CapstonePaper_Mahesh(1)

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MAE Capstone Paper
Submitted in Partial Requirement of M.S. Engineering Management
Syracuse University
Review of the Journal Paper
“Integrating lean six sigma and supply chain approach for quality and
business performance”
By Siddh M, Soni G, Gaddekar G, Jain R
By,
Mahadeva Mahesh Sankaran
M.S. Engineering Management
SU Id: 630610650

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ABSTRACT
Lean manufacturing deals with the elimination of waste or any non-value added activities
(waste) involved within the manufacturing process. By trying to incorporate Lean
strategies major businesses around the world hope to stay competitive in the global
market. Six-sigma is another concept that attempts to reduce process variation by
measuring defects in a manufacturing environment. The ultimate goal of any organization
is to get as close to zero defects as possible. Lean Six sigma is the fusion of both Lean
and Six sigma concepts where Lean creates the Standard and Six sigma investigates
and resolves any variation from the standard. A supply chain refers to a network of
organizations, people, activities, information, and resources involved in moving a product
or service from supplier to customer. By integrating Lean Six Sigma methodology with a
supply chain an organization can easily achieve its targets while providing a high degree
of customer satisfaction. The ultimate goal of a Lean Six Sigma integrated Supply chain
is to minimize cost by eliminating waste, reducing process variation and finally providing
the highest level of Customer service.

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Table of Contents
1. List of Figures…………………………………………………………………………….4
2. Executive Summary……………………………………………………………………..5
3. Introduction………………………………………………………………………………6
4. Review of the Journal………………………………………………………………..7-15
a. Wastes…………………………………………………………………………... 7
b. Value Stream Mapping………………………………………………………… 8
c. Kanban System………………………………………………………………… 8
d. Toyota's Six Kanban Practices……………………………………………….. 9
e. Production Levelling And Kanban System…………………………………. 10
f. Lean Six Sigma By DMAIC Methodology…………………………………… 10
g. Differences between Lean Manufacturing And Six Sigma……………….. 12
h. Integration Approach…………………………………………………………. 17
5. Conclusions…………………………………………………………………………… 18
6. Recommendations for further study………………………………………………….19
7. Bibliography and citations…………………………………………………................20

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List of Figures
Description Figure Number Page
Differences between lean manufacturing and six sigma 1 12
Comparison of lean and six sigma methodologies 2 13
Combining both approaches 3 14
Synergies of Lean and Six Sigma Strategy 4 16

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EXECUTIVE SUMMARY
The journal “Integrating lean six sigma and supply chain approach for quality and
business performance” proposed by Researchers at IEEE conference illustrates the
Importance of Integrated Lean Six Sigma based Supply Chain Organizations and their
contribution to improve Customer service levels and overall business performance while
cutting down all extra costs associated with production by reducing the number of
defective products produced and reducing the lead time of the production runs at different
stages of production. The authors explain their lean thinking approach and suggest
various methodologies to reduce process variations affecting the entire supply chain. The
authors also suggested various control measures geared towards attaining the optimum
sigma level (6 sigma) which is what every business/organization should strive to attain in
order to maintain their profitability and competitiveness in the market.

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INTRODUCTION
Lean manufacturing focusses on increasing process speed. To increase speed, Lean
focuses on removing wasteful or non-value added process steps. It assumes that once
waste is removed the process not only gets faster, it becomes focused on what the
customer values and the quality of the product is improved. Six Sigma is a continuous
improvement methodology that focuses on the reduction of variation. Here Sigma
represents the standard deviation, a unit of measurement that designates the distribution
or spread about the mean of a process. Six Sigma as a business initiative was first
proposed by the Motorola Corporation in the early 1990s. The philosophy of Six Sigma is
the use of data and statistical analysis tools for systematic processes improvement.
Process data are gathered and analyzed to determine average process performance and
the output quality variation. The Six Sigma methodology is a five-phase, disciplined
approach to continuous improvement. The five-phases are Define, Measure, Analyze,
Improve, and Control (DMAIC). Six sigma and Lean processes are implemented by Six
Sigma Project teams and Kaizen project teams respectively. Here, Kaizen is a Japanese
word for process improvement and in terms of an organization and its workplace it refers
to standardized activities that bring about a continuous improvement in all functions and
involve all stakeholders from the CEO to the assembly line workers. It also includes
processes such as purchasing and logistics that cross organizational boundaries into the
supply chain. Its origins can be traced to several Japanese businesses that first
implemented it after the Second World War influenced partly by the opening of Japan to
American Businesses and Quality management teachers who visited the country.
Lean Six Sigma consolidates two major continuous improvement methodologies into a
single approach to continuous improvement. The principle of Lean Six Sigma is “the
activities that cause the customer’s critical-to-quality issues and create the longest time

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delays in any process offer the greatest opportunity for improvement in cost, quality,
capital, and lead time.
REVIEW OF THE JOURNAL
WASTES:
The elimination of Waste is an important component of Lean Six Sigma. Waste
can be described as any step during any part of the production process that does not add
value to the customer. The elimination of waste is the goal of Lean, although this might
seem like a clear concept it must be observed that waste is very conservatively estimated.
Toyota identified three broad types of wastes: Muda (Japanese word meaning
uselessness or idleness), Muri (excessiveness or immoderation) and Mura (unevenness
or irregularity).These formed the basis for the Toyota Production System (TPS) that went
on to compete against the US automobile Industry and dominate it to such an extent that
other companies started following this model and it became an Industry standard.
The modern classification of wastes identifies eight types of waste identified in the
following table:

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These eight wastes, identified in Table 1, are uncovered through the determination of
what the customer values. To uncover the waste and find the value, a lean initiative uses
value stream mapping.
VALUE-STREAM MAPPING:
The “value-stream” or “value-chain” mapping is a visual representation of all the steps,
tasks, or activities in a process and documents their sequence from start to finish. This
mapping is done to identify the current state of the process and use it to determine the
steps that are value and non-value added. A value-added step is one that directly impacts
the customer’s perception of the product’s value. Although value-stream mapping is the
primary measurement tool of Lean and contributes to the improvement of process speed,
other tools are needed to implement the knowledge gained through value-stream
mapping. For example in order to improve the speed of the process, Pull systems are one
of the most important tools.
Pull systems require thinking of production flow in the reverse direction: later processes
pull on earlier processes to pick only the right part, in the quantity needed, and exactly
when needed. In production environments, a pull system is a method of managing work-
Waste Definition
Over-processing
Adding value to a process/product the customer
would not pay for
Transportation
Moving raw materials, product, or information
unnecessarily
Motion The unnecessary movement by people
Inventory
Work-in-process (WIP) that is not directly
related to a customer requirement
Wait Time
The time that WIP is not directly related to a
customer requirement
Defects
Flaws in the WIP, final products, or services
that do not meet the customer’s requirements
Overproduction
Products and services that are in excess to
current customer requirements
Unused Human Resources Having excess workforce for the process

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in-process (WIP). WIP describes materials that are in the process of becoming finished
products.
KANBAN SYSTEM:
Kanban is a Japanese term that means signal. It is one of the primary tools of a JIT (Just-
In-Time) system as well as a common tool used in Lean production. It is a scheduling
system that signals a cycle of replenishment for production and materials. It maintains an
orderly and efficient flow of material throughout the entire manufacturing process. It is
usually a printed card or sheet that contains specific information such as part name,
description and quantity, etc. Depending on the complexity of the manufacturing
operation, there may be many locations for Kanban cards. The same size of bolt, used in
many places in the factory, might all point to one internal storage area from which the
purchase order is sent to the supplier. A complex sub-assembly with a Kanban card might
send production orders to several areas in the factory. Regardless of the complexity or
the number of processing steps in a factory that pass Kanban requests internally, each
process should be considered a shelf awaiting a demand from its customer, the
downstream process.
TOYOTA’S SIX KANBAN PRACTICES:
Toyota implemented six important practices to enable Kanban to serve its needs:
 Never send defective products downstream to the next process
 Each process only orders what it currently needs from the upstream process
 Each process only produces the quantity ordered by the downstream process
 Maintain a level rate of production
 Use Kanban to fine-tune the rate of production
 Work to reach a stable state of production
IS KANBAN COMPATIBLE WITH LEAN MANUFACTURING AND PRODUCTION
LEVELING?
It may be better to say that it is possible to arrive at a rational compromise, depending on
the mix of products demanded by external customers.

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An absolutely Lean factory never stops moving material as it moves from the loading dock
as raw material, through internal steps as goods-in-process, and onto the truck from the
shipping dock. No inventory is kept anywhere. If external customers always buy in
economic order quantities with flexible deadlines, suppliers are always reliable, and
processing time is minimal, then a Lean factory will maintain level production for each
order and does not need Kanban.
If the external customers buy in variable quantities and orders may pile up, it becomes
necessary to deliberately pursue production leveling. This keeps equipment and
personnel operating at a steady and sustainable pace while producing fewer defects than
would be created in a mad rush. To avoid missing customer deadlines, however, requires
a minimal inventory of finished goods to cover peak demand.
Once one accepts the need for the “minimal inventory of finished goods to cover peak
demand”, then Kanban becomes an excellent way to trigger the production cycle. The
quantities noted on the Kanban cards reflects the compromise between the Lean goal of
zero inventory and the conflicting demands to satisfy varying demands from external
customers.
PRODUCTION LEVELING AND THE KANBAN SYSTEM:
On the assumption that the factory is building different products simultaneously, Kanban
can also serve the goal of production levelling, or heijuka. Each product that a machine
or process can make has a horizontal row in the box. Vertical columns correspond to work
shifts. As Kanban order cards are brought to that machine, the cards are placed in the
correct row for the product they represent. By distributing the cards along the row, the
orders are assigned to subsequent shifts. Each shift should have a selection of cards that
achieves the goal of level production.
Electronic versions of Kanban and heijuka are available, but the cards provide a relatively
easy implementation and can certainly serve as tools for training.
LEAN SIX SIGMA BY DMAIC METHODOLOGY:
1. Define Phase:

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This is the First Step of Six Sigma and during this phase, projects are organized,
improvement goals are set, and the overall value of the project is determined. The
needs of the customer are measured and “defined” here. Customer Demands are
established here. Project teams and project sponsors use qualitative tools such as
a SIPOC (COPIS) diagram.
SIPOC stands for suppliers, inputs, process, outputs, and customers, which form
the columns for the table and the diagram summarizes the inputs and outputs of
one or more processes. In this case the SIPOC focusses on capturing the “voice
of the customer” that is it helps the organization understand the drivers behind
customer satisfaction. An SIPOC diagram does not list the actual steps of the
process itself.
2. Measure Phase:
This is the second phase where the processes within the supply chain are mapped
using various mapping tools and relevant data is collected. Process maps are first
done at a high level and then continually refined as more quantitative data are
collected. Graphical analysis of variation and root causes, such as time-series
plots or run charts and Pareto charts, respectively, are also constructed to further
enrich the available data. The time-series plots or run charts show the data in the
order they occurred and will show how the process changes over time while the
Pareto charts are a type of bar chart that categorizes the data to highlight the
impact of a certain effect.
3. Analyze Phase:
The Analyze phase is then used to apply statistical tools to the collected data to
determine process capability and sources of variation. The in-depth knowledge
gained from using the Six Sigma tools helps the team specifically identify the
problems or defects that are contributing to quality variation of the product. This
analysis lays the foundation for further improving the process. As stated in the
paper “ANOVA (Analysis of Variance) is one of the statistical tools used, it is vital
to six sigma because it provides a significance of difference between the samples.”

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The test breaks down total variance of a given data set into meaningful
components that can undergo further hypothesis testing of different parameters or
to even calculate the variance of individual components. By knowing the variance
of specific components the sigma levels (Standard Deviation) can be calculated,
thus ANOVA is one of the most important tools available to a quality/six sigma
specialist.
4. Improve Phase:
The Improve phase uses the knowledge gained from the Measure and Analyze
phases to generate possible solutions. These solutions are then prioritized, piloted,
and then implemented. Lean implements Kaizen process steps involving a
rearrangement of the work centers involved in production if necessary while Six
Sigma carries out DOE or Design of Experiments, a series of Information gathering
exercises where variance is present. The Project then moves onto the next phase.
Steps in Design of Experiments (DOE):
DOE typically consists of the following steps:
 Identify the input and output factors that the experiments will measure.
 Define for each input value a number of levels for which the output value is
known.
 Create an experiment plan that includes the input-level values defined.
 Perform the experiments for each input level and measure the output.
 Look for differences between the output values for the different levels of the
input changes.
5. Control Phase:
This is the final phase where improvements to the process are planned. During
this phase the improved process is validated and handed over to the process
owner. The process owner is provided a set of metrics or other measures they can
use to ensure the implemented solution continues to perform as expected.
Periodic validations should then be conducted by the specific project leader to
ensure consistent process performance. Both Lean and Six sigma are dependent
in this phase. Six sigma implements Statistical process control steps to calculate

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sigma levels and establish the number of defects while lean focusses on
establishing the 5S’s: Sort, Store, Shine, Standardize, and Sustain .These help in
keeping wastes to a minimal level. The 5 S’s get their names from their Japanese
counterparts: Seiri, Seiton, Seiso, Seiketsu, and Shitsuke.
DIFFERENCES BETWEEN LEAN MANUFACTURING AND SIX SIGMA:
The following table highlights key differences between Lean Manufacturing and Six Sigma
operations in a production environment:
COMPARISON OF LEAN AND SIX SIGMA METHODOLOGIES:
Issues/Problems/Objectives SixSigma Lean
Focuseson customer valuestream N Y
Focuseson creatingavisualworkplace N Y
Createsstandardworksheets N Y
Attackswork-in-progressinventory N Y
Focuseson goodhousekeeping N Y
Processcontrol planningandmonitoring Y N
Focuseson reducingvariationandachieve
uniformprocessoutputs
Y N
Focusesheavilyontheapplication ofstatistical
toolsandtechniques
Y N
Employsa structured,rigorousandwell planned
problem-solvingmethodology
Y N
Attackswasteduetowaiting,over processing,
motion, over production, etc.
N Y

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From the above table it is clear that the secondary effects of each methodology
mirror the primary focus of the other method. The synergy of applying both the Lean and
Six Sigma methodologies simultaneously is shown in the Figure below:
Program Lean Six Sigma
Theory Remove waste Reduce variation
Application guidelines
1. Identify value
2. Identify value stream
3. Flow
4. Pull
5. Perfection
1. Define
2. Measure
3. Analyze
4. Improve
5. Control
Focus Flow focused Problem focused
Assumptions Waste removal will improve
business performance.
Many small improvements are
better than systems analysis.
A problem exists.
Figures and numbers are valued.
System output improves if
variation in all processes is
reduced.
Primary effect Reduced flow time Uniform process output
Secondary effects Less variation.
Uniform output.
Less inventory.
New accounting system.
Flow—performance measure for
managers.
Improved quality.
Less waste.
Fast throughput.
Less inventory.
Fluctuation—performance
measures for managers.
Improved quality.
Criticisms Statistical or system analysis not
valued
System interaction not
considered.
Processes improved
independently.

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In the Figure, a process is shown graphically that is unbalanced and producing
high variation (Original Process). This process is out of control. The Figure shows how
applying Lean balances the flow of the process and applying Six Sigma reduces the
variation. Finally, the Figure shows the application of Lean Six Sigma which combines the
effects of both methodologies to both balance and focus the process.
Synergies of Lean and Six Sigma Strategy can be further expressed with the
help of the following table:
INTEGRATING LEAN SIX SIGMA AND SUPPLY CHAIN APPROACH TOWARDS
IMPROVING QUALITY AND BUSINESS PERFORMANCE:
With the advent of Globalization where suppliers from one corner of the world
provide supplies to support manufacturing in a production plant in another corner of the
world it is vital to integrate the concepts of Lean Six Sigma and Supply chain
Management. A Supply chain in a typical organization consists of various aspects such
as Information Systems, Purchasing, Customer Service, Sourcing, Transportation,
LeanStrategy SixSigmaStrategy
Useaprojectbasedimplementation Projectmanagementskills
Collectproductandproductiondata Datacollection
Understandcurrentconditions Knowledgediscovery
Createstandardworkcombinationsheets Processstabilityandcontrolplanning
Timetheprocess Datacollectiontoolsandtechniques(Statistical
ProcessControl
Optimalvalueflowisachievedthrough
aggressiveeliminationofwasteandnon-value
addedactivities
Providesthe‘howto’templateforeliminating
processvariation
Reducecycletimes,set-uptimes,equipment
downtime,changeovertime,amongothers
Sevenbasictools,modernmanagementtoolsof
quality,amongothers

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Production Scheduling, Order Processing, Inventory Management, Warehousing and
Marketing. The ultimate goal of an Integrated Supply chain management approach is to
provide products/services to the customer at a price the Company can realize a profit on
and at the same level provide the highest service level possible to the Customer at the
lowest possible cost in order to maintain and improve the firm’s profitability and
competiveness in the market. Thus, the concept of Lean Six Sigma comes into play here.
Integrated supply chains with a focus on quality initiatives such as Six Sigma and Lean
Production are geared towards sustaining a desirable Customer satisfaction/service level.
According to studies conducted, it was observed that companies with an Integrated
Supply chain are better able to meet quality expectations of the end customer and
respond to supply disruptions while considering the global nature of the supply chain
network since quality improvement measures are embedded within the supply chain itself.
The above figure highlights the key components of an Integrated Supply chain with
Quality management embedded within it.

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CONCLUSIONS
Lean manufacturing ultimately helps smoothen the “flow” of processes within the
Supply chain while six sigma helps identify the defects choking the flow. Finally
Integrating Lean Six Sigma with Supply chain systems help an organization improve its
overall quality , reduce unnecessary costs involved with production , inventory storage,
transportation and improve business performance. An integrated lean six sigma and
supply chain approach ensures that every segment within the supply chain from the
suppliers who provide the raw materials to the manufacturers who make the finished
products conform to a strict quality control methodology such that if successfully built in
such integrated systems ensure that only 3.4 defective units are produced for every
million units produced. In reality it is very difficult to enforce this however many
organizations strive to get as close to this value as possible.

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RECOMMENDATIONS FOR FURTHER STUDY
The paper provides a brief introduction into some of the common processes and
methodologies involved in Lean manufacturing, Six Sigma process improvement
strategies and how these concepts get integrated into the combined philosophy of Lean
Six Sigma within the Supply chain of an organization.
One recommendation would be to conduct an actual study of an Integrated Supply
Chain network that has this philosophy built into it from the supplier level to the actual
manufacturing plants and all the process steps involved until the product reached the end
user. A comparison between one such organization and another that singularly embraces
the philosophy of either just lean production or follows the steps of eliminating process
variation and thereby reducing their total number of defective units produced with minimal
lean effort.
Another suggestion would be to examine in further detail the various elements that
make up the supply chain of an organization with the methodology of Lean Six Sigma
build into each and every segment of the organization.

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BIBLIOGRAPHY AND CITATIONS
1. Integrating Lean Six Sigma and Supply Chain Approach for Quality and Business
Performance.
http://ieeexplore.ieee.org/xpl/articleDetails.jsp?arnumber=6970949&queryText=lean+six+sigm
a&newsearch=true&searchField=Search_All
2. Larry Webber and Michael Wallace. Quality Control for Dummies. WileyPublishing,
Inc. 2007.
3. Accenture Lean Six Sigma. Published by Muzammil Fiaz
4. The origin of the Toyota Production System.
http://www.toyota-
global.com/company/vision_philosophy/toyota_production_system/origin_of_the_toyota_prod
uction_system.html
5. Minimize Waste with the 5s system.
http://www.pfmproduction.com/pdfs/pfmp_spring07/pfmp_spring07_waste.pdf
6. Lean manufacturing:
http://en.wikipedia.org/wiki/Lean_manufacturing
7. Supply Chain Systems: SCM 721: Syracuse University Course work by Prof.
Patrick Penfield.
8. Lean Six Sigma: SCM 755: Syracuse University Course work by Prof. Gary
LaPoint
9. International Journal of Production Research , Solanti E , et. Al. (2011)

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