International Journal of Business Administration and Management.
ISSN 2278-3660 Volume 7, Number 1 (2017),
© Research India Publications http://www.ripublication.com
Implementing the Lean Six Sigma as a Strategy in a
Small Medium Enterprises (SMEs)
Pramod K umar Sh rivastava
Ph.D Scholar (Management)
(2014-2017)
K alinga University, Raipu r, C.G.
En r ol l me n t No. 1 5 0 2 0 1 5 3 ( K U0 0 2M MX I V0 2 0 10 6 7 8)
Abstract
In t his paper we pro vide an explor at ion and analys is o f imple ment ing
Lean S ix S igma (LSS) as a st rat egy in manufact ur ing small - and medium-
sized ent erpr ises (SME s). Cr it ical fact ors are ident ified and analysed.
Explorat or y evidences about LSS implement at ion in SME s were co llect ed
fro m a sur vey st udy. To underst and ins ight in how organizat io ns t ranslat e
CSFs int o pract ice and cope wit h impeding fact ors, addit ional in - dept h
qualit at ive infor mat ion was gat her ed from secondar y source. T he st ud y
out lines t he issues t hat were fundamen t al to t heir successes in
imple ment ing t he co ncept as a st rategy. A r esearch met hodo log y
co mpr ises o f lit erat ure review, obser vat ion of co mpanies’ pract ices and
personal int er views have been emplo yed to reach t o t he conclusio n.
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1. Introduction
Founded by Motoro la, US A in 1986, S ix S igma is a st rat egy t hat
opt imizes t he process o f out putt ing product s and ser vices by get t ing r id o f
errors so t hat result s are always co nst ant and always growing. Several
qualit y management met hods are used t o achieve t his, incl uding met hods
based on st at ist ics. A unique infrast ruct ure of people is creat ed wit hin a n
organizat io n linking t oget her people who are expert s in t his fie ld. Project s
t hat are carr ied on in t he organizat io n are t hen do ne fo llowing a ser ies o f
st eps aimed at reaching pr e-det er mined financial t arget s.
The t er m S ix S igma is one t hat co mes fr om t he manufact ur ing sect or, in
part icular st at ist ical modeling o f processes invo lved in manufact ur ing. A
sigma rat ing is used t o indicat e t he yield of a manufact ur ing pro cess. This
rat ing is based o n t he percent age o f product s manufact ured t hat have no
defect s. I n a six s igma process, t he manufact ur ing process creat es
product s wher e 99.99966 percent are defect fr ee, t his is t he equivalent t o
only 3.4 defect s in ever y 1 mil lio n product s creat ed.
Applicat io n of Lean S ix S igma (LS S) for deplo ying cont inuous
improvement is incr easing largely in t he last decade and see ms t o have
beco me t he de- fact o approach for indust ry. LSS r epresent s t he merger o f
t wo well known improvement programmes t hat bot h have a lo ng hist or y:
Lean manufact ur ing and S ix S igma. The origin o f lean manufact ur ing is
lo cat ed in Japan, where element s o f lean manufact ur ing were applied fro m
around 1950 ( Wo mack and Jones, 2003). Lean manufact ur ing became
popular a ft er t he publicat io n of t he books The Toyot a Product io n S yst e m
(Ohno, 1988) and A St udy o f t he To yot a Product ion S yst em (S hingo,
1989). S ix S igma, on t he ot her hand, st arted at Motoro la in t he US A in t he
1980s. I nt erest in S ix S igma increased rapidly aft er General E lect r ic
adopt ed S ix S igma as t he ir lead ing qualit y improvement programme
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International Journal of Business Administration and Management. ISSN 2278-3660 Volume 7, Number 1 (2017),
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(Eckes, 2000; Hender son and E vans, 2000). The t er m LSS has been
int roduced around 2000 (George, 2002).
3. Objectives and Research Methodology
3.1 Objectives
1. To analyse t he current st at us of implement at ion o f LSS in
manufact ur ing SMEs in t he I ndia.
2. To find t he Cr it ica l fact ors in LSS implement at io n, fro m a
manufact ur ing SME perspect ive.
3.2 Research Methodology
Research met hods can be classified in different ways, t he mo st co mmo n
dist inct io n is bet ween t he quant it at ive and t he qualit at ive approaches
(Myers, 2007 1). Quant it at ive approaches were or igina lly used while
st udying nat ural sciences like: laborat ory exper iment s, sur vey met hods
and numer ical met hods. A qua lit at ive st udy is used when t he researcher
want s to get a deeper under st anding on a specific t opic or sit uat io n. Myer s
(2007) 2 st at ed t hat t he qualit at ive appr oach was developed in social
sciences in order t o support t he researcher in st udies inc luding cult ur a l
and social pheno mena. Sources included in t he qualit at ive approach ar e
int er views, quest io nnaires, obser vat ions, document s and t he r esearcher’s
impressio n and react ions. The chosen appr oach is qualit at ive.
This st udy t ypically t akes t he for m st udy of secondar y d at a available on
Lean S ix S igma manufact ur ing. As a st rategy in S MEs To underst and and
conclude t he Cr it ical Fact ors in imp lement ing t his approach in I ndia n
1
Myers, M. D. (2007), “Qualitative Research in Information Systems”, MIS Quarterly, vol. 21
No. 2, pp.241-242.
2
Ibid
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SMEs, we have not only gone t hrough a number o f report s and paper s but
also visit ed and sur vey select Mid- sized manufact ur ing organisat ions T his
has t he advant ages o f providing ver y r ich infor mat ion and avo iding t he
influence o f ot hers on t he opinio n of any one individual.
4. Implementation of Lean Six Sigma as a Strategy in SME
Lean S ix S igma ( LSS) c oncept is t he int egrat io n o f t wo (2) qualit y
management concept s which are Lean Manufact ur ing and S ix S igma
whereby it at t empt s t o increase t he scope and size o f improvement s
achieved by eit her concept alone. However, differ ent individual and
co mpanies view LSS in different ways. Some would per ceive LSS as a
fully int egrat ed s yst em bet ween Lean Manufact ur ing and S ix S igma while
ot hers would perceive LSS as t wo differ ent concept s which is adapt ed in
parallel ( Assar lind et al. 2012). Moreover, t he int egrat ion bet ween t he t wo
qualit y management concept s var ies bet ween each int egrat io n as Assar lind
et . al. (2012) po int s out t hat each int egrat ion may invo lve t ransferr ing o f
different t ools, ideas and philosophies. This leads t o many t heor ies on
how Lean and S ix S ig ma could be int egrat ed. Some aut hors reco mmended
t hat S ix S igma should lead t he init iat ives, wit h Lean t ools added dur ing
t he analys is phase o f t he init iat ives while ot her aut hors r eco mmend t hat
Lean should be t he backbo ne o f t he fr amework and S ix S ig ma is used t o
reduce and t hen eliminat e t he var iat ion fo und.
Lean Manufact ur ing focuses on wast e reduct ion and non value -added
act ivit ies in product ion ( Wo mack et al. 1990) while S ix S igma focuses on
process var iat io n reduct io n wit h bot h concept s aiming t o re duce wast e.
The int egrat io n would t ake int o account t he st rengt h, weaknesses and
effect ive aspect s o f each concept to form a bet t er concept (Ku mar et al.
2006; S nee 2010). There is a need t owards t his int egrat io n in qualit y
management as a so lut ion pro vide d via Lean Manufact ur ing concept
would be o f no use if t he execut ion o f t he so lut io n has high var iat ion. T he
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International Journal of Business Administration and Management. ISSN 2278-3660 Volume 7, Number 1 (2017),
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S ix S igma concept on t he ot her hand would give t oo much fo cus in
reduct ion o f var iat io n only leading t o high r isk o f provid ing poor service
due t o long lead t imes even if t he co mpany are operat ing at S ix S igma
level. E ven t hough mo st would agree t hat t here is a need for t he
int egrat ion o f Lean and S ix S ig ma, most companies would prefer t o
imple ment bot h concept s in iso lat io n (S mit h 2003) or in par all el but t his
would lead t o increase o f pro ject s and resources while causing conflict s o f
int erest bet ween t he t wo qualit y management concept s (Bende ll 2006).
I mplement at io n o f bot h concept s in iso lat io n t oo will not enable eac h
concept to be adopt ed effect ively as it is co nst raint by o ne anot her’s
needs in t he organizat ion. I n fact , Lean and S ix S ig ma can be co mpat ible
whereby bot h are o f qualit y management (Shah et al. 2008), bot h are
met hods t hat br ings changes and improvement to organizat io n;
part icular ly as a cost reducing mechanism (Achanga et al. 2006), bot h has
t he same final o bject ives which is t o provide qualit y t hroughout t he
organizat io n and bot h st resses t he needs t owards cont inuous improvement
at all level in t he organizat ion (Pepper and Spedding 2010). Bot h concept s
co mplement each ot her, where lean can adopt t he scient ific, st andard and
dat a dr iven approach fro m t he S ix S ig ma DMAIC (Define, Measure,
Analyze, I mple ment , Cont rol) met hodo logy t o reduce wast e while S ix
S igma can change t heir focus fro m project s work based on ident ified
var iat ion t o a cust omer requirement focus (Bendell 2005). Through t he
imple ment at ion o f lean, a co mpany would be able t o recognize ke y areas
of improvement while S ix S ig ma would t hen be imple ment ed in t hose key
areas t o reduce var iat io n.
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I mplement at io n st ages of Lean S ix S igma ma y be given as
Source: Joshua Chan Ren J ie et . al. (2014) 3
Phase 1: Define the p rob lem - T he S ME is co mpet it ive, where each
co mpany will st r ive t o provide t heir product s wit h lower cost and l ower
lead t ime. In order to compet e at such level, a co mpany should be
operat ing wit h as minima l wast e as possible. I n order words, t he
product ion o f t he co mpany should st r ive towards operat ing at six sigma
level and aiming t owards lean. T he SME so met ime i s unable t o cope wit h
demands, leading t o unsat isfied cust omer wit h lat e deliver y o f product s.
The co mpany t oo is unable t o receive orders which are urgent ; reducing
t he number o f cust omers in t he co mpany. While it is o bvious t hat t he
problem is t he inabil it y t o cope wit h demands, t he root cause t owards t he
problem is yet to be ident ified. So lving t he root cause o f t he pro blem wil l
reduce t he probabilit y o f t he same problem t o occur again. To det er mine
t he root cause o f t he problem, dat a regarding product io n has t o be
co llect ed and analyse in t he next phase. Co llect io n o f dat a includes dat a
3
Joshua Chan Ren Jie et. al. (2014), “Implementing the Lean Six Sigma Framework in a Small
Medium Enterprise (SME) – A Case Study in a Prin ting Company”, Proceedings of the 2014
International Conference on Industrial Engineering and Operations Management Bali,
Indonesia,pp. 387-395.
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© Research India Publications http://www.ripublication.com
regarding product s, capacit ies and capabilit ies o f t he product io n and
process flow. Co llect ion o f dat a is carr ied out based o n obser vat io n in t he
product ion line, discuss io n wit h t he manager, super visor and operat or of
t he label pr int ing sect ion and t ime st udy.
Phase 2: Data Analysi s and p rob lem sou rce identi fication
Based on t he dat a co llect ed, it can be deduced t hat low product ivit y is t he
reason why t he co mpany cannot cope wit h cust omer demand. Cust o mer
demands for product ; hence, t he focus of t he LSS imp lement at ion wil l
st art off wit h analys is o n SME t ype.
The product io n processes such as pr int ing, d ie -cut , cut t ing, dr ying and
packing process have a ver y low signific an t amount of defect s. Based o n
t he discussio n fro m t he manager and super visor, t he co mpany aims t o
reduce t he set up t ime o f each jo b order t hus an analys is r elat ing t o t he
set up is furt her carr ied out .
Phase 3: Root Cause Identi fication
Based on t he obser vat io n in t he product ion line o f each set up and
discussio n wit h manager, t est product io n t ime is d ir ect ly proport io nal t o
how well each set up is being made. This is also depict ed in where t est
pr int ing t ime is repet it ive if t he previous set up is not carr ied out correct ly
at t he fir st t ime.
Phase 4: Imp lement feasib le solution( s)
Based on t he root causes t hat have been det er mined in P hase 3 via
Fishbo ne diagram and Why t ool, feasible so lut io n is being discussed and
brainst ormed in order to reduce or eliminat e t he root causes. By r educing
t he t ime t o locat e t he mat er ials, t he t ot al set up t ime will be r educed. The
st orage is designed wit h such concept , whereby t he processes are p lace
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© Research India Publications http://www.ripublication.com
int o t he slot according t o t he cust o mer code. Anot her feasible so lut ion t o
propose is to imple ment SMED on t he manufact ur ing process by shift ing
t he set up process out fro m t he r eal product ion process called ext erna l
set up. Product io n can run cont inuously. The process preparat io n is
proposed t o be set up ext ernally where by a dedicat ed cell wit h o ne skilled
and exper ienced worker is requir ed t o prepare fina l product .
Phase 5: Cont rol
This phase is ver y import ant in t he Lean S ix S igma imple ment at ion as
LSS does not only aim t o reduce wast e but also t o be able t o sust ain t he
improvement t hat has been made. 5S and St andard Operat ing Procedure
(SOP) are used as a co nt rol t ool in t he LSS fr amework because 5S
provides a guideline t o sust ain t he arrangement s. SOP provides a st ep by
st ep guide in implement ing t he new set up process since so me o f t he set up
process is shift ed. 5S is a name represent ing t he five (5) st eps t hat needs
to be t aken in order to maint ain efficiency and effect iveness o f a work
place. T he five (5) st eps ment io ned ar e seir i, seit on, seiso, seiket su and
shit suke which means so rt , arrange, clean, st andardize and sust ain. SOP is
a guided procedure for operat or to do a cert ain jo b. A guided SOP is
designed t o guide operator in t heir change of work act ivit ies such as t he
process flow for manufact ur ing
4. Conclusion
The LSS framewor k is a relat ively simp le guided met hodo logy used in
problem ident ificat ion providing su it able so lut ions t o so lve problem( s)
and cont rolling t he improvement made. This met hod emphasize on
problems der ived fro m dat a, and so lut ion der iving fro m t he root cause o f
t he problem. The st rengt h of using t his met hod is t hat proble m
ident ificat io n can be relat ively easy when t her e is dat a support ing it and
t he so lut io n t owards t he problem is t o so lve t he root cause of it . B y
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International Journal of Business Administration and Management. ISSN 2278-3660 Volume 7, Number 1 (2017),
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so lving t he root cause, t he pot ent ial for t h e same proble m t o ar ise will be
low once t he improvement is made.
By embracing t he met hodo logy t hat is crit ical t o t he success o f LSS, a n
organizat io n needs t o make a t ot al co mmit ment t o a cult ure o f cont inuous
improvement and workflow opt imizat ion. Imple m ent at ion o f successfu l
LSS programs result in incr eased efficiency, higher qualit y and bet t er
cust omer ser vice fro m any organiz at io n willing to make t hat
co mmit ment . It can furt her be an int egral part of inst illing a t eam cult ur e
where ever yo ne invo lved in t he process is empowered t o t ake owner ship
in ever y aspect of t he operat io n, whet her it relat es direct ly t o t heir daily
responsibilit ies or not .
5. References
1. Achanga P, Taratoukhine V, Ro y R and Nelder G. The applicat ion
of lean manufact ur ing wit hin sma l l and medium sized ent erpr ises
Proceedings of International Conf erence on Manuf acturing
Research, S heffield Hallam Universit y, S heffie ld 2004.
2. Kenned y H, Hyland P. A co mpar iso n o f manufact ur ing t echno logy
adopt ion in S MEs and large co mpanies. Proceedings of 16th Annual
Conf erence of Small Enterpri se Associ at ion of Australia and New
Zealand 2003.
3. Amy Harr is (2016), “6 unexpect ed ways S ix S ig ma can benefit your
co mpany”, http://www.p rocessexcellencenetwork. com/ lean - si x-
sigma-busin ess-t ran sformation/arti cles/ 6 -ways- si x-sigma- can-
benefit-you r-company.
4. Ashok Kumar Pur i (2012), “I mplement ing Operat ions Excellence
In S mall & Mediu m S ized Manufact ur ing Companies . Using Lean-
S igma Techniques”, I nt ernat ional Jour nal o f Lat est Research in
Science and Techno logy, Vo l.1No. 3 :Pp.307 - 308.
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© Research India Publications http://www.ripublication.com
5. Benefit s of Lean S ix S igma, ht t ps://www.pm-
part ners.co m. au/ benefit s-o f- lean-six- sigma/.
6. Benefit s of t he Lean S ix S igma Met hodology & Cult ure,
ht t ps://www.pddnet .com/art icle/2015/06/ benefit s- lean- six-sig ma-
met hodology- cult ure.
7. Joshua Chan Ren Jie et . al. (2014), “I mplement ing t he Lean S ix
S igma Framework in a S ma ll Medium E nt erpr ise (S ME) – A Case
St udy in a Pr int ing Co mpany”, Proceedings of t he 2014
Int ernat ional Confere nce on I ndust r ia l E ngineer ing and Operat ions
Management Bali, I ndonesia,pp. 387 -395.
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ht t ps://go leansixs igma. co m/t he - benefit s-of-using- lean- six- sigma/.
11. The I mport ance of Lean S ix S igma,
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