Lean Six Sigma for Small and Medium Sized Enterprises

238 Pages·2016·4.54 MB·English

by  Antony

INDUSTRIAL & MANUFACTURING ENGINEERING / QUALITY CONTROL & RELIABILITY LEAN SIX SIGMA
A
for
n
LEAN SIX SIGMA SMALL t
for and o
n
y
SMALL MEDIUM

MEDIUM SIZED ENTERPRISES • and
V
i
n
o
d
SIZED ENTERPRISES
h
“... it constitutes a valuable addition to the Lean Six Sigma literature that is often focused •

G
on the needs of large multinational corporations. ... Lean Six Sigma is not only for large i
j
o
corporations and this book proves it ... an excellent reference text for running continuous
A Practical Guide
improvements in small and medium organizations.”
—Alessandro Laureani, Master Black Belt, Google, Republic of Ireland
Lean Six Sigma for Small and Medium Sized Enterprises: A Practical Guide provides a
ML
roadmap for the successful implementation and deployment of Lean Six Sigma (LSS) in small and
E
medium-sized enterprises (SMEs). It includes six real-world case studies that demonstrate how EA
D
N
LSS tools have been successfully integrated into LSS methodology. Simplifying the terminology IU S
and methodology of LSS, this book makes the implementation process accessible. MI
X
• Supplies a general introduction to continuous improvement initiatives in SMEs
SS
• Identifies the key phases in the introduction and development of LSS initiatives within an SME II
ZG
• Details the most powerful LSS tools and techniques that can be used in an SME environment EM
D
• Provides tips on how to make the project selection process more successful A
E f
This book covers the fundamental challenges and common pitfalls that can be avoided with No
r
T
successful introduction and deployment of LSS in the context of SMEs. Systematically guiding ES
RM
you through the application of the Six Sigma methodology for problem solving, the book devotes
PA
separate chapters to the most appropriate tools and techniques that can be useful in each stage
RL
of the methodology. IL
S

Ea
n
Keeping the required math and statistics to a minimum, this practical guide will help you to Sd

deploy LSS as your prime methodology for achieving and sustaining world-class efficiency and
effectiveness of critical business processes.
Jiju Antony • S. Vinodh • E. V. Gijo
K24217
6000 Broken Sound Parkway, NW
Suite 300, Boca Raton, FL 33487 ISBN: 978-1-4822-6008-3
90000
711 Third Avenue
New York, NY 10017
2 Park Square, Milton Park
Abingdon, Oxon OX14 4RN, UK 9 781482 260083
www.crcpress.com
LEAN SIX SIGMA
for
SMALL MEDIUM
and
SIZED ENTERPRISES
A Practical Guide

LEAN SIX SIGMA
for
SMALL MEDIUM
and
SIZED ENTERPRISES
A Practical Guide
Jiju Antony • S. Vinodh • E. V. Gijo
Boca Raton London New York
CRC Press is an imprint of the
Taylor & Francis Group, an informa business
CRC Press
Taylor & Francis Group
6000 Broken Sound Parkway NW, Suite 300
Boca Raton, FL 33487-2742
© 2016 by Taylor & Francis Group, LLC
CRC Press is an imprint of Taylor & Francis Group, an Informa business
No claim to original U.S. Government works
Version Date: 20151124
International Standard Book Number-13: 978-1-4822-6009-0 (eBook - PDF)
This book contains information obtained from authentic and highly regarded sources. Reasonable efforts
have been made to publish reliable data and information, but the author and publisher cannot assume
responsibility for the validity of all materials or the consequences of their use. The authors and publishers
have attempted to trace the copyright holders of all material reproduced in this publication and apologize to
copyright holders if permission to publish in this form has not been obtained. If any copyright material has
not been acknowledged please write and let us know so we may rectify in any future reprint.
Except as permitted under U.S. Copyright Law, no part of this book may be reprinted, reproduced, transmit-
ted, or utilized in any form by any electronic, mechanical, or other means, now known or hereafter invented,
including photocopying, microfilming, and recording, or in any information storage or retrieval system,
without written permission from the publishers.
For permission to photocopy or use material electronically from this work, please access www.copyright.
com (http://www.copyright.com/) or contact the Copyright Clearance Center, Inc. (CCC), 222 Rosewood
Drive, Danvers, MA 01923, 978-750-8400. CCC is a not-for-profit organization that provides licenses and
registration for a variety of users. For organizations that have been granted a photocopy license by the CCC,
a separate system of payment has been arranged.
Trademark Notice: Product or corporate names may be trademarks or registered trademarks, and are used
only for identification and explanation without intent to infringe.
Visit the Taylor & Francis Web site at
http://www.taylorandfrancis.com
and the CRC Press Web site at
http://www.crcpress.com
Dedication
This book is dedicated to Frenie, Evelyn, Janane, Gaurav,
Jayasree, Vaishnav, Vismaya and our parents.

Contents
Preface .............................................................................................................xvii
Acknowledgements ........................................................................................xxi
Authors ..........................................................................................................xxiii
Chapter 1 Introduction to small and medium sized enterprises
(SMEs) ...........................................................................................1
1.1 Introduction ..............................................................................................1
1.2 Definition of SMEs ...................................................................................1
1.3 SMEs’ contribution to world economy .................................................3
1.4 Characteristics of SMEs ..........................................................................5
1.4.1 Low start-up costs ......................................................................5
1.4.2 Portability ...................................................................................5
1.4.3 Leadership ..................................................................................5
1.4.4 Management structure..............................................................6
1.4.5 Planning ......................................................................................6
1.4.6 Systems and procedures ...........................................................6
1.4.7 Human resources .......................................................................6
1.4.8 Market and customer focus ......................................................6
1.4.9 Operational improvement ........................................................7
1.4.10 Innovation ...................................................................................7
1.4.11 Networking.................................................................................7
1.4.12 Revenue and profitability .........................................................8
1.4.13 Ownership and taxes ................................................................8
1.4.14 Locations .....................................................................................8
1.5 SMEs versus larger firms ........................................................................8
1.5.1 Innovation ...................................................................................8
1.5.2 Attitude towards risk ................................................................9
1.5.3 Decision-making ........................................................................9
1.5.4 Resource allocation ....................................................................9
1.5.5 Understanding and management of business models .........9
1.6 Summary ..................................................................................................9
References ..........................................................................................................10
vii
viii Contents
Chapter 2 Continuous improvement initiatives in SMEs ...................15
2.1 What is continuous improvement? .....................................................15
2.2 Continuous improvement practices in small and medium
sized enterprises (SMEs) .......................................................................16
2.3 Critical success factors in the implementation of CI practices
in SMEs ....................................................................................................18
2.4 Leadership for CI ...................................................................................19
2.5 Sustainability of CI initiatives .............................................................20
2.6 Summary ................................................................................................21
References ..........................................................................................................21
Chapter 3 Lean Six Sigma ..........................................................................23
3.1 What is Lean production system? .......................................................23
3.2 Key principles of Lean production system ........................................24
3.3 Benefits of Lean production system ....................................................26
3.4 What is Six Sigma? .................................................................................27
3.5 Some common myths of Six Sigma .....................................................28
3.5.1 Six Sigma is another management fad .................................28
3.5.2 Six Sigma is all about statistics ..............................................28
3.5.3 Six Sigma works only in manufacturing settings ...............29
3.5.4 Six Sigma works only in large organisations ......................29
3.5.5 Six Sigma is the same as Total Quality Management ........30
3.6 An overview of Six Sigma methodology............................................30
3.7 Benefits of Six Sigma .............................................................................31
3.8 Some pros and cons of Lean and Six Sigma ......................................31
3.8.1 Some pros of Lean ...................................................................31
3.8.2 Some cons of Lean ...................................................................32
3.8.3 Some pros of Six Sigma ...........................................................32
3.8.4 Some cons of Six Sigma ..........................................................33
3.9 Why Lean Six Sigma? ............................................................................34
3.10 Benefits of Lean Six Sigma ...................................................................35
3.11 Challenges in the implementation of Lean Six Sigma .....................36
3.12 Summary ................................................................................................37
References ..........................................................................................................37
Chapter 4 Lean Six Sigma road map for SMEs ......................................41
4.1 Readiness factors for the successful introduction of LSS ................41
4.1.1 RF1: Senior management commitment and involvement ....41
4.1.2 RF2: Visionary leadership and culture inculcation ............42
4.1.3 RF3: Customer focus................................................................42
4.1.4 RF4: Selecting the right people ..............................................43
4.1.5 RF5: Linkage of LSS deployment to organisation’s
business strategies ...................................................................44
Contents ix
4.1.6 RF6: Competence to develop effective framework .............44
4.1.7 RF7: Appropriate selection and usage of LSS metrics ........44
4.1.8 RF8: Education and training ..................................................45
4.2 Lean Six Sigma implementation infrastructure ................................46
4.3 A road map for implementing Lean Six Sigma .................................47
4.3.1 Conceptualisation ....................................................................47
4.3.2 Initialisation .............................................................................49
4.3.3 Implementation ........................................................................49
4.3.4 Sustenance ...............................................................................50
4.4 Managerial implications .......................................................................51
4.5 Summary ................................................................................................51
References ..........................................................................................................52
Chapter 5 Lean and Six Sigma metrics ....................................................53
5.1 Introduction ............................................................................................53
5.2 Introduction to common metrics of Lean ..........................................53
5.2.1 Value ..........................................................................................53
5.2.2 Customer value ........................................................................54
5.2.3 Creating value ..........................................................................54
5.2.4 Flow ...........................................................................................55
5.2.5 Value stream .............................................................................55
5.2.6 Value flow .................................................................................55
5.2.7 Waste .........................................................................................55
5.2.8 Value-added activity ...............................................................57
5.2.9 Non-value-added activity .......................................................58
5.2.10 First-time quality .....................................................................58
5.2.11 Computation of first-time quality .........................................59
5.2.12 Cycle time .................................................................................59
5.2.13 Takt time ...................................................................................59
5.2.14 Lead time ..................................................................................59
5.2.15 Changeover time ......................................................................60
5.2.16 Worked examples ....................................................................60
5.2.16.1 Example 1 .................................................................60
5.2.16.2 Example 2 .................................................................60
5.2.16.3 Example 3 .................................................................61
5.3 Introduction to common metrics of Six Sigma ..................................61
5.3.1 Defects per million opportunities .........................................62
5.3.1.1 Example 1 .................................................................62
5.3.2 Sigma quality level ..................................................................62
5.3.3 Rolled throughput yield .........................................................63
5.3.4 Cost of poor quality .................................................................63
5.3.4.1 Example 1 .................................................................64
5.3.4.2 Example 2 .................................................................65