Gearing Six Sigma into UK Manufacturing SMEs: Results from a Pilot Study

Gearing Six Sigma into UK Manufacturing SMEs: Results from a Pilot StudyAuthor(s): J. Antony, M. Kumar and A. LabibSource: The Journal of the Operational Research Society, Vol. 59, No. 4 (Apr., 2008), pp. 482-493Published by: Palgrave Macmillan Journals on behalf of the Operational Research SocietyStable URL: http://www.jstor.org/stable/30133026 .

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journal of the Operational Research Society (2008) 59, 482-493 1 2008 Operational Research Society Ltd. All rights reserved. 0160-5682/08 $30.00

www.palgravejournals.com/jors

Gearing Six Sigma into UK manufacturing SMEs:

results from a pilot study J Antony1*, M Kumar1 and A Labib2

'Glasgow Caledonian University, Glasgow, UK; and 2 University of Portsmouth, Portsmouth, UK

Approaches to business improvement have evolved and grown since the early 1900s and today the process focused, statistically driven Six Sigma methodology has been widely used by companies such as GE, Motorola, Honeywell, Bombardier, ABB, Sony, DuPont, American Express, Ford and many other companies in improving the business performance and optimizing the bottom-line benefits. Although Six Sigma business management strategy has been exploited by many world class organizations as mentioned above, there is still less documented evidence of its implementation in small and medium-sized enterprises (SMEs). This paper reports the key findings of a Six Sigma pilot survey in UK manufacturing SMEs. The results of the study are based primarily on descriptive statistics. The results of the study show that many of the SMEs are not aware of Six Sigma and do not have the resources to implement Six Sigma projects. It was also found that Lean Sigma was not generally popular among SMEs. Management involvement and participation, linking Six Sigma to customers and to business strategy are the most critical factors for the successful deployment of Six Sigma in SMEs. Journal of the Operational Research Society (2008) 59, 482-493. doi:10.1057/palgrave.jors.2602437 Published online 25 July 2007

Keywords: Six Sigma; SMEs; survey; impediments; critical success factors

1. Introduction

The ever changing world with new customer needs, new markets, innovation and social changes brings about a need to

improve the existing processes to serve the existing customers and a need to develop new processes to serve new customer needs (Snee, 2004). Six Sigma has proved to be a powerful business strategy to meet the aforementioned goals. Six

Sigma is a highly structured process improvement framework that uses both statistical and non-statistical tools and techniques to eliminate process variation and thereby improve process performance and capability (Antony and Banuelas, 2002). Linderman et al (2003) define Six Sigma in the following way:

Six Sigma is an organized and systematic method for strategic process improvement and new product and service development that relies on statistical methods and the scientific method to make dramatic reduction in customer defined defect rate.

This definition is based on a customer's definition of defect and its importance while making the process improvement or manufacturing a product. General Electric (GE) CEO Jack Welch describes Six Sigma as 'the most challenging and

potentially rewarding initiative we have ever undertaken at General Electric (Breyfogle, 1999)'. The voyage of Six Sigma

*Correspondence: J Antony, Centre for Research in Six Sigma and Process

Improvement Strategy, Operations and Leadership, Caledonian Business School, Glasgow Caledonian University, Glasgow G4 OBA, UK. E-mail: [email protected]

started in manufacturing based companies and it has now sailed across financial services, healthcare, and the Public Sector (Snee and Hoerl, 2003). It is worth noting that Six

Sigma has a lot of air left in its sails and continues to build momentum with no signs of letting up in the near future (Hoerl, 2004).

The aim of Six Sigma is to keep the distance between the

process average and the nearest tolerance limit to at least six standard deviations and thus reduce variability in products and processes in order to prevent defects (Wiklund and Wiklund, 2002). Six Sigma aims at achieving 3.4 defects per million

opportunities (DPMO) with an assumption that the process mean shifts by 1.5 standard deviation off the target value. A defect opportunity is a process failure that is critical to the customer (Linderman et al, 2003).

Six Sigma has evolved significantly and continues to expand since it first evolved at Motorola in the mid-1980s to improve the performance of its processes (Hoerl, 2004). This powerful business management strategy has been exploited by many world class organizations such as GE, Motorola, Honeywell, Bombardier, ABB, Sony, to name a few from the

long list and resulted in millions of dollars of bottom-line

savings (Snee, 2004). There are four aspects of the Six Sigma strategy that are not emphasized in other business improvement methodologies and Total Quality Management (TQM). Firstly, of all, Six Sigma places a clear focus on bottom-line impact in hard dollar savings. No Six Sigma project will be approved unless the team determines the savings generated from it. Secondly, Six Sigma has been very successful in



J Antony et al-Gearing Six Sigma into UK Manufacturing SMEs 483

integrating both human aspects (culture change, training, customer focus, etc) and process aspects (process stability, variation reduction, capability, etc) of continuous improvement. Thirdly, Six Sigma methodology (Define-Measure- Analyse-Measure-Control or DMAIC) links the tools and

techniques in a sequential manner. Finally, Six Sigma creates a powerful infrastructure for training of Champions, Master Black Belts, Black Belts, Green Belts and Yellow Belts

(Harry and Schroeder, 2000; Pande et al, 2000; Adams et al, 2003). (Belt system (Black, Green, White, and Yellow) is a unique feature of Six Sigma, creating an infrastructure to assure that performance improvement activities have the necessary resources. They are the change agents that act as a catalyst in institutionalizing cultural change in

organization.) The literature depicts that Six Sigma has been imple-

mented with success in many large corporations, but there is still less documented evidence of its implementation in smaller organizations. Due to the growing importance of

supply chain management issues in global market environment, large firms are heavily dependent on small and medium-sized organizations (SMEs) for the provision of high- quality products and/or services at low costs. The increasing demand for high-quality products and highly capable business processes by large organizations has left no choice on the SMEs to consider the introduction of Six Sigma business strategy.

2. SMEs and their role in UK

SMEs are well-recognized and acknowledged worldwide, both nationally and internationally, as vital and significant contributors to economic development, job creation, and the

general health and welfare of economies (Morris and Brennan, 2000; Morrison et al, 2003). SMEs contribution to world economy can be adjudged from the following (Morrison et al, 2003): small businesses in the US contribute to 99.65% of

employment (Small Business Administration, 2005); small businesses add to 96.38% of non-agricultural industries in Australia (Australian Bureau of Statistics, 2003); and in the European Union, only 1% of businesses have more than 50 employees (Department of Trade and Industry, 2000). The importance of SMEs to the economy of the United Kingdom and the industrialized world as a whole cannot be overempha- sized. A short summary of relevant statistics available from the Small Business Service (SBS), an agency of the Department of Trade and Industry (DTI) show the vital role that SMEs play.

* There were an estimated 4.3 million business enterprises in the UK at the start of 2004. Almost all of these enterprises (99.9%) were SMEs. In this research, we consider an organization to be SME if it employs less than 250 employees and has turnover of less than 122.8 million (DTI, 2003).

* SMEs employ approximately 59% of the total workforce in the UK.

* It is estimated that SMEs are responsible for 52% of the combined turnover of UK businesses.

* The SME manufacturing sector alone in which this study is focused on, accounts for over 35% of the estimated combined turnover of UK businesses.

* UK SMEs combined annual turnover is around 11 trillion (Holden et al, 2003).

SMEs exist in a very dynamic environment and changes occur within very short time scales with SMEs starting and

failing. There are a variety of reasons for their closure, including: lack of forward planning, cash flow problems, inability to capture and manage innovation, lack of investment at the right time, lack of business experience, and little or no external help. The aforementioned points can be stated as the weaknesses of SMEs. On the other hand, SMEs do have some

strengths such as effective and open communication channels, low resistance to change, people orientation company-wide awareness, functional integration, and employees adopting a natural responsibility for quality (Ghobadian and Gallear, 1997). Table 1 presents some of the strengths and weaknesses of SMEs. The table was constructed by reviewing existing literature on SMEs and Quality Management practices such as TQM (Ghobadian and Gallear, 1997; Noci and Toletti, 1998; Yusof and Aspinwall, 2000; McAdam, 2000; Levy and Powell, 2000).

However, there is a paucity of literature on the application of Six Sigma in SMEs. SMEs being the backbone of

any developed economy need to embrace new business strate-

gies like Six Sigma that can have significant impact on their bottom-line results and bring about cultural transformation within their organization.

This research work aims to 'examine the extent to which Six Sigma is being implemented within UK Manufacturing SMEs'. The research objective can be achieved by analysing the results obtained from posing the following specific research questions:

* What is the status of Six Sigma implementation in UK manufacturing SMEs1

* To what extent do UK manufacturing SMEs actually use the tools and techniques of Six Sigma and how useful do they think they are1

* What benefits have been realized by UK manufacturing SMEs through Six Sigma implementation1

* What are the critical success factors (CSFs) for implementation of Six Sigma in UK manufacturing SMEs1

* What are the common barriers in the implementation of Six Sigma in SMEs1

The next section presents a review of literature on Six Sigma implementation in SMEs that motivate the research questions for this study.



484 Journal of the Operational Research Society Vol. 59, No. 4

Table 1 Strengths and weaknesses of SMEs SMEs strengths SMEs weaknesses

Flexible and hence change can be introduced fairly quickly Low degree of standardization and formalization Flat with few layers of management and fewer departmental Focus is on operational matters rather than planning interfaces Top management highly visible and hence provide There are chances that management lay off employees when leadership by example the work becomes superfluous. This makes SMEs work

harder to retain a high calibre staff Absence of bureaucracy in management teams Limited investment in IT Tend to have high employee loyalty No incentive or reward programmes in many cases due to

budget and resources constraints Managers and operatives are more likely to be directly Lack of strategic planning and inspiring vision involved with the customers Rapid execution and implementation of decisions Responsible for many facets of the business and many

decisions. Decisions are generally made for short-term profitability

Training likely to be focused Lack of skills, time and resources; no specified training budget

Culture of learning and change rather than control Incidence of 'gut feeling' decisions more prevalent; often operate in a fire-fighting mode for survival

People oriented Not systems oriented More responsive to market needs and more innovative Extent of training and staff development in SMEs is limited in their ability to meet customers' demand and informal Likely to deploy improvements quickly and gain rapid Adamant and dictatorial nature of owner can damage new benefits initiatives Loose and informal working relationships and absence Formation of strategy process is intuitive rather than of standardization analytical

3. Six Sigma in SMEs-a review of literature Once an owner of the business (in small firms) is convinced of the advantages conferred by Six Sigma and visualizes the benefits, it is much easier to implement Six Sigma and to realize its benefits (Adams et al, 2003). In small companies, the top management team need to be visibly supportive of

every aspect of Six Sigma initiative and they must demon- strate by their active participation, involvement and by their actions that such support is more than lip service (Tennant, 2001; Adams et al, 2003). SMEs embarking on using Six Sigma have some advantages such as effective and open communication channels, low resistance to change, people orientation company-wide awareness, functional integration, employees taking up a natural responsibility for quality, flex-

ibility, innovativeness, and problem-solving action orientation (Wilson, 2004). Effort and investment, as well as results in smaller companies, are more visible within a short span of time.

As many SMEs operate their business processes at the '2 to 3 sigma quality level', an improvement of even 1 sigma represents a huge step in improving customer satisfaction and reducing costs (Spanyi and Wurtzel, 2003). For instance, if a customer order fulfilment process is operating at the 3 sigma quality level (ie, 66, 800 DPMO) and if we improve the sigma quality level to 4 (ie, 6210 DPMO), then this process would realize a 10-fold improvement in performance. Assume each error or mistake costs $5 to fix (on average), the resulting cost savings would be in the range of $300 000.

Snee and Hoerl (2003) argue that there is nothing inherent in Six Sigma that makes it more suitable for large companies. They also suggest that the greatest barrier to implementation in small companies to date has been the way major Six Sigma training providers have structured their offerings. More re-

cently, as more and more sets of deployment guides and training materials have become available, the pricing structures have begun to change. Today, it is much easier for SMEs to ob- tain good external resources without a large up-front payment.

Davis (2003) pointed out that the problem arises in SMEs when they solicit deployment proposals from Six Sigma consulting companies only to learn that the traditional Six Sigma implementation approach in large companies can require millions of dollars investment, dedication of their best people on Six Sigma projects and training of the masses. The authors argue that using a White Belt approach allows SMEs to implement Six Sigma at a less costly, more manageable pace rather than following Six Sigma Black Belt deployment model, which is not practical for every company. This proposition is further supported by the findings of Harry and Crawford (Harry and Crawford, 2004), clearly demonstrating the importance of White Belts for SMEs and the focus of this new belt system on creating value to customers. A White Belt offers a much quicker return on investment. A White Belt is expected to complete up to12 projects in a year with the potential savings of $25 000 (on average) on each project. This implies a total of about $300 000 savings a year from a White Belt.



J Antony et a/-Gearing Six Sigma into UK Manufacturing SMEs 485

Rowlands (2004), supporting the findings of Davis (2003), argues that the traditional Six Sigma approach to Black Belt

training and deployment is not desirable in the case of SMEs. Therefore deployment of Six Sigma needs to be based on the

company's available resources and skills base. The Porter's Value Chain Analysis and the Five Forces Model (Rowlands, 2004) may prove useful to analyse businesses processes prior to applying Six Sigma methodology. These models could be used to provide strategic alignment to the business objectives as well as identifying training needs and project selection

prioritization in SMEs. Gnibus and Krull (2003) illustrate a

very interesting example on price and delivery quotations for

equipment returned to a medium-sized company for repairs. The company discovered that limiting Six Sigma training to the Green Belt training level, during the continual improvement program, still provided the resources required to address their business problems.

Darshak and Desai (2004) attempts to illustrate the magic of DMAIC methodology to the small-scale industry in India. The company was struggling with the increasing failures to meet customer delivery dates. The implementation of DMAIC

methodology resulted in understanding the problem from all facets and laying out improvement through effective analysis of the roots of the problem. Sil6n (2000) illustrates through a

deployment of DMAIC model in a Finnish company, the real benefits of implementing Six Sigma. The significance of the voice of the customer and the commitment of top management as well as many other key-points were introduced to activate and help the deployment of Six Sigma in the company. A case study presented by Gupta and Schultz (2005) showed the benefits that an SME can gain through successful implementation of Six Sigma. The company located in US, achieved 30% improvement in on-time deliveries; 25% improvement in labour efficiencies; and 5% improvement in profits per year by successfully deploying Six Sigma.

Researchers and practitioners have proposed frameworks or

guidelines for Six Sigma deployment in SMEs (PQA, 2003; Schwinn, 2003; Spanyi and Wurtzel, 2003; Waxer, 2004; Gupta and Schultz, 2005). The following points may be taken into account for the successful deployment of Six Sigma in SMEs:

* Visible management buy-in, commitment and support for Six Sigma deployment (Henderson and Evans, 2000; Antony, 2004).

* Linking Six Sigma to business strategy and customers. (Henderson and Evans, 2000; Antony, 2004; Antony and Fergusson, 2004).

* Understanding the customer requirements. * Shared understanding of core business processes and their

critical characteristics. * Educating, Rewarding and Recognizing the team members

(Antony, 2004; Antony and Fergusson, 2004). * Communicating the success and failure stories (Goldstein,

2001).

* Selecting the right people and the right projects (Goldstein, 2001; Antony, 2004; Antony and Fergusson, 2004).

* Conducting monthly performance reviews (Goldstein, 2001).

* Keeping everyone aware of Six Sigma through company meetings, postings and everyday activities.

The aforementioned factors may be considered as critical to the success of Six Sigma programme. The idea of identifying CSFs as a basis for determining the information needs of

managers was popularized by Rockart (Rockart, 1979). CSFs are those factors that are critical to the success of any organization, in the sense that, if objectives associated with the factors are not achieved, the organization will fail-perhaps catas-

trophically so (Rockart, 1979). In the context of Six Sigma project implementation, CSFs represent the essential ingredients without which a project stands little chance of success.

4. Impediments and barriers in Six Sigma deployment within SMEs

The issue of whether a quality management programme can be effectively utilized by SMEs remains uncertain (Husband, 1997). Common quality models, such as quality systems and certification, have been adopted by some SMEs, and yet the rate of implementation is lower than larger organizations (Advanced Engineering Centre for Manufacturing, 1995; Brown and Van der Weile, 1995; Terziovski et al, 1997; Ramsey, 1998). More holistic quality management initiatives, such as total quality management (TQM), also appear to exhibit low implementation rates (Ghobadian and Gallear, 1996; Van der Weile and Brown, 1998). It is suspected that the poor adoption of quality management initiatives in SMEs is due to multiple and complex reasons, not just the often stated impediments of cost, time and relative impacts (Gome, 1996). In addition, it may be that the quality programmes are

being treated as an extension or separate component of SME business operations.

Many continuous improvement programmes like Six Sigma do not appear to be easily understood or interpreted by SMEs, which may be a significant contributor to low implementation. There is also evidence to suggest that quality management programmes are not being taken up by SMEs for several reasons, viz:

* Difficulty in distinguishing between different quality programmes like Six Sigma, TQM, ISO, EFQM and the system that suits best to their needs. SMEs are unclear about the advantages (due to lack of knowledge) that one system has over other (Brown and Van der Weile, 1995; Husband, 1997; Husband and Mandal, 1999; Yusof and Aspinwall, 1999; Andrews, 2004).

* SMEs believe that their existing culture and system, such as ISO 9000, is sufficient to meet their business needs (Andrews, 2004). Senior managers in SMEs view Quality System such as ISO 9000 as the destination of the




Table 2 Barriers to success of Six Sigma projects Team not supported by management

* No Champion and Black Belt assigned * Champion not meeting with Black Belt * Few or poor management reviews * Resources not properly allocated

Project scope too large * Attainable in the three to six month time frame. * An unrealistic scope (such as boiling the ocean) is probably the most commonly encountered cause of project failure.

Project objectives not important to organization Fuzzy objectives and poor process performance metrics

Team not trained or involved * No involvement of functional groups, such as personnel from finance, information technology, human resources, engineering,

R&D, etc. in the team. * Many projects have failed because this support was lacking due to personnel shortages.

Black Belt and team not given time to work on project * For Black Belts full-time is best, but they should be able to spend at least 80% of their time on a project. * Green Belts should be able to spend at least 20% of their time.

Team too large * Team working with BB should be not more than 4-6 members * As the size of the team increases, it becomes difficult to find mutually agreeable meeting times and to reach consensus

achievement of quality. In fact, quality improvement is always meant to be a journey rather than mere destination (Yusof and Aspinwall, 1999).

* There is very little evidence of success of Six Sigma in the SMEs' context. SMEs believe that this programme is another fad, fantasy or flavour of the month like TQM and BPR (Smith et al, 1994; Andrews, 2004).

* Lack of management commitment and their misinterpre- tation about the time and resources consumed for implementing Six Sigma inhibits the SMEs' initiative (Andrews, 2004).

* SMEs blindly view Six Sigma or TQM as a panacea for all process and quality problems, and as a result they encounter failure in its implementation when applying it to every problem (Andrews, 2004; Smith et al, 1994; Thomas and Webb, 2003).

* SMEs have a misconception that Six Sigma involves lots of statistics, which is beyond their domain (Andrews, 2004).

There can be several reasons for the failure of continuous

improvement initiatives like Six Sigma. Table 2 focuses on the barriers to the success of Six Sigma projects. Snee (2001) draws attention to barriers in project success and concluded that a common theme of these barriers is that they are all management related.

The next section examines the status of Six Sigma implementation in UK manufacturing SMEs by investigating how Six Sigma was introduced to them, who was involved in such initiatives, how long UK manufacturing SMEs have been engaged in Six Sigma initiative, and how the successes and failures of Six Sigma projects were perceived. The paper will also examine whether the Six Sigma CSFs considered

by large organizations are valid for SMEs. Although this study is primarily focused on manufacturing SMEs, most of the considerations and suggestions can be applied to service SMEs. The following section will focus on the research methodology adopted for the study.

5. Research methodology

In order to achieve the research objective, a survey questionnaire was constructed drawing upon prior literature. Focus is on operational matters rather than planning (Lee and Oakes, 1995; Ghobadian and Gallear, 1996; Parkin and Parkin, 1996; Yusof and Aspinwall, 1999; Antony and Banuelas, 2001; Klefsjo et al, 2001; Antony and Banuelas, 2002; Antony and Fergusson, 2004; Wessel and Burcher, 2004; McAdam and Lafferty, 2004; Snee, 2004). The survey questionnaire was developed to provide a baseline for Six Sigma practices by SMEs in the UK. It consists of four parts: Surveyed SMEs' demographic information; SMEs' experience with Six Sigma programme; Tools and techniques of Six Sigma used by SMEs; CSFs for Six Sigma implementation in UK SMEs.

5.1. Sampling method and procedure

The questionnaire was mailed out to 400 SMEs in UK, which were randomly chosen from the Glasgow Caledonian Univer- sity's FAME database. Of the 400 questionnaires mailed, 66 completed questionnaires were returned in less than 1 month. This represented a response rate of 16.5%. Six of the responses were not useable due to incomplete data. This resulted in only 60 questionnaires being used in the final analysis of this paper.




8% 8%

9% 5%

5%

7%

10%

18%

14% 116%

Chemicals Plastics Automotive Aerospace Electronics and semi-conductors Mechanical Pharmaceuticals Food Textiles Other

Figure 1 The type of industries which participated in the study.

5.2. Survey results and analysis

The analysis of the first part of the questionnaire (ie, demographics) provided a better understanding of the findings of the study. Therefore, aspects such as the number of employees in the organization which responded to the survey, the position occupied by the respondents, the types of industries, the status of Six Sigma implementation and the number of years responded companies have been utilizing Six Sigma.

5.2.1. Demographic information The majority of companies had between 50 and 150 employees (75%), 15% of the companies responded had less than 50 employees and 10% of the companies responded had between 150 and 250 employees. No micro-sized companies (less than 10 employees) responded to the questionnaire. The questionnaires were completed by Project Champions, Black Belts, Green Belts or Yellow Belts who have first-hand knowledge and expertise with the Six Sigma programme. The type of industries that participated in this study are depicted in Figure 1.

5.2.2. Status of Six Sigma and other quality initiatives of companies Only 16 out of 60 SMEs (ie, about 27%) were actively involved in Six Sigma programme. These companies have been using Six Sigma for over 1 year on average. This clearly illustrates the point that Six Sigma is a relatively new concept in UK manufacturing SMEs. It was observed that more than 80% of the SMEs who responded to the study implemented ISO 9000 Quality Management System with a mean duration of 9 years. It was interesting to note that many companies view ISO 9000 as the major achievement of product and service quality. Nearly 25% of the companies had partially and fully implemented TQM with a mean duration of 8 years. It was also found that about 5% of the companies who responded were using Lean Production System (LPS).

5.2.3. Reasons for not implementing Six Sigma One of the

questions that was included in the questionnaire was to iden-

tify the reasons companies are not implementing Six Sigma. Figure 2 illustrates the common reasons SMEs give. The most important reason is that companies do not know about Six Sigma (35%). This is followed by the insufficiency of resources (26%). Also, those companies that already have a quality system in place perceive such systems to be adequate (20%).

5.2.4. Sigma level of core business processes It was found from the analysis that a majority of SMEs who participated in the study (about 70%) had their core processes operating at Sigma quality levels between 2.8 and 4.0. Twenty-three per cent of companies responded to the survey had their processes operating at Sigma quality levels over 4.0.

5.2.5. Number of Project Champions, Black Belts, Green Belts and Yellow Belts It was observed that more than 35% of the responded companies using Six Sigma have no Six Sigma Project Champions. Moreover, less than 10% of the responded companies actively involved in Six Sigma have Yellow Belts. One company has a Master Black Belt and about 80% of the companies utilizing Six Sigma are using Green Belts. About 45% of the companies are using Black Belts to lead and deploy projects. It was also noted that the highest number of Green Belts and Black Belts were found in automotive, aerospace and electronics industries whereas the lowest number of Green Belts and Black Belts were found in the textiles industry.

5.2.6. Common Six Sigma metrics used by manufacturing SMEs A metric is a specification or attribute against which the outputs of a process are compared and declared accept- able or unacceptable. Table 3 presents the key metrics of Six Sigma and their percentages that were commonly used by the companies that participated in this pilot study.

The results of the study revealed that the most commonly used Six Sigma metrics by participating SMEs were number of complaints and percentage scrap. The least commonly used metrics were first time yield (FTY) and




11% 8%

35%

20%

26%

Not aware of Six Sigma

Insufficient Resources

Existing Quality System is sufficient

Not required by customers

No perceived benefits

Figure 2 Reasons for not implementing Six Sigma by the respondents.

Table 3 Six Sigma metrics used by SMEs

Six Sigma metrics Percentage of companies using the metric

Number of complaints 94 Percentage scrap 81 Cost of poor quality 75 Defect rate 75 Process capability 63 First time yield 25 Throughput yield 13

throughput yield (TPY). In fact, these two metrics (FTY and TPY) are the fundamental metrics of Six Sigma.

5.2.7. Six Sigma methodologies used by manufacturing SMEs The respondents were asked whether they use Six Sigma, Design for Six Sigma Lean Sigma or combination of these methodologies for tackling process and product-related problems. Figure 3 presents the results obtained on the use of Six Sigma methodologies.

The majority of SMEs (69%) that responded to the survey were utilizing the DMAIC methodology for continuous improvement. Only 19% of the companies were utilizing Design for Six Sigma (DFSS), 6% were using Lean Sigma and another 6% were employing both Six Sigma and DFSS methodologies.

5.2.8. Six Sigma projects completed by companies and their financial impact The analysis of results revealed that about 69% of the companies had completed between one and five Six Sigma projects. About 25% of the companies had completed between five and 10 Six Sigma projects, while one company had completed more than 20 projects. About 62% of the companies experienced financial benefits of up to 1250 000 per annum. Thirteen per cent of the companies experienced financial benefits of between 1250 000 and 1500 000 per annum. Somewhat surprisingly, 25% of the participated companies never quantified the financial bottom- line impact from Six Sigma projects. Yet, Six Sigma places considerable emphasis on cost savings achieved through its implementation.

5.2.9. Benefits of Six Sigma in surveyed companies The respondents were asked to rate the benefits that Six Sigma had brought to their organizations since implementation. The respondents were asked to rate on a Likert scale of 1 to 5, where 1=no benefit from Six Sigma implementation and 5 = excellent benefits from Six Sigma implementation. Table 4 summarizes the key benefits gained from the implementation of Six Sigma projects. The areas that have experienced the greatest benefits are reduction in process variability, increase in profitability, reduction of operational costs, reduction in the cost of poor quality (COPQ), etc. On the average, these scores suggest that participating companies perceive Six Sigma to have benefited their processes.

5.2.10. Impeding factors in implementation of Six Sigma by UK manufacturing SMEs Although the pressure for the implementation of Six Sigma has been increased over the last few months, there are some factors impeding the development of Six Sigma programme in UK SMEs. Companies were asked to identify the top five inhibiting factors that were felt to be barriers to Six Sigma implementation. The results of the analysis show that about 80% of the responding firms stated that lack of resources was one of the impeding factors to the successful introduction of a Six Sigma initiative in UK SME. Lack of resources covered a large number of aspects including financial resources, human resources, time, etc. This was followed by lack of leadership, poor training/coaching, internal resistance, poor project selection, etc. The other frequently mentioned impeding factor was lack of knowledge about Six Sigma methodologies.

5.2.11. Six Sigma tools and techniques within SMEs One of the success factors of Six Sigma is its ability to inte- grate both statistical and non-statistical tools and techniques within the DMAIC framework in a systematic and disciplined manner. Table 5 illustrates the most commonly used statistical and non-statistical tools and techniques used in Six Sigma projects by manufacturing SMEs. The table was developed with the purpose of showing information in three areas: familiarity with the tools and techniques, usage and



J Antony et a/--Gearing Six Sigma into UK Manufacturing SMEs 489

6% 6%

19%

69%

Six Sigma (DMAIC)

DFSS

Lean Sigma

Six Sigma (DMAIC) & DFSS

Figure 3 Six Sigma methodologies used by responding SMEs.

Table 4 Key benefits of Six Sigma to SMEs

Benefits to business Mean

Reduction in process variability 4.067 Increase in profitability 3.733 Reduction of operational costs 3.667 Reduction in COPQ 3.600 Increase in productivity 3.533 Reduction of cycle time 3.467 Reduction of customer complaints 3.465 Improved sales 3.333 Reduced inspection 3.267

usefulness of tools, techniques and problem-solving methods. Respondents were asked to rate the application of tools and techniques (ie, usage) on a Likert Scale of 1-5, where '1' indicates 'never been used' and '5' indicates 'used continuously'. Similarly, the degree of perceived usefulness was also rated on a scale of 1-5, where '1' implies 'not useful' and five implies 'extremely useful'. As can be seen from the Table 5 and Figure 4, Non-parametric Tests (eg Mann-Whitney test), Affinity Diagram, Project Charter, SIPOC model, Quality Costing Analysis, Run Charts, Measurement System Analysis and QFD were not popular in many SMEs. The most popular tools and techniques include Process Mapping, Histogram, Cause and Effect Analysis, FMEA and Process Capability Studies.

The most commonly used tools were Histogram, Cause and Effect Analysis & Process Mapping. The most useful tools and techniques include Process Mapping, Cause and Effect Analysis, Histogram, Run Chart, Control Chart, FMEA, Process Capability Analysis & Poka-Yoke. It appears that tools that offer visual representation, identify root causes of problems, and are easier to use, appeal more to users than the more sophisticated and complex statistical tools. It can be deduced from Figure 5 that most of the complex tools and techniques, for example, ANOVA, Regression Analysis, Hypothesis Testing, Measurement System Analysis, Design of Experiment/Taguchi Method, Quality Function Deploy- ment, are realized to be useful by the respondents, but in terms of the usage of these tools and techniques, the mean rating was low.

5.2.12. Critical Success Factors (CSFs) of Six Sigma implementation in SMEs The respondents were asked to rank the 11 CSFs on a scale of 1-5 (1 = least important, 2 = less important, 3 = important, 4 = very important and 5 = crucial). The CSFs used in this pilot study were derived from existing literature of TQM and Six Sigma (Badri et al, 1995; Black and Porter, 1996; Yusof and Aspinwall, 1999; Snee, 2000; Breyfogle, 2001; Antony and Banuelas, 2002; Rungasamy et al, 2002; Adams et al, 2003; Oakland, 2003; Antony, 2004). The aim was to determine the CSFs that SMEs felt to be important and make a comparative study with the CSFs identified from previous studies by the authors in large corporations. The 11 CSFs identified from the literature were as follows:

(a) Management Involvement and Participation (A) (b) Organizational Infrastructure (B) (c) Cultural Change (C) (d) Training (D) (e) Linking Six Sigma to Customers (E) (f) Linking Six Sigma to Business Strategy (F) (g) Linking Six Sigma to Employees (G) (h) Linking Six Sigma to Suppliers (H) (i) Understanding of Six Sigma Methodology (I) (j) Project Management Skills (J) (k) Project Prioritization and Selection (K)

Figure 5 illustrates the CSFs for the successful implementation of Six Sigma within UK manufacturing SMEs. Figure 5 shows that Management Involvement and Participation (A), linking Six Sigma to Customers (E) and linking Six Sigma to the Business Strategy of the Organization (F) are the most important factors for the successful implementation of Six Sigma followed by Organizational Infrastructure (B), Under- standing of Six Sigma Methodology (I), Training on Six Sigma (D) and Project Prioritization and Selection (K). These findings were quite similar to the findings from other previous studies (Antony and Banuelas, 2002; Antony, 2004; Antony and Fergusson, 2004) carried out by one of the authors with some changes in the order of importance of these CSFs. For instance, in Service Industry, the top three CSFs for Six Sigma implementation were Linking Six Sigma to Business Strategy (F), Linking Six Sigma to Customers (E) and Executive Lead- ership and Senior Management Commitment (A). A recent




Table 5 Tools and techniques used by SMEs utilizing Six Sigma

Tools/techniques Familiar (%) Unfamiliar (%) Usage Usefulness

Process mapping 100 0 4.438 4.600 Project charter 44 56 3.857 3.500 Cause and effect analysis 100 0 4.188 4.333 Histogram 100 0 4.125 4.357 Scatter plot 94 6 2.333 2.462 Run charts 56 44 3.111 4.200 Control charts 94 6 3.267 4.154 ANOVA 88 12 3.429 3.538 Regression analysis 94 6 1.800 3.167 Design of experiments 88 12 3.071 3.230 Taguchi methods 81 19 2.846 3.100 MSA 63 37 2.700 3.500 Non-parametric tests 25 75 2.000 2.333 Hypothesis testing 94 6 1.867 3.571 Quality function deployment 69 31 3.273 3.889 FMEA 100 0 3.938 4.200 Poka-Yoke 94 6 3.067 4.083 Process capability analysis 100 0 3.188 4.231 Affinity diagram 31 69 2.400 2.333 Benchmarking 94 6 3.067 3.714 Quality costing analysis 50 50 3.000 3.667 SIPOC model 44 56 3.286 3.167

a,

5.0

4.5

4.0

3.5

3.0

2.5

2.0

1.5

1.0

0.5

0.0 A B C D E F G H J K

Critical Success Factors

Figure 4 CSFs of Six Sigma implementation in SMEs.

study carried out by the first author in the Software industry has revealed the following three CSFs in their ascending order of importance (Antony, 2004):

" Top Management Commitment (A) * Organizational Cultural Change (C) * Linking Six Sigma to Business Strategy (F)

It is noteworthy that the aforementioned critical factors have a crucial role to assist in the successful implementation of any major business initiatives, not just the Six

Sigma programme. The identification of success factors

will encourage their consideration when companies are developing an appropriate implementation plan (Antony and Banuelas, 2002). If any of the critical success factors is missing during the development and implementation stages of a Six Sigma programme, it would then be the difference between a successful implementation and a waste of resources, effort, time and money (Antony and Banuelas, 2002).

6. Future of Six Sigma in SMEs Six Sigma has evolved into a business strategy in many large organizations and its importance in SMEs is growing



J Antony et al--Gearing Six Sigma into UK Manufacturing SMEs 491

Usage Usefulness

C

C

5.0 4.5 4.0 3.5 3.0 2.5 2.0 1.5 1.0 0.5 0.0

pro

pro

pro

pro

pro

pro pro

pro pro pro pro

pro

pro pro

pro

pro

pro

pro pro pro

pro pro

pro

pro

pro

pro

pro

pro

pro

pro

pro

pro

pro

pro

pro

pro

pro

pro

pro

pro

pro

pro

Tools and Techniques

Figure 5 Usage and usefulness of tools and techniques.

every day. To the best of the authors' knowledge, this study is the first pilot survey conducted in the UK manufacturing SMEs. The authors were not able to identify any such surveys in the literature review.

It is deduced from the opinions of leading Six Sigma academics and practitioners that SMEs can successfully implement Six Sigma even though they have resource constraints. SMEs should adhere to the following points for implementing Six Sigma:

* Senior management should show their commitment towards Six Sigma and encourage employees to participate in the Six Sigma initiative.

* Senior management should clearly establish the need for Six Sigma to employees at all levels.

* Decision should be taken judiciously to select a Six Sigma project that has a high probability of success.

* Train a core group inexpensively (eg through collaboration with a local university). Eventually, as knowledge and experience grows in the organization, that support will come from resources inside the company rather than outside.

* Large organizations should come forward and train their suppliers (in most cases are the SMEs) on Six Sigma business strategy. Master Black Belts or Black Belts in large organizations may provide training to their supply chain partner, which itself will help the large organization to improve their quality of final product and service delivered to customers.

* SMEs do not require a strong massive infrastructure, where Master Black Belts, Black Belts are involved in projects as are applied in large organizations. It is highly advisable, in the authors' opinion, to develop a White Belt and Yellow

Belt training programme instead of Black Belt and Green Belts. The White Belt definition provided by Harry and Crawford (2004) is not realistic and achievable. Twelve projects in a year for a White Belt is too ambitious. The authors of this article suggest White Belts carry out between 6 and 8 process or quality improvement-related projects using the DMAIC framework. The expected savings from a White Belt project can be around 18000-110 000 per project. In our opinion, a company of size 100 could go for about 10 to 15 White Belts. The White Belt system is still a grey area and further research needs to be carried out to validate the aforementioned points.

* It is important to ensure that the application of Six Sigma must be integrated into all business functions within the company (administrative processes, maintenance, customer service, customer order fulfilment process, financial processes, etc).

7. Conclusion

Six Sigma has evolved into a business strategy in many large organizations and its importance in SMEs is growing everyday. Six Sigma within SMEs is rapidly emerging as the new wave of change in Six Sigma. To the best of our knowledge, this study is among the few pilot survey conducted in the UK manufacturing SMEs. This paper has surveyed the use of Six Sigma in SMEs and shown that those who adopt it have reaped benefit both at strategic and operational level. The top management commitment is the key to success, as depicted from the survey result. If these benefits are to increase, there needs to be greater dissemination of its benefits and the creation of user groups that support SMEs in sharing




and exchanging experiences of successful deployment of Six Sigma, thus promoting the best-in-class practice within the user group.

Six Sigma may be one of the key initiatives in SMEs to

improve their management of all core business processes. The

primary focus will not only be on pinpointing and reducing defects and costs, but also on improving the overall management performance and creating value to customers and shareholders. Six Sigma will facilitate the SMEs, like large organizations, to support their organizations' strategic direc- tion and increasing the needs for coaching, mentoring and

training. The results presented in this study are exploratory and are based primarily on descriptive statistics. No attempt is made to generalize the outcomes. Future studies will

attempt to generalize some of the findings.

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Received October 2005;

accepted March 2007 after one revision



Gearing Six Sigma into UK Manufacturing SMEs: Results from a Pilot Study

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