Six Sigma in Manufacturing Sector in India

Introduction Six Sigma as a business strategy has been well recognized for operational and business excellence. This powerful business management strategy has been exploited by many world class organizations such as General Electric, Motorola, Honeywell, Bombardier, ABB, Sony to name a few (Antony, 2006). Six Sigma provides business executives and leaders with the strategy, methodology, infrastructure, tools and techniques to change the way businesses are run (Antony and Banuelas, 2001). Six Sigma has been defined as 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 reductions in the customer defined defect rates (Linderman et al., 2003). It focuses on reducing variation in all the processes of the organization. To achieve this, the DMAIC model was developed, which involved Define (D) the opportunities, measure (M) the performance, analyze (A) the opportunities, improve (I) the performance, and control (C) the performance. Six Sigma approach to the quality and process improvement has been used predominantly by the manufacturing organizations as the established base of measurable processes and quality management programs is already exist (Antony et al., 2007). The manufacturing companies suffer from uncontrolled and excessive variations in their manufacturing processes. These variations are often a major source of high process waste, low efficiency, under-utilized capacity and slow cycle times. However, it is now being increasingly recognized, there is a way forward Six Sigma programs, which encompass existing concepts and established statistical approaches within a systematic and quantifiable project based improvement methodology. Six Sigma has the potential of reducing variability from processes and products by using either a continuous improvement methodology or a design/redesign approach, also known as design for Six Sigma (BanAuelas and Antony, 2003). Six Sigma was developed by Motorola, in the 1980s, but gained enormous momentum, after its adoption by General Electric, in the mid 1990s (Koning and Mast, 2006). Numbers of studies are conducted to assess the status of Six Sigma in manufacturing and service sector worldwide. There has been very less number of reported studies in India. Other limitation of research studies is insufficient use of modeling tools. The study is conducted to fulfill these gaps with following objectives: 1) To identify the factors, those make Six Sigma needed. 2) To analyze the benefits achieved through deployment of Six Sigma. 3) To identify critical success factors for Six Sigma deployment. 4) Modeling critical-success-factors of Six Sigma using SEM. Literature Review The main reason of Six Sigma being too popular is its ability to provide excellent financial gains through process improvement. Six Sigma continues today as the best known approach to process improvement (Snee and Hoerl, 2003). Antony (2007) states that there have been three recognizable generations of Six Sigma; the first generation of six sigma lasted for a period of 8 years (1987-1994) and the focus was on reduction of defects. Motorola was a great example of a successful first generation company, The second generation of Six Sigma spanned the period from 1994 to 2000 and the focus was on cost reduction-General Electric, Du Pont and Honeywell are good examples of successful second generation companies, the focus of third generation is on creating value to customers and the enterprise itself. Examples of third generation of six sigma companies include Posco, Samsung, etc. The key issues of interest are why Six Sigma is needed, what are the benefits from Six Sigma, what are various success factors for Six Sigma and what are major tools of Six Sigma? To get the insight of these issues, literature review is divided in following categories: Need of Six Sigma Six Sigma is a business improvement approach that seeks to find and eliminate causes of defects in business processes by focusing on process outputs that are of critical importance to customers and as a result process performance is enhanced, customer satisfaction is improved, and the bottom-line is affected through savings and increased revenue (Snee, 2004). …