Lean and Six Sigma approach for Manufacturing

Manufacturing companies should have effective operations and continuously improve their services, markets, etc. Companies need to learn not just to do things better, but a way of doing better things. When companies are not doing well financially the only way forward is a thorough restructuring of the business.

They should focus not just on cost reduction but the growth of the company. Companies may have to compete, respond well, react faster, and so forth. Essentially companies will have to learn to do more with less using techniques like Six Sigma and Lean manufacturing. In India, till recently, Six Sigma has been confined to be the domain of only the large OEM companies.

In recent times a small section of the small and medium-sized enterprises are opening up to new challenges and have started thinking of adopting the Six Sigma and lean approach for improving their effectiveness. The major problem is that most of the small and medium scale industries are driven by the customers for any improvement in operations and quality systems instead of taking initiative on their own.

Many feel that Six Sigma, Lean, etc. will only add to their cost without much return on the investments. Industries across the world offer a wider variety of products and replace them more frequently. So, the Indian component suppliers, to be effective, not only have to use advanced engineering but also respond well to the market-driven issues. Practitioners across the world have realized that the two methodologies, Lean and Six Sigma, complement each other and when used together yield greater success.

Lean Six Sigma, an integrated system for managing projects, is the latest generation of improvement approaches. But, for the Indian SME sector where both Six Sigma and Lean are yet to be adopted in a bigger scale the introduction of the integrated approach directly may not be a recommended option.

Once the companies master the lean design it is important for them to adopt advanced technologies for the day-to-day workings of the company and also to meet the changing demands of the market. Our SMEs should aim to reach the level of the best lean production companies who deliver components directly to the assembly line, often hourly, certainly several times a day, with no inspection at all of the incoming parts. This procedure is the famous just-in-time system, the invention of Taiichi Ohno.

If a defective part is found, both the supplier and the customer(Manufacturer) need to trace every defective part to its ultimate cause and to ensure that a solution is devised that prevents this error from ever happening again. So, the cooperation and continuous support of the customer is the vital requirement of the entire component manufacturing SMEs.

Some of the companies in India are focusing on improving process efficiency and speed using Lean tools such as 5S, value stream mapping, cycle time analysis, pull system (Kanban), etc. But, the Six Sigma implementation efforts by the companies are not up to the same level. Six Sigma as a business system with many statistical aspects should naturally fit the business systems of most of the companies for solving process problems, improving performance, reducing defects, improving sigma levels, etc.

However, in a study, it was found that implementation of Six Sigma by taking up a number of small projects using the entire Six Sigma DMAIC toolkit is not being done by many of the big manufacturing companies themselves. So, it may be too much to ask for SMEs to estimate the cost of poor quality (COPQ) and go for full implementation of Six Sigma using the five-step DMAIC (Define, Measure, Analyze, Improve, and Control) methodology.

Having said that we also should make it clear that many of the Six Sigma tools like Pareto diagrams, flowchart/process map, Failure Mode and Effects Analysis (FMEA), design of experiments (DOE), measurement system analysis, estimation of process capability (Cp and Cpk) are being used by many industries for different purposes. Probably what is lacking with most of the companies in the understanding of Six Sigma in the real sense. If the companies realize that Six Sigma is an operational system that speeds up improvement by getting the right projects conducted in the right way with the benefits like increased profit and reduced cost, automatically they would be interested in it.

But, there are many hindrances for this to happen. One of the major hindrances of Six Sigma implementation is the need of skilled manpower and their training. SMEs cannot afford to have the Six Sigma project team consisting of Champion, Master Black Belts, Black Belts, etc.

Conclusion:

Small and medium enterprises, especially component manufacturing industries, need to supply a large variety and varying quantities of parts in line with the changing demands of their OEM customers. It is something traditional mass production systems find hard to counter. Six Sigma and Lean offer solutions to these problems raising the acceptable quality to a level that mass production cannot easily match. Lean production also significantly lowers the amount of high-skill effort needed to produce a product of a given specification. It reduces the cost of production through continuous incremental improvement. Thus it offsets the low-cost advantage of the mass production system. Six Sigma fully utilizes advanced technology and automation in ways mass production cannot. It can be stated that lean and Six Sigma approach are not only very much relevant for auto component manufacturing industries it is the need of the hour. At an advanced stage, the Lean Six Sigma strategy can be adopted by the companies to achieve value leadership along with cost-cutting and high yield. A study has been undertaken to understand the present level of application of Six Sigma by small and medium component manufacturing industries in India, the common hindrances faced by them, the critical success factors for implementation, etc. The purpose of the study is to bring out a model for implementation of Six Sigma by SMEs in a simple way along with lean manufacturing techniques which will ultimately lead to Lean Six Sigma Companies.