Impacts of and Ibrahim Alhuraish, Christian Robledo, Abdessamad Kobi

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Ibrahim Alhuraish, Christian Robledo, Abdessamad Kobi. Impacts of Lean Manufacturing and Six Sigma. 22nd ISSAT International Conference on Reliability and Quality in Design (RQD 2016), Aug 2016, Los Angeles, CA, United States. ￿hal-01547647￿

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HAL is a multi-disciplinary open access L’archive ouverte pluridisciplinaire HAL, est archive for the deposit and dissemination of sci- destinée au dépôt et à la diffusion de documents entific research documents, whether they are pub- scientifiques de niveau recherche, publiés ou non, lished or not. The documents may come from émanant des établissements d’enseignement et de teaching and research institutions in France or recherche français ou étrangers, des laboratoires abroad, or from public or private research centers. publics ou privés. Proceedings of the 22nd ISSAT International Conference on Reliability and Quality in Design August 4-6, 2016 - Los Angeles, California, U.S.A. Impacts of Lean Manufacturing and Six Sigma

Ibrahim Alhuraish, Christian Robledo, Abdessamad Kobi University of Angers, LARIS, ISTIA, France [email protected]; [email protected]; [email protected]

Keywords: Lean Manufacturing, Six Sigma, Quality Tools

Abstract -The purpose of this article is to determine the have not implemented at all with a discussion are presented in companies performance for industries applied lean section five. Finally, we conclude with the remarks and a manufacturing and six sigma. Study results indicate that summary of the findings. companies implementing lean manufacturing and six sigma 2. Literature review have wealthy performance across financial performance, operational performance and innovation performance. It The roots of lean manufacturing can be traced back to Henry discovers various tools such as , TPM, Ford invented a production system for the Highland Park , VOC, Gemba etc, associated to improve financial or manufacturing plant in 1913, which was integrated in such a operational or innovation performance. Corporations get more way to facilitate rapid manufacture of products [8]. Six sigma advantage in using quality practices to improve quality, reduce was introduced by the Motorola Corporation in the last 1980 cost, improve productivity and so on, compared to companies and is designed to eliminate variations in production and that have not implemented at all. services and their processes so that defects are reduced and customer satisfaction is improved [10; 11]. Lean and six sigma 1. Introduction have proven to be powerful and effective methodologies for In an increasingly globalized market, today companies are improving quality, reduce time, and efficiency at lowering seeking to compete through quality management for improved cost and waste for achieving customer satisfaction [1; 9; 12; efficiency in operational, innovation and financial 13; 15; 16]. There are several tools and technique under lean performance. Companies today are not satisfied to merely manufacturing and six sigma tools such as VSM, Kanban, improve operations and finances, but they also want to achieve TPM, Poka Yoke, team, 5S, VOC. VSM is an effective continuous improvement in key operational, innovation and tool to display whole process from supplier to customer financial indicators. This means continuous improvement in (actual material & information flow) to attack the seven types quality services and products, waste and cost reduction, of waste [6; 7]. TPM is necessary for maximization of the customer satisfaction and job satisfaction. Lean manufacturing lifecycle and productivity of the equipment [7]. Poka Yoke is and six sigma have been adopted by many companies with an designed to ensure that errors are not transferred from one aim of increasing efficiency and effectiveness [2; 17; 23]. phase to another; it doesn’t need or require human assistance According to Romaniello et al., (2011) where companies fail [14]. Several studies shows use of lean six sigma tools that to implement quality approach such as lean, six sigma, on help companies performance outcome. manufacturing output is poor. As a result, recent developments 3. Research methodology in terms of highly competitive global markets have put This investigation of the empirical data based on the pressure on companies to meet the demand for high quality in evaluation of implementing lean manufacturing and six sigma, terms of production and efficiency in customer services. In all of the respondents were expertise of lean manufacturing other words, companies wishing to be competitive and and six sigma. This scale was presented in ordinal scale serviceable are required to implement and enforce quality designed to measure value. Survey participants were required management as a means of satisfying customer and market to indicate whether or not they agreed with or disagreed with a demands. The main contribute of this article is shown the statement or the level of agreement or disagreement as impact of implementing lean manufacturing and six sigma follows: Strongly Disagree (1), Disagree (2), Neutral (3), implementation on financial performance, operational Agree (4), Strongly Agree (5). A score of (5) represented a performance and innovation performance. Afterward, the higher value of agreement and (1) represented the minimum study seeks to find out the relative tools that are correlated to value of disagreement. The participated evaluated the benefit support these criteria. In order to determine which tools that in ordinal scale from 1 to 5. 33 companies practiced lean play significant to enhance companies performance. This manufacturing and six sigma that completed the survey. The article is presented as follows; section one contains the type of the respondents were from various type of industries introduction. Literature review for lean and six sigma are that including ten companies from electronics industries, presented in section two. The research methodology is seven companies from automotive industries, four companies presented in section three. Section four shows the impacts of from health industries, two companies from transportation lean manufacturing and six sigma. Comparable between industries, six companies from service and four companies companies using lean six sigma tools and other companies were from other industries such as energy industry, Gas

industry, food and aerospace industries. Twenty five performance and innovation performance rise, there is a companies were more than fifteen years old and eight corresponding to increase financial performance. In order to companies were less than five years old. The survey was assess performance outcomes for (33) all French companies designed to evaluate the influence of implementing lean that implementing and practice lean manufacturing and six manufacturing and six sigma methodologies. We propose sigma on financial performance contain reduce cost and model contain three criteria. It has built by expertise that are increase profit. Where operational performance contains doing research in quality engineering systems. It groups the improve quality, reduce variation, improve productivity, twelve items in three criteria: financial performance, reduce times, increases customer satisfied, decrease inventory operational performance, and innovation performance. We and improve safety environment. Lastly, Innovation conducted testing the normality in order to determine of using performance contains involvement and suggestion from the the correct statistical tests: Parametric test or Non Parametric employees, and reduce turnover rate. All of these three main test [22]. However, the result indicated that all variable values variables are investigated. Therefore, the binomial test was were significantly different than a normality distribution at the conducted for detecting whether or not there were significant significant level 0.05. Therefore, non-parametric tests were influences of lean manufacturing and six sigma used such as Spearman correlation coefficients, Binomial test, implementation on firms performance. This paper seeks to Mann-Whitney test. assess the impact of lean manufacturing and six sigma implementation on company performance. We would like to 4. Lean manufacturing and six sigma results know the proportion of agree and disagree in this sample is Lean manufacturing and six sigma are among the most different significantly from 60%. Consequently, we would like popularly used methodologies for facilitating a firm on to test whether the proportion of agree is different from 60%, continuous improvement initiative. It seems that majority of and our hypothesis are: these companies get sufficient effectiveness of implementing lean manufacturing and six sigma as shown in Table 1.  H0: Lean manufacturing and six sigma implementation have Binomial and spearman rho correlation were used to find out not a positive impact on company performance H0: P≤ 0.60 intensely the impacts of lean manufacturing and six sigma  Ha: Lean manufacturing and six sigma implementation have implementation on companies performance. a positive impact on company performance Ha: P> 0.60 Table 1. Performance measure Therefore, if the proportions of agreement in this sample are Main Std. significantly equal or less than hypothesis value (60%), it will Mean Performance measure Mean performance Deviation accept the null hypothesis (P-value > 0.05), if the proportions Financial Increases profit 3.88 .893 3.98 of agreement are significantly greater than hypothesis value Performance: Reduces cost 4.09 .980 (60%), it will reject the null hypothesis (P-value < 0.05). Reduces Lead-time 4.18 .983 Consequently, we expected the following hypothesis from Improves 4.21 .992 lean manufacturing and six sigma implementation. Operational 3.95 productivity Performance: Reduces variation 4.00 .901  Ha: Lean manufacturing and six sigma implementation have Customer satisfaction 3.91 1.011 a positive impact on increase profit (H : P ). Decreases Inventory 3.91 1.011 a > 0.60 Improve quality 4.27 .674  Ha: Lean manufacturing and six sigma implementation have Safety environment 3.21 1.083 a positive impact on reduce cost (Ha: P > 0.60). Increases suggestions 3.67 .990  Ha.: Lean manufacturing and six sigma implementation from the employees Innovation have a positive impact on improve quality ( H : P > 0.60). 3.41 Involves employees 3.76 1.001 a performance Reduce turnover rate 2.82 0.808  Ha: Lean manufacturing and six sigma implementation have a positive impact on reduces variation (Ha: P > 0.60).  Ha: Lean manufacturing and six sigma implementation have A statistical analysis was performed in order to determine how a positive impact on improve productivity (H : P > 0.60). the implementation of lean manufacturing and six sigma a  H : Lean manufacturing and six sigma implementation have impacted performance outcomes. The statistical analysis was a a positive impact on reduce time (H : P > 0.60). conducted using the binomial test because of the abnormality a  H : Lean manufacturing and six sigma implementation have of variables. Before to determine how the implementation of a a positive impact on increase customer satisfaction (H : P > lean manufacturing and six sigma impacted performance a outcomes, we performed the spearman correlation between the 0.60). main variables such as financial and operational and  Ha: Lean manufacturing and six sigma implementation have innovation performance. There was a significant association or positive impact on decreases inventory (Ha: P > 0.60). relationship between financial performance with operational  Ha: Lean manufacturing and six sigma implementation have performance (r = 0.599, P-value <0.01), and with innovation a positive impact on improve safety environment (Ha: P > performance (r = 0.651, P-value <0.01). Increaser financial 0.60). performance reported higher-level on operational performance  Ha: Lean manufacturing and six sigma implementation have and innovation performance. Also, the Spearman’s rho data a positive impact on increases suggestions from the analysis revealed positive and significant correlation between employees (Ha: P > 0.60). operational and innovation performance (r = 0.616, P-value <  Ha: Lean manufacturing and six sigma implementation have 0.01). However, it can be determined that as operational a positive impact on involves employees (Ha: P > 0.60).

 Ha: Lean manufacturing and six sigma implementation have Table 3. The effect of Lean manufacturing and six sigma Operational Sig. a positive impact on involves employees ( Ha: P > 0.60) Observed Test performance Category N (2- Prop. Prop.  H0: Lean manufacturing and six sigma implementation have tailed) not positive impact on reduce turnover rate (H0: P ≤ 0.60). Improve quality Group 1 <= 3 2 .06 .60 .000 4.1 Evaluation of lean manufacturing and six sigma Group 2 > 3 31 .94 implementation on the basis of financial performance Improve

It identified the influences of implementing lean productivity manufacturing and six sigma in terms of increase profit and Group 1 <= 3 6 .18 .60 .000 Group 2 > 3 27 .82 reduce cost as shown in Table 2. P value was less than the Reduce variation alpha value of 0.05 (P=0.014), the null hypothesis is rejected. Group 1 <= 3 9 .27 .60 .014 It observed proportion (0.73) of agree and strongly agree are Group 2 > 3 24 .73 significantly greater than test proportion (0.60). Therefore, the Reduce time alternative hypothesis is accepted. Group 1 <= 3 4 .12 .60 .000 Group 2 > 3 29 .88 Table 2. The effect of lean manufacturing and six sigma Increase Customer

Sig. Financial Observed Test satisfaction Category N (2- performance Prop. Prop. Group 1 <= 3 9 .27 .60 .014 tailed) Group 2 > 3 24 .73 Increase profit Decreases

Group 1 <= 3 9 .27 .60 .014 Inventory Group 2 > 3 24 .73 Group 1 <= 3 6 .18 .60 .000 Reduces cost Group 2 > 3 27 .82 Group 1 <= 3 6 .18 .60 .000 Creates safety

Group 2 > 3 27 .82 environment Group 1 <= 3 19 .58 .60 .487 Group 2 > 3 14 .42 The results suggest that positive agreements are more common than disagreement on increase profit. Additionally, the result of binomial test for reduce cost is considered to be significant 4.3 Evaluation of lean manufacturing and six sigma (P-value < 0.05). It has observed proportion (0.82) agree and implementation on innovation performance strongly agree are significantly greater than test proportion Lean manufacturing and six sigma implementation have a (0.60). Therefore, lean manufacturing and six sigma have positive impact on increase suggestion and involve employees. shown a positive influence on financial performance. The results reveal that at least 60% of company implementing lean manufacturing and six sigma methodologies support 4.2 Evaluation of lean manufacturing and six sigma involvement and suggestion of employees since the value over implementation on the basis operational performance 3 is consistent with an agreement of involve and suggest The effectiveness of lean manufacturing and six sigma with employees. respect operational performance is now discussed. The Table 4. The effect of lean manufacturing and six sigma binomial test results reveal that at least 60% of company that Sig. Innovation Observed Test implementing lean manufacturing and six sigma Category N (2- performance Prop. Prop. methodologies realize improvement in quality since the value tailed) over 3 is consistent with an agreement of improvement Involve employees quality. It observed proportion (0.94) agree and strongly agree Group 1 <= 3 8 .24 .60 .005 are significantly greater than test proportion (0.60). It can be Group 2 > 3 25 .76 oblique that the alternative hypothesis is accepted. The result Increases suggestions from of binomial test for the rest variables such as improve the employees productivity, reduce variation, reduce time, increase customer Group 1 <= 3 10 .30 .60 .035 satisfaction, decrease inventory are shown in Table 3. It shows Group 2 > 3 23 .70 Reduce turnover that lean manufacturing and six sigma implementation have a rate positive impact under operational performance. While, H9 Group 1 <= 3 19 .58 .60 .487 only was rejected. It observed proportion (0.42) of agree and Group 2 > 3 14 .42 strongly disagree are significantly lesser than test proportion (0.60). Consequently lean manufacturing and six sigma implementation have not a positive impacts on creates safety Therefore, it can suppose that the employees are satisfied environment in the enterprises with this study. regarding lean manufacturing and six sigma implementation. Finding lean six sigma implementation enhance job satisfaction [18]. Additionally, the result for reduce turnover rate is not statistically significant (P-value > 0.05). This finding supports that lean manufacturing and six sigma implementation the acceptation of the null hypothesis. Consequently, lean manufacturing and six sigma

implementation have no negative impacts on reduce turnover increased profits through 5S, , Poka Yoke, regression rate. Table 4 shows the results of binomial test for innovation analysis. Companies that fail to utilize poka-yoke tools have performance. An overall, lean manufacturing and six sigma lagged behind companies that do in terms of cost reduction significantly improve innovation performance. and profit maximization. Poka yoke is effective for achieving no defect in production process [4]. Moreover, the result of 5. Implemented and not implemented lean manufacturing comparison show significant different between two companies and six sigma practices across companies performance on reduce cost by Takt time, Poka Yoke, Gemba, VSM, This paper also discusses most of the popular tools and Kanban, Voice of Customer (VOC). These practices correlated techniques applied in lean six sigma (quality tools) and highly reinforced with financial performance, compared to methodologies such as Kaizen, Kanban, 5S etc. the companies that did not utilize these practices. Table 5. Status of Lean manufacturing and six sigma practices 5.2 Operational performance Not Not Used Used Tools used Tools used The result shows that the several tools support to increase % % % % operational performance as well such as 5S, GEMBA, Brainstorming 100 0 Poka-yoke 81.8 18.2 Kanban, 5S etc. The results of comparison show significant Standardized 97 3 VSM 81.8 18.2 different (P-value <0.05) on improved quality by takt time and Work Gemba. These improvements tools were observed in reduced Visual Control 97 3 Gemba 78.8 21.2 PDCA 97 3 Kanban 78.8 21.2 waste, improve productivity and reduce variation. It can Cause and effect therefore be inferred from these findings that companies that 97 3 SMED 72.7 27.3 diagram implement Takt time and Gemba realize more improvements 5S 93.9 6.1 Control chart 72.7 27.3 in operational performance. Practicing common lean Pareto chart 93.9 6.1 Takt time 69.7 30.3 manufacturing tools such as Gemba aids in identifying and Design of Flow chart 93.9 6.1 63.6 36.4 understanding the problem. It is valuable to perform Gemba Experiment practice to identify source of waste [6]. It found that Check sheet 90.9 9.1 DPMO 60.6 39.4 companies executing 5S have achieved greater impact on Once piece TPM 84.8 15.2 57.6 42.4 Flow reduce variation. Where companies implementing Kanban VOC 84.8 15.2 DMAIC 57.6 42.4 practices show significant helpful on improve productivity and Cellular reducing time, compared to other companies have not FMEA 84.8 15.2 48.5 51.5 layout implemented (P-value <0.05). Moreover, the results of the Regression Kaizen team 81.8 18.2 39.4 60.6 comparison show significant difference on increasing analysis customer satisfaction by several tools. These tools are 5S, Takt time, One Piece Flow, Kanban, Check Sheet, flow chart. It has observed in the sample that not all the organizations Studies in the literature support these findings [24], findings in have implemented quality practices as shown in Table 5. the literature reveal that through the implementation of Takt Therefore, this study seeks to provide an in depth evaluation time, and responding to actual market demand companies not for identifying the impact to which each of these tools can be only save time, but also increase customer satisfaction. Studies implemented and practiced that support company have shown that customers are generally unsatisfied where performance. The statistical significance of implementing and One Piece Flow processes are not achieved [20]. Therefore practicing these tools will be demonstrated through the use of companies wishing to compete in consumer markets are well Mann Whitney test in regards to companies that have instructed to implement one piece flow effectively. The results implemented lean manufacturing and six sigma and companies of the comparison show significant for decreased inventory by that have not used these tools at all. Results show that TPM, Kanban and Flow chart. Additionally, the study results companies using lean manufacturing and six sigma effectively show that practicing TPM aids in the decrease of inventory have seen an improvement on performance outcomes in terms compared to companies that do not use it. This is consistent of financial, operational and innovation performance with findings by Venkatesh (2007) who found that the compared to companies that have not implemented lean implementation of TPM leads to lower inventory while failure manufacturing or six sigma at all. to implement TPM results in growth waste and cost such as machine malfunctions, loss in processes and an increase in 5.1 Financial performance customer dissatisfaction. Finally, the results of the comparison It is noted that companies implementing lean manufacturing show significant on the creation of a safe environment through and six-sigma practices have achieved higher impact on Kanban, check sheet, DOE, Control chart, Flow chart. These increase profit and reduce cost as compared to other practices are therefore linked to support the creation of a safe companies have not implemented. These practices are 5S, environment. However, it has demonstrated with this study Poke Yoke, Kanban, VSM, Kaizen team, etc, were perceived numerous tools enhance operational performance. the highest on financial performance. In order to identify whether or not significant differences exist between 5.3 Innovation performance companies that implemented lean and six sigma practices, and Companies implementing lean six-sigma practices are companies that had not implemented, Mann Whitney U test supportive on increasing innovation performance. The results was conducted. The results of the comparison show significant of the comparison show significant differences between two differences between two companies at 5% significant level on companies at 5% significant level on increase suggestion from

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