International Journal Of Advanced Production And .
IJAPIE-2016-07-305,Vol 1(3), 23-27International journal of advancedproduction and industrial engineering(A Blind Peer Reviewed Journal)A Framework to Improve Performance of Firms ThroughImplementing Lean Six Sigma Strategies During RecessionBasant Chaurasia1, Dixit Garg2, Ashish Agarwal312(IIMT Institute of Engineering & Technology, Meerut- 250001, Uttar Pradesh, India)(Department of Mechanical Engineering, NIT, Kurukshetra, Haryana-136119, India)3(Department of Mechanical Engineering,SOET, IGNOU, New Delhi, India)Email: basantchaurasia@rediffmail.comAbstarct : Today’s global business environment essential requirement to a company’s reduction of wastes, reductionof variations, reduction of lead time and innovative feature quality product with minimum cost. That strives to improvecustomer satisfaction, breakthrough strategy to solve problems with fastest process speed. Lean six sigma(LSS)methodology is framed on the basis of business and competitive excellencies of companies strategies.LSS Guidelineshelps to countries as a preventive tool in recession time and framework focused how to follow the Lean six sigma pathto improve performances.Keywords: Lean six sigma(LSS); LSS Guidelines; recession timeINTRODUCTIONChange of traditional manufacturing business excellencetowards lean six sigma practices promulgate to companies inhigh profit generation, vendor satisfaction, consumersatisfaction, employees satisfaction, productive improvement,wastes reduction substantially improves. When the recessionhit local or global market lean six sigma framework can beact as a survival tool. Garrison, 2001discussed unknowinglyunderestimating the risk sometimes investors overinvest thereturn. Individual investor cannot predict future prospectbecause they work on their economic decision on the basis ofcurrent prices .The recession affected countries locally orglobally .However time variation and magnitudes ofdownturn varied substantially around the world. Through thispaper attempt has been made to proposed how lean six sigmawork will help during recession.Recession and its implicationRecession is that when in two consecutive quarters nationalgross domestic product (GDP) of a country decline. Therecession affect stock exchange panic and wiped out millionsof investors in downturn. Causing steep declines in outputs offirms, financial institutions, severe unemployment, wages felland buying power decreased. Sometime recession start froma country and highly effect worldwide to other countriesmarket in term of GDP, employments, developments,government policies etc. Tirole J,1985 Observed sometimeassets that valued above their intrinsic value withoutsustainability, rational bubble can be originated.Overvaluation of the assets eventually burst, before gainreturn basic price.Young, 2009 discussed marketingstrategies do not slow down during recession, while customerhad shrink in market. Top oil producing countries United IJAPIE ISSN: 2455–8419 state, Russia, Saudi Arabia and Iran like countries dismaldue to continuously decline of crude oil prices worldwide andadverse effect on stock-exchange, productivity and nationalgrowth. Kocak and Edwards, 2005 observed pivotal confrontof entrepreneurial behavior and inter‐firm co‐operation forsmall firms seeking growth in a volatile, recession‐hitenvironment. William patric leonard, 2014 studied failing torecognize the inevitability of the next recession and toprepare for its uncertain arrival is a neglect of fiduciaryresponsibility. Cinzia Alcidi and Daniel Grossy,2011observed stematic comparison between the great depressionand the great recession ,fiscal policy went to the limit of whatwas possible under the conditions as they existed then in USbanking. Martin Reeves,2009 examines recession‐specificstrategies designed to drive growth and ensure that acompany survives. Scott Latham and Michael Braun, 2011review distils disparate scholarly works on firm behavior andrecessions to provide a systematic appraisal and review ofwhat people know and do not know about managing firmsthrough economic downturn.Succinct on recessionRecession is severe economic catastrophe .It had beenobserved by committee of economic experts basis ofeconomic indicators employment , personal income,indusrialproduction, quarterly GDP,capacity utilization,inflation fall,bankruptcies rate .and many mores. National bureau ofeconomic research,U.S.A. said that USA had 32 recessionsand mostly lasting 10months.Although well known firstdeepest recession is 1929-1933 when economy downturn 33percent initially originated from United states and quicklyspread out in all over world.The second great recession was1937-1939 and gross domestic product was decline18.2percent.United states and other countries faced after a certainperiod stagflation when economic growth decline andunemployment rate is increases .Therefore, to promote theeconomic growth central banks of countries, follow theory ofwww.ijapie.org Vol. 1 Issue. 3 2016 23
Basant Chaurasia et al.,International Journal of Advanced Production and Industrial Engineeringmoney supply to control the demand and supply withoutterribly concern to inflation. Early 1990 the great recession ofjapan was balance sheet recession, causes bursting ofecomonic asset price bubble in that investors ,consumers andindustrialist pay down debt instead of purchase or spend.Blinder and Reis, 2005investigated during crises might be possible to controlmacroeconomic impact by the federal reserve after the dotcom bubble. Brunnermeier et al., 2009 observed financialregulation should be macro prudential.Therefore ,highly ratedAAA is very safe respect to financial downturn.Indicator thatare responsible for the recession is systematically shown infigure 1.Figure 1.Frame work of recessionInvestors around the globe are catching their breath aftertrading on black monday 24 august 15, that plunge wiped outin many years gains .China is second biggest economy ofworld , hiccup downturn in shangahi stock exchange 8.5percent impact inflation on Dow jones 3.6 percent,londons’FTSE-100 down 4.6 percent, Nikkei 4.6percent,Hang seng 5.2 percent,Australian index 4.1 .andmany more countries. Downturn stock market starting fromchina now pondering whether today marks the start of a newand alarming phase of the crisis which began some eightyears ago. Rattle widespread investor fears about the terribledrops in stock market globally.Cod U ciprian ,2011,discussed world fiscal crisis focused on the investmentactivity also focused on how the fiscal crisis forced on theinvestment activity in local and global level.Mariosarcinelli,2010 analyze that hedge funds may provoke fromeconomical crisis.OVERVIEW JOURNEY OF LEAN SIX SIGMALeanLean is a system of measures and methods which are takenparticularly competitive state throughout the company(Warnecke and Huser’s, 1995).Lean is a systematic approachto identify and eliminate waste through continuousimprovement, flowing the product at the pull of the customerin pursuit of perfection (Womack at.al.1990). Leanproduction introduced with the term ‘‘bundles’’ to capturefour categories of inter-related and internally consistent leanpractices: Just-In-Time, Total Preventive Maintenance, Total IJAPIE ISSN: 2455–8419 Quality Management and Human Resource Management(Shah and Ward,2003).Lean production is the combinedfactors accountable for the superior manufacturingperformance and the resulting competitive edge of the ToyotaProduction System (TPS) over other automobilemanufacturers(Holweg,2007).The principle view of leanproduction is evidenced as a model where the persons assumea role of thinkers and their involvement promotes thecontinuous improvement and gives companies the agilitythey need to face the market demands and environmentchanges of today and tomorrow( Alves et al. 2012).Indicators that made lean environment are as Required to implement 5S,Kaizen,poka-yoke etc. Synchronize business-to-market Reduction in operative costs prolonged customer expectations Manage the global competition Streamline outsourcing processes Improve business performance visibility Optimum utilize energy equipment and people inthe most productive ways.Six SigmaThe approach is strategic process selection to reducesvariations. Brady and Allen, 2006 investigated that six sigmais statistical analysis and its measuring index is defect permillion opportunities. Six sigma is originated at Motorola inearly 1980,that drastically improve the product quality,process, customer satisfaction and reduces operating cost(Harry and Schroeder, 2000).This technique is statisticalmethod used to reduce waste, improve financial performance,decreases fluctuations and increases customer satisfaction(Revere et al., 2004).Six sigma understand the variation andsolve the task problem by using DMAIC(define, measure,analyse, improve, control) approach, that is philosophy ofcontinuous improvement( Shewhart 1931, Shewhart andDeming 1939, Harry and Schroeder ,2000).Thecomprehensive mapping of tools and methodology applyingto lean ,six sigma and lean six sigma is shown fig.2.Figure. 2.Specific common tools to implement lean, sixsigma and lean six sigmaLean Six SigmaEarlier lean and six sigma approach work differently, It hadseen in last decade that integration of lean and six sigmaleads towards business excellencies in most effective,productive and economical manner.Although literature oflean six sigma are very few, authors trying to extent it in thiswww.ijapie.org Vol. 1 Issue. 3 2016 24
Basant Chaurasia et al.,International Journal of Advanced Production and Industrial Engineeringpaper. Where lean manufacturing is focuses on processimprovement throughremoval of wastes, six sigmaemphasizes reduction of variation in system. LSS approachare not only reduces cost and system performance butoptimizes the organization capability and furthermore,improve effectiveness( George et al.,2004).Authors (EvertonD. et.al.,2014) has discussed distinction in model of lean,sixsigma and LSS relation to the importance of the decision areato achieve best performance in competitive environment.Fig.3.Framework of Lean six sigma es(Alexandros G.& LoukasT.,2012),telecommanufacturing (Roy Andersson et.al.,2014) has beendiscussed and found LSS offers a general direction fororganizational leaders, managers and employees and leadtowards effective improvement in all manner. Acomprehensive framework incorporated with Lean sigmais shown in the figure 3.Lean Six Sigma have businessprocess capability to resolve the ongoing economocaluncertaintyand challenging market conditions and may bethe upcoming recession or depression problem of countries.They can achieve first time right(FTR) quality performace,better bussiness relationship in control way and to reachexcellency in bussiness. Dell, Amazon, Motorola ,bank ofAmerica, Xerox Corp.,Johnson & Johnson, Chevron,Aramco, Texaco, IBM, Baker Petroilite and Halliburton,Reliance Petroleum, Oil and natural gas corporation,India IJAPIE ISSN: 2455–8419 and Indian oil corporation accelerate their businessperformance through Lean Six Sigma tools and improvemanufacturing quality to no more than 3.4 defects per millionopportunities.A comparative key factor in table 1 that showsthe basic differences between Lean and six sigma approaches.Table 1: Comparative key factors of lean and six sigmaPoka-YokeMistake proof tool to prevent errorKaizenFocuses on continuous improvementarea (Womack et al.,1990)Pull system of product rather thanpush e andcontrol the problem proactivelyrather than reactivelyDAMIC processMeasurement of performance tomeet customer expectationCritical toProcess of changing production linequantity(CTQ)in flexible manner quickly(Worley,2004)Quick changeover Process strategy supply materialwhen it needed to reduce inventorycostJust in timeSequencing family product tooptimize productionCellularA system that proactively maintainmanufacturingand optimize entire production andquality processTotal productiveGroup of expertise from crossmaintenancefunctional departmentMulfuntionalA step that limit the entire processteamlineBottleneckAssessment to meet performance ofa process against its specificationsProcess capability Unnecessary data clouding andanalysisclustering in IT network systemDigital wasteTo measure processes, product andservices for best practicesBenchmarkingUncertainty involve in processidentify and manageRisk management Graphical representation of datadistributionHistogramAccording to this principle highpriority are only fewPareto analysisWork flow process provide clearunderstanding of processProcess mappingProcess for development andimplementation as per technicalstandardStandardizationFishbone diagram emphasizes onpossible cause of problemCause and effectQuick machine setup timeanalysisMETHODOLOGYAuthor regularly touch with economical data of market andtechnology through newspaper artical,media,researchjournals,magzines,internet and industrial personals regardingwww.ijapie.org Vol. 1 Issue. 3 2016 25
Basant Chaurasia et al.,International Journal of Advanced Production and Industrial Engineeringreseach work on “select issues in lean manufacturing”,as hefindout hiccup plunge in stock market of United states ofAmerica or china impact globally selloffs in Europe, Korea,India, Hongkong, Australia and many more countries. He ndors,consultants and executives offinancial houses,state bank of india,Relience mutualfund,Sundram finance group, Geojit BNP Paribas, AdityaBirla Finance in Delhi-NCR and Oil and natural gascorporation(ONGC) dehradun.At the end summerized thecollective abstraction view in this paper.The authors depictslean six sigma terminology in table 2.Table 2: Lean six sigma TerminologyPoka-YokeMistake proof tool to prevent errorKaizenFocuses on continuous improvementarea (Womack et al.,1990)Pull system of product rather than proveandcontrol the problem proactively ratherthan reactivelyDAMIC processMeasurement of performance to meetcustomer expectationCritical toProcess of changing production line inquantity(CTQ)flexible manner quickly(Worley, 2004)Quick changeover Process strategy supply material whenit needed to reduce inventory costJust in timeSequencing family product to optimizeproductionCellularA system that proactively maintain andmanufacturingoptimize entire production and qualityprocessTotal productiveGroup of expertise from crossmaintenancefunctional departmentMulfuntionalA step that limit the entire process lineteamBottleneckAssessment to meet performance of aprocess against its specificationsProcess capability Unnecessary data clouding andanalysisclustering in IT network systemDigital wasteTo measure processes, product andservices for best practicesBenchmarkingUncertainty involve in process identifyand manageRisk management Graphical representation of datadistributionHistogramAccording to this principle highpriority are only fewPareto analysisWork flow process provide clearunderstanding of processProcess mappingProcess for development andimplementation as per technicalstandardStandardizationFishbone diagram emphasizes onpossible cause of problemCause and effectQuick machine setup timeanalysis IJAPIE ISSN: 2455–8419 LEAN SIX SIGMA PREVENTIVE GUIDELINES FORCOUNTRIES DURING RECESSION Lorenzoni, 2007, depict that collateral drops, forcesthe firms to reduce their investment in properties,consequently further drop in the value of their collateral.There is a “pecuniary externality” as investor do not identifygood or bad time investment. Control chart can be helpful inbussiness strategies to assess control stages and monitoringimprovement areas to affirmative sustainable success. Kiyotaki, 1998, highlights recession can overwhelmthe high productivity firms, because they received mostcredit before the recession and have minimal debt capacityleft.Poka-Yoke is error proofing technique work on principle“ prevention” is better than detection it intervene to blockundesired outcomes rather than controlling casual factors. Design for six sigma (DFSS) can fulfill customerexpectation and optimize design processes. According to the quantity theory of money, anincrease in the money supply tends to cause inflation, while ashrinking money supply tends to cause deflation. It wasobseved that when any country economy, employment anddevelopment strengthen, other countries threaten to drag itdown. Because USA has powerful economy Investors havepushed USA stocks to record highs and invest money in USAcompanies due to expected pace of profit althrough USAimporting product from china and other emerging countriesdue to glut of underused companies and not consuming theirown product. U.S. Census Bureau report said retail sales inthe United States decreased 0.90 percent in December of2014,DAMIC methodology having pace to strive solveproblem that may causes to upcoming recession of strongeconomic power country. Lean supply chain can significantly balencedcooperative relationship and competetion betweeen countriesthrough synchronized production and delivery by suppliers. Pareto’s approach can be helpful to prioritize thepossible change due to recession, identify root cause of eachproblem through brain storming session, 5ways, cause andeffect analysis and root cause analysis that can resolve bytaken necessary lean six sigma approach. Fault tree analysis examines proactively processfailure. Approach start with recession background throughputtime, breaks down into network series of responsible causesof failure, weaknesses of system, human error, andstructured into certain logic and rules. Through logic diagramfind out combination of causes of failure results are quicklyidentify the critical path and preventive action can be takenimmediately through risk analysis approach. Value stream mapping (VSM) approach optimizeentire process flow. This can be done in two steps firstlydraws current state map through identifying lead time,through put time and wastes in process. Second step drawfuture state map by applying Kaizen, Poka-Yoke, totalproductive maintenance and other lean manufacturing tool.Optimization of production process can revive economicalbenefits. Baldrige criteria helps to improve bussinessexcellencies of entire organization that identify non valueadded wastes,performance results through regular monitoringwww.ijapie.org Vol. 1 Issue. 3 2016 26
Basant Chaurasia et al.,International Journal of Advanced Production and Industrial Engineeringof process and improve results and effectiveness ofcompanies so that company straighten and focuses onimprovement areas.CONCLUSIONWe propose a framework of lean six sigma that may behelpful to accelerate slack economic growth and improvestagflation in ongoing situation. Typically, countries trust onspecialist team opinion and deterministic approach that hasits own limitations. Other limitation is that it does notincorporate uncertainties of business strategies duringrecessionary period. The end results assimilate framework,methodology and guidelines have optimal capability tostrengthen the business processes ,share market, grossdomestic product, household market and employment rate.REFERENCES[1] Alves, A.C., Dinis-Carvalho, J. and Sousa, R.M. (2012),“Lean production as promoter of thinkers to achievecompanies’ agility”, The Learning Organization, Vol. 19No.3, pp. 219-237.[2] Alexandros, G. P. and Loukas, K. T.(2012),“Towards anintegrated framework for Lean Six Sigma application:Lessons from the airline industry” ,Total QualityManagement & Business Excellence, Vol. 23 No.4,pp.397–415.[3] Andersson, R., et.al. (2014) “Lean Six Sigma strategy intelecom manufacturing, Industrial Management & DataSystems, Vol. 114 No. 6, pp.904-921.[4] Blinder A. and R. Reis (2005 ),“Understand
Aramco, Texaco, IBM, Baker Petroilite and Halliburton, Reliance Petroleum, Oil and natural gas corporation,India and Indian oil corporation accelerate their business performance through Lean Six Sigma tools and improve manu
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