Academic journal article Academy of Strategic Management Journal

Six Sigma Implementation by Indian Manufacturing SMES-An Empirical Study

Academic journal article Academy of Strategic Management Journal

Six Sigma Implementation by Indian Manufacturing SMES-An Empirical Study

Article excerpt

INTRODUCTION

Six Sigma is a business strategy that helps organizations to improve their operations, enhance quality, eliminate defects and thus increase profits. Many of the well-known companies all over the world doing business in different sectors have benefited enormously by adopting Six Sigma business approach. Six Sigma identifies and resolves chronic problems that directly impact the bottom line of an organization. Embarking on a Six Sigma program means delivering top-quality products and service while virtually eliminating all internal deficiencies (Thawani S, 2004).

Six Sigma is not just about statistics but rather based on the scientific method, utilizing statistical thinking (Snee, R D and R W Hoerl, 2003). It is an overall business improvement initiative rather than just a quality initiative. The main theme of Six Sigma is identifying defects and eliminating them to less than 3.4 defects per million opportunities (DPMO). It defines, measures, analyses, improves and controls the vital few processes linking the improvement of quality directly to the bottom-line results. Up till now, Six Sigma approach has been usually associated with large OEM companies because of their financial strength and manpower resources, because of which, there is a perception that Six Sigma is applicable only for large companies possessing better resources.

The component suppliers should respond to the market-driven issues quickly and effectively and also be cost effective. A supplier with poor quality becomes a weak link. Large companies should help their suppliers to improve the quality of the supplied parts, materials, assemblies or services so that they could in turn supply superior products or services to their customers. Thus, suppliers are really strategic partners in Six Sigma implementation endeavours of the companies. But, the literature says that, still a large chunk of the small and medium enterprises have some misconceptions or myths about Six Sigma approach like:

1. Six Sigma is applicable to only to large companies

2. Six Sigma is a complicated, statistical methodology that is difficult to understand

3. An outside consultant must be hired

4. Experts are needed to make it work

5. Six Sigma is repackaged Total Quality Management

6. Six Sigma is only statistics without real savings

7. Six Sigma is just training the people

8. Six Sigma is a "magic pill" to fix problems with little effort

In the course of our long industrial association with some of the small scale manufacturing companies, we also have experienced that the SMEs feel intimidated by the idea of adopting the methodologies like Six Sigma and it was mainly due to the lack of clear understanding or general misconception about these methodologies. The managements had apathy towards them and hence were not keen on knowing even the benefits of these methodologies. At the same time we used to hear about success stories of Six Sigma implementation by SMEs in some parts of the world. Through the literature review we tried to understand the global situation with regard to implementation of Six Sigma by SMEs in manufacturing and service sectors. Most of these articles articulate that achieving success in Six Sigma implementation by SMEs is possible, but the first thing needed is changing the mind-set of the companies.

UNDERLYING CONCEPTS AND OBJECTIVES OF THE STUDY

As far as government, industrial associations and other formal bodies are concerned the support for the SMEs would be at a higher level i.e. in the area of finance, infrastructure, power, taxing, administrative regulations, etc. As far as accreditation to quality management systems like ISO 9000, ISO/TS 16949, AS9100, etc. is concerned, all the required help and support are readily available through a number of consulting firms and the agencies. Since these certifications are almost mandatory requirements for the companies to do business in national and international level most of the companies big or small would go for them voluntarily. …

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