3rd international conference on six sigma …1007788/fulltext01.pdfiii 3rd international conference...
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iii
3RD INTERNATIONAL CONFERENCE ON SIX SIGMA
TIC6 σ - 2008
"Lean Six Sigma As A Vehicle For Successful Business
Transformation.”
15-16th DECEMBER, 2008
THE RSE SCOTLAND FOUNDATION 22-26 GEORGE STREET, EDINBURGH
EH2 2PQ, SCOTLAND, UK
EDITED BY:
PROFESSOR JIJU ANTONY, MANEESH KUMAR & CHIDIEBERE OGBU
YEAR OF PUBLICATION: 2008 ISBN: 978-0-947649-32-6
iv
INFORMATION ABOUT CRISSPE/SIOM
The Centre for Research in Six Sigma and Process Excellence (CRISSPE) is the very first
research centre in the field of Six Sigma in Europe. The Centre is led by Prof. Jiju Antony at
the department of Design Manufacturing and Engineering Management (DMEM), University
of Strathclyde, Glasgow, Scotland. The Centre was established in June 2004 with the
primary objective of promoting Six Sigma, Lean Strategy, Quality Management and Business
Process Improvement methods in the UK and European Industries.
Strathclyde Institute for Operations Management (SIOM) was founded in January 2007 by
the University of Strathclyde in recognition of the fragmented but internationally leading
research and development capability within the Strathclyde’s Business School and
Engineering Faculty. In doing this, Strathclyde brought together already well established
centres and groups under one umbrella that consolidates fragmented core competencies into
a critical mass. These Centres and Groups comprise of:
� Centre for Strategic Manufacturing – founded in 1995
� CompetitiveScotland.com – founded in 2002
� Centre for Business Process Outsourcing – founded in 2005
� Centre for Research in Six Sigma and Process Excellence (CRISSPE) - founded in
2004 (formally in Glasgow Caledonian University)
� Operations management groups and individuals from departments of Management,
Marketing and Management Science.
SIOM’s ambition is to position itself as the Beacon for the operations management
community worldwide. Thus its future development plans include creation of Round Tables to
facilitate discussion and progress in key areas. At present the key areas include:
v
� High value manufacturing
� Performance management
� Process excellence (Lean Six Sigma)
� Service Science
vi
MESSAGE FROM THE CHAIR 01 December, 2008 Dear Delegates,
On behalf of the University of Strathclyde, I welcome you all to the Third International
Conference on Six Sigma.
This conference is not only intended for those who are on the journey of achieving and
sustaining significant financial savings to the bottom-line using the Six Sigma management
strategy, but also for those organisations who would like to embark on this journey towards
Best-in-Class management practice. This CD contains all the selected papers further to
thorough review process and is presented on the first day of the conference.
It is my intention to help you get the most from this truly International event. If there is
anything I can do to make this programme more enjoyable for you, please do not hesitate to
ask.
Yours truly
Prof. Jiju Antony Conference Chair Centre for Research in Six Sigma and Process Excellence Strathclyde Institute for Operations Management Department of Design, Manufacturing and Engineering Management University of Strathclyde Glasgow, Scotland, UK E- mail: [email protected]
vii
TABLE OF CONTENTS PAGES 1. Integration of six sigma and service quality Function Deployment – with a case study in the Hospitality Industry. Arash Shahin 1-22 2. Lean six sigma, an expert-based study on tool & Techniques in a manufacturing context. Werner Timans 23-32 3. Expected Role of management accounting within the six Sigma methodology: case evidence Indra Devi Rajamanoharan 33-73 4. Six sigma project identification and selection: A benchmark Among Italian and US companies. AlessandroBrun 74-123 5. Lean thinking of Improving perceived Healthcare Quality
Dr. Rania Shamah 124-161 6. Implementing 5s for lean six sigma deployment Mr Paul Martin Gibbons 162-197 7. Exploring case studies on the adoption of six sigma and lean
Production Paulo Augusto Cauchick Miguel 198-218
8. The implementation of six sigma in the banking sector in Qatar Salaheldin Ismail Salaheldin 219-256 9. Six Sigma and Total Quality Management (TQM):
Similarities, Differences and relationship Souraj Salah and Juan A. Carretero 257-278
10 Proposing a sustainable six sigma model Andrew Thomas 279-301
viii
11 Development of a 5s sustainability model for use with lean And/or Six sigma projects James Marsh 302-320 12 Beyond six sigma: A holistic quality maintenance system
Embodying Systems thinking, systems engineering Knowledge-based Hari Agung Yuniato 321-337
13 Lean six sigma in Human Resources: A case study of
Transactional service Alessandro Laureani 338-350
14 Using six sigma – SIPOC for customer satisfaction Dr. Shirley Mo-Ching Yeung 351-379
15 Application of Design for six sigma processes to the
design of an Aero Gas Turbine Dr. Phil Rowe 380-421
16 Lean six sigma applied to a customer facing operations Process In financial services Dr. Nuran Fraser 422-446
17. What makes lean/six sigma succeed: Experiential
Improvement Strategy (model): A case study Alan Harrison 447-471
18. Enhancing the six sigma problem-solving methodology Using the soft systems methodology Alex Douglas and Saundra Middleton 472-487 19 Networking To Boost SME Lean Six Sigma Potential Bjarne Bergquist 488-500 20 Process Improvement at HM Naval Base- Clyde Giving Lean six sigma their place in a critical operation Dr. Neil Grant 501-553 21 The Integration of six sigma and Green supply Chain management Xixi Fan 554-572
ix
22. Adoption of daily required technologies and tools in a food service Organisation to promote an effective simplified six sigma based Methodology Alireza Shokri 573-605
1
Integration of Six Sigma and Service Quality Function Deployment - With a Case Study in the Hospitality Industry
Arash Shahin
Department of Management University of Isfahan
Isfahan, Iran
Abstract:
Six Sigma enhances the comparison and improvement of the performance of service
organizations. In service applications, a higher Sigma level indicates low error rates
or fewer dissatisfied customers. The aim of this paper is to outline how Six Sigma
can be integrated with a proposed comprehensive form of Quality Function
Deployment (QFD), which was developed by the author in his previous
investigations in service applications. For this purpose, two approaches have been
suggested for integrating Six Sigma with a two phases Service Quality Function
Deployment (SQFD). The first approach is through the measurement of Critical to
Customers (CTCs) in the first phase and the second one is through the
measurement of Service Performance Characteristics (SPCs) in the second phase.
The two approaches have been further combined to provide a multi stage model of
the integration of Six Sigma and SQFD. Moreover, a case study has been
conducted at front desk of an international four star hotel to examine the new model
in which, a level of 3 Sigma quality is considered as target and eight critical CTCs
and five most critical SPCs have been computed and addressed out of 26
customers' requirements and 16 SPCs, respectively. The outcomes imply that the
proposed model is different from existing studies, due to the fact that it not only is
compatible with them in the use of QFD as a complementary technique for the define
2
phase in Six Sigma, but also QFD could be benefited from Six Sigma, considering
the use of the measurement system of Six Sigma in targeting and evaluation of
CTQs and SPCs.
Keywords: Six Sigma, CTQ, SPCs, SQFD, SPDCs, SQDs.
Biographical notes: Dr. Arash Shahin graduated in Iran in 1995 and 1998 with BS
and MS degrees, respectively in Industrial Engineering. He obtained the degree of
PhD in 2003 from UK at the University of Newcastle for his studies on Quality
Engineering. He carried out research in Quality Engineering, both in manufacturing
and service fields. From 1992 to 1995 he was the quality manager of a car parts
producer company in Isfahan. From 1995 to 2003 he was the executive manager of
Amin Cara Engineering Consulting Co. (Isfahan). Currently, he is a full-time
assistant professor at the department of management, University of Isfahan. He is
author of three books and more than 150 published papers at national and
international levels in refereed journals and conferences since 1994
3
1. Introduction
Six Sigma is an advanced quality engineering technique that provides an objective
basis for tracking improvements within an organization from year to year. Since a
higher Sigma level indicates lower number of ‘defects’ and fewer dissatisfied
customers, it is a measure of how well an operation is being performed. Six Sigma
is a business performance improvement strategy that aims to reduce the number
of mistakes/defects – to as low as 3.4 occasions per million opportunities. Sigma is
a measure of the ‘variation about the average’ in a process (which could be in a
manufacturing or service industry). According to Conlin (1998), most companies
produce a defect rate of between 35000 and 50000 per million opportunities
(where a defect can be anything from a faulty part to an incorrect customer bill).
This defect rate equates to a Sigma quality level of 3 to 3.5.
Quality Function Deployment (QFD) is a quality design and improvement technique
and relatively is closer to the customers than other techniques. Also, QFD can
serve as a flexible framework, which can be modified, extended and integrated
with other quality design and improvement techniques (Shahin, 2008). QFD is “a
method for developing a design quality aims at satisfying the customer and then
translating the customer’s demands into design targets and major quality
assurance points to be used through out the production stage” (Akao, 1990).
The aim of this paper it is to outline that how Six Sigma can be integrated with a
comprehensive model of service quality function deployment (SQFD), which was
developed and proposed by the author in his previous investigations. The
proposed integrated approach provides a basis for continuous improvement in
service quality. In other words, it is highlighted that how Six Sigma can support
4
SQFD, or what linkages are requested to be placed between the two techniques.
Before integrating Six Sigma with SQFD, it should be useful first to explore how Six
Sigma can be used, independent of other advanced quality engineering
techniques, in service firms. For this purpose, in the following, the application of
Six Sigma in service quality and customer satisfaction improvement is
demonstrated and the SQFD approach is briefly introduced. Then, the new
methodology of the integration of Six Sigma and SQFD is proposed. A case study
is also presented in which, the proposed approach is applied in an international
four star hotel followed by discussion and conclusions.
2. Using Six Sigma for improving customer satisfaction and service quality
Although Six Sigma is a common measure for defects in manufacturing, few
companies have extended the concept of zero defects, measured by Six Sigma, to
customer satisfaction in a service environment (Behara and Lemmink, 1997).
During the last few years, however, the application of Six Sigma has begun to
broaden from being focused principally on manufacturing to encompassing all
business operations, especially those which affect the customer (Hahn et al.,
2000). Still, the usage of Six Sigma is of a rather technical nature and there is a
need to discuss Six Sigma in an even broader organizational perspective (Wiklund
and Wiklund, 2002). The service industry is even more in need of Six Sigma
quality initiatives than manufacturing, simply because the output tends to go
directly to customers, whereas in manufacturing most defects are either scrapped
or fixed before shipping, and all a customer sees is the final batch (Tennant, 2001).
Also, Pande et al. (2000) expressed that there are some important, understandable
5
reasons why service-based processes often have more pent-up opportunities for
improvement than manufacturing operations, such as invisible work processes;
evolving workflows and procedures; lack of facts and data; and lack of a head start.
However, customer satisfaction is a multifaceted process, i.e. it would involve
many business facets: such as customer service, product or service delivery, and
product quality. This means that it is even more difficult to reach a level of Six
Sigma in customer satisfaction than it is in production. On the other hand,
although the client company would improve continuously its customer satisfaction
ratings, good Six Sigma levels may be difficult to achieve as customers’
expectations could simultaneously change (usually increasing) (Behara et al.,
1995). Most quality conscious companies averaged a four Sigma level at the
beginning of 1990 (Rayner, 1990), with exception of the domestic airline flight
fatality rate, which was better than Six Sigma. In 1990, IBM was at a three Sigma
level, while Motorola was operating at a four Sigma level. Airline baggage
handling, doctor perception writing, payroll processing, restaurant billing, and
journal vouchers were rated at four Sigma. Manufacturers frequently arrive at four-
Sigma, while service firms are often at one or two Sigma (Blakeslee, 1999;
Breyfogle, 2001). Six Sigma can be applied in human resource processes, where
there are opportunities to make significant improvements. Moreover, there are
opportunities for other broader applications in society: banking, health care,
government, and teaching, including curriculum design, are just a few areas that
would be possible (Tamkins, 1997; Hoerl, 1998). The concept of Six Sigma,
however, can be applied to any company with any number of customers.
6
Among several service sectors, the hospitality industry has become increasingly
important in terms of economies and employment throughout the world (Shahin,
2003). In an increasingly complex and competitive operating environment, the
need to monitor and improve standards of performance becomes critical both to
business survival and to success of the hospitality industry including hotels. In
order to cope with these challenges the industry, through proper leadership, has to
absorb the quality management philosophy into its operations. This may
effectively be achieved by adopting and applying advanced quality engineering
techniques and systems such as Quality Function Deployment (QFD) and Six
Sigma. It is important to note that hospitality industry might seem inherently more
complex and less tolerant of failure than other service industries and Six Sigma
can provide the tools and insight needed to improve quality in this area. However,
the service industry including the hospitality sector is even more in need of Six
Sigma quality initiatives than manufacturing, simply because the output tends to go
directly to customers, whereas in manufacturing most defects are either scrapped
or fixed before shipping, and all a customer sees is the final batch (Tennant, 2001).
The Six Sigma approach allows the comparison of the performance of various
services on a common basis. It could also provide for an objective basis for
benchmarking against competitors or best-in-class organizations, or may be used
to help track internal improvements. It should be noted however the concept of
what constitutes a ‘defect’ would be different from company to company since
performance measurement invariably involves perceptions and expectations in all
concerned including customers, service providers (say, at various encounters) and
managers. It can also be used as a performance measure, since a higher Sigma
7
level indicates lower error rates or fewer dissatisfied customers. The logarithmic
relationship between the number of Sigmas and the rate of errors implies higher
Sigma levels would lead to excellence in service quality (Behara and Lemmink,
1997). However, it is important to consider that Six Sigma focuses on defects
which could be difficult to determine objectively especially for service businesses.
On the other hand, Six Sigma alone will not make a company successful (Pyzdek-
a; Pyzdek-c). Therefore, the integration of Six Sigma with other advanced quality
engineering techniques such as SQFD becomes reasonable.
Similar to the linkage with the business strategy, Six Sigma should also be linked
to what is important to the customer. An important issue is the identification of the
critical to customer characteristics (CTQs). Six Sigma can be regarded as a
performance target that applies to a single CTC, not to the total product. CTC or
CTQ (Critical to Quality) should be identified quantitatively at the starting phase of
the Six Sigma methodology. It is when several tools and techniques (e.g. SQFD)
are applied in order to obtain data that describe customer expectations. In some
cases, this is not an easy task, especially when customer requirements are
ambiguous, subjective and poorly defined. In service industries, this occurs more
frequently than in manufacturing companies (Coronado and Antony, 2002).
However, to achieve customer satisfaction demands a deep understanding of the
customer and his/her requirements (Tennant, 2001).
3. Service Quality Function Deployment (SQFD)
Shahin (2004) suggested a two phased approach for service quality function
deployment as illustrated in Figure 1. In this approach it is assumed that the
service encounter is already selected for study, otherwise, an additional phase is
8
used prior to complete the two phases in which, service quality dimensions (SQDs)
as whats and service encounters as hows are compared and critical encounters
are addressed. Here, SQDs denote customers' requirements. Therefore, the two
phases of SQFD presented in Figure 1 belong only to one selected critical service
encounter. More information on how to select service encounters could be
obtained from Shahin and Jamshidian (2005).
Serv
ice Q
ua
lity
Dim
en
sio
ns (
SQ
Ds) Service Process Design
Characteristics (SPDCs)
Critical SPDCs
Service Performance
Characteristics (SPCs)
Critical SPCs
Crit
ica
l S
PD
Cs
I
Service process
deployment
II
Service performance
deployment
HoQ-1 HoQ-2
Figure 1. A comprehensive model of SQFD with two phases (Shahin, 2004; Shahin and Nikneshan, 2008)
However, once the service encounter is targeted, customers' requirements are
related to service process design characteristics (SPDCs) at that particular
encounter and the critical SPDCs are determined (HoQ-1). Then, these items are
related to service performance characteristics (SPCs) and the critical SPCs are
determined (HoQ-2). The application of this approach is presented in the case
study in the following sections.
4. New methodology: Integration of Six Sigma and SQFD
9
Two ways are suggested for integrating Six Sigma with SQFD as follows:
4.1. Sub-model 1: Integrating Six Sigma and HoQ-1
One way of the integration of Six Sigma and SQFD is presented in Figure 2. As it
is illustrated, after determining a target in terms of a Sigma level, it is transformed
to ppm and compared with the current performance of the company. Then, the
required reduction in ppm and the required improvement in Sigma level are
computed. Then, based on the results at this stage, the critical to customers
(CTCs) are determined and transferred into HoQ-1.
Determining target
(Sigma level)
ppm
Determining the Criticals
to Customer (CTCs)
HoQ-1
Cust
om
ers
Req
uir
emen
ts
(SQ
Ds)
Curr
ent
per
form
ance
level
Curr
ent
per
form
ance
per
centa
ge
Curr
ent
ppm
Curr
ent
Sig
ma
level
ppm
consi
der
ing t
arget
sigm
a le
vel
Req
uir
ed i
mpro
vem
ent
(red
uct
ion)
in p
pm
Req
uir
ed i
mpro
vem
ent
(red
uct
ion)
in p
pm
Req
uir
ed i
mpro
vem
ent
in S
igm
a le
vel
(%
)
SPDCs
Critical
SPDCs
CT
Cs
Figure 2. Sub-model 1: Determination of CTCs before HoQ-1
4.2. Sub-model 2: Integrating Six Sigma and HoQ-2
According to Figure 3, the current performance level of the critical SPCs derived
from the second phase of SQFD, are transformed into ppm which is then
10
transformed to the current Sigma level. Then, the difference between target
(desired Sigma level and desired ppm) and the current Sigma level (and ppm),
denotes the improvement needed as well as the most critical SPCs. Considering
the related SPDCs, those items which should be improved could be addressed. It
is important to note that depending on the type of the SPCs, they could be
classified as representatives of good (+) or bad (-) performance as illustrated in
Figure 3. For instance, 'percentage of services on time' is a good performance and
'percentage of complaints' is a bad performance. Therefore, since ppm is
associated with bad performance, the percentage of good performance should be
subtracted from 100%, to be transformed to bad performance and to facilitate the
computation of ppm and level of Sigma.
SPCs
Critical
SPCs (x%)
Crit
ica
l
SP
DC
s
ppm=z x 10000
Current Sigma level
Target - current Sigma level
= Level improvement needed
Related
critical
SPDCs
Design and
improving of
the service
system
%(100-x)=z
Determining
Target
(Sigma level)
Most critical
SPCs
Figure 3. Sub-model 2: Determination of the most critical SPCs after HoQ-2
11
4.3. A multi stage integration of Six Sigma and SQFD
Six Sigma is not a destination, but a journey of continuous improvement.
Transforming the organization to Six Sigma and beyond involves a long term,
continuous improvement and company wide focus for a period of several years
(Pyzdek-b). Of course, it is really difficult, and perhaps impossible, for example, to
go from a three Sigma to Six Sigma level in one step change. Therefore, a multi
stage model of the integration of Six Sigma and SQFD needs to be developed.
This step by step Sigma level improvement should be considered as a strategy of
management in service organizations to support the quality programs and to
achieve the designated goals at the designated time with the help of Six Sigma
strategies such as DMAIC (Define, Measure, Analysis, Improve, Control). Figure 4
presents a multi stage approach which could provide a continuous improvement
perspective to the proposed approach. It starts from determining a Sigma level as
target and provides the basis for both the determination of CTCs and the most
critical SPCs. After each stage, next stages start by determining a new and higher
Sigma level. In fact, what is proposed in Figure 4 is a combination of the two sub-
models presented earlier and also a multi stage perspective of the two techniques
(Figure 2 and Figure 3).
12
ppm=z x 10000
Current Sigma level
Target - current Sigma level=
Level improvement needed
Related
critical
SPDCs
Design and
improving of
the service
system
%(100-x)=z
End of
current
stage
Next stageDetermining target
(Sigma level)
ppm
Determining the Criticals
to Customer (CTCs)
Cu
sto
mers
Req
uir
em
en
ts
(SQ
Ds)
Cu
rren
t p
erf
orm
an
ce
lev
el
Cu
rren
t p
erf
orm
an
ce
perc
en
tag
e
Cu
rren
t p
pm
Cu
rren
t S
igm
a l
ev
el
pp
m c
on
sid
eri
ng
targ
et
sig
ma l
ev
el
Req
uir
ed
im
pro
vem
en
t
(red
ucti
on
) in
pp
m
Req
uir
ed
im
pro
vem
en
t
(red
ucti
on
) in
pp
m
Req
uir
ed
im
pro
vem
en
t
in S
igm
a l
ev
el
(%)
SPDCs
Critical
SPDCs
CT
Cs
SPCs
Critical
SPCs (x%)
Crit
ical
SP
DC
s
Most critical
SPCs
Figure 4. Multi stage model of the integration of Six Sigma and SQFD
5. Case study
The international four star hotel of Ali-Qapu is one of the twenty Azadi International
Hotel chain, located on the famous historical street called Chahar-Bagh at
convenient distance to historical monuments at the center of Isfahan, the second
13
major city and the highest potential of travel and tourism in Iran. There are 104
personnel working in the hotel. 102 rooms and suites are facilitated with central air
conditioning system, TV., audio and video central systems, accessibility to satellite
programs, room service and wake up call. Ali-Qapu was established 30 years ago.
The total area of the hotel is about 1500 square meters with a six story built area of
7500 square meters. Totally the hotel room occupied rate is about %76 (%50 of
Iranian guests and %26 of international tourists). In this investigation, the front
desk (FD) is selected as the critical service encounter.
5.1. Defining target Sigma level and CTCs
26 items are considered at FD and customers are asked to fill a questionnaire in
which, they rank each item on a nine point scale (1 as weakest performance and 9
as strongest performance). According to Table 1, in order to compute the current
percentage of performance for each of the 26 customers' requirements (i.e. service
quality dimensions), the average value of the performance rankings collected from
customers are divided by 9 (the strongest performance) and subtracted from 1.
Then, then the derived value is transformed to ppm and sigma level.
In this investigation, 3 sigma is considered as the target level and therefore its
corresponding ppm, which is 66810.63 and is easily taken from Appendix 1 or a
Six Sigma calculator (such as isixsigma.com) are determined and finally, by
computing the required improvement values of ppm and Sigma level, the CTCs are
found.
As it is illustrated in Table 1, eight items are addressed as CTCs, which are
transferred into the first house of quality.
14
Table 1. Pre HoQ-1 calculations for determining CTCs
Customers' requirmentsNo.
Explaining the service itself
1
Explaining the trade-offs
between service and cost
2
13
14
15
18
22
23
Learning the customers'
special needs
Recognizing the regular
customer
Cleanliness and tidy
appearance of the tangibles
Knowledge and skills of
contact personnel
Giving hotel and tour guide
information
Experience of personnel
Current
performance
level (x)
5
3
7
5
6
6
5
4
Current
performance
percentage=
1-(x/9)%
66.67
22.23
44.45
33.34
33.34
44.45
55.56
Current ppm
666700
222300
444500
333400
333400
444500
555600
44.45 444500
Current
Sigma level
1.07
2.26
1.64
1.93
1.93
1.64
1.36
1.64
ppm with 3
Sigma as
target level
66810.63
66810.63
66810.63
66810.63
66810.63
66810.63
66810.63
66810.63
Required
Improvement
(reduction) in
ppm
377689.37
599889.37
155489.37
377689.37
266589.37
266589.37
377689.37
488789.37
Required
percentage of
Improvement
in Sigma level
45.34
64.34
24.67
45.34
35.67
35.67
45.34
54.67
CTC
Performing the service at the
designated time
Accuracy in billing
Delivering services in the
same fashion for every one
Listening to complaints
Solving problems
Completely check-in, check-
out process rapidly
Waiting time to receive
service
Explaining how much the
service will cost
Personnel speak well
Giving information that is
easy to understand
3
4
5
6
7
8
9
10
11
12
Personal characteristics of the
contact personnel
Clean and neat appearance of
public contact personnel
16
17
Behaviour of personnel
Friendliness
Calling the customer by name21
19
20
Special arrangements when
the reservations are made
Flexibility in service delivery
speed
Discount for party, ...
25
26
24
9 100 0 6 66810.63 0 0
9 100 0 6 66810.63 0 0
9 100 0 6 66810.63 0 0
9 100 0 6 66810.63 0 0
9 100 0 6 66810.63 0 0
9 100 0 6 66810.63 0 0
9 100 0 6 66810.63 0 0
9 100 0 6 66810.63 0 0
9 100 0 6 66810.63 0 0
9 100 0 6 66810.63 0 0
9 100 0 6 66810.63 0 0
9 100 0 6 66810.63 0 0
9 100 0 6 66810.63 0 0
9 100 0 6 66810.63 0 0
9 100 0 6 66810.63 0 0
9 100 0 6 66810.63 0 0
9 100 0 6 66810.63 0 0
9 100 0 6 66810.63 0 0
5.2. Designing HoQ-1
In Figure 5, all the critical CTCs selected from Table 1 are entered into the first
HoQ. As it was mentioned earlier, the first House of Quality relates CRs (e.g.
SQDs) to SPDCs. The relationships between SQDs and SPDCs are determined
on a 9 point scales (1=Lowest importance, 9=highest importance). This scale is
also used in HoQ-2. In HoQ-1, the importance ratings are set using a
questionnaire in which the importance of the eight CTCs are asked from the
customers on a three point scale (1 as lowest importance, 5 as moderate important
15
and 9 as highest importance). Finally after adding up (vertically) the values for
each SPDC, 11 SPDCs are addressed and are highlighted by stars, as the critical
SPDCs at FD. In the next step, they are transferred into the HoQ-2 for further
analysis. It is important to note that the critical items are pinpointed based on the
total values of the SPDCs at the bottom of the matrix, which are higher than 194.5.
In fact, the value of 194.5 is calculated as the average value of all the values of the
16 SPDCs on the bottom of the matrix and it is assumed that those items which
have values higher than the average are determined as critical.
Cu
sto
mer
s' R
equ
irem
ents
(C
Rs)
Explaining the service
itself8
Explaining the trade-offs
between service and cost10
Hotel and tour guide
information13
Learning the customers'
special needs14
Knowledge and skills of
contact personnel22
experience of personnel23
Wo
rker
sk
ills
Wag
e p
aym
ents
Mo
tiv
atio
n
Tra
inin
g,
edu
cati
on
, an
d
dev
elo
pm
ent
Co
mm
un
icat
ion
Fac
ilit
y l
oca
tio
n
Fac
ilit
y l
ayo
ut
Ser
vic
e te
chn
olo
gy
Pay
men
t sy
stem
s an
d f
acil
itie
s
sto
rin
g a
nd
pro
tect
ion
sy
stem
of
cust
om
ers'
po
sses
sio
ns
Tim
e st
and
ard
s
Cap
acit
y p
lan
nin
g
Pro
cess
des
ign
an
d s
ched
uli
ng
Wai
tin
g l
ine
mo
del
s
Qu
alit
y d
ocu
men
tati
on
an
d
reco
rds
Des
ign
ing
fo
r cu
sto
mer
ch
oic
e
Fai
lure
pre
ven
tio
n a
nd
co
ntr
ol
Total
Critical SPDCs
1
1
5
5
9
9
9
9
6 8 9 3 5 3 5 2 3 6
6 8 9 3 5 3 5 2 3 6
9 6 6 9 3 5 5 3 5 2 3 9
9325355399 66
6 5 3 9 6 5 5 3 3 3 5
2515151525253045152530
9 7 9 7 8 5 3 6 4 8 2 5 9
45 35 45 35 40 25 15 30 20 40 10 25 45
9 8 9 9 6 5 4 7 5 6 8 8 8 7
81
7 5 8 9 8 5 6 8 6 7 8 8 87
327 235 288 357 237 88 228 32 90 171 154 187 213 190 185 260
Imp
ort
ance
rat
ing
72 81 81 54 45 36 63 45 54 72 72 72 63
63 45 72 81 72 45 54 72 54 63 72 72 7263
x 194.5
Recognizing the regular
customer15
Cleanliness and tidy
appearance of the tangibles18
5
9
9 2 5 5 7 3 5 3 8
401525153525251045
5 4 4 8 7 7
45 36 36 72 63 63
5
25
5 5
2525
7
63
3
27
63
Figure 5. HoQ-1
16
5.3. Designing HoQ-2
In Figure 6, all those 11 critical SPDCs derived from HoQ-1 (Figure 5) are entered
into the second HoQ. As it was mentioned earlier, the second House of Quality
relates critical SPDCs to SPCs. After adding up (vertically) the values for each
SPC, critical SPCs are addressed on the bottom of HoQ. Finally, from Figure 6,
nine SPCs which are highlighted by stars are considered as the critical SPCs at
FD. It is important to note that the critical items are pinpointed based on the total
values of the SPCs at the bottom of the matrix, which are higher than 12.1. In fact,
the value of 12.1 is calculated as the average value of all the values of the 11
SPCs on the bottom of the matrix and it is assumed that those items which have
values higher than the average are determined as critical. Furthermore, for the
ease of calculations, all the values of SPDCs transferred from HoQ-1 to HoQ-2 are
divided by 1000 and set as importance ratings in the HoQ-2.
17
% o
f accu
rate
in
vo
ices
No
co
mp
lain
ts /
To
tal
roo
ms
in u
se
% o
f m
ista
kes
per
week
% o
f se
rvic
es
on
tim
e
% o
f ab
sen
teeis
m
% o
f call
s an
swere
d i
n 3
seco
nd
s
% o
f co
mp
lain
ts a
nsw
ere
d i
n 1
day
Em
plo
yees
/ C
ust
om
ers
serv
ed
To
tal
roo
ms
in u
se /
ex
pecte
d
Av
era
ge r
ate
of
dela
ys
Co
mp
ute
rs /
em
plo
yees
Sati
sfie
d c
ust
om
ers
/ A
ll c
ust
om
ers
To
tal
roo
ms
in u
se/
fro
nt
desk
sta
ff
Imp
ort
an
ce r
ati
ng
(/1
00
0)
Days
of
train
ing /
em
plo
yees
per
year
Pre
-bo
ok
ed
ro
om
s (e
nd
of
mo
nth
)
Wait
ing
tim
e f
or
serv
ice
Crit
ica
l S
erv
ice P
ro
cess
Desi
gn
Ch
ara
cte
ris
tics
(SP
DC
s)
Worker skills1
Wage payments2
Motivation3
Training education, and
development4
Communication5
17Designing for customer
choice
0.327
0.235
0.288
0.357
0.237
0.260
5 6 99 8 8 9
2.62.63.03.02.01.7 3.0
2 9 73 4 3 8
1.01.32.33.01.00.7 2.6
3
1.0
3 2 33 4 6 6
1.41.00.70.70.50.7 1.4
3 33 3 5
0.70.70.70.7 1.2
1 4 54 8 8 8
2.32.31.51.21.20.3 2.3
2 4 53 3 6
0.91.51.20.90.6 1.7
9
2.6
7 8 78 8 8 9
2.92.92.52.92.92.5 3.2
3 8 73 4 3 9
1.11.42.52.91.11.1 3.2
3
1.1
7 57 8 6
1.91.21.71.7 1.4
5 5 34 4 6
1.00.71.21.01.2 1.4
2 2 9
0.50.5 2.3
5 3 3 3
0.80.81.3 0.8
3
0.8
9Total
x 12.1
Servcie technology8
Process design and
scheduling13
Failure prevention and
control14
Waiting line models15
0.228
0.187
0.213
0.190
9 8 77 7 7 8
1.61.61.61.61.82.1 1.8
7 74 9 4 5
0.92.11.61.60.9 1.2
6
1.4
3 55 7 7
1.30.90.90.6 1.3
9 83 3 5
0.61.51.70.6 0.9
1
0.2
1 9 78 5 4 7
0.91.11.51.71.90.2 1.5
6 63 2 3 8
0.70.41.31.30.7 1.7
3
0.7
8 95 4
1.71.01.5 0.8
9 94 4 8
0.81.71.70.8 1.5
Quality documentation and
records16 0.185
7 57 4 9
0.80.91.31.3 1.7
31 1 4
0.20.60.2 0.8
Critical SPCs
1
0.2
3
0.6
1
0.2
7 1
0.21.3
4
0.8
8
1.5
8
1.5
1
0.2
4
0.8
8
1.5
15.9 16 16 6.4 13.6 15.7 18.5 5.2 4.9 8.7 15.3 14.4 8.8 8.7 17
Figure 6. HoQ-2
In Table 2, nine critical SPCs derived from HoQ-2 in Figure 6 are considered. The
current performance for each of those items is determined with respect to the
available data from service processes gathered from hotel databases, direct
observations of the author or interviews with service providers and service
managers. Similar to Table 1, the target of 3 Sigma is assumed. The percentage
of the current performance is calculated in two ways; if the performance is
determined as percentage of defects (bad performance), then it is directly
transformed to ppm, but if the performance is determined as percentage of
18
performance (good performance), then it is subtracted from 100 and transformed
to ppm. Finally, by computing the required improvement values of ppm and Sigma
level, the most critical SPCs are found and addressed.
As it is illustrated in Table 2, five items are addressed as the most critical SPCs.
At this point, the current stage of analysis is finished and depending on the
relationship between the critical SPCs and the critical SPDCs (as illustrated by
dash lines in Figure 4), the service system could be redesigned and improved. In
the next stage, a higher level of Sigma, for instance four Sigma could be set as
target and the stages are continued.
Table 2. Final determination of items to be improved after HoQ-2
Critical Service
Performance Characteristics
(SPCs)
No.
% of complaints
% of services on time
Current
performance
level (%)
2
85
Current
defects
percentage
15
Current ppm
150000
2 20000
Current
Sigma level
2.54
3.55
ppm with 3
Sigma as
target level
66810.63
66810.63
Required
Improvement
(reduction) in
ppm
0
83189.37
Required
percentage of
Improvement
in Sigma level
0
15.34
Most critical
SPCs
% of mistakes per week
2
3
4
1 1 10000 3.83 66810.63 0 0
% of calls answered in 3
seconds90 10 100000 2.78 66810.63 33189.37 7.346
% of complaints answered
in 1 day
Average waiting time for
service
95
10** 10** 100000
5 50000
2.78
3.14 66810.63
66810.63
0
33189.37
0
7.34
Days of training / employees
per year
7
8
12
2.5* 9.5* 95000 2.81 66810.63 28189.37 6.34
Average rate of delays 5 5 50000 3.14 66810.63 0 013
Dissatisfied customers/ all
customers9.1*** 9.1*** 91000 2.83 66810.63 24189.37 5.6715
* 20/8=2.5; Standard=12; 12-2.5=9.5
** Current: 5.5 min; Standard=5 min; (5.5-5.0)/5.0=10%
*** 20/220=9.1%
19
6. Discussion and conclusions
In this paper, a new multi stage model was proposed for the integration of Six
Sigma and SQFD. The new model can be employed in a multi-stage improvement
scheme following the spirit of Deming’s plan-do-check-act (PDCA) methodology or
the DMAIC strategy in Six Sigma. In the new proposed model, Six Sigma can
provide a multi stage performance measurement and improvement in two ways: (i)
determining the desirable level of improvement for performance of services,
depending on customers’ points of view (customers’ perceptions); (ii) determining
the level of improvement for performance of services, depending on company’s
records and evaluation criteria (key performance indicators -KPIs). In fact, Six
Sigma could benefit the proposed approach and the related sub-models, because
it provides a means for measuring and monitoring quality level both subjectively
(based on customers) and objectively (based on the business data).
A case study was conducted at front desk of an international four star hotel to
examine the new model in which, a level of 3 Sigma quality was considered as
target and eight critical CTCs and five most critical SPCs were computed and
addressed out of 26 customers' requirements and 16 SPCs, respectively.
Apart the fact that setting 3 Sigma for analysis provided the means of internal
benchmarking, it is important to note that setting target is usually done based on
competitive analysis in QFD. However, it is understood that the availability of
competitors’ performance data is almost difficult in the highly competitive
commercial market environment, such as hotels and airlines. However, for service
organizations such as the health service or education, there seems to exist
benchmarking statistics.
20
The possibility of introducing enhancements to the Six Sigma technique was also
emphasized. One of the important subjects in Six Sigma is focusing on critical to
customers (CTCs) or critical to quality (CTQ), which could be facilitated through a
simple integration of Six Sigma and the QFD approach.
In conclusion, the proposed model is different from existing studies, due to the fact
that it not only is compatible with them in the use of SQFD as a complementary
technique for the define phase in Six Sigma, but also SQFD could be benefited
from Six Sigma, considering the use of the measurement system of Six Sigma in
targeting and evaluation of CTQs and SPCs. It is emphasized that the integration
of Six Sigma with other quality engineering techniques such as SQFD will increase
the efficiency of quality management programs and it seems that the new
proposed approach enables service quality designers to enhance the performance
and continuous improvement aspects of their quality design and improvement
programs.
References
Akao, Y. (1990) Quality Function Deployment (QFD) – Integrating customers’ requirements into product design, English translation copyright, Portland OR: Productivity Press.
Behara, R.S., Fontenot, G.F., and Gresham, A. (1995) 'Customer satisfaction measurement and analysis using Six Sigma', International Journal of Quality & Reliability Management, Vol.12, No.3, pp. 9-18.
Behara, R.S. and Lemmink, G.A.M. (1997) 'Benchmarking field services using a zero defects approach', International Journal of Quality & Reliability Management, Vol.14, No.4/5, April-May, pp. 512-527.
Blakeslee, J.A.Jr. (1999) 'Implementing the Six Sigma solution: How to achieve quantum leaps in quality and competitiveness', Quality Progress, July, pp. 77-85.
Breyfogle, F.W., III, Cupello, J.M. and Meadows, B. (2003) Managing Six Sigma: A practical guide to understanding, assessing, and implementing the strategy that yields bottom-line success, New York, NY: John Wiley & Sons.
Conlin, M. (1998) ‘Revealed at last: the secret of Jack Welch’s success’, Forbes, Vol. 161, No.2, p.44.
21
Coronado, R.B. and Antony, J. (2002) 'Success factors for the implementation of Six Sigma projects', The TQM Magazine, Vol.14, No.2, pp. 92-99.
Hahn, G.J., Doganaksoy, N. and Hoerl, R. (2000) 'The evolution of Six Sigma', Quality Engineering, Vol.12, No.3, pp. 317-326.
Hoerl, R.W. (1998) 'Six Sigma and the future of the quality profession', Quality Progress, June, pp. 35-42.
Pande, P.S., Neuman, R.P., and Cavanagh, R.R. (2000) The Six Sigma way: How GE, Motorola, and other top companies are honing their performance, New York, NY: McGraw Hill.
Pyzdek, Th. (a) Ignore Six Sigma at your peril, retrieved from: www.pyzdek.com/PDF/2001-04.pdf.
Pyzdek, Th. (b) Six Sigma and beyond deployment, retrieved from: www.pyzdek.com/ deployment.htm.
Pyzdek, Th. (c) Why going beyond Six Sigma?, retrieved from: www.pyzdek.com/ beyondsixsigma.htm.
Rayner, B.C.P. (1990) 'Market driven quality: IBM’s Six Sigma crusade', Electronic Business, October, pp. 68-74.
Shahin, A. (2003) A Comprehensive Model for Service Quality Design: Integrating CRS, SQFD and other Advanced Quality Engineering Techniques for Designing Quality Service, PhD Thesis, Newcastle upon Tyne: University of Newcastle.
Shahin, A. (2004) 'SQFD: Designing a Comprehensive Quality Function Deployment (QFD) for Service Applications', The First International Conference on Total Quality Management and World Trade, Tehran, 20-21 September.
Shahin, A. (2008) 'Quality Function Deployment (QFD): A Comprehensive Review', in: Total Quality Management - Contemporary Perspectives and Cases, Rajmanohar, T.P. (ed), 1st edition, Andhra Pradesh, India: ICFAI University Press.
Shahin, A. and Jamshidian, M. (2005) 'Service Encounter Selection (SES): An Effective Approach for Targeting Service Encounters', QMOD 2005: Quality Management for Organizational and Regional Development, Palermo, Italy, 29 June – 1 July.
Shahin, A. and Nikneshan, P. (2008) 'Integration of CRM and QFD: A Novel Model for Enhancing Customer Participation', The TQM Journal, Vol.20, No.1, pp. 68-86.
Tamkins, R. (1997) 'GE beats expected 13% rise', Financial Times, October, p. 22.
Tennant, G. (2001), Six Sigma: SPC and TQM in manufacturing and services, Aldershot: Gower Publishing Limited.
Wiklund, H. and Wiklund, P.S. (2002) 'Widening the Six Sigma concept: An approach to improve organizational learning', Total Quality Management, Vol.13, No.2, pp. 233-239.
22
Appendix 1. Conversion of ppm and Sigma quality level (Breyfogle et al., 2001)
23
Lean Six Sigma, an expert-based study on tools & techniques in a manufacturing context
Werner Timans* , Kees Ahaus, Rini van Solingen
Department of Mechanical Engineering, Stenden University,Emmen, the Netherlands
Post Box 2080, 7801 CB Emmen, the Netherlands E-mail [email protected]
Abstract:
A set of tools and techniques is presented for the different phases of Six Sigma
improvement projects in manufacturing and engineering organizations, based on a
literature study and expert judgment.
A literature study was conducted to identify tools and techniques applied within
case studies. A number of case studies, published within the timeframe from 1997-
2007, were selected and thoroughly screened on the use of tools and techniques
within the different phases of projects. The findings with respect to the tools and
techniques used in the industrial settings studied were listed as a set of so-called
statements. A list of 95 statements was presented to a group of Dutch experts. In a
Delphi study these experts commented on and prioritised the 95 statements during
three rounds, providing us with a final list of 46 statements. These statements were
grouped into the DMAIC-phases of Six Sigma projects, resulting in a description of
tools and techniques to be used in DMAIC-structured projects within a
manufacturing/ engineering context. The results were compared to results of an
earlier theoretical study of De Koning and De Mast (2006).
Keywords – Lean Six Sigma tools, manufacturing, Delphi method, research paper.
24
Biographical notes: Drs Werner Timans is teaching on quality management and
quality engineering subjects at Stenden University, Emmen, the Netherlands and he
is a consultant and owner of QuStat Quality Engineering in the Netherlands.
Prof. Dr. Kees Ahaus is part-time professor of Quality Management at the Faculty
of Economics and Business of the University of Groningen, The Netherlands and
he is managing director of TNO Management Consultants, subsidiary of the
Netherlands Organisation for Applied Scientific Research TNO. University of
Groningen, Faculty of Economics and Business, P.O.Box 800, 9700
AV Groningen, the Netherlands, E-mail [email protected]
Dr. Rini van Solingen is a part-time associate professor in Globally Distributed
Software Engineering at Delft University of Technology, and Chief Technology
Officer at Mavim in the Netherlands.
Delft University of Technology, Electrical Engineering, Mathematics and Computer
Science, P.O. box 5031, 2600 GA Delft, the Netherlands, E-mail
1. Introduction
In recent years a new trend has emerged: the integration of lean principles into Six
Sigma (George, 2002; De Koning, 2007). Historically, Lean Manufacturing and Six
Sigma were developed separately. The development of Lean Manufacturing started
25
in Japan (the Toyota production system; Shingo,1989) and focussed on flexible
manufacturing systems aimed at increasing production efficiency. Six Sigma was
initially developed by Motorola in the 1980s, and later on adopted by General
Electric in the 1990s, which gave Six Sigma an enormous boost towards general
recognition.The integration of Lean methods into Six Sigma has become popular
under a new name for the integrated quality improvement approach: Lean Six
Sigma (LSS).
In the highly competitive environment of today Lean Six Sigma is becoming
increasingly important for Small and Medium business Enterprises. However, the
development of Lean Six Sigma has started within large companies, and
transferring the experiences from large organizations to SME is not simple.
In this study we focus on the following research questions:
1. Which LSS- tools and techniques are used in case study publications on
projects carried out within manufacturing or engineering organizations?
2. How do experts assess the relevancy of best practice based tools and
techniques and how do they group these into a LSS project structure with
DMAIC-project phases?
3. To which extent is the arrangement of tools and techniques in DMAIC-project
phases in accordance with the rational reconstruction of DMAIC-project phases
as published by De Koning and De Mast (2006)?
26
2 Method
Our study was carried out along the following stages:
- Literature study: case study search and selection, extraction of statements
from case studies (202 statements), screening and refining the list of
statements to a list of 95 statements. Preparing a first questionnaire.
- Delphi study,
o round 1, assessing the 95 statements by giving a priority score and
reformulation of the statements by the experts.
o Evaluation of the experts’ reactions, preparing a new list of
statements for Delphi-round 2.
o Delphi round 2, refining the list of statements, preparing a new list of
statements for Delphi-round 3.
o Delphi-round 3, refining the list of 95 statements to a final list of 46
statements.
- Grouping of statements in DMAIC-project phases.
3. Literature study
We tracked a total number of 98 papers that were Six-Sigma- or Lean-Six-Sigma-
oriented, published within the timeframe from 1 January 1997 to 1 June 2007.
These papers were published in a wide range of journals, among others:
J. of Quality & Reliability Management
Quality and Reliability Engineering Int.
27
Journal of Advanced Manufacturing Technology
Journal of Six Sigma and Competitive Advantage
Total Quality Magazine
Total Quality Management
Quality Engineering
Production Planning & Control
Assembly Automation
Many of these papers did not comply with our conditions for inclusion, and
therefore they were excluded. We finally selected 24 Six Sigma case studies
executed in a context of manufacturing or engineering organizations. Because of
the focus of our research programme, case studies from SME-type companies
received special attention. In many papers, however, no clear information was
given about the size of the organization.
Decisions about including or excluding case studies were taken after a thorough
process of reading the papers and making abstracts of them. Based on the
abstracts the tools and techniques were formulated into statements by describing
each activity by means of a verb and making a short description of its aim. From the
24 abstracts we first formulated up to 202 statements. These statements, however,
showed much overlap. Several extensive discussions about this issue led to a
refinement of the formulated statements by combining those with a similar content.
After the discussions the list of statements was reduced to 95.
28
3.1 Delphi study
Next, a Delphi study was carried out to further narrow down the list and improve the
statement formulations.
The Delphi method is an exercise in group communication among the members of
a panel of experts (Adler & Ziglio, 1996; Linstone & Turoff, 2002). The technique
allows the experts to deal systematically with a complex problem. The essence of
the technique is fairly straightforward. It consists of a series of questionnaires
presented to a pre-selected group of experts. These questionnaires are designed to
elicit individual responses to the problems posed and to enable the experts to refine
their views as the group’s work progresses in accordance with the assigned task.
We wanted to present our results to a group of experts in the field in order to
improve decision making about further narrowing down the list of statements that
resulted from our literature study, and reformulating statements based on expert
judgment. Delphi methods were regarded as the most suitable for this purpose
because they have proofed to be effective for scientific research and offer the
opportunity to reach consensus within a limited timeframe.
Expert group members should comply preferably to the following criteria: six sigma
experiences at least at Black Belt level, familiarity with a wide range of six sigma
tools and techniques, professional experience in manufacturing/ engineering,
scientific experience in quality management subjects, including Lean Six Sigma.
We were aware that it would be almost impossible for an individual member to meet
all these requirements. So we composed a group consisting of a well-balanced mix
29
of experts coming from manufacturing companies, consultancy organizations and
universities.
In our Delphi study we used 3 rounds to reach consensus. In the first remote
access round the members of the group delivered responses to the questionnaire.
The second and third rounds were executed in a half-day meeting. During this
meeting groupware (Meeting Works) was used to distribute new questionnaires to
the group members, to collect the answers, to evaluate the scores and to prepare
the information for the following Delphi-round. In this approach group dynamics
could play a significant role.
After each round elements were included if more than 80% of the experts judged
these elements as relevant or very relevant to be used in industrial DMAIC-
structured projects. They were excluded if more than 50% judged them as not
relevant or moderately relevant. In the next round new elements and elements that
were neither included nor excluded were presented. After each round some
statements were slightly reformulated on the basis of comments of the group
members, merely to clarify them.
3.2 Grouping of statements in DMAIC-project phases
After the Delphi rounds an additional step was planned. The group members were
asked to divide the statements of the final list among the DMAIC Six Sigma project
phases. Using the Meeting Works groupware system the participants gave an
individual judgment about the phase that an individual statement should be
30
assigned to, while they were also given the opportunity to clarify the assignments.
For 40 of the 46 statements the majority of the members agreed upon their
assignment to the different phases. For six statements the members’ choices were
too diverse to reach a majority agreement. The remaining 6 statements were
assigned to DMAIC-phases by ourselves, keeping in mind the distribution of the
scores given by the experts.
4. Results and discussion
This study has resulted in 46 statements extracted from a number of case study
publications that were assessed by a Delphi panel as being relevant in Six Sigma
projects.
A survey of the results of our Delphi study together with the assignment of the
statements to the phases and a comparison with the assignment according to De
Koning and De Mast is not presented in this conference paper, because the full
paper on our Delphi Study has been submitted to a scientific journal and is still
under review. More information will be presented at the conference.
When comparing the statements with the rational reconstruction of the Six Sigma’s
toolbox (De Koning & De Mast, 2006), it becomes clear that these statements
largely match the elements of the toolbox. The rational reconstruction of De Koning
and De Mast uses a wide range of literature sources. These literature sources do
not entirely agree on the distribution of the tools over the DMAIC-phases. This
uncertainty of the DMAIC-classification is to a certain extent demonstrated in our
31
study. For the assignment of six statements the members of our group of experts
did not vote by majority. With regard to the other statements there was more
agreement and the classifications seem to be in line with the generic Six Sigma’s
reconstruction of De Koning and De Mast.
5. Conclusions, outline to further study:
The rational reconstruction of De Koning and De Mast is based on a wide range of
literature sources, papers and textbooks on Lean Six Sigma. Our study was based
on specific literatures sources on case studies describing real projects carried out
within manufacturing and engineering companies, following a DMAIC- or equivalent
project structure. The particular value of our study is that it is founded on practice-
and expert-based experience. The results of both studies largely comply with each
other.
These results will be used as a basis for further study to develop a Lean Six Sigma
toolbox for manufacturing organizations customized to manufacture polymer
products, especially those using injection moulding or polymer extrusion
techniques. In focusing on this area we expect that further study is required to
define new tools that are especially applicable in this area, and to refine the tools
and techniques incorporated in the 46 statements selected in this study.
References
Adler, M., & Ziglio, E. (1996). Gazing into the oracle : the Delphi method and its application to social policy and public health. London: Jessica Kingsley Publishers.
32
De Koning, H., & De Mast, J. (2006). A rational reconstruction of Six Sigma’s breakthrough cookbook. International Journal of Quality & Reliability Management, 23(7), 2006, 766-787.
De Koning, H. (2007). Scientific grounding of Lean Six Sigma Methodology (PhD-thesis, Ibis, University of Amsterdam, 2007).
George, M.L. (2002). Lean Six Sigma: Combining Six Sigma Quality with Lean Speed. New York: McGraw Hill.
Linstone, H.A., & Turoff, M. (2002). The Delphi Method: Techniques and Applications. Web site: www.is.njit.edu/pubs/delphibook/
Okoli, C., & Pawlowski, S.D. (2004). The Delphi method as a research tool: an example, considerations and applications. Information & Management, 42(1), 15-29.
Shingo, S. (1989). A Study of the Toyota Production System. New York: Productivity Press.
33
Expected Role Of Management Accounting Within The Six
Sigma Methodology: Case Evidence
Indra Devi Rajamanoharan* Lecturer,
Faculty of Accountancy and Accounting Research Institute, Universiti Teknologi MARA,
14th Floor, Menara SAAS, 40450, Shah Alam, Selangor. Malaysia
Fax No: 603-55444921 Tel No: 603-55444817 (O) E-mail: [email protected]
Paul Collier,
Professor, School of Business and Economics, Streatham Court, Rennes Drive,
Exeter, EX4 4PU, UK Fax No: 01392-263242
Tel No:01392-263238 E-Mail: [email protected]
Brian Wright Senior Lecturer, School of Business and Economics,
Streatham Court, Rennes Drive, Exeter, EX4 4PU, UK
Fax No: 01392-263242 Tel No: 01392-264480 E-mail: [email protected] *Corresponding Author Indra Devi Rajamanoharan
ABSTRACT
Drawing on International Federation of Accountants’ (IFAC) (1998) conceptual
framework for management accounting, this study argues that many of the
principal roles in the Six Sigma (SS) DMAIC process fit closely with IFAC’s four key
roles for management accounting. The results showed that the SS features
applicable at all phases of the DMAIC process match closely with IFAC’s key roles
for management accounting. At the broadest level the case studies illustrated that
the role of management accounting had undergone considerable change, in
parallel with the changes that were taking place in the wider business activities with
34
the adoption of the DMAIC management process. Changes occurred mainly in the
course of project prioritisation (define phase), and in project deployment (measure
phase onwards). At both stages SS members focused on a set of standard criteria
that link directly to IFAC’s best practices of management accounting in terms of the
fourteen concepts that form part of the conceptual framework for management
accounting. Therefore, the results of this study provide a common understanding of
the potentially useful role that IFAC’s best practice of management accounting
could play in the DMAIC phases.
Key words: six sigma DMAIC process, conceptual framework for management
accounting, IFAC, business process orientation, best management accounting
practices, principal roles in the DMAIC process, management accounting concepts.
Biographical notes: Indra Devi Rajamanoharan is a Lecturer in Management
Accounting at the Universiti Teknologi MARA, (UiTM), Malaysia. Her research
interest and publications are in the fields of six sigma, performance measurement
systems, management accounting, corporate sustainability, and accounting
education.
Paul Collier is a Professor in Accounting at the University of Exeter. His research
interests and publications are in the fields of corporate governance, management
accounting and accounting history.
Brian Wright is a Senior lecturer at the University of Exeter. His research interests
and publications are in the fields of finance and management accounting.
35
1 Introduction
The International Management Accounting Practice Statement No.1 Management
Accounting Concepts (IMAPS 1), developed by the International Federation of
Accountants (IFAC), describes management accounting by reference to leading
edge practice internationally (IFAC, 1998, IMAPS 1:Para. 3). The description of
leading edge practices in the statement is supported by a conceptual framework
that elaborates the description and serves both as a set of assumptions for
reasoning about appropriate directions for practice and as a set of criteria for
evaluating good practice (Para. 3). Together the description and conceptual
framework provide a benchmark of best practice in management accounting that
serves as a resource in developing, understanding and improving practice
worldwide (IFAC, Paras. 4, 5, 6).
According to IFAC (1998) best practice in organisations is often interwoven with
other distinctive parts of the organisation’s management process that are
associated with organisational direction setting, structuring, securing commitment,
control and change (Paras. 26, 34). In this regard, best practice in management
accounting is taken as that part of management process concerned with the use of
work technologies and managerial processes that are focused on adding value to
organisations by attaining the effective use of resources in a dynamic and
competitive setting (IFAC, Para. 28). The concept of best practice in management
accounting used in this paper refers to the use of work technologies and
managerial processes that are applicable within the SS domain.
36
The rationale for considering IFAC’s best practice of management accounting is
that it constitutes part of the best practice recommended by the SS featured
DMAIC process which has not been extensively explored in the management
accounting literature. Hence, drawing on IFAC’s conceptual framework for
management accounting (IFAC, 1998) this case study based research is focused
on the following research questions:
• the extent to which SS implementation involves IFAC’s four identified roles
for management accounting, and
• the extent to which tools used in the DMAIC process are recognisable as
management accounting tools.
IFAC’s conceptual framework for management accounting (IFAC, 1998) focuses
on four principal roles for management accounting, and the first research question
will be examined by reference first to the extent to which SS implementation
involves these four identified roles for management accounting, and second the
extent to which tools used in the DMAIC process are recognisable as management
accounting tools. The examination will result in a framework linking DMAIC stages
with specific IFAC management accounting roles and recognised management
accounting tools to provide a template illustrating maximum best practice
involvement of SS team members in SS implementation.
This paper is organised into three parts. The first part describes in some depth the
relevant literature on IFAC’s (1998) conceptual framework for management
accounting, the DMAIC management process, DMAIC tools and management
accounting and the IFAC-DMAIC link. The second part discusses the research
37
methodology. The final part presents the results of the case study analysis and
discusses the implications.
2 Relevant Literature
2.1 IFAC’S conceptual framework for management accounting
IFAC’s conceptual framework for management accounting describes the functions
of management accounting by reference to best practice internationally through the
following interrelated concepts:
1. The distinctive function of management accounting within the management
process in organisations;
2. The way in which the utility of work outcomes of the management
accounting process can be tested;
3. Criteria which can be used to assess the value of work processes and
technologies used in management accounting; and
4. Capabilities necessarily associated with the effectiveness of the
management accounting function overall (IFAC, 1998, IMAPS 1:Paras. 37-71)
In each category of the conceptual framework, IFAC developed associated sub-
concepts that elaborated the four main concepts identified in the framework (Table
1). According to IFAC, the sub-concepts can be used either as a benchmark for
best practice in management accounting or as means for managers, accountants,
academicians, professional association and others to understand different
institutional and cultural approaches taken to management accounting work around
the world (Para. 6). Further, the sub-concepts may serve as guides for the
38
evaluation or development of best international management accounting practices,
in particular organisational applications, for example in an organisational change
management perspective (Para. 73). The paper uses this final function of the
framework as the point of reference for establishing the expected roles of
management accounting within the SS designed DMAIC management process.
Table 1 presents the sub-concepts that form part of the conceptual framework for
management accounting.
Table 1: The sub-concepts within each category of IFAC’s conceptual
framework
MA Function Interrelated sub-concepts
Distinctive
managerial
function
Resources
productivity
focus
Value
orientation
Business
process
orientation
Team
orientation
Utility of work
outcomes
Accountability Performance
criteria
Benchmarking
Value of work
processes and
technologies
Equation of
resource use
and value
generation
Management
process
interface
Technology
development
and evaluation
Capabilities
required for
function
effectiveness
Core
competences
Critical
consciousness
Creating
opportunities
Continuous
improvement
39
The sub-concepts identified in Table 1, besides describing IFAC’s best practices
for management accounting, provided a number of cues for identifying, testing,
assessing and evaluating the existence of management accounting practice within
the management process of organisations concerned with effective use of
resources and value creation. From a resource and value creation perspective,
IFAC noted that organisations attained these through involvement in various
organisational and business process change initiatives (Para.34). Given that SS is
a recent business process change tool that has been widely used by organisations
seeking to locate their business processes along favourable value chains, the
management accounting function should be involved in the SS management
process provided the IFAC analysis holds true.
2.2 The DMAIC management process
The five phase DMAIC management process is the driving force of SS, and it is
applied by SS trained teams either for improving a current business process, or
improving product/service performance which does not meet customer satisfaction
(Stamatis, 2005). SS commentators also claim that by moving away from a
traditional functional approach to positioning SS within the field of business
process management, that organisations achieve optimal results as the DMAIC
process has the capacity to identify the causes of business problems and thereby
deliver cost savings, increased customer satisfaction and enhanced profitability
(Averboukh, 2002; Hammer, 2002; and Lee Beebe, 2004).
In deploying the DMAIC process, most SS experts recommend adopting a
standard structured method with set steps or tollgates that necessitate the
40
application of key improvement tools and techniques (Breyfogle III, 2003; Harry
and Schroeder, 2000).
The structured approach, besides providing a logical roadmap for SS management
teams, also promotes the application of best management practices that provide a
prescription to achieve breakthrough strategies for SS organisations (Breyfogle III,
2003).
2.3 DMAIC Tools and Management Accounting
Several management accounting practices (referenced to the Statements on
Management Accounting (SMA) principles and practices) have been recognised to
complement the DMAIC process. For instance, Gupta (2004), Hammer (2002) and
Harry and Schroeder (2000) suggest that a properly executed DMAIC process,
should focus on the underlying principles of process management (IMA, 2000),
activity based cost management (ABCM) (IMA 1998), and also incorporate
techniques like benchmarking (SMA 4V) and the balanced scorecard. Besides the
application of management accounting practices, the DMAIC process is supported
by a range of process improvement tools.
Generally, SS process improvement tools/techniques fall into two primary types: 1)
statistical analysis tools and 2) process optimisation tools (Gygi et al., 2004). From
a management accounting perspective, Bromwich and Bhimani (1994) argued that
statistical analysis tools as a means of measuring the parameters of a process and
assessing variations inherent in the process is well established. Hence, in keeping
with such managerial thinking, statistical analysis tools which plays a vital part in
41
the DMAIC process, have been seen as being able to supplement the process
management approach as well as activity based costing system (IMA, 2000), both
of which have been recognised as management accounting practices that
complement the DMAIC process for the successful deployment of SS initiatives.
Similarly, process optimisation tools such as cause and effect diagram, failure
mode error analysis (FMEA), SIPOC, QFD and process mapping that underpin the
DMAIC process are rooted in management accounting practices that complement
the DMAIC process. For management accounting decisions, a combination of
these tools provides much of the information needed to develop an integrated
performance measurement system analysis that supports both process
management and/or ABCM practices (IMA, 1998) which . For example, the SIPOC
tool and process maps are used as high level process management tools at the
define phase of the DMAIC process (IMA, 2002: Para 58; Hammer, 2002) and
SIPOC diagrams, process mapping and QFD are also used as planning and
control tools for process management and/or ABCM approaches within DMAIC
(IMA, 2002; 1998).
2.4 The IFAC-DMAIC Link
In an identical way to the DMAIC process, IFAC (1998, para.20) holds that within
dynamic and competitive organisational contexts organisations should shift from
their traditional functional specialisations to a focus on the business processes.
Along this line of discussion, the SS literature (manuals and articles) suggests that
the criteria/features identified with 1) the selection of project process improvements
and 2) the formation of a SS team structure should promote the application of best
42
management practices for SS organisations, thus enabling a link between SS and
IFAC’s management accounting concepts
2.4.0 Selection of the project
The first step in project selection is to define and process map the business
processes to identify areas of weaknesses. The following section links SS
processes related to this step with IFAC’s description of best management
accounting practice in terms of the concepts shown in Table 1.
2.4.1 Business process orientation concept
According to IFAC (1998) management accounting work is centred on the core and
enabling business processes of an organisation, involving customers, suppliers,
and other stakeholders (Para. 46), an approach which is also adopted for SS
methodology. From a SS perspective, Smith et al. (2002) asserted that in the first
step in the project selection process, SS organisations should focus on the
business processes, which strongly support their strategic goals (a top-down
approach), a position also consistent with IFAC’s aims for optimising organisations’
business processes (Para. 20). The process ensures that high value and well-
balanced SS projects are identified and linked to the company’s strategic
objectives (Keller, 2001; Carey, 2007)
2.4.2 Resource Productivity Focus and Value Orientation Concepts
According to IFAC the management accounting process should be focused on the
efficient and effective use of resources (Para. 42). Hence, by adopting a business
43
process oriented approach for project selection, SS is also centred on the efficient
and effective use of resources. Stamatis (2005) asserted that an effectively
managed project based business process, besides ensuring the optimal use of
resources, should continuously generate customer and business value for
organisations. Therefore, in the first step in the project selection process, SS
organisations are also urged to examine the way resources are deployed (resource
productivity focus), and consumed by business processes in generating value
(value orientation) over time (Pyzdek 2004; Breyfogle III, 2003; Swinney, 2000).
For SS organisations, organisational resources relate to people, facilities, systems,
cost and money (Basu, 2004) and this is consistent with IFAC’s description of
resources (IFAC, 1998:Para. 31).
2.4.3 Performance criteria concept
Consistent with the IFAC performance criteria concept, SS recommends a wide
range of performance criteria at both strategic and operational levels in the first and
second steps in the project selection process. In the first stage, Pyzdek (2004) and
Phadnis (2003) stressed the importance of having a strategic balanced scorecard
for successful SS initiatives. Gupta (2004) added that a properly executed SS
strategic business scorecard besides encouraging leaders to uphold profitability
should demand a high level of performance from management teams and these
views are also shared by IFAC. Further, performance criteria and the systems for
monitoring them should be emphasised at the operational project level, during the
measure phase and the choice of measure should be closely aligned with their
strategic level scorecard (Akpolat, 2004). Hence, the IFAC performance criteria
concept for project selection is one of many critical success factors for SS
44
initiatives (Smith et al., 2002; Gupta, 2004; Breyfogle III, 2003 and Brewer and
Bagranoff, 2004).
2.5 Benchmarking performance concept
According to IFAC (1998: para. 52) the performance objectives used to express
management accounting accountabilities within an organisation should reflect the
outcomes of benchmarking management accounting work across organisations.
Similarly, Harry and Schroeder (2000: 62) claim that benchmarking with external
and internal competitors forms an essential part of operating SS in organisations
and is a key feature in the project selection and management processes linked to
the define, measure and analyse phases of the DMAIC process. Furthermore, to
achieve competitive advantage and operational excellence Basu (2004) identified
benchmarking as a key step in the project selection process.
2.5.1 Equation of Resource Use and Value Generation
According to IFAC the management accounting process draws on a distinctive
mode of thinking, focused on the equation of resource use and value generation
over time (Para. 54). SS uses a similar analytical approach in the identification of
the critical to quality (CTQs) process characteristics in the second step of the
project selection process. In this stage, the identification of process CTQs is
centred on a simple performance equation, y= (f)x, where at the strategic (macro)
and operational (micro) levels, a business process output, y, is stated as a function
(f) of the process input resources, (x) (Gygi et al., 2004). Like IFAC (Para. 32, 36,
56, 57), most SS practitioners also suggest that organisations should first identify a
45
set of strategic level process CTQs characteristics that significantly impact on
customer satisfaction, and stakeholder and business profitability, and form the
basis for operational level project CTQs (Stamatis, 2005;Gygi et al., 2004). By
adopting this approach both SS and IFAC believe that both customer and other
stakeholder needs could be effectively met.
2.5.2. Critical consciousness
IFAC’s critical consciousness is a generic concept that is applicable to all
management activities (Para. 70), and the SS management activities are no
exception. For instance, Gupta (2004) and Akpolat (2004) stressed that during the
second step process of identifying CTQ characteristics, SS management teams
should have a clear understanding of business processes and posses a strong
‘critical consciousness’ as otherwise selected projects may not have the predicted
impact on business results or may achieve only insignificant improvement to
process. While, George (2003) added that throughout the DMAIC process SS
management besides developing a rigorous culture for identifying, scoping and
selecting projects should at all times possess a critical mindset for taking decisions
that concern value added and not activities.
2.6 Seeking Opportunities
Seeking opportunities is another generic concept applicable to management
activities. IFAC suggest that a management accounting function should embody a
culture of pro-activity, in seeking out and finding opportunities for value creation
within organisations (Para. 67). Similarly in SS, SS management are urged to use
46
brainstorming sessions to identify opportunity areas within the organisation, which
they believed were critical to business performance (Stamatis, 2005; Gygi et al.,
2004; Phadnis, 2004). For instance, when seeking opportunities, Phadnis (2004)
suggests that project priority should be given to critical business processes that
currently indicate a low to medium level of performance, but have a medium to high
impact on overall business performances.
3. 2.6.1 SS team Structure (Team Orientation concept)
The selection of the SS team structure is the second key issue addressed as part
of the DMAIC define process. IFAC also recognised that the management
accounting process is deployed and conducted through various types of teams
(Para. 47). Further, IFAC pointed out that management teams besides having a
strategic, managerial or operational focus should also have a task, process or
cross-functional orientation (Para. 47). Similarly, SS organisations are urged to
develop a top-down team approach to undertake process improvements within the
organisation and at project level cross-functional teams are responsible for the
successful completion of improvement projects (Knowles et al., 2004; Breyfogle III,
2003; Antony and Banuelas 2002; Harry and Schroeder, 2000). Hence, IFAC team
orientation concept is represented within the define phase of the DMAIC process.
2.6.2 Management interface, Accountability and Continuous
Improvement
The IFAC management interface and accountability concepts are generic concepts
applicable to management activity, which can be directly associated with a SS
47
team infrastructure. Management accounting requires close links with management
and accountability as does SS. For example, Breyfogle III (2003) stated that a SS
cross-functional team facilitated communication with management from other parts
of the organisation, and led to optimal results through a more effective
management of cross-functional business processes.
Stamatis (2005) suggested that SS team members should be held personally
accountable for project completion and achieving the performance improvement
goals they set for their respective business units or departments. A position echoed
in IFAC’s description of accountability (Para. 50). Similarly, IFAC s views on
empowerment and reward systems are central to SS (Para. 50-52). For example,
Gupta (2004) held that for optimal results SS team members should be fully
empowered and that to ensure greater accountability their joint efforts should be
linked to a reward/incentive system. Finally, to sustain continuous improvement,
Gygi et al. (2004) suggest that process owners as custodians of a particular
process should be held accountable for completed projects and the IFAC
continuous improvement concept upholds a similar culture.
2.7 Core Competence
Amongst other things, IFAC associated core competence with the expertise and
skills of staff and the interactive work processes used (Para. 64). These concepts
are also applicable for assessing SS team skills. Therefore, besides individual
accountability, an organised team approach for continuous process improvement
demands a high level of competence from the management team involved in the
application of a range of tools and techniques (Basu, 2004). Basu (2004) suggests
48
that all SS members should be trained to use the tools and techniques, to a level of
competence that ensures optimal results. Gupta (2004) added that a lack of
competence from SS teams might lead to conflicting priorities and fragmented
deployment of resources and efforts. Hence, throughout the DMAIC process the
core competence of SS team is in part assessed by their ability to effectively apply
SS related tools and techniques for SS.
2.8 Summary
Overall, the examination of the literature culminated in the development of a
framework that postulates that the DMAIC managerial processes and work
technologies fit closely with IFAC’s management accounting concepts (refer to
Figure 1). Thus, in Figure 1 the framework for DMAIC-IFAC practice provides a
template for illustrating best practice involvement by SS teams in SS
implementation.
49
PROCESS OPTIMISATION TOOLS AND RELATED MANAGEMENT ACCOUNTING TECHNIQUES
Phases Define
Measure
Analyse
Improve
Control
Managerial process/steps 0. Project selection
1. Select CTQ characteristics
2. Define performance standards
3. Measurement system analysis
4. Establish process capability
5. Define performance objectives
6. Identify variation sources
7. Screen potential sources
8. Discover variable relationship
9. Establish operating tolerance
10. Validate measurement system
11. Determine process capability
12. Implement process control
MA Concepts MA Concepts
Cross-functional team
orientation
Resources productivity
focus
Customer & business
value orientation
Business process
improvement focus
VG- The
Ys
RU
The
Xs
Creating
opportunities CTQs-critical
consciousness
Benchmarking Resource use (RU) and
value generation (VG)
Accountability
Core competence
Mgt. process
interface
Technology development &
evaluation
Continuous improvement
Performance criteria
ABCM
Benchmarking PMS ( BSC) approach
SIPOC/IPO
diagram
FMEA
Process mgt.
Process map
Fishbone
diagram Dashboard
QFD
S
T
A
T
I
S
T
I
C
A
L
T
O
O
L
S
S
T
A
T
I
S
T
I
C
A
L
T
O
O
L
S
Figure 1: A framework for DMAIC-IFAC practice
50
In Figure 1 the DMAIC managerial process, which begins with the define phase and
ends with the control phase, involves thirteen managerial steps (0 to 12). IFAC’s
management accounting (MA) concepts as identified in Figure 1 are initiated by SS
teams in all phases of the DMAIC process. The figure also shows that, the DMAIC
managerial process and the accomplishment of IFAC’s management accounting
concepts are facilitated by adopting various management accounting techniques in
association with a range of process improvement tools for the effective management
of SS initiatives. Together, the DMAIC process, and the related management
accounting tools and techniques form a template for illustrating maximum best
practice involvement by SS members (project champions, black belt/ green belt
project leaders), in SS implementation.
3 Research Methodology
A case-study approach has been used to address the issues identified in the
research. Scapens (1990) argued that case studies are particularly appropriate in
areas where theory is not well developed and that they are a basis for scientific
research. Yin (1994) classified case studies into explanatory, descriptive and
exploratory approaches. Yin (1994, p.7) states that to differentiate among these
approaches, it is necessary to examine the type of research question being posed.
The two questions in this paper are essentially ‘what’ questions, and Yin associates
51
these with an exploratory research approach. Therefore, an exploratory approach is
used in this study to examine the research issues.
This paper presents the evidence obtained from two case study companies
(hereafter referred to as Company A and B)1 in the services sector in Malaysia. The
two firms were chosen because they provided a good illustration of the possible
differing issues that may reflect the implementation process of locally owned
companies and foreign owned subsidiaries. A multiple case study approach allowed
for a more direct comparison of the similarities and differences between the
implementation practices in different organisational contexts (Silverman, 2000).
3.2 Data collection and analysis
Access to the companies was obtained through direct contact between the
researcher and the companies. The main source of data for this study was the
personal interviews with 13 and 7 members of the SS team at Company A and B
respectively. To eliminate any bias by a single respondent, attempts were made to
ensure triangulation of data from multiple sources within the SS team structure. As a
result, the SS respondents comprised of six senior managers appointed as SS
champions, and fourteen managers and executives; eight trained as SS black belts
and the other six as green belts. The SS champions were the project sponsors, while
1The name of these companies were withheld to maintain confidentiality
52
the SS trained black belts and green belts, were appointed as project leaders
responsible for the successful completion of SS projects.
The personal interviews with the SS teams at Company A and B were supplemented
by studies of annual reports, newsletters and information from the company’s
website. An extensive review of the SS literature surrounding the research questions
was undertaken before developing the interview questions. The interviews made use
of a semi-structured approach, the structured component of which served as a
guideline for consistency and cross-referencing. The interview involved asking the
questions, elaborating and probing where necessary. The whole data collection
process involved tape recording, taking notes and viewing/collecting documents
relevant to the SS implementations. To put the managers at ease, the purpose of the
interview was explained to the respondents. To avoid biased responses, no attempt
was made to reveal the objectives of the study.
4 Findings
4.1 The case study companies
Company A undertakes a range of principal activities in the service sector through a
number of subsidiaries. A minority of its subsidiaries have been awarded the ISO
9001 certification and one has had its certification upgraded from the 1994 version to
the 2000 version in the 2003 financial year. The introduction of the SS initiative within
53
the group and its subsidiaries reflected an intention to move beyond ISO 9001
compliance and to focus on customer driven activities and improve current business
processes.
Company B was originally a locally owned business. In 1997, a US based multi-
national company, acquired control through the purchase of a 70% stake in the
company. The company’s name was subsequently changed and a parent company
representative was appointed to manage the operations. The parent company
incorporated various restructuring and change management programmes, to ensure
that Company B did not get isolated from the parent’s built-in values and culture. One
of the initial change management programmes introduced at Company B was the SS
methodology, which was implemented as a company-wide initiative by the parent
company.
4.2 Best Practices and Tools and Techniques used within the DMAIC
Process
In both case firms, SS teams used a set of standard structured steps within the
DMAIC process to guide process improvements in all areas of their organisation. As
postulated in the DMAIC-IFAC framework (Figure 1), IFAC’s management accounting
best practice (concepts) can be found at all stages of the DMAIC process. Although
IFAC’s concepts are linked to all phases of the DMAIC process, SS project leaders
interviewed asserted that the initial steps in the Define phase, besides encouraging a
54
top-down management approach, should promote the application of best
management practice from SS organisational leaders (SS champions), and
subsequently demand high levels of performance and participation from SS teams
involved in the project deployment stages (MAIC) of the DMAIC process. Given this
view, in this paper the DMAIC process is used as a framework, for discussing the
research questions posed in this study.
4.2.1 Define Phase
In Figure 1, the define phase, which was perceived by SS teams as the most critical
phase within any SS project, is the first phase in the DMAIC process. At this phase,
the SS team members undertook a significant role in SS project decisions. From a
SS project decision perspective, SS team members at Company A and B undertook
roles in the identification, prioritisation and validation of SS opportunities (projects) in
the company.
Identification and prioritisation of projects
At Company A, the finance and department heads were appointed as project
champions (members) and were directly involved in the identification and
prioritisation of projects. The identification and prioritisation of projects at Company A
was carried out during the firms’ strategic planning session. The process involved an
intensive brainstorming session among senior management who examined existing
55
processes with the objective of identifying areas of inefficiency and costs overruns.
Consistent with the literature, when targeting project based process improvements
SS members at Company A were urged to focus on the business processes, which
strongly supported their strategic goals (a top-down approach), a position also
consistent with IFAC’s aims for optimising organisations’ business processes (Para.
20). The process ensured that high value and well-balanced SS projects are
identified and linked to the company’s strategic objectives.
The practice of focusing on business processes is consistent with the underlying
principles found in process management practices which fall within the ambit of
management accounting techniques. According to a SS member at Company A, SS
members seeking possible opportunities, moved away from their traditional functional
decision process to improving processes within various business functions.
The prioritisation of projects in these firms culminated with the development of a
several project team charter that endorsed a team-based problem solving approach
in the finance function. The project charter stated the scope and boundaries of each
project and identified the members of the SS team. According to the members at
Company A, all projects were prioritised on the basis of their likely impact on bottom-
line performance, a position consistent with IFACs performance criteria concept.
56
At Company B the prioritisation of projects in the finance function was also
undertaken by green belt members, and like Company A the prioritisation of projects
in this firm also culminated with the development of a project charter. The SS policies
and the project prioritisation decisions at Company A was constrained by a set of SS
goals, which had been set and communicated to the subsidiary by top management
at the parent company level. This top-down deployment approach conforms to
recommendations in the SS literature (Breyfogle III, 2003).
Criteria for project prioritisation
A standard procedure adopted during the project prioritisation process was the
identification of critical business processes that incurred costs overruns and caused
wastage. Thus, the SS team members, while targeting process improvements,
undertook a critical assessment of firm processes with a view to eliminating non-
value added activities in the finance and wider business functions. In the course of
project prioritisation, and subsequently in project deployment (measure phase
onwards), the team members focused on a set of standard criteria that closely fitted
with the following IFAC best management accounting practice concepts:
• The search for process improvement opportunities links directly with IFAC’s
creating opportunity concept. The process involved an assessment of the
current finance function processes and the identification of possible
opportunities for improvement in relation to company goals to ensure the
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optimal use of process resources. In the course of seeking opportunities,
Company B also used inter-division benchmarking to identify performance
gaps in the finance processes, a best practice recommended by IFAC.
However, due to the absence of clear comparative information, the SS
members at Company A set their own targets when determining process
performance gaps.
• The mapping and targeting the critical processes that affected customer
satisfaction and bottom-line results in both their organisation are consistent
with IFAC’s best management accounting practices in terms of the business
process orientation, customer and business value creation concepts and also
promote critical thinking among members.
• Identifying a set of SS performance criteria that closely aligned with corporate
goals. For Company B, SS performance criteria were determined by top
management at parent company level and Company A such measures were
determined by senior management who headed key areas within the
organisation.
Focusing on an SS performance equation, y=f(x) where, the key output of a
process (Y), is the function (f) of the resources input into a process (x).
• To ensure the effective management of business resources is consistent with
the resources productivity focus, equation of resources use and value
orientation concepts recommended by IFAC.
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• The use of a team based approach for solving business processes problems.
For cross-functional process improvements the members of the team
comprised staff from cross-functional backgrounds. At the time of the
investigation, this approach was found in the more experienced parent-led firm
Company B. The cross-functional team approach besides encouraging SS
members to interface with SS members from other areas of the organisation
also ensured that targeted projects achieved optimal results, and such an
approach directly links to IFAC’s best management accounting practices in
terms of the team orientation concept identified in Figure 1.
Validation of SS projects
In both firms, the SS members were also involved in the validation and tracking of
potential project savings. The process involved tracking potential project savings to
the firm’s bottom-line performance, as improvement in profitability was the key criteria
for project prioritisation. This approach is consistent with Breyfogle III (2003) and
Gupta’s (2004) recommendations that SS projects should be aligned closely with
company’s financial goals, thus fulfilling IFAC’s value creation role.
4.2.2 Measure Phase
The SS members at both firms, were directly involved in the deployment of the
projects in the finance and wider business activities, and this entailed them being
59
actively involved in the DMAIC measure phase. From SS project decision point, the
members were involved in the following roles in the measure phase:
Identification of critical process activity
In measure phase it was necessary for SS members to ascertain the critical activity
within the business processes that was incurring costs overruns. The identification of
critical process activity began with the collection of relevant data by team members.
The SS members at both firms claimed that this step was the key to understanding
the process irregularities in the business processes. Besides the identification of
critical process activities, the members were also involved in the measurement of key
activities within a process, with the objective of establishing a baseline measurement
and for assessing the current performance of each process activity. In the course of
identifying the critical process activities, the members fulfilled IFAC’s performance
criteria and critical consciousness concepts.
According to a SS member at Company B, baseline data was used to seek the
possible opportunities available for improving a process, a view that was also shared
by other members. While focusing on a data driven decision approach, SS members
were focused on seeking opportunities that created value through the efficient use of
resources within the finance function and this approach closely matched with IFAC’s
best practice of management accounting, in terms of the value creation, resource
productivity focus and creating opportunity concepts.
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For identifying the critical activities, SS members in both firms used tools such as
process mapping and cause and effect diagrams. These tools helped the team to
identify the possible causes affecting the performance of finance processes. The SS
members interviewed explained that the project decision making process was
centred on the standard SS performance thinking y=f(x) that closely fitted with IFAC’s
equation of resources use and value creation concept which has been identified in
the framework in Figure 1. By adopting this approach, the SS members at both firms
were involved in a critical decision making role that involved identifying the most
critical activities within the processes. The SS members held that only non-value
adding process activities that had the highest impact on the performance finance
processes were targeted and this practice matched with the underlying principles
found in process management and ABCM practices.
Project measurements and performance standards
Another key task for SS members was developing appropriate project measurements
and performance standards for SS projects and this matched with IFAC’s
performance criteria and benchmarking concepts identified in Figure 1. The choice
of measurements besides reflecting the outcome of a particular project, were closely
aligned with company goals. Company B also benchmarked their project
performance against inter-divisional best practices, an approach that is strongly
recommended by SS practitioners However, due to the absence of comparative
information project benchmarking was not possible at Company A. Instead, the SS
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members at Company A assessed the average baseline project performance and
established a reasonable performance standard above the current average.
4.2.3 Analyse Phase
The SS members at both firms undertook the following analytical roles in this phase:
Identification of root causes of defects
SS members reported that the first task in analyse phase, was to determine the root
causes of process defects affecting process capability (project performance). An
approach directly linked with IFAC’s equation of resource use and value creation
concept. The process involved the use of various statistical control tools. The
members possessed a working knowledge of the basic statistical tools that were
essential for a data driven decision approach. The SS members believed that there
were often more than one root causes of process defects, and that therefore it was
important for the SS team to select the appropriate statistical tools to be able to
distinguish between the general causes and main causes. This approach is similar to
ABCM principles where the procedure involves the identification of various forms of
wastage that may occur within a process (Glad and Becker, 1994).
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Determine source of process variation
According to the SS members interviewed, it was important for them to target the vital
few sources of process variation that significantly impacted on project performance.
Tools used by SS members to analyse process defects included Pareto charts, and
the Failure Mode and Effect Analysis (FMEA) diagrams. For analysing very complex
processes, the members had the option to use various statistical software packages.
Most SS Members reported that prior to adopting SS methodology they in their role
as accountants and company executives had rarely used statistical tools. Hence,
they had limited knowledge of the use of statistical tools and often sought advice
from the engineering staff when dealing with complex issues. A position reflected in
IFAC’s core competence concept.
Monitor activity costs and savings
SS members stressed the need to conduct process performance gap analysis that
mirrors IFAC’s performance criteria and benchmarking concepts. The aim was to
identify and monitor the activity costs and savings of potential SS projects. By
determining the gap between the current and desired state, the SS members
established the process capability of specific finance function projects. For this
exercise, tools and techniques such as benchmarking and FMEA diagram were
widely used. For instance, at Company B, the desired state was determined through
a process of inter-company benchmarking as discussed in define, and measure
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phases, but for Company A the desired state represented any reasonable
improvement to the current state.
4.2.4 Improve Phase
As in Figure 1, the fourth phase involved the improve phase. In this phase the SS
members at both firms were involved in the selection of an optimal project
improvement solution. The process involved an intensive brainstorming session
among members who identified and evaluated possible solutions with the objective of
improving customer satisfaction and increasing bottom-line results. Besides
conducting brainstorming sessions, the members also used various tools such as
process mapping and FMEA diagrams to identify alternative improvement plans that
added value to their finance processes. The ‘members’ project decisions taken at this
stage were facilitated by the information obtained during measure and analyse
phases. The members search for an optimal solution closely links with IFAC’s core
competence and accountability concepts. According to a member at Company B,
selection of an optimal solution was often supported with a simple cost benefit
calculation. Although members from Company A claimed that they followed a similar
approach, there was no documentary evidence to support this claim.
4.2.5 Control Phase
In the control phase, the SS members from both firms, evaluated and validated the
actual savings obtained from SS projects. The SS members in both firms were
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responsible for meeting the targeted project goals, which had been defined by them.
Their responsibility can be associated directly with IFAC’s accountability concept. In
Company B, the members compared the actual project performance against desired
targets. In contrast, the members from Company A used a ‘before SS’ and ‘after SS’
evaluation approach to determine the performance of projects and merely sought
evidence of some improvement. Finally, to sustain continuous improvements,
control systems such as post implementation audits and/or a process control plan
were put in place at Company A. SS practitioners for example Pyzdek (2004) and
Breyfogle (2003) recommend the use of dashboard controls to monitor SS progress,
but at the time of the investigation there was no evidence of such practice at
Company A.
4.3 Summary
Table 2 summarises the interaction between SS team members and IFAC’s best
practices of management accounting (concepts), and by reference to the five stages
in the DMAIC process.
Table 2: The DMAIC-IFAC best practice of management accounting
Stages
Role
SS team Members Tools and
techniques
IFAC concepts
• identify, • Process • creating opportunity
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Define
prioritise and
validate
projects
management • business process
orientation
• value creation
• critical consciousness
• resource productivity
concept
• equation of resource use
and value creation
• management process
interface
• team orientation
• accountability
• benchmarking &
performance criteria
Measure
• identify critical
process
activity
• develop
measurements/s
et performance
standards for
selected projects
• Process
management
• ABCM
• process
mapping
• Cause and
effect diagrams
• team orientation
• value creation
• resource productivity
focus
• creating opportunity
• equation of resource use
and value creation
• benchmarking &
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performance criteria
Analyse
• identify root
causes of
process defects
• determine
process
variation
• monitor process
activity costs
and savings
• FMEA diagrams
• ABCM
• Cause and
effect diagrams
• Pareto charts
• Equation of resource use
and value creation
• benchmarking &
performance criteria
Improve
• select optimal
improvement
solution for
selected
projects
• Process
mapping
• FMEA
diagrams
• Core competence
• Accountability
Control
• validate project
savings and
sustain
continuous
improvement
• post-
implementation
audits
• process control
• Accountability
• Continuous improvement
Overall, Table 2 shows that SS member roles in the DMAIC process involve many
aspects that fall within the IFAC management accounting concepts previously
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discussed. Both IFAC and SS are centred on a common business process
orientation approach for value generation. By positioning SS within the field of
business process management the case study illustrated that the DMAIC process
interfaces with best management accounting practices and management accounting
tools and techniques to identify the causes of business problems and thereby deliver
cost savings, increased customer satisfaction and enhanced profitability. This
approach was applied widely by SS teams targeting project based process
improvements in the finance and wider business activities.
5.0 Conclusion
The paper posed two research questions. The conclusions drawn on each are as
follows:
5.1 IFAC’s four identified roles for management accounting and DMAIC
The results have shown that the SS features applicable at all phases of the DMAIC
process match closely with IFAC’s four key roles for management accounting. Both
IFAC and SS are centred on a common business process orientation approach for
value generation. By positioning SS within the field of business process management
the case study illustrated that the DMAIC process and tools interfaces with best
management accounting practices to identify the causes of business problems and
thereby deliver cost savings, increased customer satisfaction and enhanced
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profitability. This approach was widely applied by SS teams targeting project based
process improvements in the finance and wider business activities. Overall, this
research which reinforces the views of previous studies on the evolving role of
management accounting, culminated in the development of the IFAC-DMAIC
conceptual framework (Figure 1).
At the broadest level the case study also illustrated that the role of management
accounting had undergone considerable change, in parallel with the changes that
were taking place in the wider business activities with the adoption of the DMAIC-
IFAC management process and tools. Changes occurred mainly in the course of
project prioritisation (define phase), and in project deployment (measure phase
onwards). At both stages SS members focused on a set of standard criteria that link
directly to IFAC’s best practices of management accounting in terms of the concepts
identified in Table 1. Therefore, the results of this study provide a common
understanding of the potentially useful role that IFAC’s best practice of management
accounting could play in the DMAIC phases.
5.2 DMAIC tools recognisable as management accounting tools
Consistent with the literature, both statistical analysis tools as a means of measuring
the parameters of a process and assessing variations inherent in the process, and
process optimisation tools such as SIPOC, process mapping, cause and effect
diagram and FMEA tools widely used by SS teams for process planning, control and
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decision making were well established in the DMAIC-IFAC management process
adopted by Company A and Company B. Consistent with the principles of process
management and/or ABCM, for SS initiatives, each failure mode is ranked for
severity of the effect on performance, frequency of occurrences of its causes and
detection of the failure mode based on the effectiveness of the control methods.
Overall by adopting this approach and tools, SS focuses on the capacity, costs,
quality and responsiveness of the process, which represent the key elements that are
measured and compared to define customer needs. These elements are also the
concern of management accounting.
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Six Sigma Project Identification And Selection: A Benchmark
Among Italian And US Companies
Alessandro Brun
Department of Management, Economics and Industrial Engineering Politecnico di Milano
Via G.Colombo, 40 – 20133 – Milan – ITALY Tel. +39-02-2399-2799 - Fax +39-02-2399-2700
E-Mail: [email protected]
Abstract
Purpose: The present paper discusses the results of a research project going on at
Politecnico di Milano, aiming at analysing the idiosyncrasies of Six Sigma
implementations in Italian companies. In particular, the project investigates which are
the sources of information and the tools used to identify potential Six Sigma Projects
and which are the criteria and tools used for projects prioritisation and selection.
Approach: First, lists of possible sources of information, tools for project
identification, criteria and tools for project selection are singled out based on a
comprehensive literature review about Six Sigma. Noticing that often, in the literature,
there is both lack of specific guidelines concerning the project selection process and
of real life cases of Six Sigma implementation in Italian company, the second phase
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of the research consisted in the setup of a questionnaire which was mailed to 65
Italian and international companies implementing Six Sigma.
Findings: 11 companies (6 Italian and 5 US based ones) participated to the survey.
Results coming from the survey respondent are commented, allowing to compare the
situation of Italian companies at the early stages of their Six Sigma implementation
with respect to that of more mature implementations in US companies
Originality of the paper: With such a study, the research team aimed at filling a
specific gap in the literature, concerning project identification and selection process,
in particolar in Italian companies. By contributing to a still young and promising
research stream concerning the project selection process, the authors hope to foster
further research. The paper also attempts to identify a best practice for the selection
of Six Sigma projects and thus to improve the quality of the results and the credibility
of the Six Sigma approach.
Research implications and limitation: Managerial implications presented in the
paper are just the beginning for the development of a best practice. Further research
will follow the direction defined by this first work.
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5. Paper Category: Survey
6. Keywords: Roadmap for Six Sigma implementation in Italian companies, project
prioritization and selection
1. Introduction
The present paper describes the results of a research project focused on Six Sigma
implementation process, with a particular attention to understand which is the
situation of the enterprises operating in Italy and, consequently, which are the
managerial implications of a Six Sigma implementation in the typical Italian company.
As it is well known, the Six Sigma methodology, born in the mid-80’s in Motorola, is
strongly oriented to measurement and in particular to the adoption of statistical
techniques. Such statistical techniques have been since long used in other quality
philosophies and approaches and are now embedded in a comprehensive framework
advocating the adoption of some basics quantitative tools for the resolution of the
most common problems affecting every sort of organization.
A research project is going on at Politecnico di Milano, aiming at developing a
reference model for Six Sigma implementation in Italy. In particular the present paper
focuses on the project identification and selection process, analysing it both from an
international literature and from the Italian practice standpoints.
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The paper is structured as follows:
• Section 2 is devoted to a brief overview of the literature on Six Sigma
• next, two limitations of the literature are highlighted: first of all, the process of
project identification, prioritization and selection has not been analysed in
detail; secondly, there is lack of bibliography describing Italian implementation
case histories. Starting from these two simple findings, the research going on
at Politecnico di Milano along with its research questions are introduced in
Section 3.
• In Section 4, we present the main results of an extensive literature research
aimed at answering the first research question;
• In Section 5, the results of a survey aiming at answering the second research
question are presented, in particular highlighting main differences between the
Italian and the US respondents.
• Section 6 will conclude the paper, with some final remarks and indications
about future research directions.
2. Scientific Background
In order to better introduce the research questions, it is important first of all to trace
the roots of Six Sigma; we will then describe the way Six Sigma was born and then
devote a subsection on the Critical Success Factors of Six Sigma implementations.
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2.1 TQM, the “father” of Six Sigma.
It is here interesting to devote a short paragraph to the main concepts of Total
Quality Management (TQM), since it can be considered as the father of Six Sigma:
many of the principles constituting the basis of TQM are also paramount for Six
Sigma.
TQM is a management philosophy originated in the 50’s, which has steadily become
more popular since the early 80’s. The term “Total Quality” describes both the cultural
mindset as well as the organizational approach of a company striving to provide
customers with product and services satisfying their needs.
Total Quality Control was the key concept of Armand Feigenbaum’s 1951 book
“Quality Control: principle, Practice and Administration” – a text that was lately
revised under the title “Total Quality Control” – and many other quality gurus, like
Deming, Juran and Ishikawa, also contributed to the body of knowledge now known
as TQM.
According to the International Standards Organization (ISO), TQM is “a management
approach. For an organization centred on quality, based on the participation of all its
members and aiming at long-term success through customer satisfaction, and
benefits to all members of the organization and to society”. TQM seeks to integrate
all departments (from Marketing to Finance, to Design, Engineering, Manufacturing,
Customer Service etc.) in a joint effort towards meeting customer needs and
company-wide organizational goals. TQM views an organization as a collection of
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processes, arguing that every company should strive to continuously improve these
processes by exploiting the knowledge and the experience of every worker in the
organization.
Albeit originally applied to manufacturing operations, TQM is now becoming
recognised as a generic management tool, just as applicable in service companies
and in the public sector.
The key principles characterizing TQM in its most general conception are (K. Hashmi,
2006):
• Management commitment: in TQM, management should be the driver of
change.
• Employee empowerment, through Training, Measurement and Recognition
(for both the teams and individuals), and Teamwork.
• Fact-based decision making tools
• Focus on the customer
• Continuous improvement
Lately, TQM also received strong criticisms because it provides only very broad
guidelines for implementation. As T. Pyzdek (2006) reports, “true, solid research
showed that organizations, which succeeded in successfully implementing TQM,
reaped substantial rewards. But the low probability of success deterred many
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organizations from implementing TQM. Instead, many organizations opted for ISO
9000, since this promises not world-class performance levels, but standard
performance and provides clear criteria and a guarantee that meeting these criteria
will result in recognition. In contrast, TQM offered a generic set of philosophical
guidelines and no way to prove that one had accomplished their quality goals”.
2.2 The Six Sigma revolution.
As it is well known, the Six Sigma programme was first launched at Motorola in the
mid-80’s, thanks to the joint efforts of some key figures, among which Mikel Harry
(Senior Engineer of the Government Electronics Group), Bill Smith (VP and Senior
Quality Assurance Manager) and Bob Galvin (CEO). “Motorola invented the Six
Sigma quality improvement process in 1986. Six Sigma provided a common
worldwide language for measuring quality and became a global standard.” (source:
www.motorola.com; other sources frequently report that the official launch of Six
Sigma took place in 1987). This allowed Motorola to became the first American
company to win the Malcolm Baldrige Quality Award, in 1988.
The Six Sigma methodology, originally conceived as an approach to improve
manufacturing processes, has been utterly revised by General Electric, in the mid-
90’s, first in the form of a Total Quality programme, to be then promoted to the rank
of “managerial approach” by which to manage the entire organization.
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Any Six Sigma implementation aims at improving customer satisfaction, by mean of
an improved process capability. This, on turn, is made possible by focusing on
“Critical to Quality” (CtQ) characteristics and implementing improvement actions
seeking to continuously reduce processes variability. These actions are carried out
involving every employee.
Most successful implementations of Six Sigma methodology have common
characteristics:
- Six Sigma embeds quality management in the company’s functions and
departments, rather than maintaining it as a separate entity. The idea of a Six
Sigma implementation being a private affair of the Quality Management
Department is a profoundly distorted one: the Quality Management VP
couldn’t bear the responsibility of a companywide implementation of Six
Sigma.
- In most successful implementations, the Six Sigma programme has been
extended to all company’s processes. It would have been a big mistake to limit
the implementation only to the most relevant areas.
- Six Sigma takes management involvement and support for granted. It is
paramount that the company board places quality as first priority.
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- Six Sigma focuses on well-defined, measurable goals. Often the Finance Dept
is involved, being in charge to validate economic savings resulting from the
various improvement actions.
- The organizational structure of a Six Sigma implementation is based on
precisely specified roles (e.g. Green Belts, Black Belts). A key driver of
success of Six Sigma is the possibility to recruit the best resources in the
company; linking career paths of the staff to personal achievements within the
Six Sigma programme and to contribution to its success, is often useful to
increase motivation and commitment.
It is then apparent that Six Sigma has been inspired by TQM, being based on a pretty
similar list of principles. Among the main differences it is worthwhile noticing that:
- while TQM is oriented to the final result of a process, Six Sigma aims at
preventing errors, reducing the variability of the processes;
- TQM mostly provides broad guidelines for quality management, while Six
Sigma commends precise applicative methodologies (DMAIC for existing
processes and DFSS for new ones) and focuses on numeric certification of
improvements and associated savings;
- in Six Sigma, top-down management leadership plays a critical role in
enabling the successful deployment of tools and techniques – much less in
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TQM – and this, on turn, ensures alignment of projects with strategic goals of
the organization.
So there are authors considering Six Sigma as an evolution of TQM (“Six Sigma
emerged from the fertile environment created by Total Quality Management”, K.
Black and L. Revere, 2006) while others regard Six Sigma as a methodology to adopt
“within the larger framework of TQM” (B. Klefsjö, H. Wiklund and R. L. Edgeman,
2001).
2.3 Critical Success Factors of Six Sigma implementations
In the recent years, many papers and books have been written on the Six Sigma
methodology.
In order to correctly direct the research project, the authors exploited an extensive
literature survey encompassing 96 books and 75 papers published on international
journals.
Most of the scientific production was written in the last 5 years. New methodologies,
stemming from the original methodology, are mushrooming: authors worldwide are
preaching second generation approaches like “New Six Sigma” (M. Barney and T.
McCarty, 2003), “Lean Six Sigma” (S. Taghizadegan, 2006; B. Wheat, C. Mills and
M. Carnell, 2003), “Fit Sigma” (R. Basu and N. Wright, 2003), “Customer-centered
Six Sigma Quality Management” (CSSQM) (C. H. Kuei and C. N. Madu, 2003), but
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the “revolutionary aspects” of this initiative at organizational level, differentiating Six
Sigma from all the previous quality initiatives, remained virtually unchanged in time.
Many papers present case studies of Six Sigma implementation. A useful exercise
was to sort out the various aspects that, according to the authors, are at the base of
a successful Six Sigma implementation. We will call these items “Critical Success
Factors” (CSF) of Six Sigma.
We started from the work of Anthony and Banuelas, which analysed the “key
ingredients for the effective implementation of Six Sigma program” (J. Anthony and
R. Banuelas, 2002; R. Banuelas Coronado and J. Anthony, 2002). More aspects than
those highlighted in Section 2.2 emerged in their study.
Y. H. Kwak and F. T. Anbari (2006) boiled down Anthony and Banuelas’ list in 4
points (management involvement and organizational commitment; project selection,
management, and control skills; encouraging and accepting cultural change;
continuous education and training), yet their approach is way too synthetic for our
purposes.
We considered Anthony and Banuelas’ list presented in (R. Banuelas Coronado and
J. Anthony, 2002) which, with respect to that presented in (J. Anthony and R.
Banuelas, 2002), contains Communication. We make only a small modification by
expanding “Training” to “Education and Training” (Y. H. Kwak and F. T. Anbari,
2006). The resulting list follows.
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• Management involvement and commitment;
• Cultural change;
• Communication;
• Organisational infrastructure;
• Education and Training;
• Linking Six Sigma to business strategy;
• Linking Six Sigma to customers;
• Linking Six Sigma to human resources;
• Linking Six Sigma to suppliers;
• Understanding tools and techniques within Six Sigma;
• Project management skills;
• Project prioritisation and selection.
Of course, the specific items pointed out by the various authors varied according to
the type of industry, company size, etc. A statistic of the frequency of the various
CSF in a sample of 18 papers trying to analyse the reasons behind the success of
real life applications is depicted in Figure 1. Some additional factors emerged during
the analysis (such as Measurement System and Information Technology
Infrastructure); yet we decided not to include in the analysis factors that were
highlighted in only one paper.
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***PLEASE INSERT FIGURE 1 ABOUT HERE***
3. Research goals
3.1 Project identification and selection.
As any other quality improvement program, Six Sigma presents some limitations.
One limitation found while analyzing literature was the fact that many organizations
still identify and prioritize projects based on pure subjective judgment, even though
selection and prioritization of projects is one of the Critical Success Factors of a Six
Sigma program. Arguably, this happens because it is difficult to find literature that
explains in an organized way how exactly to perform this task, despite the fact that
many authors confirmed its importance.
Starting from such consideration, we decided to research and organize in a rational
and sequential fashion the necessary and essential steps to accomplish this task. In
the following Section, we present the main results of an extensive literature research
aimed at answering the following research question, thus filling a gap currently found
in literature.
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Q1: Which are the sources of information and the tools used to identify
potential Six Sigma Projects? Which are the criteria and tools used for
projects prioritisation and selection?
3.2 The situation of Italian companies.
The bustling industrial Italian territory encompasses a huge amount of Small &
Medium Enterprises, many of which still have the characteristic of a family owned
business, hence utterly different from the North-American public company model.
Introducing Six Sigma in such small organizations is not so simple, since HR training
can represent a significant burden for the limited budget of such companies, and the
management is not so keen to distract employees from the daily business as
organizational structures are extremely lean and most of the staff represents key
roles and has no substitutes. Moreover, any type of change is often perceived as a
foe by middle management fearing the unknown and rather sticking to the old habits.
Notwithstanding the great amount of literature written on Six Sigma, the bibliographic
analysis showed a significant gap: no contributions were focused on implementation
of Six Sigma in Italian companies. It is not a surprise that also in the national
literature, almost no authors are specifically concentrating on the Italian situation. In
most of cases, books published in Italian are just a translation of international books.
Starting from such considerations, a research project was launched in 2006 at
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Politecnico di Milano, to study the idiosyncrasies of Six Sigma implementations in
Italian companies.
The present research constitutes a part of the larger project. In particular on the topic
of project prioritization and selection, the following research questions arose,
regarding the approach of Italian companies:
Q2: In terms of project identification and selection, is the approach adopted
by Italian companies consistent with that of best practice Six Sigma
implementations?
4. Q1 – Identification and selection of Six Sigma projects
In order to answer to the first research question, the research team carried out a
literature review regarding tools and methodologies to identify and select/prioritize
Six Sigma projects.
Throughout the Six Sigma literature it is often reported that the identification and
selection of the projects correspond to the most important task in the whole DMAIC.
Some authors even claim that selecting the right projects means having
accomplished 50% of the whole Six Sigma methodology. Yet, it is not simple to find
in the whole literature, let alone in a single book, specific guidelines on how this
important task should be carried out.
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In the present section, with the use of a vast literature review, we have tried to
summarize in a logical and sequential manner the steps to follow to identify and
select Six Sigma projects. The section is divided into two Sub-Section, corresponding
to the two main stages of the projects identification and selection process:
• The former refers to the identification of potential Six Sigma projects; the Sub-
Section first focuses on the sources of information – that is, actors (or things)
from which project ideas can be obtained – and then concentrates on the tools
used to obtain and organize the information from these sources in order to
identify the potential projects.
• The latter consists in the prioritization and selection of Six Sigma projects; the
corresponding Sub-Section describes the criteria used to evaluate the
relevance of each one of the previously identified projects, as well as the tools
used to prioritize and select the projects; the Sub-Section will conclude with a
brief discussion about the importance of the group in charge of projects
evaluation and selection.
4.1 Project identification.
As it was mentioned above, we have divided the process of projects identification into
two parts. We first identified the major sources of information and explained their
importance and how they direct the company towards better performance. We then
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focused on main tools used by the companies to obtain data from these sources,
identifying potential projects.
4.1.1 Sources of information.
There are many sources that a company can resort to, when scouting for potential
Six Sigma projects. The most obvious are the stakeholders of a process. M.
Thomsett (2005) describes a stakeholder as any individual who will be affected by
the changes made in the Six Sigma process. Three noteworthy stakeholder groups
are:
• customers;
• employees;
• suppliers.
C. Adams, P. Gupta, and C. Wilson (2003), include four other sources from which to
look for potential Six Sigma projects:
• developments in technology;
• extension of other Six Sigma projects;
• benchmarking against other companies;
• waste.
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4.1.2 Tools for projects identification.
But how are the information coming from the customer or the suppliers, or data
regarding main wastes or gaps again benchmarking, used to identify a possible
improvement project? Companies are relying on some tools to collect and organize
the information in a structured way. We started from the results of a survey by
Banuelas et al. (2006), in which they analyse the most common tools used by
companies in the UK to identify Six Sigma projects, namely:
• brainstorming;
• CTQ tree;
• focus group;
• interviews;
• customer visits;
• Quality Function Deployment;
• Kano analysis;
• surveys;
• other.
By analysing other contribution in the literature, we found out two additional tools that
were frequently quoted, which we decided to add to the above list:
• Ishikawa diagram;
• flowchart.
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Results of the literature review are summarised in the following Table 1.
***PLEASE INSERT TABLE 1 ABOUT HERE***
4.2 Project selection.
The list of potential projects identified might be overly abundant and, in order to figure
out the best way to allocate scarce resources (both human and financial ones), a
company might need to prioritize projects and to tell the ones to carry out from the
ones to discard.
As a consequence, we focused on criteria adopted to rank the projects, depending
on the company’s drivers; tools used to prioritize and select the projects, once the
criteria have been chosen; and importance of the selection team and of the person
responsible for making the final decision.
4.2.1 Criteria for projects evaluation.
The criteria used to identify a potential Six Sigma project are directly related to the
company’s drivers for success. They are the guidelines used by the company to
focus on its necessity and goals. According to G. Brue (2002), the criteria used in
project selection should reflect the major issues faced by the business. Also as
stated by D. Smith, J. Blakeslee and R. Koonce (2002), identifying and ranking
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priorities and strategies for the company helps to coalesce the organization’s top
leaders around a common set of goals.
Only after having sorted out the decision criteria can the potential projects be
prioritized. Obviously, one can expect that different companies will choose different
criteria, or, even if they happen to choose similar criteria, each company may weigh
them differently. For example, one company may deem customer impact as the most
important criterion, while another may consider the financial impact of a Six Sigma
project more relevant.
Even though there is a wide range of possible criteria among which to chose,
according to a survey realized by Banuelas et al. (2006), the main ones can be
grouped into the following list:
• customer impact;
• financial impact;
• top management commitment;
• measureable and feasible;
• learning and growth;
• link with business strategy and core competence.
In order to further extend the above list we decided to investigate different sources in
literature to seek different possible criteria. In particular, we deemed other two criteria
to be particularly relevant:
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• time until results;
• employees motivation.
The first criteria we decided to add to the list in (Banuelas et al., 2006) is time until
results, meaning that a company will favour those projects with a high probability to
give the first results in the short term. This criterion is ranked first according to D.
Smith, J. Blakeslee and R. Koonce (2002). The “results” to consider are not
necessarily financial; they can be associated with any of the other criteria; so, for
example, “time until results” could for one company be interpreted as “the time
expected before the customers recognize the benefits”. This is an important criterion
that can be used to analyze if companies prefer a project with a faster result but less
benefits, over a project that takes more time to mature but has a more significant
impact on the overall results. Smith et al. suggest that this criteria is more important
for companies in their early stages of Six Sigma implementation, since they need to
show to their employees that this approach works and to build momentum for future
projects.
The second criterion added is employees motivation. We have taken this into
consideration because, as mentioned before, one of the main CSFs of Six Sigma is
cultural change, which is strictly connected to the personnel motivation.
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4.2.2 Tools for projects prioritization and selection.
The list of possible tools to resort to for project selection is quite long and
encompasses the following:
• Pareto analysis;
• Pareto Priority Index (PPI);
• Cost-benefit analysis;
• Cause and Effect Matrix;
• Group consensus and voting techniques;
• TOC (Theory of Constraints);
• AHP (Analytical hierarchy process).
The TOC is an overall managerial philosophy, originally developed for Production
Planning and Control by Eliyahu M. Goldratt in the mid-1980s (E. M. Goldratt and J.
Cox, 1984). Though TOC is not a Six Sigma tool, in literature it is advised to combine
these two methodologies in a synergic way (I. Ehie and C. Sheu, 2005); in particular,
it would be possible to use a TOC-based approach in the projects selection phase of
Six Sigma methodology. T. Pyzdek (2003) clarifies the use of TOC as a project
selection tool, illustrating with an example a Six Sigma project selection based on the
five steps of TOC.
For sake of synthesis, we are not presenting the other tools here, since their
description can be found in many Six Sigma and Quality Management books.
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4.2.3 Projects selection team.
No matter which the criteria and tools used to prioritize Six Sigma projects, the team
or person in charge of the selection is of paramount relevance.
For instance, it may be useless to adopt a sophisticated tool for prioritization if the
group responsible for the selection has no experience in using it. Similarly, it would
be incoherent to use as main criteria the connection to the business’ strategy, unless
in the selection team there is somebody representing the company’s strategic
orientations.
The formation of the projects selection team is strongly related to some CSFs of Six
Sigma as the Management involvement and commitment. Project prioritization and
selection itself is a CSF and the first step of Six Sigma project selection is the
creation of a cross-functional team including the top management. The responsibility
of the team or steering committee is to identify, prioritize, select, monitor and
evaluate Six Sigma projects.
Therefore, creating the right project selection team would impact directly on at least
two CSFs, justifying its relevance and deserving attention in this work.
It is usual to find in literature that the Master Black Belt’s main responsibilities include
selection, execution and support of Six Sigma projects (Treqna Base Manual Ed1,
2005); however, this doesn’t mean that MBBs should be the only ones participating in
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the project selection team. Projects must be focused on the right goals; and this is
the responsibility of the senior management involved in the Six Sigma programme,
e.g., the project sponsor, Six Sigma Executive Council, or equivalent group (T.
Pyzdek, 2003).
Top management involvement helps to cascade down the company strategy into
specific Six Sigma projects (M. Kelly, 2002). This top-down approach to select
projects has three main advantages. Firstly, this helps in executing the selection
process in a more structured, managerial way. Secondly, all the projects would be
aligned with the corporate strategy. Finally, Six Sigma projects will most probably
enjoy strong management support (M. Harry and R. Schroeder, 2000).
It is important to notice that a more bottom-up approach in the selection of Six Sigma
projects could contribute to a higher level of participation, motivation and
communication at the lower levels of the enterprise, but could result in a lack of
management commitment and in poor alignment with the business’ strategy.
Hence, the group in charge of projects evaluations and selection should be formed in
a balanced and intelligent manner, taking into account skills and know-how needed
for the task, the structure of the enterprise and, most important, CSFs that drive Six
Sigma.
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5. Q2 – the Italian situation
5.1 Research methodology.
The literature review presented in the previous section highlighted the main issues
concerning the project selection process. More than often, the books and gurus of
Six Sigma preach only some general guidelines for the project selection phase. The
tools, processes and methods for carrying it out usually either appear as theoretical
suggestions or fail to explain the whole process in a detailed manner. Moreover, the
proposed approaches are seldom validated or supported by practical evidences.
For this reason, the second research question focuses on how this process takes
place in reality, how it differs from (or couples with) literature contents, and possibly
what do practical evidences point out to be a sound way for selecting Six Sigma
projects.
To be able to compare the approach of Italian companies against a sound
benchmark, we have assumed that - being generally larger, more structured and
more experienced in terms of Six Sigma - US companies have had more time and
resources to experiment different approaches towards projects selection and can,
therefore, be considered a best (or at least better) practice.
Summarizing, the main goals of the study we propose are:
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1. To map how the firms are or have been carrying out the projects selection
process in reality.
2. To verify how they adapt theory to their specific situation.
3. To compare how more mature American companies carry out the project
selection phase, with respect to how less experienced Italian companies do
so.
A similar study was performed in the UK and presented in (R. Banuelas, C. Tennant,
I. Tuersley and S. Tang, 2006). We, however, intend to extend the research and
compare two very different groups of companies. In our sample we included five top
American companies with a long experience in Six Sigma and six top Italian
companies who are still in the initial years of Six Sigma implementation. This is an
important original aspect of our study.
5.2 Data collection.
We have decided to compare the practices according to the same structure
described in the literature review, and to check if the comparisons between the two
groups of companies (the more experienced American and the Italian new adopters)
show relevant gaps suggesting remedial actions. Based on the literature review and
expert judgments, we singled out the following phases as most relevant when
selecting Six Sigma projects:
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• composition of the project selection team;
• sources of information for potential projects identification;
• tools for potential projects identification;
• most relevant criteria for project prioritization;
• tools for projects selection;
• key performance indicators to measure post-project results.
A structured questionnaire has then been developed, in order to investigate such
aspects. The questionnaire consisted of four main sections, as follows:
1. General company information and current level of Six Sigma
implementation. The first section was important to understand the nature of
the companies and to analyze the maturity of Six Sigma implementation.
Fundamental pieces of information were gathered, such as: industry sector,
annual sales, number of completed projects, number of Master Black Belts,
Black Belts, and Green Belts currently in the company, and years passed
since Six Sigma adoption.
2. Identification of Six Sigma projects. In the second section, companies were
asked to rank in descendent order of importance the main sources of
information and the tools used for potential projects identification (leaving
blank the ones not used). The list of sources and tools has been taken from
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the literature review. Additionally, two boxes were intentionally left blank so
that other tools or sources could be added if relevant.
3. Prioritization and selection of Six Sigma projects. In the third section,
companies were asked seven questions. First of all, they were asked to
indicate the relevance of each of the possible criteria to prioritize Six Sigma
projects, according to a five-point Likert scale, from “Extremely important” to
“Unimportant”. The second question asked the companies to rank in order of
importance the tools used to prioritize Six Sigma projects, leaving blank the
ones not used. The next two questions were open-ended and served to
identify the composition of the group that prioritizes the potential projects and
also who is the person in charge of finally deciding which projects to carry out.
This helps us to identify if the company has a top-down approach, or, in other
words, to analyze if the top-management is involved or not (and to what
degree). To better understand the nuances between the different project
selection processes that may not emerge when asking only close-ended
questions, we asked the respondents to briefly explain their selection process
in the fifth, open-ended question. We finally inquired as to whether they
realized multiple projects at the same time and if they had any structured
procedure that took into consideration how to allocate limited resources to
projects in an optimized way. This would constitute the basis for a future study
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concerning resources allocation approaches to a portfolio of Six Sigma
projects.
4. Post-project evaluation. This section of the questionnaire focuses on the
results obtained by the companies after projects completion. We first asked,
through a multiple-answer question, how the companies measured the
project’s results. In the second question the companies were asked to quantify
their results (savings, sigma level improvement, increase in employee
motivation, etc.) since the beginning of the Six Sigma implementation.
In order to gather the data from Italian companies, we used a two-step approach.
• First of all, we organized a workshop at Politecnico di Milano, with the
participation of important Italian companies implementing Six Sigma. During
the meeting, we presented the main results of our literature review about Six
Sigma projects identification and selection; afterwards, three MBBs presented
the approach in use at their companies. All the participants contributed with
interesting insights and suggestions. This first discussion was important to
validate the practical relevance of our research question as well as the
questionnaire structure and contents.
• Immediately after, we send out the questionnaire to 65 companies. In
response, we received a total of 11 replies, achieving an overall response rate
of 17%.
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5.3 Analysis of results.
Among the eleven respondents to our survey, six are Italian-based organizations (or
the Italian branch of a multinational company) and the rest of them are American
based companies with international presence. All companies have a Six Sigma
implementation in place, and all questionnaires have been carefully filled in, thus
allowing us to make sensible analysis and comparisons. Highlights of the most
interesting results follow.
5.3.1 General company information and current level of Six Sigma
implementation:
Regarding general company information:
• In the Italian group, annual turnover ranges from a minimum of 110M € to a
maximum of 560M €. The number of employees varies from 140 to 4,300.
• In the American group the annual sales goes from 3.5B US$ all the way up to
24.5B US$, while the number of employees is in the 7,000 to 21,000 range.
• Two of the respondents belong to the service sector, while the rest pertain to
the manufacturing/industrial sector. Both of the companies that belong to the
service sector are Italian.
As regards time since Six Sigma implementation started (see Table 2):
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• The majority of the firms in our sample (55%) implemented Six Sigma since
ßmore than five years
• There are two main and extreme classes of firms that answered the survey:
the ones with low maturity of implementation and the ones at a more
advanced stage of implementation, with no firms in the middle segment of the
classification.
• Italian companies in general have low level of maturity in Six Sigma
implementation (besides one case in which Six Sigma was embraced 6 years
ago) while American companies already have much more experience in this
field (7 or more years). This supports the claim that Six Sigma is still young in
Italy.
• Since the implementation time varies considerably among the companies, it is
quite obvious that the number of projects will also vary. In fact, companies
where the implementation of Six Sigma is still in its early stages, have realized
less than 100 projects, while more mature applications resulted in the
completion of more than 1,000 projects (with a company having completed the
remarkable quantity of about 21,000 projects).
***PLEASE INSERT TABLE 2 ABOUT HERE***
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5.3.2 Identification of Six Sigma projects:
With regards to sources of information to identify Six Sigma projects, main findings
are synthesised in Figure 2, in particular:
• In the literature review we identified seven main sources used to identify Six
Sigma projects. Due to the fact that Six Sigma was born in a manufacturing
company – Motorola – the importance given to waste and defect reduction has
always been stressed. Accordingly, in our survey, 82% of the companies
responded that they use waste reduction as one of the main sources. This
may also be due to the fact that nine out of the eleven respondents belong to
the manufacturing sector (among them, eight said that they use waste
reduction as a source of information).
• The use of the customer as a source, also known as the Voice of the
Customer (VOC), also stands out in literature as one of the main sources. In
fact, one of Six Sigma’s main objectives is to identify and satisfy the
customers’ needs. Correspondingly, this was second most frequently adopted
source by the companies (64% of respondents).
• On the other hand, although it is frequently suggested in literature that it is
very important to expand Six Sigma outside of the company to the suppliers in
order to increase the quality of the inputs, very few companies actually use the
supplier as a source (18% of the sample).
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• When comparing the answers given by the American companies against the
Italian ones, a noteworthy result is that the frequency of American companies
adopting a specific source is always greater than in Italy, thus suggesting that
US companies usually use more sources simultaneously. The largest gaps
between the Italian and the American companies are found in developments in
technology and clients – American companies use them much more often than
Italian ones.
***PLEASE INSERT FIGURE 2 ABOUT HERE***
Main findings concerning the tools to identify Six Sigma projects (see Figure 3):
• Brainstorming is by far the top tool for Six Sigma project identification both in
terms of numbers of firms employing it (100% of the interviewees declared to
use it) and of importance given to the tool. This is true either for overall results
as for stratified by nationality results.
• American companies make use of more tools than their Italian counterparts; in
particular 40% of the former use Flowchart and QFD whereas none of the
latter does so. Also remarkable is that the majority (60%) of American
companies employs the CTQ tree, against an almost irrelevant fraction (17%)
of the Italians. The different time since implementation in the two groups of
companies could probably account for such a difference in the adoption of
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tools: from the one hand, complexity of adopted tools should grow in time with
the skill of the Six Sigma project selection team, so it is not surprising that in
younger implementations, only simpler tools are used; from the other hand,
after 1,000 or even 10,000 projects, areas of improvement and potential
projects are not so immediate to spot, therefore American companies have to
rely on more, and more sophisticated, tools.
***PLEASE INSERT FIGURE 3 ABOUT HERE***
5.3.3 Prioritization and selection of Six Sigma projects.
Regarding the criteria to prioritize Six Sigma projects, we asked the companies to
rate the criteria according to a Likert five point scale (0 = unimportant, 2 = moderately
important, 4 = extremely important). To verify the level of internal consistency, a
Cronbach’s α test was carried out. All the criteria in this survey resulted in an α
coefficient above 0.60, thus showing a good internal reliability.
The scores given by each respondent were then averaged to determine the
importance of each criterion in the project selection process. A vital line of 2.0 was
adopted to highlight which are the criteria that are at least moderately important.
Results were stratified according to the nationality of the company and time since Six
Sigma adoption. Main results are as follows:
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• No matter how many the years of implementation and which the nationality,
financial impact and connected to business strategy and core competence are
always considered the two most important criteria in our sample.
• The least important criteria, on the other hand, are motivation, learning and
growth and project duration.
• In both groups, a great importance was given to financial impact and not to
project duration (nor to short payback time, in case of Italian companies): this
suggests that companies are more concerned with bottom line results, than to
the time it will take to obtain this result.
• On average, American companies give a larger importance to all of the criteria
(see Figure 4). To better compare the two countries, we normalized the data,
multiplying American scores by 0.85. After normalization, the Italian and
American profiles are somewhat similar, with two factors (top management
commitment and short payback time) still presenting a large gap between the
groups (see Figure 5).
• Time since Six Sigma implementation proved to influence the importance
given to customer impact and top management commitment, with the more
experienced companies considering these criteria much more important
(moving from an average score of 2.0 to 2.8 for customer impact and from 2.1
to 3.0 for top management commitment). We also noticed that, contrary to
what was found during the literature review (D. Smith, J. Blakeslee and R.
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Koonce, 2002), as the implementation grows in maturity, so does the
relevance of payback time. The relevance of project duration does not vary
significantly throughout the different phases of implementation.
***PLEASE INSERT FIGURE 4 AND FIGURE 5 ABOUT HERE***
Regarding the tools used for projects prioritization and selection, results were as
follows (also see Figure 6):
• In overall terms, firms demonstrate to use the simplest tools and neglect the
more sophisticated ones. The most important tool used to prioritize projects is
by far Cost-Benefit analysis (adopted by all but one company); while more
than half of the sample (55%) declared to use Pareto analysis.
• It can be seen that Pareto analysis is usually not used alone, generally being
used accompanied by another tool, and it is usually considered as a
complementary tool (i.e. although being the second most frequently used tool,
it ranked fourth in term of importance – after Cost-Benefit analysis, Cause-
and-Effect matrix and Group consensus and voting techniques).
• American companies make use of more tools simultaneously (each of them
adopts 3 tools, on average) than their Italian colleagues (2, on average).
• Italian companies indicated unanimously Cost-Benefit analysis as most
important tool for prioritization, while American firms distribute more evenly the
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importance among three tools, namely Cost-Benefit analysis, Cause and
Effect matrix and Group consensus and voting techniques.
***PLEASE INSERT FIGURE 6 ABOUT HERE***
5.3.4 Post-project evaluations.
In terms of frequency of adoption of the various Key Performance Indicators (KPIs) to
evaluate project results, main findings are summarised as follows (please also see
Figure 7):
• Net savings are measured by almost all of the companies in the sample
(91%).
• Some companies have shown to be inconsistent, since they claimed to
consider customer impact an important criterion, but do not actually measure
the results.
• Employee learning was the least used KPI (9%).
• The biggest gaps between the countries are related to the
manufacturing/industrial oriented KPIs. However, the difference still cannot be
attributed to the difference in the nature of the firms of each nationality
because even when comparing only the industrial Italian companies with their
American peers, large gaps can still be noticed in the following KPIs: RTY,
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Inventory level, cycle time, sigma level, and net savings (see Figure 8, where
only companies of industrial sector are represented).
• When confronting the two different sectors, KPIs difficult to measure in a
service environment come out clearly: cycle time, scrap rate, capability index,
RTY, sigma level and FTY.
• American companies measure more KPIs than their Italian counterparts: 6.6
parameters against 4.
***PLEASE INSERT FIGURE 7 AND FIGURE 8 ABOUT HERE***
5.4 Managerial implications.
At the end of this analysis, a few noteworthy aspects differentiating the approaches
of Italian vs US companies emerged. Albeit we cannot prove that such a difference in
approach would imply better overall results, there are some suggestions that we
would like to give to Italian managers:
• Never overlook any source of information for potential projects identification; in
particular, pay attention to developments in technology and to the Voice of the
Customer.
• Insist for a wider adoption of tools for project identification and selection. In
particular, for project identification, it is worthwhile considering Flowchart, QFD
and CTQ tree, while for project selection, along with Cost-Benefit analysis
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(which is considered by Italian companies as the most important tool), do not
overlook Cause and Effect matrix and Group consensus and voting
techniques
• Make sure that there is coherence between the company’s strategic priorities
and the criteria adopted for project selection, and between the criteria’s
relevance and the KPIs used to assess achievements after project completion.
• Match the complexity of tools with the skill of the Six Sigma project selection
team; if required, institute adequate training concerning the project
identification and selection tools.
• Adopt as many KPIs as possible (if relevant) to measure the results of Six
Sigma projects.
• If it hasn’t been done already, devote enough time to the formalization and
monitoring of the whole project selection process.
6. Conclusions
In the present paper, results of a research project going on at the Politecnico di
Milano are presented. The reasons for focusing the research on the projects
selection process are twofold:
• First of all, we believe that the initial phase of a process is the most important
one, since the quality of all the following phases depends on how well the first
step is performed.
113
• At the same time, a bibliographic analysis showed a lack of literature both
concerning Six Sigma implementation in Italian companies and giving specific
direction and guidelines to carry out a project selection process in a structured
way.
For these reasons, two research questions have been defined, and two intertwined
research streams started.
With such a study, the research team aimed at accomplishing several goals: first of
all, filling a specific gap in the literature; to contribute to a still young and promising
research stream concerning the project selection process, and possibly fostering
further research; identifying a best practice for the selection of Six Sigma projects
and thus improving the quality of the results and the credibility of the Six Sigma
approach; identifying the extent to which reality differs from theory, and how one
could “learn” from the other.
The reader would have noticed that not all the questions in the questionnaire have
been commented in Section 5. In fact, some of the questions will serve for future
research purposes. For instance, we devised the possibility to relate the project
selection process to the achieved results (i.e. analysing the degree to which a more
structured project selection process could drive to better results). Nonetheless, a
sample of 11 respondents is not enough to draw reliable conclusions. The author and
114
the research team are therefore aiming at expanding the sample in order to widen
the research with further findings and insights.
Managerial implications presented at the end of Section 5 are just the beginning for
the development of a best practice. Further research will follow the direction defined
by this first work.
References
Adams, C., P. Gupta, and C. Wilson, Six Sigma Deployment, Butterworth-Heinemann, 2003
Anthony, J., and R. Banuelas, “Key ingredients for the effective implementation of Six
Sigma program”, Measuring Business Excellence, 6(4), 2002, pp. 20-27 Banuelas, R., C. Tennant, I. Tuersley and S. Tang, “Selection of six sigma projects in
the UK”, The TQM Magazine, 18 (5), 2006, pp. 514-527 Banuelas Coronado, R., and J. Anthony, “Critical success factors for the successful
implementation of Six Sigma projects in organizations”, The TQM Magazine, 14 (2), 2002, pp. 92-99
Barney, M., and T. McCarty, The New Six SIGMA: A Leader's Guide to Achieving
Rapid Business Improvement and Sustainable Results, Prentice Hall PTR, 2003
Basu, R., and N. Wright, Quality Beyond Six Sigma, Butterworth-Heinemann, 2003 Black, K., and L. Revere, “Six Sigma arises from the ashes of TQM with a twist”,
International Journal of Health Care Quality Assurance, 19 (3), 2006, pp. 259-266
Brue, G., Six Sigma For Managers, McGraw-Hill, 2002
115
Ehie, I., and C. Sheu, “Integrating Six Sigma and Theory of Constraints for Continuous Improvement: a case study”, Journal of Manufacturing Technology Management, 16 (5), 2005, pp. 542-553
Goldratt, E. M., and J. Cox, The Goal: Excellence in Manufacturing, North River
Press, 1984 Harry, M., and R. Schroeder, Six Sigma: The Breakthrough Management Strategy
Revolutionizing the World’s Top Corporations, Doubleday Currency, 2000 Hashmi, K., “Introduction and Implementation of Total Quality Management”,
www.isixsigma.com, 2006 Kelly, M., “Three steps to project selection”, ASQ Six Sigma Forum Magazine, 2 (1),
2002, pp. 29-33 Klefsjö, B., H. Wiklund and R. L. Edgeman, “Six Sigma seen as a methodology for
Total Quality Management”, Measuring Business Excellence, 5(1), 2001, pp. 31-35
Kuei, C. H., and C. N. Madu, “Customer-centric Six Sigma Quality and Reliability
Management”, International Journal of Quality and Reliability Management, 20 (8), 2003, pp. 954 - 964
Kwak, Y. H., and F. T. Anbari, “Benefits, obstacles, and future of Six Sigma
approach”, Technovation, 26, 2006, pp. 708-715 Pyzdek, T., “Why Six Sigma is not TQM”, www.qualityamerica.com, 2006 Pyzdek, T., The Six Sigma Project Planner A Step-by-Step Guide to Leading a Six
Sigma Project Through DMAIC, McGraw-Hill, 2003 Smith, D., J. Blakeslee and R. Koonce, Strategic Six Sigma - Best Practices From
The Executive Suite, John Wiley & Sons, 2002 Taghizadegan, S., Essentials of Lean Six Sigma, Elsevier, 2006 Thomsett, M., Getting Started in Six Sigma, John Wiley & Sons, 2005 Treqna Base Manual Ed1, http://www.scribd.com/doc/32438/TreqnaBaseManualEd1,
2005
116
Wheat, B., C. Mills and M. Carnell, Leaning into Six Sigma – a parable of the journey to Six Sigma and a lean enterprise, McGraw-Hill, 2003
TABLES
Table 1. Tools for Six Sigma project identification in a sample of 8
papers/books
Larson(2003)
Smith et al (2002)
Eckes(2003)
Shina(2002)
Brue(2002)
Basu(2003)
Pzydek(2003)
George(2003)
Brainstorming X X X X X X X
CTQ tree X X
Focus Groups X X X
Interviews X X X X X X X
QFD (Quality function deployment) X X X X
Kano analysis X X
Surveys X X X X X X X
Ishikawa Diagram X X X X
Flowchart X X X X X
Table 2. Time since Six Sigma adoption
Time since six sigma adoption Number of companies Percentage
One year or less 1 9%
Between 1 and 3 years 4 36%
Between 3 and 5 years 0 0%More than 5 years 6 55%
117
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.
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Und
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ject
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Figure 1. Frequency of CSF highlighted in a sample of 18 papers
118
67%
50% 50%
100%
80% 80%
60% 60%
20% 20% 20%
33% 33% 33%
17% 17%
0%
20%
40%
60%
80%
100%
Waste
reduction
Clients Developments
in technology
Employees Extension
from previous
Six Sigma
projects
Suppliers Benchmark
against other
companies
Others
Sources
Pe
rce
nta
ge
of
com
pa
nie
s
Ital ian companies American Companies
Figure 2. Frequency of adoption of Sources of Information
119
33% 33%
0% 0%
60%
40% 40% 40%
60%
33%
0%
17%17%17%
100%
20%20%20%
0%
20%
40%
60%
80%
100%
Brain
storm
ing
CTQ tr
ee
Focu
s Gro
ups
Inte
rvie
ws
Ishik
awa
Diagr
am QFD
Surv
eys
Flow
char
t
Kano a
nalys
is
Oth
ers
Tools used to identify potential Six Sigma project
Pe
rce
nta
ge
of
com
pa
nie
s
Italian companies American companies
Figure 3. Frequency of adoption of Tools for Six Sigma projects identification
120
1.83
3.33
1.33
2.50
1.17
1.831.67
3.00
1.33
2.25
3.75
3.25 3.25
2.50
2.00 2.00
3.75
2.25
0
1
2
3
4
Customer
impact
Financial
impact
Top
management
commitment
Measureable
and feasible
Short
payback time
Project
duration
Learning and
growth
Connected to
business
strategy
Motivation
Sco
res
Italian companies American Companies Vital Line
Figure 4. Scores of criteria for Six Sigma projects prioritization (original data)
1.83
3.33
1.33
2.50
1.17
1.83
1.67
3.00
1.33
1.91
3.19
2.76 2.76
2.13
1.70
1.70
3.19
1.91
0
1
2
3
4
Customer
impact
Financial
impact
Top
management
commitment
Measureable
and feasible
Short payback
time
Project
duration
Learning and
growth
Connected to
business
strategy
Motivation
Sco
res
Italian companies Scaled scores Vital Line
121
Figure 5. Scores of criteria for Six Sigma projects prioritization (normalized
data)
80%
60% 60%
40%
20% 20%
0% 0%
20%17%17%
33%
50%
100%
0%
20%
40%
60%
80%
100%
Cost-
Benefit
analysis
Pareto
analysis
Group
consensus
and voting
techniques
Cause and
effect
matrix
Non-
numerical
models
AHP PPI TOC Other
Tools used to prioritize Six Sigma Projects
Pe
rce
nta
ge
of
co
mp
an
ies
Italian companies American companies
Figure 6. Frequency of adoption of tools for Six Sigma projects selection
122
0%
50%
0% 0% 0%
100% 100%
80% 80%
60% 60%
40% 40% 40%
20% 20% 20%
33%33%33%
50%
17%17%
83%
0%
20%
40%
60%
80%
100%N
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g
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ers
Key Performance Indicators
Pe
rce
nta
ge
of
co
mp
an
ies
Italian companies American Companies
Figure 7. Frequency of adoption of KPI to evaluate Six Sigma projects results
(complete sample)
75%
25%
75%
50%
0%
50%
25%
0% 0% 0% 0%
50%
100%
60% 60%
80%
40%
20% 20% 20%
100%
40%
80%
40%
0%
20%
40%
60%
80%
100%
Ne
t sa
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gs
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RT
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g
Oth
ers
Key Performance Indicators
Pe
rce
nta
ge
of
co
mp
an
ies
Italian industrial sector American Companies
123
Figure 8. Frequency of adoption of KPI to evaluate Six Sigma projects results
(only industrial sector)
124
Lean Thinking for Improving Perceived HealthCare Quality
Dr Rania shamah
High Institute of Cooperative & Managerial studies Cairo, Egypt
Abstract:
This paper provides a model for continuous improvement quality in healthcare
organizations; through applying the principles of lean thinking and 5S, which could
lead to processes improvement and outcomes, reduce cost, and increase satisfaction
among patients, providers and staff. However, lean thinking is providing improved
quality without adding extra money. The model could support enterprises in
identifying suitable actions for going lean. The applied study is on the Egyptian
Healthcare organizations.
Key Words:
Lean thinking, 5S , continuous Improvement.
1. Introduction:
Customer satisfaction, quality issues and managing change are crucial factors in the
current ever-expanding competitive business environment (Balzarova et al., 2004).
125
Patients may be seen as the primary customer at health care organizations since the
patient justifies the existence of such service (Kollberg, 2006). Meeting patient needs
on the spot is essential in the service economy of the late of 1990s; which creates
pressure on workers quickly assessing solutions; decide what can be offered to the
customer/patient; be able to define what has done ;and quickly move on to the next
situation (Mallak, 1998).
Hence, organizations across all sectors recognize that effective and efficient
performance plays a critical role in their future success. All though, healthcare
organizations are focusing on processes improvement and outcomes, reduce cost,
and increase satisfaction among patients, providers and staff. One of the meaningful
and innovative tools for processes improvement is Lean Thinking.
Lean thinking is related to Toyota Production System (TPS) which had been
developed in the binging of 1980s’ by Toyota automotive company. The new
production approach is developed based on Deming’s quality principals, which
managers should instead of depending on mass inspection to achieve quality focus
on improving the services process and building quality into the service in the first
place. Lean much like current practice has the goal of better meeting customer needs
while using less of everything. In other word; using less to do more. Therefore, it is
commonly applied at manufacturing, workstations; production lines; suppliers; … etc.
126
Lean is much more than a technique; it is a way of thinking, and the whole system
approach that creates a culture in which everyone in the organization continuously
improve operations (Womack and Jones, 1996).
The influence of lean practices contributes substantially to the organization operating
performance. However, the implementation requires customized solutions. The
internal flow to and from each workstation depends on the production conditions and
particular characteristics of each workplace. The work-in process should be reduced
as much as possible (Domingo, et al., 2007; Shah & Ward; 2003).
According to that lean thinking is not typically associated with healthcare, where
waste of: time, money, supplies, and good will is a common problem. In essences,
lean thinking principles can work in healthcare organizations in the same way they do
in other industries; as a fact, all organizations are composed of a series of processes,
or sets of actions intended to create value for those who use or depend on them
(patients). And the core idea of lean is determining the value of any given process by
distinguishing value added steps from non-value-added steps, and eliminating waste
(muda) so that ultimately every step adds value to the process.
Healthcare leaders are considered with maximizing value add to stakeholders, so
they must evaluate each processes to specify value stream; and eliminate non-
value-added steps; and making value flow from beginning to end based on the pull of
127
the patient. When applied rigorously and throughout an entire organization, lean
principles can have a dramatic affect on productivity, cost, and quality.
However, for healthcare organizations, to adopt world class management practices
such as lean, 5S to improve its quality by integrating this tools at the strategic layer;
improvement layer; and business value stream layer to provide efficient
benchmarking ,as well as, enhance perceived quality.
Therefore, this paper argues that the accumulation between lean thinking and 5S
could increase organization performance while providing innovative services.
Although, this paper develops a model for determining key factors affecting
organizations to achieve optimum performance and add value to stakeholders. The
main questions posed in this study are: Is lean thinking applicable at Egyptian
healthcare organizations? ; If so, how could healthcare organizations acquire their
capabilities and resources for lean thinking and 5S? ; What changes needs to be
done at healthcare organization to be able to apply lean thinking? ; and Could the
accumulation between lean thinking and 5S enhance organizations perceived
quality?
2.0 Research Hypotheses:
Based on the nature and the purpose of this study, the qualitative method applies to
the project work based on the essay format. The other is the quantitative method
128
based on numerical scoring and grading. Finally, the results clubbed together in the
mixed approach, a natural choice. In addition, the study is model- interview guide
spread over a period of two year submitted to Hospitals working in Egypt (Appendix
1). It involved two types of questionnaires, first questionnaire is provided across all
managerial levels at healthcare organization “Top; Senior; and Executive managers”,
this questionnaire is divided to three main session: the first session is considered
about the lean thinking principles, while the second session is related to 5S
implementing principles; and finally the latest session is focusing on perceived quality
dimensions for evaluating the overall satisfaction of patients from healthcare
organization point of view. While, the other questionnaire type is provided to patients
at same healthcare organization, this questionnaire is for evaluating the overall
satisfaction of patients. Thus, both questionnaires included questions that overlapped
into both qualitative and quantitative approaches. This gave the interviews options to
respond qualitative, quantitative, a combination of both or just one of them.
Therefore, study hypotheses are:
� "H1": There is a significant interaction between lean thinking and 5S while
affecting perceived healthcare quality;
� "H2": There is significant difference refers to hospital type “Public; and Private”
and/or administration level “Top; Senior; and Executive managers” with
organization willingness to implement lean thinking and 5S on continues
quality improvement; and
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� "H3": There is significant difference between patients’ overall satisfaction and
hospital satisfaction of perceived quality.
3.0 Building Lean Thinking Improvement Model:
In this section, a model to analyze the implementation of lean and to represent value
in an organization is described. The model is aimed to enhance the perceived quality
and positioning organization ability of innovation through the focus of continuous
improvement. This model is based on developing three main steps as follows:
3.1. First step: Key Factors Affecting Perceived Quality:
Figure (1) represents these factors
3.1.1 Performance and Measurements:
Is an important component of customer relationship management strategies and that
their use can generate significant cost-savings (Brown, Massey and Boling, 2005;
Gartner Group, 2000; Massey, 2001). Hence, it represents an organized effort to
capture expertise and disseminate it to user populations. It also can serve as a
support resource for customers (internal or external) who want to solve their own
problems rather than rely on technical support staff. In addition, employees,
department or/ and organization are aiming to enhance performance for adding value
to stakeholders. In addition, efficient performance is related to reducing cost through
enhancing quality, speed; flexibility; and eliminating waste. However, efficient
130
performance leads to organization value added; as well as; enhancing employees or
department’s productivity (Shamah, 2008).
Figure (1) Key Factors Affecting Perceived Quality
Hence, healthcare organizations patient is its primary customer so it is important for
patients to define what adds value to them. Essential elements needed if the
organization is to access optimum performance to enhance perceived quality.
Womack and Jones (2003) and Kollberg (2006) argue that main factors are for
measuring performance for lean apply at health care organizations is: Specify value;
Value stream; Flow; and perfection. However, optimum performance is not related to
131
valuing cost only but is about how to eliminate waste of time, effort, equipment, as
well as, saving money.
Organizations must evaluate exact performance periodically to recognize how far it is
from achieving the promised quality for patients. Hence, Nave, 2002; Womack and
Jones (2003) argue for measuring performance at health care organizations is to put
patients in the foreground and include time and comfort by indicating team skills who
is taking care about patients and as well as the active involvement of patients in the
process is emphasized. This study argues that there are three main elements
affecting performance as follows:
3.1.2 Organization Mission & Vision:
“If you don’t know where you are going; any road will get you there”. Indeed,
management should first decide what it intends to accomplish through the
organization and then develop strategic plans based on this over all vision. Then the
organization could establish its mission through indicating the boundaries for an
organization’s activities (Etzel et al., 1997).
Therefore, when deciding to apply lean organizations must redevelop their own vision
and mission to clarify the unique objectives needed to be achieved for stakeholders
through employees; and suppliers for changing recent performance. As Toyotas’
mission is “customer’s time is central component of total cost and that major
132
opportunity awaits business executives who build on that insight” (Kroninger; 2005).
Indeed, healthcare organizations must integrate 7-Steps when re-establishing their
mission and vision. This 7-Steps as Scott (1993) suggested: 1) Theme selection, 2)
Data collection, 3) Causal analysis, 4) Solution planning and implementation. 5)
Evaluation, 6) Standardization; and 7) Reflection. This 7-Steps are overlapped when
running business. However, the start is through top managers and leaders who
believe that lean is more than a tools but a philosophy of organizational profitability
and customer satisfaction which should integrated with the way of doing business.
3.1.3 Organization Culture:
Refers to, the set of values and believes that affects people behavior in cretin
ways. According to that, the biggest challenge facing organizations is changing
composition of workforce (Daft, 1997). Indeed, organization culture is related to:
valuing differences; prevailing value system; and cultural inclusion. Implementing
lean thinking requires major management changes through the entire organization,
which is difficult. As, in the case of lean, the organization places a value on the speed
at which its service travels through the system. In other words, Speed and volume
are the main determinates of success. Based on creating new values and believes
as, Byrne & Fiume (2003) suggested lean culture vs. traditional culture as the
following table summarizes it:
133
Table (1) Traditional Culture vs. Lean Culture
Traditional Culture Lean Culture
Function silos Interdisciplinary teams
Managers direct Managers teach/ enable
Benchmark to justify not
improving
Seek the ultimate performance, the absence
of waste
Blame people Root cause analysis
Rewards: individuals Rewards: group sharing
Supplier is enemy Suppliers is ally
Guard information Share information
Volume lowers cost Removing waste lowers cost
Internal focus Customer/ patient focus
Expert driven Process driven
Managers who wish to change their organizational culture cannot do so by edict but
by edification. In addition, they must intervene and require people to behave
differently, allowing them to experience a better set of results. One of the challenges
of implementing lean in health care is that it requires people to identify waste in their
work, while, all need to feel their work is valuable. Therefore, managers must create
a clear vision for guiding people to make the right choices. They must evaluate the
134
organizational structure and work to flatten it, elimination. In addition, managers
should recognize the organization type and the respondent has to choose one from
the following: exploitive, bureaucratic, consultative, participative, and highly
participative.
In addition, lean provider looks at patients’ circumstances. This is where lean
consumption can fundamentally change the equation- because the patients can
actually obtain the same items cost- effectively through the entire range of store
formats without being forced to make these trade-offs between time and price
(Kroninger; 2005). Indeed, developing powerful culture for applying lean thinking
needs leadership focuses on key areas: PDCA thinking, “GO & See” philosophy, and
Process confirmation (Kenny, 2007)
3.1.4 Competitors Performance:
Organization competitiveness depends on its ability to perform well in dimensions
such as cost; quality; delivery dependability and speed, innovation and flexibility to
adopt itself to variation in demand (Carpinetti et al., 2003). Therefore, organizations
in order to compete well should got: 1) quality beyond the competition; 2) technology
before the competition; and 3) costs below the competition (Comm et al.,. 2000;
Watson, 1993). Hence, continuous improvement is organizations key factor for
enhancing its competitiveness adage, while continuous improvement is a
135
companywide process of focused and continuous incremental innovation (Bessant et
al.,1994).
Efficient and effective organization performance is achieved through reasonable use
of existent resources. However, it is important for organizations to look at the
differences between its competitors to determine the cause of these differences, and
propose alternatives to eliminate these differences. The main obstacle in learning
has been overcoming resistance to change in order to implement benchmarking.
Some organizations do not think they can learn from others. Other issues, which
have been identified as barriers, were time constraints, competitive barriers, and lack
of personnel resources (Comm et al.,. 2000; Rogers et al., 1995).
3.1.5 Business value Stream:
Value-stream maps are called “material and information flow maps” is one page
diagramming depicting the process used to make a product; it identify ways to get
materials and information flow without interruption to improve productivity and
comparativeness, and help people implement system rather than isolated process
improvements. (Womack & Jones, 1996). Value-stream maps is used in healthcare
to indicate waste that exists in business processes, where waste is defined as an
activity
136
( Ohno, 1988) or behavior ( Emilini,1998) that adds cost without adding value. Value-
stream maps is used to elucidate and characterize the existence of the eighth waste,
behavioral waste, which is powerful in its ability to block the flow of information
between key stakeholders such as employees, suppliers, customers, investors, and
communities (Emiliani, 1998, 2000, 2003; Emiliani et al., 2003).
3.2 Second Step: Measuring Perceived Quality:
For measuring perceived quality at healthcare organizations Brady & Cronin (2001)
model is used as figure (2) provides it. The model is based on three main dimensions
for services quality “interaction; environment; and outcome” has three sub-
dimensions. Those perception leads to an overall service quality perception. Patients
form their service quality perceptions on the basis of an evaluation of performance at
multiple levels and ultimately combine these evaluations to arrive at an overall
service quality perception. Even if the patients are satisfied with the process of
providing services this process should be improved for eliminating waste through the
entire service.
137
Figure (2) Measuring Perceived Quality
This like Virginia Mason Medical Center in Seattle, Washington had developed a
system named “Virginia Mason Production System (VMPS)” (2002), for achieving
continuous improvement by adding value without adding money, people, large
machines, space or inventory, all toward a single overarching goal - no waste. The
suggested VMPS is focusing on: 1) “Patient First” as the driver for all processes; 2)
Environment creation in which people feel safe and free to engage in improvement;
3) Implementation of a company-wide defect alert system“Patient Safety Alert
System”; 4) Encouragement of innovation and “trystorming”; 5) Creating a
138
prosperous economic organization primarily by eliminating waste; and 6)
Accountable leadership.
3.3 Third Step: Quality Improvement Tools:
3.3.1 Quality Improvement:
Quality Improvement is a coherent series of concepts, steps, methodological rules
and tools that guide a quality professional in bringing the quality of a process,
product, or service to unprecedented levels. Bhuiyan and Baghel (2005) defined
continuous improvement as a culture of sustained improvement targeting the
elimination of waste in all systems and processes of an organization. Hence, quality
improvement is based upon two main points: 1) Identifying opportunists by
discovering relations between quality characteristics and influenced factors; and 2)
Testing conjectured relation (Mast; 2004).
3.3.2 Improvement Tools:
Service operations are usually complex, human-based systems involving the
concurrent provision of many customer experiences and outcomes, with both
employees and customers/patients taking part in the process (Johnston & Michel,
2008; Johnston & Clark, 2005). Therefore, applying unique philosophy for improving
quality without adding cost is a challengeable; as figure (3) presents. Hence, most
139
common way for enhancing quality is going lean, the improvement program is used
in this study is a flow focused applied through lean principles for eliminating waste.
Figure (3) Quality Improvement Tools
3.3.3 Lean Thinking:
Lean means “manufacturing without waste”. Waste is anything other than minimum
amount of equipment, materials, parts, and working time that are absolutely essential
for production. However, best lean organizations probably waste 30 percent.
140
Interestingly, every company has to find its own way to implement the lean method:
there is no universal way that will apply to all. Despite the wide knowledge and
available resources, many companies are struggling to stay “lean” (Taj, 2005).
Lean makes optimal use of the skills of the workforce, by giving workers more than
one task, by integrating direct and indirect work, and by encouraging continuous
improvement activities. As a result, lean production is able to produce larger variety
of products and services, at lower costs and higher quality, with less of every input,
compared to traditional mass production: less human effort, less space, less
investment, and less development time (Dankbaar, 1997). In addition, lean is
considered about controlling the resources in accordance with patients’ needs and to
reduce unnecessary waste “including the waste of time” (Andersson et al., 2006). By
adopting this believe of lean, the following definition of lean is suitable ”Lean is a
systematic approach for identifying and eliminating waste through continuous
improvement (NIST, 2000); and to provide services to customer in pursuit of
perfection, which require rooting out everything that is non-value-add” (Comm et al.,
2000).
Indeed, applying lean in organizations increase its competitive advantages through
achieving the following benefits: reduced work-in-process; increased inventory turns;
increased capacity; cycle-time reduction; and improved patient satisfaction
141
(Andersson et al., 2006; Diming 1994). Farthermore, lean is used to accelerate the
velocity and reduce the cost of any process be it service by removing waste.
Therefore, lean is funded on the following mathematical suggested by George
(2008):
Lead Time of Any Process =
Therefore, waste elimination is the main goal of lean; Toyota defined three types of
waste; 1)muri; focuses on what work can be avoided proactively by design, 2) Mura;
focuses on implementation and the elimination of fluctuation at the scheduling or
preparation level; and 3) Muda; discovered after the process is in place and is dealt
with reactivity variation in outputs.
Hence, eliminating waste focuses on the value of people’s efforts at the creating
activities that patients’ desire and are willing to pay for, and results in improved
business processes (Emiliani et al., 2003; Swank, 2003). Eight key wastes exist in
Healthcare organizations (Ohno, 1988; Emiliani, 1998), are: Overproduction: Waiting:
reviews and approvals; Transportation:”transporting documents”; Processing;
Inventories; Moving; Defects; and Behaviors. Without using value-stream maps
organizations could not estimate the waste amount. This is what the Swedish health
care developed “flow model” to flow up lead-times for reducing long waiting time and
Quantity of Things in Process
Average Completion Rate/Unit of
Time
142
delays (Kollberg, et. al., 2006) Indeed, lean as a holistic approach requires discipline
and attention to each layer of the lean philosophy, including the value stream,
business improvement, and as an applied business (Lean Recourses Center; 2008).
This study argues the following lean fundamentals for achieving continues
improvement (PDIMAL) “1) Plan for change; 2) Design the suitable strategies and
procedures need to support applying lean; 3) Implement the suggested plans; 4)
Measure employee; department and /or organization performance; 5) Analysis
defects; and finally 6) Learn from leaders and /or from feedback to create knowledge
base to achieve optimum performance leading to eliminating waste, exceeded
customers/ patients ;and adding value to stakeholders.
Hence,5S is a key approach which could be integrated at business improvement
layer to ensure continuous improvement when applying lean. Therefore, this study is
arguing that applying 5S would lead to a continuous quality improvement. So what is
meant by 5S?
5S: is based on the Japanese acronyms of seiri (organization), seiton
(neatness),seiso¯ (cleaning), seiketsu (standardization) and shitsuke (discipline), is
used as a platform for developing an integrated management system by the parallel
use of total productive maintenance (TPM) (Gapp et al., 2008; Bamber et al., 2000).
143
5S implementation can also uncover hidden problems that may have otherwise
remained unnoticed. Some of the important benefits of implementing 5S are
summarized as: 1) Orderliness (seiri and seiton) – to maximise efficiency and
effectiveness by reducing people’s workload and human errors through simplifying
processes; 2) Cleanliness (seiso and seiketsu) – to maximise effectiveness by
contributing to a healthier life, safety and wellbeing as well as enhancing
transparency; and 3) Discipline (shitsuke) – through training and education to
enhance the level of morale which leads to increased quality of work/life and work
standards (Osada, 1991).
3.4 Testing Hypotheses:
3.4.1 Testing First hypotheses "H1":
Multiple Linear Regression estimates the coefficients of the linear equation, involving
one or more independent variables, that best predict the value of the dependent
variable (all variables are continuous). Regression analysis model is used for testing
the significant of "H1"; as table (2) provides the test result. It is obvious from table (2)
results, significant effect related to apply lean thinking, 5S and interaction on
enhancing perceived quality in healthcare organizations.
The output shows the results of fitting a multiple linear regression model to describe
the relationship between quality overall patient satisfaction and 2 independent
144
variables, but lean thinking not significance using stepwise method at α=0.05
(Stepwise Criteria: Probability-of-F-to-enter <= 0.050) . The equation of the fitted
model is:
Quality overall patient satisfaction = -2.607 + 0.141*5s + 1.689*(lean thinking*
5S)
Since the P-value of F-Statistics is less than 0.05, there is a statistically significant
relationship (affecting) between the variables at the 95.0% confidence level. The R-
Squared statistic indicates that the model as fitted explains 95.9% of the variability in
quality overall patient satisfaction. The standard error of the estimate shows the
standard deviation of the residuals to be 0.154. The affect of lean thinking* 5S
(interaction) is 0.893 and 5s is 0.108 on quality overall patient satisfaction.
Table (2): Regression Results
Un-standardized
Coefficients
Standardiz
ed
Coefficients Independent
Variables
B Std.
Error Beta
t Sig.
(Constant) -2.607 0.088 -29.700 0.000
145
Lean Thinking*
5S 1.689 0.044 0.893 38.404 0.000
5S 0.141 0.030 0.108 4.635 0.000
F=2308.8 Sig. F= 0.000 R-Square=0.959 S.E=
0.154
Therefore; this results reflects an appropriate opportunity for continuous improving
quality to gain an overall patient satisfaction. However, it would lead to meaningful
opportunity to innovation of new ideas; and new services. Elsewhere, no significant
effect detected related to interaction quality. Then, the first hypothesis "H1"; is
accepted, which say's “There is a significant interaction between lean thinking and 5S
while affecting perceived healthcare quality".
3.4.2 Testing Second hypotheses "H2":
Analysis of Covariance “ANCOVA” analysis model is used for testing the significant
of "H2"; as table (3) provides the test result. Where the dependent variable is
continuous (quality improvement) and four independent variables mixed (continuous
(lean thinking, 5S) & categorical (hospital type, managerial level)).
146
It is obvious from table (3) results, significant effect related to hospital type,
managerial level, lean thinking, 5S and interaction between every two on. Then, the
second hypothesis "H2"; is accepted, which say's "There is significant difference
refers to hospital type with organization willingness to implement lean thinking and
5S on continues quality improvement". Partial eta-squared (η2). This value is an
overestimate of the actual effect size in an F test respectively 5S, lean thinking,
hospital type* managerial level, managerial level, hospital type and lean thinking*5S.
Table (3): ANCOVA Results
Source Sum of
Squares df
Mean
Square F Sig. η2
Corrected Model 110.732 8 13.841 664.12
8 0.000 0.965
Intercept 0.575 1 0.575 27.569 0.000 0.126
hospital type* managerial
level 0.354 2 0.177 8.493 0.000 0.082
lean thinking* 5S 0.095 1 0.095 4.539 0.034 0.023
hospital type 0.101 1 0.101 4.864 0.029 0.025
managerial level 0.281 2 0.141 6.750 0.001 0.066
lean thinking 0.701 1 0.701 33.621 0.150
147
0.000
5S 0.788 1 0.788 37.832 0.000 0.165
Error 3.981 191 0.021
Total 2152.296 200
Corrected Total 114.713 199
Table (4): Descriptive Statistics and Mean difference of continues quality
improvement by hospital type & managerial level
Type JOB Top
Mange.
Senior
Mange.
Exe.
Mange. Total
Mean 3.606 2.680 2.866 2.903 Private
Std. Dev. 0.339 0.742 0.710 0.739
Mean 4.113 3.635 3.419 3.705 Public
Std. Dev. 0.221 0.449 0.418 0.471
Mean diff.(Public-
Private) 0.507 0.955 0.553 0.802
148
3.4.3 Testing Third hypotheses "H3":
Independent Samples Test “T-Test” is used for testing the significant of "H3"; as table
(5) provide the test result. As it is obvious from table (5) results, significant defiance
between health care organizations opinion about provided services and patients
overall satisfaction.
Therefore; this results consider healthcare provider attention for improving quality to
gain an overall patient satisfaction in seven significance dimension (Interaction
Quality, Attitude, Behavior, Expertise, Ambient Conditions, Design and Waiting
Time), but not significance in three dimension (Service Environment Quality, Social
Factors and Outcome Quality) and overall.
It is obvious from table (5) results; there is a significant difference between patient
overall satisfaction and hospitals opinion about provided service. Then, the third
hypothesis "H3"; is accepted, which say “There is significant difference between
patients’ dimension and overall satisfaction and hospital satisfaction of perceived
quality".
149
Table (5): T-Test Results
Dimension Group Mean Std.
Dev.
Mean diff. (H-
P) T Sig.
Hospital 3.240 0.985 Interaction
Quality Patients 3.040 1.108 0.200 2.248 0.025
Hospital 3.573 0.974 Attitude
Patients 3.036 0.891 0.538 6.753 0.000
Hospital 3.377 1.094 Behavior
Patients 3.137 1.068 0.240 2.574 0.010
Hospital 3.027 1.123 Expertise
Patients 3.273 0.892 -0.246
-
2.700 0.007
Hospital 3.080 1.128 Service
Environment
Quality Patients 3.240 1.154
-0.160 -
1.813 0.107
Hospital 2.902 1.178 Ambient
Conditions Patients 3.287 0.981 -0.385
-
3.983 0.000
Hospital 2.973 1.088 Design
Patients 3.162 0.961 -0.188
-
2.077 0.039
Hospital 3.110 1.088 Social Factors
Patients 3.286 1.043 -0.176
-
1.892 0.059
150
Hospital 3.325 1.153 Outcome Quality
Patients 3.208 1.105 0.118 1.211 0.227
Hospital 3.335 1.023 Waiting Time
Patients 3.142 1.049 0.193 2.148 0.032
Hospital 3.192 0.759 Overall
Patients 3.183 0.603 0.009 0.148 0.884
4.0 Results and Recommendations:
Based on this study, it is considered that the key factor for successful continuous
quality improvement in healthcare organizations is Lean thinking approach. To
examine the hypothesis a field study technique was employed. The following are the
main results of this study:
� Private hospitals gain a great opportunity for going Lean. Which, reflect a
supported organization culture, for integrating lean principals within
organizations’ vision and mission. While for Public hospitals it needs to
establish unique methods for changing its culture to apply lean.
� There are, and still will be employees who do not have a solid grasp on their
duties when going lean. Therefore, seminars; value aids should be used to
provide leaders experience when applying lean; and focusing on their benefits
to stakeholders “ employees, customers/ patients; and shareholders”;and
151
� Flow value to avoid non-value adds to stakeholders and reduced cost leading
to efficient performance to gain customer/patient satisfaction. Executive
commitment is required to provide absolute measures for calculating each
employee, department, and the organization performance.
� Hospitals leaders; and top managers must focus on going lean do not mean
downsizing, for avoiding employee resistance. Hence, lean is as an
enterprise-wide goal.
5 Conclusion:
The purpose of “Lean Thinking Improvement Model” is to gain a better
understanding of how could applying lean and 5S enhance quality and lead to a
continues improvement and adding value without spending more money. The “Lean
Thinking Improvement Model” has been proposed to analyze the factors affecting
perceived quality at service organizations.
Wherein, today’s competencies become tomorrow’s core rigidities with
unprecedented speed. An organization should have the capacity to exploit its
resources and learning capabilities better than its competitors, if it decides to assume
a given competitive strategy.
152
To conclude lean thinking is a process that helps organizations find, select, organize,
disseminate, and control its resources to gain business advantage through
eliminating waste. Data analysis carried two-stage methodology: questionnaire
validation and then applied in order, to test the hypothesis .SPSS version 15 is used
for data analysis and findings, while the method(s) sections describe the steps of the
procedure.
However, the strength of this study methodology lies in its comprehensive coverage
of various aspects of lean thinking and 5S and its implementation at hospitals. It
provides for both, as in-positivist researchers adopt a quantitative methodology and
carry out surveys and questionnaires.
Furthermore, interpretive researchers adopt a qualitative methodology and carry out
interviews and ethnographies. On the other hand this is Limitations; the study period
interval in data collection may have influenced the variance in responses and
therefore should be considered a limitation. In addition, Due to many incomplete
responses that were received and the qualitative response parts are sometimes
estimated based on collected impressions, there is a minor influence on the accuracy
of the estimates for “key areas of weakness” in leanness implementation. While
these limitations outline potential areas of weakness in the methodology, yet, it still
has been possible to undertake a comprehensive approach successfully. Lean
153
principles survey identified a significant degree of impact on the awareness of the
average employee regarding leanness principles. The need for formulating an overall
strategy for knowledge base to support lean thinking comes forward very strongly.
The following factors are important for the future requirements to ensure lean
principles initiatives to succeed:
� High priority top management support;
� Establishing unique organizations vision and mission to support apply of lean
thinking;
� Developing and coordinating well communications plans;
� Capturing business value stream; for allocating non-value added; and Strong
involvement of staffing; and
� Establishment of incentives to lean principles; and
� Going lean do not mean downsizing.
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157
Appendix 1: Population and Sample Size:
Hospitals in Egypt are divided in to two main sectors “Public; and Private” hospitals A
Pilot study of 50 units is used for evaluating variables validity and reliability. Inter-
consistency is used for examining variables validity; although; Alpha- Cheloficiof is
used for examining variables reliability. From those tests results are as follows:
Hospitals Sample:
All variables are high validated, as Alpha- Cheloficiof= 0.944
Patients Sample:
All variables are validated, as Alpha- Cheloficiof= 0.881
First; Survey Society: As mentioned before, two questionnaires types where
established in this study. The first type is submitted to those who work in hospitals
Clink Department for both sectors (public and private). Hence, the second type is
submitted to patients receiving medical treatment from these hospitals.
Second; Sampling Society: Stratum Random Sample is carried as follows:
Stage A: Hospitals Sample: To guarantee similarity presentation for both sectors; the
study randomly selected 50% of the hospitals (public and private); by using
Generation random numbers in computer systems. The following is selected
hospitals.
158
Table 1: Chosen Hospitals:
No. Hospital Name Beds
No.
No. Hospital Name Beds
No
Hospital
Name
Beds
No.
First, Public Hospitals”
1 15th of May 110 2 Bolak Abu El-
Alia
275 3 El-Monira 261
4 El-Khalifa El-
Mammon
232 5 Cairo University 2190 6 Ain Shams
University
2908
7 Mainsheet El-
Barky ×
359
Second, Privet Hospitals
1 Cleopatra 80 2 El-Salam
International
330 3 El-Islamic
×
50
4 Egypt Air 150 5 El-Nile Badrawi 160 6 El-Tahra 50
7 Abd Elkader
Fahmi ×
40 8 Nozha
International
80 9 El-Rahman
×
40
10 El-Wafaa & El-
Amal
400 11 El-Farouk 50 12 Plistin 300
13 El-Mokawlon El-
Arab
199 14 El-Fatah El-
Islamic
60 15 Othman 60
159
16 El-Hekma 40 17 El-Amal 109 18 San Peter 61
19 Tab ark
Children ×
40 20 El-Anglo
American
106 21 Italian 309
22 Life River 40 23 El-Mailmen × 145 24 El-Salam × 40
×Refers to uncompleted bank’s indicators; therefore, these banks are rejected
from next stage.
The following table provides frequency distribution of selected hospitals:
Table 2: Relative & Repeated Distribution for Chosen Hospitals only
Sector Freq./count %
Public 476 0.386
Private 756 0.614
Total 1232 100
160
Stage B: Determining Hospitals Sample through:
A- Calculating sampling: (Seheafer; Mendenhall &Lyman, 2000) suggested
equation is used for best sample size calculation:
n = ᵶ2α/2 ᵶQ /d2
Where:
n: Sample size;
P: Population Percentage; It is assumed (Based on Pilot Study Results): �=
0.4
Q: Accumulating Percentage, estimated value ( Q= 1- P )
�: Normal Distribution coefficient α= 5%; where: ᵶα/2 = ᵶ0.025 = 1.96; and
d: Sampling Error; estimated value ( d= 5%); by substitute in equation“1” we
get:
n = 214.286 ~ 215 cases
B- Sample Allocation: Proportional Allocation System is used to indicate data
gathering total cost; as following table summarize:
Table (3) Relative & Repeated Distribution for Survey Sample
1
161
Valid Cases Sector
Calculate
Sample Count Count %
0.8780
5(1)
Public
82
72
0.36(2)
0.9624
1(1)
Private
133
128
0.64(2)
0.9302
3(1)
Total
215
200
100(2)
1-The percentage calculated from sample size “equation 1”.
2-The percentage calculated from the total value.
Stage C: Determining Patients Sample through:
Since Patients Population size is unlimited so according to (Seheafer;
Mendenhall &Lyman, 2000) the ideal sample size = 400 units.
162
IMPLEMENTING 5S FOR LEAN AND SIX SIGMA DEPLOYMENT
Mr Paul Martin Gibbons
Research Engineer, Cummins Power Generation & University of Bristol
Columbus Drive, Manston Kent
United Kingdom Email: [email protected]
Telephone: +44 (0) 01843 255722
Keywords: Lean, Six Sigma, 5S, Soft Systems, Hard Systems, TPM, Quality
Engineering, Critical Success Factors
Abstract
This paper sets out to introduce the effectiveness of the Japanese 5S system as a
steady state platform for future lean and/or six sigma implementation. Using findings
from six case studies of heterogeneous businesses complemented by and a
taxonomic review of the contemporary 5S literature; a model of 5S deployment is
suggested identifying the critical success factors to 5S implementation. Developing a
conceptual framework for guiding future research; a model of lean and/or six sigma
deployment is presented arguing sustainable business improvements can be
achieved through the antecedent implementation of the 5S system.
163
1 Introduction
The 5S concept derives from a Japanese system for organising people, plant,
processes and products. Typically 5S has been adopted in the West to represent a
method of achieving high levels of housekeeping. In this paper the argument is made
that 5S is much more than a method for keeping the workplace clean and should also
be used as the foundation for any lean and six sigma projects.
The 5S concept introduces a five stage process to achieving very high levels of
efficiency and effectiveness for plant, people, processes and products: -
• Seiri roughly translated means to sort,
• Seiton roughly translated means to straighten,
• Seiso roughly translated means to scrub,
• Seiketsu roughly translated means to standardize,
• Shitsuke roughly translated means to sustain.
164
Figure 1 5S model of deployment
For achieving a successful deployment of 5S the argument is made that rather than
being a sequential process -working from Seiri through to Shitsuke- a holistic
approach is required taking into account the system process inputs and outputs
including defining the internal and external system environments (cf. Figure 1).
Figure 2 System map of a typical process
INPUTS OUTPUTS
HUMAN ELEMENTS HISTORY
SOFT SYSTEM ELEMENTS COMPLETED PROCESS
HARD SYSTEM ELEMENTS WASTE
PROCESS
INTERNAL ENVIRONMENT
EXTERNAL ENVIRONMENT
FIRST STEP
SORT
SECOND STEP
STRAIGHTEN
THIRD STEP
SCRUB
FIFTH STEP
SUSTAIN
FOURTH STEP
STANDARDIZEO
165
Also critical to a successful 5S deployment is the matching of the hard system
elements of the process inputs to Seiri, Seiton & Seiso. In parallel the soft system
elements of the process inputs must be matched to Seiketsu. Finally, the overall
success of the deployment in seen as dependent on the discipline (Shitsuke) of the
human elements to the process.
Figure 2 represents a typical process with human, soft system and hard system
inputs to the process. The author argues 5S can improve the efficiency and
effectiveness of the overall system by correctly organising these inputs to the
process so that you may have exactly:
• What you want
• When you want it
• Where you want it
2 Background to research
The background for the research project comes from the author’s own experience of
working in operations management in particular the contrasting experience of
working for both a Japanese automotive manufacturer and typical (non Japanese)
UK manufacturers. For reasons of business anonymity any company names used
166
are pseudonyms and the UK manufacturer where this study was based will be
referred to as PMG Designs.
Justification
According to Osada (1991) there is a commonality for factories to have inefficiencies
in the basic management of resources in their manufacturing processes. Detailing
further, Osada (1991) defines typical failures to be in:
• The sorting of equipment and procedures into relevant categories of usage or
their disposal,
• The organisation of the equipment and procedures,
• The cleanliness of the factory,
• The failure to implement improvements in a permanent and sustainable
manner.
Reviewing these potential failures in the example of PMG Designs, the following
examples were found to be extant:
1. Over the years of company growth there has been a build up of the equipment
that is used for specific jobs. This has lead to:
• Tool storage areas that are overloaded with tooling that has not been used for
years and is kept just in case the company gets a contract to manufacture the
product the tooling was designed for again.
• Documents are kept locked away in filing cabinets just in case.
167
2. No standard for the organisation of equipment and procedural documents:
• Where tooling is often just put in a place where there was spare space to put it
at that time,
• Where there is no traceability of that tooling for the next time it is to be used
and so a lot of time is spent looking for it the next time it is needed.
• Where critical procedural documents are often out-of-date and stored in an
inaccessible location for the person that needs to use them.
The factory is often dirty and can be a dangerous place to work:
Cleaning and tidying up are often only done when an important visitor is coming to
look around the factory.
Once the visit is over the standard of cleanliness is not maintained and the factory
goes back to being dirty and unsafe. An example of this inefficiency is oil leaks from
machines. A detected oil leak could have one of the four following financial effects on
a company:
The continual topping up of the oil if it is allowed to continue to leak. This will incur
costs of cleaning, replenishment and labour.
The machine is allowed to run out of oil and seizes up. This will incur costs of
replacement parts, lost production and possible lost orders.
An industrial accident occurs. Somebody could slip on the oil and have a serious
accident. This could incur, the factory being closed while an investigation is carried
168
out and legal as well as compensation could be paid if the company is sued by the
employee.
The oil leak is repaired at source. This would incur minimal labour and component
costs.
3. Previously at PMG Designs the factory management have had a tendency to grab
onto new ‘buzzword’ type improvement activities. This has led to the following:
• The true benefits of any improvement activity are not always met because of
the failure of the implementation.
• Failure of any improvement project due to the company looking for a fast
turnaround or from just being after a quick fix or the company has not looked
at the long-term sustainability of the project.
• Workers in the factory have become very wary of new ideas for improvement
and they now sometimes stand in the way of the successful implementation of
any proposed improvement activities.
• There is now a viscous circle that stands in the way of many improvement
activities and cost savings.
3. Literature review
Why do we need 5S?
When a need for improvement has been identified there are two choices that
can be taken:
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1. Continuous improvement,
2. Innovation or radical change.
Continuous improvement is defined by Bessant (1992) as an organisational
innovation requiring the mobilisation and commitment of all employees in the firm to
continually improve the products and processes. It is a systematic attempt to involve
all employees in incremental improvement. The improvements are made in small
steps over a long period of time. Antithetically, innovation or radical changes are
defined as being: short-term, usually a technical breakthrough, being one-off in
character & project based and high cost.
Figure 3 Continuous improvement and innovation (Gibbons, 2004)
Time
Performance
Improvement through
many small incremental
step changes
Innovatory step changes
in performance
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Figure 3 illustrates the impact on performance over time for both the continuous
improvement and innovation strategies. In summary, continuous improvement offers
smaller but more frequent improvements in performance and innovation offers much
larger improvements in performance but less frequently (Gibbons, 2004).
In Japan, continuous improvement is translated and defined as Kaizen (Bicheno,
1999). Imai (1986) argues ‘Kaizen is simply an umbrella concept covering most of the
Japanese practices that have recently achieved world-wide fame’. Figure 4 shows
this vision of Kaizen with a sample of Japanese improvement activities making up the
stem of the umbrella (Imai, 1986).
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-Productivity improvement
-New product development
-Customer orientation
-TQC (total quality control)
-Robotics
-QC circles
-Suggestion system
-Automation
-Discipline
-TPM (total productive maintenance)
-Cooperative labour-management relations
-Quality improvement
-Kamban
-Just-in-time
-Zero defects
-Small-group activities
KAIZEN
7. Figure 4 The Kaizen umbrella (Imai, 1986)
One of the improvement activities identified under the Kaizen umbrella is Total
Productive Maintenance (TPM). Robinson & Ginder (1995) explain the history of TPM
as it having its beginnings at a Toyota sub-contractors factory in Japan. The Japan
Institute of Plant Maintenance absorbed the main principles and begun spreading it
to other Japanese factories. Miyake et al. (1995) define TPM as a tool to maximize
the overall effectiveness of equipment used in production. It is also used to “transfer
a great number of maintenance-related tasks to front-line operators, overthrowing the
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myth that dealing with ‘too complex’ equipment is an exclusive competence of the
well qualified experts in the maintenance department”.
Ho (1999) argues the first stage of any implementation of TPM is to successfully
implement the 5S. Operationalising the theory to incorporate other improvement
initiatives, Ho (1999) introduces a TQMEX model detailing the sequential stages
required to successfully achieve Business Process Re-engineering, Quality Control
Circles, ISO 9001/2 TQM and TPM. Complementing the improvement initiatives and
strategies suggested by Ho would be the inclusion of the Six Sigma DMAIC process
as requiring 5S as a platform for successful deployment (Gibbons, 2006).
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5S = Seiri, Seiton, Seiso, Seiketsu, Shitsuke
BPR = Business Process Re-engineering
QCCs = Quality Control Circles
ISO = Iso 9001/2 Quality Management System
TPM = Total Productive Maintenance
TQM = Total Quality Management
BE = Business Excellence
TPM
TQM/BE
Operations
Management
Quality
Management
5S
BPR
QCCs
ISO
8. Figure 5 The TQMEX model (Ho, 1999)
Focusing in on the 5S conceptual framework, Table 1 details a sample of published
definitions of translations to the original Japanese 5S Romanji words (Gibbons,
2000).
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9. Table 1 The 5Ss translated (Gibbons, 2000)
Author Seiri Seiketsu Shitsuke
Hirano (1995) Organization Standardized cleanup Discipline
Ho (1999) Organization Standardization Discipline
Osada (1991) Organization Standardization Discipline
Laria etal (1999) Sort Standardize Sustaining
Sekine & Arai (1998) Organization Standardized clean-up Discipline
Hartmann (1992) Organization Cleanliness Discipline
Lapa (1998) Sorting Sanitizing Self-discipline
Bicheno (1998) Sort Standardise Self-discipline
Peterson & Smith
(1998)Organization Standardization Discipline
Imai (1997) Sort Systematize Standardize
Prod. Press (1996) Sort Standardize Sustain
Chu (1999) Housekeeping Cleanliness Discipline
Seiton Seiso
Orderliness Cleanliness
Neatness Cleaning
Neatness Cleaning
Neatness Cleaning
Organize Clean
Orderliness Cleanliness
Tidiness Purity
Systematizing Sweeping
Straighten Scrub
Organization Cleanup
Straighten Scrub
Set in order Shine
Table 1 indicates there is a common consensus to published definitions of the five
different stages to the 5S system with the only differences evident being minor, or the
use of a similar word with roughly the same meaning. However, at this stage a more
detailed review of the individual stages to 5S will provide focus and explanation to the
capabilities as a foundation for lean and six sigma deployment.
3.1 First S: Seiri The first step in the 5S system is ‘Seiri’. Translated into
English it means to sort or to organize (Laraia et al., 1999). Seiri can be directly
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related to the problem areas highlighted in the first example of inefficiencies of
storage at PMG Designs. The idea is simply to sort out what is needed from what is
not needed, and to then discard what is not needed (Ho, 1999). Peterson and Smith
(1998) suggest this is best done by placing red tags on items that are possibly no
longer needed. The items are logged and then placed in a holding area for a
predetermined length of time before being discarded. This method enables all people
concerned a chance to evaluate whether the item is of any use or needs to be
discarded. The outcome from this activity is then the benefit of a reduced inventory of
equipment. Hirano and Rubin (1996) concur suggesting a red tag strategy is a simple
method for identifying potentially unneeded items in the factory, evaluating their
usefulness, and then dealing with them appropriately
When completing a red tag activity Imai (1997) argues sorting can be classified into 2
categories, necessary items and unnecessary items. The unnecessary items should
be discarded or removed from the workplace. The removal of waste is a key element
of lean manufacturing (Womack and Jones, 1996) and Schonberger (1982) suggests
there are three main wastes found in manufacturing plants:
1. Muri, meaning excess, producing more than is required.
2. Muda, meaning waste, in all of its forms
3. Mura, unevenness, materials parts and goods should all flow at an even
rate and not fluctuate.
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Of the three wastes suggested by Schonberger (1982) muda is the most applicable
to 5S deployment and is further categorised into seven types of waste as defined by
Ohno (1988):
1. Overproduction
2. Waiting
3. Transport
4. Inappropriate processing
5. Unnecessary inventory
6. Unnecessary motion
7. Defects
3.1.1 Second S: Seiton
The next step in the 5S system is Seiton which translated into English means to
straighten or orderliness (Sekine and Arai, 1998) . Following on sequentially from the
sorting phase, Tonkin (1998) suggests once you have sorted what you need and
discarded what you do not need, Seiton is used to:
• Set the workplace in order,
• Assign a separate location for all essential items,
• Make sure the assigned space is self-explanatory so everyone knows what
goes where.
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Laraia et al. (1999) agree suggesting once everything has been sorted out it is time
to organize a place for the remaining equipment. Locations for materials should be
clearly identified ‘from wastebaskets to hand tools to work instructions. The object is
to create visual cues to locations, and work flows etc’ (Laraia et al., 1999). Osada
(1991) suggests a typical example of Seiton for storing gauges and other
instrumentation devices would be a padded shadow board.
The benefits of Seiton relate directly to the seven wastes of lean (Ohno, 1988)
eliminating the ‘unnecessary motion’ waste in parallel to the removal of inappropriate
processing. The benefit of Seiton is therefore to be able to find something with little
time wasted searching. For example, one of the best gains will be in process
changeovers, shorter set-up times increase machine availability, make the system
more responsive to market demand and increase strategic advantage (Shingo, 1981,
1989).
3.1.2 Third S: Seiso
Once all of the waste has been thrown away and what is left is straightened out, it is
then time to clean up what is left (Hirano, 1995). This can be an initial clean up to set
the standard required, followed by periodic cleaning to maintain it. According to
Osada (1991) cleaning means inspection and can be split into a three step approach:
• Macro (cleaning everything and dealing with overall causes)
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• Individual (cleaning specific machines)
• Micro (cleaning specific parts of machines and causes of grime etc and
identified and rectified).
Hirano (1995) concurs arguing cleaning is also inspection and machine or equipment
breakdowns are frequently caused by age related deteriorations. To prevent an
unwanted breakdown Hirano (1995) proposes to use a daily check sheet that
highlights any problem areas. The micro step in Osada (1991) and the daily check
sheet proposed by Hirano (1995) would have highlighted and rectified the oil leak
scenario identified in the review of PMG Designs.
Tangential to the equipment cleanup benefits suggested by Osada (1991) & Hirano
(1995) and important in the development of a conceptual framework for 5S
deployment for Lean & Six Sigma; Chen & Lu (1998) argue ‘employee commitment
to continuous quality improvement can only be nurtured in a clean, well organized
environment, suggesting the 5S system should be implemented as a starting point for
all quality programs’.
3.1.3 Fourth S: Seiketsu
The fourth ‘S’ Seiketsu translated into English means standardise. Bicheno (1998)
advises standardise can only be successfully implemented if the first 3 Ss are in
place and being maintained. Arguing further, Bicheno (1998) states standardise has
179
its main focus on standardising the processes and then ensuring that those
standards are stringently adhered to.
This is similar to the workings of Taylor (1911) whose philosophy was to find the one
best method of carrying out a task. The method would minimise time and effort, and
maximise quality and productivity.
Bicheno (1998) suggests that these standards must be in some written or
diagrammatic form and never be verbal. The standard should also say what to do
when things go wrong not just when things are operating normally. Imai (1986)
provides a useful example of a standardised document introducing Standard
Operating Procedures (SOPs). SOPs give clear instructions that should be followed
exactly to achieve the required outcome. They are in a standard format that is used
for all process procedures.
3.1.4 Fifth S: Shitsuke
The fifth and final ‘S’ is Shitsuke. Lapa (1998) describes it as the evaluation of all the
other four ‘S’ concepts applied into the workplace. Lapa (1998) suggests a complete
survey is carried out by the workforce to measure the level of achievement of the first
four Ss. Lapa (1998) also outlines some useful criteria for the surveys:
180
• It is important that all of the evaluations are carried out in a uniform
manor around the workplace.
• The frequency of the audit should be clearly defined
• The standard used for measurement should also be clearly defined to
avoid unnecessary variation in the results of the audit.
The benefits of this are two-fold, first it gives an indication of the level of 5S being
achieved and second it highlights where the areas of improvement are needed.
Sekine and Arai (1998) provide a useful example of a Shitsuke audit template. The
audit template is adapted for this study and discussed in more detail in the next
section.
4. Research methodology
4.1 Research problem and hypothesis
There are two components to this research problem. First is the practical problem;
this is based around the need for having the 5S. It may seem like common sense to
use the 5S system, so why can it be difficult to convince people of their need for it?
Second, is the theoretical problem; this is simply the best method of implementation.
Why is something that seems so simple so difficult to implement?
181
Structuring the research investigation, the following questions are seen as driving
factors to answering both the practical and theoretical problems:
1. Does the existing culture in the company have an influence on the success
of the implementation?
2. What are the critical factors in the implementation process?
3. Does the commitment of management driving the system through have an
influence on the potential success of the implementation process?
Synthesising the research questions and postulating a potential theory, a
research hypothesis is developed:
The successful implementation of the 5S’s depends on the following:
i. That the existing culture is not hostile towards new ideas.
ii. The reason for the implementation is not based on achieving a
cleaner factory alone.
iii. The implementation drive comes from a committed management
team.
4.1.1 Research strategy
The intended outcome of this research project is to show how to successfully
implement the 5Ss as a platform for lean and six sigma deployment taking into
account the extant business culture. Through the literature review definitions of the
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individual steps of the 5S have been made formulating a lens to test the research
hypothesis. Taking a case study approach (Yin, 1994), the research design is
presented as a means to validate/invalidate the research hypothesis.
4.1.2 Cases study design
According to Collis and Hussey (2003) a case study is usually associated with the
extensive examination of a phenomenon of interest, probably a form of exploratory
research, which is classified under the umbrella of a phenomenological methodology.
Bryman (2001) classes phenomenology as a contrasting epistemology to positivism
and categorises it under the interpretivist epistemology as anti-positivist. Yin (1994)
describes a case study as an ‘empirical enquiry that investigates a contemporary
phenomena in context; when the boundaries between the phenomenon and the
context are not clearly evident, multiple sources of evidence are used’. Scapens
(1990) suggests there are four additional case study types to those suggested by
Collis and Hussey (2003): descriptive, illustrative, experimental and explanatory.
Blaxter et al. (2001) argue the case study is “in many ways, ideally suited to the
needs and resources of the small-scale researcher”.
4.1.3 Research investigative techniques
Taking into account the criteria for a successful case study research design and the
suitability for small scale research projects the case design and data collection
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methodology is defined. There are many investigative techniques that could be used
for case study research (Yin, 1994). A few of the relevant ones are: analysis of
company records, questionnaires, focus groups, structured interviews and
observation. To fill in the gaps of this research into a small specialised area,
structured interviews are chosen as the main tool allowing for more open ended
questioning. Another tool that is useful in this research is the analysis of company
records. This can be used to analyse the success of the case study subject in its
market place. Finally, the observation tool is useful for measuring the level of
success in the implementation of the 5S in the case study subjects work
environment.
4.1.4 Summary
In summary the research methodology uses a case study design operationalised
through the following research process steps:
• Literature search defining the 5Ss.
• Structured interviews of staff at 6 manufacturing companies based in the UK.
• 5S audits at the 6 companies.
• Analysis of case results.
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4.2 Case study results
This section presents a summary of the case study findings through the structured
interviews and 5S audits. Ensuring anonymity for the 6 companies involved,
pseudonyms are used as follows:
1) Company A
2) Company B
3) Company C
4) Company D
5) Company E (PMG Designs)
6) Company F
5S audit results
Table 2 summarises the performance related findings taken from the 5S audits and
the structured interviews. To enable a standard ‘index’ figure to be made for the
results shown, the following calculations have been made:
1. A financial performance index figure was calculated by:
• Dividing the number of staff over the profit made.
• Then, dividing this figure over the turnover.
• Finally, multiply by 100 000 to give an index figure for profit made per
employer.
2. An accident performance index figure was calculated by:
185
• Dividing the number of accidents over the number of staff.
• Finally, multiply by a hundred to give an index figure for the accidents per
employee.
Table 2 Case study results summary
Company A 65 2.3 0 10 0 15 83
Company B 285 36 1.8 70 18 25 57
Company C 180 28 1.4 16 28 9 69
Company D 68 N/A N/A 20 N/A 29 63
Company E 450 42 2.1 160 11 36 61
Company F 15 1.1 0.005 8 30 53 52
CompanyTurnover
£(M)
Profit
£(M)
Number of
Accidents
Financial
Index
Accident
Index
5S Audit
Index
Number of
Staff
Figure 6 shows the results of a comparison between the 5S audit results and the
accident index figure for each company. The companies are put in order of their
achievement in the 5S audit, with the highest rated first.
0
10
20
30
40
50
60
70
80
90
Company
A
Company
C
Company
D
Company
E
Company
B
Company
F
Accident
Index
5S Audit
Index
Figure 6 Analysis of 5S audit to accident index
From the data shown in Figure 6 the following inferences are made:
186
Company A was rated highest in the 5S audit (index of 83) and had a low number of
accidents (index of 15) per employee.
Company C was rated 2nd highest in the 5S audit (index of 69) and had the lowest
number of accidents (index of 9).
Company A was rated 3rd highest in the 5S audit (index of 63) and had an average
number of accidents (index of 29).
Company E was rated 4th highest in the 5S audit (index of 61) and had the highest
number of accidents for a 5S company (index of 36).
Company B was rated the lowest out of the 5S companies in the audit (index of 57)
and had an average number of accidents (index of 25).
Finally, Company F had the lowest rating in the 5S audit (index of 52) and also had
the highest frequency of accidents (index of 53).
There is a definite pattern showing in the graph, as the level being achieved in the 5S
audit reduces the frequency of accidents increases.
Figure 7 shows the results of a comparison between the 5S audit results and the
financial performance index figure for each company. The companies are put in order
of their achievement in the 5S audit, with the highest scorer going first.
187
0
10
20
30
40
50
60
70
80
90
Company
A
Company
C
Company
D
Company
E
Company
B
Company
F
Financial
Index
5S Audit
Index
Figure 7 Analysis of 5S audit to financial index
From the data shown in Figure 7 we can make an analysis of the relationship the 5S
has with the profits a company is making:
Company A scored highest in the 5S audit (index of 83) but, did not make any profit.
Company C was rated 2nd highest in the 5S audit (index of 69) and had the 3rd
highest profitability index (18).
Company D was rated 3rd highest in the 5S audit (index of 61) and had the 2nd
highest profitability index figure (index of 28).
Company E was rated 4th highest in the 5S audit (index of 61) but no profitability
figures were made available due to the company being a new starter at the time of
the review.
188
Company B was rated lowest out of the 5S companies in the audit (index of 57) and
had the second highest profitability index figure (18) for a 5S company.
Finally, Company F -as the only non 5S company- finished last in the 5S audit (index
of 52) however, they had the highest profitability index figure (30).
As was evident in Figure 6, Figure 7 infers there is possibly a relationship between
the 5S audit rating and the profitability index figure. As the 5S audit rating reduces,
the profitability index increases. The main exception to this trend is Company C who
have a reasonable level of 5S and the second highest profit levels.
4.2.1 Interview results
From the interviews the following summary statements can be made:
• Of the companies interviewed 40% had not had any previous improvement
activities. The remaining 60% had all failed in their previous attempts at an
improvement activity.
• The driving force for the 5S had come from the management team in four out
of the five companies, the other coming from the engineering department.
• The response from the workforce was generally quite negative from the
companies where previous implementation projects had failed. In the two new
companies the workforce were more positive and saw the 5S as a worthwhile
venture.
189
• All of the training was given away from the work place and in classrooms
except at Company D, where the training was given on-the-job. The normal
duration for a training session was one day.
• Once the training had been completed all of the companies set up
implementation teams and went through the 5Ss sequentially. At Company D
the team decided to set up a pilot area whereas the other companies
implemented company wide.
• The reasons for companies implementing the 5S were split into 2 categories.
First, 40% were doing it to have a cleaner/tidier factory. Second, 60% were
doing it to improve safety, increase productivity as well as for having a cleaner
factory.
• 60% of the companies felt the 5S had or was being successfully implemented
into their companies. The rest felt that it could have been implemented
successfully if a different method was used.
• All of the companies felt that commitment at management as well as shopfloor
levels were needed to successfully implement the 5Ss. One of the key failings
listed was a lack of discipline from all levels.
• The following suggestions were made on the best method of implementation:
o First train all staff in the practical as well as theory elements of 5S
o Plan implementation around quiet periods of production
o Have a 5S Champion
190
o Make 5S mandatory across the company
o Use audits in a competitive manner to encourage improvements
o Have full financial support from company accountants
o Allow ownership of areas and encourage empowerment to design and
sustain
o Encourage team working
o Make resources available if needed.
5 Conclusions
The research questions and hypothesis are now revisited and a summary
explanation is provided for each.
Does the existing culture in the company have an influence on the success of the
implementation?
The existing culture can sometimes have an influence on the success of the
implementation. However, this is only at the start of the implementation and can be
overridden by the methods used. This was seen at PMG Designs where previous
implementation projects had failed. The 5S implementation teams identified the
previous failings and used them as a focus point for their improvements. The
workforce changed their attitudes once they had seen that the previous failings they
191
had identified had been rectified. This ‘hurdle’ then enabled a trusting working
relationship between the management and the workforce.
What are the critical factors in the implementation process?
The critical factors in the implementation process have been identified as:
1) Training must be given to all members of staff.
2) Commitment must be shown from the management early on and sustained
throughout.
3) Communication must be happening up as well as down the chain of
command.
4) To have the required discipline, the 5S must be mandatory across the whole
of the company.
5) The timing of the first three Ss is key. The sorting, straightening and scrubbing
must be done in a low pressure production period or in overtime.
6) Auditing must be carried out to maintain discipline and to encourage
improvement.
7) Finally, the project must have the full financial backing on the company
accountants.
Does the commitment of management driving the system through have an
influence on the potential success of the implementation process?
192
Yes it does in many ways; the management need to show their commitment right
from the start and then continue it through the life of the project. This was seen at
Company D where not all of the managers were committed to the 5S. They had
stopped doing the 5S audits and thus shown their team that the 5S were not
important to them.
Hypothesis
The successful implementation of the 5S’s depends on the following:
i. That the existing culture is not hostile towards new ideas.
ii. The reason for the implementation is not based on achieving a
cleaner factory alone.
iii. The implementation drive comes from a committed management
team.
The hypothesis has been falsified in two of its dependant factors. First, as we have
seen, the existing culture can be changed to support the 5Ss if carefully managed.
Second, some of the companies who had successfully implemented the 5S had
achieved their objectives of having a cleaner factory. Finally, the one verified factor
of the hypothesis is that the implementation drive must come from a committed
management team. Or to be more accurate, the management team must be
committed to the successful implementation of 5s into manufacturing companies.
193
6 Summary
As Chen & Lu (1998) have previously argued ‘employee commitment to continuous
quality improvement can only be nurtured in a clean, well organized environment,
suggesting the 5S system should be implemented as a starting point for all quality
programs’. Through the results of this study -as a foundation for lean and six sigma
deployment- the 5S process has been shown to be a useful platform to standardize
current processes creating a steady state arena for successful implementation.
Antecedent to the launch of any lean and/or six sigma deployment is the requirement
to achieve a demonstrated capability to sustain the 5S. Future research should look
to further validate the correlation between antecedent levels of 5S and lean and six
sigma deployment success levels. Figure 8 represents a working model of 5S
deployment as a foundation for successful lean and/or six sigma deployment
including the critical success factors to 5S implementation.
194
5S Deployment
FIRST STEP
SORT
SECOND STEP
STRAIGHTEN
THIRD STEP
SCRUB
FIFTH STEP
SUSTAIN
FOURTH STEP
STANDARDIZEO
SPONSORSHIP
CO
MM
UN
ICA
TIO
N
TRAINING
RE
SO
UR
CE
S Sustainable
Business Improvements
Lean & Six Sigma Implementation
INPUT PROCESS OUTPUT
Lean & Six Sigma Critical Success
Factors
Company Objectives
Company Values
Company Culture
Figure 8 5S and Lean & Six Sigma deployment model
Additional research findings included a correlation between 5S effectiveness and the
number of accidents and firm profitability. The findings from the case study analysis
indicated the higher the level of 5S being achieved, the lower the number of
accidents the company is likely to have. Also, the case analysis showed that having a
high level of 5S does not necessarily mean the company will or has made a profit.
195
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Womack, J. P. & Jones, D. T. (1996) Lean Thinking: Banish Waste and Create Wealth in Your Corporation, New York: Simon & Schuster.
Yin, R. K. (1994) Case Study Research: Design and Methods, London: Sage.
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Exploratory Case Studies on the Adoption of Six Sigma and Lean Production
Paulo Augusto Cauchick Miguel, Rogerio Confortini
and Thiago Henrique Pinheiro
Departamento de Engenharia de Produção,
Escola Politécnica, USP; Av. Prof. Almeida Prado, Trav.2, nº. 128, Cidade
Universitária, 05508-070 São Paulo, SP, Brazil; Tel. +55 11 2091 5363 ext., 476;
Fax +55 11 3091 5399; e-mail: [email protected]
10. Abstract
This paper investigates the adoption of six sigma and lean production, by
emphasising their interaction. To accomplish these objectives, three organizations
from different industrial sectors that claimed to apply both programs were studied.
It was found that the programmes were successfully implemented in only two of
those companies. Based on the case studies analysed, it is possible to conclude
that one of the greatest difficulties encountered by the program leaders is related
to the company’s human resources infra-structure.
Key words: Lean six sigma, six sigma, lean production, quality improvement,
quality management.
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1. Introduction
The intense competition for markets has led companies, regardless of size, to
implement one or more quality improvement programs. There are several of these
programs, such as ISO 9000, TQM (Total Quality Management), TPM (Total
Productive Maintenance), and others. The main objective of all these programs is the
improvement of the effectiveness and efficiency of the companies that implement
them. However, there are significant differences among the implementation
processes of these programs. A proposal called lean six sigma has attracted interest,
since its objective is to apply the concepts of the six sigma program and integrate
them with Lean Production. For a company that implements it, the program brings
significant competitive advantage and a fast adaptation to changes in the market. Six
sigma contributes with methods for identification, measurement and problem
analysis, and the Lean Production system offers techniques and procedures applied
to production optimization.
In this context, the objectives of this paper are to investigate the adoption of six
sigma and lean production and, to a certain extent, the integration between them. To
accomplish this, three organizations from different sectors that claimed to apply both
programs were studied by conducting case-based research. The paper is then
structured as follows: the next section presents a summary of the literature used in
this research; then, the research methods are outlined, followed by the study findings
and its conclusions, limitations and recommendations for future work.
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2 Theoretical background
Six sigma theory has become increasingly significant presently. The main focus of
the programme is to continuously reduce variations in processes and thus eliminate
defects or faults in products (Linderman et al., 2004). Six sigma is understood as a
management practice that seeks to improve company profitability in any sector of
activity, whether products or services (Hahn et al., 2000) in companies of any size
(small, medium or large) for the purpose of increasing market share, reducing costs
and optimising operations (Wessel and Burcher, 2004).
The term six sigma was created at the beginning of 1987 at Motorola. Its purpose is
to improve company performance by analysing variations in its processes (Harry and
Schroeder, 2000). The results obtained earned it the Malcolm Baldrige Award for
Quality in 1988 and six sigma was credited with the organization’s success
(Breyfogle III et al., 2001). This resulted in publicity for six sigma and other
companies were encouraged to incorporate the programme. Since then, six sigma
has been adopted by various industrial sectors. An important benchmark is the six
sigma practices of the General Electric Company, one of the leaders in implementing
the process (Henderson and Evans, 2000). According to the previous authors, while
the original goal of six sigma was to focus on the manufacturing process, it become
clear that distribution, marketing, customer order processing functions as well as
service operations also need to focus on achieving the six sigma standards, as can
be seen in Hensley and Dobie (2005), Chakrabarty and Tan (2007), and Antony et al.
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(2007). Currently, six sigma is now applied in industrial sectors such as the health
care industry aiming at focusing on the root causes of health care problems to
produce near-perfect health care services (Taner et al., 2007).
An important phase of six sigma is its implementation. There are key ingredients for
effective implementation (see Antony and Bañuelas, 2002) as well as factors which
are essential to the process of structuring the programme within the organizations,
namely: management’s commitment to the programme (Goh and Xie, 2004), the
existence of organizational infrastructure adequate to assure the introduction,
development and continuity of the programme (Wiper and Harrison, 2000), the
selection and training of the professionals involved with six sigma (Hoerl, 1998), and
an effective selection of projects (McAdam and Lafferty, 2004).
With over two decades of experience in implementing six sigma, the success and
benefits possible with the use of the methodology are well-documented (Kumar et al.,
2008). Table 1 provides a summary of some publications on six sigma. It includes
some relevant topics that can be found in the referred journals.
Table 1 – Brief summary of the six sigma literature.
Six Sigma Topics References
Case studies Henderson and Evans (2000); Pande et al. (2000); Eckes (2001);
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Barney (2002); Motwani et al. (2004)
Lean production Arnheiter and Maleyeff (2005); Andersson et al. (2006)
Implementation Breyfogle III et al. (2001); Bañuelas and Antony (2002)
Health care Taner et al. (2007)
Service Hensley and Dobie (2005); Antony et al. (2007); Chakrabarty and Tan
(2007)
An important initiative of six sigma is to combine the programme with other
management tools. One of the emerging developments within the six sigma context
is lean six sigma. As pointed out by the references in Table 1 (Arnheiter and
Maleyeff, 2005; Anderson et al., 2006), lean production might be used in combination
with six sigma. Lean production, a well-known term used by Womack et al. (1990),
had a tremendous influence on mass producers, mainly in the American automotive
industry (Skjott-Larsen et al., 2007). Slack et al (2005) summarise the lean
philosophy of operations as the basis for Just-in-time techniques that consider
workforce involvement, waste reduction, and continuos improvement. Lean six sigma
extends six sigma to include lean production principles, such as eliminating waste
and improving process capability (Skjøtt-Larsen et al., 2007). While six sigma is more
often associated to defects and elimination of variability, lean production
concentrates on achieving more efficiency and waste elimination. The decisions
taken within the lean six sigma context are based on an analysis of the data which
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are continuously collected during process (Arnheiter and Maleyeff, 2005). George
(2003) states that through lean six sigma it is possible to lead companies to a new
quality level and effectively to foster value creation. Lean six sigma also considers
DMAIC and its phases adding other concepts and tools usually used in the lean
production. These include tools for process mapping (e.g. value stream mapping)
and continuos improvement (e.g. kaizen) that enable the achievement of better
results in shorter time.
Having presented the theoretical background for this research, attention is turned to
the research methods and empirical findings of the study.
3. Research methods
The research was designed using a case-based approach due to the nature of the
variables and research questions. Those questions were related to checking the
integration of six sigma and lean production. To develop the case studies, guidelines
from the literature were followed (Voss et al., 2002). In addition, the context for
conducting the cases was also important, since the selected companies are good
representatives of their respective industrial sectors in the country.
Data from a previous survey (Cauchick Miguel and Andrietta, 2006) were helpful in
selecting the companies. Other criteria for selecting them were also considered such
as: whether they were using six sigma as well as lean principles, and whether they
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were willing to be interviewed. They are large organizations and belong to different
industrial sectors. Table 2 shows some characteristics of the companies.
Table 2 –Profile of companies.
Company A Company B Company C
Industrial sector Cosmetics Automotive Insurance
Number of employees 3,200 3,500 1,800
Origin Brazilian American Spanish
Annual revenue (US$) 1,500 million 600 million 500 million
Six sigma implementation 2004 1999 2000
Lean production
implementation
2002 1999 2000
Quality professionals responsible for six sigma and/or lean production were
interviewed using a semi-structured instrument for collecting data. The first part of the
instrument, basic data on six sigma and lean production programmes were gathered
followed by the main points such as benefits, difficulties experienced, and the
reasons for implementing them. Clarifications were obtained through complementary
questions when necessary. Annotations were made and the interviews were tape
recorded and transcribed afterwards for data analysis.
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4. Findings
The results are divided into an individual case description followed by a case cross-
analysis. The former emphasises some important remarks on data collection and the
latter tries to compare some issues. However, this analysis is limited since the
companies have distinct characteristics, as pointed out in Table 2.
Company A
The company produces beauty products. It is relatively well-established in its
business. The firm adopts direct sales as its selling model. Instead of distributing its
products to shops the firm relies on consulting personnel (over 390,000), as they call
those who sell the products. This model has differentiated the company for many
years and is believed to be one of the reasons for its success.
The company also has other programmes such as ISO 9001: 2000 certification, ISO
14001, Total Productive Maintenance (TPM), and Current Good Manufacturing
Practices (cGMP). Although the company started to implement lean production in
2002 and six sigma in 2004, both programmes were interrupted. The reasons for that
were related to unexpected problems, especially due to the lack of support from top
management. Another problem was related to the use of statistical tools. The
employees in charge of applying the tools did not see strong reasons to use them
(and even where). The six sigma programme was being utilised to solve minor and
basic day-to-day problems and the company did not see advantages especially due
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to the investments required in training. Surprisingly, there was no difference between
black and green belts. Training of black belts was questionable since they do not
have to conduct a full project to be certified. Later on, this programme was replaced
by ‘management by process’, which is not really a substitution in the sense that one
programme can complement other. Although the interviewees claimed that the
programme was going to be reinitiated, this has not occurred so far.
Similar problems arose when the company implemented lean production. In addition,
it lacked suitable infra-structure, especially personnel with knowledge of lean
production. The manager claimed that lean production did not work because the
company operates differently from the automotive sector, since it has 600 products
that can be combined to generate a lot of derivatives. This might not permit precise
forecasts of demand.
Since our objective was not to investigate why the company interrupted the
programmes, it will be left to a future study to gain a deeper understanding about the
problems that led the company to abort both programmes. Due to these problems, it
can be seen that six sigma is not integrated with lean production.
Company B
Company B is part of a strong North America group that has as its customer major
automakers, including car, lorry, and machinery manufacturers (e.g,. Ford, General
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Motors, Nissan, Volkswagen, Daimler Chrysler and Volvo). Six sigma was
implemented in the company for 7 years. The projects are divided into three groups:
long term and complex projects (10-15 per year), medium term (lasting 3-4 months),
and, the majority, simple projects, that also includes kaizens. All projects are selected
to be aligned to company strategy and its goals. The return from each project is
measured through return on investment (ROI), cost and inventory reduction, and
customer satisfaction (measured by a survey). Risk analysis is also considered to
measure the success of the project. The company also applies Design for Six Sigma
(DFSS) to developing its products.
The process of becoming a black belt in the company is rigorous. They have to
conduct two projects in a year (one of them with a strong statistical basis) in addition
to taking an exam. The green belt has to develop one project in a year. Recently the
company introduced the yellow belt programme to train blue collar workers.
According to the interviewee the six sigma project experienced some failures with
respect to project management. They identified limitations in the scope and that it
was too focused on tools and techniques. Nevertheless, to date, the company has
had a return of US$ 250,000.
The principles of lean production were introduced at the same time as six sigma. It is
strongly based on the Toyota Production System. At the beginning of implementation
the company identified a sort of competition between the programmes to get
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resources. In addition, in the period before a lean production audit, six sigma was set
aside for a while. They identified the difficulties employees had with the programme
related to its philosophy and adaptation to the company culture. They tackled this
problem with strong leadership from project leaders. In addition, they have managed
these problems by combining both programmes under one office. Accordingly to the
interviewee, the two programmes are complementary. However, it is necessary to
implement one followed by the other. The company’s approach is to use the
Japanese-based work philosophy and culture from lean production with a strong
emphasis on data analysis provided by six sigma. As mentioned before, they claim
that one programme complements the other
Company C
This Company is a service organization founded in the 1930’s in Spain, but its
presence is worldwide. The group is present in several Latin American countries and
is number one in revenue. It started its operation in Brazil in 1992. Its products
include insurance for personal risks, commercial credit, retirement plans, and others.
Six sigma is a separate department in the company since it was introduced by the
company president in 2000. The area answers to the company vice-president. The
programme was introduced at the firm’s initiative for the general purpose of meeting
customer demands. Due to the company’s growth, it was necessary to standardise
the process and introduce a programme for quality improvement. Six sigma was
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introduced in two phases - first as a pilot in a company sector and afterwards to the
whole company, including the largest sector (insurance). The pilot ran well with no
resistance from the workforce. The major barrier was the transition between two
phases to expand six sigma to the rest of the firm. In the beginning, four black belts
were then trained with the support from an external consulting firm. To expand six
sigma to the rest of the company involved practically introducing of another
programme. At the time of the study there were 17 six sigma projects. So far, it is
estimated that the company had a return of US$ 1 million with the programme.
Lean production was also introduced by the company president and for almost the
same reasons as the introduction of six sigma. These initiatives were strongly aligned
with company strategies and main objectives. No project is carried out if it is not well-
aligned with its strategies.
The interviewees see six sigma as very integrated with lean production. They
consider lean as a ‘work tool for six sigma projects’. They claim that is difficult to
separate them, since both programmes aim at reducing waste and costs and
preventing error. To illustrate that, all employees are trained in both programmes.
The company claims that the recent financial gains, increased productivity and
market share resulted from both programmes, since they make no clear distinction
between them.
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5. Analysis and discussion
Table 3 shows a summary of main results in the three companies. It is difficult to
make a comparison between the cases since they have many differences with regard
to the company profile (industrial sector, size, etc.). However, an attempt has been
made to compare the results to certain extent.
As can be seen, the results for Company A are limited because it interrupted both
programmes, although the interviewee claimed they intended to restart soon. Even
when the programmes were running simultaneously in the past, they worked as
separate entities. Moreover, data from the interviews on this subject is unclear. The
causes for suspending the programmes were not clearly stated or the interviewee did
not want to reveal them. Nevertheless, the intention is to study this company further
in order to understand the reasons as noted above, since there are very few studies
that explore the negative aspects or drawbacks of six sigma and lean production
implementation.
Table 3 – Summary of results.
Company A Company B Company C
Six Sigma projects/year n.a.1 10-152 20
Master black belts 0 1 0
Black belts 20 5 8
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Green belts n.a.1 30 65
Personnel trained in six sigma n.a.1 n.a.1 1,650
Lean projects/year n.a.1 about 803 30
Tools and techniques4,5 basic3 basic4 and
more
elaborated5
basic4 and more
elaborated5
Maturity6 of both programmes none high high
Integration between the
programmes
none high moderate to high
Notes: 1data not available; 2considering long term and complex projects; 3most
kaizens in production; 4basic tools and techniques: cause-effect diagrams, histogram,
hypothesis tests, Pareto analysis, PDCA cycle, scatter graphic, 5S; 5more elaborated
tools and techniques: ANOVA, box plot, DFSS (only Company B), DOE, FMEA, QFD,
statistical non-parametric tests, 6considering the time of implementation and other
results (number of finished projects, people trained, ROI, etc.).
Examining the three investigated firms, Company B is probably where six sigma has
been most extensively applied. It adopted the programme a decade ago and has
completed a number of projects. In addition, the company has implemented a PMO
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(project management office) where six sigma and lean production projects are
integrated either functionally or horizontally among departments. This has contributed
to minimising competition for resources among the programmes. The company has a
significant number of belts in addition to one master back belt. Many basic and more
advanced tools are applied within the six sigma and lean production contexts with an
emphasis on having introduced DFSS. Both six sigma and lean production have
provided a good return on investment in the programmes.
As outlined earlier, one of the major challenges faced by company C when
implementing six sigma was the transition from the pilot programme to the
programme to deploy to the whole company. This challenge is somewhat related to
the need for people who are capable of understanding six sigma methodology. Thus,
it is necessary to train the professionals in order to achieved best results. At the time
of the present study the company had 8 black belts, 65 green belts, 325 yellow belts,
and 1224 white belts. In accordance with the literature (Antony et al., 2007), other
critical factors for six sigma introduction in Company C were associated to
management commitment and organisational infrastructure. The former was
facilitated since the programme was introduced and monitored by the company CEO.
The latter is a challenge faced by all the companies studied, especially due to the
competition for resources among the programmes.
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As highlighted, Companies B and C are in different businesses and any comparison
between them is thus somewhat limited. Company C applies six sigma in back office
operations, since it is easier to conduct projects due the nature of quantitative data of
six sigma. In addition, they usually use basic tools in the DMAIC phases. On the
other hand, Company B managed to achieve a smooth introduction of six sigma and
lean production concepts, due to the nature of its (industrial) business. In addition,
Company B has had a longer history of applying quality and production management
and methods. This has contributed to deploying both programmes throughout its
production and administrative operations. Nevertheless, in the past the programmes
have competed for the same resources. As mentioned earlier, this was overcome by
establishing an adequate infrastructure through a centralised project management
office.
6. Conclusions
This paper has presented an empirical investigation of adopting six sigma and lean
production. All the companies studied have argued that is necessary to set up an
adequate organizational infrastructure when adopting six sigma and lean production.
This infrastructure contributes to the dissemination of the culture for both
programmes as well as providing the foundation to apply them. However, two of the
three investigated companies claimed that the programmes do compete for common
resources (financial and human resources). In one of them (Company B) this was
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overcome by establishing a PMO. The consensus of the companies is that one
programme can complement the other.
This study was carried out with some limitations such as the number of companies,
industrial sectors, and it is restricted to organizations that operate in Brazil. Future
work will include further empirical studies in order to validate the results of this
investigation.
Acknowledgements
The authors wish to thank the CNPQ (The National Research Council) and FCAV
(The Carlos Alberto Vanzolini Foundation) for their financial support of this research
as well as the companies who made it possible to carry out this work.
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Hahn, G.J., Dogonaksoy, N. and Hoerl, R. (2000), The evolution of six sigma, Quality
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Progress, Vol. 31, No. 6, pp. 35-42.
Kumar, M., Antony, J., Madu, C.N., Montgomery, D.C. and Park, S.H. (2008), Common myths of six sigma demystified, International Journal of Quality and Reliability Management, Vol. 28, No. 8, pp. 878-895. Linderman, K., Schoeder, R.G., Zaheer, S. and Choo, A.S. (2003), Six sigma: a goal-theoretic perspective, Journal of Operations Management, Vol. 3, No. 21, pp. 193-203.
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Biography
Paulo Augusto Cauchick Miguel obtained his PhD in Manufacturing Engineering from
the School of Manufacturing and Mechanical Engineering at the University of
218
Birmingham, UK. His industrial experience in Brazil includes working as a
manufacturing engineer for Varga/TRW and Bendix/Allied Automotive brake system
companies. He is an Associate Professor in the Department of Production
Engineering of the Polytechnic School at the University of São Paulo (USP) and at
University Nove de Julho (Uninove). He was a visiting researcher in the Baldrige
National Quality Program at NIST (National Institute of Standards and Technology) in
Gaithersburg, MD, USA and is currently the editor of the Brazilian Journal of
Operations and Production Management. His research interests include new product
development, total quality management, project management as well as research
methodology in production engineering and operations management.
Rogerio Confortini is a undergraduate student on production engineering at the
University of São Paulo. He has worked in the research project ‘Application of Six
Sigma Programme in Brazil’.
Thiago Henrique Pinheiro is a undergraduate student on production engineering at
the University of São Paulo. He has worked in the research project ‘Application of Six
Sigma Programme in Brazil’.
219
Salaheldin Ismail Salaheldin* Management & Marketing Department,
College of Business & Economics, Qatar University P.O. Box . 2713, Doha, Qatar
E-mail: [email protected] E-mail: [email protected]
*Correspondence author Iman Shafee Abdelwahab
HSBC, Financial Tower Branch P.O.Box. 16755 Doha, Qatar
E-mail: [email protected]
Abstract:
This research investigates the process of six sigma implementation by banks in Qatar
in order to identify its perceived benefits and to explore the critical success factors.
Survey questionnaires were distributed to both local and foreign bank officers at
different managerial levels in Qatar. Out of a total 150 questionnaires distributed, 73
useable responses were received resulting in a 48.7% response rate. Our findings
confirmed the belief among the respondents that in implementing quality control tools
in general, and six sigma in particular, requires certain tools and techniques that are
found to be unsuitable or are difficult to be implemented in the banking sector of
Qatar. Surprisingly, the findings of the survey confirmed that there is hardly any
The Implementation of Six Sigma in the Banking Sector in Qatar
220
difference among the different managerial levels in perceiving and in evaluating the
benefits, as well as the critical successful factors in the implementation of the quality
control tools in the Qatari banking sector. The managerial implications and further
research of the study are also discussed.
Keywords: Six Sigma, Benefits, Critical success factors, Banking sector, Road map,
Implementation, DMAIC methodology ,Qatar.
Biographical notes: Salaheldin Ismail Salaheldin is the Chair of Department of
Management & Marketing at College of Business & Economics at the Qatar
University. Dr. Salaheldin earned a PhD in Operations Management from the
Glasgow Business School at Glasgow University, UK. His publications have appeared
in many refereed journals including International Journal of Operations and
Production Management, Journal of Industrial Management & Data Systems, The
Joural of Business in Developing Nations, Journal of Manufacturing Technology
Management, International Journal of Management & Decision Making, International
Journal of Learning and Intellectual Capital, International Journal of Productivity &
Performance Management, and The TQM Journal.
Iman Shafee Abdelwahab is a manager of Personal Banking Services at HSBC,
Financial Tower Branch, Doha, Qatar. She has an MBA from college of Business &
Economics at Qatar University, Doha, Qatar.
221
1. Introduction
Since its introduction in the quality management world as a powerful quality
management tool, six sigma has gained an increasing interest among many different
manufacturing organizations about the benefits and improvements that can be
gained from its usage. Despite that, implementation of six sigma in the service sector
is still not as popular as compared to other sectors(Anthony, 2006). Implementing six
sigma in the banking industry in particular is even a newer concept in the world in
general not to mention in Arab countries, in particular An extensive review of the
literature has revealed a lack of research in six sigma implementation in the service
sector in general and in the banking sector in particular.
There is hardly any research at all on six sigma implementation in the banking sector
in State of Qatar, specifically on the process of six sigma implementation, on the
benefits that can be gained from its usage, and on its critical success factors.
Accordingly, this research aims at filling part of these gaps. More importantly, the
current study will conclude with some managerial implications for managers and
policy makers pertaining to effective and efficient implementation of six sigma in the
banking sector of Qatar.
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2. Literature Review
Six Sigma as a powerful management strategy has evolved from being exclusively
about the original goal of targeting of less than four failures or defects or errors per
million of opportunities, to encompass a broad range of approaches for incorporating
quality into products and services from the early design and development stages and
throughout their life times" (Harry and Schroeder, 2000, Hensley & Dobie, 2005, and
Cheng, 2008).
As pointed out by many researchers including Bank (2000), Banuelas & Antony
(2002), Antony et al. (2007), Taner et al. (2007) and Antony (2008), there are several
expected benefits from implementing six sigma in the banking sector, these include
reduced customers' complaints, reduced internal call backs, reduced flaws in all
customer facing processes, significant reduction in the number of returned renewal
credit cards, identifying and eliminating defects and mistakes in business processes,
reduction in administration cost, and reduction in costs associated with order
corrections.
Along the same line, Anthony (2006) listed some of the benefits obtained by the
financial institutions as a result of Six Sigma implementation. These are: reduced
internal call backs by 80 per cent, external call backs by 85 per cent and credit
processing time by 50 per cent, reduced the cycle time from customers placing an
223
order to service delivery and the credit decision cycle by 67 per cent (i.e. from three
days to one day), reduced statement processing cycle time from 28 to 15 days and
increased customer satisfaction and improved efficiency and cycle times by over 30
per cent. More importantly, Chakrabarty and Tan (2007) have investigated lots of
articles concerning six sigma in services and filtered their results on 40 articles on the
same topic. They strongly believed that six sigma is a recent improvement initiative
that is difficult to implement in services because services' processes cannot be
amended easily. Moreover, they highlighted the emphasis on Critical Success
Factors of Six Sigma implementation in both manufacturing as well as in services
sectors including top management commitment, education and training, cultural
change, customer focus, clear Performance metrics, attaching the success of
financial benefits, and organized understanding of work process.
Al-Marri and Zairi (2007) have studied 250 banks in the UAE to identify key success
factors affecting Quality Management practices in the banking sector in UAE. They
concluded that little knowledge is available about key factors influencing the
application of quality management in banking sector in the UAE.
Kumar et al. (2002) indicated in their study on quality management practices in the
Indian institutions that the application of Six Sigma problem-solving approach is very
less. This shows the immediate need to make all organizations (service or
224
manufacturing organizations) aware of six sigma business improvement strategy by
removing the misconception about it, that it is highly mathematical and costly to
implement.
Moreover, Antony (2006) listed the benefits that two famous financial instructions
have gained as a result of six sigma implementation as follows: A) in Citibank group,
the implementation of six sigma led to reducing the cycle time from customers
placing an order to service delivery and the credit decision cycle by 67 per cent (i.e.
from three days to one day), and reducing statement processing cycle time from 28
to 15 days. B) Six sigma has enabled J P Morgan Chase to reduce flaws in its
customer-facing processes such as account opening, payment handling and cheque-
book ordering. This has resulted in increased customer satisfaction and improved
efficiency and cycle times by over 30 per cent.
In contrast, in their study on "Assessing readiness for six sigma in service setting"
Hensley and Dobie (2005) formed the following difficulties in using six sigma in
services: gathering data, measuring customer satisfaction, quantifying and
measuring data of sub process since data collection is not automated like in
manufacturing, cultural change, organizational infrastructure, linking six sigma to
business strategy and linking six sigma to customer. These difficulties are in line with
225
the limitations expressed by Coronado and Antony (2002), Rajamanoharan and
Collier (2006), and Chakrabarty and Tan (2007).
From the literature review, we noticed that six sigma can be implemented effectively
and efficiently via the TQM improvement (Cheng, 2008).
In the same vein, researchers such as Anthony (2006), Ladani et al. (2006), Antony
et al. (2007), Chakrabarty & Tan (2007), and Antony (2008) are in favor of applying
the DMAIC (define, measure, analyze, improve and control) methodology as the best
way to implement Six Sigma in both manufacturing and service sectors, and this
includes the following phases:
Figure 1 Six Sigma Processes`
1. Define
2. Measure
3. Analyze
4. Improve
5. Control
Define Measure
Control Analyze
Improve
226
3. Research Objectives, Justification and Hypotheses
3.1 Research Objectives
The purpose of this paper is to examine the implementation of Six Sigma in the
banking sector in Qatar. Specifically, this paper attempts to identify:
• the expected benefits of Six Sigma implementation in the banking sector of
Qatar.
• the critical success factors of Six Sigma implementation in the banking sector of
Qatar.
3.2 Importance of the Study
The contribution of this study is three fold. First, the findings of this study contribute
to operations management literature in general and to Six Sigma literature in
particular. This may provide the opportunity for other researchers to execute more
research in the field of the Six Sigma implementation.
Second, this study contributes to what is a very limited amount of empirical studies
on Six Sigma implementation in developing nations in general and in Qatar in
particular.
227
Third, a very significant contribution of this study is providing a fully developed Six
Sigma road map which can be used as a template for local and foreign banks in the
Qatari banking sector since it provides an insight into the critical factors influencing
a successful Six Sigma implementation in the bank.
3.3Hypotheses
In order to shed some lights on six sigma implementation in the banking sector in
Qatar, two hypotheses have been developed for testing.
H1. There is no significant difference among different levels of management in the
Qatari banking sector concerning the expected benefits of six sigma implementation.
H2. There is no significant difference among different levels of management in the
Qatari banking sector concerning the critical success factors of Six Sigma
Implementation.
4. Methodology
4.1 The construction of the questionnaire
Since the research is dealing with a service industry, we felt that a questionnaire
would be the best way to measure banks' professionals' thoughts and feedback on
Six Sigma implementation.
228
The mail survey questionnaire was constructed based on several successful studies
previously conducted in related fields of study, i.e. Al-Marri et al . (2007), Antony
(2006;2007;2008), Antony et al. (2007), and Pinto et al. (2008). The modifications
made to these studies were determined by the researchers’ own knowledge of
conditions of the Qatari banking sector and the theoretical issues discussed
previously.
The questionnaire distributed contained 11 questions as follows (see appendix 1):
(1) Questions 1-4 – data on profile of the respondents,
(2) Questions 5-9- data on the bank,
(3) Question 10 – data on the expected benefits of Six Sigma implementation ,
and .
(4) Question 11 – data on the critical success factors of Six Sigma implementation
.
4.2 Sample
The mail questionnaire was sent to approximately 150 managers at different
managerial levels (first line, middle and top management ) in different departments of
the banks, for example, Customer Service, Support Department, Personal Banking,
corporate and investment. The questionnaire focused on 4 major areas :-
demographics of respondents, data on the bank, the expected benefits of Six Sigma
229
implementation and the critical success factors of six Sigma implementation. Usable
responses of 73 were obtained resulting in a response rate of 48.7 percent. This rate
was found to be better than a similar study by Antony, et al. (2007) where they only
obtained a 12.5% response rate.
4.3 Reliability of the questionnaire
Cronbach's alpha scores were computed for each construct (expected benefits and
the critical success factors of Six Sigma implementation) to measure the internal
consistency and to indicate how different items can reliably measure the construct.
Kline (1998) pointed out that a reliability coefficient of around 0.90 can be considered
‘excellent’, values of around 0.80 as ‘very good,’ and values of around 0.70 as
‘adequate’, depending on the questions. In this research, all scales have reliability
coefficients ranging from very good to excellent where their values were 0.97 and
0.92 as shown in Table 1 below.
Table 1 Measures of constructs' reliability and convergent validity.
Constructs Number of
Items
α
Expected benefits a 17 0.97
Critical success factors b 30 0.92
230
a Expected benefits
b Critical Success Factors e
α = Cronbach alpha
5. Findings
5.1 Profile of the respondents
Table 2 shows that the majority (63%) of the respondents are in the age range of 30 -
40 and it makes sense since we were targeting the middle management positions
which requires a college degree, in addition to some experience either in the same
bank or in banking in general which is gained over time and is unlikely to be gained
before one reaches the age of thirty.
Male response percentage was higher than female, probably because males felt
more comfortable about the subject itself.
The only surprising observation in the sample is the fact that 50.7% have spent less
than 5 years in their existing banks. This could be due to the high level of competition
and the high rate of turnover in the industry in Qatar five years or less in their banks
but not necessarily in the banking sector in general. Another explanation could be the
relatively quicker progress of banking careers compared to other careers.
231
Table 2 Demographics of respondents of the survey.
Number of
respondents
Percent of
respondents
Age
Less than 30 years
30-40
41-50
51-60
More than 60 years
19
39
11
4
0
26
53.4
15.1
5.5
0
Gender
Male
Female
42
31
57.5
42.5
Role
Top management
Middle management
First line management
13
46
14
17.8
63
19.2
Working Experience
Less than 5 years
5-10
More than 10 years
37
19
17
50.7
26
23.3
232
The respondents were asked to provide some important information on their banks
which provided a lot of information of the Qatari banking sector and its quality control.
Table 3 below indicates that majority of the respondents 60% believe that their banks
have not planned for six sigma and even more 69% believe that their banks have not
implemented six sigma as yet. This is consistent with the introduction of banks in
Qatar which states that none of the banks has implemented six sigma and only few
(2 banks) have planned for quality.
The higher response rate came from multinational banks (75.3%) showing a
better understanding and a higher interest in the concept than local banks. 64.4% of
the sample were from banks that have between 500 and 1000 employees indicating
well established organizations.
Table 3 Demographics of banks of the survey.
Number of
respondents
Percent of
respondents
Planning for Six Sigma
implementation
Yes
No
13
60
17.8
82.2
Implementing Six Sigma
233
Yes
No
4
69
5.5
94.5
Nationality
Qatari
Multinational
Other
18
55
0
24.7
75.3
0
Number of employees
Less than 20
20-50
51-100
101-500
501-1000
More than 1000
0
0
1
10
47
15
0
0
1.4
13.7
64.4
20.5
Years of establishment
Less than 5 years
5-10
11-15
16-20
More than 20 years
1
0
0
0
72
1.4
0
0
0
98.6
234
5.2 Hypotheses Testing
Hypothesis one.
The results of ANOVA analysis in Table 4 support our hypothesis that there is no
significant difference among different levels of management in the Qatari banking
sector concerning the expected benefits of six sigma implementation. There is a
consensus among the different managerial level in Qatari banks in relation to their
expectation of six sigma implementation benefits. Out of 17 benefits, only 4 vary
among different managerial levels.
Most of the sample were middle management staff ( 63%) and first line managers
(17% ). Both levels , though different, were exposed to the same company
philosophy. They were similarly but not equally involved in crafting the company’s
strategies and vision. Surprisingly, reduction of correction cost, returned credit cards
and customer waiting time were in general what most of the studies have identified
as the benefits resulted from six sigma implementation in services. However, one
explanation may be the fact that these studies have illustrated benefits resulting from
actually implementing six sigma not what is to be expected id six sigma is
implemented. This highlights one more time that this belief is a result of lack of
understanding of six sigma implementation and its results on the bank business.
235
Table 4 Significant levels (P values) for the differences among different managerial
levels in the Qatari banking sector concerning the expected benefits of Six Sigma
implementation.
Benefit ANOVA ∗
1. Six sigma reduces transaction cost
2. Six sigma reduces administration cost
3. Six sigma reduces costs associated order
corrections.
4. Implementing six sigma helps in reducing retuned
renewed credit cards.
5. Six sigma focuses on solving the problem not
preventing it.
6. Six sigma implementation improves the decision
making process.
7. Six sigma is a tool to improve internal business
processes.
8. Six sigma aims at reducing mistakes in general.
9. Six sigma is basically a prevention tool.
10. Implementation of six sigma provides consistency
.361
.301
.050
.042
.889
.774
.969
.802
.203
.779
.448
.007
.765
.617
236
in Service Level
Agreements (SLAs).
11. Six sigma reduces customers' complaints.
12. Implementing six sigma reduces customer waiting
time.
13. It improves timing of answering customers' calls.
14. Six sigma in banking speeds service delivery to
customers.
15. Six sigma will result in a higher customer
satisfaction rate.
16. Implementing six sigma in the bank will affect
bank's image positively
as a quality organization that seeks continuous
improvement.
17. Implementing six sigma will result in higher
expectations of
customers that are difficult to meet.
.630
.000
.639
Based on a Likert scale: 1 = "strongly disagree"; 5 = "strongly agree"∗Using
One Way Analysis of
Variance (ANOVA) ∗∗Significant at level .05
237
Hypothesis two
We accept the hypothesis that there is no significant difference among different
levels of management in the Qatari banking sector concerning the critical success
factors of Six Sigma Implementation as there is consistency with only 6 variables out
of 30. Those variables are mainly related to management role and quality
management role in quality implementation. The major inconsistency is in the
improvement tools and techniques, which could be due again to the depth of
understanding the different level managers' levels have of six sigma. Further studies
are actually needed to identify who has a better understanding of the critical success
factors. We believe that high level management is the level at which managers put
more weight on tools and techniques and the emphasis becomes less as we go
down the managerial levels.
Table 5 Significant levels (P values) for the differences among different managerial
levels in the Qatari banking sector concerning the critical success factor of Six Sigma
implementation.
Critical success factor ANOVA∗
F1. Management Support and commitment
1. Management supporting implementation of six sigma.
.252
238
2. Management builds a control quality culture.
3. The task of quality control is assigned to a particular
department.
4. Business Heads promote quality control implementation.
5. Management are concerned about the quality of service
provided to customers
6. Quality control and continuous improvement are clear
objectives in management strategy.
F2. Measurement and feedback
1. Customer satisfaction levels are measured and
monitored.
2. A system to feedback customer concerns is established.
3. Internal measures (such as quality costs, no. of rejects)
collected to monitor quality improvement.
4. Employees views are listened to and acted upon.
5. Critical processes are identified for improvement.
F3. Improvement tools and techniques
1. Statistical techniques used in design processes.
2. Statistical techniques used in production processes.
3. Training on tools and techniques provided.
4. Non-production related functions such as marketing and
.220
.593
.005
.397
.968
.987
.492
.479
.
635
.482
.001
.766
.799
.001
.017
239
sales use quality tools for improvement activities.
5. Appropriate techniques are implemented when
necessary.
F4. Systems and processes
1. Systems and procedures for quality assurance are
implemented.
2. Information and data collection system established to
monitor improvement activities.
3. Relevant training system in place.
4. Key business processes identified, improved and
monitored.
5. Key business processes focused on meeting the needs
of customers.
F5. Resources
1. Sufficient financial resources provided to support
improvement activities.
2. Human resource availability considered in
improvement activities.
3. Investment decisions based on sound resources
consideration.
4. Technical resources (e.g. software, equipment) are
.033
.115
.565
.481
.930
.858
.453
.599
.658
.367
.883
.591
.276
.001
240
provided.
F6. Education and training
1. Employees are trained in job-specific skills.
2. Employees are trained in quality-specific tools and
techniques.
3. Employees are trained on total quality concepts.
4. Training time is provided for employees.
5. Regular training is provided by quality management
team.
Based on a Likert scale: 1 = "not important at all"; 5 = "very important" ∗Using One
Way Analysis of Variance
(ANOVA) ∗∗Significant at level .05
6. Managerial Implications and Conclusion
Analysis of the data and testing of the hypotheses provide some interesting results
about six sigma benefits and critical success factors in the banking sector of Qatar.
The study demonstrates that there is no a big difference in understanding about six
sigma benefits and critical success factors among the different levels of managers in
the Qatari banking sector.
241
The results have emphasized the assumption that six sigma implementation requires
complicated statistical tools that are difficult to apply in service sector.
An interesting belief amongst bankers that their banks have taken some steps in the
direction of six sigma implementation have been revealed by the study.
The study confirms that majority of the banks do not have a specific department for
quality control. At the same time, employees believe that quality is the responsibility
of all staff.
One of the most desired benefits expected from implementing six sigma is the
consistency in Service Level Agreements as well as increasing customer satisfaction
levels .
When studying successful factors, top management support and measurement and
feedback have topped the list while improvement tools and techniques have been
identified as the least favorable factors.
More importantly, in order to gain from the benefits six sigma can provide, banks
should start by educating staff about six sigma and its benefits, get familiar with the
tools and techniques, take an ownership of the initiative, educate and train staff and
242
keep monitoring and improving through proper feedback. Figure 2 is a road map of
Six Sigma implementation that can be followed:
Install a
Basic
QMS
Define
Strategy
(Values,
Vision,
Mission)
Develop
Measure
ments and
Goals
(Balanced
Scorecard
)
Understan
d the
strength &
weakness
, Areas for
Improvem
ent
Adopt
Six
Sigma
Process
as Long
Term
Busines
s
Strategy
.As part
of
Continu
ous
Improve
ment
243
Develop
Six
sigma
Govern
ance
Process
Identify
Resourc
e
Require
ments
Develop
the
Roadmap
for Six
Sigma
Process
Deployme
nt
Distribute
Roles &
Responsi
bilities for
Six Sigma
Deployme
nt
Articulat
e the
Busines
s
Govern
ance
Model
to
Monitor
Busines
s
Perform
ance
Develop
Six
Sigma
Training
Progra
m
Identify
Projects
for
Improve
ments
Install
Quality
Assess
Business
Performan
ce related
to Six
Sigma
Process
244
Circle (Enhance
the QMS
Process)
Figure 2 Six Sigma Road Map For a Bank
7. Limitations and Suggestion For Future Research
The study has touched on the current stage of six sigma implementation in the
banking sector of Qatar. Since the data showed a very low degree of six sigma
implementation, more research is needed to exactly specify the degree level of
quality control tools application in general and six sigma in particular.
The study has revealed some of the most important benefits perceived by bankers as
a result of using six sigma. Further studies are needed to identify reasons behind low
scores of important benefits like cost reductions whether it is the lack of knowledge of
six sigma or the lack of experience.
Other studies can help in shedding more light on how much knowledge of six sigma
is there especially among people who have the power to implement six sigma within
their organizations and followed by a study on how much this knowledge or lack of it
is actually affecting attitudes towards six sigma implementation. Lastly, in-depth
245
research should be undertaken regarding the impact of leadership, communication
and linking strategy to customers on the successful implementation of Six Sigma in
the Qatari financial sector.
Acknowledgements
I would like to thank the editor and the reviewers for their creative comments, which
helped us to formulate this paper in better shape.
References
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Antony, J. (2006), "Six Sigma for service processes", Business Process Management Journal, Vol. 12 No. 2, pp. 234-248.
Antony, J. ( 2007 ) "Is six sigma a management fad or fact?", Journal of Assembly Automation, Vol. 27 No 1, pp. 17-19.
Antony, J. (2008), “What is the role of academic institutions for the future development of Six Sigma?”, International Journal of Productivity & Performance Management, Vol. 57 No. 1, pp. 107-110.
Antony, J., Downey-Ennis, K., Antony, F. and Seow, C. (2007), “Can Six Sigma be the cure four our ailing NHS?”, Leadership in Health Services, Vol. 20 No. 4, pp. 242-253.
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Antony, J. (2008), “Can Six Sigma be effectively implemented in SMEs?”, International Journal of Productivity and Performance Management, Vol.57 No. 5, pp. 420-423.
Antony, J., Antony, F., Kumar, K. and Cho, B. (2007) , "Six Sigma in service organizations – benefits, challenges and difficulties, common myths, empirical observations and success factors", International Journal of Quality & Reliability management, Vol. 24 No. 3, pp. 294-311.
Bank, J. (2000), The Essence of Total Quality Management, Prentice-Hall Europe, pp208.
Banuelas, R. and Antony, J (2002), "Critical Success Factors for the successful implementation of six sigma projects in organizations ",The TQM magazine, Vol. 14 No.2, pp92-99.
Chakrabarty, A. and Tan, K. (2007), "The current State of Six Sigma Application in Services", Journal of Managing Service Quality, Vol. 17 No. 2, pp. 194-208.
Cheng, J. (2008), “Implementing Six Sigma via TQM improvement: an empirical study in Taiwan”, The TQM Journal, Vol. 20 No. 3, pp. 182-195.
Coronado, R. and Antony, J. (2002), “Critical success factors for the successful implementation of Six Sigma projects in organizations”, The TQM Magazine, Vol. 14 No. 2, pp. 92-99.
Foster, J. ( 2008), A Future vision of the Qatari Economy, Al-Sharq Newspaper, Vol. 71 No.40, pp 3.
Hensley, L. and Dobie, K.( 2005 ), " Assessing readiness for six sigma in service setting", Journal of Managing Service Quality, Vol. 15 No. 1, pp. 82-101.
Kline, R. (1998), Principles and practice of structural equation modeling, Guilford Press, New York, USA.
Kumar, V., Garg, D. and Mehta, N.P. (2002) ‘JIT/TQM in Indian industries’, Productivity, Vol. 43, No. 2, pp.215–224.
Ladani, L., Das, D., Cartwright, J., Yenkner., R. and Ramzy, J. (2006), “Implementation of Six Sigma quality system in Celestica with practical examples”, International Journal of Six Sigma and Competitive Advantage, Vol. 2 No. 1, pp. 69-88.
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Rajamanoharan, I. and Collier, P. (2006), “Six Sigma implementation, organizational change and the impact on performance measured systems”, International Journal of Six Sigma and Competitive Advantage, Vol. 2 No. 1, pp. 48-68.
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Appendix.1
Questionnaire on Six Sigma Implementation
Dear Sir/Madam
We are carrying out study about the implementation of Six Sigma in the banking
industry in Qatar. Your bank has been selected for this study based on a random
sample of banks. The study is purely for academic purposes and any information
provided will be of course treated in strict confidence and will not be used for any
other purpose other than the stated objective.
The study will have several benefits mainly in the form of assisting our understanding
of the implementation of Six Sigma, the critical success factors that underpin the
success of Six Sigma implementation.
248
The results and major findings of this study can be shared with the participating
banks at no cost to them. Of course, you are not required to identify your bank if you
do not wish to do so. Should you however, wish to have a summary of the results
sent to you, please include the relevant forwarding address or your business card.
Your kind cooperation in this matter is very much appreciated and we sincerely hope
that you will find study of interest to you and hopefully relevant to your bank.
We look forward to hearing from you.
Yours Sincerely
Project Supervisor: Dr. Salaheldin I. Salaheldin
MBA Candidate: Eman Shafee Younes Abdelwahab
• Who should complete this questionnaire? How?
The questionnaire should be filled in by those persons who are in charge of the
implementation of Continuous Improvement approach of Banks operating in
Qatar. This will be done through asking respondents:
1. To choose an answer in an appropriate box.
2. To indicate their extent of agreement about different issues based on five-point
scales (1-5).
249
1- BACKGROUND INFORMATION
About You
1. Age Category
� Under 30 yrs � 30-40 yrs � 41-50 yrs � 51-60 yrs � More than 60
yrs
2. Gender: � Male � Female
3. What is your role in the Bank?
� Top management � Middle management � First line management
4. How long have you been working in your Bank ?
� Under 5 yrs ago � 5-10 yrs ago � More than 10 yrs ago
About your Bank
250
5. Has your Bank planned for six sigma system?.
6. Has your Bank implemented six sigma system?.
7. Your Bank nationality.
� Qatari � Multinational � Other
8. Number of employees
� Less than
20
� 20-50 � 51-100 � 101-500 501-1000 More than 1000
9. Years of Establishment?
� Less than 5
yrs
� 5 –10yrs � 11-15 yrs � 16-20yrs More than 20 yrs
2. Six Sigma Benefits
� Yes � No
� Yes � No
251
10. The following statements relate to your perceptions of Six Sigma benefits.
Please indicate the box that you feel is the most appropriate to each statement (1=
Strongly Disagree; 2 = Disagree; 3=Neutral; 4=Agree; 5=Strongly Agree).
Six Sigma system offers the benefit of:
1. Six sigma reduces transaction cost 1 2 3 4 5
2. Six sigma reduces administration cost 1 2 3 4 5
3. Six sigma reduces costs associated order corrections. 1 2 3 4 5
4. Implementing six sigma helps in reducing retuned renewed
credit cards.
1 2 3 4 5
5. Six sigma focuses on solving the problem not preventing it. 1 2 3 4 5
6. Six sigma implementation improves the decision making
process.
1 2 3 4 5
7. Six sigma is a tool to improve internal business processes. 1 2 3 4 5
8. Six sigma aims at reducing mistakes in general. 1 2 3 4 5
9. Six sigma is basically a prevention tool. 1 2 3 4 5
10. Implementation of six sigma provides consistency in Service
Level Agreements (SLAs).
1 2 3 4 5
11. Six sigma reduces customers' complaints. 1 2 3 4 5
252
12. Implementing six sigma reduces customer waiting time. 1 2 3 4 5
13. It improves timing of answering customers' calls. 1 2 3 4 5
14. Six sigma in banking speeds service delivery to customers. 1 2 3 4 5
15. Six sigma will result in a higher customer satisfaction rate. 1 2 3 4 5
16. Implementing six sigma in the bank will affect bank's image
positively as a quality organization that seeks continuous
improvement.
1 2 3 4 5
17. Implementing six sigma will result in higher expectations of
customers that are difficult to meet.
1 2 3 4 5
3 Success Factors
11. The following statements relate to your perceptions of factors influencing the
success of Six Sigma implementation. Please indicate the box that you feel is the
most appropriate to each statement (1=Not important at all; 2 = Not important;
3=Moderate; 4=Important; 5=Very important).
The success of an Six Sigma implementation depends on:
253
FACTORS Importance
F1. Management Support and commitment
1. Management supporting implementation of six sigma.
2. Management builds a control quality culture.
3. The task of quality control is assigned to a particular
department.
4. Business Heads promote quality control implementation.
5. Management are concerned about the quality of service
provided to customers
6. Quality control and continuous improvement are clear
objectives in management strategy.
F2. Measurement and feedback
1. Customer satisfaction levels are measured and monitored.
2. A system to feedback customer concerns is established.
3. Internal measures (such as quality costs, no. of rejects)
collected to monitor quality improvement.
4. Employees views are listened to and acted upon.
5. Critical processes are identified for improvement.
F3. Improvement tools and techniques
1 2 3 4 5
1 2 3 4 5
1 2 3 4 5
1 2 3 4 5
1 2 3 4 5
1 2 3 4 5
1 2 3 4 5
1 2 3 4 5
1 2 3 4 5
1 2 3 4 5
1 2 3 4 5
1 2 3 4 5
1 2 3 4 5
254
1. Statistical techniques used in design processes.
2. Statistical techniques used in production processes.
3. Training on tools and techniques provided.
4. Non-production related functions such as marketing and sales
use quality tools for improvement activities.
5. Appropriate techniques are implemented when necessary.
F4. Systems and processes
1. Systems and procedures for quality assurance are
implemented.
2. Information and data collection system established to monitor
improvement activities.
3. Relevant training system in place.
4. Key business processes identified, improved and monitored.
5. Key business processes focused on meeting the needs of
customers.
F5. Resources
1. Sufficient financial resources provided to support improvement
activities.
2. Human resource availability considered in improvement
activities.
1 2 3 4 5
1 2 3 4 5
1 2 3 4 5
1 2 3 4 5
1 2 3 4 5
1 2 3 4 5
1 2 3 4 5
1 2 3 4 5
1 2 3 4 5
1 2 3 4 5
1 2 3 4 5
1 2 3 4 5
1 2 3 4 5
1 2 3 4 5
1 2 3 4 5
255
3. Investment decisions based on sound resources consideration.
4. Technical resources (e.g. software, equipment) are provided.
F6. Education and training
1. Employees are trained in job-specific skills.
2. Employees are trained in quality-specific tools and techniques.
3. Employees are trained on total quality concepts.
4. Training time is provided for employees.
5. Regular training is provided by quality management team.
1 2 3 4 5
1 2 3 4 5
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257
Six Sigma and Total Quality Management (TQM): similarities, differences and relationship
Souraj Salah* and Juan A. Carretero Dept. of Mechanical Engineering
University of New Brunswick, Fredericton, NB, Canada P.O. Box 4400, Fredericton, NB E3B 5A3, Canada
Fax: 1-506-453-5025 Email: [email protected]
Email: [email protected]
* Corresponding author
Abdur Rahim
Faculty of Business Administration University of New Brunswick, Fredericton, NB, Canada
P.O. Box 4400, Fredericton, NB E3B 5A3, Canada Fax: 1-506-453-3561
Email: [email protected]
Abstract:
The success of an organization is directly related to how effective its implementation
of continuous process improvement is. For any manufacturing system, Total Quality
Management (TQM) and Six Sigma are important methodologies used for process
improvement. Effective understanding of these methodologies and their relationship
will provide an industry with a competitive edge. Many industrial organizations today
are using either TQM or Six Sigma as the core for their process quality improvement
258
efforts. There is a lot of dispute on which methodology is superior, how they relate to
each other, what the common grounds are and what their differences are. As such,
the relationship between TQM and Six Sigma is worth further investigation. In this
paper, a thorough comparison between Six Sigma and TQM is performed. This
includes the similarities and differences of the two methodologies and how they relate
to each other.
Keywords: Six Sigma, Total Quality Management (TQM) and Continuous
Improvement (CI).
Biographical notes Souraj Salah is a Ph.D. Candidate studying at the Department of
Mechanical Engineering at the University of New Brunswick, Canada. He is a certified
Master Black Belt working in the manufacturing sector in Canada.
Juan A. Carretero is an Associate Professor of Simulation, Optimization, and
Robotics at the Department of Mechanical Engineering at the University of New
Brunswick, Canada.
Abdur Rahim is a Professor of Quantitative Methods, Quality Control, Inventory
Control, Reliability, Production Management, Operations Management and Total
259
Quality Management at the Faculty of Business Administration at the University of
New Brunswick, Canada.
1. Introduction
Among various process improvement methodologies, Total Quality Management
(TQM) and Six Sigma are two key methodologies widely used by various
organizations. TQM has been a dominant management concept for continuous
improvement (CI) utilizing Deming’s basic concepts including Plan-Do-Check-Act
(PDCA) (Snee, 2004). The Six Sigma Methodology is a well disciplined and
structured approach used to enhance process performance and achieve high levels
of quality. TQM and Six Sigma share the same goals of pursuing customer
satisfaction and business profit. However, TQM can not be fully replaced by the Six
Sigma. On the other hand, TQM has not achieved the radical results that have been
achieved by Six Sigma (Yang, 2004).
1.1 Six Sigma
Six Sigma is a collection of process improvement tools used in a series of projects in
a systematic way to achieve high levels of stability. Quantitatively, Six Sigma quality
means only two defects per billion opportunities. The necessity to operate at such a
low defect level may not be economic in all industries. Most companies operate at a 3
260
σ level, i.e., 2.7 defects per one thousand opportunities (Kwak and Anbari, 2004).
However, at high-yield companies such as Motorola, producing electronic parts each
with thousands of opportunities of failure, achieving an almost defect-free level is very
necessary.
In 1987, Motorola’s Six Sigma Quality Program was created by B. Smith (Devane,
2004). Also, W. Smith (Kumar et al., 2007) and Harry (Harry and Schroeder, 2000)
developed the concepts of Six Sigma as a way to improve the reliability and quality
of products. Motorola created a number of steps to achieve Six Sigma which where
later replaced by General Electric’s four phases of measure, analyze, improve and
control. After that, the define phase was added before the measure phase to form the
well known DMAIC process, i.e., Define, Measure, Analyze, Improve and Control.
This may be regarded as a short version of Deming’s Plan, Do, Check and Act cycle
(Dahlgaard and Dahlgaard-Park, 2006). If the product or service under consideration
is still at the early stages of development or major design changes are required, the
five phases that are used become DMADV (Define, Measure, Analyze, Design and
Verify) or DFSS (Design for Six Sigma). The goal of DMADV is to achieve a Six
Sigma level from the early stages and it normally applies the principles of concurrent
engineering.
261
The Six Sigma methodology starts with the identification of the need for an
improvement project. In the Define phase, the problem and the goal of the project are
formulated and an analysis is performed to quantify its expected financial savings.
The baseline performance is then studied in the Measure phase and brainstorming is
conducted to identify the list of the potential process inputs. These potential inputs
are all investigated in the Analyze phase to verify the critical few inputs negatively
affecting the process output. In the Improve phase, the critical inputs are examined to
determine the solutions. Finally, in the Control phase, the focus is on ensuring that
inputs and/or outputs of the improved processes are monitored on a day-to-day basis
to confirm that the anticipated gains are being held.
1.2 TQM
Quality Management evolved through different stages in the last several decades
such as inspection, control, assurance and Total Quality Management (TQM) (Basu,
2004). Short and Rahim (1995) viewed TQM as a philosophy used by organizations
to drive CI across its business activities. TQM has been a dominant management
concept for CI utilizing Deming’s basic concepts of Plan-Do-Check-Act (PDCA).
TQM can be defined as a quality management system (QMS) or a corporate culture
continuously evolving and consisting of values and tools focusing on customer
satisfaction and the use of fewer resources. There are seven quality control tools and
262
seven management tools frequently mentioned in the TQM literature (Arnheiter and
Maleyeff, 2005). The seven quality tools are control charts, histograms, check sheets,
scatter plots, cause and effect diagrams, flowcharts and Pareto charts. The seven
management tools are affinity diagrams, interrelationship diagraphs, tree diagrams,
matrix diagrams, prioritization matrices, process decision program charts and activity
network diagrams.
2 Comparison and discussion of Six Sigma and TQM
Six Sigma represents a new wave of the quality management evolution (preceded by
TQM evolution) towards operational excellence (Basu, 2004). The definition of TQM
is different from that of Six Sigma but the aims are similar (Anderson et al., 2006). Six
Sigma has additional data analysis tools and more financial focus than what is found
in TQM (Kwak and Anbari, 2004). TQM has a comprehensive approach that involves
and commits everyone in a company while Six Sigma has a project management
approach that is associated with a team (Anderson et al., 2006). Arnheiter and
Maleyeff (2005) have indicated that a number of components of Six Sigma can be
traced back to TQM. This explains that Six Sigma is an extension of TQM and that
they both share similar principles. Antony (2004) stresses that it is important to
remember that Six Sigma has a better record than TQM since its inception. Table 1
and Table 2 represent a summary of a literature review on the Six Sigma and TQM
similarities and differences respectively. Based on an extensive literature review and
263
the authors’ own experience, a comprehensive and appropriate basis for comparison
based on 25 dimensions is considered here.
Table 1 Similarities and relationship of Six Sigma and TQM.
Dimension Six Sigma TQM
Theory
Six Sigma is similar to
TQM in terms of theory
and handling methods
(Hwang, 2006).
Both draw from behavioral
and quantitative sciences
(Friday-Strout and
Sutterfield, 2007).
Basis It includes two
dimensions of
philosophy (or
management) and
methodology (or
analysis) (Hwang, 2006).
TQM can be described as a
philosophy and is considered
as a management process
that applies management
principles (Jitpaiboon and
Rao, 2007).
Aim
It is an improvement
methodology (Hoerl,
2004). Six Sigma and
TQM focus on CI
(Antony, 2006) and
TQM aims at improving all
processes within an
organization and it treats it as
a total system (Shah and
Ward, 2007). It is a holistic
264
share similar principles
and aims.
QMS (Jitpaiboon and Rao,
2007) or management
process with the goal of
generating a quality-based
culture (Aly et al., 1990).
Link to
Deming
Six Sigma DMAIC is
closely linked to
Deming’s PDCA cycle
(Haikonen et al., 2004;
Linderman et al., 2005)
and it improves upon the
PDCA cycle (Tannock et
al., 2007).
TQM is based on teachings of
Deming (Snee, 2004) in which
the main tenets of Six Sigma
are embedded (Mayeleff and
Kaminsky, 2002; Black and
Revere, 2006).
Change
Six Sigma is focused on
the belts leading the
projects along with the
involvement of the team
members.
TQM and Six Sigma use
training and organization-wide
support as levers of change
(Buch and Tolentino, 2006).
Approach
to design
Its design process is
more prescriptive in
TQM and Six Sigma stress the
importance of using QFD and
265
nature (Schroeder et al.,
2008). It has a stronger
focus on product design
using DFSS or DMADV
(Upton and Cox, 2008).
cross-functional design and
design for manufacturability
(Schroeder et al., 2008).
Focus (on
customer
and
process)
Six Sigma has a stronger
emphasis on customer
satisfaction through
mainly focusing on
critical to quality (Klefsjo
et al., 2001 and
Schroeder et al., 2008).
TQM and Six Sigma share
same values such as process
focus, customer focus, CI and
use of facts and data
(Tannock et al., 2007).
Customers are in the focal
point of TQM (Voros, 2006).
Both focus on product quality
and quality assessment
(Cheng, 2008).
Manageme
nt support
Six Sigma and TQM
depend on management
leadership.
TQM puts less stress on the
support by senior
management and financial
department (Hwang, 2006).
Complexit It is criticized for the Top managers often find it
266
y
difficulty to stick with the
rigor of the approach
(Linderman et al., 2005).
difficult to understand and it
does not work well for
processes that require major
changes (Klefsjo et al., 2001).
It is very difficult to manage as
it evolved to become all-
encompassing and intangible
(Jitpaiboon and Rao, 2007).
Table 2 Differences and relationship of Six Sigma and TQM.
Dimension Six Sigma TQM
Mutual
relationshi
p
Six Sigma is an
expansion of TQM
(Terziovski, 2006;
Proudlove et al., 2008)
with components traced
back to TQM (Aly, 1990;
Arnheiter and Mayeleff,
2005) and can be viewed
Six Sigma is an extension of
TQM (Klefsjo et al., 2001;
Proudlove et al., 2008).
Existing TQM activities can
help in the implementation of
a Six Sigma system (Cheng,
2008). TQM has become an
umbrella for Six Sigma and
267
as a methodology within
TQM and not as an
alternative (Klefsjo et al.,
2001).
other tools (Harnesk and
Abrahamsson, 2007).
Financial
savings
It tracks savings of each
project (Schroeder et al.,
2008). It has more
financial focus (Kwak
and Anbari, 2004)
It has an organization-wide
cost of quality calculation
(organizational level tracking)
(Schroeder et al., 2008).
Incentives It has less challenge to
have incentives to
pursue improvement
(Terziovski, 2006).
There is less incentives and
less career development focus
in TQM (Upton and Cox,
2008).
Strategic
link
It provides better
alignment with
organizational strategic
business objectives
(Antony, 2006).
A CEO considers TQM as
quality slogan carried without
translated goals to
implementable initiatives
(George, 2002).
Project
selection
Project selection rights
reside with management
There is no clear way of
prioritizing projects that are
268
to ensure financial and
strategic implications are
considered (Schroeder
et al., 2008).
carried out irrespective of cost
to operation (Banuelas and
Antony, 2002; Bhuiyan and
Baghel, 2005). The link
between economy and project
selection was missed in most
TQM implementations
(George, 2002). Projects can
be selected by bottom-up
approach which is often based
on convenience (Schroeder et
al., 2008).
Training
focus
It is a structured training
focused on Belts or
levels (Basu, 2004) that
create an infrastructure
for implementation
(Terziovski, 2006)
without focus on wide
team participation
(Schroeder et al., 2008).
It is a comprehensive
approach that involves
everyone (Ricondo and Viles,
2005; Anderson et al., 2006)
using improvement teams that
are sometimes in the form of a
quality department (Schroeder
et al., 2008).
269
Functional
team
It uses an intra-
organizational cross
functional improvement
team (Cheng, 2008).
It uses an inter-organizational
improvement team (Cheng,
2008).
Criticized
for
It does not focus on all
people and culture
(Linderman et al., 2005).
However, it is less
difficult to re-engineer
and evaluate breakup of
an organization using Six
Sigma as the team is
more independent of the
processes under
consideration (Hwang,
2006).
Terziovski (2006) indicated
that Snee claims TQM does
not integrate human elements
of improvement like team work
as good as in Six Sigma.
Training
intensity
There is more intensity in
the training of full-time
improvement individuals
(Schroeder et al., 2008).
TQM uses shorter length for
training (i.e. 1 week) but
targets all people in the plant
(Schroeder et al., 2008).
270
Motivation It is driven by tangible
benefits (Motwani et al.,
2004).
It is driven by idealism of
quality (Motwani et al., 2004).
Suppliers It targets supplier only if
critical to quality of
studied process
(Schroeder et al., 2008).
Targeting supplier
management is an important
element of TQM (Schroeder et
al., 2008).
Progress
monitoring
It has a mix of long and
short term focus with
better monitoring of
progress toward goals
(Motwani et al., 2004).
It promotes open-ended and
open-financed CI (Klefsjo et
al., 2001). It has a long term
focus with loose monitoring of
progress (Motwani et al.,
2004)
Structure
It is a project focused
approach using DMAIC,
reinforcing Juran tenets
(Basu, 2004) and a well
structured DMAIC road
map for deployment
(Terziovski, 2006). A key
TQM is not sequential and it
does not have a specific route
used by all organizations no
matter what their cultural
circumstances look like
(Leonard and McAdam, 2004).
TQM is criticized for lack of
271
strength in it is that it
builds a quality
improvement structure in
parallel to existing
management structure
(Linderman et al., 2005).
clear definition or strategy and
structured communication
(Ricondo and Viles, 2005).
Tools
It is not new in terms of
the tools but it has a new
approach to CI
(Banuelas and Antony,
2002). It has additional
data analysis tools
(Kwak and Anbari, 2004)
with more statistical
emphasis (Basu, 2004).
It is criticized for focusing
on tools not problems
(Linderman et al., 2005)
TQM and Six Sigma attempt
to find root causes but TQM is
not as specific or focused
(Klefsjo et al., 2001). It has
mainly 7 quality and 7
management basic tools
(Arnheiter and Mayeleff,
2005).
Performan
ce target
Its performance target
applies to a single critical
quality characteristic
It has a more comprehensive
performance target that
applies to the total product
272
(Banuelas and Antony,
2002). Sigma level can
be used in assessing
quality level attained or
in benchmarks (Klefsjo
et al., 2001).
(Banuelas and Antony, 2002).
It does not have a specific
way to quantify quality level
attained by an organization
(Klefsjo et al., 2001).
Results
Since its inception, Six
Sigma has a better
record than TQM
(Antony, 2004) and a
better record of
effectiveness (Cheng,
2008).
Some researchers found a
significant impact of TQM
practices on operational
performance and others did
not (Shah and Ward, 2003).
It is seen from Table 1 that Six Sigma and TQM share common ground in terms of
theory, philosophical approach, CI focus, aims, principles, links to the teachings of
Deming, approach to design, focus on customer, focus on process, dependence on
management support, change approach and complexity. On the other hand, Table 2
shows that Six Sigma and TQM are different in terms of mutual relationship (Six
Sigma can be seen as part of the holistic TQM. TQM can help Six Sigma and Six
Sigma extends TQM), financial focus and scope, incentives and career development,
273
strategic link, project selection approach, training focus and intensity, team approach,
structure, progress monitoring, basis for motivation, tools, performance target, focus
on suppliers and record of results. However, these differences can be considered as
additional strengths for the integration of TQM and Six Sigma as the weaknesses of
one are completed by the strengths of the other. Based on observation of many firms,
Lucas proposed that (Yang, 2004):
Current business system + Six Sigma = TQM
Equation 1
TQM and Six Sigma can be thought of as the process improvement and management
block which is directly connected and in the centre of all other business blocks.
Schroeder et al. (2008) proposed that the introduction of Six Sigma to organizations
that already have TQM would help them realize incremental benefits in their financial
results and customer service. The application of Six Sigma can help strengthen the
values of TQM within an organization (Anderson et al., 2006). Thus, TQM and Six
Sigma are similar in many aspects and compatible with each other. They share
numerous values and aims and both can benefit from the advantages that each can
provide where TQM can be the holistic and comprehensive umbrella that reaches to
all stakeholders and Six Sigma can be the extension that provides a strong structure
for achieving greater continuous process improvements. Six Sigma has roots traced
274
back to TQM (Upton and Cox, 2008). Six Sigma principles are embedded in TQM
(Sheehy et al., 2002) and it could be seen as a concept supporting the aims of TQM.
3 Conclusion
TQM and Six Sigma are very powerful CI methodologies that share common grounds
in terms of principles, goals, customer and process focus, dependence on
management support, approach to design, approach to change and complexity. They
also complement each other and can be integrated where Six Sigma can fit under the
umbrella of TQM to form a better methodology. On the other hand, they are different
in terms of mutual relationship, financial focus, training focus, incentives, strategic
link, project selection approach, team approach, structure, motivation, tools,
performance and record of results. However, these differences can be considered as
additional strengths for the integration of TQM and Six Sigma as the shortcomings of
one are completed by the strengths of the other. Despite their differences, there are
many areas where TQM and Six Sigma intersect and there are compatible areas
where one of them may excel forming an opportunity to help the other one. Thus, the
integration of the two is concluded to be possible and beneficial.
In sum, a thorough comparison between Six Sigma and TQM was performed in this
work. It was shown that TQM and Six Sigma are similar in many aspects and
compatible with each other. They both share numerous values and aims and can
275
benefit from the advantages that each can provide. More specifically, TQM can be the
holistic and comprehensive umbrella that reaches to all stakeholders and Six Sigma
can be the extension that provides a strong structure for achieving greater continuous
process improvements. The next stage for research in this area is to study how Six
Sigma and TQM can be integrated together and present a description for this
integration.
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Proposing a Sustainable Six Sigma Model.
Andrew Thomas Newport Business School
University of Wales Newport Wales,
Email. [email protected]
Hefin Rowlands Research and Enterprise Department
University of Wales Newport Wales,
Email: [email protected]
Paul Byard Manufacturing Advisory Service
Waterton Centre Bridgend
Wales Email: [email protected]
Gareth Thomas
British Airways Avionic Engineering Llantrisant
Wales Email: [email protected]
Abstract:
This paper proposes a strategic business model called Sustainable Six Sigma (S3). It
will provide an overview of the S3 concept through the integration of Lean, Agility and
Six Sigma into one effective approach and shows how S3 has a clear strategic
hierarchy which links the strategic business requirements through the PMASEE cycle
280
with the operational requirements via the DMAIC cycle. The main aim of this paper is
to show how the effective implementation of the S3 approach will lead to greater
opportunities for companies to achieve economic sustainability through continued
growth and improved manufacturing efficiency.
Keywords: Lean, Six Sigma, Sustainability
1 Introduction
Lean and agility are widely considered as business process strategies that have
facilitated high levels of sustainable growth in many manufacturing industries
throughout the world (Hines & Rich, 1997) Over the years many academics and
practitioners have attempted to integrate the two approaches through proposing the
concept of ‘Leagility’ (Childerhouse & Towill, 2000) and later, ‘Agilean’ (Cox,
Chicksand and Tong, 2007) since it was hoped and proven in some cases that an
integrated system of creating a Lean yet highly responsive manufacturing system
was beneficial to a range of companies dealing with the increased threat of
globalization and low labour cost competition. Over the past ten years or so Six
Sigma has been hailed as a key business improvement approach that is capable of
achieving significant improvements in business process performance. Companies
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such as Motorola and GE have based their business process strategy around the Six
Sigma concept.
As companies have continued to seek ways of delivering greater business
performance at lower cost, the concept known at Lean Six Sigma has come to the
forefront. Early developers of the Lean Six Sigma approach (George, 2002) seemed
to concentrate on a simple connection between Lean and Six Sigma proposing that
the business should be “Leaned up” first and then introduce Six Sigma as a
mechanism to reduce variation and improve quality. Others proposed that the ‘Lean’
part of Lean Six Sigma could be brought in at the Improve stage of the Six Sigma
DMAIC process thus effectively demoting Lean to a secondary process (Breyfogle,
1999). More recently, Six Sigma has been considered as an effective business
process improvement strategy (Amheiter & Maleveff, 2005), (Anthony, 1999), (Bohte,
1991). However, Six Sigma and the associated DMAIC cycle can be seen as a
simple yet powerful five stage methodology and it can be argued that it has limited
strategic capability in its current form. The authors of this paper therefore propose a
strategic S3 framework which will allow for the effective implementation and delivery
of S3 to manufacturing companies thus assisting them to achieve Lean and highly
repeatable manufacturing processes. The proposed S3 framework has been
developed as a result of extensive research work with twenty manufacturing
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companies both large and small who have Six Sigma or Lean Six Sigma projects in
their companies.
Through working with these companies the authors have been able to piece together
both the best practices undertaken and the failings made through the adoption of the
various business improvement strategies. This has therefore allowed for the creation
of an integrated framework for future development.
2.0 Survey Data and Findings
A sample of 20 manufacturing organizations were targeted and visited for the survey.
10 companies were classed as SMEs (meeting EU criteria for SME status) and 10
companies were large companies all forming part of multi-national organizations. Of
the 20 manufacturing companies, 10 Six Sigma Black Belt practitioners were
interviewed along with a 10 Green Belt practitioners and 2 Master Black Belts. The
aim of the interviews was to identify the problems associated with implementing,
managing and operating Six Sigma and/or Lean Six Sigma projects.
Unstructured interviews were undertaken with each practitioner in an attempt to draw
out key issues. The interviews were supplemented by a detailed walk through the
company’s operations concentrating upon the Lean and Six Sigma projects and how
this work impacted upon the company’s manufacturing operations. A number of key
findings were identified:
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1. The Six Sigma projects which were considered as poorly performing from the
company’s viewpoint were attributed to poor initial strategic planning where the
selection of the wrong project or project area was seen as the major issue. Most
companies had highlighted that if more time had been spent early on in the
project through accurately planning and identifying project needs and
requirements, resources would have been used more effectively and the project
would have yielded greater benefits to the organizations concerned.
2. Practitioners also highlighted the need to develop a clear and well defined set of
tools and techniques which could be developed at each point in the Six Sigma.
This would assist in removing the confusion of what to use and when in the Six
Sigma cycle
3. Practitioners identified that projects were delivered in a piecemeal format often
with teams being split between Six Sigma specialists and Lean specialists. This
approach limited integration of the teams and often led to the teams trying to
implement ideas and techniques which did not benefit the overall project process.
4. The ‘Improve’ phase was identified as a weak link with 60% of the practitioners
interviewed. Although the solution was deemed as being robust and effective, the
implementation of the improve phase was not seen as sufficiently effective and
did not deliver the fully benefits expected from this phase. The practitioners
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identified the lack of a distinct implementation mechanism which provided the
necessary impetus to drive the change forward.
5. The lack of an effective control mechanism was also seen as a weakness in the
current DMAIC Six Sigma and Lean projects. Following the implementation
phase, many of the practitioners felt that the good work undertaken during
implementation of the improve phase was lost soon after as bad practices
returned to the operational system. Also, the control phase was not seen as
being effective enough to develop a culture towards sustainable and continuous
improvement.
6. The DMAIC cycle was firmly seen by all practitioners as a short term highly
intense business improvement process rather than as being a long term
strategic development cycle or continuous improvement strategy.
3.0 The S3 Approach
The survey identified some key deficiencies within the DMAIC process, much of
which comes from the inability of the companies to improve and control the DMAIC
projects effectively. Also observed from the survey was the misconception amongst
managers that Lean Six Sigma suggests a sequential approach to applying the tools
and techniques. In many cases there seems to be two distinct operating mechanisms
for applying the concepts where Six Sigma employs a five stage DMAIC process and
Lean is implemented in a number of different ways each employing a different
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number and sequence of Lean techniques which are encased in a strategic vision
based around the issue of doing more with less.
Figure 1 The S3 Triad
The S3 triad in figure 1 identifies the need to address three business objectives
namely: (i) achieve performance targets which are driven by customer requirements
and demand, (ii) reduce variation in the achievement of the performance target i.e.
meet the performance target every time and (iii) remove waste, improve value and
drive efficient throughout the organization. S3 therefore aims to achieve economic
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sustainability for an organization by meeting the three objectives within the triad in a
simultaneous manner.
In order to alleviate the problems identified in the survey, the authors of this paper
propose a strategic model for Lean Six Sigma implementation called S3. The aim of
S3 is to provide an overarching management tier which allows senior managers
within companies to set strategic targets and to undertake a structured approach
towards identifying and developing Six Sigma projects within the company. The S3
approach allows senior management to deploy their strategic level intentions down
the system into specific DMAIC projects at the next level.
The S3 proposes three distinct levels connected together in order to form a single
strategy. At the first strategic level, a Six stage process cycle called PMASEE (Plan-
Measure-Analyse-Solve-Execute-Embed) is used. This allows for senior
management in an organization to follow a high level six sigma analysis process.
Through employing PMASEE, senior management can employ a series of advanced
planning, measuring and solution tools and techniques which when applied to a
complete business process, can yield a series of specific Six Sigma DMAIC projects
which Six Sigma black and green belts can undertake at the second strategic level
Figure 2 shows the strategic stages of S3
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With PMASEE, the traditional Define stage is replaced by a ‘Plan’ stage. This allows
managers to concentrate more on planning the system in such a way that maximum
benefit is achieved. . The Planning stage subsumes the define stage but also
includes the need to consider the effect on the manufacturing system if a particular
process is improved (downstream bottlenecks as a result of improved system
efficiency upstream, effects of improved reliability on the output of the system etc).
Also, PMASEE introduces an ‘Execute’ stage. Experience through working with
companies implementing such projects has shown that in many companies
implementing Six Sigma the Improve stage is not fully exploited and that the
effectiveness of the solution is reduced through incorrect project execution. It is
therefore important that the ‘Execute’ stage is added and is distinctly separate to the
Solve stage. Therefore in this approach the DMAIC ‘Improve’ stage is replaced with
Solve and Execute. The ‘Execute’ stage allows practitioners to concentrate on
implementing an effective solution in order to maximize effectiveness of the system.
Table 1 shows each of the stages of the S3 approach and includes the typical tools
and techniques that can be used to support the process. Note that the tools,
technique and stages identified in bold lettering are suggested essential elements of
the S3 process with the other elements being optional and used to suit the problem at
hand.
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3.1 Strategic Levels of S3
S3 proposes three distinct strategic levels. These levels allow for the effective
deployment of the high level strategic issues down to the operational level where the
Improvement projects are undertaken.
At strategic level 1, S3 enables higher level planning and the development of further
and more focused Lean Six Sigma projects that can be deployed down at the level
2 operational level.. Level 2 is the operational strategy level and it is here that the Six
Sigma projects identified at the PMASEE stage are now undertaken and fully
developed by Six Sigma Black and Green belts using the standard DMAIC cycle. At
this stage, the belted practitioners may decide that at the Improve stage of the
DMAIC cycle, to delegate the Improvement projects to a lower level. It is here that the
Level three projects will be undertaken. Practitioners will deploy a range of simple
‘Improvement’ projects onto the shop floor (5S, Autonomous Maintenance etc) to be
undertaken by key personnel. This deployment strategy through three levels will
provide for a clear delineation of activity and creates an effective hierarchy for Six
and Lean Sigma development. Figure 3 shows the schematic breakdown of the
strategic levels. Figure 2 shows the integrated nature of the S3 concept. The figure
shows the PMASEE model working within the Lean framework so that operational
integration is achieved.
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S3 employs the best aspects of lean, agility and product / process quality combined
with the important aspect of systems re-configurability. The latter requires a company
to change its strategic and technical focus quickly to respond to market trends and
demands. This therefore calls on companies to have the necessary business process
systems in place along with the correct technology platform and management
systems.
For any particular manufacturing facility, a balance between Lean / Agility and Six
Sigma is crucial. In some plants, leanness may be important, agility less so and vice
versa for others. More often than not, however, companies will need to manufacture
a range of products where each product line has a different demand profile and, as
such, the balance between lean and agility varies each time whereas the application
of Six Sigma remains the same in each case. While the level of leanness and agility
will change, the issue that remains static throughout is that of sustainability and the
need for a company to continually remain competitive.
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Figure 2 The S3 Concept
Whatever the balance between Lean and Agility is for a company, what is required
however is the need for the company to achieve world class levels of product quality
and performance and this is where Six Sigma becomes an integral business driver
(Breyfogle, 1999). What is therefore required is a suitable control system which
enables a company to measure at any stage in its operating cycle, whether the S3
process requires adjustment or improvement in order to keep operations running to
target.
S3 extends throughout a company, from order placement to repair and dispatch.
Technology is central to the S3 strategy concentrating on the technological interfaces
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between customer and company. This technology is then dovetailed into an effective
strategic and operational management system that leads to the creation of an
efficient, sustainable and responsive manufacturing environment. S3 integrates key
business process strategies together with a company’s existing and future
technology platforms and support systems This integration provides not just a single
business approach but an integrated design and manufacturing system that
combines the systemics of a range of business process concepts into one model that
has low operational and systems complexity
Technology includes more than just the machinery and associated systems that
convert the raw material into a finished product. It also covers e-commerce at the
front end through to the electronic transfer of customer order requests and the
complete e-manufacturing facility that takes essential customer data, design and
manufacturing data and drives them forward in a simultaneous manner so that a
product can be manufactured quickly and cost effectively. It is the tight integration of
these various electronic platforms with the strategic and business systems that will
provide the seamless cost effectiveness and rapid response required to meet
customer demands. In order to provide effective backing for the technology elements
in the strategy, support functions must exist that can ensure that the systems operate
in the expected manner with minimum downtime and maximum efficiency (Thomas &
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Barton, 200&), (DTi, 2002). These support functions include self-diagnostic systems,
adaptive control systems, and so on.
4.0 Application of S3 in Sample Company
The S3 model is currently being adopted by a sample company. The company is a
major repair organization in the UK and has tried to implement a range of business
process improvement (BPI) programmes in the past but without success. The
company cited a number of problems associated with previous BPI programmes
many of which were outlined in the survey results reported earlier in this paper. The
company is currently in the initial stages of Lean Six Sigma implementation and has
decided to employ S3 as a strategic mechanism towards deploying Lean Six Sigma in
the organization. A schematic representation of the S3 approach is shown in Figure 3,
the details of which were described previously in this paper.
The company is approximately twelve months into the S3 implementation programme
and the initial results are promising. Senior managers of the company were
interviewed to obtain feedback about how the S3 programme was progressing. The
feedback obtained was information from individual interviews. Table 2 shows the
benefits and the disadvantages of implementing S3.
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5.0 Conclusions
The survey identified a number of issues which troubled implementation teams and
managers employing Lean Six Sigma. In particular problem were seen at the
managerial level in achieving complete problem solutions and maintaining the
benefits of Six Sigma projects once undertaken.
The PMASEE model is proposed by the authors as a high level strategic stage within
Lean Six Sigma which allows for tighter and more focused managerial control and
ensures and effective deployment of projects down through the S3 hierarchy.
Developing a S3 strategy calls for consideration of three major operational areas of
systems development. These are:
♦ the development of a company’s supply chain system to ensure high quality,
highly responsive and dependable supply of raw material and subcontracted
products;
♦ the development of a lean, technologically driven and highly agile manufacturing
system that is designed to convert customer requirements to finished products
quickly and efficiently; and
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♦ the development of systems that enhance sustainability by supporting and
continually improving the performance of the product, the logistics and the
manufacturing systems.
The requirements of S3 can thus be split into the three main areas of lean, agility and
Six Sigma. These are integrated into a holistic system structure. It is every
company’s basic requirement to be sustainable. Sustainability is essentially the ability
of a company to stay competitive by adapting to changes in the market trends and
customer requirements.
References
Hines, P., Rich, N., “The Seven Value Stream Mapping Tools”, International Journal of Operations and Production Management”, 1997, 17,1. Childerhouse,P Towill,D. “Engineering supply chains to match customer requirements” Logistics Information Management; 2000, 13, 6 Cox,A, Chicksand,D, Tong, Y “The proactive alignment of sourcing with marketing and branding strategies: a food service case”, Supply Chain Management: An International Journal; 2007, 12, 5. George, M L,. (2002) “Lean Six Sigma – Combining Six Sigma Quality with Lean Speed”, McGraw Hill, ISBN 978-0071385213 Breyfogle, F.W. Implementing Six Sigma, Smarter Solutions - Using Statistical Methods, (1999).John Wiley & Sons Inc. Amheiter,E,D, Maleveff, J., “The integration of Lean Management and Six Sigma”, The TQM Magazine, 2005, 17,1,
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Antony, J., (1999), “Spotting the Key Variables Using Shainin’s Variables Search Technique”, Journal of Logistics and Information Management, Vol 12, No.4. Bhote, K.R. (1991), World Class Quality, American Management Association, New York, NY. Thomas A J and Barton R - Developing an SME based Six Sigma Strategy, Journal of Manufacturing Technology Management 18/5 2007, 417-434 ISSN
1741-038X, pp 490-512 “Achieving Best Practice in Your Business – QCD Measuring Manufacturing Performance”. Department of Trade and Industry Brochure, www.dti.gov.uk., 2002.
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Table 1 The S3 Process and Typical Tools and Techniques
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Table 2 Early Stage benefits of S3 Implementation
S3 Stage Advantages Disadvantages
Plan The planning stage allowed us to see
the full picture. It forced us to consider
the effects of one action on the complete
process rather than just in isolation. This
generated further Lean Six Sigma
projects for the company
This is a large and complicated stage
and more time could have been spent
on this stage.
Measure Allows the organisation to collect high
level business / strategic data which
would not have been collected under the
DMAIC process. High level data looked
at profit and loss in each value stream
including the analysis of the contribution
each value stream gave to the total
Sometimes wondered what this data
was going to be used for. Sometime lost
track of data streams and their impact
on the organisation rather than just the
line which I was working on.
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company profit margins.
Analyse Analysis stage looked at the complete company picture whereas the DMAIC Analysis stage focussed on the value stream under consideration. This allowed us to look at the effects of improving one area and how that could impact +ve or –ve on other key business processes
None Given
Solve This was a good stage since it allowed us to split the solution stage from the doing (execute) stage. We could then bring in specialists at the solve stage which could do their work and then move out to leave the doing tasks to the manufacturing people. Allowed us to use more advanced techniques to solve problems.
This is a rather technical stage and needed much more training in the company in order to solve the problems correctly. Management need to consider costs here
Execute As Above As Above Embed Not Undertaken Yet Not Undertaken Yet
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Figure 3 Hierarchical Breakdown of the S3 Structure
Strategic Level 1 Business Level
Strategy
Strategic Level 2
Operational level
Management
P
M
A
S
E
E
D
M
A
I
C
D
M
A
I
C
D
M
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Development of a 5S Sustainability Model for use with
Lean and/or Six Sigma projects
James Marsh Faculty of ACES
Shefield Hallan University, & SD&S consulting LTD, UK
Terrece Perrera Faculty of ACES
Shefield Hallan University
Vijitha Ratnayake, Gamini Lanarolle Department of Textile and Clothing Technology
University of Moratuwa, Sri Lanka
Abstract:
Many thousands of companies throughout the world implement Lean and/or
Six Sigma with varying degrees of success. Of the companies that have used
these proven approaches, 77% of Lean and 76% of Six Sigma
implementations fail. Of the tools and techniques most commonly used in the
early stages of improvement deployments, 5S and Value stream mapping are
identified. Research has shown that 5S provides quick improvements within
many organisations but they find it difficult to sustain this improvement over
time particularly when they reach the 4th phase of the approach. Once the low
hanging fruit has been reaped, the motivation often reduces and the
improvement programme can fail.
A 5S sustainability model using the DMAIC approach would provide a means
of measuring the level of achievement within various functions of an
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organisation across each phase of the 5S program. The model would consist
of an audit process designed around the 5S toolset aimed at all levels of the
organisation. This would provide an insight into the culture of the organisation
and a general operational health-check of the 5S process in place at the
company. The data from the audit would subsequently be analysed via a
specially developed model and the resulting recommendations implemented
to improve the overall “buy in” of the process. It is proposed to conduct this
methodology in a Lean “automated” manner reducing the need for time
consuming methods for collecting, measuring and analysing the data.
This paper details the strategy and development thus far of the sustainability
“proof of concept” model and the next steps required to meet the needs of
selected companies, with the future aim to benchmark this process within
other sectors before full role out to industry.
Key Words: 5S; Sustainability; Six Sigma; Lean; Industry; Organisation;
Audit; Assessment
1 Introduction
Both Lean and/or Six Sigma approaches have been in existence for many
years and prove to be ever popular in Industry however the success
associated with these tools and techniques remains low. Of the companies
that have used these proven approaches, 77% of Lean and 76% of Six Sigma
implementations fail (Mehta 2004) to achieve the benefits associated with
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these approaches. Of the tools and techniques most commonly used in the
early stages of improvement deployments, 5S, 7 Wastes and Value stream
mapping are identified.
Much research has been conducted examining the reasons for failure of
Lean and Six Sigma approaches (Peterka 2005, Flinchbaugh 2006, and
Carnell 2008), the popular theories include cultural readiness,
management commitment, inadequate training/education and dilution of
the core approaches amongst others. However what is clear is that each
organisation is unique and there is not one single solution to solve the
problems of providing continuous sustainability. Therefore it would be
useful to provide a method of assessment so that the issues preventing
sustainability can be identified and worked on to improve the probability of
success.
This paper examines one of the most popular tools used during the early
phases of Lean and/or Sigma implementations. 5S is extremely
widespread and is very useful for gathering the low hanging fruit and
gaining momentum for success however for many organisations this
success is short lived and is not sustained.
The aim of the paper is not to identify why 5S fails in general terms but to
develop an audit tool which can be used by companies who currently use
5S. The reason for this is that each 5S implementation is different and the
causes for failure and lack of sustainability also vary. Therefore it is
deemed of value to be able to assess a company’s implementation and
clarify the causes for failure as well as opportunities for improvement.
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2 Market Need
The need for the 5S Sustainability tool was borne from both a client need
and personal experience of ineffective Lean Six Sigma assessment
processes over the previous ten years. The short term strategy is to
therefore develop and optimise the proposed 5S sustainability model and
to broaden this out in the long term to a Lean Six Sigma sustainability
assessment process.
It is envisaged that the 5S audit tool will help facilitate the success of Six
Sigma by providing companies with an insight as to what exactly is preventing
the 5S process from being sustainable within the workplace. These specific
causes once clarified can then be acted upon using a suitable continuous
improvement planning process with key stakeholders from the project.
The client, a leading producer of industrial chemicals in their current state
has a 5S audit tool based around a series of questions formulated on an
EXCEL spreadsheet. This type of method is commonly used within
industry and this process suffered several disadvantages these included: -
• Time consuming task
• In effective metrics
• No feedback process
• No defect control
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2.1 Key Customer Requirements
Taking into account the current limitations of the existing process the
following key customer requirements were clarified with the client for the
revised 5S Audit to meet: -
• Development of a 5S Audit assessment questionnaire which can be
easily modified
• Delivery of 5S Audit to stakeholders via email or hosted on a web
page.
• Automatic submission of 5S Audit once complete
• Capability to generate a variety tables and charts for analysis
• Capability to generate statistical outputs
• Use of results to generate constructive conclusions and
recommendations
• All the above to be provided using within a single software application
3. Software Application Evaluation
A market survey was undertaken to find a package capable of delivering
the requirements. 5 different applications analyzed and evaluated against
a selection criteria matrix. Analysis of this is depicted in figure 1.
From the evaluation, Snap Survey was the only package deemed to meet
the customer and technical requirements to the necessary levels to
deliver a 5S Assessment process. The application had the ability to build
audits quickly and easily, which many of the other packages could also
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deliver apart from EXCEL. However when combined with its ability to
produce a wide range of graphs and tables its uniqueness began to show.
Coupled with detailed statistical features normally found in packages such
as SPSS and Minitab, the software made a strong case for itself.
Snap Survey also allows the user to publish the audit to users via email
and on websites. The time to conduct the audit using this process is also
drastically reduced in particular within medium to larger organizations.
Rather than filling in the audit with pen and paper and entering the data
later on onto a spreadsheet, the audit can be completed in a variety of
ways. For example it can be conducted using a personal digital assistant
(PDA) and the audit if required can be submitted for analysis
instantaneously. Alternatively it can be completed on paper, scanned and
read automatically for analysis.
4. 5S Sustainability Audit Development
The development of the audit took into account the requirements of the
client and also utilised personal experience of performing 5S audits in a
variety of industry sectors. The audit itself consists of two different sets of
questions these are lead questions and specific audit questions based on
the use of 5S within a specific area within an organisation.
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4.1 Lead Questions
The first set of questions is general leading questions and the information
from these questions will aid in the analysis phase. These general
questions clarify certain information about the individual conducting the
audit itself. These questions are used as variables which can be cross
referenced with the 5S audit questions using the software application and
this will aid in the generation of conclusions and recommendations with
regard to sustainability of the 5S process. These questions include the
auditors, gender, and role, duration of 5S training, department and
company level amongst others. This will be covered in detail later in the
paper.
The lead questions ask for the following typical information shown in
figure 2.
4.2 Audit/Observational Questions
The 2nd set of questions is structured around each of the 5S Phases.
Each individual phase has its own set of five questions or observations.
Each question can be rated over a defined range from a minimum of zero
to a maximum of four. Zero being observed as “never” and a four is
deemed as being “always”
Figure 3 is an example of the questions for the straighten phase.
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With a total of 25 questions for the five phases of the 5S approach and a
maximum rating of four for each observation, a maximum score of 100
can be attained from the 5S sustainability audit assessment. The
development of the individual 5S questions themselves was conducted
from personal industrial experience of 5S implementation and
benchmarking of other 5S approaches from other organisations.
A useful feature of the Snap survey software is its ability to create multi
language questionnaires which allow the user to switch from one
language to another. Therefore when for example an English only
speaker has to email an audit to a Dutch client, the audit is published in
Dutch. When the questionnaire is returned in Dutch the English speaker
can switch over using a “tab” function within the software and conduct the
analysis in English with no problems understanding the Dutch auditor’s
answers.
5. Proof of Concept Testing
The 5S audit required some initial testing to identify any issues that may
exist with the proof of concept (POC). Once the questionnaire is
developed within the software application it needs to be published. There
are a variety of ways the questionnaire can be issued but the most
suitable in this situation due to the clients being in the Netherland and Sri
Lanka was to publish the questionnaire as an HTML file to be emailed.
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Once published the user simply emails the audit to all the auditors of the
5S process. This can include cell operators, managers, 5S trainers and
external 3rd party assessors. The file once received is downloaded by the
auditor and they complete the audit when the time is appropriate for them.
When the audit is complete they simply click on the submit button and the
audit is returned to the creator of the 5S sustainability audit. All the
returned audits should be left as unopened mail and to access the data
the Snap Survey software imports the data directly from the mailbox.
These files are now classed as opened files in the mailbox.
A process flow diagram depicting this process is shown in figure 4.
Testing of the send and receive process of the 5S Audit proved relatively
trouble free with no issues or problems. Completed example audits were
collected for both the Dutch and Sri Lanka 5S audits and the next phase
would be to develop the analysis process of the results.
6. Analysis of Data
In order to create the graphs and charts the software application had to have
some logic applied. This consisted of creating a specific weighting factor for
each value for each of the 5S audits questions. This was required in order for
the software to understand that an observation rated as a 3 for example
should be scored as a 3 within the application. Also for each of the 5S phases
these had to be labelled via a “dummy” question or label in order for the
graphs and tables to understand which questions were related to which phase
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of the 5S approach. These then needed to be applied to specific routing logic
within the software.
With the necessary logic created, it was possible to create the tables and
charts as required by the client. By combining the variables from the
leading questions with the observations from the 5S audit it is possible to
obtain some very interesting analysis and comparisons.
Taking the case data compiled from Sri Lanka textiles sector it is possible
to analyse the different between the leading questions and the 5S audit
questions. Initial analysis of this data in Figure 5 and 6 shows a table and
radar chart for comparing the leading question of department with the 5S
audit responses. This shows clearly how each department is performing
with regard to its 5S program for each individual phase. It can clearly be
seen that administrations 5S programme is performing very well apart
from the Sustain phase. Whilst in finance there seems to be issues across
most of the 5S Phases, therefore highlighting a general issue with the 5S
deployment within the area.
The reasons for the success and failure may not be apparent initially
however by continuing the analysis using the other leading questions a
picture can start to be developed of what is happening in each area. By
adding variables such as “how long have you been trained” you could
determine that the department has only recently being trained for
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example. Or it could be that certain employees have just joined the
organisation and have little or no 5S awareness.
There could also be differences in opinions between different levels of the
organisation demonstrating lack of management commitment or shop-
floor fear of the 5S approach. This is where using the right leading
questions with the general audit questions is crucial.
Initial analysis of statistical outputs from the 5S Audit showed how the tool
can clarify valuable information to the user. The sample detailed in figure
7 contains statistics from Sustain Questions 15a to 15e. These clarify
where more effort is required within that phase of the 5S approach within
the topicality of team boards (mean 3) however the emergency equipment
on the whole is highly visible (mean 4.516) and focus of effort is needed
less here. The statistics also depict the variance of the results and where
this is high, further investigation should be placed to determine why this is
so within particular departments.
7. Conclusions and Recommendations
Initial feedback from industry clients and fellow academics of the proposed 5S
sustainability process has been positive thus far. Referring to the customer
requirements for the process and the market needs defined earlier in the
paper all of these have been met by the study. It has been important to meet
these criteria for the model to be successful as part of the development
process.
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Managerial implications for this type of process are widespread as it can
help make both strategic and operational decisions within the deployment
of the 5S approach. It provides focus on where effort should be placed to
get value added benefits and where effort should not be placed reducing
waste.
The Snap Survey software has proved useful in its abilities to combine the
questionnaire element with statistical capabilities to be able to produce
tables and graphs which can be used to clarify opportunities for
improvement in specific areas of the 5S steps. The ability to combine the
output from the leading questions with the 5S audit question enables the
user to “drill down” to get to the root cause or close to it. This will help
reduce the time to get to the root cause and subsequently reduce the time
to solve the problem.
The 5S Audit tool does have some small limitations over conventional
audits methods in existence, namely the initial cost of the software and
the time required in getting acquainted with the various functions and
complexities of the Snap survey. However when these are compared to
the time it takes to collect and analyse data for conventional audit
processes the payback is soon realised. When this is also coupled with
the abilities of the software analysis capabilities the disadvantages
become less important.
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Lessons learnt from this research have been the overall size of the project
was bigger than initially envisioned. Therefore following these initial trials
of the 5S Sustainability model, it is the intension to conduct full statistical
analysis of case study data and further trials to fully understand its
benefits and potential areas for improvement.
Once this process is completed the next phase will be to develop the
sustainability model for other Lean Six Sigma tools such as FMEA, DOE,
7 Wastes, and Value Stream Mapping. The ultimate aim will be to develop
a full Lean Six Sigma Sustainability Assessment (LSSSA) process and an
Environmental (ELSSSA) version also. It is proposed that the assessment
tool could be used both by external consultants and/or by trained internal
employees to gauge how departments are performing in relation to Lean
Six Sigma tools and techniques.
References
Carnell M. (2008) Understanding Six Sigma deployment failure, isixsigma.com
Flinchbaugh J (2006) How to Avoid the 5 Biggest Lean Pitfalls, Assembly Technology Expo in Rosemont, IL, Sept. 26 2006
Mehta M. (2004) Committing to a Lean Six-Sigma Roadmap, IIE Lean Solutions Conference, Dec. 2005, Orlando, FL
Peterka P. (2005) Exploding Six Sigma Myths, white paper, Sixsigma.us
315
Figure 1 – Evaluation of Software applications for 5S Audit
316
Figure 2 – Example Lead Questions
317
0 = Never, 1 = Rarely, 2 = Half the time, 3 = Mostly, 4 = Always
Straighten Audit
0 1 2 3 4
Is there a location for
every item stored?
Is every item in its
correct location e.g. in
relation to labels?
Is the storage area
generally clean &
tidy?
There is an updated
and clear storage plan
(visible) available
Are all
cables/leads/pipes
tied up & safe?
Figure 3 – Example Generic 5S Straighten Phase Questions
318
Figure 4 Example Process Flow of the 5S Audit
319
Base
Base
SORT TotalSTRAIGHTEN
TotalSWEEPING
TotalSTANDARDISE
Total SUSTAIN Total
Missing
No reply
Department /Function
Production
Logistics
Administration
Finance
Laboratory / Testing /
Inspection
R&D
Customer Service
Other
- - - - - -
- 7.33 9.67 12.00 8.33 1.00
- 11.38 12.63 13.13 9.63 7.00
- 16.00 7.50 16.50 14.50 15.00
- 16.50 18.00 17.75 16.50 8.00
- 7.00 9.00 9.00 9.00 12.00
-17.00 16.00 14.00 15.00 5.00
- 8.50 9.25 14.75 9.25 7.75
- 15.50 15.00 18.50 17.00 7.50
- 12.57 14.71 15.43 14.00 13.86
Figure 5 – Table of 5S performance in relation to Function/Department
Case Data from Sri Lanka Textile Sector
0
5
10
15
20SORT Total
STRAIGHTEN Total
SWEEPING TotalSTANDARDISE Total
SUSTAIN TotalProduction
Logistics
Administration
Finance
Laboratory / Testing / Inspection
R&D
Customer Service
Other
Department / Function by SORT, STRAIGHTEN, SWEEPING, STANDARDIZE, SUSTAIN showing means
Figure 6 – Radar Chart of 5S performance in relation to Function/Department
320
Case Data from Sri Lanka Textile Sector
Base
Missing
No reply
Descriptive Statistics
Count Mean Mode Median Minimum Maximum
Standard
Deviation Variance
Have standard
markings, labels, etc
been used
Is the team/cell
activity board topical
& up to date?
Are all
regular/moveable
items 'footprinted'?
Are all documents/
working instructions
clearly identified?
Is emergency
equipment clearly
marked & visible?
320 32 3.3125 4 3.5 1 5 1.1022 1.214844
320 32 3 2 3 1 5 1.118034 1.25
320 32 3.03125 4 3 1 5 1.334269 1.780273
320 32 3.4375 4 4 1 5 1.170937 1.371094
321 31 4.516129 5 5 1 5 0.79802 0.636837
Figure 7 – Table of Statistics from Sustain Questions 15a to 15e
Case Data from Sri Lanka Textile Sector
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Beyond Six Sigma: A Holistic Quality Maintenance System Embodying Systems Thinking, Systems Engineering Knowledge-Based Management And
Multiple-Criteria Decision Making
Hari Agung Yuniarto*
1School of Mechanical, Aerospace, and Civil Engineering, The University of Manchester,
Sackville Street, Manchester M60 1QD, UK 2Department of Mechanical and Industrial Engineering,
University of Gadjah Mada (UGM), Yogyakarta, Indonesia, 55281
Email: [email protected] *Corresponding author
Hiroshi Osada
Graduate School of Innovation Management, Tokyo Institute of Technology,
2-12-1 Ookayama, Meguro-ku, Tokyo 152-8550, Japan
Andrew Starr
School of Aerospace, Automotive and Design Engineering, The University of Hertfordshire,
Hatfield, Hertfordshire AL10 9AB, UK
Taha Elhag
School of Construction and Project Management The Bartlett – University College London,
Gower Street, London WC1E 6BT, UK
Abstract:
Six Sigma as a framework for process quality improvement and problem
solving has increasingly attracted many board of director around the world and
widely been adopted into various region of industry. Notwithstanding its fame
in quality assurance, this methodology overlooks a holistic view which is
treating the process being improved as the whole system. It fails to recognize
multiple CTQs to be addressed and balanced in synchronization with dynamic
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of the demand of global marketplace for wider product range, higher product
quality, and lower product cost. This micro-level assessment paradigm regards
Six Sigma as only a non-conformance avoidance tool and falls short of
breakthrough, rather than put huge efforts on achieving long-term business
goals with creative innovation. It was also believed, as lacking from system
thinking as well as knowledge-based management, Six Sigma’s philosophy
and structure are not yet compatible with attaining learning organization that is
robust to change in customer needs.
To gain in-depth understanding of the true problem, self-learning, and better
quality decision making, this study is developing frameworks for future Six
Sigma suitable to the establishment of creative innovation projects, as well as
future knowledge acquisition and optimum problem solving and design. Details
of frameworks developed in the integration of System Dynamics, Knowledge
Management and Multiple Criteria Decision Making techniques will be
described in this paper. The essential features of these “beyond Six Sigma”
frameworks will be highlighted followed by brief overviews of potential
application to the maintenance problems in a manufacturing industry.
Keywords: System Dynamics, Six Sigma, Systems Thinking, Systems
Engineering Knowledge Management, Analytical Hierarchy Process,
Maintenance Management, Quality Control
1. Introduction
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Six Sigma is well known for quality improvement by reducing variations from
the output specification limit (Goh, 2004, Harry, 1999). While this six sigma
level characterizing the calibration of process performance using statistical
tools becomes a means of enhancing the competitiveness of an organization
towards business excellent, it is also fruitful on reflecting voice of customers
through CTQ (Critical To Quality) and establishing DMAIC framework as a
data-intensive systematic approach (Morgan, 2006, Snee, 2003, Harry, 1997,
Goh, 2002, Antony, 2004).
Notwithstanding success stories of many companies reducing their defects
through Six Sigma projects, the arguments raised about its flaws keeps
increasing. Some authors (Yuniarto, 2008, Montgomery, 2001, Goh, 2004)
argue that Six Sigma is flawed, as it does not take into account systems
perspective in the algorithm itself. It fails to describe this methodology as a
system oriented approach with dynamic nature, optimality outcome,
knowledge-based execution, system behaviour analysis and breakthrough
objective. This paper offers novel frameworks taking the Six Sigma one step
further to underpin organization’s competitive advantage.
2 Six Sigma – The Truth
Six Sigma is aimed on reducing variations to improve quality of the process
(Snee, 2000, Harry, 1997) with goal-theoretic perspective as its scientific
approach (Linderman, 2006). Thus in a process where the output is whished
to be not more than a specification limit, there should be a sufficient buffer
between process mean and the specification limit to ensure no out-of-
specification performance exists (Goh, 2004). According to this, the variation
or sigma of the output must be reduced. If the buffer forms six standard
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deviations between process mean and the specification limit, the process may
be said to be of “six sigma” which reflects that the out-of-specification or
defective rate is 3.4 defects per million opportunities (DPMO). Figure 1
depicts the percentage of data which falls within various level of sigma.
Figure 1 Standard deviation with normal distribution
Six Sigma adopts a pack of statistical tools to construct a framework for
process improvement reflecting the needs of the customers by CTQ
(Customer To Quality). This framework, namely DMAIC, is in the use to
improve CTQ through its systematic approach of Define-Measure-Analyze-
Improve-Control. Problem is defined from the customer’s view in the define
phase. In the measure phase, CTQs of the product are determined and
baseline performance levels as well as improvement goals are assessed and
established. Discovering root cause of defects and key process variables that
might have link to the defects is done in the analyze phase. Followed by
improve phase which contains a process creative to reduce CTQ defect levels
within acceptable limits that had been secured in the measure phase. At last,
actions to sustain the improved levels of sigma are designed and monitored
through the control phase.
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Figure 2 Scope of systemic SMBP Vs Six Sigma – The Analogy
With such statistical quality concept and packed quality improvement tools,
organizations adopting Six Sigma are hoping to gain customer’s loyalty thus
contributing to their competitive advantage (Antony, 2007, Goh, 2004, Snee,
2003, Harry, 1999). And besides, when Six Sigma is a top-down initiative, it
will be in accordance with a well-known strategic policy design and
deployment, namely Strategic Management by Policy (Osada, 1998).
Relationship between those is illustrated in Figure 2. Yuniarto and Elhag
(2008), however, argue that increasingly high customized demand in the
global market has put the need of a systemic point of view and systems
perspective as prominent issues for the next-generation of Six Sigma. Few
authors (Montgomery, 2001, Goh, 2004) have also identified these needs.
Goh and Xie (2004) capture flaws in Six Sigma due to lack for system thinking
paradigm as follows:
326
1. mostly concerned only on single CTQ with less attention to varied
customer expectations
2. attention paid to partial view of the problem overlooking systems
perspective with narrow attention span
3. not a means to encourage self-learning towards learning organization
as well as not to promote future knowledge acquisition for innovative
outcomes and creative breakthrough
4. focussed on isolated project-based activities constitutes sub-
optimization
5. with increasing complexities of the system, it is unable to elaborate
non-linear dynamic relationship lies within the system
Figure 3 Beyond Six Sigma’s concept
Since it fails to look beyond the system that had gone wrong, the next
generation of Six Sigma needs to be equipped with new frameworks which
327
enable all stakeholder levels partake in the process to explicitly deal with the
worth of knowledge and systems thinking as illustrated in Figure 3.
Methodology of System Dynamics and Systems Engineering-Knowledge
Management combined together with Analytical Hierarchy Process can be
fruitfully used to address these gaps for performance enhancement and
quality maintenance of business excellent.
In the following sessions, the idea and new frameworks of beyond Six Sigma
will be described.
3 Beyond Six Sigma – A New Paradigm
To make Six Sigma relevant and useful in the long-term coping with high
quality product customization and cost effective in the global marketplace, it
must have system thinking perspective embedded through every phase in
DMAIC (Montgomery, 2001, Yuniarto, 2008, Goh, 2004). This systemic point
of view will help see a problem in big pictures to gain better understanding of
the problem at first before any alternative solutions could be offered with
optimum results, as well as providing macro-level assessments and
innovative approach. Considering problems in their entirety to understand
behaviour of dynamic relationships within the system needs an approach to
facilitate the sharing and integration of knowledge.
Miles (Miles, 1973) argued that solving complex system problems with the
application of system approach requires a great deal of knowledge in wider
disciplines. The knowledge developed across process improvements should
be wisely managed in a scientific manner towards reaching a learning
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organization. In order to enable Six Sigma to bring these new paradigms to
bear on, other three prominent methodologies are incorporated into DMAIC
constitutes a new methodology - the Beyond Six Sigma. These three
additional methods are Systems Thinking, Knowledge Management, and
Analytical Hierarchy Process. Table 1 summarizes the uniqueness of all
methodologies incorporated.
Table 1 Characteristics of the methodologies incorporated in Beyond Six
Sigma
The people’s motivation, the organizational goals and business strategies, the
knowledge developed and shared, the environment, the technologies and
technical factors, and the socio economic current issues must all be
considered for holistic quality improvement initiatives. From Table 1, it can be
shown that Systems Thinking can enhance Six Sigma through its ability to
depict complex process and thus enhance understanding to respond the
needs of a dynamic organization. A Knowledge Management approach to Six
Sigma can address the lack of knowledge that has to be created, organized,
applied, and shared along phases in DMAIC. While Analytical Hierarchy
Process contributes to optimizing the results of Improve phase in DMAIC.
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4 Beyond Six Sigma – The Structures
In Figure 4, a structure of how systems thinking involving diverse range of
stakeholder works in Six Sigma is presented. The system perspective
embraced in this new Six Sigma methodology throughout all phases of
DMAIC employs feedback mechanism in order for the system to be robust in
a complex and dynamic business environment. It looks at problems as a
system of the whole in its entirety, taking into account all the variables and
relating both “soft” factors and “hard” factors. Including in these hard factors
are physical and technical problems, whereas soft factors often relate to the
people, motivation, procedures, environment, and other socio-economic
human related issues. The involvement of all stakeholders within systems
thinking initiatives for their thoughtful ideas in every phase of DMAIC will
enrich solutions to the problems and benefit from values created by
interdisciplinary team. To comply with this, the DMAIC is now deemed to be
non-linear as depicted in Figure 5.
Figure 4 Systems thinking concept
330
CC OO NNTT RR OO LL
CCOONNTTRROOLL
Figure 5 DMAIC’s new relationships
While enjoying their merit in being integrated, the incorporation of Systems
Thinking into Six Sigma still suffer from their low ability to provide a general
sense of direction for knowledge management initiatives. This is benefiting Six
Sigma from organizational learning in which eliciting and leveraging
knowledge are the result of synergies among different parts of the knowledge
management system that are evident only when it is considered in its entirety.
These prominent methodologies combined would then enable the new Six
Sigma establishes frameworks for responding dynamic needs of stakeholders
towards learning organization. Thus, Systems Engineering – Knowledge
Management (SEKM) which comprises several steps to be accomplished,
graphically exemplified in Figure 6 below, must be adhered into the DMAIC in
all levels continuously and concurrently.
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Figure 6 Six Sigma scheme with SEKM
A neglect of several issues like knowledge integration with company’s goals,
the people involved in knowledge management activities, and the cultural
context within which knowledge management is developed (Montano, 2001)
will be coped using SEKM. With the use of feedback loops within SEKM
ingrained in DMAIC enhances the ability of Six Sigma by its adaptability and
responsiveness for the dynamic changes in CTQ and business process
environment.
5 Beyond Six Sigma – The Frameworks
What the new paradigm of Six Sigma is required to successfully implement is
frameworks where the structures discussed above could be laid down. Two
main frameworks for new DMAIC recently developed during this study are the
one for DEFINE phase and the one for combined phase of ANALYZE and
IMPROVE. As shown in Figure 7, several consecutive tasks with feedback
loops are involved in the DEFINE framework. Such framework, with close
consideration to quality system requirements and business objectives, allows
drawing appropriate boundaries for CTQ determination, combining potentially
332
conflicting CTQs for integrative approach, as well as providing tools for
multiple CTQs to be recognized, addressed, and balanced (Goh, 2004).
Figure 7 A framework for new DEFINE phase
The strong emphasis on recognizing, addressing, and balancing multiple
CTQs using framework above could mean that critical attribute of quality
product which customers do not think can be clearly highlighted and conveyed
through the process of improvements from the early phase in DEFINE. This
creativity leading to innovations results in product customization with
333
increased variety and attractiveness that is going to be important in now days
business globalization.
The second framework is developed with a synergy of substantial
components within ANALYZE and IMPROVE phase aimed at providing
enhanced tools for root cause analysis and optimum strategic policy design.
Rather than implement these two phases subsequently, ANALYZE phase
overlaps ANALYZE phase to some extent in this new framework. This will
help provide the combined framework with a robust concurrent procedure that
will enable dynamic behaviour of the system changes to be dealt with
continuously. It is comprised of two sub-phases; “know-how” constitutes
descriptive tasks, while “decision” is set to prescribe best solutions for
optimum result, as illustrated in Figure 8. A System Dynamic simulation
software will be utilized in “know-how” sub-phase to model the system with
systems thinking perspective providing dynamic relationships and change
patterns to be further analysed. Following the results of this strategic analysis,
alternative quality improvement designs which help mitigate or eliminate
recurring the problems in the future are sought for optimum value with the use
of Analytical Hierarchy Process technique.
334
Figure 8 A framework for combined ANALYZE and IMPROVE phase
6 Case Study –The Validation Techniques
These proposed frameworks for new - beyond - Six Sigma are going to be
implemented in practice in industry for validation and refinement. A company
producing fertilizers in Indonesia will host the case study of executing the
frameworks especially engaged to cope problems in maintenance. The case
study itself will then be followed by survey works to collate information from
prospective users across 75 Asian-based firms and 90 European-based firms
in manufacturing industry. As both case study and data survey are still on
going, discussions on the data resulting from this validation are not yet
available to present.
335
7 Conclusions
- New paradigm in Six Sigma is required to response prevalent trend of
dynamic changes in global business marketplace which will facilitate in
attaining in-depth understanding of the true problem at first, as well as self
learning, for quality improvement.
- This systems thinking embedded paradigm also enables business
operatives to have wider insights of quality process improvement gained
from diverse range of skills project team with interdisciplinary views giving
better response for competitive advantage.
- The new frameworks proposed - beyond Six Sigma - offer robust
methodology for quality improvement focussing on innovative
breakthrough rather than just defect avoidance through knowledge-based
and systems thinking approach.
- These frameworks also equipped with a multiple-criteria decision making
technique to augment its contribution in optimization.
- Integration of Systems Thinking, Knowledge Management, and Multiple-
Criteria Decision Making into Six Sigma will greatly facilitate the handling
of complex and changing situations, as well as to optimize multiple
decisions under operational and resource constraints.
- Case studies and a survey with questionnaires will be adopted to validate
the proposed frameworks.
336
References
ANTONY, J. (2004) Some pros and cons of six sigma: an
academic perspective. The TQM Magazine.
ANTONY, J. (2007) Six Sigma: a strategy for supporting innovation in pursuit of business excellence – invited paper. International Journal of Technology Management, 37, 8-12. GOH, T. (2002) A Strategic Assessment of Six Sigma. Quality and Reliability Engineering International, 18, 403-410. GOH, T., XIE, M (2004) Improving on the six sigma paradigm. The TQM Magazine. HARRY, M. (1997) The Vision of Six Sigma, Phoenix, Tri Star. HARRY, M., SCHROEDER, R (1999) Six sigma: The breakthrough management strategy revolutionizing the world's top corporations, New York, Doubleday. LINDERMAN, K., SCHROEDER, ROGER G, CHOO, ADRIAN S (2006) Six Sigma; The role of goals in improvement teams. Journal of Operations Management, 24, 779-790. MILES, R. J. (1973) Systems Concepts, New York, Wiley. MONTANO, B., LIEBOWITZ, J, BUCHWALTER, J, MCCAW, D, NEWMAN, B, REBECK, K (2001) A systems thinking framework for knowledge management. Decision Support Systems, 31, 5-16. MONTGOMERY, D. (2001) Editorial: Beyond Six Sigma. Quality and Reliability Engineering International, 17. MORGAN, J., JONES, MB (2006) Six Sigma and the future of quality. Management Services, 50. OSADA, H. (1998) Strategic management by policy in total quality management. Journal of Strategic Change, 7, 277-287. SNEE, R. (2000) Impact of six sigma on quality engineering. Quality Engineering. SNEE, R., HOERL, RW (2003) Leading Six Sigma Companies, Upper Saddle River NJ, Prentice-Hall.
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YUNIARTO, H., ELHAG, TMS (2008) Enhancing Six Sigma with System Dynamics. The 2008 International Conference of Manufacturing Engineering and Engineering Management (ICMEEM). Imperial College London, UK, IAENG.
Acknowledgement
This research study becomes available to achieve its aims and objectives with
all means of support provided by the Islamic Development Bank – Jeddah
SA.
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Lean Six Sigma in Human Resources
A Case Study in Transactional Services
Alessandro Laureani PHD Student
University of Strathclyde
Six Sigma Black Belt
Hertz Europe Service Centre
Swords Business Park Swords, co. Dublin
Ireland
Tel 0035318133051 Fax 0035318131414
Mobile 00353876220762
E-mail: [email protected]
ABSTRACT
Despite its outstanding success so far also, the organizations that have
embraced it, have applied Six Sigma mostly to their more quantitative and
measurable areas of their business, where the existence of hard quantitative
metrics allows a clear definition of defects, and so a more straightforward
application of the Six Sigma tools.
This paper illustrates how Six Sigma can be applied to the Human Resources
(HR) practice of an organization, challenging the myth that a lack of
339
quantitative metrics in HR makes impossible to apply the DMAIC
methodology.
Keywords: Lean, Six Sigma, Human Resources, Talent management,
Human Capital
1. Introduction
Since its inception in manufacturing about 20 years ago, Six Sigma has grown
out of the manufacturing plants into the service sector. Many organizations,
from Shared Service Centres managing large call centre operations, to
financial institutions, have implemented the Six Sigma Breakthrough
methodology within their business’ practice.
Despite its outstanding success so far also in the service sector, the
organizations that have embraced it, have applied Six Sigma mostly to their
more quantitative and measurable areas of their business, where the
existence of hard quantitative metrics allows a clear definition of defects, and
so a more straightforward application of the Six Sigma tools. Plenty of
examples and case studies exist of the application of Six Sigma to Finance
(e.g. Account Receivables, Account Payable, etc...) or Operations (claims
processed, calls handled, etc…).
In this paper we want to examine how Six Sigma can be applied to the Human
Resources (HR) practice of an organization. We want to challenge the myth
340
that a lack of quantitative metrics in HR makes it almost impossible the
application of the DMAIC methodology.
In a business world becoming fiercely competitive, managing employees, and
their talents, is a complex and demanding challenge, both for national and
multinational companies. Recruiting costs, training investments, employees’
turnover, experience and transfer of knowledge are all key areas of how a
company manages its workforce’s talent.
Considering how crucial this area is to the success of an organization, it’s
surprising that Six Sigma has not yet been widely adopted in the review of HR
practices: this can maybe be attributed to the myth that those things can’t be
properly measured, coupled with a relaxing attitude of HR practitioner to
quantitative metrics.
The paper will show how Lean Six Sigma can be applied to HR practice, and
a case study of a Lean Six Sigma project in the HR function of a multinational
company will be analyzed.
1.1 Human Capital Value Stream Map
In order to understand how Six Sigma can be beneficial in the Human
Resources area, it’s first necessary to clearly map its different functions.
341
The overall goal of a HR department is to maximize the return of investment
on the human capital of the organization. At different stages of the employee’s
relationship with the organization, the HR department will perform different
functions: each of those is a point along the value stream map of the human
capital:
Human Capital Value Stream Map
Let’s briefly see the objectives of each step:
Attract: to establish a proper employer’s brand that attract the right calibre
individuals;
Recruit: to select the best possible candidate for the job;
Integrate: to ensure new employees are properly trained and integrated in the
organization;
Reward: to ensure compensation package is appropriate and in line with the
market;
Develop: to individuate talent and ensure career progression;
Manage: to supervise and administer the day to day job;
Separation: to track reasons for voluntary leavers and to maintain a
constructive relationship.
It’s possible to apply Lean Six Sigma to each step of the value stream map, in
order to eliminate waste in the HR processes: to do, it’s necessary to
determine the inputs, outputs and defects of each step, in other words it’s
342
necessary to determine precise and clearly defined metrics and key
performance indicators.
HR Metrics
For each step in the value stream map it’s possible to consider the following
questions in order to determine opportunities for Six Sigma implementation:
a. What is the expected deliverable of the step?
b. What are the relevant metrics and key performance indicator of
the step?
c. What are the opportunities for defects in the step
A vast literature exists on possible metrics for HR processes: it’s not the
objective of this paper to debate which metric is best for each step in the
value stream map.
The point is that answering the above questions will provide the output, the
defects and the opportunities for error: those three elements will allow
calculating the DPMO (Defect per Millions Opportunities) and hence the
sigma value of the process. Once this is done, implementing Six Sigma in HR
would not really being different from implementing it in other parts of the
organization. Let’s now examine a practical case of Six Sigma application to
the HR domain.
343
A case study: Hertz Corporation
The case focus on a Six Sigma project conducted in the HR function of the
Hertz Corporation: one of the leading worldwide car rental organizations.
1.2 Company Background
Hertz carries one of the world’s leading brand names: its history back to
Chicago in 1918, when Walter L. Jacobs opened a car rental operation which
he sold to John Hertz in 1923. Today, Hertz is a leading car rental company,
represented in over 147 countries, with more than 8,000 locations and 26,000
employees worldwide. Its world headquarters are located in Park Ridge, New
Jersey and Hertz Europe is headquartered in Uxbridge, London. During its
history Hertz has been part of General Motors, RCA, United Airlines and Ford,
with periods as a publicly traded company. It was an independent, wholly-
owned subsidiary of the Ford Motor Company from 1994 until 2005, when it
was acquired by a group of investment firms. Hertz Global Holding Inc.
completed an initial public offering (IPO) on 17 November 2006, and is now a
publicly traded company listed on the New York Stock Exchange (code HTZ).
Hertz started implementing Six Sigma in 2000, when part of the Ford Motor
Group: since then Six Sigma projects have been run in different parts of the
organization: Finance, Operations, Supply Chain, and Customer Service.
However the Human Resources department was not involved with Six Sigma
until early 2008.
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1.3 Project Background
Faced with an employees’ turnover rate considered too much higher for the
business needs of the organization, Hertz decided to run a Six Sigma project
across the HR division with the high level objective of reducing employees’
turnover.
The operational definition of employees’ turnover was the ratio of voluntary
leavers of the organization over the total number of employees in any given
period of time.
Although the level of turnover varied across different business units and
geographic regions, it had been at around 20% for the overall Hertz
Corporation over the last five years. At the begin of the project, the
employees’ turnover rate was at 19.3% average across the organization, with
peaks of 39% for some level or functions; costing almost $60 million annually
(including jobs’ advertise costs, recruitment costs, training costs, etc…). The
goal was to reduce those of 20%, with a potential bottom line benefit of $12
million annually.
2. Lean Six Sigma at work in HR
The approach used for the project was the traditional Six Sigma approach
couple with elements of Lean Management: for each step of the value stream
345
map detailed above, a Kaizen (‘Continuous Improvement’) workshop was run,
with representative from the HR function and other areas affected.
The output of each workshop was:
a. ‘Current State’ Process Map: how the function was operating at the
moment;
b. ‘Future State’ Process Map: how the function could operate without
waste and defects
c. ‘Action Item Register’: the list of actions necessary to move from point
a. to point b., in order to bridge the gap between current and future
state
As mention above, once output, defects and opportunities have been defined,
implementing Lean Six Sigma in HR is no different from implementing it in
other areas of the business. Let’s take one step of the value stream map as
an example.
2.1 A step of the value stream map: Recruitment
In the case of the recruitment process, the answers to the above questions
are:
a. What is the expected deliverable of the step?
The output is to recruit the right person for the job in the shortest time possible
and at the best possible recruitment cost.
346
b. What are the relevant metrics and key performance indicator of
the step?
Key metrics are:
- Time: length of time to fill the vacancy;
- Quality: this tie with getting the right person for the job, something that
can be difficult to measure objectively. However each new hire has a
probation period of 6 months in the organization: failing to meet the
requirements of the job would end the contract of employment. As
such, the percentage of new hires that were confirmed at the end of the
probation (trial) period of employment was considered as a good proxy
for measuring the quality of the recruitment process;
- Cost: cost of recruitment (advertise, recruiting agencies, etc…).
c. What are the opportunities for defects in the step
Some opportunities of defects are: lack of a detailed and updated job
description may impact the quality and time of hiring, an excessive reliance on
external recruiting agencies may inflate costs, a cumbersome assessment
and interview process may unnecessary delay the recruitment process. As
such a defect of the Recruitment process is any vacancy that is not filled
within the established time frame and budget, and where the candidate fails to
successfully pass the probation period (quality). From here it is possible to
apply the usual DMAIC tools to the project, delivering a reduction in cost and
time to hire an employee.
347
For example, it’s possible to map the current state (‘what it is’) and the future
state (‘what should be’), as shown below:
Current State Map
Start
End Lead Time: 4
weeks
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Future State Map
As the customers of this process will be Recruiting Managers, which avail of
the services of the Recruitment team to fill vacancies in their departments, it is
possible to collect the ‘Voice of the Customers’ (VOC) with internal surveys.
From here, any Six Sigma practitioner would be able to follow on, working his
way through as any other project in another function.
2.2 Comparative Study (‘before’ vs. ‘after’)
The application of Lean Six Sigma tools in the Recruitment area has
highlighted the non-value added parts of the recruitment process, helping in
reducing its variance.
The achievement of the above ‘future state’ map has allowed in practice:
Lead Time: 1-2
weeks
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• Reduction in the use of external recruitment agencies (i.e. cost
savings);
• Lead time to recruit halved from four to two weeks (i.e. time savings);
• More flexible manpower planning model, allowing for easier
adjustments according to the seasonality of the business
Also, as a result of the time savings, recruitment staff could dedicate less
time to high volume recruitment for the same positions over and over, and
spend more time in value adding activities, such as better job profile
design: the identification of the “critical to quality” competencies for each
role to be reflected in the job description.
3. Conclusion
In conclusion, we can state that implementing Six Sigma in HR is not really
different from implementing it in any other part of the organization: key is the
selection of the right metrics. Some examples of objectives for a Six Sigma
implementation in the HR function are:
• Reduction in employees’ turnover rate;
• Reduction in time and cost to hire a new employee;
• Reduction in training costs;
• Reduction in cost of managing employees’ separation;
• Reduction in administrative defects (payroll, benefits, sick
pay, etc…);
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• Reduction in queries from employee population to the HR
department
The HR function has its own internal customers within the organization,
whose expectations are the same of the external customers: a fast, cost
effective, efficient process with the least possible defects. Lean Six Sigma can
help in achieving it, as it has already shown in other functions.
References
• Banuelas C. R. and Antony J. (2002) “Critical Success Factors for the successful implementation of Six Sigma projects in organizations”, The TQM Magazine, Vol. 14, No. 2, pp. 92 – 99
• Gates R. (2007) “Lean Six Sigma Deployment: start off on the right
foot”, Quality Progress, Aug 2007; 40, 8, pg. 51 – 57
• Gupta, P. (2005), “Six Sigma in HR”, Quality Digest, QCI International.
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Using Six Sigma - SIPOC for Customer Satisfaction
Dr. Shirley Mo-Ching Yeung
Lecturer/ Quality Assurance Officer, Department of Business Studies, Hang Seng School of Commerce (HSSC) , Hang Shin Link, Siu Lek Yuen,
Shatin, New Territories, Hong Kong
Email: [email protected]
Abstract:
The aim of this paper is to explore the use of “Suppliers, Inputs, Processes,
Outputs and Customers” (SIPOC) in Six Sigma to monitor products and
services provision for customer satisfaction. This paper has been supported
with literature in Six Sigma, quality management and marketing management
with a case of a retail shoe shop in Hong Kong.
Previous researches seldom covered the application of SIPOC in marketing
management to fulfill customer need, customer satisfaction, concerns of
stakeholders and the community. A case of integrating SIPOC of Six Sigma
into a social responsible (SR) and ethical retail shoe shop has been
demonstrated in this paper.
However, adopting quality concepts in marketing management is still not
common, neither in academic curriculum nor in business practice. It is
suggested carrying out further researches on the use of quality concepts in
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analyzing the relationship between consumer behavior and business
performance.
Key Words: quality concepts; SIPOC; Six Sigma; marketing management;
customer satisfaction; systematic.
1 Introduction
Sheahan (2007) mentioned that business today requires new perspectives on
strategy, operation, customers and staff. He urged management of
organizations shall have a mindset of flexibility and should try different ways
of doing things in this complex business world. There is no single way to
success. This is especially true in marketing management as customer
demand keeps on changing. The survival of business relies heavily on
realizing and actualizing the demands of customers through appealing
marketing campaigns. Therefore, people working in marketing field should
keep abreast of not only the dynamic business environment, but also the use
of quality concepts in managing and enhancing customer satisfaction.
Developing a mindset of social responsibility in marketing management is
crucial for sustainability. Marketers should have a concept of social
responsibility when launching marketing campaign to the public; and they
should be competent in integrating latest quality management tools into
marketing matrix to catch up with the needs of society as mentioned by Scott
(2005) that responsiveness to needs of society is important.
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According to Sheahan (2007), there are four forces of change. They are:
1. increasing compression of time and space;
2. increasing complexity ;
3. increasing transparency and accountability; and
4. increasing expectations on the part of everyone for everything.
As the fundamental function of marketing is to promote products or services
to the public, the driving force of change mostly comes from transparency and
accountability, and expectation of people in a community. This relates to the
concept of social responsibility – showing concern for an organization’s
stakeholders, like owners, employees, customers, and the communities.
Being responsible for customers is important for sustainable business. Collins
(2008) mentioned that ethical organizational activities include the criteria of
treating customers fairly and holding every member accountable for his or her
actions. Therefore, the change in marketing management is to develop a
sense of social responsibility and ethics when launching marketing activities
to the public. This has been well supported by Ambler (2000) that “marketing
is the process of satisfying three groups of people: immediate (trade)
customers, end users (consumers) and, all the firm’s stakeholders.”
“Awareness is vitally important in the work of transformation
because the habits of our personality let go most completely when
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we see them as they are occurring. Analyzing past behavior is
helpful, but it is not as powerful as observing ourselves as we are
in the present moment.” (Riso, 1999)
Riso (1999) brought up the use of observation in our daily life for learning.
Marketers should observe changes in the business environment, realize
techniques in launching marketing campaigns, and develop a good sense of
social responsibility to their stakeholders for achieving sustainability in
business.
“Awareness can not only change your life, it can save your life.”
(Riso, 1999)
However, making one realize the importance of quality concepts in marketing
is not an easy task in this fast-paced commercial world. One justification for
this paper is to increase the awareness of using quality concepts in marketing
activities, and to develop a social responsibility of marketers who engage in
product and service promotion to the public.
2 Marketing Management
Sheahan (2007) stated that customers’ total ownership experience derived
from four things, namely service, form, functionality and story. Among these
four things, story is the most powerful one as a feeling is established between
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products and customers. However, the way of realizing whether a feeling has
been created between products and customers is not easy to be identified.
“Innovation permeates so much of business that we need to be clear
about the unit of analysis for marketing metrics. (Ambler, 2000)
In order to identify the link between marketing activities clearly – people,
product, place, price, promotion, customers’ needs and satisfaction,
innovative metrics shall be used. SIPOC (Suppliers, Inputs, Process, Outputs,
Customers) is a systematic tool to help build a link of these variables and act
as audit criteria for marketing performance. “Quality Progress” magazine of
American Society of Quality (ASQ, 2007) has stated that SIPOC diagram is a
tool used by Six Sigma process improvement teams to identify all relevant
elements of a process improvement project before work begins.
According to Ambler (2000), innovation should be found in creation,
development and implementation of goods, services, service delivery and any
new activity that will affect a firm’s performance in the market. All businesses
concern about their performance – profits and growth. Innovation can be a
way to bring profits and growth. This refers to innovative products and
processes of manufacturing in production; creativity in the process of service
delivery; and value in marketing metrics which help monitor marketing
performance.
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Most marketing management concerns factors affecting performance. Hence,
using practical metrics to identify variables in marketing activities can help
control and decision-making. Marketing management should have strategic
leadership in setting goals for sub-ordinates. They should establish an
innovative culture in generating ideas of product and service promotion and
measuring marketing performance. The process of measurement shall be
fast, cheap, efficient to realize marketing performance.
3 Considerations of Ethics and Social Responsibility in
Marketing
Tsai et al. (2006) mentioned that business ethics is attracting increasing
attention among management scholars in North America and Europe.
However, this topic has not been covered comprehensively in East Asian
economies with exception of perhaps Japan. They stated that relationship is
found between organization structure and ethics. DesJarins (2006) described
‘business ethics’ as those values, standards, and principles that operate
within business. He emphasized that we not only study the standards, values,
and principles, but also learn how to articulate them into business operation.
DesJarins (2006) mentioned that each of the Four P’s - product, pricing,
promotion, and placement is actually involved with ethical questions that
marketers need to be aware of. They should make sure that there are no
fraud, deception, or coercion involved. They should treat consumers fairly in
marketing situations.
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“When these conditions are violated, autonomy is not respected
and mutual benefit not attained. (DesJarins, 2006)
“It is not always easy to determines if someone is being treated
with respect in marketing situations…First, the person must
freely consent to the transaction…..the more a consumer needs
a product, the less free he or she is to choose and therefore the
more protection he or she deserves from unsafe products or
unscrupulous manufacturers.” (DesJarins, 2006)
In an international conference on business ethics in 2006, Michalos brought
up that though Aristotle had not given people a clear concept of business
ethics, it is understandable that to serve people in highest good is the ultimate
aim of business ethics. According to Michalos, commitment for actions shall
be borne with the concept of "right" and the anticipated "consequences". This
has been well supported by DesJarins (2006) that “we should consider the
consequences, all the consequences, of our actions, before deciding what to
do.” He stated clearly that we should not only consider the consequences of
our acts, but also the consequences of our acts for all parties affected by
them. This means we need to be responsible for our stakeholders. Hence, the
initial steps for a socially responsible organization are to find out its structure
and key process, its stakeholders and its needs in order to serve the
community better.
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The term “Stakeholder” has been put into today’s management vocabulary. In
fact, it provides a full picture for management to map their ‘ought to be’ –
“obligations” and as well as their ‘need to be’ – “customers’ requirements”.
Having a stakeholder map, it can widen the horizon of marketers in the sense
of making them realize the importance of social responsibility in marketing
activities, and the need of fulfilling requirements of customers and the society.
According to DesJarins (2006), the stakeholder theory of corporate social
responsibility begins with the insight that every business decision affects a
wide variety of people, benefiting some and imposing costs on others.
Therefore, marketers should be responsible and accountable for their
stakeholders.
Sheahan (2007) mentioned that accountability is being forced onto business
in three interconnected ways: top-down accountability, lateral accountability
and bottom-up accountability. Bottom-up accountability plays a crucial role in
marketing management as a great impact on organizational reputation will be
formed via a positive or negative experience people have had with its brand.
Hence, it is worth to highlight social responsibility to marketers for maintaining
a positive image.
“Despite the fact that marketing is one of the core disciplines
of business, marketing ethics as a field of study has only recently
become a focus within business ethics. While product safety and
advertising, admittedly two central parts of marketing, have received
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a good deal of attention, areas such as pricing, market research,
sales, target marketing, and social marketing have received much
less.” (DesJarin, 2006)
Building on the principles of business ethics, being responsible and
accountable to stakeholders, marketers should have a responsibility to
represent the best interests of the organizations that they work for with
consideration of the financial desires of investors. Besides, some concerned
parties have started identifying shared values and developing a common
perspective on business behavior that is acceptable to and honoured by all.
Maignan et al. (2005) mentioned that marketing should be moved from a
narrow perspective – customer orientation into a broader and balanced
perspective – managing relationships and benefits for stakeholders. The
followings are the areas that can be embedded with corporate social
responsibility (CSR) into marketing:
Discovering organizational values and norms;
Identifying stakeholders;
Identifying stakeholder issues;
Assessing the meaning of CSR;
Auditing current practices;
Implementing CSR initiatives;
Promoting CSR; and
Gaining stakeholder feedback.
4 System Thinking and SIPOC of Six Sigma
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Ottman (2000) mentioned that systems thinking could be applied at any stage
of a product’s life cycle, from concept development to raw material extraction,
manufacturing, distribution end-use, and recovery or disposal. The use of
systems thinking is especially important in three stages named as: product
concept, raw materials and disposal.
She highlighted that cross-functional product development and marketing
teams could interpret information from different life cycle phases and
synthesize new ideas by using systems thinking.
“The most successful businesses are those that understand, appreciate, and
leverage the system in which they operate.” (Ottman, 2000)
As there are many variables in marketing activities affecting marketing and
business performance, marketers need to develop systems thinking for
making right decisions. According to the idea of Woodside (2006) that all
variables have both dependent and independent relationships with other
variables. Consequently, business performance will be highly affected by
variables as demographics, socio-cultural and economic factors. Hence,
mapping and building relationship of involved variables for decision-making
has been emerged.
Christensen (cited in Woodside, 2006) mentioned that rational decisions are
correlated with profitable returns while Weick (cited in Woodside, 2006) has
forwarded the idea of mapping out positive and negative relationships and
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feedback loops among organizational variables for making sense of the
complexity and hidden influences in decision making.
“All systems include complexities in relationships and events unrecognized
by the implicit mental models of humans. As humans we have limited capacity
and willingness in seeking information and in making decisions (see Simon,
1957, 1990; Payne et al., 1993). Our decisions usually employ ‘local
rationality’ and ‘satisficing’ rules (Simon, 1990). We tend to focus on
snapshots of isolated parts of a system and fail to see the entire patterns of
changes occurring after changing the value in one event; and we often select
the first option found that appears to be workable, failing to spot much better
solutions.” (Woodside, 2006)
Metcalfe (2006) pointed out that the main advantage of system thinking is to
shift thinking from the object to an inter-relationship of components.
Therefore, marketers should develop systematic thinking through the use of
quality tools, like SIPOC is used to find out the linkage between customer
satisfaction and marketing activities. Wedgwood (2007) further pointed out
that SIPOC is a powerful tool in the Lean Sigma toolkit.
“The SIPOC helps the Team reach consensus on the simple
scope and purpose of the process and the project…To that end
it is a potent change management tool. The useful outputs of the
tool are : an agreed process scope and process, the beginning
of a list of customers to feed into Voice of Customers (VOC) work….”
(Wedgwood, 2007)
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“Sigma“ is a symbol meaning how much deviation exists in a set of
data. It is used to identify the number of defects within the production
process. For service industries or social service organizations in
relation to organization culture, it can be interpreted as defects in
working relationship, communication and management that affect the
organizational performance. Eckes (2003) mentioned that the
fundamental use of Six Sigma is to improve both effectiveness and
efficiency at the same time. It is technical measure of the number and
the kind of unhappy customers per million opportunities.
“Six Sigma is a measure of customer satisfaction that is near
perfection. Most companies are at the two or three sigma level
of dissatisfaction occurrences per million customer contacts.”
(Eckes, 2003)
Eckes (2003) brought up that a process was defined as a series of steps and
activities that take inputs provided by suppliers; add value and provide outputs
for their customers. Management needs to measure the existing sigma
performance of each of their processes. This is especially crucial in marketing
management as there are a number of marketing processes involved and
they affect customers’ satisfaction either directly or indirectly. Hence,
management not only identifies the processes, but also monitors their
performance. Their performance is supposed to add value in each process
from suppliers to final outputs with a final destination of achieving their
company’s business objectives.
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The aim of this research is to make use of the idea “Suppliers, Inputs,
Process, Outputs, Customers” (SIPOC) in six sigma to reduce defects by
finding out the major components in marketing activities from the eyes of
marketers for improving the management of product, price, place, promotion
and people with stakeholder concern, with a target of meeting customers’
need, and with an ultimate goal of enhancing customer satisfaction. With the
use of SIPOC in marketing metric, systematic and factual information can be
consolidated for measuring performance of marketing promotion.
“Six Sigma, unlike other quality initiatives that have come
before it, is a management philosophy.”
(Eckes, 2003)
As marketing activities are situational, using systematic thinking for building
inter-relationship of marketing components is very important. Metcalfe (2006)
mentioned that human behavior is very situational.
“Much of what we do is because of the situation we are in and
who we are with.”
(Metcalfe, 2006)
Przekop (2006) mentioned that a fundamental driving principle behind Intuit’s
Six Sigma efforts is to incorporate three stakeholders into outcomes of
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improvement. The three stakeholders are: employees, customers, and
shareholders.
“…looking at the organization’s three core processes :creating
the products, acquiring customers and expanding relationship, and
servicing and fulfilling customer requests.”
(Przekop, 2006)
4.1 Integrating SIPOC into Marketing Management
Craven (2005) mentioned that customers pay a price for products or services
as they believe that products will deliver benefit and value to them. Hence,
marketers should make sure that value of the benefit exceeds the price that
customers pay through making a standard list of wants and desires: to be
safe, to be happy, to have fun, to laugh a lot, to eat good food, to be
entertained, to look good, to be fit, to be healthy, to be popular.
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Figure1 “Integrating SIPOC of Six Sigma into Marketing Management” is
established based on the rationale of using systems thinking to identify the
variables in marketing activities for decision-making, for marketing success,
for business performance, and for customer satisfaction. Under the idea of
Brue (2005) that a set of business metrics should start with customers and
measure matters that are challenging, like areas of marketing management in
Figure 1 all end with customer relationship or customer satisfaction – product,
people, price, place and promotion.
SIPOC is an intermediary between the customer and business. Figure 1 is
started with “Product” as marketers understand that customers want a product
or service that can offer them benefit with value. Therefore, marketers should
identify the capabilities of manufacturers in product design (suppliers).
Information gathered from manufacturers will then be transferred to the
business for producing a product with customers’ specifications (inputs). Once
a product has been created, the marketing department is responsible for
communicating, distributing, displaying and selling (process) the benefits of
the product to customers (outputs) with an ultimate aim of increasing
customer satisfaction with quality products (customers).
Figure1 focuses on how people – reliable, innovative and customer-oriented
personnel can strengthen customer relationship, how price-setting – payment
terms can let customers enjoy the product, how place – distribution network
can increase product accessibility, and how promotion – appealing but ethical
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promotional campaign can let customers obtain fair information on product
and service.
Moore and Parek (2006) highlighted that marketing is one of the central
functions of a firm as revenue is generated from customers. Hence,
management skills of planning, organizing, directing and controlling are
implemented in all aspects of SIPOC as shown in figure 1. With appropriate
use of management skills in SIPOC metric, marketing variables can then be
measured and monitored; and customer satisfaction can then be achieved.
“As such, the fate of the organization rests in the abilities of its
marketing managers...they’d be a communicator, seller, planner,
researcher, analyst, product developer, supply chain specialist, or
in other words, every activity that involves meeting a customer’s
need would be a responsibility of a marketing manager.”
(Moore and Parek, 2006)
Moore and Parek (2006) emphasized that marketing concept should be built
primarily on the rationale of offering product or service to customers in a more
efficient and superior manner. Needs of customers should be well-defined
with operations directly related to delivery of desired product or service. This
is well supported by Wedgwood (2007) as he has stated that SIPOC is a lean
sigma toolkit.
“The marketing approach creates a symbiotic relationship
between consumers and suppliers, where businesses tie
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their survival to their customers, and their customers are bound
to the company satisfy their needs. Loyalty and trust form the
basis of the relationship.” (Moore and Parek, 2006)
5 Case Study – a Retail Shoe Shop in Hong Kong
The retail shoe shop in this study was set up in 1999. The services that it
provides include economical footcare products, free foot assessment and
consultation to their clients. It believes that “Prevention is better than Cure”.
Hence, it provides regular foot assessment service with the help of orthotist
assistants and on-going educational campaigns to the public about methods
of preventing foot problems. These can be regarded as their quality service
for customers. The following information was collected during a face-to-face
interview with President, Vice-president and the marketing team members of
the shop in February 2008.
5.1 Integrating SIPOC of Six Sigma into Marketing Management
As shown in Figure 1, marketing management involves five Ps – Product,
People, Price, Place and Promotion. First of all, the product lines of the shop
can be divided into: 1) baby, 2) child, 3) lady and 4) adult. Different patterns
for their shoe products can be found to cater different situations, and to offer
protection to the feet of their customers.
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5.1.1 Product
The case shop has gone through several developmental stages in the past.
The management of the shop realizes that improvement is a way to be
successful in the future. It started business in 1999. Its image was quite
negative and orthopedic. It was not easily acceptable to its customers. Then,
it changed its image into healthy one with a slogan of the company - “Check &
Fit”.
The concept of “Check & Fit” is well accepted by customers. Staff of the shoe
shop will check customers’ foots before choosing suitable shoe insoles. Its
products can be regarded as professional products as academic research
supports their products. The idea of standardization – ready-made insoles
and customization - “Check & Fit” is found in its products. School bags will be
a kind of product extension of the case shop for developed countries. This is
what Figure 1 mentions about “Product” – output of providing quality products
to increase customer satisfaction.
5.1.2 People
The President of case is an expert in shoe production while the Vice-president
is a well-recognized prosthesis and orthotist consultant over 20 years. Their
partnership is one of the critical success factors in retail shoe industry. The
staff working in the case shop equips with professional knowledge in
prosthesis and orthotist with at least 20 training hours. They know how to
operate foot-related machinery that is recognized from hospitals.
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Apart from business partnership and professional staff, the shop has
established a membership programme with its existing customers. Their
Customer Relationship Management (CRM) activities involve establishing
customer data base, issuing membership cards, sending birthday cards to
members, mailing bulletins with discounts offered by other retail shops twice a
year to customers.
For new customers, “Check &Fit” is provided at no cost. For existing
customers, a free “Check & Fit” service is offered after four months of
purchase. As a result, the shop has 55% customer retention rate.
Furthermore, the shop has been participating different kinds of CSR activities
since 1999. These include: donation to Red Cross and Community Chest,
helping the disabled, sponsoring healthy shoes and school bags to Salvation
Army and Tung Wah Group of Primary Schools, and environmental projects
with NGOs. This is what Figure 1 mentions about leadership skill of
management, co-operation among staff and between the shop and social
community groups for establishing positive organizational culture for
strengthening customer relationship.
5.1.3 Price
Though children are the main target group of customers of the shop, its
marketing strategy has been changing – putting more focus on adults and
elderly. Its management realized that lowering the prices of products could
make every one afford a healthy pair of shoes. It did more promotions on
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price cut. It wanted to promote foot health as a global concept. It has been
trying hard to educate customers to understand that health is very important.
And, accepting its professional footcare services is a trend in Hong Kong. This
is what Figure 1 mentions about setting a reasonable and competitive price
for target customers to enjoy the products.
5.1.4 Place
Presently, the retail shoe shop in this study has 41 branches in Hong Kong
covering Hong Kong Island, Kowloon and the New Territories. The locations
of the shops are either close to public transport or located inside shopping
malls to make shops accessible to customers.
Exploring market in China, especially Shengzhen is one of the future
marketing strategies of the shop. Its management realized that the culture of
Shengzhen is quite similar to that of Hong Kong. However, consuming
behavior of Shengzhen is not exactly the same as that of HK. They need to
study the taste of customers and the tax system in Shengzhen. This has been
covered in Figure 1 - choosing appropriate locations for product distribution to
increase customer reach and customer satisfaction.
5.1.5 Promotion
The management of the shop has found that there is a growth in European
style of
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sport wear in the past few years. Hence, their shoe style and promotional
strategy has been changed as followed:
1999-2001
Promotion on medical purpose – providing orthodontic and prosthetic services
to children
2002 - 2003
A change on market position - focus on health and comfortable concept for
both sexes, especially for 1,000,000 elderly in Hong Kong.
2004-2005
Developing marketing strategy on health for all ages with price adjustment - to
make price more affordable with synthetic materials in shoe production.
2005 and up
A theme of “Globalization” has emerged to spread the business concept of the
shoe shop to the America and Europe, that is, a health concept of “Check &
Fit” with trying three kinds of layers to see the suitability at no cost.
A “Health” concept with diversified products in a trendy look with co-branding
strategy with Disney will be the focus of the case. Establishing corporate
accounts with the police, postmen, airline staff and the Food and
Environmental Department will be part of the shop’s future marketing strategy
too.
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Promotional activities of the shop are found in shopping malls with
collaboration with medical authority and Occupation and Health Services
Department of Hong Kong. Elderly homes and schools are also their focus of
promotion. Educating the public, conducting foot-health workshops,
distributing leaflets, holding magazine interviews are methods to increase
exposure of the shop. This has been covered in Figure 1 - launching
informative and appealing promotional campaigns for “Word of Mouth” effect.
Areas of
Marketing
Managem
ent
(5Ps)
Suppliers (S) Inputs (I) Process (P) Outputs
(O)
Customer
s(C)
Product
Manufacturers
’ technical
capabilities
(planning,
organizing,
directing and
controlling
skills)
Customer
needs
and
specificat
ions
(organizi
ng)
Selling
Distributing
products
Displaying
(organizing)
Providing
quality
products
(controlling
)
Increasing
customer
satisfaction
with quality
products
(controlling
)
People
Sourcing
reliable
Innovatio
n
Leadership
Co-operation
Positive
culture
Strengthen
customer
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suppliers
(planning,
organizing,
directing and
controlling
skills)
Customer
relation
skills
(planning
and
organizin
g)
Ethics
Coaching
Collaboratio
n
(controlling)
(directing
and
controlling)
relationshi
p with
reliable
performanc
e of
supplier s
for product
guarantee
(controlling
)
Price
Bargain with
suppliers for
best price, for
bulk price, for
desirable
payment
terms
(planning,
organizing,
directing)
Market
research
Customer
affordabili
ty
(planning
and
organizin
g)
Price
segmentatio
n
Price target
Price
penetration
Price
skimming
(controlling)
Reasonabl
e and
competitive
market
price
(controlling
)
Enjoy
product
satisfaction
with
reasonable
price from
the
perspectiv
e of target
customers
(controlling
)
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Place
Distribution
network
(planning)
Market
research
Land
price
Manage
ment of
budget
(planning
)
Renovation
and design
(organizing,
directing
controlling)
Appropriat
e location
for product
distribution
to increase
customer
reach
(controlling
)
Increase
customer
satisfaction
with
accessibilit
y and
convenienc
e
(controlling
)
Promotio
n
Appealing and
ethical
promotional
campaign
from design
house
Market
research
Customer
demogra
phics
Trend of
CSR and
considera
tions of
Promotional
mix
Successful
promotiona
l campaign
with word
of mouth
Increase
customer
satisfaction
with
ethical,
informative
and
appealing
promotiona
l mix
375
(planning,
organizing,
directing and
controlling
skills)
external
environm
ents
(planning
,
organizin
g,
directing
and
controllin
g skills)
(directing
and
controlling)
(controlling
)
(controlling
)
Figure 1 – Integrating SIPOC of Six Sigma into Marketing Management
6 Limitation and Discussion – Measuring Marketing
Performance
The major finding of this paper is the use of systematic thinking of SIPOC in
marketing management for customer satisfaction. It was noted that
establishing a metric of 5Ps – Product, People, Price, Place, Promotion with
SIPOC in Six Sigma undoubtedly increases an awareness of marketers for
the control points in marketing management. However, SIPOC was only
applied into one case study that limits the generalization to other potential
areas as manufacturing and construction industries.
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Besides, results of integrating SIPOC into marketing management as
illustrated in Figure 1 have not been investigated. As this paper is a
conceptual one with a qualitative case study, there is a need to collect
quantitative data from marketers about the effectiveness of implementing
SIPOC into marketing activities. Information covered should not be only on
customers, but also on employees, influencers and shareholders. Detailed
criteria for evaluating marketing performance of suppliers, inputs, processes,
outputs and customers need to be developed. The criteria for measuring
marketing performance also needs to be discussed – financial or non-
financial, achieving goals of an organization or differentiating from competitors
in the market.
7 Conclusion
With an introduction of the importance of social responsibility in marketing
management; and an illustration of integrating SIPOC of Six Sigma into
marketing metrics, marketers shall develop a basic concept that managing
and evaluating marketing performance should be systematic and follow a path
of:
- Considering the needs of stakeholders in the society during the
different stages of SIPOC;
- Collecting factual information with stakeholder feedback as inputs of
marketing activities into SIPOC diagram before launching a marketing
campaign;
- Applying management skills of planning, organizing, directing and
controlling into reviewing, verifying and validating of marketing
377
promotional activities
- Measuring marketing activities with organizational objectives; and
- Adjusting marketing activities if the outcome is not satisfactory.
If marketers can develop a social responsible and quality mindset in
marketing management; and academic marketing professionals can develop
marketing students with systematic thinking with the use of SIPOC, it is
believed that marketers can serve customers in the highest good for the
benefit of the society.
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Collins, K. (2008) Exploring Business, Pearson International, Inc., New Jersey.
Craven, R. (2005) Customer is King, Virgin Books Ltd., London.
DesJarins, J. (2006) An Introduction to Business Ethics, The McGraw-Hill Companies, Inc., New York.
Eckes, G. (2001) The Six Sigma Revolution, John Wiley & Sons, Inc., Canada. Eckes, G. (2003) Six Sigma for Everyone, John Wiley & Sons, Inc., New Jersey. George, M. L., Rowlands, D., Price, M. and Maxey, J. (2005) Lean Six Sigma Pocket Tool Book, The McGrawHill, The United States.
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Johansson, O. L. (2006) Empowering Employees with Integrity. Proceedings of World Business Ethics Forum, November, 2006, Hong Kong.
Kaufman, R. A. & Zhan, D. (1993) Quality Management Plus, Corwin Press, California: Newbury Park. Maignan, I, F., O.C. and Ferrell, L. (2005) A Stakeholder Model for Implementing Social Responsibility in Marketing, European Journal of Marketing, Vol. 39 No. 9/10, 2005. p.956-977. Emerald Group Publishing Limited.
Metcalfe, M. (2006) Reading Critically at University, SAGE Publications Ltd.,
London.
Michalos, A. C. (2006) Ancient Observations on Business Ethics : Middle East Meets West, Proceedings of World Business Ethics Forum. November, 2006, Hong Kong.
Moore, K. and Parek, N. (2006) The Basics Marketing. Routledge, New York.
Ottman, J. A. (2000) “The Systems that Surround You” In Business, July/
August 2000.
Przekop, P. (2006) Six Sigma for Business Excellence. McGraw-Hill Companies, U.S.
Pyzdek, T. (2001) The Six Sigma Handbook, McGraw Hill, U.S.
Riso, D. R. and Hudson, R. (1999) The Wisdom of the Enneagram. Bantam Books, New York.
Sheahan, P. (2007) FLIP, Random House Australia Pty. Ltd., Australia.
Stanley, M. A. (1994) The Future of ISO 9000, Corporate Board. Vol. 15.
Tsai, T., Young, M. N. & Cheng, B. (2006) Is Honesty The Best Policy in East Asia ? The Case of Sinyi Real Estate, Proceedings of World Business Ethics Forum, November, 2006, Hong Kong.
379
Thomsett, M. C. (2005) Getting Started in Six Sigma, John Wiley & Sons, Inc.,
Canada.
Wedgwood, I. (2007) Lean Sigma, Prentice Hall, U.S. Woodside, A. G. (2006) “Advance systems thinking and building microworlds in business and industrial marketing”, Journal of Business & Industrial Marketing, 21/1 (2006) 24-29.
http://www.cauxroundtable.org
http://www. asq.org.
380
Application of Design for Six Sigma Processes to the Design of an Aero Gas Turbine
Dr. Phil Rowe, Bourton Group
mailto:[email protected]
Gordon May, Rolls-Royce plc
mailto:[email protected]
Abstract
Gas turbines are highly complex systems with many competing and increasingly
onerous requirements, for example: lower emissions, improved availability and lower
running costs. This means that future designs will be driven to be lighter in weight,
operate at higher and higher temperatures and speeds to reduce fuel burn, whilst at
the same time maintaining acceptable life and overall performance characteristics.
However, it is important to recognise that all of these requirements must also be
robust (insensitive) to the effects of variation (“noise”) to which the gas turbines will
be subjected throughout their lives.
In order to better identify solutions to these requirements a number of new
technologies are being developed in research programmes and then applied in full
engine programmes. As an example of this improvement activity, Design for Six
Sigma (DfSS) has been applied to the design of a specific component – a High
Pressure Turbine (HPT) disc – the result of which will then provide a template for a
generic robust design process going forward that can produce better designs faster.
381
Design for Six Sigma (DfSS) has been applied to the design of a specific
component – a High Pressure Turbine (HPT) disc – the result of which will
then provide a template for a generic robust design process going forward
that can produce better designs faster.
The aim of this paper is to show how DfSS was applied, using a “DCOV”
methodology, to result in a quantitatively robust HPT disc design. An
overview of the DCOV methodology will be given including usage of some of
the key tools, such as: Quality Function Deployment (QFD), Design of
Experiments, Surrogate modelling, Analytic Hierarchy Process (AHP), Monte
Carlo simulation, Data Mining and parameter design. This will be followed by
a review of the DCOV process for the HPT disc example.
Author Biographies
Dr. Philip Rowe specialises in Six Sigma and Design for Six Sigma. He
earned a Doctorate in High Energy Particle Physics at Manchester University,
England, in 1984. Prior to becoming a consultant with the Bourton Group in
2003 he was a Quality Manager and GE-certified Master Black Belt for a large
engineering organisation. He has worked with a number of clients in the area
of Six Sigma and DFSS deployment, including Rolls-Royce, Network Rail,
Vodafone, Pilkington Glass and Cooper Standard Automotive.
Gordon May is a specialist in Design Optimisation and Design for Six Sigma
at Rolls Royce plc. In 1989 he earned a BEng (Hons) degree in Mechanical
Engineering at The University of Liverpool, England, after which he spent
382
three years in post-graduate research at Liverpool in to the simulation of
seismic events on pressurised piping systems for the nuclear power
generation industry. He joined Rolls-Royce plc in 1992 as a structural
analyst, then progressing to a role in optimisation methods development in
1997. Currently he has the role of Optimisation and Robust Design Systems
Management Team Leader and is part of the working group that oversees the
development and deployment of Design for Six Sigma throughout
Rolls-Royce.
1. Design for Six Sigma and DCOV
1.1 Introduction
Although predictive techniques for engineering design (such as statistical
tolerancing) have been in widespread use for many years, the methodology
“Design for Six Sigma” (DfSS) was popularised by General Electric in the late
1980s. The intent of DfSS is to gain quantitative confidence in the design
stage that a design will perform as intended, obviating the need for costly re-
design after the product, service or process is realised.
Six Sigma product and process improvement via the DMAIC methodology has
become reasonably standard, although there are variants of it that incorporate
“pre-define” and “knowledge transfer” phases. DfSS, on the other hand, is
less well understood and less widely applied. As a consequence, DfSS is
less standardised in its implementation than Six Sigma, resulting in several
383
variants of the most widely recognised methodologies: IDOV (Identify, Design,
Optimise, Verify) and DMADV (Define, Measure, Analyse, Design, Verify).
In Rolls-Royce (aero engine, power generation and marine propulsion
sectors) the methodology of choice is DCOV (Define, Characterise, Optimise
and Verify). The following paragraphs explain the objectives and tools &
techniques that are typically used in each of these phases of the process.
1.0. Define
The first objective of Define phase is to elicit, understand and prioritise the
customer requirements for the design. Prioritisation is achieved by the use of
AHP (Analytic Hierarchy Process – see Ref. Error! Reference source not
found.). In AHP all the requirements at any level in the hierarchy are formed
in to a triangular matrix as shown in Figure . The row items are compared to
the column items and the following question is answered in each case: “is the
row item more, equally, or less important than the column item in fulfilling the
requirement at the level above?” If the row item is deemed more important
the comparison is scored between 2 and 9; if less important it is scored
between 21
and 91
; if they are of equal importance a score of 1 is given –
see Figur. At level 1 (the highest level) in the hierarchy, requirements are
compared for their importance relative to the operational definition of the
system. If we consider the example of a domestic toaster, such an
operational definition would be “toast bread products safely”.
384
Figure 1– Requirements Hierarchy and Prioritisation using AHP
Figure 2 – Scoring Comparisons in AHP
385
Notwithstanding the benefits of the discussion that AHP stimulates, another
benefit of using AHP is the Consistency Ratio that is calculated as part of the
process. This informs us as to whether the set of comparisons (within a group
at any level) is self-consistent. A high value (greater than 0.10) indicates
inconsistency such that the scores could plausibly have been generated
randomly. The result of this process is that we have an importance weighting
on a continuous scale of all requirements, rather than a simple ordinal
ranking. We can therefore make meaningful ratio comparisons between any
two requirements – impossible with ranked data.
Requirements are then translated into a technical (functional) specification for
the design using Quality Function Deployment (QFD) – see Error! Reference
source not found. for a simple example of “QFD1” for a domestic toaster,
create in Qualica (see Ref. Error! Reference source not found.). Note that
the suffix ‘1’ attached to QFD indicates that there are a number of QFD
matrices in the requirements translation - flow-down - process, this being the
first.
386
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Figure 3 – Simplified QFD1 for a Domestic Toaster
It is important to understand that the functional specification should be
concept invariant – thus allowing more scope for innovation in proposed
design solutions. To illustrate this point, using the domestic toaster example,
some of the functions of a toaster are to: load bread products, generate heat,
apply heat, monitor toasting, remove from heat, and unload toast. This
functionality would be the same whether we were using an electric toaster or
a toasting fork! Thinking of the functionality in these generic terms allows us
to ask the question “how might we fulfil this function?” Systems Engineering
387
tools – such as morphological analysis for concept generation and Pugh
matrices (or again AHP) for concept selection – can be used here.
Once a high level concept has been selected, the next objective in the Define
phase is to establish a detailed nominal design. In this context, a nominal
design is one that, prior to understanding the effects of variation on
performance, meets all nominal requirements. Rolls-Royce design processes
are heavily simulation-based; involving computationally intensive and complex
calculations of air flow, structural stresses, temperatures etc. For this reason
the only efficient and effective means of understanding the design space is to
perform these simulations systematically according to a Design of
Experiments (DOE) scheme, as opposed to a trial and error (sometimes
known as “engineering judgment”) approach.
Figure 3 explains diagrammatically how the judicious use of DOE allows us to
evolve our understanding of the design space whilst minimising computational
effort.
Figure 3 – Schematic of a “DOE Roadmap”
Once the nominal design has been established, the final objective in the
Define phase is to understand what might influence the robustness of the
388
design. In this context, robustness doesn’t mean “bigger, stronger, harder
etc.”, rather it refers to a design’s ability to perform consistently in the
presence of unavoidable sources of variation (“noise”). In order to achieve
this objective it is first necessary to identify, prioritise and quantify the causes
of variation in the key design performance metrics - the CTQs (Critical To
Quality characteristics). We must therefore pose the question “what things
will cause the CTQs to deviate from their target values either directly or
through affecting the values of the design parameters themselves?”
An example of the latter type of noise (referred to as “type A” noise) is wear –
when something wears its physical characteristics change. These changes
transmit variability to the outputs that are driven by the design parameter in
question. An example of the former type of noise (referred to as “type B”
noises) is road surface condition; its effect on stopping distance (the CTQ for
a vehicle’s braking system) is direct: an icy road will influence stopping
distance but it will not change the physical characteristics of the braking
system itself.
In order to collate both the control factors that influence the performance
characteristics of the product by design and the noise factors (sources of
variation) that may inhibit the ability of those parameters to deliver the desired
performance, P-diagrams are employed. Shown in generic form in Error!
Reference source not found., a P-diagram elegantly captures and
categorises these factors and equates the performance CTQ (labelled “output
Y”) of the design as a function of Signal, Control and Noise factors.
389
Incidentally, a signal factor is one whose values are set by the system user in
real time with the intent of achieving a desired output; an example for the
braking system would be pressure applied to the brake pedal by the driver –
by exerting more force on the brake pedal, the driver desires the car to stop
more quickly.
Output YM
SignalFactor
Product/Process
N - “Noise Factors”
“Source of Variation”
The “Whys”
N - “Noise Factors”
“Source of Variation”
The “Whys”
Z - “Control Factors”
“Design Parameters”
The “Whats”
Z - “Control Factors”
“Design Parameters”
The “Whats”
Side effects
Figure 5 – A Generic P-diagram
This exercise can reveal many more design parameters and sources of
variation than may otherwise have been identified. Although in principle all of
these factors will be modelled probabilistically in the Characterise phase of
DCOV it is necessary to prioritise which sources of variation will be modelled
using real-world data since this is often difficult and expensive to collect.
To achieve this prioritisation a “What-Why table” is employed (see Error!
Reference source not found.). This involves making both subjective and
(preferably) objective assessments of the contribution of noise factors to
design parameter variability (type A) and CTQ variability (type B). It results in
390
a set of design parameters that are most influenced by noise, and a set of
noises that cause most of the variability.
Identifies those sources of variation which directly affect control factors and thereby most influence
the robustness of the design
Highlights those control factors most susceptible to sources of variation
How sensitive we think the output is to variation in this control factor
Type B
Deterior-
ation
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loadVehicle speed
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Noise
Factors
Figure 6 – A Sample What-Why Table
1.2 Characterise
“Characterise” is the phase in DCOV in which variability in the CTQs is
quantified. Combined with mean performance of the CTQs their variability in
the presence of noise variation measures the robustness of the design, as
shown in Error! Reference source not found..
Lower Limit
Upper Limit
Target Performance
Not OKNot OKOK
Lower Limit
Upper Limit
Target Performance
Not OKNot OKOK
Lower Limit
Upper Limit
Target Performance
Not OKNot OKOK
ProductProduct
Variation inThe Input
Xs
Variation in theProduct & Environmental
Parameters
Figure 7 – Transmission of Variation from Input to Output
391
There are several methods and metrics available in DCOV that can be used
to quantify the robustness of a design. The choice of both method and metric
is driven largely by the knowledge and nature of the input variation, but also
the speed of the simulation code and the ability to automate the simulation
workflow parametrically to calculate the CTQs for which a quantification of
robustness is required.
The simplest of these robustness metrics is called “Delta Y” (ᵶY): if a change
to noise factor is made of a magnitude that is to be expected in the real world
we can measure (for hardware) or calculate (for software) the change induced
in the CTQ. For any given noise factor j, this is called ᵶYj. In the Delta Y
approach to robustness assessment all noise factors are varied by their
expected amounts one at a time and all resulting individual ᵶY values are
summed. If the result is of the same order of magnitude as the tolerance
width for the CTQ then the design is unlikely to be robust in practice.
Although not a statistically rigorous robustness metric, Delta Y can be used as
both a ‘rough cut’ assessment and to determine which noise factors have the
most impact. It can also be used to compare alternative design concepts. An
alternative robustness metric (with statistical meaning) is the variance of the
CTQ; ᵶy2. If one has an explicit equation (an explicit transfer function) linking
the noise factors n and the control factors z to the CTQ of the form y = ƒ(n,z)
then one can generate a variance transmission equation (VTE) from partial
differentiation of the transfer function with respect to the noise factors to
392
approximate ᵶy2. For example, the VTE derived from a first order Taylor
series approximation, for two independent noise factors is:
2
2
2
2
1
22
21
∂
∂+
∂
∂≈
n
y
n
ynny σσσ Equation 1
Ref. Error! Reference source not found. gives a more accurate higher order
approximation, but often
2
2
2
2
1
22
21
∂
∂+
∂
∂≈
n
y
n
ynny σσσ
Equation 1 will suffice. Remember that for type A noise, the noise
factor and the control factor are the same variable, so one would differentiate
with respect to z for such factors. If the explicit transfer function is generated
from a designed experiment, rather than from theoretical standpoint,
2
2
2
2
1
22
21
∂
∂+
∂
∂≈
n
y
n
ynny σσσ
Equation 1 will be supplemented by
the model error ᵶ2 (see Ref. Error! Reference source not found..)
Another way to obtain an approximation for ᵶy2 when the transfer function
exists but cannot be written down explicitly (an implicit “black box” transfer
function) is via the technique of simple differences. This method utilises the
first order approximation as in
2
2
2
2
1
22
21
∂
∂+
∂
∂≈
n
y
n
ynny σσσ
Equation 1, but in the simplified form (again shown for two noise
factors):
( ) ( )2
2
2
1
2yyy ∆+∆≈σ Equation 2
This simplification is made possible by three assumptions: the transfer
function is approximates to linearity over the small region of design space
393
being perturbed by the noise factors, the noise factors are independent and
the change in noise factors ᵶn is defined to be the standard deviation, ᵶn. If
we represent small (tangible) changes in the noise factors by ᵶn, rather than
the infinitesimally small amount represented by ∂n, then since ᵶn2/(ᵶn)2 = 1,
2
2
2
2
1
22
21
∂
∂+
∂
∂≈
n
y
n
ynny σσσ
Equation 1 reduces to
( ) ( )2
2
2
1
2yyy ∆+∆≈σ
Equation 2, so that ᵶy2 is simply the
summation of the squares of the changes in the CTQ (ᵶyj) away from its
nominal value when each noise factor is varied in turn by one standard
deviation. This can be surprisingly accurate, but if desired higher order
approximations can be made to refine the estimate. In long running
simulation codes with a large number of noise factors k, simple differences
can be very efficient, since it requires only k + 1 runs.
The final method we shall discuss here is Monte Carlo Simulation (MCS), of
which there are several variants. The metric we shall focus on is Pc, the
probability of conformance for the CTQ. We shall limit our discussion to
“simple MCS”, the basic form. MCS requires a transfer function to exist, but it
need not be explicit. As we have already said, variation in noise factors
causes variation in the response (CTQ). If we can model the probability
density function (PDF) of the noise factors through data fitting (or experience
or judgment to be begin with), then these distributions can be sampled one at
a time at random to produce a random value of the CTQ via the transfer
function, as shown in Error! Reference source not found..
394
Figure 8 – Single Random Sample from Input PDFs to Predict Single Result from Transfer Function
This can be repeated many times to produce a probability distribution for the
CTQ itself, as shown in Error! Reference source not found..
Figure 9 – Multiple Random Samples from Input PDFs to Predict PDF of Result from Transfer Function
The CTQ data can be fitted to a PDF, which may then be used to compute the
probability of conformance, Pc to the specification for the CTQ. The beauty of
this method, of course, is that it gives a complete picture of the variation of the
CTQ without having to perform mathematics, or use approximations.
Disadvantages are that MCS is only relevant to simulations, whereas the
395
previous two methods could also be performed on hardware, and additionally
a large number of runs of the simulation code are needed to form a smooth
picture of the CTQ variation.
When performing Monte Carlo simulation another important consideration to
make is whether or not there is correlation between input parameters. This is
important as a strong correlation between any of the factors may have a
profound influence on the evaluation of robustness for the design. Clearly if
two parameters are correlated then not all combinations of them are sensible.
However, applying Monte Carlo simulation in the usual fashion does not
account for this – any combination of values is possible and may therefore be
selected by the sampling process. Omission of the effects of so-called
‘covariance’ between inputs can result in over- or under-estimation of the
output variance.
Whether there is under- or over-estimation depends upon the direction of the
correlation between the inputs and the signs of their gradients in the design
space (also referred to as ‘sensitivity coefficients’) at the point in the design
space at which we are interested in quantifying the robustness of the design.
The magnitude of the covariance effect depends upon the strength of the
correlation, the magnitude of the sensitivity coefficients and the variance of
the inputs themselves. Scatter plots can identify correlations, which can then
be statistically justified through hypothesis tests. Error! Reference source
not found. shows an example of a collection of scatter plots (called a ‘matrix
plot’ in Minitab) that suggest the presence of significant correlations between
396
three pairs of input noise parameters used in the case study described in the
next section.
Figure 10 – Matrix plot showing correlations between input parameters, and statistical quantification of correlation coefficients with statistical significance.
The results shown in Error! Reference source not found. include values for
the correlation coefficient, which can have values between -1 and +1 with
values closer to these extremes indicating a stronger correlation. The
confidence in these correlations is supported by an associated p-value
(shown below the correlation coefficients). This is the probability of observing
such behaviour shown in the scatter plot if there is actually no correlation
between the variables in reality. A value of 0.000 therefore indicates a very
high confidence that the actual correlation coefficient is non-zero.
In many situations the simulations required to be performed are relatively
long-running (perhaps taking even days to complete for a single analysis),
making MCS impractical. In this instance, either one of the other metrics may
be used, or alternatively a surrogate model (a synthesised transfer function)
for the source code can be created.
397
Using a suitable software package (such as iSIGHT-FD) in conjunction with a
Designed Experiment approach a data set can be generated on which to
“train” a surrogate model. Depending on the peakedness of the response
surface the surrogate models may take the form of Polynomial equations,
Kriging models or Radial Basis Functions. Once created, the surrogate model
must be validated. This involves testing the ability of the surrogate to predict
the value of the CTQs at other, randomly selected, points throughout the
design space.
The benefit of these surrogate models is that they run extremely quickly,
regardless of the complexity of the model and the number of parameters
involved, allowing robustness to be evaluated everywhere in the design
space. In fact, through judicious application of DOE in the Define phase, the
same model that was used to generate a good nominal design can be re-used
for robustness assessment – and even optimisation. An output from
Characterise is also an understanding of the sensitivity of the CTQs to input
variation: which sources of variation contributed most to the observed
variation in the CTQs?
In the simplified case depicted in Error! Reference source not found., a
single CTQ is determined by two design parameters, each affected by type A
noise. In this case, the CTQ is not robust to the expected extent of variation
in X1 and X2 – and the response is equally sensitive to both sources.
398
Figure 11 – A Non-robust, Sensitive Design
1.3 Optimise
Any shortcomings in robustness revealed in the Characterise phase give rise
to the need for the Optimisation phase. Alternatively, an “overly robust”
design can be made less (but still sufficiently) robust in order to gain benefits
in other performance metrics (e.g. reduced weight or cost). This is important
to understand, since many, if not all, engineering problems involve satisfying
multiple objectives simultaneously.
A variety of sophisticated techniques are available to deliver robustness
without necessarily incurring cost associated with the common practice of
achieving robustness through tightening tolerances or increasing design
margin as illustrated in Error! Reference source not found. and Error!
Reference source not found. respectively.
399
Pe
rfo
rma
nc
e
x1x 2
Robust design performance – at what cost?
Pe
rfo
rma
nc
e
x1x 2
Pe
rfo
rma
nc
e
x1
Pe
rfo
rma
nc
e
Pe
rfo
rma
nc
e
x1x 2
Robust design performance – at what cost?
Figure 12 – Achieving Robustness through Tightening Tolerances
Error! Reference source not found. illustrates the design margin approach
to a problem whereby the strength of the component is insufficient. The
design margin solution is to “beef up” the design. Although this works, it
increases weight and material cost.
Figure 13 – Achieving Robustness through Increasing Margin
Parameter Design and Tolerance Design are two strategies that can be
applied to deliver a required robustness improvement, either separately or in
combination, as part of the Optimise phase of DCOV. Parameter Design is a
method to reduce the transmission of input variation to the CTQs by
400
simultaneously adjusting the nominal values of a combination of design
parameters.
Figure 14 – PARAMETER DESIGN: changing the nominal settings of the design parameters to achieve design robustness
In this strategy the sources and extent of noise variation remain unchanged.
Rather we exploit the underlying non-linearity in the relationship between
CTQs and design parameters to achieve robustness of the CTQs. Error!
Reference source not found. illustrates such a Parameter Design approach.
Tolerance Design is a strategy that modifies the amplitude of the noise
affecting the CTQs to achieve the same result: improved design robustness
(see Error! Reference source not found.).
401
Lower Limit
Upper Limitx1
x2
x3
Nominal Design
Before
After
Lower Limit
Upper Limit
● CTQ highly sensitive to variation in X1 and X3: tighten tolerances
● CTQ insensitive to variation in X2: loosen tolerance
Lower Limit
Upper Limit
Lower Limit
Upper Limitx1
x2
x3
Nominal Design
Before
After
Lower Limit
Upper Limit
Lower Limit
Upper Limit
● CTQ highly sensitive to variation in X1 and X3: tighten tolerances
● CTQ insensitive to variation in X2: loosen tolerance
Figure 15 –TOLERANCE DESIGN: changing the tolerances of the
design parameters to achieve design robustness
It is important to understand that this is not the same as the simple approach
of tolerance tightening; Tolerance Design is achieving the appropriate balance
between tightening some tolerances while at the same time loosening others
according to the sensitivity of the CTQ to each source of variation. Hence
Tolerance Design can result in cost savings!
The results of the Optimise phase are confident predictions of design
robustness, an understanding of the drivers of robustness and statistically-
based specifications for design parameters. An example of such a
specification is shown in Table 6 (See also Ref. Error! Reference source not
found.).
Table 6 – Statistically-based Specifications for key design parameter
402
21.07019.7302.4600.0001.163
Upper Control Limit for Xbar Chart,
UCLXbar
Lower Control Limit for Xbar Chart,
LCLXbar
Upper Control Limit for Range Chart,
UCLR
Lower Control Limit for Range Chart,
LCLR
Average Range, Rbar
51.3332.0000.50020.400
SPC Subgroup Size, N
Short-Term Capability to which ±Tolerance Refers
(Cpk)
±Tolerance in Units of Measure
Target Short-Term Standard Deviation
Target Mean (centre line for
Xbar chart)
21.07019.7302.4600.0001.163
Upper Control Limit for Xbar Chart,
UCLXbar
Lower Control Limit for Xbar Chart,
LCLXbar
Upper Control Limit for Range Chart,
UCLR
Lower Control Limit for Range Chart,
LCLR
Average Range, Rbar
51.3332.0000.50020.400
SPC Subgroup Size, N
Short-Term Capability to which ±Tolerance Refers
(Cpk)
±Tolerance in Units of Measure
Target Short-Term Standard Deviation
Target Mean (centre line for
Xbar chart)
Here we can see that rather than the traditional “goalpost” specifications of a
nominal with plus/minus tolerancing (20.400±2.000 in the above case), we
have a statistical process control specification defining a required process
capability, Cpk. This gives manufacturing a gauge by which to better assess
actual ongoing process performance manifestly linked to design performance
via the analysis chain created during the DfSS process – something that is not
possible with traditional tolerancing!
1.4 Verify
The Verify phase assures us that the predictions made during Characterise
and Optimise are both accurate and trustworthy. This means collecting
production, hardware testing and in-service data in order to perform
statistically-designed tests of confidence that the assumptions used to predict
robustness were correct. The Verify phase also assures us that the
statistically-based specifications are being consistently achieved. This
involves monitoring the process and comparing to the control limits and target
lines for Statistical Process Control (SPC) charts defined in the Optimise
phase, an example of such is shown in Error! Reference source not found..
403
252321191715131197531
21.0
20.5
20.0
Sample Mean
__X=20.337
UCL=20.942
LCL=19.731
252321191715131197531
2
1
0
Sample Range
_R=1.049
UCL=2.219
LCL=0
252015105
21.6
20.8
20.0
Sample
Values
22.221.621.020.419.819.218.6
LSL USL
LSL 18.4
USL 22.4
Specifications
22212019
Within
O v erall
Specs
StDev 0.451076
C p 1.48
C pk 1.43
Within
StDev 0.43913
Pp 1.52
Ppk 1.47
C pm *
O v erall
Process Capability Sixpack of Design Parameter CTQ
Xbar Chart
R Chart
Last 25 Subgroups
Capability Histogram
Normal Prob PlotAD: 0.254, P: 0.727
Capability Plot
Figure 16 – Statistical Process Control chart to demonstrate conformance to statistical design specifications (Minitab “Capability Six Pack”)
In Error! Reference source not found. we can see that the process is in
control and exceeding the required capability of Cpk = 1.33. This data can be
fed back to design, along with data for all the other CTQs for the system so
that we can re-assess the robustness of the design on an on-going basis.
2.0 Application of DfSS to a HP Turbine Disc
2.1 Introduction
Gas turbines are highly complex systems with many competing and
increasingly onerous requirements, for example: lower emissions, improved
availability and lower running costs. These “high level” requirements translate
404
in to more specific design targets, meaning that future designs will be driven
to be lighter in weight, operate at higher and higher temperatures and speeds
to reduce fuel burn, and at the same time maintaining acceptable life and
overall performance characteristics. However, it is important to recognise that
all of these requirements must also be robust (insensitive) to the effects of
variation (“noise”) to which the gas turbines will be subjected throughout their
lives.
This section shows how the DfSS DCOV process was tailored to suit the
design process of a specific HPT disc, which will provide a template for a
generic robust design process for similar components that will produce better
designs faster in the future.
Large aero gas turbine engines built around the three-shaft design concept
(as depicted in Error! Reference source not found.) are unique to Rolls-
Royce and were introduced with the entry into service of the first of the RB211
series in the 1970s. This basic architecture continues still in today's Trent
family of high-thrust, high-bypass engines powering the new generation of
wide-bodied jets from Airbus and Boeing.
405
Fan (LP Compressor) IP Compressor
HP Compressor
Combustor
HP Turbine
IP Turbine
LP Turbine
Fan (LP Compressor) IP Compressor
HP Compressor
Combustor
HP Turbine
IP Turbine
LP Turbine
Figure 17 – Schematic of a Gas Turbine showing Major Subsystems
The engineering principle involves low, intermediate and high pressure
“spools” (LP, IP and HP respectively), each consisting of a number of
compressor and turbine stages, with each spool mounted on independent
shafts that run at different speeds. In this system the principal functions of the
HP Turbine disc is to maintain the correct location of the set of HP Turbines
blades in the hot gas path exhaust from the Combustion system and to
transmit the power absorbed from the hot gas by the blade through to the HP
shaft which then drives the HP Compression system.
2.2 Define
Because the design style for the HPT disc is generally heavily constrained by
both the engine and turbine sub-system architectures, the standard approach
406
to QFD is not well suited in this instance: there is less scope for innovation in
this component, hence QFD1 was bypassed in favour of a more pragmatic
approach that directly linked the prioritisation of requirements to the functional
definition of the HPT disc through AHP, as shown in Error! Reference
source not found..
Transmit Torque
Cost Weight Life Leakage
Seal Oil Seal AirManage Bearing
LoadCool Disc Assembly
Locate Blade
Axially
Radially
Cool Disc Body
Cool Disc Rim
Cool BladeSeal Disc Rim
Seal Front
Seal Rear
Contain Oil
Maintain Bearing Pressure
Maintain Buffer Pressure
Meter air outSeparate rear
cavity airMaintain bearing
bufferMeter air in
Separate Air
Meter non-Pre-swirl air
Seal Pre-swirl Cooling Air
Requirements
Functional Hierarchy
Transmit Torque
Cost Weight Life Leakage
Seal Oil Seal AirManage Bearing
LoadCool Disc Assembly
Locate Blade
Axially
Radially
Cool Disc Body
Cool Disc Rim
Cool BladeSeal Disc Rim
Seal Front
Seal Rear
Contain Oil
Maintain Bearing Pressure
Maintain Buffer Pressure
Meter air outSeparate rear
cavity airMaintain bearing
bufferMeter air in
Separate Air
Meter non-Pre-swirl air
Seal Pre-swirl Cooling Air
Requirements
Functional Hierarchy
Figure 18 – Hierarchy of Requirements and Functions for the Disc used in AHP
The result from AHP was then be used to define the importance of the
Functions within QFD2, which, in conjunction with understanding the
relationship to functionality by each individual design feature, determined the
relative importance of features, as shown in Error! Reference source not
found..
It should be noted that the importance of features resulting from QFD2 does
not necessarily give us the complete picture as to what should be the focus of
407
any DfSS project – adding practicality and opportunity to this importance gives
us valuable extra insight.
VOC Importance Calculations
Importance %
CTQs Importance
Importance
1 S
eal O
il
1.1 Contain Oil
1.2 Maintain Bearing Pressure
1.3 Maintain Buffer Pressure
2 S
eal A
ir
2.1 Seal Dsic Rim
2.2
Sea
l F..
.
2.2.1 Seal Pre-swirl Cooling Air
2.2.2 Meter Non-pre-swirl Air
2.2.3 Separate Air
2.3
Sea
l Rea
r
2.3.1 Maintain Bearing Buffer
2.3.2 Meter Air Out
2.3.3 Separate Rear Cavity Air
2.3.4 Meter Air In
3 Manage Bearing Load
4 C
ool D
is..
.
4.1 Cool Blade
4.2 Cool Disc Rim
4.3 Cool Disc Body
5 Lo
c... 5.1 Radially
5.2 Axially
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1 Disc
1.1
Firt
ree
1.2
Dia
phra
gm
1.3
Cob
1.4
Buc
ket
Gro
ove
2 Front Drivearm
2.1
Driv
earm
2.2
Fla
nge
2.3
Bol
ted
Ass
embl
y
2.4
Bal
ance
Hol
es
3 Lo
ckpl
ate
4 Front Seal
4.1
Cov
erpl
ate
4.2
Out
er S
eal A
rm
4.3
Inne
r S
eal A
rm
4.4
Mid
dle
Sea
l Arm
5 R
ear
Sea
l5.
1 S
eal P
late
5.2
Dis
cour
ager
Sea
l
6 Rear Stubshaft
6.1
Bea
rimng
Tra
ck
6.2
Riv
et H
ole
6.3
Car
bon
Sea
l Run
ner
6.4
Baf
fle
6.5
Stu
bsha
ft
02 Functionality
03 D
esig
n S
olut
ion
5.6%
1.6%
2.3%
13.5%
6.2%
2.7%
3.0%
1.1%
0.7%
1.2%
1.2%
9.2%
12.5%
9.8%
4.3%
19.0%
4.8%
Impo
rtan
ce %
6.9%
4.5%
5.6%
6.3%
4.4%
0.1%
0.3%
5.3%
9.4%
11.0
%
6.0%
9.9%
3.4%
8.7%
1.3%
7.2%
2.2%
2.6%
2.5%
2.2%
Importance
0% 2% 4% 6% 8%10%12%14%16%18%
0%
2%
4%
6%
8%
10%
5
3
5
3
8
4
3
4
2
3
2
4
5
7
7
10
7N
umbe
r of
sig
nific
ant r
elat
ions
hips
Significant relations 4 6 3 2 4 1 2 6 7 7 7 3 3 4 5 4 5 5 4
Figure 19 – Completed QFD2 Showing Functional Importance, Relationship between Features and Functionality and Resultant Feature Importance
In this case “practicality and opportunity” equate to the ability to analyse
individual features behaviours within Project timescales and also align with
current (or historical) areas of particular interest, and so the questions posed
to further down-select features were as follows:
408
1. Outputs of the analysis are able to be modelled?
2. Analysis codes involved (including time for setting-up to run) run
quickly?
3. Is there flexibility in parameters to determine the nominal design
(design freedom & lead time)?
4. Manufacturing variation and other potential sources of variation can be
collected?
5. High risk of poor service performance and/or manufacturing problems?
6. Significant cost implications of changes to the design after hardware
has been committed to, if you get the design wrong?
Taking each of these criteria in to consideration and combining them with the
importance rating from QFD2, a sub-set of features were down-selected for
further study using the DfSS methodology; other features being treated as
“business as usual”.
For simplicity, we shall continue on and discuss only a single feature (the disc
firtree root) from this down-selected list.
The firtree root is the name for the style of fixing that locates a turbine blade
radially to the disc at the rim. Axial retention is maintained by another feature,
the “lockplate”. The name firtree derives from the distinctive shape that
resembles a fir tree: radial location is maintained through a series of inter-
locking “teeth” as shown in Error! Reference source not found.. Even on
409
this single feature of the disc, it is clear that there are many factors – including
the number of teeth on the firtree and the geometry of each individual tooth –
that will affect some aspect of the fitness for purpose of the design to some
degree or other.
Blade Root
Disc Rim
Blade Root
Disc Rim
Figure 20 – A Schematic of a Firtree Root
In Error! Reference source not found. we see a breakdown for likely
sources of variation that might affect one of the CTQs for the firtree: Life. This
information, combined with a detailed description of the firtree geometric
parameters, is used create a specific P-diagram, the generic form of which is
shown in Error! Reference source not found..
410
y = ƒ(x1, x2, x3, ...)
Life
Noise
Material Property Variation
Geometric Variation
Customer Usage Variation
Thermal Load Variation
Mech. Load Variation
Strength Variation
Proof strength variation
UTS variation
LCF variation
Shaft speed variation
Blade Mass variation
Air temperature variation
Air pressure variation
Manufacturing variation
Friction coefficient variation
Residual stress variation
Deterioration
Blade CoGvariation
Lcckplate Mass variation
Lockplate-blade contact variation
Thermo-Mechanical FE Analysis
y = ƒ(x1, x2, x3, ...)
Life
Noise
Material Property Variation
Geometric Variation
Customer Usage Variation
Thermal Load Variation
Mech. Load Variation
Strength Variation
Proof strength variation
UTS variation
LCF variation
Shaft speed variation
Blade Mass variation
Air temperature variation
Air pressure variation
Manufacturing variation
Friction coefficient variation
Residual stress variation
Deterioration
Blade CoGvariation
Lcckplate Mass variation
Lockplate-blade contact variation
Thermo-Mechanical FE Analysis
Figure 21 – Key Variational Inputs for Firtree
Similarly a specific What-Why Table for the firtree (see Error! Reference
source not found. for the generic form) was produced that identified all key
parameters that were built in to the automated, parametric Finite Element
Analysis (FEA) model that was then employed in all further simulation.
Following the “DOE roadmap” as defined in
Figure 3, a screening design was used to reduce the number of parameters
for the firtree that would be taken forward in further study. The screening
design was in this case a Resolution V 2-level fractional-factorial design. It is
more usual for screening designs to be highly fractionated (Resolution III) 2-
level fractional-factorial designs, but in this instance analysis time allowed a
more powerful screening process to be employed. This avoided the
411
considerable confounding in the Resolution III design, allowing a more reliable
choice of important factors to be made. (See Ref. Error! Reference source
not found. for more on the resolution of a fractional factorial design).
Following this screening process, a 3-level face-centred Central Composite
Design (see Ref. Error! Reference source not found.) was performed on
the reduced set of factors in order to create a Surrogate Model that was
suitable for making predictions about the behaviours of other combinations of
factors that were not explicitly exercised as part of the experiment. This is
important because, by their nature, Designed Experiments only look at
“extreme” combinations at the outer bounds of the design space, and as such
are not likely to result in a combination of factors that lead to the best design
configuration.
An important part of the surrogate modelling process was the validation step
(see the DOE Roadmap,
Figure 3). This involves testing the model’s predictive ability at points in the
design space other than those used to train the model. These additional test
points allow us to compute residuals: the differences between values
predicted by the surrogate model and the actual values produced by the
simulation code. 4 shows the resultant residuals for the final Kriging Model
that was chosen as the best predictor for the firtree in this instance.
412
Prediction of Response from Surrogate Model
Prediction of Response from Simulation Code
Prediction of Response from Surrogate Model
Prediction of Response from Simulation Code
4 –
Figure 22- Residuals of Predicted versus Actual values for Surrogate
Model
Differences between surrogate and actual values are of course to be
expected, but we are checking for “fitness for purpose”: the residuals should
be well-behaved, demonstrate that the surrogate follows the general trend of
the simulation code data, and is equally good at predicting values throughout
the design space. In these respects, as can be seen in 4, the surrogate
model is more than adequate. Other model forms (Polynomial and Radial
Basis Functions) were of poorer quality. A 3D visualisation of this Kriging
model, produced in iSIGHT-FD, is shown in Error! Reference source not
found. for a single CTQ plotted against two of the input factors.
413
Figure 23 – 3D plot of Firtree Surrogate Model
The creation of a surrogate model now allows us to efficiently explore the
available design space in order to find a good nominal design.
It is not necessary at this point in the process to employ automated design
optimisation. It is in fact simpler (and possibly more reliable) to define a
further Designed Experiment that will densely populate the available design
space in an unbiased manner – a simple Latin Hypercube (space filling)
design is well-suited to this purpose. The results of such an exercise can be
seen in Error! Reference source not found..
414
10,000 executions of Surrogate Model to populate Design Space
Each individual point on the adjacent scatter plots corresponds to a “candidate design”
Axes correspond to pairs of the six CTQs relevant to the firtree
Feasible designs are contained within the rectangular regions shown – these are design that satisfy all constraints on the CTQs
Figure 24 –Results of Design Space Exploration
using Surrogate Model for Data Mining
In iSIGHT-FD (see Ref. Error! Reference source not found.), it is possible
to employ graphical data mining techniques as shown in Error! Reference
source not found.. The upper chart in this figure allowed the user to
interactively select any set of values for the design parameters, for which the
corresponding values of the CTQs were automatically highlighted in the lower
chart as shown. Furthermore the values of CTQs displayed could be filtered
in order to isolate only those designs that are feasible. This then enabled the
user to make an informed choice of the best nominal design. The selected
design point was then validated by running the selected combination of design
parameters through the simulation code in order to prove that the design gave
a similar level of performance for the CTQs as was predicted by the
surrogate.
415
Figure 25 – Graphical Data Mining of Candidate Designs
2.3 Characterise
Following the selection of the nominal design the next phase of the DfSS
process is to characterise the robustness of the design. A precursor of this
was to statistically model the important noise factors identified in Error!
Reference source not found. using real world data where available (and
valid engineering assumptions otherwise).
An example of a statistical model fitted to data is shown in Error! Reference
source not found. for one such source of noise. In this case a ‘beta’
distribution was the best choice of model. A combination of Minitab (see
Ref. Error! Reference source not found.) and Crystal Ball™ (an Excel plug-
in; see Ref. Error! Reference source not found.) was used to model the
data.
416
As stated previously it is important to account for correlations between
sources of noise, so as to correctly calculate the design robustness. For the
firtree, where sources of noise were shown to be correlated by examining the
data in Minitab, Crystal Ball™ was used to account for the correlation by
creating a sample “look-up table” of correlated values for each pair of
correlated noises. This look-up table was in turn used in iSIGHT-FD by
randomly selecting a set of correlated values from the table, thereby enabling
the correlations to be correctly accounted for in the robustness analysis.
From iSIGHT-FD version 3.0 onwards, such correlations can be directly input,
thereby eliminating the need for this step.
Figure 26– Statistical Model of Variation based on Real-World Data
417
Because a validated surrogate model that covered the whole of the design
space had already been created, it was possible to evaluate robustness using
Monte Carlo Simulation and to choose Pc as the robustness metric. In this
case, since the target value for Pc was 0.999 or greater, the robustness
assessment shown in Error! Reference source not found. meant that the
chosen nominal design was not, in fact, robust! Traditionally, this may not
have been recognised until much later in the design life cycle.
Table 2 – Results of Robustness Assessment on Nominal Design
Robust Objectives
CTQ
Robust Objectives
CTQ
2.4 Optimise
Since the current nominal design was not robust, it was necessary to identify
an alternate solution that met the twin requirements of feasibility and
robustness for all CTQs simultaneously. Using the population of previously
identified feasible designs and the same surrogate model, the robustness of
each of the many alternative feasible candidates was calculated and
evaluated in order of preference (based on nominal performance) against the
requirement of achieving Pc > 0.999 until a robust option was found.
418
This is an implementation of the Parameter Design approach since we are
not altering input variation, only choice of nominal design parameters. At this
stage in the design life cycle, these changes are ‘free’ since hardware has not
been committed to.
Such a sequential approach to determining nominal designs and thence
robustness is preferable from a computational standpoint, since – even when
employing a surrogate model – the calculation of Pc from a Monte Carlo
Simulation is not trivial. It is logical to identify the candidate subset of feasible
nominal designs and then calculate robustness only for these designs rather
than calculate robustness of all designs irrespective of their feasibility.
In fact, the resultant design selected through this methodology was sufficiently
robust to obviate the need for further robustness improvement through
applying Tolerance Design. Similarly, as the final design was sufficiently
robust, but not overly so, there was no cost advantage to be gained from
loosening tolerances in this instance.
2.5 Verify
At the current time, the HPT disc design under discussion is still purely
“digital” and has not yet been manufactured. This means that although the
Verify phase is planned, results will not be available until some time in the
future as part of the engine development programme.
419
3 Conclusions
This paper has set out not only to clearly describe a practical implementation
of DfSS using the DCOV methodology, but also to highlight the demonstrated
benefits of the approach, specifically:
• A more thorough exploration of the design space is achieved than would
otherwise be possible. This means that many more feasible options are
made available to the designer for evaluation, enabling a design solution
to be chosen that best meets the competing demands of low cost and
consistent high performance.
• A quantified estimation of Pc (probability of conformance) for the design –
hence greater confidence in the consistency of delivery for actual in-
service performance.
• The application of Parameter Design – rather than traditional “Tolerance
Tightening” – to fix robustness issues thereby avoiding extra cost and
pain.
• Much of the data and associated models of variation, the automated
analysis chain and surrogate models, QFD matrices, P-diagrams, What-
Why tables, etc. used in this project can be re-used in future projects
where a similar design concept is to be evaluated in a new application –
thereby further speeding up design cycle times and improving quality.
420
• Through its team-based activities such as QFD, P-diagram and What-Why
table creation, development of a multi-disciplinary analysis chain, DfSS
promotes better cross-functional cooperation leading to a higher overall
awareness of all design issues that exist. This improves the quality of
decision making throughout the design process.
• Adapting individual methods and tools that form part of the overall “DfSS
toolkit” to the needs of the engineering task at hand (in particular tools
such as QFD and DOE) so they are less burdensome in application but
still highly beneficial in progressing the engineering design process an
hence encourage its adoption as a framework within which to solve
engineering problems.
• With the computational power that is available today, it is possible to
achieve design optimality (including robustness) through fully automated
“black box” optimisation techniques. However, the more “hands on”
approach as described in this paper is often more desirable, since it
imparts a greater knowledge of the design space and the factors that
influence both nominal performance and robustness to the design team.
.
References
Thomas L Saaty (1999), Decision-Making For Leaders; The Analytic Hierarchy Process For Decisions In A Complex World, RWS Publications, 1999
visit their web , For more information on Qualica and how to contact the Qualica team
desite.qualica.www://http at
421
KC Kapur, and Q Feng (2005), “Integrated Optimisation Models and Strategies for the Improvement of the Six Sigma Process”, Int. J. of Six Sigma and Competitive Advantage, Vol. 1, Nr.2,
Raymond H. Myers and Douglas C. Montgomery (1995), Response Surface Methodology, Process and Product Optimisation using Designed Experiments, Wiley Interscience, 1995
P.G. Rowe (2006), “Setting Statistical Specifications for Critical To Quality Characteristics”, Int. J. of Six Sigma and Competitive Advantage Vol. 2, Nr.1,
visit their web , amFD and how to contact the Engineous te-For more information on iSIGHT
com.engineous.www://httpsite at
visit their , e Minitab teamFor more information on Minitab and how to contact th
com.minitab.www://http
visit their , ll teamFor more information on Crystal Ball and how to contact the Crystal Ba
crystalball/com.oracle.www://http website at .
422
'LEAN SIX SIGMA APPLIED TO A CUSTOMER FACING OPERATIONS PROCESS IN FINANCIAL SERVICES’
Dr Nuran Fraser
Manchester Metropolitan University Home Address: 3 Coral Avenue
Cheadle Hulme Cheshire SK8 6HJ
United Kingdom
John Fraser GE Money
Home Address: 3 Coral Avenue Cheadle Hulme
Cheshire SK8 6HJ
United Kingdom
Abstract:
This study explores the use of Lean Six Sigma methodologies and
tools as applied to supply chains within a services environment. The
approach taken was to examine a L6S project as run within a large
American financial services conglomerate to understand how this has
been applied. The project not only demonstrated the results achievable
but also the business thinking presented some compelling findings.
Although there are differences between the Lean and Six Sigma
approaches as well as the difference between a manufacturing and
services environment, there were also some key learnings
demonstrated. Certainly some of the key issues uncovered is that clear
423
objectives combined with accurately set parameters and data gathering
aligned with stakeholder buy-in is key to the success of a project of this
nature. The implications and strategy adopted by the services
company are borne out with the results as outlined in this study and
further supports the deployment of a carefully thought through L6S
programme within services supply chains.
Lean Six Sigma applied to a Customer Services Process within a Commercial Finance
Organisation – An Empirical Case Study
1 Introduction
Lean Six Sigma has been around in business as a form of quality programme
for more than two decades now. Established by Motorola in the mid-Eighties,
Six Sigma has since been adopted by a number of very high profile
organisations including Boeing, Kodak and GE. This then developed further
through Toyota into the complimentary Lean 6 Sigma methodology. What has
sometimes been questioned by businesses is the tangible value that a
programme such as L6S delivers. This is particularly true in services where
there are many intangible processes and effects that require careful thought
so that a true measure may be defined.
Historically, the first firms to grasp L6S were mainly in the manufacturing
sector. This was due to the fact that the core Six Sigma methodology
424
revolved around the reduction of defects in a process. As with Aircraft
Engines, this might be a defect in the width of a piece of steel for use in the
manufacture of a turbo fan engine. This might typically lead to a catastrophic
failure, so a solid quantitative methodology lends itself well to the prevention
of problems in this type of scenario.
Services by its nature is very often bound by time in terms of the processes
that are run and lead to the delivery of an outcome that then benefits a
customer. This is where Lean comes in as a methodology that looks at how
waste (in terms of time) may be taken out of a process and allows that
process to become more efficient and, in turn, builds capacity. This is where
the focus of this paper will be, however to better outline the building blocks of
Six Sigma we need to first look at the methodology behind the paper and its
component parts.
2. Research Methodology
2.1 Secondary Research
The authors have performed extensive reading on supply chain management
and on the application of Lean 6 Sigma methodologies, in order to provide a
good theoretical background on the subject being studied. This has included
books, academic journals, Newspaper and magazine articles, and Internet
sources.
Illustrations to support the theories can be found within the text of this paper.
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A list of all the literature and sources of information used for the outcome of
this work can be found in the reference section of this paper.
2.2 Primary Research
The main thrust of this paper revolves around a project run at GE within its
customer services department with the objective of improving a process,
eliminating waste and building capacity in the department.
3. A Case Study for Best Practice Deployment of L6S in a Services Environment
The case study that will be used for this paper centres around the National
Grid, who as a client of GE Fleet Services in the UK, required renewal
prompts for its vehicles to be issued to drivers in a timely and resource
efficient manner. Please note that the case and the associated opinions as
outlined in this paper in no way represents the opinions of either GE or the
National Grid and are those of the authors of this paper only. Please also
refer to Exhibit 1 onwards following the reference section.
The first step in a L6S project is to define what is being undertaken and what
represents success. Identifying the CTQ or what is 'Critical To Quality' is the
first step and is ultimately what the customer wishes to gain from this
exercise. The Big Y is the Yield that is expected to result and the little y
represents a measure of this Big Y. In this case, the Voice of the Customer is
expressed as:
426
'Need to reduce the amount of time taken to issue and manage order
prompts. From the point that drivers are identified for a prompt to the point
that it is issued by email is using too much resource capacity in terms of time'
The Big Y is then defined as to 'Free up resource capacity when running
renewal prompts' The measure associated with this or the little y is then
defined as, 'time spent running prompts’. This process of defining the CTQs
is completed with the customer's approval and buy-in.
Exhibit 1
As a next step, the Project Charter is then drawn up and populated with
relevant details covering the business case, objectives, scope, timelines and
team involved in delivering on the customer's CTQs. The separate sections
as outlined in the charter above are outlined below by way of an explanation
of the steps involved:
3.1 Business Case (reason to run with this project)
The consistent and timely prompting of renewals followed by the subsequent
placing of orders is a key service for this customer in the UK, National Grid.
The process was taking too long to issue prompts, leading to a lack of
resource capacity within the NG customer services team.
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3.2 Specific Problem Statement (clearly quantify what the problem is)
From 01/01/2006 to 22/03/2006, it was recorded:
• An order prompt number of 80 per month
• An order prompt process time median of 530 secs; P95 is 606 secs (8
mins 50 secs and 10 mins 6 secs respectively)
This has resulted in less time spent on other growth and value-add customer
services activities by the National Grid customer services team.
3.3 Specific Goal Statement
This was defined as, ‘reduce the time taken to process and issue an order
prompt so that the P95 drops from 606 secs (10 mins 6 secs) to 240 secs
(4mins) by Q2 2006. This should help to build resource capacity without
creating more re-work loops or effecting the Yes/ No ratios at subsequent
prompt steps’.
Note that the median is the mid-point of a set of data, not the mean or
average. Whether to use the mean or the median is determined by the nature
and spread of the data. So, for the numbers, 1, 20, 45, 100, 1000; the median
is 45. The average would be all of the numbers added together and divided
by 5.
As for the P95 reference, this relates to the percentile of a group of numbers.
The P95 relates to the 95th percentile and means that in this case 95% of all
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prompts are issued within the time specified. So, the target of 240 secs or 4
mins is what we would like 95% of prompts to be processed within.
3.3.1 In Scope (what is the focus of this project)
All NG Renewals that require prompts and follow-up to achieve timely order
placement
3.3.2 Out of Scope (what is not being included in the project)
Any other processes outside of NG Renewals within Customer Services
3.3.3 Project Team (who are the stakeholders who will work on this project)
Project Sponsor
Quality Leader
BB Serve
Customer Services Manager
NG Account Manager
NG Service Delivery Executives
3.4 Define Process Map
A high level process map was drawn up to highlight the areas of focus for the
project. In this case:
1. Filter invoked and renewals identified
2. Check driver details and validate
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3. Mail-merge letter and prepare email for issue
4. Dispatch to driver
These are the areas that this project looked to improve that would in turn lead
to the achievement of the specific goals as outlined.
3.5 Select CTQ (Critical to Quality) Characteristics
The CTQ characteristics are then outlined and this relates back to where the
improvement is being made within the business, as previously described.
Exhibit 2
3.6 Define Performance Standards
This step is one of the most critical as it outlines very clearly what is being
targeted for improvement and how the various processes may be defined to
ensure that the desired performance is achieved. Starting with the left hand
box and then working down the table to the right:
3.6.1 Voice of Customer (as previously stated)
Need to reduce the amount of time taken to issue and manage order prompts
3.6.2 Unit Definition – Processed Order Prompt (what unit are we
measuring)
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3.6.3 Output Characteristics - Time Spent to Process Order Prompt
3.6.4 Output Operational Definition - Order Prompt from the time filter is
applied to identify drivers to prompt to the time that the email prompt is issued
to the driver
3.6.5 Customer Specification Limits - USL = 240 seconds (4 mins) –
USL stand for the Upper Specification Limit and this,as you may recall, is with
the P95 measure.
Target - 180 seconds (3 mins) = LSL – this is the ideal situation for the
customer and is regarded as the Lower Specification Limit (LSL)
3.6.6 Defect – This is basically saying, what represents a defect in this
process and the definition of a defect is if the time taken is greater than the
Upper Spec Limit, > USL
3.6.7 Defect Opportunity Number per Unit – this is asking how many
opportunities per prompt are there for a defect to occur. As the defect is
defined as total time taken for prompt to be identified and then issued this is 1.
Exhibit 3
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3.7 Measurement System Analysis
This step looks to identify how a particular measuring system may or may not
affect the recording of processes or parts under investigation. For example,
using a digital stopwatch for a sprint race will record a very accurate time with
little bias added from the stopwatch itself in terms of +/ - fractions of a second.
However, if a wall clock was used with no second hand, then the only unit that
could be measured would be minutes and for a sprint race this would not be
sensitive enough. Indeed even with a second hand, the clock may still not
have the accuracy required to record a faithful time.
For this project, the following procedure was outlined and followed:
3.7.1 Operational Definition of the Measurement
Order Prompt from the time the filter is applied to identify drivers to prompt to
the time that the email prompt is issued to the driver
3.7.2 Sampling Plan (what is measured to determine the bias of the gage)
The figures are based on 20 order renewal prompts identified during March
2006 as part of the National Grid order prompt process.
3.7.3 Measurement Procedure
The data was recorded by two people timing the prompts process from the
point where the Customer Services Operator signalled they were starting the
process to the point where they pressed the send button for the prompt to be
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issued via Outlook. The result being that two people checked the timings of
20 prompts one time each using the second hand on a wrist watch.
A short form gauge R&R was then run on the 20 observations and it was
found that the gage would not be a bias beyond any reasonable level and that
the project could be based around the measures as taken using the second
hand of a watch.
Exhibit 4
3.8 Establishing the Process Capability
This step essentially quantifies where the process sits today. This is achieved
in this case using a statistical tool to provide a measure. Looking at the
bottom right hand table outlines the capability as follows, based on 20
observations:
N = 20 (observations)
Median = 530 seconds
P95 = 606 seconds
DPMO = 1,000,000
The above basically demonstrated that the process was completely defective
and that not one of the prompts issued met with the customers desired Upper
Specification Limit as previously defined.
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3.9 Value Added Goals
This step allows a summary of the value added tasks that are key to this
process happening and also outlines the non value added tasks that can
occur within this process. The aim being to maximise the value added tasks
and reduce or eliminate the non value added tasks.
4. Mapping the Value Stream (VSM)
Moving into the Analyse phase, the objective here is to walk the process and
ensure that it is fully representative of the process being measured. This
involved sitting with the operator as they went through the process and
recording each step with a description of the activity. The length of time that it
took for each step was also measured as well as any waste in between those
steps.
Colour coding was used to differentiate between one application as used and
another. In this case, all were MS office products but they had been used in a
piecemeal manner and the process had evolved around these rather than
being something that was carefully conceived and deployed. This mapping of
the underlying process provided the framework for the subsequent phase of
the analysis as outlined below.
Exhibit 5
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4.1 The next stage is to look at Potential Causes
This allows an objective view of the process and highlights and isolates
causes of wasted time. In this instance, a lot of manual intervention, re-
keying, verification and manual mail-merging being the main issues.
Exhibit 6
4.2 Establish a New Process Flow
Through workouts and drilldowns on the various steps along with the input of
stakeholders including IT, a new flow was developed that allowed a large
number of the non value added steps to be removed and a new process to be
implemented that allowed for a more streamlined and accountable output.
The key to the new flow was in allowing the various applications to operate
more effectively by both optimising their performance individually and also in
helping them to talk more efficiently between each other. This was achieved
by making the filtering process more automated within Excel, so that relevant
data was pulled through to an appropriate template and also merging directly
to a email message rather than merging to a word document to create a letter,
then saving that letter and sending the combined as part of an email
message.
The end result is that through all of this change and refinement, the process
time for 20 prompts was reduced to 180 seconds combined, representing a
time saving of 99% over what was achieved before.
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4.3 Implementing the Pilot Solution
This step represents a workplan with roles and responsibilities for anyone
looking at understanding how the new process will work from an operational
perspective.
Exhibit 7
4.4 MSA (Measurement System Analysis) Step 10
The key at this step is to measure the 'X' rather than the 'Y'. So, where the Y
is the main yield or output, then the X is the variable that affects the Y. For
example, (X1 + X2 + X3 + X4) = Y. There may be many variables that affect
the Y. In this instance, the inputs in terms of the refining of the applications
used and the efficiencies in the manner in which they talk to each other
means that in this case the measurement of the Xs are closely matched with
the Y. So a measure of the time taken to issue the prompts and a record is
what is shown here. This is where the 180 seconds for 20 prompts can be
clearly seen and the reduced file size is illustrated.
Exhibit 8
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4.5 New Process Capability
Once the new process has been established, the capability of the process
may be measured. Due to the prompts being issued at a rate of 20 in 180
seconds, this represents a capability of 6 sigma and a defect rate of 0.
4.6 Implement Process Control
The aim of this step is to ensure that the new process does not lapse back to
a previous state and the benefits of the new method is lost. The tool used
here was a Failure Modes and Effects Analysis (FMEA) that basically looks at
the severity, occurrence and detectability of factors that may arise such as
systems failure or different operators running the prompts that may then have
an adverse affect on performance.
5.0 Conclusion
The project conclusions more or less speak for themselves in terms of the
impact that a well structured project can have on a business, as follows:
• The time taken to issue National Grid order prompts reduced from a
Median of 530 seconds for 1 prompt to a total time of 180 seconds for 20
prompts
• Capacity generated allowed for a new customer to be assimilated and
managed – Rightmove PLC
• The size of the order prompts issued reduced from 3.5MB per prompt to
2KB as a result of the changes made
• Making the most of existing technologies that in turn increases capacity is
a highly effective way in which to drive growth
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One of the key aspects here is that a project with a relatively short timeframe
(6 weeks) was able to achieve such significant improvements and in turn both
meet the needs of the external customer and the GE business. This project
subsequently received recognition from the business sponsor and quality
leader in the form of an award. The citation from the business sponsor
included the following:
“…We should not overlook the very positive motivational impact this
project has had on the customer services employees directly involved in
the National Grid account. Also note the future positive impact on the
rest of the department given the project solution has universal
application on the orders renewal process generally.”
Indeed, this project subsequently led to the building of a bespoke IT solution
to manage the order prompts for other customers within the GE Fleet
customer base.
Lean Six Sigma has had a great deal of practitioner and academic coverage
over the past year or two as organisations such as the NHS has embraced
the methodologies to enhance and refine their processes. However, there
has also been a great deal of scepticism shown by the industry at large as to
the costs and timescales for delivery of such improvements. This GE project
clearly demonstrates the value of a well applied L6S method to solve a
process problem within a services environment in a timely manner and create
capacity in an over-stretched customer services department. There are
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lessons that can be learned here to benefit both the public and private
sectors.
References Bendell, T (2000), Qualityworld – What is Six Sigma?, London: The Chartered Quality Institute
Brook, Q (2004), Six Sigma and Minitab – A Tool Box Guide for Managers, Black Belts and Green Belts QSB Consulting Ltd
George, M (2000), The Six Sigma Way, McGraw-Hill
Geroge, M (2003), Lean Six Sigma For Service, McGraw-Hill
Christopher, M (1998), Logistics and Supply Chain Management – Strategies for Reducing Cost and Improving Service, 2nd Ed, London: Financial Times Pitman
Porter, M (1998), Competitive Advantage: Creating and Sustaining Superior Performance, London: New York: Free
11.
12. Ross, D. Frederick (1995), Distribution: Planning and Control, Chapman &
13. Tom Donnelly, Kemal Mellahi, David Morris, European Business Review, Bradford: 2002. Vol. 14, Iss. 1; p. 30 (10 pages)
Van Weele, A (2002), Purchasing and Supply Chain Management: Analysis, Planning and Practice, 3rd Ed, 2002, London, Australia: Thomson Learning
Walters, D (2002), Operations Strategy, Basingstoke: Palgrave Macmillan
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Appendices
Exhibit 1
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Exhibit 2
441
Exhibit 3
442
Exhibit 4
443
Exhibit 5
444
Exhibit 6
445
Exhibit 7
446
Exhibit 8
447
What Makes Lean / Six Sigma Succeed
Experiential Improvement Strategy (Model)
A Case Study
Alan Harrison, FCQI, CQP, MIET, C.Eng Global Lean Champion,
The Weir Group PLC, 20 Waterloo Street, Glasgow, G2 6DB
e-mail: [email protected]
ABSTRACT
This paper presents pragmatic and experientially developed business
improvement model that quickly and positively influences mind set, aligns
people, drives right actions and behaviour, and delivers and sustains desired
improvements.
The model was developed and applied in an international organisation that
successfully manage change in a traditional engineering environment through
adapted Toyota Production System, Lean, Kaizen, Six Sigma,
benchmarking...which are integral parts of their overall business improvement
strategy.
448
The main drivers for applying and developing this approach were:
• need to focus improvement activities on true customer, market and
business improvement needs
• re-align organisation from traditionally (functionally) structured to value
stream organisation
• get all functions to define and share improvement goals (vision)
• break functional barriers and get all functions to work together along
value stream to own and sustain new system
The key steps of the model are explained with a particular focus on how to
achieve and sustain the system that drives desired way of thinking and
behaviour with examples of achieved benefits.
KEYWORDS: Rapid Improvement, Lean Mind-Set, Kaizen, Lean
Leadership, Six Sigma, Sustained improvement, Make Vision Happen, Value
Stream Mind Set
1.0 Introduction
1.1. Common causes of success and failure
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During the last 20 years the author has participated in hundreds of
improvement projects across different organisations, engineering,
manufacturing, service, private and public…and has experienced many great
successes, but also many occasions where efforts did not produce desired
outcomes.
He has also attended a number of national or international conferences
dedicated to business improvement, met many enthusiastic and inspiring
practitioners and asked them the same questions.
One of the questions was: “What, in your experience and opinion, makes or
breaks improvements?”
All practitioners gave the same answer: “People”
Based on this (unofficial) survey and years of business improvement
experience, the author has developed hypotheses that the root cause of any
success and failure is the same, and it is a mind-set, the way how and what
we think, as presented below.
Common causes of a failure can be categorized as:
• Lack of leadership – lack of individuals who have imagination to create the
right vision, charisma to inspire people and energy to drive realisation of
that vision
• Limiting beliefs that prevent people to listen, understand, accept and
believe in the right vision
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• Negative emotions that prevent individuals to have confidence to drive
themselves and support others in new direction and take failures as
learning opportunities
• Ineffective strategies and plans that fail to identify and realize right
improvement actions
Common principles of success can be described as follows.
� Goal focus
� Recognise your customers and your business real needs. This is the
first step in creation of the right vision.
� Take massive action
� One implemented action is better than a hundred good intentions.
� Know where you are
� Understand your starting and end positions, track you progress during
your journey.
� Be flexible
� Keep focus on your goals, and also keep flexibility during your journey.
The goal of an improvement project is to deliver improvements, not to
practice Lean or Six Sigma.
� Start and operate from a physiology and psychology of excellence
� This is about ‘winning mind-set’. Imagine and behave like you have
already achieved your goals. This makes you more confident and it
makes all barriers look solvable.
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Another question that the author asked business improvement practitioners
was:
“What percentage of success would you allocate against ‘soft’ improvement
elements, where ‘soft’ stands for leadership, direction, team building,
communication…and similar against ‘hard’ improvement tools?”
So, before their answers is quoted - what do you think, in your own
experience, what percentage of successful improvement activity is due to
‘soft’ elements?
…
…
…
Amazingly, all practitioners (not even almost all, but literally all) gave the
same answer, which is “I would allocate 70%-80% against ‘soft’ elements”.
(Possible explanation could be that Pareto 80/20 rule has become common
sense).
Note: the author has interviewed business improvement practitioners in a
period 1998 - 2008 during his benchmarking visits to other organisations in
the UK and Europe, chairing Lean Six Sigma Club in Glasgow (approx. 25 UK
organisations), and internal practice sharing. A number of interviewed
individuals is approximately 280.
So, if 70-80% of success (according to interviewed business improvement
practitioners) depends on ‘soft’ issues, why is it that we usually spend 70-80%
452
of improvement training and execution effort focusing on ‘hard’ issues? (this
practice was also confirmed by majority of interviewed business improvement
practitioners).
Is this your experience as well?
1.2. The three elements of Lean / Six Sigma Success
Fig.1: The three elements of Lean / Six Sigma success
Again, based on years of personal business improvement experience and
feedback from hundreds of peers, the author suggests the following model, as
presented in the above figure.
1.2.1. Mind set
Mind set consists of set values, beliefs and attitudes. Those are widely
published and recognized, for example Deming’s ’14 points’.
Implementation
Strategies
Methods, Tools, Techniques
Mind-
set
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The following statements and comments present example of required mind-
set for successful Lean / Six Sigma implementation.
• There is no failure, only feedback
This is a core value of any continuous improvement mind set. It is based
on the fact that when a failure happens it is already in the past and we can
not change the past. Undesired outcomes are best seen as learning points
which offer opportunities to define and complete right corrective,
containment and preventive actions so we do improve present and the
future.
• You get more of what you focus on
…or…energy flows where attention goes. Desired outcomes are easier
achieved when there is a consistent focus on those outcomes.
• If what I’m doing is not working I will do anything different until I get
the response I want
During an improvement journey leaders, facilitators, and team members
need to be flexible and change roads when required to reach desired
outcomes in effective, efficient and ecological way.
• You cannot not communicate
Communication is important part of any improvement activity. Any gaps
and holes in communication tend to be filled in by rumors, which may harm
desire for improvement.
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Business leaders are responsible to consistently demonstrate desired
mind-set and demand desired outcomes in a positive way.
• People are victims of broken processes.
The root causes of undesired outcomes are in the process, the system the
way how work flows, not in the people. People are part of the process and
they will do their best in their own model of the world. It is better to aim for
perfect processes supported by average or above average people than the
other way around.
• Lean / Six Sigma practitioner is one who demonstrates Lean / Six
Sigma
The operative word is ‘demonstrates’ which makes the difference between
Lean / Six Sigma practitioner and someone who has knowledge of Lean /
Six Sigma.
1.2.2. Implementation Strategies
The next element of successful Lean / Six Sigma implementation is how
change is put in place, i.e. ‘a recipe’ how Lean / Six Sigma is deployed.
There are probably as many ways to implement Lean / Six Sigma as
organisations doing it.
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Some important elements of any Lean / Six Sigma implementation are as
follows:
o Top management vision and participation
o Ownership and drive of results by all involved
o Use of facilitators, internal or external to the organisation
o The right focus on monetary benefits when prioritizing
improvements
o The speed of implementation, for example improvements spread
over 2-9 months or ‘blitz’ improvements spread over 1-3 weeks
o The extent of focus on ‘hard’ and ‘soft’ tools
o The extent of integration of improvement within overall business
strategy and operation
It is most likely that there is no ‘one right universal way’ to implement Lean
/ Six Sigma.
Even the same organisation will have to keep flexibility in Lean /Six Sigma
deployment to achieve desired goals.
1.2.3. Methods, tools and techniques
Those are specific Lean / Six Sigma tools, whether widely recognized or ‘in-
house’ developed or adapted.
KEY POINT
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Successful Lean / Six Sigma implementation requires the right mind-set,
effective implementation strategies and effective and efficient use of
improvement tools.
The author strongly believes that no failure can be caused by Lean / Six
Sigma improvement methods, tools and techniques themselves, but rather by
ineffective improvement strategies and/or inappropriate mind-set.
Successful improvement in not only caused by improvement tools
Too many times failures is attributed against Lean / Six Sigma methods, as
their application is more visible than applied mind-set and implementation
strategies.
2. EXPERIENTIAL IMPROVEMENT MODEL – A CASE STUDY
The following case study presents specific improvement strategies that were
‘hands-on’ developed and used by the author during his facilitation of
definition, implementation and sustaining improvement of complete value
stream within an engineering and manufacturing organisation.
At the beginning of their improvement journey, the organisation was organised
in a traditional way, as follows:
- Departmentalized, business functions acted in isolation rather than in
unison
457
- Production system was running in batches, through push system, all the
way from Sales to Manufacturing
- Formal and structured business improvement was in its infancy
The management wanted to focus improvement activities on fully understood
customer, market and business improvement needs, re-align organisation
from traditionally (functionally) structured to value stream organisation and get
all functions to work together yo create and sustain the new system.
2.1. Direction - Defining Improvement Needs
This step was crucial as it sets improvement direction. Successful definition of
improvement needs determines how effective improvement is going to be.
The author facilitated plant management team in a one day workshop.
Customer and business improvement needs were categorized against Quality
– Delivery – Cost/Price.
Note:
Quality-Delivery-Cost/Price categories are applicable to any
organisation, regardless of industry type, size and ownership.
In order to compete on the market suppliers need to satisfy minimum
requirements for Quality, Delivery and Price, but just meeting the
minimum will not necessarily make their product more competitive.
They need to achieve a ‘competitive advantage’ - a product or service
feature(s) that make customers choose specific supplier.
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Improvement team had a structured discussion, aiming to identify specific
market competitive advantages. At the end ‘Delivery’ was identified as having
the biggest room for improvement and highest impact on the organisation
competitive position.
The objective was simply defined as:
“We need to reduce overall lead time, from taking an order to delivery and
cash collection.”
Benchmarking against competitors and market needs revealed that there was
a gap between current company performance and its main competitors, and
that reduced lead time would secure bigger market share. Targets were set
based on this benchmarking, i.e. looking into delivery (lead) time from
customers point of view.
Extra attention was paid to quality of information and results were presented
using simple charting techniques, for example bar charts as presented below.
Fig.2 Lead Time Benchmark (‘dummy’ data, for illustration only)
Product A
note: 'dummy' data, for illustration only
0
10
20
30
40
50
60
70
80
A B C D E F G H I
Company
Deli
very
Tim
e (
weeks)
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Benchmarking exercise helped the team to faster define and agree
improvement directions and goals.
2.2. Vision and Ownership
Each team member accepted need to reduce overall lead time, from taking an
order to delivery and cash collection.
The next step was to build a vision – to visualize overall flow of information
and material that will deliver reduced significantly lead time.
After brief discussion the proposal was a simple vision statement: “End-to-end
flow running just-in-time”, meaning that no work and job would ever be
stopped and waiting.
Such work flow, by default, takes shortest lead time.
The goal was defined as
“End-To-End Just-In-Time ‘Product A’ Stream by end of ###”
We wrote in the middle of a whiteboard our Vision Statement as:
“End-to-end JIT ‘A Stream’ by and of ###”.
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‘End-To-End’ means that we wanted to always consider complete product ‘A’
stream, from tendering to delivery and cash collection. This focus and
continuous view of the complete stream enabled better prioritization of
improvements and prevented sub-optimisation of product ‘A’ stream.
After agreeing and sharing the vision and the ultimate goal, each team
member was asked the following question:
“Do you really believe in this vision?”
All of them answered ‘Yes’ and each member of the team put their signature
next to the Vision Statement on the whiteboard. In this way, each team
member has demonstrated the ownership of the common goal and timescale.
2.3. Improvement Plan
The next step was to develop elements of our End-to-end JIT ‘A’ Stream
vision.
We started by brainstorming how each of us can visualize ideal flow of
information and material, end-to-end, starting from tendering, through sales,
engineering, supply chain, manufacturing… to product and service delivery
and cash collection.
461
As discussion developed we kept capturing elements of our vision, writing
them around the Vision Statement.
The final outcome was similar to the drawing below, Vision Statement in the
middle and vision elements around.
Fig.3: Vision Statement and Vision Elements (some elements presented
as example)
The vision key elements that were initially identified were as follows:
1. Key Performance Indicators
2. Design
3. People
4. Maintenance
End-To-End
JIT A
Stream by
####
People -
HR
Design –
Engineering
Quality
Supply
Chain
Customer -
Marketing &
Sales
Equipment
Manufacture
Unknown
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5. Planning
6. Supply Chain
7. Work-In-Progress Reduction
8. Quality
9. Cell / production
10. Machine / Equipment
11. Customer
12. Benchmarking
13. IT
14. Unknown
We deliberately added element ‘Unknown’ to leave room for improvement and
keep our mind open to future ideas.
The next step was to allocate leaders against each Vision Element.
We simply asked ourselves:
“Who has required mind set, knowledge, skills, experience and position to
lead a particular Vision Element?”
Names were allocated within 5 minutes, as most people volunteered to lead
their function or department, for example ‘People – HR’ was led by HR
manager, ‘Maintenance’ by Maintenance manager, and so on...
In total, 13 leaders were nominated.
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For ‘Unknown’ we decided to complete end-to-end Value Stream Analysis to
identify and prioritise improvement opportunities in existing and new Vision
Elements. Allocated leader of ‘Unknown’ was plant Lean Facilitator, who was
fully trained and experienced in preparing and running Value Stream Analysis.
All nominated leaders accepted their roles and full ownership and
responsibility.
Within first 3 months a couple of leaders gave up and asked to be replaced.
The follow up process, which is to be presented in the next chapter, made it
very visible who was delivering agreed objectives and who struggled. A peer
pressure and regular demand for results made those two leaders to ask to be
replaced. No individual or the team suffered, ex-leaders continued to support
the overall improvement project and new leaders.
2.4. Sustain
In order to have visibility of the progress the team produced a simple matrix,
which was named ‘Tracker’, as presented in the figure below.
464
Fig. 4: Progress Tracker
Progress tracker had te following elements:
A – Vision Statement
B – Vision Element, Responsible department / function, Leader’s name
C – Status at the beginning of the improvement, which is qualitative and/or
quantitative statement of the situation; for example: ‘no visual management
present in the cell’
– Agreed milestones, consisting of qualitative and quantitative outcome
statements and target dates, for example ‘visual management will be defined
and half of it implemented in the cell by 30-Jun
D – Monthly team review, which consisted of:
- colour coded field (green/yellow/red) against expected progress
- statement of achievements and
Date Progress:major
concern
minor
concernOK
Stream ElementVisual
MngmtKPIs Design People
Mainten'c
ePlanning
Supply
Chain
WIP
ReductioQuality Cell Machine Customer
Benchma
rkingIT
Process / Area Cell CellEngineeri
ngHR Mnfg
Prod.
ControlPurch'g
Prod.
ControlQA Cell Cell Sales Lean IT
Leader
Status on 01-
March
Where are we
today?
Goal by 30-Jun
Where do we
need to be?
Goal by 31-Dec
Where do we
need to be?
Goal by 30-Jun
Where do we
need to be?
What are we going to do to get there? Review 24-AprilReview 22-MayReview 19-JunReview 26-July
Review 27-SepReview 26-OctReview 22-Nov
Review 19-DecReview 31-Jan
"A" Product JIT end-to-end Value Stream Improvement
Progress Reviews
A
B
C
D
465
- specific actions, if required to rectify ‘yellow’/’red’ to ‘green’ or any
other planned improvement action to be completed and reported at the
next monthly review
Reviews were conducted with the presence of all team members present or
their substitutes when they were not available.
Each team member had 5 minutes to present expected achievement of their
Vision Element, report on actions completion, raise relevant concerns and
propose how they are to overcome them, and finally, to colour code their own
Vision Element monthly progress, as appropriate.
Those meetings proved to be excellent way of communication, as all team
members were at least once a month updated on progress of end-to-end
value stream improvement.
The author’s main objectives, as a facilitator of the overall improvement
process, were to instill ownership of each Vision Element with its leader and
more importantly to get each team member to realize and continuously act
from ‘end-to-end’ mind-set point of view.
In other words: To act locally and think globally
where
‘locally’ stands for is their own Vision Element (which is also the value stream
element) and ‘globally’ stands for complete ‘end-to-end’ value stream
All actions were completed using relevant Lean Thinking ad Statistical
Thinking method and tools.
466
KEY POINT
It is more important to get people to believe in why they need to do
something rather than to train them in how to do it.
People who truly believe in shared vision and are actively helped by
their management will make Vision happen.
In the author’s experience, most Lean / Six Sigma trainings aim to teach
people HOWs of Lean / Six Sigma.
It makes bigger impact on a mind-set and will more likely get people to
change their practice and behaviour when Lean / Six Sigma training
demonstrates WHYs of Lean / Six Sigma.
2.5. Summary of Achieved Benefits
In general, improvement benefits can be split into the following three
categories:
• Observable benefits, for example behaviour, attitude, housekeeping,
morale, …
• Operational benefits, for example utilized space reduction, lead time
reduction, quality improvement…and
• Monetary benefits, for example direct labour utilization, overhead recovery
increase, supply chain cost, work in progress, cash flow, cost of human
resources, cost of poor quality…
467
The following is the summary of operational benefits achieved in improvement
project presented in this paper.
Improvement Objective Target Achieved / Comment
Improve productivity by 50% 100%
Reduce average lead time by 50% 75%
Reduce work-in-progress by 40% 33% - initial improvement
Reduce space by 40% 73%
Reduce waste (transport…) by 60% 67%
Develop people - 11 people involved & trained
Improve On-Time-Delivery > 90% 86%
3. CONCLUSIONS
Presented model is an experiential model - the outcome of a number of actual
applications where significant improvements have been achieved, an example
is presented in the previous paragraph.
The main purpose of this model is to provide an improvement team and their
leader with a method to:
• define and share improvement vision, derived from customers/market
and business needs
468
• effectively and simply break down vision statement into actionable
process/functional elements, including ownership, roles and
responsibilities of each team member
• efficient way to define objectives, milestones and maintain regular
review of the progress against each vision element
This model is very simple, logical and structured improvement system that
integrates all three elements of a success:
• mind-set - where team leader and facilitator clearly articulate and
continuously coach the right way of thinking, demonstrate the right
behaviour and policies
• implementation strategy – ‘a recipe’ that helps an improvement team to
share and make the right vision happen fast
• relevant Lean/Six Sigma method/tools – the right improvement tools
are used to complete agreed tasks and deliver and sustain agreed
improvement objectives
The key strengths and limitations of the model are presented in table
below.
Strengths Limitations
Simple and universally applicable - for
any improvement, across any private,
public organisation and also in private
life.
Good outcomes require true
understanding of customer, market
and business needs.
The model itself will not necessarily
correct wrong vision.
469
Based on systems thinking – the
model seeks inclusion of all the
elements of the system that make
impact on delivery of the vision
statement. This promotes cross-
functional and value stream systems
and thinking.
Team leader and/or facilitator must
have the right mind-set from the very
beginning – clear understanding of
system, value stream and team work
to lead.
Effectiveness and efficiency of the
model depends on their mind-set and
leadership skills.
Driven by customer, market and
business needs – full understanding
of those needs is the starting point
Ineffectiveness caused by focusing
on internal issues, improvement
actions, neglecting the customer. The
model assumes true understanding of
customer needs.
Achievement focus – improvement
activities are defined and driven by
defined vision statement and
objectives, as derived from
understanding true customer, market
and business needs.
As above – the model itself will not
necessarily correct wrong vision
statement and ultimate goal, i.e. the
effectiveness of the model is not
implicitly embedded.
Teamwork - supports teamwork with
clear individual objectives, roles and
responsibilities. Peer pressure can be
used to resolve individuals that are
not willing to play their roles.
Requires strong leadership to resolve
individuals who are not willing to
participate, peer pressure can help.
Structured progress review – regular
470
review of progress against agreed
milestones
‘Hands-on’ training – experienced
facilitator(s) can develop team
members through ‘learning by doing’.
Facilitator(s) who have good
experience and knowledge of
business improvement tools, e.g.
Lean/Six Sigma are required to
develop team members.
Milestones and metrics – clearly
defined and shared from the
beginning, progress regularly
reviewed and status of all actions
tangibly expressed in either numerical
or descriptive form
Selection of wrong metrics and
milestones can lead actions into
wrong direction and/or discourage
team
Notes:
The author would recommend ‘pull system’ when selecting which
improvement tools to use, where those tools are defined by shared
improvement vision, agreed improvement objectives and team roles &
responsibilities.
The author also believes that the next logical step that complements Lean/Six
Sigma is adaptation of relevant and practical elements of modern psychology
and linguistic practice that can effectively and efficiently help embed Lean/Six
471
Sigma way of thinking in order to create work systems that achieve and
sustain desired business improvement objectives.
References
Clark, J (2008) How To Achieve Fast Change Using Advanced Elements of Linguistic, Coaching and Psychology - Live Experiential Training Event, Glasgow, UK
Harrison, A. (2008) Do It Now, Do It Right and Sustain, presentation at the 9th Annual Process Excellence Summit, London Harrison, A. (1994) Six Sigma Training and Certification by Dr Mikel J. Harry
private notes
Harry, M. (1994) The Vision of Six Sigma – A Roadmap for Breakthrough, Sigma Publishing Company, Phoenix Arizona, USA
Imai, M (1986) Kaizen, McGraw-Hill, New York, ISBN-10: 007554332X
Imai, M (1997), Gemba Kaizen: A Commonsense, Low-Cost Approach to Management: A Commonsense, Low-cost Approach to Management, McGraw-Hill Professional, ISBN-10: 0070314462
Osono, E (2008), Extreme Toyota: Radical Contradictions That Drive Success at the World's Best Manufacturer, John Wiley & Sons, ISBN-10: 0470267623
Schonberger, R.J. (2002) Let's Fix It!: Overcoming the Crisis in Manufacturing, Free Press, ISBN-10: 0743215516
Sempler, R. (2001), Maverick!: The Success Story Behind the World's Most Unusual Workplace, Random House Business Books, ISBN-10: 0712678867
www.scottishengineering.org.uk (Scottish Engineering Lean Six Sigma Club)
472
Enhancing the Six Sigma Problem-Solving Methodology Using the Soft Systems Methodology
Alex Douglas and Saundra Middleton Liverpool Business School,
98 Mount Pleasant, Liverpool, [email protected]
Jiju Antony The Centre for Research in Six Sigma and Process Excellence
(CRISSPE)’University of Strathclyde, Glasgow; [email protected]
ABSTRACT
This theoretical paper describes the two main approaches to problem-solving
– the reductionist approach and the systemic approach. The reductionist
approach, the dominant problem solving approach, works well for simple, well
defined “hard” problems but fails to perform well on complex, ill-defined “soft”
problems and when the parts of a more complex problem are all
independently optimised. The holistic approach aims to understand problems
holistically and addresses many of the weaknesses of the reductionist
approach. This paper identifies evidence to categorise Six Sigma as a
reductionist approach to problem-solving. Six Sigma therefore must be open
to improvement opportunities particularly if they can address the weaknesses
inherent in the reductionist approach. This requires a more holistic approach
such as that offered by Soft Systems Methodology. The extant literature is
reviewed to evaluate SSM to determine if it could broaden the DMAIC
473
approach making it more effective and applicable to both simple and complex
problem situations
Key Words: Six Sigma, Soft Systems Methodology (SSM), Problem-solving,
Reductionism, Holism.
1. Introduction
If there is any doubt about the spectacular rise of Six Sigma one has only to
witness the very large number of articles now available on that topic in
academic search engines such as Business Source Premier and the year-on-
year exponential increase in such articles (Goeke and Offidle, 2005). But Six
Sigma today represents a number of differing concepts and is not without
criticism from both practitioners and academics. Six Sigma has been variously
describes as:
(a) A performance measurement (Black and Revere, 2006; Gygi et al,
2005);
(b) A problem-solving methodology (Gygi et al, 2005, McAdam et al,
2005, Hilds and Sanders, 2007);
(c) A quality movement developed from Total Quality Management
(TQM) (McAdam et al, 2005; Spencer, 1994; Black and Revere,
2005).
This paper is concerned with Six Sigma as a problem-solving methodology.
However, it is not the only approach to problem-solving.
The main aims of this paper are:
474
(i) To compare and contrast the reductionist and holistic
approaches to problem-solving, categorising Six Sigma as either
the former or the latter;
(ii) Evaluate the Soft Systems Methodology to determine whether it
could make an appropriate contribution to the Six Sigma toolkit.
A large amount of the extant literature on Six Sigma focuses on its successes
and in particular the financial benefits that are deemed to be the return on
investment made by organisations deploying the technique (See for example
Hahn et al., 1999; Raisinghani et al., 2005 and SÖrqvist, 2001). Six Sigma,
however, is not without its critics and a number of criticisms have been
reported and discussed by, for example: Truscott, 2003; Stephens, 2001;
Cooper and Noonan, 2003; Senapati , 2004; Bendell, 2004; Dahlgaard and
Dahlgaard, 2006; Edgeman and Bigio, 2004; Antony and Coronado, 2002;
Bajari, 2001; Schneiderman, 1999; Goh, 2002 and Antony, 2004. However,
the most relevant criticisms appropriate to this paper are:
• Managing change is a major issue. Hopen (2003) discusses
managing resistance to change as more complex than using the Six
Sigma tool kit and is usually where Six Sigma projects fail. In order
to change the process the organisation culture may first have to be
changed (Chauncey and Thornton, 2006);
• Edgeman and Bigio (2004) suggest a future improvement for Six
Sigma is to adopt and adapt ideas from other fields in order to
advance and strengthen the Six Sigma approach. Indeed, since
475
everything is in a state of change, Watson (2007) asks the question
“Should Six Sigma change to embrace change?”
• There is much debate in the extant literature regarding the
relationship between Six Sigma and Total Quality Management
(see for example McAdam et al., 2005 and Black and Revere,
2006). This debate is beyond the scope of this paper, however, as
Senapati (2004) states TQM's greatest merit is its approach to
tackling the soft issues of the problem-solving process. It is these
issues that are problematic for Six Sigma.
This paper takes the view that in order to survive Six Sigma must evolve as
the business environment evolves and so tackle some of the criticisms
discussed above.
Problem-Solving
There are two approaches to problem-solving. The conventional problem-
solving approach, used by most organisations, is based on reductionism
(Nadler, 2004). The other approach is based on holism. The differences are
discussed below.
The Reductionist / Mechanistic / “Hard” Approach
The reductionist approach is a mechanistic or "hard" systems approach to
problem-solving that derives from the Cartesian scientific thinking paradigm
476
that emerged in 17th Century Europe named after the French philosopher
Descartes. His approach relied on empirical evidence, logic and reason.
Problems are solved scientifically using the following steps:
• Identify a key part or assumption;
• Collect data about the part;
• Analyse the data;
• Propose a hypothesis;
• Test the hypothesis;
• Evaluate the results;
• Make a conclusion (Nadler, 2004).
This is the dominant problem solving approach and is based on four
principles:
1) Everything can be divided into its component parts;
2) Any of these parts can be replaced;
3) The solution of the partial problem can solve the entire problem;
4) The whole is nothing more than the sum of its parts (Nadler,
2004).
When these principles were applied to organisations, i.e. an entity made up of
parts each of which could be independently optimised in pursuit of the same
objective, they failed to perform well as a whole. The need for Systems
Thinking and the interdependence of the parts was established. The
reductionist approach was more effective if problems were simple, “hard” and
well structured / defined. That is they have completely specified initial
conditions, goals and operators. Furthermore, the hard systems approach
477
asserts that all things can be measured and therefore can be analysed using
standard quantitative tools and techniques. The reductionist approach also
adopts a means-ends strategy to problem solving by attempting to reduce the
gap between the goal state and the problem state (Sweller, et al. 1982). Hard
Systems methodologies all utilise the Means to an End approach.
Jackson (1987) identified the main problems of this approach as its inability to
cope with multiple perceptions of reality and handle extreme complexity.
Flood (1995) argued that “Reductionism dominates management thinking and
organisational problem solving” and leads to “ineffective problem solving”.
This is because it tackles only pieces of the problem without considering the
consequences of any changes on the whole problem and whole organisation
(Flood, 1995, Nadler, 2004).
2.0 The Holistic / Systemic / “Soft” Approach
Holism is the opposite of reductionism and is based on the idea that all the
properties of a given system cannot be explained by its fundamental parts.
The principle of holism was concisely captured by Aristotle when he described
it as “the whole is more than the sum of the parts”.
Healey (2004) refers to “Methodological Holism: An understanding of a certain
kind of complex system is best sought at the level of principles governing the
behavior of the whole system, and not at the level of the structure and
behavior of its component parts.” He then goes on to argue that it is possible
478
to view holism from a metaphysical perspective where the nature of some
“wholes” cannot be derived from an examination from their parts. This
approach works best with ill-structured / defined problems that have some
aspects which are not completely specified.
3. Reductionist Analysis of the Six Sigma Methodology
The Six Sigma DMAIC methodology (Define, Measure, Analyse, Improve and
Control) utilises the sub-optimisation principle; if each element of the problem
is optimised independently it does not mean that the system as a whole will
operate efficiently. DMAIC is similar to the Descartes methodology described
above. Clearly it identifies the desired end (goal) at the start of the project and
the remaining methodology is identifying the means of achieving this desired
state. Statistically the desired performance goal is for a process to produce
fewer than 3.4 defects (or errors) per million opportunities for defects (Gygi et
al, 2005). Many of the quality tools used within Six Sigma are dependent upon
reductionism (David, 2003). Where some of the characteristics of problem
situations are selected and minimised some of the important elements may be
lost. Six Sigma can be viewed as a reductionist / “hard” system approach.
Indeed it has been called "the ultimate reductionist approach"
(www.healthcareisixsigma.com) and as such may lack certain components
that could improve its performance, particularly those associated with "softer"
issues such as people and where standard quantitative tools are not able to
measure and analyse performance issues. Clearly Six Sigma is open to
improvement. The next section examines possible sources of these
479
improvement components from within one "Soft" / Holistic approach, namely
the Soft Systems Methodology.
3.1 Soft Systems Methodology
Checkland developed the Soft Systems Methodology (SSM) for use in ill-
structured or “messy” problem situations and to identify acceptable
improvements that could be made to these situations (Checkland and
Scholes, 1990, Flood and Jackson, 1991). These situations occur when the
root of the problem or even the nature of the problem itself is unclear or
unknown. It is further argued that SSM is best employed where the interests
of the parties or stakeholders are compatible but the participants have
developed their value sets and beliefs along different paths but nonetheless
are ready to accommodate and compromise, if possible. The methodology
aims to guide actions in trying to "manage" real world problem situations.
"Soft" or unstructured problems are those in which a modelling language is
required which is capable of a more detailed, "richer" description of the real
world than mathematics and statistics can provide. Such a language is based
upon the concept of a Human Activity System (HAS) (Wilson, 1990). A HAS is
defined as "a collection of activities, in which people are purposefully
engaged, and the relationship between the activities" (Platt and Warwick,
1995). The methodology identifies a wide range of stakeholders’ views and
uses tools to study the problems in that Human Activity System (HAS) as
discussed in Beckford (1998). Figure 1 below shows the Four- Activities
model of SSM, as it is presented in Checkland and Scholes (1990).
480
The tools of SSM provide an alternative approach to identifying the issue or
issues which are causing the problem. The main tool is the “Rich Picture”, as
the name suggests it is a pictorial representation of the problem (Stage 1),
identifying stakeholders, issues which cause conflict and the primary tasks of
the system. The picture has no particular hierarchy or structure but simply
records all the elements of the system and the issues around it as they
become apparent, no priority or status is accorded to any particular issue or
primary task. It gives a holistic, multi-perspective view of the situation
methods.
The rich picture is used to produce alternative scenarios through the deriving
of a set of relevant purposeful activity models each based on a declared
world-view (Stage 2).Stage 2 encourages the development of alternative
systems and thus the exploration of alternative scenarios. Stage 3 is debating
the situation, using the models. The outcome of the debate should be (a) the
changes that are desirable and culturally feasible, and (b) finding
accommodations between conflicting interests which will allow actions-to-
improve to be taken (Stage 4) (Checkland and Scholes, 1999).
481
4 Conclusions
Six Sigma has clearly delivered substantial savings for many organisations.
However, because of its reductionist approach it may not be maximising its
potential, particularly where problems are ill-structured and complex where a
more holistic approach is required. The purpose of SSM is to deal with
complex and messy problem situations and especially the human elements of
the problem. It is recognised by most business analysts that the majority of
business system developments and enhancements include just these issues
and thus this weakness does appear to compromise the success of Six Sigma
in solving or improving problem situations where human actions or problem
identification are issues. In particular the DMAIC approach may benefit from
1. Perceived
Real- World
Problem
4. Action
to
3
(a)Comparison
(Question
problem
Figure 1: The four-activities model of SSM
(Checkland and Scholes, 1990)
find
3(b)Accommodati
ons
which enable
Leads to
selection of
2. Models of
relevant purposeful
activity systems
each based on a
declared world-
482
the use of such SSM tools as the Rich Picture for a more holistic view of the
problem, its stakeholders and context. This can then lead to the identification
of all relevant human activities and their people issues that impact on the
project selected for improvement. The engagement of the relevant people in
the problem-solving process and the accommodation of any potential conflicts
of interest as well as any cultural issues may reduce resistance to change and
improve the success rate of six sigma projects. It is recognised that Six Sigma
practitioners may find some SSM tools more beneficial than others, at least in
the first instance, as they are being asked to take a less “hard” perspective
than formerly. Future papers will evaluate other Systems Thinking tools to
determine what contribution, if any, they can make to the Six Sigma DMAIC
problem-solving methodology.
References
Antony, J. (2004), Some Pros and Cons of Six Sigma: An Academic Perspective, The TQM Magazine, Vol. 16, No. 4, pp. 303-306.
Antony, J. and Coronado, R. (2002), Critical Success Factors for the Successful Implementation of Six Sigma Projects in Organisations, The TQM Magazine, Vol. 14, No. 2, pp. 92-99.
Bajaria, H.J. (2001), Six Sigma Quality: Popular Notion Versus Strategic Notion, Proceedings of the 4th International QMOD Conference, LinkÖpings University, Sweden, pp. 136-143.
Beckford, J. (1998), Quality: A Critical Introduction, Routledge, New York.
Bendell, T. (2004), A Review and Comparison of Six Sigma and the Lean Organisation, proceedings of the 7th International Conference on Quality
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Management and Organisational Development (QMOD), Monterrey Institute of Technology, Mexico, pp. 39-56.
Black, K. and Revere, L. (2006), Six Sigma Arises from the Ashes of TQM with a Twist, International Journal of Health Care Quality Assurance, Vol. 19, No.3, pp. 259-266.
Chauncey, D. and Thornton, G. (2006), Soft Solution to a Hard Problem, Six Sigma Forum Magazine, Vol. 6, No.1, November, pp.24-28.
Checkland, P. and Scholes, J. (1990), Soft Systems Methodology in Action, Wiley, Chichester.
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Cooper, N.P. and Noonan, P. (2003), Do Teams And Six Sigma Go Together? Quality Progress, June, pp. 25-28.
Dahlgaard, J.J. and Dahlgaard-Park, Su Mi, (2006), Lean Production, Six Sigma Quality and Company Culture, The TQM Magazine, Vol. 18, No. 3, pp. 263-281.
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486
www.healthcareisixsigma.com UVA Reduces Coding Errors with Six Sigma,
accessed 24/07/2008.
Alex Douglas is a Reader in Service Quality Management in Liverpool
Business School at Liverpool John Moores University.
He is a Fellow of the Chartered Quality Institute, a Chartered Quality
Professional, a Senior Member of the American Society for Quality and a
Fellow of the Higher Education Academy. He has attended conferences
presenting research papers round the world, including the, Australia, China,
Finland, France, Israel, Italy, Mexico, Russia, Sweden, USA and the UK. He
has had over 50 articles and research papers published in conference
proceedings and a wide range of journals including: Total Quality
Management, Managing Service Quality, International Journal of Public
Sector Management, Journal of Workplace Learning, Managerial Auditing
Journal and TQM Magazine/Journal. He is editor of The TQM Journal.
Saundra Middleton was a senior academic at Liverpool John Moores
University for nearly twenty years. She is a Chartered IT Professional, a
Member of the British Computer Society, Member of the Association of
Computing Machinery in the USA and a Member of the Learning and
Teaching Committee and Business and Community Engagement Panel, sub-
committees of the Joint Information Systems Committee in the UK. She has
attended international conferences on Computer Security and Biometrics and
487
presented papers at the QMOD Conference. She is now an independent
consultant in IT and Education Quality.
Jiju Antony is a Professor and Deputy Director of the Strathclyde Institute for
Operations Management (SIOM) and Director of the Centre for Research in
Six Sigma and Process Excellence (CRISSPE) within SIOM. He has
published more than 150 refereed papers and 4 textbooks in the area of
Reliability Engineering, Design of Experiments, Taguchi Methods, Six Sigma,
Total Quality Management and Statistical Process Control. He is currently
working on his fifth book entitled "Robust Design for Six Sigma" which is due
to be published in February 2008 by World Scientific Publishers, Singapore.
He has successfully launched the First International Journal of Six Sigma and
Competitive Advantage in August 2004.
Prof. Antony has been invited several times as a keynote speaker to national
conferences on Six Sigma in China, South Africa, Netherlands, India, Greece,
New Zealand, and Poland. Prof. Antony has also chaired the First and
Second International Conferences on Six Sigma and First and Second
International Workshops on Design for Six Sigma.
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Networking To Boost SME Lean Six Sigma Potential
Bjarne Bergquist* and Mats Westerberg**
*Quality Technology, **Entrepreneurship Department of Industrial Engineering and Social Sciences
Luleå University of Technology Luleå, Sweden
Abstract
At the beginning of 2008 three SMEs in a small town in Sweden started a
network project inspired by the Six Sigma programme, and hired a full-time
Black Belt to lead the improvement activities. Three months into the project,
we interviewed the top management of the participating companies and the
Black Belt, to pinpoint success factors as well as risks of the cooperation
project. Results show that statistical methods were unused in favour of
methods associated with lean manufacturing such as 5S. Accordingly, the
expectations of the CEOs were related to production improvements and flow
rather than quality. Both the Black Belt and the CEOs stated that
management commitment was vital for the success of the partnership, but
also that the visibility of this commitment could be improved. Despite this, all
interviewees agreed that the project had gotten a good start and the
managers had high expectations for its progress.
* Corresponding author: Tel. +46 (0)920 492137; E-mail: [email protected]
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Key words:
Lean, SME, network, interview, management commitment
1. Introduction
The Six Sigma programme, initiated by Motorola in 1980s, has spread
worldwide, almost as rapidly as Total Quality Management from where much
of the content can be traced. One reason for the large and rapid growth is that
many large companies that have followed the programme have ascribed large
cost savings to their Six Sigma effort. The descriptions of the programme
have also many features that may be suitable for large organizations, such as
full-time improvement specialists (the “Black Belts”), and extensive education
efforts for the staff. Since smaller companies seldom have resources to
maintain employees that devote their time only to improvement work, or to
send staff away for month long training, it is perhaps logical that most success
stories originate from large, often multinational corporations.
Most companies are not large. The small and medium size enterprises
(SMEs) make up for 99 % of all enterprises in the European Union and
provide for more than 100 million jobs in Europe alone (European
Commission, 2008). All companies must improve and readjust to internal and
external changes, and smaller organisations also need suitable improvement
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programmes. The success factors for smaller companies differ from large
corporations’ factors. The smaller organization allows for agility that larger
companies cannot match, due to their flexibility and simple decision-making
(Gélina and Bigras, 2004). The shifting needs created by changes in the
surrounding world is often easier to address in the smaller company’s simpler
and less rigid infrastructure and processes. The small company has strengths
such as efficient inner communication channels, a natural responsibility for
quality, and less resistance for change. Lack of resources is a limiting factor;
the smaller company needs to cope with scarce resources and can thus not
have all important competences in house. The analysis of what changes are
needed to comply with e.g. changing regulations or customer requirements is
such a competence that may be lacking. The lesser resources that a smaller
company can invest in improvement work and improvement methodology
education is part of the picture (Ghobadian & Gallear, 1997). Other difficulties
include vulnerability and difficulties in offering for large orders.
Hansson (2001) investigated Swedish smaller organisations that had received
the Swedish Quality Award, and found that even these admittedly capable
organisations struggled with many problems with their improvement work. To
continuously improving their processes, to increase the proportions of
decisions being taken based on facts and to work process based was
considered difficult in these organisations. These complexities are highly
connected to the possibilities to set aside resources to training for and
working with improvements.
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2. Relevant Literature
2.1 Improvement activities and Six Sigma
Improvement is necessary for organisations to sustain and survive.
Improvement work can be performed in many ways and the current plethora
of programmes makes selecting the one with the largest potential difficult. It is
reasonable to assume that suitable improvement programmes are those that
support improvements in areas where small organisations are weak, such as
creating process view, generate hard data to support decisions, and to create
a sustainable improvement effort. The Six Sigma improvement programme is
strong in these areas.
The purpose of Six Sigma is to boost company profits by reducing slack and
variability in organisational processes, to increase quality, and the Six Sigma
name reflects the process goal of almost defect free operation, see e.g. Harry
(1998). Success factors for Six Sigma deployments have been advanced
training in problem solving including statistically based and efficient analysis
methods such as Design of Experiments or Regression Analysis, together
with tools such as the House of Quality, Root Cause Analysis etc. The trained
improvement agents, the Black Belts, have often received status as
improvement experts devoted full-time to improvement work. Naturally, there
is a lower size limit of an organisation that can allocate such resources, and
one hundred employees per full-time Black Belt has been mentioned
(Magnusson et al., 2003, p.40). Slimmed Six Sigma variants suitable for
organisations exceeding twenty employees have also been suggested, where
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a project leader is given a week of training and working one day per week with
improvement work (Pyzdek, 2005, Burton, 2003).
In a British study, Antony et al (2005) investigated use of Six Sigma in British
small and medium sized companies and found that a slender variant of Six
Sigma was common and that the benefit of the programme was commonly
increased quality, profitability and reduced costs. Lack of resources was still
considered a major obstacle for a successful Six Sigma deployment in SMEs
(ibid.).
2.2 Networking–An opportunity for SMEs
To overcome some of the obstacles that come from being small, working in
networks may offer virtual muscles and many SMEs have therefore turned to
networking to access more resources. The networks may have various
purposes, such purchasing, product development, sales, production,
administration etc. (Human & Provan, 1997). It is, however, not certain that
small networking companies receive the effects that they had hoped for, as
many obstacles must be overcome for successful cooperation. These
obstacles include opportunistic behaviour of involved parties, conflicting views
of network aims and means, and large competence differences between
companies. Mutual trust is a success factor in early phases of a project
(Tomkins, 2001), and since trust is earned, previous encounters between the
partnering companies are usually seeds for the formed networks. For a
network to be sustainable, all network members must benefit from their
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participation. All firms need to give-and-take, i.e. there need for reciprocity
between the companies (Blau, 1986).
3. Research Design & Methodology
3.1 Setup of a Six Sigma Project in a network of SMEs
Three SMEs in a Swedish town located in the north of Sweden, in the
province of Norrbotten, formed in March 2008 a network to boost their Six
Sigma inspired improvement work. The network was created to work with
improvements continually at the three companies without having to pay for a
full time employee. It was also hoped that by sharing an improvement
resource, there would be synergy effects where the three companies could
learn from the improvement work of the others.
Besides from their close locations and being manufacturing companies, their
sizes and businesses differed. The largest company, company A, a
manufacturer of prefab wooden apartment buildings, had a workforce of 130
people and an annual turnover of 30 M€, a profit margin of 1%, and was a
family enterprise. It was the CEO of company A that invited the other member
companies to the network. The other companies, B and C were smaller.
Company B, a door manufacturer and a subcontractor (only minor part of
turnover) to company A, employed eighteen people, had a turnover of just
below 3 M€ and a zero profit margin. Company B was co-owned by the former
and present CEO. The last company, company C, was owned by the CEO,
employed 17 persons, had a turnover of approximately 5 M€, a profit margin
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of 6% and specialized in manufacturing plastic components for construction
purposes, especially laminated boxes used for instance for cooling
compartments or telecom relay stations.
Together they hired a consultant with Black Belt training, and the Black Belt
was given authority to lead improvement activities in all three companies. It
was assumed that the network project was aimed to run for at least three
years, with a stop/go checkpoint each year, and each member of the network
did, together with a local business funding agent place an equal sum of
money in the project to pay for the Black Belt. The authors of this paper were
engaged to assist in generating data for the stop/go checkpoints and for
aiding the project by giving advice or holding short courses, and advice in
setting the project up. As of when this study was conducted, the short courses
given by the researchers had been limited to one day directed to the
managerial level of the companies, and devoted to explaining the outline of
the Six Sigma programmes, and lean improvement methodology, as well as a
two one hour long lectures on improvement work and networking that had
been held during regular project bi-monthly meetings.
3.2 Inquiry in an early phase of the project
This paper presents some of the findings for the first stop/go checkpoint,
based on interviews with the CEOs of company B and C, the production
manager of company A and the Black Belt. A purpose of the investigation was
to study the expectations and attitudes towards improvement work and
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networking in general, and towards the planned activities and members of
current project. Another purpose was to investigate the early progress of the
project, and to pin-point obstacles. Semi-structured interviews were selected
because of the need to understand attitudes and expectations, and interview
guides were constructed. The interviews each took approximately ninety
minutes and the interviews were recorded and transcribed afterwards.
The transcripts were then analyzed by coding each sentence according to 117
codes such as “Experience of improvement work”, “Role of Black Belt” and so
on, and these codes were finally grouped into ten categories such as
“Improvement work” and “Black Belt” using OpenCode software. The authors
then analysed the content and implications of the transcripts, category by
category by reading the coded text, discussing the implications, drawing
conclusions for the project and judging what advice the project members
needed.
4. Results
In the interviews, all three leaders were clearly enthusiastic about the project
and had high expectations. Having small resources to support a full-time
Black Belt was not the only reason for them to join the Six Sigma network.
The leaders all mentioned the opportunity of benchmarking that the network
approach would bring as a success factor, and the benchmarking possibility
was stressed by the CEOs of the two smaller companies. Perhaps
surprisingly, the leaders had not preferred to have full-time access the Black
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Belt, since they suspected that a full-timer would generate too much
improvement work for one company to cope with. Hiring a third of a Black
Belt, they felt would generate enough for the improvement work to be done
alongside ordinary work.
Regarding how the project had started, the positive attitude of the managers
had clearly not been manifested visibly towards the employees in the
companies. In fact, all three leaders first mentioned how they had talked about
the project externally and their manager colleagues were impressed and
curious about the project. The lacking internal promotion of the project had led
to that the Black Belt experienced problems in advancing the projects as
employees were neither persuaded that the project was important nor that it
was not blowing over. As a result, the Black Belt needed to devote much time
to overcome staff resistance. Moreover, the leaders had allocated too little
time to interact with the Black Belt to discuss strategic issues, which made the
Black Belt frustrated since he was uncertain about how to approach his work
in each of the three companies. Still, the Black Belt managed to start
successful projects in all companies, but he felt he could have done more for
advancing the started improvement projects, for getting more improvement
projects started, and for the quality of the started projects.
Although the project initially had a “Six Sigma” labelling, the Black Belt had
not used sophisticated statistical tools six months after the start of the project.
While some of the Six Sigma methods were used such as calculating cost-
benefit of improvement and using a full-time improvement agent, the company
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leaders and the Black Belt initially agreed on that many methods related to the
“lean” school were more suitable to start with. The reasons for this was that
the companies were thought to have enough “low hanging fruits” for simple
methods to work and that these methods would show fast results. The simple
improvement methods still were large improvements over the traditional
approach used, described by the managers as fire fighting, and it was
believed lean methods would better suit the start up phase. Accordingly, the
5S method and flow analysis have been used in the early improvement
projects for improving tidiness and improving production flow. Although the
participants were pleased with the results of the lean methods, the Black Belt
did after three months want to redirect his work towards more problem solving
tasks, if the managers took larger responsibility for the internal selling of the
improvement project.
5. Discussion and Conclusions
Based on this early examination of the project, we believe that networking to
share an improvement expert carry potential. The Black Belt found the
maturity level of the initial improvement work of the networking companies
unsuited for advanced statistical methods, and instead the improvement
activities was directed to 5S activities, like tidiness of the workplaces and the
production paths. The lack of use of statistical methods in small firms is in line
with earlier studies of their use (Bergquist & Albing, 2006). Due to the early
stop-go checkpoint of this project, it is perhaps not surprising that simpler
methods have been favoured by the Black Belt to harvest low hanging fruits
498
for fast results, rather than to devote time to teach the staff on how to
understand complex tools. The study also shows that top management
support is equally or perhaps more important when doing improvement
projects in a network setting as it is in traditional improvement programmes.
Since the Black Belt can be seen as an “outsider” in all companies the Black
Belt needs more internal support from the management to carry out the work.
When the Black Belt lacked the visual engagement from the management, he
had no means to involve others in the improvement activities besides his
persuasion skills. Our overall impression of the project is, given that this
support is present that the Black Belt may be able to provide substantial value
to the companies at a cost and effort that is sustainable. We believe that the
assistance offered by the university has been positive for the outcome so far,
but, due to the limited time we have been able to assist the project, that most
results should have been even without our interference. An exception is the
formation of the project, were we believe that the project would not have
started without our aid, due to the lack of similar projects to benchmark from.
References
Antony, J., Kumar, M. & Madu, C.N. (2005). Six Sigma in small- and medium sized UK manufacturing enterprises – some empirical observations. International Journal of Quality & Reliability International, Vol. 8, No. 22, pp. 860-874.
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Bergquist, B & Albing, M. (2006). Statistical Methods - Does Anyone Really Use Them?, Total Quality Management & Business Excellence. 17(8), 961-972.
Burton, T.T. (2003). Six Sigma for Small and Medium Sized Businesses, Available: http://www.isixsigma.com/library/content/c030224a.asp. Access date: 18 September 2008.
Blau, P. M. (1986). Exchange and Power in Social Life. Transaction Books, New Brunswick, NJ.
European Commission (2008) Facts and Figures – SME in Europe [Online]. Available from http://ec.europa.eu/enterprise/entrepreneurship/facts_figures.htm [Accessed 17 September 2008].
Gélinas, R. and Bigras, Y. (2008). The Characteristics and Features of SMEs – Favorable or Unfavourable for Logistics Integration? Journal of Small Business Management, Vol. 42, No. 5, pp. 263-278.
Ghobadian, A. and Gallear, D., (1997). TQM and organization size, International Journal of Operations & Production Management, Vol. 17, No. 2, pp. 121-163.
Hansson, J., (2001). Implementation of total quality management in small organizations: A case study in Sweden, Total Quality Management, Vol. 12, No. 7&8, pp. 988-994.
Harry, M. (1998). Six Sigma: A Breaktrough Strategy for Profitability. Quality Progress, Vol. 31, No. 5, pp. 60-64.
Human, S. E. and Provan, K. (1997), An Emergent Theory of Structure and Outcomes in Small-Firm Strategic Manufacturing Networks, Academy of Management Journal, Vol. 40, pp. 368-403.
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Magnusson, K., Kroslid, D. and Bergman, B. (2003). Six Sigma – The Pragmatic Approach. Studentlitteratur, Lund.
Pyzdek, T. (2005). A Roadmap for Deploying Six Sigma in Small Businesses, Internetreferens, Available from: http://www.isixsigma.com/spotlight/default.asp, Accessed September 18, 2008.
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Process Improvement at HM Naval Base - Clyde
Giving Lean & Six Sigma their place in a critical operational environment
Dr Neil F Grant –
Operations Director, Babcock Marine - Clyde
Synopsis
Faced with the challenge of reducing the costs of running HM Naval Base
Clyde by about £40m per year over a ten-year timeframe, Babcock Marine
had to choose carefully how to implement the huge variety of tools,
techniques and initiatives available to help process improvement campaigns.
Adopting a 4-phase framework spanning 8-10 years has proved valuable in
structuring and time phasing hundreds of approaches by ensuring that the
most immediate issues are tackled with the simplest tools and that change is
sustained as the problems become more difficult and the tools more complex.
Although deciding not to campaign under a Lean or Six Sigma banner, the
adoption of tools from these schemes was essential in getting the best return
from process re-engineering efforts and has seen huge strides made and
targets achieved on an annual basis over the first three-four years.
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Avoiding the pitfalls of adopting highly publicised cure-alls and their
associated ‘flavour of the month’ risks – while being seen to be making real
change with no reduction in output - has been strongly supported by such a
disciplined approach. This has also helped to focus traditionally broad-brush
external offerings from consultancies, head-office and a customer who is
closely integrated with daily operations
Maintaining themed phases for a roughly 2-3 year cycle has also simplified
communication with and understanding by the workforce and allowed many
recruitment, development and investment decisions to be taken with
confidence, despite an ever-growing choice of techniques.
This paper outlines the operational and commercial challenges, relates how
the objectives are deployed, explains the framework and roadmap adopted
and justifies the grouping of potential solutions in to well-defined timeslots,
adding a new dimension to the selection of the right tolls for the job.
Successes, problems and the current status are discussed, in order to assist
potential adopters and those who might already be mired down in the sea of
options currently available.
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1 HM Naval Base Clyde
1.1 Role
Her Majesty’s Naval Base Clyde at Faslane and Coulport is home to the
United Kingdom’s Strategic Nuclear Deterrent. It is the largest military
establishment in Scotland and the biggest single site employer in the country,
with more than 6,000 civilian and naval personnel at work. The workforce is
fully integrated and comprises Royal Navy, Ministry of Defence Civilian,
Babcock Marine - the MOD’s commercial partner - and regular contractor
personnel. The base contributes around £270 million a year to the Scottish
economy.
HM Naval Base Clyde is the home port for the ships and submarines it has in
its care, a repair facility for visiting vessels of all nations and a very large hotel
and leisure facility for the crews of those ships while they are alongside.
Amongst its support facilities are a Shiplift and Explosives Handling Jetty
which are comparable with only two or three others in the world.
It is the base port to the ships and submarines of the Faslane Flotilla, made
up of four VANGUARD-class and one SWIFTSURE-class submarines and a
squadron of eight SANDOWN-class Mine Counter-measures Vessels
(MCMVs). The Base is also preparing for the arrival of the new ASTUTE-class
submarines in 2009. All of Clyde’s submarines are nuclear powered and the
VANGUARD-class carry ballistice nuclear weapons.
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1.2 Contractor Arrangements
Babcock Marine – part of the Babcock International Group - is the commercial
partner to the Ministry of Defence, responsible since 2002 for the eleven year
partnership agreement to manage a significant part of the Base’s output. The
HMNB Clyde partnering agreement was the first of its kind between the MOD
and private industry and the contract was part of a Warship Support
Modernisation Initiative (WSMi) to seek wider industrial involvement in the
running of the UK’s three naval bases. As well as managing around 1500
employees, 200 staff seconded from the Royal Navy and 50 from the MOD,
Babcock Marine manages engineering work on all ships and submarines at
the base and provides a comprehensive range of support services, including
logistics, facilities management and the provision of accommodation, catering
and domestic services for Royal Navy personnel. Babcock Marine also
operates the naval base at Devonport and owns and operates the dockyard
facilities at both Devonport and Rosyth.
The primary purpose of the partnership agreement is to provide the same
service as was provided by the MoD itself but at an annually reducing cost.
This strategy emerged from the fact that there is overcapacity in the industry –
three naval bases but a smaller navy – but no political or operational
justification for closing any one of the bases. A lack of customer affordability
due to large demands on the armed services in general and the requirement
to update its equipment adds to the demand for ‘more for less’ in service
terms. The local challenge includes the inheritance by Babcock Marine from
the MoD of a very expensive industrial relations culture and constraining
505
operating procedures, some necessary from a nuclear safety perspective and
many inefficient compared with modern industrial and commercial best
practice. A plethora of government and industry led initiatives to rationalise
and consolidate the industry also encourage improvement and greater value
for money and have led to significant realignment, in Babcock Marine’s case
capitalising on the operational effectiveness and partnering performance at
Clyde to facilitate the take-over of the former DML Ltd at Devonport, thus
creating a single UK submarine support organisation.
At its core the target cost incentive fee (TCIF) arrangement is a pricing
mechanism based on the agreement of a target cost and profit to be set within
agreed levels of confidence for costs. Cost savings exceeding the target cost
are shared in accordance with an agreed ratio or share line so that both
parties are appropriately incentivised. The benefit to MoD is obvious - reduced
cost whilst Babcock Marine (Clyde) is free to pursue its profit aspirations
within defined parameters. Costs in excess of the target cost are shared on a
similar basis.
Since the contract commenced, Babcock Marine (Clyde) has exceeded every
performance target and delivered £114m of savings to the MoD against the
initial £76m target. As a result, in recognition of the benefits delivered by this
partnering arrangement, in 2005 the MoD enhanced the original £400m, 5
year contract with a £425m 5.5 year extension. Along with the re-let came a
savings target of a further £67m over the second term of the contract, forming
the challenge currently being pursued by all parties.
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1.3 Operational hurdles
1.3.1 Cultural clashes
By far the biggest obstacle to change is the complex culture of the Naval
Base. Although MoD civilians and Royal Navy staff had worked together for
decades, no attempt had been made to institute process improvement
(generally processes were augmented rather than refined) and therefore there
was no track record of, appetite for or expertise in change management. The
2002 ‘contractorisation’ of 1500 jobs – mostly MoD civilians who were
transferred to Babcock under the TUPE regulations but including 300 RN
personnel – sent waves of uncertainty through the organisation and
complicated the culture significantly. There would thereafter be civilians
working for MoD, civilians working for Babcock, RN officers and rates working
for the MoD, the RN and for Babcock and MoD civilians interspersed, during
the early years, with the Babcock organisation to ensure compliance to
nuclear safety standards.
The conflicting ethos of MoD and industrial cultures – one structured,
selected, trained and encouraged for not making changes and the other,
conversely, set up and rewarded for stripping back, restructuring and
removing waste and inefficiency - inevitably led to culture clashes.
Nonetheless, over the years and aided by Babcock’s policy of protecting the
business it had just won and making only incremental changes, the attitude of
many has moved significantly towards one of realisation that change is not
507
only demanded by the MoD’s desire to save money but inevitable, due to the
adoption of increasing instances of best practice by the Company.
Currently, after six years, including three years adhering to the framework
outlined below and of adopting lean and six sigma tools and methods,
significant inroads have been made – money has been saved, management
at lower levels have begun to see change as part of their role and many of the
staff have acknowledged that changed was long-overdue and less of a threat
than anticipated.
1.3.2 Partnership
The concept of partnership in a traditional contracting environment introduced
yet another element of complexity into the challenges described above.
Although the contract is structured as Target Cost Incentive Fee, as indicated
above, the concept of a partnered implementation was the original aspiration
at the highest levels of the MoD. Thus, it was anticipated that both sides
would cooperate at all levels and that the usual working relationships involving
constant, adversarial, negotiation around every subtlety of the contract as
unplanned activities and demands emerged over its life, would be avoided
and be replaced with cooperation, flexibility, teamwork and other,
constructive, approaches resulting in mutual benefit, speedier resolution and
faster, more sustainable, savings.
Although not the subject of this paper, much work has gone into the institution
and development of the partnering relationship over the years. Based on
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studies by Rosabeth Moss Kantor, a partnering model has been used to
articulate the key features of a partnership and various measures have been
used to determine areas of strength and weakness. This has been
particularly necessary and beneficial in coping with the instability forced upon
the collective partnership by the frequent changes in staff at the most senior
levels. There have been three Naval Base Commanders and two company
Managing Directors in the last six years and almost all of the senior directors
in all three organisations have changed at least once. Having a methodology
that transcends these changes and allows smooth transition during staff
changes has not been easy since each incumbent brings their own view of
what it should be like and, generally, takes six to nine months to adapt.
Constant development is necessary and much has been done with the top
teams to develop the relationships and teamwork necessary in a true
partnership. More recent successes have emerged at lower and lower levels
in the management organisation which not only improves the overall working
relationship and aids the campaign of process and business improvement but
also helps to smooth the transition during changes in the senior team, as
individual personalities begin to play less of a part in the partnership.
1.3.3 Nuclear Authorisation
Inevitably, the fact that the business model centres on a Naval Base hosting
nuclear-powered submarines and nuclear weapons places huge limitations on
the style, pace and detail of operational changes. Many years of tried and
tested protocols are in place to ensure safety of operation of the Base and
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these protocols themselves can prevent change of any description if that
change is not properly thought through, planned and presented to various
authorisation bodies. Success has come from methodical presentation and
that, in turn, has been greatly aided by the Company’s consistent and well-
articulated change programme. Avoiding fashionable initiatives, positioning
the latest proposal in a stable framework and being prepared to modify
intentions and/or provide further objective evidence of the benefits of process
change have all helped to build the confidence of the authorisees and
significant change has been made. For obvious reasons, this authorisation
culture is not one that anyone would wish to change in a hurry with the result
that the speed of change is, on the whole, slower than it might be in a more
conventional operation, a fact that will be obvious as the detail of the
operational effective strategy emerges in this paper.
2 Strategy deployment
2.1 General
All of the foregoing pointed to a massive challenge for the Company –
reducing the total running costs by almost £190m over 10 years on a contract
value of £850m. Such an unusual business model – profit is increased by
deliberately reducing turnover – merited careful delineation of business
development strategy – to win more business through increasing the scope of
work carried out on the Base or by diversification – and the operational
effectiveness strategy – doing the same business for less expense. As
identified by Porter, these lines of attack are mutually dependent in the long-
term but require different skills, approaches and techniques throughout the
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journey. The remainder of this paper focuses exclusively on the internally-
facing operational effectiveness campaign.
While gathering windfall benefits and even harvesting low-hanging fruit
yielded early benefits, it was immediately obvious that a more structured and
sustainable approach would be required if the effort involved in achieving
these targets was to be effective over a long period of time – possibly during
which many people would change careers into or out of the Company. The
concept of developing an operational effectiveness roadmap emerged as a
necessary methodology, not only to provide a framework for 8-10 years worth
of improvement initiatives but, more importantly, to provide guidance as to
what these improvements might need to tackle. The structure of this roadmap
and its justification are discussed more fully in Section 3 however it is
important to note that such a roadmap exists as the mechanism before the
overall business strategy and its cascade is introduced. Additionally, the
associated decision not to campaign under a Lean or Six Sigma banner
accentuated the need to ensure that objective setting and cascading did have
a suitable vehicle to ride upon and to hint at where Lean & Six Sigma tools
would be required.
2.2 Balanced Scorecard & Business Plan Cascade
Early adoption of the Kaplan & Norton Balanced
Scorecard concept provided a sound methodology
for deploying performance management and for
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ensuring an even spread of strategic objectives that support each other, from
people’s skills, up through process improvement to customer satisfaction and
financial success. In addition, the scorecard format provided its own
framework for the development of performance measurement dashboards at
various levels throughout the organisation. These will be further discussed in
Section 3.
Communicating corporate objectives is critical to any campaign that has
aspirations of success and longevity and the
annual business plan seen as an ideal starter
for this purpose. The plan was deliberately
formatted in colourful booklet form, kept clear of
any more than headline financial figures, filled with a mixture of graphical and
plain textual descriptions of what had been achieved in the previous year and
what challenges and objectives lie ahead. The format and style are
maintained and each year, in April, this document is published and posted to
all employees’ homes. The booklet is also used by the management team as
a checklist and reminder of the objectives and its visual look provides
constant reinforcement of its role and necessity in meetings and reviews,
year-round. While the operational effectiveness framework is mentioned in
these annual communications, the concept itself is not heavily detailed as an
initiative; simply as a useful roadmap, thus staff have got used to the fact that
there is a current theme without having to sell the overall structure explicitly,
preferring to view it as a current way of life rather than an initiative in its own
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right. Objectives are reviewed and renewed each year but with a common
thread running from year to year.
This approach is also extended to the customer community to ensure that the
next ‘big idea’ or ‘silver bullet’ from the outside world does not wreck the
overall campaign without being properly assessed. Innovative or fashionable
initiatives are tested against the overall framework and either adopted or
postponed ‘til some future date when they will return more for any investment,
in an appropriate phase. This ability to maintain a level of stability of purpose
is especially important in the MoD environment where centrally-sponsored
initiatives tend to be short-lived due to staff churn and lack a coherent or
integrated rationale but an urgent need to change something. Once again,
the decision not to pursue campaigns explicitly labeled as Six Sigma or Lean
but to use their associated toolsets as appropriate, influenced by the current
and time-phased improvement theme, removed the risk of the workforce
experiencing the apparent regular change in direction (rather than emphasis)
often experienced during long campaigns, due to management or
environment changes.
2.4 Rich pictures
Since there is no single
communications medium that can be
relied upon to guarantee successful
transmission, reception or
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understanding of a message, the annual business plan publication is
generally backed-up by a variety of other complementary channels. While the
business plan is effectively ‘broadcast’, the use of rich pictures or learning
maps has enabled much more intimate engagement – usually within groups of
eight to twelve people – and is based upon a carefully constructed picture of
the current state of the business and the future, desired, state. All elements
of the environment are included and staff were facilitated to share their
impressions, feelings and understanding of both why the change is needed
and how the journey will be accomplished. The image also incorporated the
four evolutionary steps planned for the journey, allowing staff to discuss the
implications and benefits of the approach. The detail of the narrative used to
generate this aspect of the image is expanded in Section 3.3. Using this
technique allowed complete coverage of the workforce in small groups, aiding
contribution and understanding, again with minimal reference to specific
details but hinting at the concept of change themes rather than a perceived
deluge of change initiatives.
2.5 Publicity and exposure
Providing constant back-up and reinforcement of business
objectives, progress and successes along the way, various,
regular, channels are utilised, including monthly magazines,
corporate newsletters, toolbox talks, performance reviews and
selective reward mechanisms. Generally reiterating a message or
acknowledging success via publicity maintains the challenge at the front of
people’s minds and illustrates that progress is being made and hence change
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is not only possible but happening. All of the techniques employed are
backed up by periodic employee opinion surveys, roadshows and annual
management conferences to ensure that the message is properly translated
and fully understood at all levels and many modifications and improvements
have been made to these techniques in the light of either performance
assessment or staff feedback. This process continues as an organisational
culture that was not used to these styles of communication, far less the
concept of change gradually matures, responds to and begins to request
more information.
3 4-phases Framework
3.1 Manufacturing evolution
The phases of operational evolution which follow were first categorised by
Jaikumar at Harvard in the mid-1980s, based on unpublished research into
the evolution of companies such as Casio, Sony, Hitachi, etc and have been
developed to various degrees by companies such as the former Pilkington plc
(both in defence electronics and float glass production), Yarrow Shipbuilders
Ltd and MacTaggart Scott. More formally, this work has become the basis of
the enterprise improvement programme and checklist championed by Lawrie
Rumens, formerly of the Oliver Wight organisation, with Class A status
becoming the aspiration of many manufacturing and service companies
across the globe.
As manufacturing evolved from the era of individual craftsmen, with their
unique and personal skills, into groups of people who could follow patterns to
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produce a much higher number of products, managers began to realise that
these people could be much more effective if their work was planned so that
the right number of people with the right skills were given the right material at
the right time. The benefits that were gained by the organisations that
adopted such coordinative disciplines – championed by Taylor – were
immense and set the scene for the next stage of evolution. Known for its
focus on quality improvement, this scientific management phase focused on
numerical techniques like statistical process control and six-sigma. The
benefits here come from attention to process understanding and control.
Following on from this phase or era, companies are then able to invest in
automation, such as numerically controlled machines and computer-aided
design, where everything possible is done to remove tedious, wasteful, time-
consuming and error-prone processes by systemising them, thereby releasing
the time and energy of the people to ‘think’ – about further improvement and
innovation. Finally, any islands of automation created in this era are linked
together or integrated to form a very efficient and agile design and computer-
integrated manufacturing process.
Jaikiumar’s work indicated that, where a company set out specifically to
pursue this evolutionary model, each phase, or era, would last two to three
years. Based on this work and in order to structure a potentially large number
of improvement initiatives into a coherent, logical and comprehensible
campaign – and avoid the accusation of ‘flavour of the month’ – Babcock
Marine adopted the 4-phase, 10-year approach, with each phase planned to
last 2-3 years and providing the necessary foundation for succeeding phases.
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These inward-facing operational effectiveness steps complement the
development of a company’s outward-facing business development strategy,
enabling it to compete in ever-more complex marketplaces in ways not
previously possible or even contemplated.
3.2 Framework
3.2.1 Outline
Each phase majors on a theme – Coordination
(doing the right things at the right time); Process
Control (doing things right); Systemisation (doing
things at lowest cost); and Integration (doing
business in new and agile ways) – and focuses on
specific solution groups – project management,
planning & mrp (material requirements planning), with knowledge vested in
key people; quality control and process analysis, with knowledge captured in
the processes; process automation, information systems and knowledge
management; and, finally, independent businesses applying knowledge to
influence its markets. Looking at this sequence in practical terms, it’s
justification stems not just from the research & application described above
but from the naturally emerging sequence of problems needing addressed
when reasons for failure are recorded and analysed. For example, lack of the
correct resource, un-matched skills and the non-availability of tools always
surface amongst the primary reasons for failing to achieve a plan. Once
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these are tackled, process repeatability and quality control issues tend to
emerge next, in Pareto style.
In each of the phases, or eras, any of the tools from the plethora available
under, for example, ERP (Enterprise Resource Planning), Six Sigma and
Lean Manufacturing can be applied but campaigns based on these headings
alone were carefully avoided, since fashionable groupings can tarnish both
the aims and the tools, which are timeless.
So, if you want to be agile & flexible in the future, you need to have highly
integrated systems providing free & accurate information to a highly skilled &
motivated staff.
Before you can integrate you must automate or systemise as many repetitive,
non-value-added processes as possible – you cannot connect up typewriters
but you can join up word-processors !
Before you can automate you must make sure that you can carry out jobs
without error – there is no point in giving a clerk a typewriter in place of his
pencil and paper if he can’t spell - you’ll just get garbage out faster !
But before you get the job done at all, you must make sure that material,
resources/skills and facilities are available on time – there is a clerk available,
he has paper & pencil and a desk to sit at and he can complete a job when
you need it !
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3.2.2 People, processes & systems
The following sections indicate yet another dimension to this framework;
namely the implications on the development of people, processes & systems
of moving through time-phased improvement themes. In addition, following
the Balanced Scorecard dictates that success will only follow from a customer
and shareholder perspective if the current business processes and systems
can be performed and operated by people who have been given the right
skills and attitudes to carry them out.
3.2.2.1 People
The role of the individual will change markedly during the journey. Leadership
styles will move from command & control, through self-managed teams, to
agile enterprises, capable of leading their own markets and morphing to suit
prevailing conditions. As this happens, the individual will move from being a
well-defined resource, holding a particular set of skills and whose day is
planned to minimise his time-wastes, to an adapter of knowledge who
influences the business and capitalises on the capabilities of the systems
around him and the people who augment his skills with their expertise, across
the supply chain and probably physically remotely. Behaviours will therefore
range from ‘do what the plan says’ to ‘seek out and influence your business
future’ – requiring clear commitment and involvement from those responsible
for organisational and resource development throughout the journey and
demanding a clear HR strategy that is complementary to and supportive of the
overall operational effectiveness and business development strategies.
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3.2.2.2 Processes
Traditionally, process improvement or re-engineering has been the focus of
campaigns to right a company’s wrongs, getting rid of wastes and turning
processes that might have been effective but were never efficient into shining
examples of best practice. Often, too, the lists of processes to be improved
are long and, in the better environments, subjected to some form of
assessment or prioritisation of resources to provide a fix. It is at this point that
the adoption of the 4-phase framework differentiates the broad-brush
application of Lean and Six Sigma as catch-alls for a variety of improvement
strategies from using the general principles and tools of waste reduction and
process predictability in a much more focused way, not as panaceas for a
company’s ills.
The particular attractions of applying Lean and Six Sigma tools in a more
methodical and time-phased manner at the Base are twofold. Firstly, there
was and remains much to be done and hence prioritisation at a gross level,
above that of endless sifting and sorting of proposed opportunities for process
change, is a useful capability offered by the framework. Secondly, the
inescapable fact that change will take a long time - probably twice as long as
in other engineering-oriented companies due to the complexities of nuclear
regulation and cultural history – means that achieving sustainable change
and, more importantly, a sustainable and consistent change culture beyond
the tenure of several top leaders, was critical.
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The implications of the 4-phase framework on the application of tools
encouraged by Lean and Six Sigma philosophies are that the tools are and
will be applied, but in reasonably strict order, such that they are applied,
firstly, to the elimination of waste due to poor planning and coordination
processes (at which time many other, non-Lean or Six Sigma, tools such as
project management, planning and general mrp will have much more effect)
and only then, in the second phase, to process control in a much more
traditional ‘quality improvement’ sense.
3.2.2.3 Systems
The role of systems is one of the most difficult to manage during the early
phases of the journey. Whereas, in later eras, systems are critical to
automation, as vehicles for interconnectivity, knowledge hosting and
management and to enable interactive communication, the dilemma during
Coordination & Process Control challenges is where, when and whether to
invest in automation if there is no certainty about the quality of data being
processed and the processes being modeled: the guidance involves scale. If
the business to be planned or the process to be modeled or measured is
complex or involves large amounts of data, then systems support will be
necessary. Typical examples are computer-aided design and manufacturing,
project management and material requirements planning tools and the
ubiquitous PC. The secret then is to ensure that no investment is made
without a complementary suite of data accuracy and process improvement
initiatives, designed to guarantee that the output is worth the investment. In
other words, the proposed use of a piece of automation must invoke a rapid
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pass through the first two phases, even within an overall campaign (of several
years) of coordination or process control.
Systems solutions are also expensive. Ensuring that time-related wastes and
process-related wastes have been eliminated in early years will maximise the
return on systems investment by ensuring that operational effectiveness has
reached the point where investment in automation will be accepted as the way
ahead since all less-expensive people and process improvement avenues
have been exploited.
3.3 What ‘good’ will look like
The following sections describe, in narrative fashion, how a manager will
recognise and communicate to his staff the achievement of each of the four
phases of evolution. A detailed roadmap necessarily contains more specific
goals and gives examples of typical measures and targets for each phase but
offering staff a description of the end-game also helps them to ‘picture’ the
future and to work back from that, translating the vision into harder and
smarter objectives. These definitions also help senior managers to cope with
the transitions between phases. As will be seen from the figure of merit
discussed in Section 5.1, there is unlikely to be a clear point at which a
transition can be announced. It is more likely that it happens piecemeal, with
some functions or processes ready to move ahead faster than others. This
can be problematic if the overall transition is too spread out and the distinction
between phases becomes blurred – you could end up with two themes in play
at the same time and hence confusion. Early recognition that a transition has
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begun can help management accelerate the pace in lagging areas and
carefully moderate the enthusiasm of the pioneers. Although no formula
exists to determine how long a transition should last, experience indicates that
if it is much more than a year, confusion begins to creep in and the cascade,
from business plan down, becomes difficult to keep simple.
3.3.1 Coordination
In this phase, the emphasis is on gaining visibility and then control of our
processes so that we can plan our work properly. By getting our data
accurate and our work scheduled properly, we can have a clear view of the
important issues and therefore have a much better chance of carrying them
out. Customers will see products being delivered when we promised and
there will be a reduction in the amount of resource and material being wasted
on unimportant or non-value-added activities.
As we approach the end of the Coordination phase, we will have gained
significantly more visibility of our business processes and we will know the
limitations of them from a general capability viewpoint eg if we have limited
skills in an area or a demarcation issue, we will see the implications of these
issues more systematically. We will have plans and performance measures in
all areas - in a level of detail appropriate to the complexity and timescales
involved - and we will regularly review the aggregate effect of progress on
existing work and the need for and implications of new work. Our
management team, from the Board to Team Leaders, will have visibility of the
operation, unity of purpose, loyalty to the campaign and each other and will be
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in control and accountable for achieving a simplified business. We will be able
to make decisions on investment - in buying or specifying materials, improving
processes and training & re-organising people - with a lot more confidence
and we will have reduced the risk of either failing to meet contracted targets or
in bidding for new work. Customer delivery performance will rise because we
step back from the firefighting and take the time to plan - not endlessly and
needlessly but in a style which is both effective & efficient in any area - and
we will measure teams against this plan in order to flush out all the reasons
for failure to achieve the plan. Knowing these basic reasons - which will
inevitably be made up generally of a lack of the right skills, materials and
facilities in the right place at the right time - will allow us either to change the
processes causing the shortages or to acknowledge that, at this stage, we
cannot and to build the appropriate factors into our planning process. People
at all levels, including our customer, will accept that planning has changed our
performance and is critical to our ongoing success. We will have learned to
say 'no' when it is clear to all that what has been requested is not possible but
we will have gained the ability to deliver against what we do promise and
those we say no to will see a much-improved service against some alternative
date. We will have reinforced & embedded planning and performance
behaviour and culture. We will get frustrated by and constantly try to remove
any reasons for late delivery. We will have done this intelligently - sticking
rigidly to our principles but applying them pragmatically and flexibly across our
diverse operation. The techniques used to plan the next major submarine
maintenance programme will not be the same as those use to plan the on-
going support of the building fabric, although the daily implementation of a
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large maintenance plan for a vessel will use very similar techniques. We will
become much more operationally efficient during the coordination phase
because we will have exposed and removed a tremendous amount of waste
(of time in particular) and we will have set in place the foundation for
beginning the phase of tackling our processes in all areas in much more
detail, looking for opportunities to remove waste from many other sources.
We will also have become much more comfortable with the concept of a long-
term improvement strategy and with our own and our managers' ability to be
responsive on the one hand but confident in our policies on the other, often
while people around us are skeptical and not used the concept that
investment (or measured action) today means a better service tomorrow.
3.3.2 Process Control
This is the phase in which the major focus is doing things error free and on
time. Having improved the accuracy of planning and delivery in the previous
phase, it is important to ensure that the goods and services that we produce
actually satisfy the Customer (internal & external). In this phase we look at
our quality failures, analyse the trends, find the root cause of the problem and
take corrective actions to guarantee that it doesn't happen again. Thus our
Customers will start to see a massive improvement in the quality of our work
and will begin to acknowledge that we are indeed a supplier with whom they
want to do business This will also allow us to begin to tackle new markets -
which demand quality, and dependability - with our existing products. In
addition, this vital stage positions us well for beginning to automate our
wasteful processes.
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As we approach the end of this phase, we will have gained complete control
of our business processes and be able to perform them with no errors. The
concept of redoing or reworking a job will embarrass people because they will
have let down their team's performance and they will understand the full cost
implication of their actions. People will also be trained to be on constant alert
for opportunities to improve their processes and will not accept that there is no
room for improvement. Measurement - including Statistical Process Control
techniques - will be in common use and we will have determined how far
along the Six Sigma path we wish to travel and have achieved that aim. We
will have applied these tight measurement and control techniques to all
aspects of our business - from physical operations such as submarine repairs,
through the availability of key services such as cranes, to the data that we use
such as times, routings, stock, skills, bills of material and all other aspects of
performance measurement. Our customer will acknowledge the quality of our
work and we will have involved RN/MoD staff in our culture of 'right first time'.
We will be developing key suppliers - especially contractors - to ensure that
they contribute to our process control culture and we will be recognised
externally as a quality outfit where people take a pride in their work at all
levels. Previously administrative necessities, like ISO 9001 and ISO 14001
accreditation and all forms of regulation and authorisation will be embraced to
such an extent as to be kept fully up to date, seen as valuable structures and
be fully integrated into every aspect of daily work. Our standards will be
demanding and unrelenting. We will strive for continuous improvement. We
will celebrate success but move on quickly to seek further improvement and
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this will not always be driven from the top down - teams will be responsible for
their own performance and will be acknowledged for achievement and self-
generated, novel, approaches to process improvement. People from other
companies will want to visit HMNB Clyde to see our techniques in action and
our teams will host these visits & present their work to these visitors. We will
be asked to present the top stories at external conferences and will be the
subject of trade articles. Our workforce will be in demand by external
companies wishing to convince their workforces that change is necessary and
rewarding. Our ability to deliver savings - contracted and beyond - will be
greatly enhanced and we will have moved into areas of potential business not
previously open to us due to our costs.
3.3.3 Systemisation
By identifying processes that are time-consuming, tedious or error prone, it is
then necessary to invest in systemising them using whatever technology is
available. Although this is the phase where this investment - ranging from
Intelligent Knowledge-based Systems (IKBS) to Automatic Test Equipment
(ATE) - is the key focus, we will already have introduced limited systemisation
where we could identify clear, early benefits, even although, as a Company,
our drive was previously on coordination or quality. Thus we can begin to
offer a clear and competitive 'value for money' response to our Customers'
demands and therefore win additional business - especially by defeating
competitors - which, in turn, will help to pay for the investment in the current
and future systems.
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The work we have done in the preceding phases - firstly, to become
coordinated and reduce the waste caused by failure to support planned
delivery and, secondly, to reduce the waste caused by poor processes,
rework and lack of quality - will have given us the necessary basis for
removing the remaining process inefficiencies and associated costs from our
business. Regardless of the level of process improvement made in the
second phase, we are bound to have residual opportunities for waste - either
due to errors in the handling of information through overly-complex or clumsy
processes and systems or resulting from mistakes which are inevitable in
repetitive, boring or unchallenging processes carries out by people. Success
in the systemisation or automation phase will come from maximising the use
of systems support and introducing relevant automation in all areas. Single
databases; universal access to the intranet; e-notice boards; RF tracking of
material, plant, equipment and other assets; instantaneous job booking; RF
security access & time & attendance logging are all areas ripe for
implementation in this phase. Maximisation of computer-aided planning,
computer-aided design, modelling of maintenance schedules & through-life
cost models will merit significant investment in this phase, even though they
may have been introduced during earlier phases to suit opportunities
emerging during process improvement initiatives. Challenging our manual /
maintenance processes will reveal many areas open to automation or
systemisation eg calibration, automatic diagnosis of faults, modelling and
scheduling of reliability centred maintenance, some forms of welding and non-
destructive testing and advanced analyses of trends in motor, generator and
transformer performance. Clearly there will remain very specialist areas of
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manual skill but we must learn to challenge even these. (even the concept of
berthing or docking a submarine without teams of labourers on ropes is not
beyond the realms of modern tracking and positioning systems). In other
words, our prices come down through efficiency improvements and our
versatility comes up due to the fact that we rely more on the brains of our
people (with their systems support). By this stage, we will be operating a
business at the appropriate level of lean-ness for our marketplace and
available levels of investment and the release of the cost of inefficient human
effort in these areas takes a major step to valuing people for their intellectual
contribution - instead of tedious 'doing', people are much more involved in
thinking, planning & learning, thus giving us huge scope to transfer-out
business capability to opportunities currently excluded through cost.
3.3.4 Integration
A totally integrated business environment is our ultimate aim. We will be
using the skills and intellect of our people to innovate technology applications,
services and the processes which enable them. Data, relating to our
products, will be captured once, early in the project, and will be added to as
concepts become reality. This information will be reused time and time again
but will be maintained in a paperless environment with no human
transcription. In this environment, our people will be spending a greater part
of their time thinking and adding value to our knowledge-base. Having the
ability to capitalise on knowledge and experience of how to manage efficient
and effective core processes will allow us to adapt flexibly to, and even
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create, market and business opportunities which, in turn, will allow us to take
new products into new markets.
We will be ready to compete seriously in the external markets required for
significant business growth. Having systemised our competencies as far as
possible, we will be able to transport them, supported by people skilled in
applying the techniques, both at management and craft level, to other
locations or applications. The move towards universal access to highly-
accurate data by all staff begun in the previous phase will now give us a
business advantage in being able to apply rules, techniques, analyses,
measurement & improvement in new business environments and to new
processes. The freedom of information and the sharing of knowledge and
experience across business units around the world will be our strength while
the attraction for our customers will be certain knowledge that our reputation
for efficiency and value for money will be delivered. Concepts such as the
Babcock Marine 'Naval Base Management Manual' or 'Nuclear Site Process
Review Manual' will be a familiar concept and the training of staff to
accredited levels will be acknowledged in the industry.
4 Implementation roadmap
The remainder of this paper focuses on the implementation of Phase 1 –
Coordination and some early preparation for Phase 2 – Process Control.
Although opportunities to invest in process automation or systemisation were
reviewed and pursued, these instances were few at this stage, with the
biggest benefits so clearly available from basic, foundation work.
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4.1 Practical approach
In the first couple of years of the partnership contract, significant savings had
been made, based primarily on highly visible opportunities, including
renegotiation of subcontracts, unwieldy procedure review and rationalisation
of expensive maintenance regimes. Nonetheless, the outlook was
challenging, with a long list of ideas, including further known areas of
inefficiency, but no robust implementation plan and no method of prioritising
one initiative over another, leading to a certain level of ‘flavour of the month’
selection. The risk of continuing in this ad hoc manner, given the commercial
targets that had been set, firstly for a five and then ten year period was too
high. Additionally, the concept of approaching process improvement in areas
of high regulation, both real and perceived, or surrounded by sensitive
industrial relations, with enthusiasm but not enough logic or objectivity and
often with no forewarning to the recipients, was deemed to have too high a
chance of failure. The application of the 4-phase framework was therefore
adopted, based on positive experiences in other, reasonably similar,
industries. At this time, it was also decided that the framework itself would not
be classified as a campaign or an initiative – rather a useful management and
communications tool that would be used to set other campaigns and initiatives
in context and to help managers with limited resources to prioritise their
efforts.
Early in 2005, the Board and Heads of Department were briefed and became
involved in early awareness workshops to help them come to grips with the
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logic, the timescales and some practical ways of redefining – or in many
cases seeing for the first time - just what had to be done to move the
Company forward. Many proposed initiatives were shelved or postponed and
new ones listed, all within the framework, with decisions being made against
hard questions regarding ‘fit’ and likelihood of success, using the descriptors
of ‘what good will look like’ presented earlier.
Following this early work and as part of the preparation of the forthcoming
Business Plan for 2005/6, new objectives were set under Balanced Scorecard
quadrants and in line with the 4 phase framework. The scorecard and the
framework were not, themselves, given significant publicity; they were
describes as part of the overall management strategy but the major emphasis
was always on the improvement objectives themselves. The long-term
horizon of the framework also supported the desired intention of keeping the
Business Plan ‘look’ and content consistent from year to year, aiding gradual
acceptance and understanding in an environment not used to such explicit
communications and presenting apparently incremental improvements within
a structure which encouraged periodic radical shifts in emphasis.
4.2 Key Coordinative initiatives
Many initiatives were planned for the first 2-3 year era, all aimed at achieving
a coordinated workplace and building the foundation for future improvement
eras. The following sections pick out the key themes pursued during this
period.
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4.2.1 Management re-structure
Much has been said elsewhere about the role or importance of making
changes to the structure or the people as an improvement initiative in its own
right. However, in this case there was one major rationalisation of the
structure and two equally important reasons to review the people required to
implement the new structure.
In the first instance, coordination demands visibility of purpose, simplification
of the processes associated with the achievement of that purpose and control
of those processes at all times. The existing structure was clumsy, confusing
and complex and did not allow clear accountability for the achievement of
business goals: it had to change and so it was simplified, from the Board
down, to be quite explicitly functional, with clear ownership all the way down
to shop-floor supervisory level. The Board was reduced from nine to five and
a new Head of Department structure created, with fifteen positions held
accountable for running the business. Up to eight tiers of management were
reduced to a maximum of four and, in many cases, three, thereby improving
the chance of messages and objectives reaching all levels.
Moving on to the people responsible for fulfilling the structure, the new,
improved ownership and accountability demanded that the roles be filled with
subject matter experts with good management skills. Significant external
recruitment took place to populate the management structure with people who
would bring expertise and best practice and who would champion constant
change and improvement.
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While good management practice might suggest that highly functional
structures are a shade jaded, there is no doubt that, in a command and
control era where clear line-of-sight is required, it is the only option and
avoids, at a crucial stage, the complexities and constraints of a matrix
structure, which fits more appropriately in later eras.
4.2.2 Performance management
4.2.2.1 Process performance
Performance management plays a key role throughout the overall picture but
carries its own complexities of implementation. According to the framework,
the key processes to be monitored during the coordinative phase include on-
time delivery, due-date performance, lead-times and data accuracy – all
classical mrp measures. However, experience has shown that the heavy
demands placed on process performance management as an essential part of
a second phase implementation programme striving for process control
means that it is essential to commence construction of a detailed performance
management regime long in advance of a formal process control campaign so
that it is mature in structure, quality of data and application when it is needed.
Babcock Marine began construction of its Balanced Scorecard-based
monitoring system in parallel with its Coordination campaign – using it initially
to focus on delivery measures as discussed but quickly widening
it to cover all areas of the business and a broad spectrum of
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processes. Presented as an electronic dashboard, available at this stage to
all management levels, and using the standard DMAIC format for each of
several hundred structured metrics, this policy has yielded many benefits
beyond visibility of performance. It has advanced the acceptance of
performance management to a point where it could roll seamlessly into a
Phase 2 era, it has encouraged managers to begin to question process
performance in areas deemed as sacrosanct in the past and it has yielded
genuine process improvements through the application of DMAIC and other
Six Sigma and Lean tools.
4.2.2.2 Staff performance
Selecting staff for development and ensuring that efforts are focused on the
business goals requires a versatile staff performance management system.
Linked intimately with the process performance mechanisms described
above, the business plan objectives are cascaded to all managers and staff,
to provide line-of-sight visibility. This is aided by a graphic ‘dashboard’
allowing users to access the goals, initiatives and their current and historic
performance in a paperless environment and it is reviewed by managers and
the Board on a monthly basis. Ownership is ensured by cascading the
business goals to individuals via their performance development reviews, thus
providing a mechanism for performance assessment and personal
development through regular appraisals. Backing this up for the longer-term,
a management potential assessment process is carried out annually,
identifying the capability of key staff and others to progress one or more levels
within the organisation. Other development assessments, like 360-degree
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appraisals, are used to ensure some level of peer review while financial
bonuses are offered at most management levels to reward success against
specific objectives.
4.2.3 Integrated business planning
The cornerstone of coordination is an integrated planning process.
Adopting manufacturing best-practice, a major new process was
developed and has been operational now for almost two years.
Centred on an integrated programme, or master schedule, this
mechanism provides for the collection of all relevant demands on Base
resources and facilitates the balancing of this demand with available
resources. The current status of major Base projects is taken into account
along with current and planned operational performance. Using traditional
tools, such as Sales & Operations Planning, has enabled a much clearer and
confident picture to be developed, exposing areas of imbalance, due to peaks
or troughs in demand or the lack of or surplus resource. Major decisions, both
commercial and operation have been encouraged and supported by this
model, which is executed in stages on a monthly basis, at a level of detail
appropriate to the each function.
4.2.4 Programme and project management
Integrated business planning can only operate if it is fed with accurate
demands and a true reflection of the status and performance of ongoing work.
Forward-looking project management (rather than daily reactive scheduling)
had existed previously and significant investment has been made in
536
developing, through recruitment and training, a more modern capability in
project management. The use of work and organisation break down
structures, cost and work package accounts, risk assessment and forecasting
and the introduction of earned value management has made an extremely
valuable contribution to the coordinative push. Although operating in a less
predictable environment than traditional manufacturing organisations, much
work has been carried out to develop standard templates, akin to product
family profiles, so that forecasting of workload and timescales has moved
from the almost non-existent to around eighty percent accuracy. External
auditing has placed the Base’s capabilities in this area above the average,
significantly ahead of its position only three years ago and work continues to
widen and strengthen capabilities here, in line with current Association of
Project Management standards and coaching.
4.2.4 Materials planning
The concept of materials planning, using existing knowledge, accurate lead-
times and a bill of materials was another novel concept to traditional
processes at the Base. Repairs to vessels requiring new or replacement
equipment often depended on coincidence that material was available or
suffered long delays when material and parts were only ordered when
needed, without regard to availability or lead-times. Mrp principles are being
applied, again based on templates which, themselves, are built from past
experience and information that has always been around in some format but
never before seen as relevant. Much remains to be done in this arena; to
improve supply chain integration, to increase the accuracy of lead-time and
537
specification data and to move towards a much greater just-in-time rather than
a much too early or way too late environment.
4.2.5 Data accuracy
Data accuracy is an obvious requirement in the materials and operations
planning spheres, as described above, but it plays a significant part on the
other side of the balance; namely resources and their capabilities. Several
programmes of improvement have taken place to drive up the quality of
information and the integration of HR and training databases. More work is
required here, particularly to counter the forecast engineering and nuclear
skills shortages - training and recruitment will have to be much more effective
in future and so knowledge of people’s skills and capabilities will have to be
much more timely and accurate. In getting to the current level and in striving
for further improvement, many Lean tools have been employed to support
process improvement and statistical metrics are in place in areas where
trends are extremely important, such as recruitment and retention. This is
another area where having a Company and often Base-wide framework for
improvement has paid dividends, since people from all areas understand the
same language, follow the same general set of objectives and pursue
improvement initiatives geared towards coherent progress on a wide front, all
with access to the same powerful tools.
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4.3 Facilitation & support for the campaign
4.3.1 Training
Training plays a key part in the successful implementation of an operational
effectiveness programme and the Babcock Marine policy has been to focus
that training on two key areas, namely; process change skills and tools under
the Change Leader banner and project planning & management skills at a
variety of levels. In addition to this change-oriented training described below,
various other offerings are available to staff. All managerial and supervisory
staff undergo development as part of a results-based leadership programme,
part-time masters degrees in operations and supply chain management are
offered to nominated individuals,
Approximately sixty people from the business at all levels have been trained
in basic process change tools, as indicated below, in a series of four, two-day
modules. These people were then returned to their normal duties where they
support the challenge placed on line managers, via the Business Plan, to
increase performance in their areas. Specific training in statistical
measurement and in measurement principles is focused on areas identified as
benefiting from these skills and this is an area that will be stepped-up in
preparation for the transition to the process control phase, where SPC and Six
Sigma techniques will become more effective. The table below illustrates the
methods and tools taught in each of the modules of the Change Leaders
course.
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Module 1
Problem Solving
Module 2
Project
management
Module 3
Lean Process
Improvement
Module 4
Leadership
DMAIC
Problem definition
statement (aims
grid)
Histograms
Checksheets
What Makes a
good measure?
Flow charting
Brainstorming
Cause & Effect
Cause screening
5 why’s
Pareto
Solutions
selection Grid
Run charts
Project definition
- TORs
BOSCAAR,
Team Selection,
Stakeholder
analysis, Risk
Assessment,
Project Initiation.
Planning – WBS,
Network
Diagram, Critical
Path analysis,
PERT, Gantt
Charts, MS
Project Overview
Project Execution
– progress
updates, team
meetings, action
planning,
Milestones
5 S
7 wastes
Value Stream
Mapping
Kaizen
Takt Time
Kanban
“Pull” system
Visual factory
(scorecard)
Sense of
Urgency
Powerful Team
Compelling
Vision
Gained Buy-in
Empowered for
Action
Quick Wins
Determined to
Succeed
Reinforcing new
behaviours
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Project Closure –
Completion
Criteria, Close
out meeting, Post
Project
Evaluation
4.3.2 Planning Specialists, PI coaches & Production Engineers
Following the guidance of the 4-phase framework, where the bulk of planned
improvement comes from better
coordination through workload planning and
project management, a large investment
was made in procuring these skills – mostly
from outside the Company – and a new
function was created at a senior level to structure, implement and coach
across all areas. Specialists in operations, materials and project planning
have been injected with great effect into areas where these techniques had
not been understood or used and local coaching and development follow from
these injections. In support of this, four process improvement coaches, at
green belt level, and five production engineers are distributed around the
business as required to bring professional back-up.
541
This bias illustrates a deviation from a typical Lean or Six Sigma umbrella
approach, where the emphasis is on an early infusion of related experts in
these techniques and often massive internal training programmes geared-up
towards giving everybody a formal capability. This would have been
unnecessary, unsustainable and ineffective in the existing culture, where the
vast majority of problems were quickly exposed as poor performance through
lack of coordination and a general offensive to ‘lean the business’ or strive for
six sigma performance would have been premature.
4.3.3 Six-Sigma and Lean tools
Great emphasis has been placed up to this point on the importance and
benefits of the time-phased approach to long-term operational effectiveness.
Avoiding large campaigns under the Lean and/or Six Sigma banners has
been key to the sustainability of the change process in an environment where
the pace of change is heavily regulated. Nonetheless, the tools and
techniques historically collected and presented under these headings remain
powerful, necessary and effective in the campaign. As described above,
these tools feature heavily in training programmes and the lean-oriented
DMAIC process is in daily use in hundreds of situations across the Base. The
table below shows a small selection of the application of these tools and the
benefits returned.
Initiative
Tools and
Techniques used Improvements
Value
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NSI
Maintenance
Visibility
Project
BOSCAAR
Process Mapping
Trend Charting
Pareto
Pie Charts
Brainstorming
Identifying Wastes
Process Pilots
Trend Charts &
Traffic Lights
Improved processes.
Established NSI
Maintenance visibility,
measures and
corrective action /
improvement plans.
Created an
environment which
facilitates future
productivity
improvements.
Nuclear
Regulations
Compliance.
Faslane
Maintenance
Improvement
Project
IDEF
Brainstorming
Pareto
Cause & Effect
23000 Maintenance
Hours Saved
5000 Hrs removed
from Plan
18000 Hrs
Efficiency Saving
Saving of £
414,000 per
annum
Absence
Management
Improvements
Process Mapping
Value Stream
Mapping
Trend Charts
SPC
Process Cycle Time
Reduction
Single Point Contact
Phoneline
20 %
Reduction
in Number
of Days
recorded
Absence
Fleet Services
Planning -
Process Mapping
Brainstorming
Implemented a one-to-
one 1 hour meeting
2950 hrs
saved per
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Planning /
Production
agreeing draft
plan
SWOT Analysis
Process measures
between planner and
each individual
production section.
Feedback from
production sections
increased from 45%
feedback to 72% and
then to 100%
annum
(equivalent
to £53100
pa)
Project
Cochrane
(Workshop
Integration)
BOSCAAR
Process Mapping
Data Analysis
Centralised workshop,
cross skilling of teams,
improved facilities and
reduction of 18 bodies
and 1 team Leader
Savings of
£850000
per annum
Shiplift Stores
Review
BOSCAAR
Process Mapping
Force Field Analysis
Run Charts
Pareto
Continued high level of
service with more
efficient processes and
less bodies
Saving of
£25000 per
annum
4.3.4 Publicity and feedback
Publicity contributes significantly to strategy deployment, as discussed in
Section 2 and this is further exploited by on-going exposure of initiatives and
their champions on a regular basis. Celebrating success is key to further
commitment and to signaling the change of culture to all, including pockets of
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resistance. Peer group pressure can and does play a part – people do not
want to get left behind while others get credit for change and improvement.
Photographs and short articles on set-up, interim progress and successful
conclusion cost little but have a cumulative effective on the overall campaign.
In addition, low-cost awards made on an ad hoc basis – but not an award or
suggestion scheme as these are Phase 2 contributors – boost enthusiasm
immeasurably.
4.3.5 Regulation and an Incident & Injury-free (IIF) Environment
No amount of support for any major initiative would be complete if it did not fit
within the context of an environment where people can go home without
incident or injury. The Company’s and Base’s drive to adhere to its regulatory
conditions and to reduce accidents to zero fits hand-in-glove with the
achievement of operational effectiveness and benefits were traded in both
directions.
Firstly, in a culture which has been both resistant to change and where
change could have serious implications, it is very important that proposed
change is properly assessed. Here, the pre-existence of various regulatory
approval routes might have posed insurmountable obstacles if used to inhibit
change as a political maneuver, however, having a long-term plan, being able
to position process and organisational changes in context and having a
consistency of argument on each occasion forged a much smoother path
through the approvals process.
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Secondly, many of the tools used in getting to the root cause of accidents,
analysing trends, generating improvement ideas and managing a large-scale
project are exactly the same ones in play for process improvement. Thus the
language is the same, and there is a great deal of efficiency, with the IIF
ambition benefiting from this commonality.
Finally, the major theme of the IIF project is to get to the hearts and minds of
the whole workforce in a way that encourages them to be aware of their
surroundings, to challenge where they see their own safety being
compromised and to have a care for workmates and visitors. This is a very
subjective behavioural and attitudinal approach that goes way beyond rules
and regulations but which, in the long-term will yield very positive results. The
benefit to the operational effectiveness programme is two-fold, namely;
assisting the culture change towards one of interest and contribution – not just
in safety but in daily operations - and contributing directly to waste elimination
via accident and absence reduction.
5 Current Status
5.1 Progress measure
Assessing progress during a long-running operational effectiveness project is
always difficult although, under the business model outlined in Section 1, it will
be clear that achievement of the business financial targets can only have
been the result of successful reduction in the cost of running the same level of
business: there is little influence from the more traditional factors such as
changing market demands, changes in profit levels, major changes in the
546
level of business carried out and planned reduction or redefinition of service
levels.
These business results have been very good. Targets and objectives have
been met, service levels have, in fact, improved and scope has been
expanded, with the the MoD and the Royal Navy seeking more and more
support from their industrial partner. This has all happened, especially in the
years beyond the easy pickings, by having a well-defined operational
effectiveness strategy and carrying it through. The use of the Balanced
Scorecard and it’s supporting dashboards of metrics provided a powerful
window into this success and, as will be discussed below, enabled
consolidation of these gains during more difficult times.
Regardless of these gross business-oriented measures, the fact that this is a
complex, time-phased framework, spread over ten years and which has
significant changes in theme – up to four times – during that period, strongly
suggests that progress has to be monitored at a more detailed level. The risk
of resting on the laurels of early successes is that lessons are not
consolidated, phase transitions are not made on time and a blurring of theme
begins to creep in, contaminating the whole theme-based approach. Quickly
after that comes the failure to prioritise initiatives that compete for resource,
the threat of cancellation or significant change in direction due to senior
management changes and, ultimately, the failure to meet targets that sit on a
curve demanding more and more effort or investment.
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The guidance encapsulated in the
Oliver Wight Class A checklist
(sixth edition) presents a very
practical way to assess progress
and pinpoint areas for
reinforcement. Based on classical
mrp theory (being the benchmark for mrp and MRPII implementations in the
70’s, 80’s and 90’s) and then expanded and extended to cover the essence
and early phases of Jaikumar’s theories on the attainment of ‘computer
integrated manufacturing’ and agility of business capability. The summary
challenges posed in the checklist have been used to determine just where in
journey Babcock Marine- Clyde sits and these results are presented in Table
xx. They clearly show progress however they also show areas of concern,
particularly in the fact that progress towards formal coordination is running
behind schedule.
At the point when the survey was carried out – about two thirds of the way
through the coordinative push – progress was at about fifty percent. There
were several reasons for this, most notably a period of almost twelve months
when external business demands (the acquisition of a major rival) necessarily
placed progress on the back-burner. No benefits were lost – a feat in its own
right – but progress against the original timescales was delayed.
Nonetheless, by way of compensation – and the major reason why accrued
benefits were not lost – progress was made on a couple of key Phase 2
Operational Effectiveness - Phase 1/2 Assessment - Overall
0
5
10
15
20
25
30
35
40
45
50
Strategy Planning ProcessManagement
People &Behaviour
PerformanceManagement
PerformanceImprovement
Leadership Communication
Category
Sco
re
Phase 2
Phase 1
Target 2
Target 1
548
streams. Performance Management and Performance Improvement actually
benefited from the slight hiatus in the implementation of some change
initiatives and became more mature in their own right and becoming used to
influence progress, through measurement and the DMAIC approach, for those
initiatives not stalled for business reasons.
While the strength of the performance-related topics actually helped overall
progress in certain areas, the survey also revealed that there was a danger of
Phase 2 concepts – process control and quality improvement – being
muddled with Phase 1 concepts – visibility, simplification and control. In
principle, these concepts can be mutually supportive, however there is a risk
that two of the main justifications for adopting the 4-phase approach,
particularly building a coordinative foundation on which future eras could rest
and depend and forcing a prioritisation of initiatives to simplify resource
allocation, would become corrupted.
As a result, increased focus has been given to the genuine Phase 1 activities,
to the extent that project management and other coordinative activities are
being rolled out beyond Babcock Marine’s contracted scope to cover the
whole Base. On the performance management side, the latest (1998/9)
Business Plan has re-emphasised the need for coordination and been quite
specific with it’s operational effectiveness objectives.
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5.2 Benefits
Table yyy in Section 3 listed a small sample of areas where Lean and Six
Sigma tools have been applied, under the overall 4-phase framework. It also
gives a general indication of the value of savings made in each case. In the
round, all business targets have been met and sometimes exceeded over
recent years. The following chart gives a picture of the total benefits
achieved, showing a reduction in the running costs of the Base compared with
the best outcome of a ‘no action’ approach.
5.3 Lessons
While there may be alternative approaches to achieving operational
effectiveness, there are some unusual, if not unique, circumstances at HM
Naval Base Clyde that conspire to frustrate progress. However, this firm and
phased approach has stood the test of time and other obstacles such that it
provided and will continue to provide a robust framework for further
improvement. The lessons learned are many and a small sample is offered
here to encourage others who might be mired down in the sea of options
currently available.
550
� Prioritisation of initiatives relieves ‘initiative overload’ pressures
• eg IIP, self-directed teams, suggestion schemes – all
postponed to a later era
� Confidence to withstand ‘flavour of the month’
• eg several MoD Lean campaigns and at least 6 external
consultancies
� Focus any need for limited external support
• eg only two instances required additional, external,
practitioners, rather than wholesale ‘consultancy’
with little return
� When a major change happens you can regress if you don’t recognise
the need to revisit earlier phases
� periodic measurement of progress is necessary
� if the change can be forecast as lengthy, consider
compensating with addition resource
� Business-wide approach difficult but has benefits
• eg common language, mutual support and understanding,
coherent business plan, more sustainable
� Programme has survived Board changes and now fully expanded to
cover MoD aspects – a huge leap forward into an area where the
Company’s success has rubbed-off on objectors who became
bystanders who are in the process of becoming followers
� Measuring progress against best practice focuses effort
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� Lean & Six Sigma tools are essential and practical and should be used
wherever necessary without branding as an eponymous campaign
With hindsight, only very few aspects of the approach would be changed.
Further management development – especially at Team Leader level – would
have allowed the cascade to operate more freely. In addition, strengthening
the senior management team to cover the acquisition period would have kept
the early momentum, the loss of which cost over a year of progress, although
it remains difficult to see how such a forecast could have been made at the
time. The effort now going on to encompass the MoD aspects of Base
management actually serves to give new impetus to the campaign and the
existence of the framework provides very timely and necessary bounds for
this drive.
Progress to date, even including the delay, would not have been certain
without the framework and Babcock Marine sees no reason why it would not
adopt the same approach again, in similar circumstances.
6. Conclusion
Sustaining both the benefits gained from process improvement and the
desire, energy and coherency of approach over an eight to ten year timeframe
is not easy. The traps set by ad hoc initiatives, flavour of the month urgencies
and banner waving saviours are frequently sprung by staff changes, mergers
and acquisitions, too-early matrix structures and lack of stamina. The
adoption of a simple framework, with each step building on the last, the early
552
stages giving the biggest, fastest and cheapest returns for effort and each
stage lasting, nominally, two to three years offers a worthwhile option and
extra dimension to a complex change-management problem. Babcock
Marine, on behalf of their MoD and Royal Navy partners introduced this
methodology in 2005 to ensure that their business model of making a profit
only from year-on-year savings could be sustained over the remainder of a
ten year contract and beyond.
Immediate benefits were gained by re-prioritising worthwhile but mis-timed
initiatives and by identifying many initiatives that were missing from the
campaign. External business constraints were coped with and changes in
senior staff on both the Company and MoD sides were smoothed-over with
minimal disruption.
Functional and process champions now have a test for their ideas for
improvement and this avoids the feast and famine risk when initiatives are
simply pulled from a list in no coherent fashion. The workforce has benefited
from a consistent message and there is no desire from any quarter to attempt
to ‘speed things up’ things up with the next biggest idea that seems to
contradict the previous version.
Lean and Six Sigma play their part; not as silver bullet-style panaceas but as
very valuable and useful principles and collections of tools that can be and
have been applied widely, from health and safety issues to manufacturing and
administrative process improvements. Wastes have been removed but in a
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phased manner, with most emphasis going on the wastes caused by bad
planning and scheduling. Many more remain, in terms of process and
material quality, staff skills and capabilities and the information and
specifications associated with requirements. These will be addressed, again
using tools from the Lean and Six Sigma toolsets but within a timeframe set
by the overall framework and only when the improvements can be sustained
by virtue of the fact that they are built on the established foundation of
coordination.
Babcock Marine and the wider Base community will continue to learn from the
successes and failures of the programme and hopes to continue its run of
commercial success based on a measured application of best practice.
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The Integration of Six Sigma and Green Supply Chain Management
Xixi Fan
Department of Management, Economics and Industrial Engineering
Politecnico di Milano Via G.Colombo, 40, 20133, Milan, Italy
E-Mail: [email protected]
Corresponding author
Alessandro Brun Department of Management,
Economics and Industrial Engineering Politecnico di Milano
Via G.Colombo, 40, 20133, Milan, Italy E-Mail: [email protected]
Abstract:
The application of Six Sigma has been the focus of recent study. Introducing
Six Sigma into Green Supply Chain management is proposed in the paper by
describing what organizations practicing Green Supply Chain Management
can gain from Six Sigma and what Six Sigma practitioners can benefit on
exploring Green Supply Chain Management. A concerted implementation of
the practices will lead to environment-oriented quality management,
overcoming the limitations of each practice when adopted in isolation.
Possible approaches to integrating the two methodologies are presented for
further research. Exploration of the integration further digs into the value of
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the two methods and suggestions are provided in terms of methods that
would create a Green Six Sigma company. The paper puts forward value
propositions of methodology integration, but there is lack of a comprehensive
description of phenomenon to support the practice. It will be addressed in
future research.
Key words: Quality Management, Six Sigma, Green Supply Chain
Management
1. Introduction
The concept of quality evolves over time, and so does quality management.
As early as the Middle Ages in Europe it was managed by informal inspection,
as the manufacturing and quality inspection activities are tied together in the
hand of the craftsman. In 1923, W.A.Shewhart developed a statistical chart for
the control of product variables, which marked the conception of statistical
quality control. From 1950s and 1960s, quality began to evolve from a
manufacturing-based discipline to one with managerial perspective (Yong and
Wilkinson, 2002). Quality assurance shifted the focus to preventing defects,
where the supplier’s focus is on telling the good from the bad parts. Then total
quality management came into being in Japan after World War Two and went
west, becoming a widespread concept for quality management. Since 1980s’,
Six Sigma, as a western methodology, has started to prevail all over the
world. The study on Six Sigma still keeps going on and going wide and deep.
556
On the other hand, environmental issues have drawn the attention of
researchers. Manufacturing organizations also have recognized the
importance of their supply chain partners in the management of the natural
environment. Major manufacturers around the world have developed and
implemented comprehensive programs to control and improve their
environmental practices across the entire supply chain (Krut and Karasin
1999). Louis Vuitton has launched eco-luxury program along its supply chain
for the purpose of creating ethic value to the brand and appealing to
customers’ requirements. The term “Green Supply Chain” is coined to
describe this phenomenon.
As we bring up this two research areas, a possible integration of them is the
research focus which we are going to target at. Green Supply Chain
Management (GSCM) is burgeoning and it is in need of effective
methodologies to secure its steady growth. The current techniques applied in
GSCM are not sufficiently address some specific issues, while Six Sigma,
which is a comparatively well-established method, could make contributions to
generate a novel viewpoint and provide reformative tools and techniques in
GSCM. The application of Six Sigma into GSCM is also extending the
methodology to a broad area and exploring it benefits in a larger degree.
The purpose of this paper is to identify the research opportunities regarding
Six Sigma and GSCM by describing the two approaches and main concepts
and techniques that underline their implementation. The discussion will be
557
followed by an analysis of how Six Sigma and GSCM can be integrated.
Green Six Sigma bridges these two practices via evolutionary, rather than
revolutionary, changes. The cases are briefly presented to demonstrate how
Green Six Sigma is arising in practice. Finally, the further research focus is
presented.
2 Six Sigma
Sigma is the letter used in statistical model to signify the standard deviation
from the mean. Six Sigma, in mathematical and statistical terms, is six
standard deviation units of process variation. From the quality management
perspective, it could be seen as a quality target of 99.9997% of production
conforming to specifications. If the manufacturer produces 1,000,000 units of
components, at maximum 3 of them would be regarded as defects.
Nevertheless, the scope of Six Sigma is far beyond the statistical meaning,
and is extended to a quality program which was initiated by Motorola in 1986
when Bill Smith proposed to insert statistics into the philosophy of TQM, and
propagandized by GE’s overwhelming success. Since then, Six Sigma
evolved from a quality metric to a comprehensive methodology to achieve
unprecedented quality levels by “focusing on characteristics that are critical to
customers and identifying and eliminating causes of errors or defects in
process” (Evans and Lindsay, 2005).
Six Sigma borrows some ideas from TQM, but also differentiates itself from
TQM in several aspects which compose the essentials of Six Sigma (Basu
and Wright, 2005).
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Six Sigma emphasizes statistical control and measurement. Apart from
the tools advocated in TQM, including control charts, histograms, check
sheets, scatter plots, cause-and-effect diagrams, flowcharts, and Pareto
charts (Arnheiter and Maleyeff, 2005), Six Sigma also employs Design of
Experiments, Failure Mode and Effects Analysis, Quality Control and
Capability Analysis (Raisinghani, 2005).
It adopts structured training programs at different level (Champion, Master
Black Belt, Black Belt and Green Belt).
It is a project-based approach exploiting a set of problem-solving
techniques. Projects are carried out following the DMAIC approach.
DMAIC stands for Define, Measure, Analyze, Improve and Control.
It quantifies the benefits in tangible savings and focus on improvement
with financial accountability.
It requires top management commitment and leadership, continuous
education and annual saving plan.
3 Green Supply Chain Management
Lately, environmental sustainability in the supply chain has been the topic of
several papers (Hall 2000, Bowen et al. 2001). Vachon and Klassen (2006)
put forward the concept of green supply chain practices which comprise two
sets of related yet independent environmental activities: environmental
collaboration and environmental monitoring. Hence, an organization’s green
supply chain practices imply: internalizing by integrating its environmental
management activities with other organizations in the supply chain or
559
externalizing environmental management in the supply chain by employing
market-based mechanisms.
Since GSCM considers environmental issues at every aspect of supply chain,
Srivastava (2007) specifies the five areas covered by GSCM: product design,
material sourcing and selection, manufacturing, distribution and product end-
of-life management. Design for Environment as a method comes into being
and is understood to be: “a systematic process by which firms design
products and processes in an environmentally conscious way” (Lenox et al.,
1996). In terms of material sourcing and selection, Green Purchasing arises to
address relevant issues (Min and Galle, 1997). Clean production, reverse
logistics, waste management are all in place to settle the environmental
problems with production, distribution and product end-of-life (Srivastava,
2007).
Five practices are employed to address environmentally conscious business,
which include reduce, reuse, remanufacture, recycle, and disposal
alternatives (Sarkis, 2003). Sarkis (2003) suggested that reduction could be
aided by total quality management and JIT programs which aim at eliminating
waste and also the redesigning of product and process will benefit the
reduction of waste or toxic emission. End-of-life management entails the
remaining four factors.
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4 Potential research areas of Six Sigma and Green Supply Chain Management
4.1 Research gap in Six Sigma
Six Sigma is one of the methods successfully employed in Quality
Management. Its contribution has been proven by the enormous savings
obtained by practicing companies. Nevertheless, Six Sigma can be further
explored to extend its advantages, and for the purpose of this paper
prospective research could focus on the following areas.
Six Sigma is mainly applied by companies internally, but the concept of
quality in Six Sigma can be expanded outside the manufacturing. It relates
to the entire customer value, encompassing manufacturing, delivery, after
service. Also Six Sigma is not only devoted to quality improvement, its
techniques and methodology can be extended to customer interaction,
supplier involvement. How to exploit Six Sigma on other aspects of
management is untouched area in academic research.
Stamatis (2000) states that Six Sigma is “an appraisal tool that does
nothing for presentation”. This argument indicates that quality needs to be
integrated into design, not just to be monitored in the process of
manufacturing. Six Sigma has not contributed enough to plan quality
ahead of the manufacturing. How Six Sigma can impact product design is
open to research to further explore its value.
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4.2 Research gap in Green Supply Chain Management
GSCM is still in its infancy, compared to other mature fields such as quality
management. A large number of potential research subjects exist in the study.
Srivastava (2007) conducted a comprehensive state-of-the-art literature
review on GSCM, and concluded that the complexity of environmental issues
pose challenges to researchers and suggested that research is demanded in
deciding how companies select products to maximize returns. For the purpose
of this paper, three relevant research gaps are pinpointed and analyzed.
First of all, there is a poor selection of effective and practical tools in
GSCM. Although GSCM is equipped with a set of tools which facilitate the
identification of environmental status of product and process and provide
possible directions of solving the problems, it lacks in practical tools and
techniques which can be applied efficiently in practice. For example, Life
Cycle Assessment is a complex tool which demands professional
knowledge and expertise on environmental impacts of product and
processes (Rebitzer, etc., 2004). External assistance is often required
when a company is devoted to environment management and tries to gain
benefits from the program. Fads like LiDS-wheel and MET matrix (IHOBE,
2000) are easy to utilize for those having limited environmental know-how,
but they are poorly linked to the front-line practices.
Secondly, GSCM is composed of various aspects of study, ranging from
Green Design to End-of-Life Management, and disparate methods are
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employed in those areas (Srivastava, 2007). One of the drawbacks is that
the company has to acquaint itself with a variety of tools in GSCM. It is a
challenge for the company to execute those techniques by training the
employees first. Also, it is difficult to convince the top management who is
more managerial competent with less environmental sense. Without
comprehensive and profound understandings among employees and
whole-hearted and effective support from the top management, the path
to success of GSCM in the company is filled with obstacles. Another
drawback is that there is lack of a methodology for the company to launch
the environment management along the supply chain in a consistent way.
Lastly, GSCM is advocating the benefits of bringing environmental
consideration into the supply chain, without demonstrating the benefit in a
concrete fashion. It is agreed on the importance of having the
stakeholders behind a program, which builds up the foundation of
success. The lucrative benefit is always the reason that lures the
stakeholders to support the pursuit of an activity. By showing how much
GSCM can save for the company, the top management can be easily
taken on board, which is crucial to the triumph of GSCM.
5 Integrating Six Sigma with Green Supply Chain Management
As illustrated above, there are research gaps in both areas. In this section, the
similarities and links between Quality Management and Environment
Management are delineated, showing how a “Green Six Sigma” approach
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would make sense in bringing Six Sigma and GSCM together. Then, it is
explained how integrating the two methodologies would complement each
other and open a brand-new research focus, which we would call “Green Six
Sigma”.
5.1 Similarities
The similarities shared by GSCM and Six Sigma can be identified on strategic
business issue, waste reduction, and product and process design. These
three aspects reveal how they can be integrated naturally.
Both quality and environmental issues have become strategic to a company,
involving top management, employee training, culture change and integration
of business processes. They have similar development and evolution process.
Tank (1991) conceptualized five stages in quality program: innocence,
awareness, understanding, competence, and excellence. Similar five-stage
progression is proposed by Hunt and Auster (1990) for environment
management, which are beginner, fire-fighter, concerned citizen, pragmatist
and proactivist.
Table 1: Similarities of evolution process
Quality Management
(Tank, 1991)
Environment Management
(Auster, 1990)
Innocence Beginner
Awareness Fire-fighter
Understanding Concerned citizen
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Competence Pragmatist
Excellence Proactivist
Waste reduction is one of the primary goals in quality management, and it is
also the objective shared by GSCM (Zsidisin and Siferd, 2001). Waste is the
cost to quality and depletion of natural resources, so the management of
quality and environment is reaching the objectives by driving waste out of the
system.
Design for Six Sigma and Design for Environment are all studied in current
research, which indicates how quality management and environment
management approach the solution in similar ways. This also implies that the
design stage is crucial to both quality and environment and it provide them
with proactive action to contribute on the better performance of management.
5.2 Integration
GSCM provides a broad scope where Six Sigma can be applied and explored,
from material purchasing to end-of-life management, and from supplier
involvement to customer engagement. Meanwhile, GSCM lacks effective
tools, and the techniques in Six Sigma can be used for GSCM with
modification.
Six Sigma is aiming at listening to the voice of customers. If the customers
and stakeholders are asking for an environmentally sustainable products or
565
production, Six Sigma is a suitable approach to integrate environmental
considerations into supply chain management.
GSCM places its focus on proactive solution, while Six Sigma instead uses
problem-solving approach to address issues. When the two of them are
integrated, thinking-ahead and fire-fighting can be utilized for a variety of
situations to achieve continuous improvement.
GSCM needs an efficient methodology to ease the managerial complexity,
and Six Sigma can be relied on to fill the gap. First, Six Sigma is a project-
centered practice, and it allows the human resource and expertise to vary
among projects. This kind of flexibility, on the other hand, is also a way to
simplify the organization. Its DMAIC approach allows managing and improving
environmental issues in a systematic way. A hierarchy training system is
suggested to organize the education of employee involved into green supply
chain.
Executive Leadership includes the members of top management. They
are responsible for launching Green Six Sigma implementation.
Champions act as mentors to Black Belts and are responsible for
identifying environmental improvement project.
Master Black Belts, devote 100% of their time to Green Supply Chain
Management. They assist champions and guide Black Belts and Green
Belts. Apart from statistical tasks, their time is spent on ensuring
consistent application of Six Sigma to environmental issues.
Black Belts act under Master Black Belts to apply Six Sigma methodology
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to specific projects. They dedicate 100% of their time to Six Sigma. Their
primarily focus is on the project execution.
Green Belts are the employees who take up Six Sigma implementation
along with their other job responsibilities.
Last but not least, Six Sigma values the financial saving gained from each
project which would encourage the execution of continuous environmental
improvement along the supply chain. It is very important for green practice
which is in need of stakeholders’ full support.
6 Green Six Sigma arising from cases
In order to further support the argument of integrating Six Sigma with GSCM,
we would like to highlight several companies practicing Six Sigma with
environmental orientation.
GE, as a successful pioneer in Six Sigma, has considered environment as
one of the strategic issues. In order to be a responsible citizenship, GE places
environment into the categories which enable them to make contributions for
society in ways that are aligned to the business strategy. Six Sigma approach
has been influencing the managerial fashion of the company. Its methodology
has penetrated the organization and is supposed to be employed to solve
environmental issues to some extent.
In 2007, Ford integrated Six Sigma into the company’s core processes. The
Six Sigma teams are located in almost every business unit in the company.
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As environment becomes an increasingly important element in the company
development strategy, Six Sigma teams contribute to the improvement of
environmental sustainability.
Federchimica is the association of chemical companies in Italy, which
incorporates 1350 associated firms. Presently it is planning to launch a project
with Politecnico di Milano, with the goal of implementing Six Sigma to reduce
the CO2 emission. This case provides us with the solid evidence that there is
a need from industries to apply Six Sigma into the improvement of
environmental performance.
Although some companies have not advocated that Six Sigma is used to
address environmental issues, the cultural and organizational changes and
even the implementing methodologies resulting from Six Sigma would
contribute to environmental advancement.
7 Conclusion
In the conclusion, the strengths and limitations of integrating Six Sigma and
GSCM are discussed, and also the possible study directions are pointed out
for future research.
7.1 Strengths and limitations of Green Six Sigma
The integration of Six Sigma and GSCM suggests applying the techniques
effectively developed in Six Sigma into the management of supply chain
sustainability. It could be the way to extend the strength of Six Sigma to the
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area where the green issues have not been effectively addressed in the
supply chain management. Apparently, such integration would overcome
some pitfalls in GSCM and renovate the techniques by considering the
approach adopted by Six Sigma. On the other hand, it will further exploit the
potentiality of Six Sigma. Six Sigma was born to improve quality performance.
As it is put into the context of GSCM, the scope of its application is expanded.
It creates the framework for those implementing Six Sigma and moving to
green practice.
The limitation of Green Six Sigma would be due to the fact that Six Sigma is
not a simple methodology, which requires not only the profound
understanding of some statistic tools and also the change of company’s
culture. This could be an issue for those which are not familiar with the
method when they are trying to launch Green Six Sigma practices. For
instance, Federchimica is planning to first train 100 engineers in its associated
companies. The concept of Six Sigma is brand-new to them and it is not sure
whether applying this methodology to improve environmental performance will
be a positive result.
7.2 Further research
The management school of Politecnico di Milano has started a Six Sigma
Circle of Italian companies, which builds cases base for us to conduct further
study. As Green Six Sigma starts to roll out, manufacturing area would be the
point of departure. The suggestions for training and education, how to
569
implement the DMAIC approach, and how to measure the green saving would
be the preliminary research questions to be focused on.
Then the attention would be extended to design and purchasing. Even though
Green Design and Green Purchasing have already attracted the interests of
researcher, academia and practitioners, the interaction between the two areas
is still untouched so far. In particular, the application of Six Sigma to them is
where our future research focus is. How to apply Six Sigma and to improve
the management over Green Design and Green Purchasing would be the
general research question. We will address the techniques for Green Six
Sigma in product design and purchasing, the workflow between product
design and purchasing with environmental consideration, and the
identification of project opportunities on these two.
To go further into the techniques development, QFD has been adjusted by
taking into account environmental issues (Sakao, 2007), and other tools still
have the potential be redeveloped in order to fit environmental objectives.
Energy, material, packaging and weight could be the aspects where the tools
of statistic process control are altered around. Five principles for Green Six
Sigma in design and purchasing are reduce, reuse, remanufacture, recycle,
and disposal alternatives.
Green Six Sigma has its roots in both GSCM and Six Sigma. It brings forth a
new research field to consider environment as a quality issue to manage and
improve it along the supply chain. Six Sigma establishes a firm foundation of
570
management methodology, while GSCM regards environment as the focus of
research. Green Six Sigma would capitalize on the strength of both of them.
References:
Arnheiter, E.D. and Maleyeff, J. (2005) ‘The Integration of Lean Management and Six Sigma’, The TQM Magazine, Vol.17 No.1, pp.5-18.
Basu, R. and Wright, J.N. (2005) Quality Beyond Six Sigma, Butterworth Heinemann.
Evans, J.R. and Lindsay, W.M. (2005) The Management and Control of Quality, six edition, Thomson South-Western, pp.479.
Hunt, C.B. and Auster, E.R. (1990) ‘Proactive Environmental Management: Avoiding the Toxic Trap’, Sloan Management Review, Vol.31 No.2, pp.7-18.
IHOBE (2000) Handbook for Eco-design Implementation, Edited by the Basque Country Government.
Krut, R. and Karasin, L. (1999) Supply Chain Environmental Management: lessons from leaders in the electronics industry, United States-Asia Environmental Partnership.
Lenox, M., Jordan, B., & Ehrenfeld, J. (1996) ‘Diffusion of Design for Environment: a survey of current practice’, Proceedings of the IEEE International Symposium on Electronics and the Environment, pp. 25–30.
Min, H. and Galle, W.P. (1997) ‘Green Purchasing Strategies: Trends and Implications’, International Journal of Purchasing and Materials Management, August.
Raisinghani, M.S., (2005) ‘Six Sigma: concepts, tools and applications’, Industrial Management and Data System, Vol.105 No.4, pp.491-505.
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Rebitzer, G. etc. (2004) ‘Life Cycle Assessment Part1: Framework, goal and scope definition, inventory analysis’, Environment International, 30, pp.701-720.
Sakao, T. (2007) ‘A QFD-centred Design Methodology for Environmentally Conscious product design’, International Journal of Production Research, Vol.45, No.18-19, pp. 4143-4162.
Srivastava, S.K. (2007) ‘Green Supply-Chain Management: A state-of-the-art literature review’, International Journal of Management Reviews, Vo.9, Issue 1, pp.53-80.
Stamatis, D.H. (2000) ‘Who needs Six Sigma anyway?’, Quality Digest e-Store, available at:www.qualitydigest.com/may00/html/sixsigmacon.html (accessed 30 January 2004).
Tank, A.G. (1991) ‘Global Perspectives on Total Quality’, The Conference Board, New York, NY.
Yong, J. Wilkinson, A. (2002) ‘The Long and Winding road: The evolution of quality management’, Total Quality Management, Vol.13, No.1, 101-121.
Zsidisin, G.A. and Siferd, S.P. (2001) ‘Environmental Purchasing: a framework for theory development’, European Journal of Purchasing and Supply Management, 7, pp.61-73.
Biographical notes:
Xixi Fan: graduated from the University of Liverpool, MSc in Operations and
Supply Chain Management, and presently she is the PhD candidate of
Politecnico di Milano, researching on quality management, with particular
focus on Six Sigma.
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Alessandro Brun: holds a PhD in Industrial Engineering. He is Assistant
Professor of Quality management at Politecnico di Milano and Director of
Master in Operations, Quality & Supply Chain Management at MIP Politecnico
di Milano. His main research streams are related to Supply Chain
Management and Quality Management, with particular emphasis on Six
Sigma.
573
Adoption of Daily required technologies and tools in a food service organisation to promote an effective
simplified Six Sigma based methodology
Alireza Shokri,
MSc in Food Technology,
PhD Student in Manufacturing Management,
School of science and Technology,
University of Teesside, UK,
Farhad Nabhani,
Professor of Biomechanics and Manufacturing,
School of Science and Technology,
University of Teesside, UK,
Abstract
Purpose –The purpose of this paper is to justify the application of some
potential day-to-day technical, statistical and institutional tools and
technologies within a food Service organisation to a problem solving
methodology.
574
Design/methodology/approach – A pilot questionnaire was conducted and
sent to the food manufacturers and distributors to verify the extent in which
some potential tools and technologies could be used for a problem solving
methodology.
Finding – The result of questionnaire has indicated that 50% of the
respondents have already been using different tools and technologies with no
statistical background. These tools or technologies could potentially be
applied in DMAIC (Define, Measure, Analyse, Improve, Control) problem
solving methodology alongside the statistical tools for a food Service
organization to achieve the key purposes of each stage in DMAIC
methodology.
Research limitation / implication – The Simplified version of DAMIC and a
good understanding of these recommended tools and technologies in food
industry will help to have most effective integration in the industry. This
implies some more in depth practices in this type of business.
Practical implication – The suggested tools and technologies can be
potentially beneficial in terms of managing the business strategy in food safety
and quality while solving the problem through simplified version of DMAIC in a
food business.
Originality/Value – This paper represents a potential approach to adopt
some food service related tools or technologies in order to support the
application of Six Sigma based methodology in a food service firm.
Keywords – Six Sigma, DMAIC, Problem Solving, Food service, quality
management
575
1 Introduction
Food Safety and Customer Service are two key quality dimensions in order for
the Food Service industry to achieve a competitive quality standard which can
meet customer expectations. This has suggested a rocky road to achieve a
top quality. There are highlighted problems associated with identifying the
customer expectations, designing services to meet customer requirements
and assessing the performance of service by customer (Beardsell, 1999). This
may be especially true for SMEs in the Food Industry, because of the
subjective nature of the customer expectations and the limited resources of
such organizations.
The customer’s expectation in Food Service is the final word to judge the food
service quality. In fact, food service quality is the important factor affecting the
choice of the end consumer. The UK Food industry is a growing market where
the new version of competition has been addressed via quality and service.
This has been significantly observed in UK Fast Food Service from Farm to
Fork. Application of any quality improvement program in Food Service will
potentially increase both customer satisfaction and competitiveness. The UK
Food industry needs to place greater emphasis on genuine quality to increase
public confidence by meeting or exceeding customer expectations from the
service (Leach et al, 2001).
576
According to different Food Safety and Quality Acts & Regulations (Food
Safety Act, 1999, 2006, FSA), there is a complementary interaction between
applying a systematic quality improvement program and other existing
measures and practices in Food Service industry to generate a toolset which
will assist in achieving top level quality. Whilst the majority of the Food
Service components and production processes might not be complicated, a
0.1% defect in a Fast Food Service outlet with a weekly 10,000 served food,
is providing 10 unsafe portions of Food which is a big risk for the health of the
end consumer.
This paper intends to justify the application of some other potential daily
problem solving technical and institutional tools and techniques within a Food
Service business which could be applied in different stages of simplified Six
Sigma methodology to improve the Service Quality differently and more
rigorously.
2- Six Sigma in the Food Service Industry
“Six Sigma” is a project, data and technology driven quality management tool
and acts as a business strategy in order to improve the customer satisfaction
and profitability through reducing the defects and improving the quality of the
service or the product. There are different definitions of the Six Sigma in
literature. “Six Sigma” is a business strategy used to improve business
profitability, to improve the effectiveness and efficiency of all operations to
meet or exceed customer needs and expectations (Chakrabarty, 2007).
577
Six Sigma has been undertaken in different sectors including manufacturing
and service industries. It has also been adopted by different companies with
different sizes. Six Sigma has a systematic methodology to reduce the defect
or variability, but the approach in service industry needs to be different to that
required in manufacturing sector.
There are different supportive studies indicating the benefits of Six Sigma in
Service Industry. (Antony, 2006; Antony et al 2007). There are also different
studies which revealed the limits of applying Six Sigma in the Service Industry
(McAdam, 2004; Antony, 2006; Chakrabarty, 2007)
The Six Sigma application in the service sector has been limited in specific
industries such as Health care, Financing and Banking. This is reflecting the
idea of applying Six Sigma for big monitory or complicated processes. So, it
is noted that implementing Six Sigma in Food Service enterprises has hardly
been in attention of any researches. Whilst, there are limited number of big
Food manufacturer or service organisations which are Six Sigma cultured and
has been experiencing the Six Sigma.
Six Sigma depends on implementing systematic problem solving process
based methodologies such as DMAIC (Define, Measure, Analyse, Improve,
and Control). It has been suggested that the major contribution of a process
based methodology is to provide a simple and robust mathematical model to
calculate a performance index of a performance measure in Supply Chain
network to deal with both tangible and intangible performance measures
578
(Chan, 2003). Performance measurement and improvement through this
methodology is operated by applying some appropriate tools and techniques.
The application of the DMAIC methodology requires intensive training and
consultation to promptly achieve the purpose of Six Sigma. More simplified
tools and techniques which are less complicated can also be adopted. These
tools are flexible and can be used in different stages of the DMAIC.
Table I Indicates some of more comprehensible and straightforward tools and
techniques that can be used in a Food Service organisation which potentially
has limited resources and a different dimension of Quality Expectation of the
customer in Food Industry .
Table I – The common simple DMAIC tools and techniques which can be used in Food Service firm (Antony, 2005; Antony, 2006)(www.isixsigma.com) Stage of
DMAIC
Tools & Techniques
Define
SIPOC, Project Structure, Stakeholder Analysis, Gantt
Chart, Affinity Diagram, Brainstorming, Pareto Chart
Measure
Data Collection Plan, Benchmarking, Brainstorming,
Process Sigma Calculation
Analyse
Cause & Effect XY Matrix, Histogram, Pareto chart, Scatter
Plot, 5 Whys, Fishbone Diagram
Improve
Brainstorming, Analytical Hierarch Process, Affinity
Diagram, House of Quality
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Control
Monitoring Chart, Check Sheet, Process Sigma Calculation
Application of these tools and techniques in a Food Service firm is more
practical and more intact with other organisational tools and technologies in
this type of business, since they are simpler and more common tools in Six
Sigma methodologies.
The use of simplified version of Six Sigma where appropriate, through basic
training, simple tools and laser focusing in projects and methodology stages
has been unanimously supported by the academics. (Arthur, 2004; Antony,
2005; Mortimor, 2006)
The Six Sigma application in a Food Service organisation can potentially
demonstrate benefits in three different Key Performances Indicators (KPIs)
including, Food Safety, Stock and Operation Efficiency and Delivery
Performance. In fact, the whole idea of applying the methodology of DMAIC in
a Food Service organisation is to improve these aspects in which the direct
impact is customer safety and satisfaction, while the indirect impact is to
increase the profitability of the business. “Cost of Poor Quality” is the key
outcome of defect and variable in a Food Service business which could reflect
the scrap, rework, customer loss or public safety risks. “Six Sigma” can
reduce the Cost of Poor Quality, increase the consistency level of Service and
prevent fire fighting (Antony, 2004). It appears that all these three issues are
critical aspects of a Food Service organisation.
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Customer expectation in a Food Service organisation is based on what
customers think about quality therefore exceeding the quality for one
customer might be an expected quality of another customer. “Six Sigma” can
be an attractive tool to solve the quality problem in a Food Service
organisation because it establishes and maps key processes that are critical
to customer satisfaction in a Service environment (Antony, 2007).
The Six Sigma Problem solving strategy in a Food Service organisation deals
with small number of opportunities which act as safety and human functional
quality dimension rather than financial pain or gain. Therefore, the application
of Simplified Six Sigma methodology in Food Service concentrates on Health
& Safety improvement through process improvement but in a different
methodology, which is reliable and trustworthy in data analysis.
3- Food Service and its KPIs:
Food Service is an activity to add value to the Food Supply Chain from “Farm”
to “Fork”. Packaging, Storage, Delivery, Catering and Hospitality are among
the key activities in the Food Service. Food Services represent a series of
different processes in which the value of the Supply Chain is transmitted to
the end consumer. Food Service improvement has a growing role in
improving the quality of the entire Food Chain. Process improvement in Food
Service is difficult to achieve, as human factors have direct interactions with
the quality attribution. On the other hand, process improvement in Food
Service does not significantly rely on product or process, but it intensifies the
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people’s role in the whole operation. Food Service operations are a complex
mix of people and processes that need to be balanced in order to satisfy their
major stakeholders. There is high risk of business failure in a Food Service
business and this is an indication of the inherent complexity in this activity
(Ingram, 1998).
Food Service businesses are forced to achieve a high level of quality in order
to meet and exceed legal requirements and customer satisfaction. The latter
is difficult to define in this type of business as the customer expectation is too
wide. Quality Improvement in a Food Service must focus on specific
measures, which not only increase the efficiency of the service but also the
level of customer satisfaction. These measures demonstrate the degree of
success or failure to meet or exceed the customer expectations or legal
requirement. As such, they are essential Key Performance Indicators (KPI)
required to be focused when applying any quality improvement program.
Implementing any quality improvement program in a Food Service
organisation requires an intensive research on these KPIs since the defect;
variable or customer complaint arise from these measures and need to be
dealt in a systematic problem solving procedure. Research on Food Services
represents a large body of scientific knowledge supporting Food Safety, Food
Quality, Operation Management and Marketing (Rodgers, 2005).
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This paper suggests four different KPIs, applicable to any Food Service
organisation. Their improvement addresses dramatic growth in customer
expectation:
� Food Safety
� Operation efficiency
� Delivery Performance
� Customer Relationship and Communication
These measures represent the quality aspects of the Food Service process.
Scientific knowledge is required to maintain the integration of these measures
with DMAIC in order to solve the problems associated with the Food Service.
It is necessary to identify the key aspects of these KPIs, including their
benefits in the Food Service industry as well as the technical or institutional
tools and technologies that are used and could be beneficial to implementing
DMAIC.
It is intended to rectify the benefits of these different institutional tools and
technologies which are regularly practiced in a Food Service SME in order to
promote an effective approach of a simplified methodology of DMAIC and to
maintain each KPI. These tools and technologies can increase the
effectiveness of implementing DMAIC tools via being applied as their
facilitators in data collection, data analysis and understanding and monitoring
the Service measures which have different criteria.
583
This has been already agreed by the academics that service environment is
tougher than manufacturing to support the DMAIC methodology. DMAIC tools
and techniques require certain key ingredients to make their application
effective. Co-operative environment, back up from facilitators and availability
of resources are some of the major elements to make the application of
DMAIC in Service as effective as manufacturing (Antony, 2007).
3-1- Food Service KPIs:
Food Safety has always been an important subject in quality improvement
associated with the Food quality but in the last decade it has become a very
critical issue since the public concern has increased (Alsaleh, 2007). Quality
improvement with a focus on the safety issues in a Food Service has both
technical and social benefits. From this perspective, DMAIC benefits for the
Food Service industry can be technical, social and even political.
Operation efficiency includes all performance measures that rely on stock and
quality control. Nevertheless, the operation efficiency in a Food Manufacturing
could be so many other aspects in production. Quality improvement in the
operation of a Food Service SME concentrates on improving the monitoring of
the activities and reducing the waste or rework.
Delivery process in a Food Service varies from a simple food takeaway outlet
to national franchised restaurant, Food Wholesaler or Food Distribution
business. Although, the scale of the delivery might be different in size, some
of the key measures are the same. For example, time is one of the key
584
elements and is always a concern in delivery performance regardless of type
or size of the Food Service organisation.
Customer relationship is a key metric in Food Service in order to target the
Critical to Quality (CTQ) issues in Six Sigma, as many customer complaints
either internally or externally reflect the defects or variables in this measure.
Simplicity, time, flexibility, timely response and communication are among the
major CTQ elements in customer relationship of the Food Service when
applying Six Sigma.
This paper aims to establish a set of tools and technologies which could be
used to achieve the KPIs of the Food Service process in the structure of
DMAIC as the facilitators for the main tools and techniques in each stage of
DMAIC. This includes the introduction of the tools followed by a preliminary
research to support the claims.
3-2- Tools and Technologies for a Food Service SME:
There are different daily tools and technologies available in a Food Service
organisation which can potentially support each stage of DMAIC to simplify
the operation. The major concern is that these tools might not ever be
approached for such a significant quality improvement program in a Food
Service sector. Table 2 introduces these tools and technologies which can be
approached in different stages of the DMAIC.
585
Table 2 indicates that these tools and technologies can be used in different
stages of the DMAIC and are not applied in one specific stage according to
their type of function. This supports their availability in each stage as they are
required to increase the effectiveness of the major tools and technologies. It is
obvious that applicability of these tools as the supportive elements in DMAIC
is not the same. Some of these tools or technologies are straight forward and
less expensive to use, whilst some others are more expensive and
complicated. Some of these tools or technologies can be useful in data
collection, reporting, observation and indication and are suitable for Define
stage. Some of them are useful in measurement, benchmarking and data
collection and therefore are suitable for measure stage. Potentially, the
application of some of these tools and technologies can help to find the root
causes of the problem and they are fit for the Analyse stage. Many of these
tools or technologies are available in implementation and can actually be
applied as the solution. Therefore, these tools and technologies are
introduced as the improvement strategies. Finally, some of these tools and
technologies can be applied in monitoring the strategies as they are available
for data collection and process control. Perhaps, it is appropriate to describe
some of these tools and technologies which are not common before stating
the methodology and the result of the empirical research in this matter.
Table 2- List of supporting and facilitating tools and technologies for the
DMAIC stages in a Food Service SME
Technology Tool Define Measure Analyze Improve Control Skill of user Tool Function
Sage Line 50 √ √ √ √ √ Intermediate measures,
586
counts,
generates,
groups,
implements
Tracking
System √ √ √ √ √ √ Intermediate
measures,
generates,
counts
Tachograph √ √ √ √ Novice
measures,
generates,
counts
Answering
Machine √ √ √ Novice generates
Website & E-
Mail √ √ √ √ √ √ Intermediate
generates,
measures,
counts, groups
Recording
Machine √ √ √ Novice generates
Microsoft
Access √ √ √ √ √ Intermediate
implements,
groups, generate
Microsoft Excel √ √ √ √ √ √ Intermediate
measures,
counts,
generates
Satellite
Navigator √ √ √ Intermediate
generates,
measures
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Help & Enquiry
Line √ √ Novice generates
Traceability
System √ √ √ Intermediate
generates,
implements
HACCP √ √ √ √ √ √ Advanced
generates,
groups,
measures
Calibrated
Temp Probe √ √ √ √ Novice
measures,
generates
Temperature
Probe √ √ √ √ Novice
measures,
generates
CCTV √ √ √ √ √ Novice generates
Minitab √ √ √ √ √ √ √ Advanced
generates,
measures,
groups, counts
Heater Mat
Controller √ √ Novice
implements,
measures
Racking
System for dry
goods √ √ Novice implements
Refrigerated
Rigid Vehicle √ √ √ √ √ Novice
implements,
generates
Digital Camera √ √ √ √ √ √ Novice generates,
RFID & Bar √ √ Advanced implement
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coding
CRM Software √ √ √ √ √ √ √ Advanced
generates,
groups,
implements
Fully
automated
Freezer √ √ Novice implements
Fully
Automated
Chill Room √ √ Novice implements
Online
Ordering &
Faxing √ √ √ Intermediate
generates,
implements
ERP √ √ √ √ √ Advanced implements
E- Invoicing √ √ √ Advanced implements
Racking
System for
Frozen goods √ √ Novice implements
Wi-Fi
Technology √ √ √ √ Intermediate implements
RABIT
Microbiology √ √ √ √ Advanced
measures,
counts,
generates
Online √ √ Advanced generates,
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Inventory
Management
measures,
implements
Process
Automation
System √ √ √ √ Advanced implements
Sage Line 50 is a type of accounting and stock control software which is used
for financial, stock control, data collection and report generating purposes. As
such it may be used in the data collection stage of the DMAIC methodology.
On-line Tracking System is a tool that can provide high levels of accuracy and
data integrity for the data analysers in delivery and transport. It may deliver
major benefits in fleet productivity by enabling more effective management.
This on-line program is directly linked to satellite and enabling the quality
improvement team to access real-time data of fleet or transport. This tool can
be used to provide valuable data and information in Define, Measure and
Analyse stages.
Tachograph is another technology which can provide useful data and
information about the performance of the fleet or transportation. The accuracy
of the data is high, whilst the variety of data access and information is not as
high as on-line tracking system. This technology can also provide useful
information that may be used in measuring or benchmarking the data in
transportation.
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Traceability System is a very important tool which helps to determine the root
causes of the problem in DMAIC procedure and monitoring the implemented
solutions down the supply chain to make sure that the solution is in place. The
European Commission has mandated that every food business must improve
the food safety measures which are vital to improve the quality of food
service. Traceability system by itself guarantees nothing, but it is clearly a
prerequisite to Supply Chain and quality management (Viaene, 1998).
Product recalling due to quality problems is one of the most common defects
in the food industry and traceability is a useful tool to trace the problem back.
Using Traceability information, a company can accurately target the product
lots that must be recalled from the market and save significant costs through
allocating the root causes of the problem. (Kelepouris et al, 2007)
Hazard Analysis & Critical Control Point (HACCP) is a scientific and
systematic approach for assuring food safety. It was developed in the1960s
for the US Army and NASA program in an effort to achieve zero defects and
ensure total food safety (Nguyen et al, 2004). HACCP is a significant measure
in food safety in respect to setting the Critical limit of occurrence of a violation
in process and stating the control measure of preventing the process to go
beyond the limit. In the light of persistence of Food Safety to achieve the Food
Service quality, HACCP could be a useful tool in food service organisation in
order to identify the defect or CTQ in the process. It can also help to set up a
systematic control measure in the process of DMAIC methodology. In fact, it
has been suggested that HACCP has a close link to some of the Six Sigma
tools in purpose aspects. Some companies have already implemented
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HACCP alongside the Six Sigma since the HACCP is a subjective and
quantitative risk – centered method relying on judgment of likelihood and
severity of the failure. This is very close to the FMEA analysis which is a
common tool in DMAIC. (Nguyen et al, 2004; Al-Mishari et al, 2008).
Trienekens et al (2007) has also introduced the HACCP as a systematic
approach to the identification, evaluation and control of those points that are
critical to product safety which in this context could be a defect. (Trienekens et
al, 2007)
Radio Frequency Identification (RFID) and Bar Coding are two useful
technologies in improving the Supply Chain. These two technologies can
assist the Food Service operation in implementing the DMAIC in transport and
distribution operations via simplifying the process of finding the root causes of
the problem or implementing it as an improvement solution in transport and
distribution. In the distribution industry, RFID technology enables suppliers to
accurately determine the location of a pallet, to track its journey through the
supply chain and to make instantaneous routing decisions. (Attaran, 2007).
These two technologies could be available to simplify the process of Analysis
or facilitate the process of improvement by providing new supports.
Customer Relationship Management (CRM) is a valuable tool to improve the
relationship with the downstream. This can potentially impact on collecting the
voice of the customer, brainstorming, benchmarking and data analysis. In IT
terms, CRM is an enterprise – wide integration of technologies together such
as data warehouse, website and intranet that can assist companies to detect
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problematic areas in the existing customer – based information system and
motivate them to improve it (Stefanou et al, 2003). CRM application can be
justified in any DMAIC stage, since its organizational ability has such an
important role in a service organisation in order to expand the customer
relationship. Moreover, this tool can be adopted in any type of business and
its application is not just limited to Food Service businesses.
Enterprise Resource Planning (ERP) is another element which is useful in
different stages of the DMAIC including any task related to the
communication, data analysis and improvement strategies. ERP is a set of
business applications or modules which links various business units of an
organization into a tightly - knit single integrated system with the common
platform for flow of information across the entire business. So, it could be a
useful support to accurately collect the data. It can also improve the business
process. By improving and reengineering business processes, poor quality
and the most costly areas of the operation can be identified and improved or
eliminated. ERP enables the organization to analyse the value chain as a
system from suppliers to firm to customers. (Beheshti, 2006). Hence, it can be
suggested that ERP is a potential supportive technology in all stages of the
DMAIC. Arguably, ERP is an expensive technology and could not be available
for all Food Service organisations as well as the other tools or technologies.
Wi-Fi is a valuable technology to improve the communication within the
organization which could be assumed both an improvement technology and a
tool for the Define Stage.
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It has been observed from different food service organizations that
implementation of these tools and technologies is possible but it depends
upon the type, size and resources of the organaisation. The following
research rectifies the extent that these tools or technologies are utilized in
Food Service firm in order to support this idea that these tools or technologies
which have already been adopted can be approached as the facilitators of the
real DAMIC tools and techniques in respect to implementing the simplified
methodology of DMAIC in a Food Service organisation.
4- Research Methodology:
An on-line questionnaire has been conducted and has been sent out to 110
UK based Food Wholesalers, Distributors and Retailers. The questionnaire
has been available for 6 weeks and the follow - up phone calls for the
questionnaires have also been carried out once. After the six weeks, 35
questionnaires were received electronically representing the response rate of
32%. All questionnaires have been reviewed and 29 of them have been
verified for the analysis. Most of the respondents had less than 500
employees and 19 of them had less than 50 employees, 8 companies had
between 50 and 500 employees and two of them had more than 500
employees.
The purpose of the study was to analyse the tools and technologies based on
their function in each stage of DMAIC. It has been indicated that many of
these tools and technologies that could be adopted in the Define Stage had
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already been used widely by the respondents. Table 3 is representing the list
of the Tools and Technologies in Define Stage for a Food Service operation.
Table 3- The List of Facilitating and Supporting Tools and Technologies for the Define Stage for a food Service SME
More than 75% of the respondents have a Website and CCTV which could be
used in collecting the voice of customers and data. More than 60% of the
respondents have also been using the Sage Line 50 and Microsoft Excel
which could be applied to generate the data, brainstorm and finally indicate
the defect. Similarly, more than 60% of respondents have been using an
Answering Machine which could also be used to collect the voice of the
customer or customer complaint as a communication technology. Minitab,
ERP system, CRM and Wi-Fi technology are within the least used tools and
technologies as the facilitators of the Define stage. Perhaps, their complexity
is the main reason. Figure 1 is presenting the percentage of the respondents
that use these tools and technologies. It has been indicated that average 46%
of the respondents have already been using these tools or technologies.
Define Percentage
Minitab 10.34
ERP System 13.79
CRM Software 17.24
Wi-Fi Technology 20.69
Digital Camera 31.03
Microsoft Access 37.93
Online Ordering 37.93
Tracking System 44.83
Telehone Recording Machine 48.28
Help & Enquiry Line 55.17
Sage Line 50 62.07
Answering Machine 62.07
Microsoft Excel 62.07
HACCP 65.52
CCTV 75.86
Website & E-mail 89.66
Average 45.91
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Figure 1 – The percentage of respondents that use the supportive tools or technologies for the Define Stage in a Food Service SME
In the Measure stage all of the tools and technologies that can be used in
measuring the performance or benchmarking have been studied. Table 4
shows the list of these tools or technologies that have a potential role in
measuring the existing performance.
Table 4 – The list of supporting Tools and Technologies for the Measure Stage in a Food Service SME
Measure Percentage
RABIT Microbiology 6.90
Minitab 10.34
CRM Software 17.24
Wi-Fi Technology 20.69
Digital Camera 31.03
Microsoft Access 37.93
Tracking System 44.83
Sage Line 50 62.07
Microsoft Excel 62.07
Tachograph 62.07
HACCP 65.52
Temperature Probes 68.97
Average 40.81
0.00 20.00 40.00 60.00 80.00 100.00
Percentage
MinitabERP System
CRM SoftwareWi-Fi Technology
Digital CameraMicrosoft Access
Online OrderingT racking System
T elehone Recording MachineHelp & Enquiry Line
Sage Line 50Answering Machine
Microsoft ExcelHACCP
CCT VWebsite & E-mail
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The questionnaire analysis suggested that more than 60% of the respondents
have been using the Temperature Probes, HACCP and Tachograph which the
first two are used for the Food Safety measures and the third one is utilized
for Transport and Delivery Measures. The usage of these tools and
technologies also depends upon the size, type and resources of the
organization. For instance, just 6% of the respondents have been using the
RABIT microbiology technique (Rapid Automated Bacterial Impedance
Technique) which is a complicated technique to measure, count and detect
the level of severity of the food microorganism and not all of the Food Service
organisations have resources to use this technique. Minitab is also a least
common tool in this stage than Microsoft Excel in data analysis as just 10% of
the respondents have been using this software. So, this is supporting the fact
that the facilitating measuring tools for the actual measure tools in DMAIC in a
Food Service are quite unique such as Temperature Probe and HACCP as
two of the key data recording tools in the Food Safety to be used in data
collection process in the measure stage.
Figure 2 represents the percentage of respondents that have been using
these tools or technologies.
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Figure 2 – The percentage of respondents that use the supportive tools or technologies for the Measure Stage in a Food Service SME
In the Analyse stage there are also some tools and technologies that can be
used again while they are used in other stages. Table 5 lists these tools and
technologies which all of them have already been represented in other stages.
In fact, these tools and technologies support all stages of DMAIC in
accordance to the function of the stages.
Table 5 – The list of supporting Tools and Technologies for the Analyse Stage in a Food Service SME
Table 5 suggests that there is again a wide difference between the tools and
technologies as the matter of simplicity. The results suggest that more than
Analyse Percentage
RABIT Microbiology 6.90
Minitab 10.34
ERP System 13.79
CRM Software 17.24
Digital Camera 31.03
Tracking System 44.83
Recording Machine 48.28
Microsoft Excel 62.07
HACCP 65.52
Traceability System 72.41
CCTV 75.86
Website & E-Mail 89.66
Average 41.38
0.00 10.00 20.00 30.00 40.00 50.00 60.00 70.00 80.00
RABIT MicrobiologyMinitab
CRM SoftwareWi-Fi Technology
Digital CameraMicrosoft AccessTracking System
Sage Line 50Microsoft Excel
TachographHACCP
Temperature Probes
Percentage
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40% of the respondents have already used facilitating tools to find the root
causes of defect in a Food Service organisation. Figure 3 shows that
traceability system and HACCP are more popular within the more special
tools to find the root causes of the defect alongside the common tools. Online
Tracking system is the most common tool to find the root causes of the
delivery defects among other specific tools or technologies in Delivery and
Transport. In contrast, ERP, CRM and RABIT microbiology are the least used
tools as they are less common to be adopted in a Food Service organisation.
Digital camera could be a very helpful technology to generate the step by step
effect of the defects on food processing or food service procedures.
0.00 20.00 40.00 60.00 80.00 100.00
RABIT Microbiology
Minitab
ERP System
CRM Software
Digital Camera
Tracking System
Recording Machine
Microsoft Excel
HACCP
Traceability System
CCTV
Website & E-Mail
Percentage
Figure 3– The percentage of respondents that use the supportive tools or technologies for the Analyse Stage in a Food Service SME The results of the questionnaire suggest that many of these tools or
technologies can be adopted either on their own or part of an improvement
solution or strategy after finding the root cause of the problem. In fact, most of
these tools have the ability to minimize or eliminate the root cause of the
defect. It has been suggested that many of them, for example refrigerated
rigid vehicle or HACCP, could be indicated as the mistake proofing or
599
preventive measures in a Food Service organisation. Table 6 lists these
supportive tools and technologies for the key improvement tools of DMAIC.
Table 6 – The list of supporting Tools and Technologies for the Improvement Stage in a Food Service SME
More than 60% of the respondents have already been using the Food Safety
tools and technologies, whilst fewer respondents have been using the
facilitating tools or technologies in Transport (44%) or Customer relationship
(Less than 40%) as two other KPIs.
Food Safety improvement has been given more attention from the
management team of these businesses as the most critical issue of customer
satisfaction and variable reduction in Food Service organisation.
Figure 4 illustrates the argument that Food Safety has been a more important
KPI for the respondents and the related tools and technologies are more
Improve Percentage
Minitab 10.34
ERP System 13.79
Online Inventory Management 13.79
CRM Software 17.24
Process Automation System 17.24
Wi-Fi Technology 20.69
Heater Mat Controller 24.14
E-Invoicing 31.03
Online Ordering & Faxing 37.93
Tracking System 44.83
Satelite Navigator 44.83
RFID & Barcoding 48.28
Calibrated Temp probe 62.07
Fully Automated Chill Room 62.07
HACCP 65.52
Temperature Probe 68.97
Refrigrated Rigid Vehicle 72.41
Fully automated Freezer 75.86
Racking System 79.31
Website & E-Mail 89.66
Average 45.00
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available as the facilitators for implementing any improvement strategy to
minimize the defect. It is suggesting that most of the respondents lack a
sophisticated tool or technology in communication such as CRM, ERP in
order to improve the customer relationship.
Figure 4– The percentage of respondents that use the supportive tools or technologies for the Improve Stage in a Food Service SME
In the Control stage, the application of these tools or technologies reflects the
success of monitoring the improvement solutions. The simpler tools and
technologies are more available to help the major control tools in DMAIC.
Table 7 lists these tools and technologies as the facilitators of the control
tools.
0.00 20.00 40.00 60.00 80.00 100.00
Percentage
MinitabERP System
Online Inventory ManagementCRM Software
Process Automation SystemWi-Fi Technology
Heater Mat ControllerE-Invoicing
Online Ordering & FaxingTracking System
Satelite NavigatorRFID & Barcoding
Calibrated Temp probeFully Automated Chill Room
HACCPTemperature Probe
Refrigrated Rigid VehicleFully automated Freezer
Racking SystemWebsite & E-Mail
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Table 7 – The list of supporting Tools and Technologies for the Control Stage in a Food Service SME
The results of the questionnaire indicated that more than 70% of the
respondents have the ability to use simple tools such as CCTV, an answering
machine or step – by - step procedures such as HACCP, Traceability System
or the reading record of the freezer unit in refrigerated vehicles to ensure that
Food Safety solutions are in control. Tracking system and Tachograph are
two tools which facilitate the monitoring of delivery performance. Figure 5
shows the percentage of the respondents that use the tools that can support
the major control tools in DMAIC.
Figure 5– The percentage of respondents that use the supportive tools or technologies for the Control Stage in a Food Service SME
Control Percentage
Minitab 10.34
CRM Softwares 17.24
Digital Camera 31.03
Microsoft Access 37.93
Tracking System 44.83
Sage Line 50 62.07
Tachograph 62.07
Microfost Excel 62.07
Calibrated Temp Probe 62.07
HACCP 65.52
Traceability System 72.41
Refrigrated Rigid Vehicle 72.41
CCTV 75.86
Answering Machine 89.66
Website & E-Mail 89.66
Average 57.01
0.00 20.00 40.00 60.00 80.00 100.00
Percentage
Minitab
CRM Softwares
Digital Camera
Microsoft Access
T racking System
Sage Line 50
Tachograph
Microfost Excel
Calibrated Temp Probe
HACCP
Traceability System
Refrigrated Rigid
CCTV
Answering Machine
Website & E-Mail
602
It has clearly been illustrated through this research that Minitab, the major
software for applying the main DMAIC tools and techniques, is not a common
data analysis program within respondents. However, having adopted the
remaining tools and technologies can have dramatic change to the way that
data are analysed via Minitab or Microsoft Excel.
5. Conclusion:
Many day to day tools and technologies are available in Food Service
organisations that can be adopted in order to reduce the complexity of the
DMAIC for these environments. Arguably, the implementation of Six Sigma in
Food Service organisations has not yet been in favor due to the fear of
expenditure, lack of resources and complexity of the methodology. This
research enlarged more optimistic view of the DMAIC in the businesses with
less resources and high requirement of the Quality Improvement such as
Food Service industry. The study introduced available tools and technologies
which can be utilised to make the application of DMAIC methodology more
effective. It has been observed that more than 50% of the UK based Food
Service respondents have already been using these tools. There is the
possibility of integrating these tools and technologies with DMAIC
methodology. It has also been concluded that many of these tools or
technologies have multi - functional role in different stages of the DMAIC and
this makes them valuable and flexible enablers in Six Sigma methodology.
603
In fact, these tools and technologies may recover the lack of training
resources or encourage assigning less costly project specialists in Six Sigma
such as Green Belt for these types of businesses to achieve the major
purpose of the Six Sigma in Food Service which is reducing the Food Safety
and Food Service violation as the defect to improve the food safety and food
service quality for the customers.
It has been suggested that the role of these tools and technologies in each
stage is not from the same level, since their utilization depends on the level of
existing resources, management commitment and the level of training. It
means the result of the research indicated that more basic and legally
required tools and technologies have been the most useful supportive
elements for the key DMAIC tools, whilst the least common tools and
technologies have been the most expensive or complex elements. But
generally, they are potential available enablers for the Food Service
processes to increase the possibility of using DMAIC methodology of Six
Sigma for a Food Service organisation.
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