The purpose of this thesis is to develop a model for assessing cost effectiveness of applying lean tools. Themodel consists of eight phases: it starts by understanding customers' requirements using Voice of Customer(VOC) and Quality Function Deployment (QFD) tools. In phase 2, the current state of plant is assessedusing lean profile charts based on Balanced Scorecard (BSC) measures. In phase 3 and phase 4,identification of critical problem(s) and generating of improvement suggestion(s) are performed. Phase 5provide evaluation of the cost effectiveness of implementing the suggested lean methods based on life cyclecost analysis (LCCA) and phase 6 prefers the right alternative based on multiple criteria decision making(MCDM). In phase 7 the selected alternative is supposed to be implemented and finally the user shouldmonitor and control the process to make sure that the improvement is going as planned. The model wasverified successfully using a case study methodology at one Swedish sawmill called Södra Timber inRamkvilla, one part of Södra group. Results obtained from the study showed that the production and humanresources perspectives are the most critical problem areas that need to be improved. They got the lowestscores in the lean profile, 63% and 68%, respectively. Using value stream mapping (VSM) it was found thatthe non value added (NVA) ratios for the core and side products are 87.4% and 90.4%, respectively. Usingthe model, three improvement alternatives were suggested and evaluated using LCCA and MCDM.Consequently, implementing 5S got the highest score, second came redesigning the facility layout.However, it was estimated that 4.7 % of NVA for the side product would be reduced by redesigning thefacility layout. The recommendations were suggested for the company to improve their performance. Thenovelty of the thesis is based on the fact that it addresses two main issues related to lean manufacturing:firstly, suggesting lean techniques based on assessment of lean profile that is based on BSC and QFD, andsecondly assessing the cost effectiveness of the suggested lean methods based on LCCA and MCDM. Thisthesis provides a generalized model that enables the decision-maker to know and measure, holisti...
