A Review of Six Sigma Implementation at Exporting Industries

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International Journal of Emerging Technology and Advanced Engineering

Website: www.ijetae.com (ISSN 2250-2459, ISO 9001:2008 Certified Journal, Volume 4, Issue 3, March 2014)

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A Review of Six Sigma Implementation at Exporting Industries

Nayan J. Prajapati

1

, Darshak A. Desai

2

1_{M.E. Scholar, G.H.Patel College of Engineering & Technology, Vallabh Vidyanagar, Anand, Gujarat} 2_{Proffesor & Head, Mechanical Engineering Department, G.H.Patel College of Engineering & Technology, Vallabh}

Vidyanagar, Anand

Abstract— The world has become a global village in the 21st century. Many industries have started providing products and services across the globe. These industries are called exporting industries. Such exporting industries have high impact on the economy of the company as well as help in speeding up the industrialization process of a country. Considering the global scenario, the increase in competition demands the products and service to be of the best quality. The need of the hour is to have a business strategy. Six Sigma have been implemented in many industries around the globe and has been proved as a business strategy that can provide breakthrough improvement to business. This review paper is an effort to capture an overview of the impact and practices that six sigma implementation has at exporting industries. It also discusses the methodology generally adopted, tools and techniques used, benefits obtained and critical factors for successful implementation of this business strategy.

Keywords—Six Sigma, Exporting Industries, DMAIC, Critical Success Factor, Business Strategy

I. INTRODUCTION

A. Six Sigma: Definition

Over the last three decades, Six Sigma has been implemented by various sectors including the service sectors. Authors have different viewpoints regarding Six Sigma. There are four streams of thought of Six Sigma as 1) Statistical tool 2) Operational philosophy of management 3) Business culture 4) Analysis methodology [1]. But the fact is that from its inception as statistical tool, Six Sigma has today developed into a business strategy providing breakthrough improvements and benefits. Yet various authors explain Six Sigma from their perspective and experience. Few of which are presented here.

Six Sigma is a business system with many statistical aspects, and it naturally fits business systems of most companies, it is an improvement drive which has the ability to introduce a common metric of customer-perceived quality which should be applicable to any size and type of organization [17]. Six Sigma is a business strategy that focuses on improving customer requirements understanding, business systems, productivity, and financial performance [5].

Six Sigma besides being a measure of performance and process variability’ is also a management philosophy and strategy that allows organizations to achieve lower cost, as well as a problem solving and improvement methodology that can be applied to every type of process to eliminate the root cause of defects [18]. Six Sigma is a data driven, structured, CI programme that works at a company’s foundation to help it reach operational excellence. Operational excellence is the goal – Six Sigma is a means to that goal [24]. Six Sigma is an integration of statistical thinking and statistical engineering into an existing engineering control application [20]. Six Sigma is one such technique available to bring the breakthrough improvements almost in every sector through overall operational excellence [21]. Six Sigma is recognized as a problem-solving method that uses quality and statistical tools for basic process improvements and as a highly performing strategy for driving defects out of a company’s quality system [22]. Six Sigma is a formalized change programme or quality initiative that can have a significant impact on bottom-line and working culture of an organization [19]. Although these explanations looks different but in actually they are overlapping seeking overall business excellence in the competitive environment. As of today Six Sigma is considered as a business improvement strategy for gaining a breakthrough improvement a necessity to have a stand in the 21st century competitive environment.

B. Six Sigma: Historical Background

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Over time Six Sigma has undergone many changes and from implementation in only manufacturing industries today the advantage of Six Sigma is being taken by service industries as well. Successful implementation and growing organizational interest to six sigma method have been exploding in the last few years. It is rapidly becoming a major driving force for many technologies driven, project driven organizations [5]. Six Sigma is one of the last addition in the field of quality improvement methods and (or) business process improvements methods. Its structured framework for controlling processes and measuring results with a financial aspect and with the use of quantitative techniques and tools has drawn attention from academics and practitioners [2].

C. Exporting Units: An Overview

After the World War 2 there was a great economic depression in the under developed as well as the developed countries, so these countries started to have a hard time economically. During such war time many foreign markets were closed due to danger of trading and shipping. Many countries looked for another solution to development. The initial solution called import substitution industrialization came into existence followed by Latin American and some Asian countries. However during 1950s and 1960s the Asian countries like Taiwan and South Korea started focusing their development outward, resulting in exporting strategy which gave birth to exporting industries. Eyeing the success of the Asian countries, especially Taiwan and South Korea, countries across the globe started considering these exporting industries the best strategy to promote development. Export led growth is important for mainly two reasons. The first is that export led growth can create profit, allowing a country to balance their economy, as well as surpass their debts as long as the facilities and materials for the export exists. The second, reason is that increased export growth can trigger greater productivity because competition is global, thus creating much better quality product leading to development of the country. This led to a creation of global market in the 21st century wherein industries needed to have a business strategy to survive in such cut throat competition. Six Sigma has proved to be such a business strategy and has provided considerable benefits to the industries implementing it.

Six Sigma is on focus of almost every industrial sector, The objective of this paper is to provide an overview of Six Sigma and bring out the general method followed, tools/techniques used, benefits reaped and Critical success factor from the various exporting units selected for study that have already implemented Six Sigma projects at their organizations.

For this exporting units from various parts of the globe where Six Sigma was successfully implemented are studied and the review has been presented here.

II. RESEARCH METHODOLOGY

The aim of this study is to bring out the benefits and to notify points that an exporting units must keep in mind. It is an attempt to trace the current trends on Six Sigma in exporting units which faces a global competition. The research strategy was made by identifying the relevant data source, keyword and selecting research paper in which successful implementation of Six Sigma in an exporting unit was presented and documented. The initial part gives an overview of Six Sigma by various authors. In the next part few cases of industries (available from established publications) where Six Sigma projects were successfully implemented are presented. To provide a global vision of the subject the considered cases are taken up from various parts of globe. Most of the cases are taken from Asian continent, as most manufacturing export takes place from this part of the globe. The considered cases are taken up from established journals and publications. However due to limited established research literature and the details of the exporting units are not generally disclosed easily by the author so only 8 genuine cases were considered.

The study of all the cases is then compared and is presented in the following sequence 1) General overview of publication and the case industry. 2) General methodology of Six Sigma implementation and the methodology adopted by the cases industries 3) Tools and Techniques used in various phase by them 4) Benefits reaped by each of them 5) Critical factors for successful implantation of Six Sigma improvement strategy.

III. GENERAL OVERVIEW OF CASE INDUSTRIES

The table I below gives the publication name (i.e. research paper title), the product of the case industry and country it belongs. The referred name on the left most column indicates the name by which the publication has been referred in the rest of the review paper. The table also give information about the journal, authors’ name and year of publication of the selected cases. The publish cases considered from a set time frame (i.e. 21st century).

IV. METHODOLOGY ADOPTED BY CASE INDUSTRIES

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These two methods/approaches are general approach but the author [1] has listed many methods which are a modified version of the above mentioned method. P-DMAIC (Project DMAIC), E-DMAIC (Enterprise DMAIC) and DMAICR (DMAIC report) are some DMAIC modified versions whereas DMADV (Define Measure Analyze Design Verify), DCOV (Define Characterize

Optimize Verify) are some of DFSS modified versions. DMAIC is generally used for process improvements and DFSS for new development of product and service [1].

The case industries here have used DMAIC as the general methodology for implementing Six Sigma business strategy. Table II shows the method adopted and for what process.

TABLEI

AN OVERVIEW OF CASE INDUSTRIES

Referred

name Title Journal, Year Author/ Authors

Products (Country)

A

Reducing electronic component losses in lean electronics assembly with six sigma

approach

International Journal of Lean Six Sigma, 2012

Tan Ping Yi, Chin Jeng Feng, Joshna Prakash,

Coh wei Ping

Automotive electronic components

(Malaysia)

B

Improving customer delivery commitments the six sigma way: Case study of an Indian

small scale industry

International Journal of Six Sigma and

Competitive Advantage, 2006

Darshak A. Desai

Sanitary Stainless steel vessels

(India)

C

A six sigma and DMAIC application for the reduction of defects in a rubber gloves

manufacturing process

International Journal of Lean Six Sigma, 2014

Polytip Jirasukprasert, Jose Arturo Garza-Reyes,Vikas kumar,

Ming K.Lim

Rubber gloves (Thailand)

D

Process improvement through Six Sigma with β-correction: a case study of

manufacturing company

International Journal of Advance Manufacturing

Technology, 2013

E.V.Gijo, Johu Scaria

Automotive parts and sub assemblies

(India)

E

Statistical process control for monitoring non-linear profiles: A six sigma project on

curing process

Quality Engineering, 2012

Shung I. Chang, Tzong Ru Tsai, Dennis K. J. Lin, Shih Hsuing Chou,

Yu-Siang Lin

High Pressure hoses (U.S.A)

F

Increasing bottom-line through Six Sigma quality improvement drive: Case of small

scale foundry industry

Udyog Pragati, 2012 Darshak A. Desai

Alloy Steel Castings (India)

G Improvement process for rolling mill through the DMAIC six sigma approach.

International Journal for quality research,

2012

Kunal Ganguly Flat rolled products (India)

H Reduction of scrap in an electronic assembly line using DMAIC approach

SASTECH, 2012

Afzal Matathil, Ganapatri K N, Kalathil

Ramachandran

Electronic Manufacturing Service provider

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TABLEII

METHODOLOGY AND PROCESS UNDER IMPLEMENTATION

V. THE TOOLS AND TECHNIQUES USED BY THE CASE

INDUSTRIES

There are many tools and techniques for Six Sigma implementation used in various phases of DMAIC methodology. Here the tools and techniques listed in ISO 13063-1 standard mentioned by author [2] and some other useful tools and Techniques are adopted. The use of all this tools and techniques by the case industries in various phases are presented in table III. This is to study which are the most commonly used and prominent tools and techniques among the exporting industries.

From the table III we can list down the general tools and techniques used in different phase.

Define Phase (D): Brainstorming, Pareto diagram, Pie, bar chart, SIPOC diagram and Critical to Quality matrix.

Measure Phase (M): Pareto diagram, Control charts, Gauge R & R, Process map and Statistical process control.

Analyze Phase (A): Pareto diagram, Histogram, Hypothesis testing, Analysis of variance, Regression, correlation analysis, Brainstorming, Cause & Effect diagram, Process map, FMEA, Root cause and why-why analysis.

Improve Phase (I): Pie, bar chart, analysis of variance, Design of experiments and brainstorming.

Control Phase (C): Control charts, analysis of variance, Flow Chart and descriptive statistics.

VI. BENEFITS REAPED BY THE CASE INDUSTRIES

For the past 3 decades Six Sigma has been implemented by many industries and most of them have reaped fruitful benefits. The benefits achieved mark a difference in their earlier and current status. These benefits do make a difference in their bottom-line. The benefits achieved in the case industries have been presented in the table IV.

VII. CRITICAL SUCCESS FACTORS

Management involvement and organizational commitment, project selection, management and control skills, encouraging and accepting cultural change, continuous education and training [5]. Committed leadership of Top management and fully fledged training are crucial to success of Six Sigma implementation [1]. Clear and successful communication was also identified as important to successful implementation [4]. The most critical factor for implementation of Six Sigma is: management commitment, training, cultural change, importance to financial benefits, statistical tools and techniques and data analysis, linking it to business strategy [2]. These factors are necessary for the successful implementation of Six Sigma. The critical success factors in each of the case industries are studied and noted. A list of critical factors available from various literature review done were listed and then were compared with the case industries in order to conclude the most prominent factors among exporting units. Focusing on such factor will make the implementation of Six Sigma a better success. Table V gives us a output that among the 9 factors considered all the factors are equally important for successful implementation of Six Sigma. The top two factors top management commitment, linking the Six Sigma project with business objectives and training on Six Sigma are the critical factors.

Name Method adopted Process

A DMAIC Reducing electronic component losses in lean electronics assembly B DMAIC Increasing the success rate of meeting customer delivery commitments

C DMAIC Reduction of defects in a rubber gloves

D DMAIC To improve the first pass yield

E DMAIC Curing process of Rubber hoses

F DMAIC Reducing the rejection rate in a foundry

G DMAIC Improving process for rolling mill

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TABLEIII

TOOLS AND TECHNIQUES USED BY THE CASE INDUSTRIES

Tools and techniques A B C D E F G H

Pareto Diagram A A M A D

Histogram A

Run charts

Pie, bar charts D I D

Scatter diagram

Hypothesis testing A

Analysis of variance I A,C A

Regression analysis A A

Correlation analysis A

Design of Experiments I A I

Non-parametric tests

Brainstorming I A A,I D,I A,I A,I

Tree diagram

Cause & Effect diagram A A A A A M A

Control chart C C C M C C

Flow chart A C

Gantt chart Check sheet

Process map M A A

Process capability analysis

SIPOC diagram D D D D

SWOT analysis

Voice of customer D

Affinity diagram

Critical to Quality matrix D D D D D M

KANO model QFD Benchmarking

Statistical Process Control C M

FMEA M A

Poka yoke Prioritization matrix

Descriptive statistics C

Relation diagram Process decision Program Chart

Arrow Diagram Matrix Diagram Matrix data analysis

Root Cause analysis A A A

Why-why analysis A A A

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TABLEIV

BENEFITS REAPED BY THE CASE INDUSTRIES

Name Benefits

A Average weekly saving of $1280

B 25% increase in the turnover

C $16,000 saving per annum

D $87,000 added to profit per annum

E Significant energy savings

F Cooler plate: 44% saving annually, Hammer: 45% saving annually, Nose ring segment: 22.5% saving annually G Cycle time reduced from 47 days to 20 days, Slippage problem eliminated, Learning of the new market requirement

H Rs. 23,27,000 saving per annum

TABLEV

CRITICAL SUCCESS FACTOR FOR SIX SIGMA IMPLEMENTATION AT CASE INDUSTRIES

VIII. CONCLUSION

From the study done on the exporting industries in 21st century we conclude that Six Sigma is indeed a business strategy that can provide a breakthrough improvement in the competitive era. The key strategy for successful implementation of Six Sigma is that the industry applying it should follow a correct methodology and make correct use of tools and techniques. Moreover the critical factors like Top management commitment, linking the Six Sigma project with business objectives and Training on Six Sigma can make the implementation smooth and fruitful. Thus a proper execution of this business strategy can lead to great benefits. This study will help exporting unit motivate and apply Six Sigma at their organization and reap high benefits. The current status suggests there is future scope of getting better and become a world-class level organization by reaching Sigma level above 5.

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Critical Success Factors A B C D E F G H

Top Management commitment √ √ √ √ √ √ √ √

Training and Education √ √ √ √ √ √ √

Project selection √ √ √ √

Proper team formation √ √ √ √ √ √

Customer satisfaction and requirement √ √ √ √

Employee satisfaction √ √ √

Linking Six Sigma with Business Objectives √ √ √ √ √ √ √

Time based approach √ √

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[12] Darshak A. Desai, Jiju Antony, M.B. Patel. 2012 ―An assessment of the critical success factors for Six Sigma implementation in Indian industries‖, International Journal of Productivity and Performance Management, Vol. 61, No. 4, pages 426-444.

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