procter & Gamble, Cincinnati, OH, USA; Coca-Cola, Atlanta, GA, USA; PepsiCo, Harrison, NY, USA; Adidas, Herzogenaurach, Germany; Inditex, Arteixo, Spain; Zalando, Berlin, Germany).
• A total of 156 Polish manufacturing companies from industries: Chemicals, Wood, Paper, Furniture, Electrical, Rubber, Automotive, Clothing and Cosmetics, Pharmaceuticals, Food

The average changes in net profit and the proportion of COGS (cost of goods sold) in revenue were calculated for all these companies. The aim of these analyses was to determine whether the problems that have occurred in recent years, including the increase in energy prices, have had an impact on the economic efficiency of these companies.

This topic has already been analyzed by the authors of this article, and the results of the study on the impact of energy costs on the efficiency of Polish manufacturing companies have been included in an earlier publication [54].

The calculations for the period 2016–2019 for a group of Japanese Lean Management (JLM) companies were carried out as follows:

Changes (%) Average Net Profits 2019/2016 (JLM) = (Average Net Profits (JLM) 2019 − Average Net Profits (JLM) 2016)/Average Net Profits (JLM) 2016

Changes (%) Average COGS/Revenue 2019/2016 (JLM) = (Average COGS/Revenue (JLM) 2019 − Average COGS/Revenue (JLM) 2016)/Average COGS/Revenue (JLM) 2016

The diagram of the profit calculation process is also shown in Figure 1.

Calculations were carried out in the same way for the following period (2020–2023), for the other company groups (Six Sigma, Agile), and for each company individually.

Table 3. Average changes in profits and COGS/revenue share in manufacturing companies.

Change of:	Net Profits		Share of COGS/Revenue
Firm	2016–2019	2020–2023	2016–2019	2020–2023
Lean Japan	14.53%	55.56%	8.92%	−2.10%
Lean USA	37.56%	71.64%	−0.45%	0.05%
Six Sigma	71.52%	22.13%	2.03%	−0.09%
Agile	287.63%	−75.71%	−0.54%	8.05%
LeanSigma	54.47%	24.80%	−4.42%	−11.85%
LeanAgile	64.53%	3.88%	7.23%	18.06%
Multinational corporations	31.38%	19.76%	−0.06%	−3.99%
Polish companies	134.14%	143.27%	0.46%	−0.22%

,

Table 4. Average profit changes in Lean Management leaders.

Change of:	Net Profits		Share of COGS/Revenue
Japanese Companies	2016–2019	2020–2023	2016–2019	2020–2023
Toyota Motor Corporation	−18.59%	20.08%	3.78%	1.34%
Honda	66.43%	40.67%	44.74%	−14.31%
Nissan	−57.13%	78.72%	6.30%	−3.38%
Suzuki	34.46%	17.79%	−14.43%	8.96%
Mitsubishi Motors Corporation	47.47%	120.54%	4.19%	−3.10%
US companies	2016–2019	2020–2023	2016–2019	2020–2023
General Motors Company	134.70%	60.43%	−1.92%	3.28%
Parker Hannifin	87.48%	73.29%	−3.04%	−11.76%
Illinois Tool Works	−14.43%	40.21%	−3.09%	−1.39%
Kimberley-Clark Corporation	41.35%	−25.00%	1.77%	1.90%

,

Table 5. Average profit changes for Six Sigma leaders.

Change of:	Net Profits		Share of COGS/Revenue
Firm	2016–2019	2020–2023	2016–2019	2020–2023
Motorola	55.54%	79.85%	−4.43%	−2.23%
BAE Systems	52.38%	38.49%	−12.71%	−4.96%
Denso Corporation	13.02%	271.29%	2.03%	−0.09%
Eastman Kodak Company	540.00%	−109.98%	13.08%	−6.54%
3M	188.55%	−78.31%	6.20%	9.58%
Xerox	−17.60%	−11.98%	−0.49%	6.06%
Boeing	−60.27%	−107.30%	11.40%	−17.89%

and

Table 6. Average profit changes in companies using Agile and combining these concepts.

Change of:	Net Profits		Share of COGS/Revenue
Agile	2016–2019	2020–2023	2016–2019	2020–2023
Sony	572.05%	29.48%	−6.75%	8.04%
Lego	−99.38%	−439.87%	8.51%	5.02%
Siemens	708.09%	244.73%	0.08%	11.94%
Koninklijke Philips	−30.22%	−137.17%	−4.00%	7.19%
LeanSixSigma	2016–2019	2020–2023	2016–2019	2020–2023
John Deere	113%	270%	−1%	−23%
Ford Motor Company	−99%	−440%	−5%	−4%
Caterpillar Inc.	148%	245%	−8%	−8%
Textron	−15%	198%	1%	11%
LeanAgile	2016–2019	2020–2023	2016–2019	2020–2023
Intel Corp.	80%	−92%	14%	36%
Nike, Inc.	49.2%	99.7%	0.2%	−0.2%

show the changes in net profits and the share of “Costs of Goods Sold” (COGS) in revenues in 4-year periods: 2016–2019 and 2020–2023, i.e., before and after the outbreak of the COVID-19 pandemic and during the “energy crisis”, which was partly related to the war in Ukraine.

Table 3 shows the average (aggregated) data for groups of companies using different strategies (Lean Management, Six Sigma, Agile, combinations of these strategies).

In the period before the pandemic, many companies increased their profits—mostly in the group of companies using Agile (287.63%), followed by those using Six Sigma (71.52%) and combining different concepts: Lean with Agile (64.53%) and LeanSigma (54.47%). Profits also increased in US Lean companies (37.56%). What may seem surprising is that the results of global corporations were similar (31.38% increase) and that the smallest increases in profits occurred in the home of Lean Management in Japan (14.53%). But what may be even more surprising is that Polish manufacturing companies performed even better (up 134.14%).

Polish companies performed even better in the following period—2020–2023 (profit increase by 143.27%). The pandemic crisis and the increase in energy costs did not harm the profits of Lean Management leaders; on the contrary, profits increased to a greater extent both in the USA (71.64%) and Japan (55.56%).

In contrast, profit increases were smaller in companies using Six Sigma (22.13%—less than in the previous period) and LeanSigma (24.80%). Agile companies were not immune to the crises during this period (75.71% decrease), as well as those that combined Lean Management with Agile (only 3.88% increase). International corporations recorded a relatively lower increase in profits, yet it was still only slightly less than in the previous period (19.76%).

Energy costs often account for a significant share of production and logistics costs. It is therefore to be expected that rising energy prices will have an impact on economic efficiency. On the other hand, the implementation of management concepts such as Lean Management or Six Sigma aims to increase process efficiency, which should indirectly contribute to increased energy efficiency.

The data show that the share of COGS in the value of revenues has remained relatively stable over the years. This raises the question of whether management concepts such as Lean, Agile, and Six Sigma are helping in improving the process efficiency and cost reduction. Most surprisingly, there was even an increase in the share of these costs in Japanese “Lean” companies between 2016 and 2019 (by 8.92%), as well as in companies that combined “Lean” and “Agile” (7.23%). “LeanAgile” companies saw a further increase of 18.06% in the next period (2019–2023). The “Lean Leaders”, however, have performed well during the crises in recent years—in Japan, the share of COGS declined (−2.10%), in the US it remained at a similar level to the previous period. The least effective proved to be the combination of Lean and Agile (increase in COGS share by as much as 18.06%). International corporations (−3.99%) and Polish companies (−0.22%) managed to reduce costs during this difficult period, and their results were comparable to those of Lean, Six Sigma, or Agile leaders.

However, it is necessary to analyze not only the average data of individual groups but also of individual companies. Such data are presented in Table 4, Table 5 and Table 6. It turns out that there are very large differences between the individual companies, which shows that it is not only the management concept itself that is important, but also how it is implemented and perhaps impacted by external factors beyond the control of the company.

In 2020, most companies felt the effects of the pandemic in the form of reduced profits. But most of them also started to make up for the losses in the following years, albeit at different rates. Many of these companies, regardless of the management concept applied, achieved higher profits after 2020 than before 2020.

Table 4 shows the results of Japanese and American companies using the Lean Management concept.

The company most associated with Lean Management, i.e., Toyota, experienced an 18.59% drop in profits, and Nissan even bigger (−57.13%). Yet the other Japanese firms increased their profits in both 4-year periods. Mitsubishi Motors Corporation increased profits by as much as 120.54% in recent years.

US Lean companies fared much better, with the exception of two cases: Illinois Tool Works and Kimberley-Clark Corporation. These companies posted profit increases in both periods, and more than Japanese companies. Textron’s profits increased between 2020 and 2023 by as much as 198.06% (more than Mitsubishi—120.54%).

There are even greater differences between companies using Six Sigma (Table 5), Agile, and combinations of these strategies (Table 6). Moreover (like in “Lean” organizations), a company that increased its profits in the years before the pandemic did not have to be in a good financial position in the following period.

The largest increase in profits in the years 2016–2019 took place at the Eastman Kodak Company (540.00%), while in the following period, there was a decrease (−109.98%). In some of the companies in this group, financial performance improved in the latter period (Denso Corporation 271.29%, Textron 198.38%, Motorola 79.85%). However, it is difficult to conclude from this that Six Sigma helps to improve resilience to crises.

The financial situation was worse at Agile organizations—two companies had smaller profit increases: Sony—29.48% and Siemens—244.73%. These increases in the previous period were 572.05% and 708.09%, respectively. The other two had declines in profits—at Lego −99.38% and Koninklijke Philips −30.22%. In the following years, these declines were even greater—specifically: −439.87%, −137.17%.

The companies that used a combination of these strategies were more successful: three out of five companies recorded an increase in profits before 2020 and even more in the following years (John Deere—113–270%, Caterpillar Inc.—148–245%, Nike, Inc.—49.2%, 99.7%). The percentage of such companies is higher than in organizations that only use Lean Management or only Six Sigma. This seems to confirm the views presented in the literature (see Section 2) on the benefits of combining these concepts.

However, when it comes to the share of COGS in the value of sales, the changes in this value are much smaller than the changes in profits. Meanwhile, one would expect to see an increase in process efficiency in companies that apply process improvement concepts. A decrease in the share of these costs between 2016 and 2019 occurred in 55 per cent of companies, but in most cases, the savings were a few per cent. The largest ‘Leaning’ occurred in one Lean organization—Suzuki (−14.43%), a Six Sigma organization—BAE Systems (−12.71%), one Agile organization—Sony (−6.75%), and one that combines Lean and Six Sigma—Caterpillar Inc. (−8%). As it turns out, however, these ‘productivity leaders’ proved little immune to the crises of the following years, in which the shares of COGS either remained at similar levels or even increased. Manufacturing costs, on the other hand, declined during the ‘energy crisis’ for companies that had experienced increases in the previous period (Honda—14.31%, Parker Hannifin −11.76%, Boeing −17.89%, John Deere −23%). Again, it is needless to say, it would be difficult to demonstrate that any management strategy is more efficient. The effectiveness apparently depends on the decisions made within a given company. It is possible to hypothesize that the crises forced the companies that experienced them to introduce more radical solutions than just “small step” improvements.

The data presented above are aggregated. In order to have a better picture, it would be necessary to carry out such an analysis on an annual basis. The results of such an analysis are presented in Figure 2, Figure 3, Figure 4, Figure 5 and Figure 6.

In the Japanese Lean companies (Figure 2), with the exception of Honda, it is difficult to identify any year in which any of these companies experienced a decrease or increase in the share of the COGS. The share of these costs has also remained stable in the “Lean” US companies (Figure 3). At “Parker Hannifin”, there was even a decrease in 2020. The share of these costs remains even more stable in companies applying Six Sigma. (Figure 4) and those combining Lean and Six Sigma (Figure 5).

The same was also true in companies applying Agile and Lean (Figure 5). In only one company in this group, there was a significant (46.88%) decrease in 2020 (70.15% before 2020). However, it remained at a similar level in the following years. In Intel Corp., these costs have steadily increased their share over the years—37.75% in 2017, 43.99% in 2020, and 59.96% in 2023.

In comparison, decreases (from 1.64% to 22.20%) in the share of these costs in the value of revenues in the years 2020–2023 occurred in 43% of Polish companies. In 22% of cases, the increase in their share did not exceed 5%, and in only 7% of the companies surveyed, it amounted to between 11% and 17%. There was no connection to the industry. Decreases in the share of these costs (from 1.09% to 27.87%) in this period also occurred in 47% of international corporations.

Thus, it is not apparent in any of these groups or individual companies that the application of a given management concept helps to increase the efficiency of production (and perhaps logistics) processes. On the other hand, it is also not apparent that crises in their environment, such as increases in energy prices, have had an impact on their efficiency. Perhaps, however, it is precisely this stability that demonstrates their great resilience—i.e., that they are able to keep costs under control despite crises or that they introduce innovative solutions that allow them to avoid the negative effects of these crises. However, in order to find an answer to this question, it would be necessary to carry out thorough research in these companies.

3.3. Interviews

The authors of this article conducted interviews in June and July 2024 with employees of companies operating in Poland that apply Lean Management, consultants serving such companies, and academics working on Lean Management issues.

The responses concerned a dozen companies from the following industries: food, metal (steel processing), furniture, aeronautics, automotive, engine production, plastic production, feed production, agricultural equipment production, and yacht production.

The questions asked related to recent years:

• Have costs increased or the economic situation worsened at a time of economic disruption and instability caused by the COVID-19 pandemic, the war in Ukraine, and fluctuating energy prices?
• Has the company had to make changes to its process organization?
• Has the increase in energy prices forced a change in previously used logistics strategies (Just-In-Time), and have inventories increased?
• Is Lean crisis-proof?

The surveyed organizations operate in different industries. The automotive industry has been mostly affected by the crisis of recent years (decrease in sales and reduction in employment). It is the very industry from which Lean Management originated and is at the forefront of the concept. This raises the question of whether Lean is therefore crisis-proof? Opinions on this are divided, but several respondents believe it is not immune. However, one might ask, if these companies had not implemented Lean Management, would not the crises have affected them even more?

Respondents see improvements in sales and production. For example, one manufacturer produced 300 engines in January 2023, 500 units in March, and 700 units in July.

Due to the disruption in the logistics and production processes, costs have increased, and the economic situation has worsened at some companies. However, this was largely influenced by increased customer demands. Companies using Lean are often companies working in integrated supply chains, so the economic situation depends largely on the partners in the chain, which is also influenced by the JIT strategy.

Here are some key reasons why production costs have increased:

• Rising costs of raw materials and energy (the war in Ukraine).
• Supply chain problems (caused by the COVID-19 pandemic).
• Increase in labor costs (increase in the minimum wage).

Lean organizations have faced a serious challenge—safety standards on the one hand, and the need to maintain process time standards on the other.

Some companies had to make changes in the management of both processes and employees. Training and upskilling of employees was necessary. The pandemic situation—separation of employees from each other, hygiene—had a big impact here. However, according to respondents, the pandemic did not have as much impact on the organization of work and forms of production organization (e.g., work cells).

Companies that used Just-In-Time and the “Pull” strategy are still using it. On the other hand, solutions like those of Japanese companies can rarely be found in Polish companies. In the companies surveyed, deliveries are not made directly to the production lines. Components supplied by suppliers are delivered close to the production machines, but often in quantities equivalent to, for example, several production days. Furthermore, only some of these components (e.g., 20%) are delivered in the JIT system, and these are the ones with the highest value. There is also a wide variation in the size of delivery batches, e.g., from 1 unit to 2000 units.

The increase in transportation costs as a result of rising fuel prices, therefore, had little impact on the solutions used. Companies did not increase delivery volumes. Instead, inventories increased, but this was more due to an increase in safety stock levels due to the uncertainty resulting, for example, from the political situation (war in Ukraine). However, companies are trying not to increase inventory levels too much—they are trying to optimize them. Thus, the JIT system does not necessarily mean the complete elimination of inventories, because this is not its essence. In some companies, JIT is a solution used not in cooperation with the supplier, but in the internal chain, if the company itself produces production parts. In some cases, JIT is imposed by the customer.

Not every company that claims to use Lean also uses Just-In-Time delivery. For example, a producer of food for animals, due to fluctuating costs of raw materials, buys them in large quantities to stockpile at times when prices are lower. As a result, it achieved record profits during the crisis. This has also saved it from having to reduce its workforce and raise the prices of its products.

One of the interviewed persons—Dr. Czerska had similar (but only to a certain extent) comments:

“Lean is not immune to crises, and companies should adapt to phenomena in the modern world, which is facilitated by companies’ use of “lean thinking” and “lean management”. As far as JIT is concerned, even if a company experiences an increase in transportation costs (as a result of rising energy prices), this does not mean that it is necessary to increase delivery volumes and inventories, because the distance between the manufacturer and its supplier can be shortened”.

To summarize, it can be stated that while there are differences in opinion, the more common view is that although Lean organizations are not entirely immune to crises, Lean allows them to navigate through them more easily. If they had not used Lean, their situation would be even worse. For example, companies like Mercedes are recovering from crises by winning new orders.

Prof. P. Walentynowicz gave an example of a company in the agricultural industry that did not apply Lean and is performing well, but he believes that if it had applied Lean, it would have performed even better. However, Lean Management, in its classic form, is not enough—it needs to be combined with other concepts: Agile, Six Sigma, and Industry 4.0. Agile strategy can be more effective in adapting to change, especially changes in the company’s environment. Lean is immune to internal crises (poor management, organization). The Just-In-Time system may need to be modified—for example, to Just-In-Case. Lean can greatly enhance an organization’s ability to survive and adapt in crises by focusing on efficiency, flexibility, and continuous improvement. However, full resilience to crises requires more than just implementing Lean Management—companies should take appropriate steps to increase this resilience.

Mr. Paweł Dobek, a production optimizer in ZMM Maxpol, believes that nowadays, in the modern labor market, there is no choice but to invest in technological solutions (problems with employees, employee absenteeism—such as the lack of an experienced worker). In this company, the increase in productivity and labor efficiency in the long term has been achieved through the use of traditional tools (e.g., Poka-Yoke) to streamline processes with the support of modern technology (3D printing technology, robots, and cobots). But it is important to maintain a balance between automation and human labor. In this company, AI solutions are implemented gradually and with great care.

The company has been using Lean Management for more than five years (that is, before the pandemic) and has succeeded in reducing waste, simplifying processes, and increasing productivity. The pandemic has not caused the company’s economic situation to deteriorate; on the contrary, the company has increased its profits. In the period of 5 years before the implementation of Lean, i.e., 2014–2018, the company recorded a 5.02% increase in the annual Overall Equipment Effectiveness (OEE) indicator.

Costs at this company have increased due to inflation, the market situation, and supply chain disruptions caused by the pandemic. However, the use of Lean Management helped it navigate through difficult times and adapt faster to changes in the market. These changes did not mean fundamental changes in the organization, but gradual improvements that allowed for increased productivity. The company did not move away from JIT, but tried to apply solutions to reduce energy costs (renewable energy sources, installation of photovoltaic panels, energy recovery in various ways).

However, in Mr. Dobek’s opinion, Lean is not immune to crises, but a Lean organization is more likely to survive in difficult times.

4. Discussion and Conclusions

The authors conducted research based on a literature review, an analysis of financial results of companies applying Lean Management, Agile and Six Sigma concepts (as well as their combinations), which are well known and appreciated by theoreticians and practitioners, and interviews with representatives of companies applying (or declaring to apply) Lean Management, including Just-In-Time.

Based on the literature review, the authors conclude that:

• Lean Management generally has a positive impact on energy efficiency through the elimination of waste.
• Lean Manufacturingis considered one of the most effective methods of increasing energy efficiency, especially when using tools such as 5S, Visual Workplace, work standardization, poka-yoke, and Total Productive Maintenance (TPM, SMED, value stream mapping).
• Six Sigma and Agile can also help to reduce energy consumption by improving processes (and thus increasing energy efficiency) in both production and logistics.
• Even greater benefits can be achieved by combining Lean and Agile or Lean and Six Sigma concepts and using hybrid solutions.
• Benefits can also be achieved by combining the digital technologies of Industry 4.0 with the tools of Lean Manufacturing.
• In order to achieve high energy efficiency, a detailed analysis of energy and resource consumption is necessary, using specialized methods and tools, not just traditional process improvement methods.
• One method aimed at analyzing energy consumption and its reduction is the “Leanergy”.

Based on the analysis of the financial results of Polish companies, international corporations, and companies applying Lean Management, Agile, and Six Sigma strategies, the authors conclude that:

• The analysis of the financial results of companies from individual analyzed groups showed that the differences in their effectiveness are very large, which proves that it is not only the management concept itself that is important, but also how it was implemented and how the company and its processes are managed, and perhaps also other factors.
• In general, the situation was better in companies using combinations of strategies (Lean and Agile or Lean and Six Sigma), confirming the views presented in the literature.
• It is not apparent that any of the management concepts used are helping to increase the efficiency of production processes, but on the other hand it is also not apparent that the increase in energy prices is impairing their efficiency, which may indicate that despite crises these companies are able to keep costs under control or that they are introducing innovative solutions that allow them to avoid the negative effects of these crises.

Based on the interviews conducted in Polish companies, which implemented “Lean Management”, the authors conclude that:

• The rise in fuel and energy prices has not caused a move away from the Just-In-Time concept. Companies that have used Just-In-Time continue to do so. However, there are opinions that the Just-In-Time system may need to be modified, e.g., to Just-In-Case.
• The majority of respondents believe that although Lean organizations are not immune to crises, Lean allows them to navigate through these crises more easily. If they did not use “Lean”, their situation would be worse.
• Lean, in its classic form, has to be combined with other concepts: Agile, Six Sigma.
• Lean can significantly enhance an organization’s ability to survive and adapt in crises thanks to its focus on efficiency, flexibility, and continuous improvement. However, full resilience to crises requires implementing innovative solutions (e.g., Industry 4.0).
• Companies try to reduce energy consumption, using renewable energy sources.

However, in addition to the problem of the resilience of these concepts to crises in their environment, there is another issue that requires further research: namely, whether we are facing significant transformations in both companies and their economic, social, and technical environments. This is particularly true of the concept of Lean Management, which contains interesting contradictions. One very distinctive one is the combination of innovation and creativity with a conservative approach to certain problems. This has manifested itself in the approach to technical solutions. Proponents of Lean Management have always taken pride in the fact that it is a concept that uses the potential contained in people and their creativity, rather than in technical solutions. It seems, however, that in the present time of the shortages of labor force on the one hand, and rapid technological advances (e.g., artificial intelligence) on the other, these conservative views, preached for decades, should be revised.

The aggregated research findings are presented in

Table 7. Aggregated results of the authors’ research. Source: authors’ own work.

Analysis of Literature	Analysis of Financial Results	Interviews
Lean Management, Six Sigma, and Agile have a positive impact on energy efficiency. Greater benefits can be achieved by combining Lean and Agile or Lean and Six Sigma concepts and by combining the digital technologies of Industry 4.0 with Lean Manufacturing.	There are significant differences in the efficiency of companies using a particular strategy. Companies that use a combination of strategies (Lean and Agile or Lean and Six Sigma) are more efficient. The increase in energy prices did not lead to a deterioration in the efficiency of companies using the strategies studied.	The increase in fuel and energy prices has not caused a departure from Just-In-Time. Although Lean organizations are not immune to crises, Lean allows them to navigate through them more easily. It is reasonable to combine Lean with other concepts: Agile, Six Sigma.

. In the studies using each of the methods, the conclusion is repeated that combining Lean and Agile or Lean and Six Sigma is effective.

There is a need to continue research on the energy efficiency of business management concepts and their processes, and verify the results of the research already conducted. For example, according to the results of studies already cited in this article, there is a positive impact of Lean Management tools on the environmental efficiency [9]. However, there were also a small number of cases where it was found that an increased consumption of energy and water Lean tools was induced by implementing SMED (Single Minute Exchange of Dies). It is surprising because the effect of such tools should be not only reductions in time of setups and changovers but also costs and costs of energy. This raises questions about whether the surveyed companies are actually using Lean Management tools and whether the employees of these companies understand the meaning of the terms used in the literature.

In addition, the following further research directions are possible:

• Extending the research to more companies from different industries and regions, of different sizes;
• Conducting analyses of groups of companies by industry.

The general conclusion that emerges from the research is that the effectiveness of the management systems, methods, and tools used does not imply that they are the answer to all problems. It refers especially to the problem of energy consumption—even if given methods indirectly help increase energy efficiency, specialized tools are needed. Lean Management is not a concept that provides immunity to instability in the environment; its assumptions should be revised, long-term trends of a social nature (aging population) should be taken into account, and the opportunities offered by modern technologies should be used.

The financial results, especially the continuing similar (high) share of costs (COGS) in the value of sales, seem to confirm the need to revise the management methods used so far.

The limitations of the financial analysis method were the high level of aggregation of the data published in financial reports and on company websites. For example, not all companies publish data on energy costs.

The limitations of the interviews conducted are due to the small number of people interviewed. This was due to the fact that the interviews are very time-consuming. However, the authors made sure that the people interviewed were highly competent.