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PROJECT SUBMISSION PRO-FORMA
NAME : Rukiye KIRGIL
Student ID: 1158834
I wish the dissertation to be considered for:
MSc in Cybersecurity & Management
MSc in e-Business Management
MSc in Engineering Business Management
MSc in Engineering Business Management for Defence & Security
MSc in Enterprise Integration Management
MSc in Innovation & Entrepreneurship
MSc in International Technology Management
MSc in Management for Business Excellence
MSc in Manufacturing Systems Engineering
MSc in Process Business Management
MSc in Programme & Project Management
MSc in Supply Chain & Logistics Management
I have checked that my modules meet the requirements of the above award
I confirm that I have included in my dissertation:
An abstract of the work completed
A declaration of my contribution to the work and its suitability for the degree
A table of contents
A list of figures & tables (if applicable)
A glossary of terms (where appropriate)
A clear statement of my project objectives
A full reference list
I am willing for my marked dissertation to be used for staff training purposes
Signed: Rukiye KIRGIL Date: 19.09.2013
ENTERPRISE RESOURCE PLANNING SYSTEMS’
INTEGRATION WITH THE LEAN SIX SIGMA STRATEGY
by
Rukiye KIRGIL
Supervisor:
Graham WARREN
Dissertation submitted in partial fulfilment for the Degree of
Master of Science in E-Business Management (e-BM)
The University of Warwick
Warwick Manufacturing Group
Submitted: September 2013
iv
ABSTRACT
Organisations are becoming more demanding day by day because information
technology has increased business standards with the advent of computer
technology. Business processes have been streamlined since the computers came
into the business life. In this sense, the most popular Japanese business
improvement strategy, Lean Six Sigma (LSS), is focused on this dissertation. The
possibility of its integration with Enterprise Resource Planning (ERP) systems is
investigated. In that case, ERP systems might expedite LSS projects and enhance
their effectiveness. When looking from the outside, ERP systems provide software
programs to companies for managing their information systems while LSS strategy
helps the companies to achieve business excellence by eliminating waste from their
organisations, improving quality of their processes’ outputs and streamlining their
business processes. In this project, it is claimed that even though they seem different
from each other, they might be mutually supportive.
In order to reveal the benefits of their combination, some questions have been
produced based on the literature. After that, these questions have been discussed
with nine experts from the real business life. Subsequently, the data aggregated
through semi-structured interviews with those experts have been analysed and
evaluated in Discussion section.
Finally, some conclusions have been drawn after the interviews’ evaluations.
Although all specialists agree with the idea of this project, some doubts have
emerged in some critical cases. Therefore, advantages and disadvantages of their
relationship are indicated in the Conclusion chapter. The sequence of their
implementation in case of their integration is also evaluated in the Conclusion.
All in all, if all conditions are taken into consideration, their collaboration
seems profitable for the companies which implement ERP and/or LSS to their
organisations.
v
ACKNOWLEDGEMENTS
I would like to express my deepest appreciation to my supervisor –Graham Warren–
who has always supported me to produce my best throughout MSc program and
made me motivated, happy and concentrated.
I would like to thank Dr. Adrian Watt who has helped me to find specialists in my
research subject from the industry. Also, many thanks for all of these experts who
have kindly accepted my interview request. I would like to articulate their names
again: Dr. Angela Clarke, Ton Van Esch, Kim Stansfield, Mike James-Moore, Greg J.
Hughes, Dr. Terra Vanzant-Stern, Serkan Mahir, Dr. David Scrimshire and Mete
Mazlum. I am really grateful to those people.
Additionally, I would like to thank my friends who have been with me at all times and
also made me happy. Finally, a big thank to my family who have been always
supportive to me materially and morally throughout my life.
vi
DECLARATION
I have read and understood the rules on cheating, plagiarism and appropriate referencing as
outlined in my handbook and I declare that the work contained in this assignment is my own,
unless otherwise acknowledged.
No substantial part of the work submitted here has also been submitted by me in other
assessments for this or previous degree courses, and I acknowledge that if this has been
done an appropriate reduction in the mark I might otherwise have received will be made.
Signed candidate: Rukiye KIRGIL
The project should normally be related to the management of:
1. Companies in the engineering sector,
2. The engineering function within a non-engineering company or
3. The supply chain within the engineering sector.
The project could address many different aspects such as operational, financial, human
resource, technical or strategic management issues.
Where the project is of a technical nature, there must be clear evidence of business benefit
from this technology.
If the focus of the project is outside the above industrial spectrum it MUST contain
considerable comparative analysis of practices in the engineering sector.
My project relates to this definition in the following way: The project examines the relationship between the Enterprise Resource Planning (ERP) Systems and Lean Six Sigma (LSS) strategy. Firstly, how effectively could ERP and Lean Thinking contribute to the DMAIC method which is based on Six Sigma strategy has been investigated. Subsequently, the relationship between ERP and LSS has been analysed. Finally, which one should be implemented at first if they are decided to be implemented together has been researched. All of those explanations just mentioned above indicate that this research study is not only related to information management systems, but it also focus on some engineering tools such as Lean Thinking and Six Sigma strategy.
The above shows the relevance of the work to the degree for which it is submitted
Signed Agree Disagree
Supervisor
Second Assessor
vii
TABLE OF CONTENTS
1. SECTION ONE: INTRODUCTION ....................................................................... 1
1.1. BACKGROUND FOR THE PROJECT .......................................................... 1
1.2. OUTLINE OF THE PROJECT ....................................................................... 1
2. SECTION TWO: LITERATURE REVIEW ............................................................ 4
2.1. ERP AS AN INFORMATION-ORIENTED BUSINESS .................................. 4
2.1.1. What is ERP? .......................................................................................... 4
2.1.2. Evolution of the ERP ............................................................................... 5
2.1.3. ERP Implementation ................................................................................ 6
2.1.4. Benefits of an ERP system .................................................................... 14
2.1.5. Challenges of the ERP Systems............................................................ 22
2.2. LEAN SIX SIGMA (LSS) APPROACH ........................................................ 23
2.2.1. What is Lean Thinking? ......................................................................... 23
2.2.2. What is Six Sigma? ............................................................................... 30
2.2.3. Why should Lean and Six Sigma be combined? ................................... 33
2.2.4. Challenges of Lean Six Sigma .............................................................. 48
2.3. CORRELATION OF ERP SYSTEMS AND LEAN SIX SIGMA STRATEGIES
50
2.4. CONCLUSION OF THE LITERATURE REVIEW ........................................ 55
3. SECTION THREE: RESEARCH METHODOLOGY ........................................... 60
3.1. RESEARCH PHILOSOPHIES AND APPROACHES .................................. 60
3.2. RESEARCH PARADIGMS .......................................................................... 62
3.3. RESEARCH APPROACHES ....................................................................... 64
3.4. CLASSIFICATION ABOUT RESEARCH PURPOSE .................................. 64
3.5. RESEARCH STRATEGY ............................................................................ 65
3.6. DATA COLLECTION ................................................................................... 67
3.6.1. Literature Resources ............................................................................. 67
3.6.2. Data Collection Methods ....................................................................... 68
3.6.3. Ethics ..................................................................................................... 71
3.7. TIME HORIZONS......................................................................................... 71
4. SECTION FOUR: DATA ANALYSIS ................................................................. 73
4.1. ANALYSING THE DMAIC METHOD ........................................................... 73
viii
4.1.1. Analysing the Define Phase of the DMAIC Method ............................... 73
4.1.2. Analysing the Measure Phase of the DMAIC Method ............................ 83
4.1.3. Analysing the Analyse Phase of the DMAIC Method ............................. 89
4.1.4. Analysing the Improve Phase of the DMAIC Method ............................. 93
4.1.5. Analysing the Control Phase of the DMAIC Method .............................. 96
4.2. THE POSSIBILITY OF CROSS RELATIONSHIP BETWEEN THE ERP
SYSTEMS AND LEAN SIX SIGMA STRATEGIES ............................................. 101
4.3. SEQUENCE OF THEIR IMPLEMENTATION (ERP & LSS) ...................... 105
5. SECTION FIVE: DISCUSSION ........................................................................ 108
5.1. DISCUSSION FOR THE DMAIC METHOD ............................................... 108
5.1.1. Discussion for the Define Phase.......................................................... 108
5.1.2. Discussion for the Measure Phase ...................................................... 115
5.1.3. Discussion for the Analyse Phase ....................................................... 123
5.1.4. Discussion for the Improve Phase ....................................................... 126
5.1.5. Discussion for the Control Phase ........................................................ 129
5.2. DISCUSSION FOR THE RELATIONSHIP BETWEEN ERP & LSS .......... 131
5.3. DISCUSSION FOR THE SEQUENCE OF THEIR IMPLEMENTATION .... 133
6. SECTION SIX: CONCLUSION ......................................................................... 135
6.1. SUMMARY OF THE PROJECT OUTCOMES ........................................... 135
6.2. PRACTICAL APPLICATION OF THE RESEARCH IDEA ........................ 137
6.3. LIMITATIONS FOR THIS RESEARCH ..................................................... 137
6.4. RECOMMENDATIONS FOR FUTURE RESEARCHES ............................ 138
7. REFERENCES ................................................................................................. 139
ix
LIST OF FIGURES
Figure 1: Evolution of the ERP approach .................................................................. 6
Figure 2: Technology Capability Ladder ................................................................... 10
Figure 3: Driving to a Common Understanding ....................................................... 12
Figure 4: Technology effects upon a supply chain ................................................... 16
Figure 5: ERP Initiation Responsibility .................................................................... 18
Figure 6: Value Organisation Alignment Mapping .................................................... 25
Figure 7: Time Value Mapping ................................................................................. 25
Figure 8: Swim Lane Flow Charts ............................................................................ 26
Figure 9: Physical Process Maps ............................................................................. 26
Figure 10: Logical Process Flow Maps .................................................................... 27
Figure 11: 7 Wastes of Lean Manufacturing ............................................................ 28
Figure 12: Customers’ perception of a company’s quality ........................................ 32
Figure 13: The four Pillars of a quality culture .......................................................... 38
Figure 14: Lean Six Sigma Integration ..................................................................... 48
Figure 15: Comparison between ERP Systems and Lean Six Sigma Methodologies
.................................................................................................................................. 56
Figure 16: Research Paradigms .............................................................................. 62
Figure 17: Literature Resources ............................................................................... 68
Figure 18: Research choices ................................................................................... 69
Figure 19: The Research Onion .............................................................................. 72
Figure 20: Experts’ evaluations about the Question A ........................................... 109
Figure 21: Experts’ evaluations about the Question B ........................................... 111
Figure 22: Experts’ evaluations about the Question C ........................................... 112
Figure 23: Experts’ evaluations about the Question D ........................................... 115
Figure 24: Experts’ evaluations about the Question E ........................................... 117
Figure 25: Experts’ evaluations about the Question F ............................................ 120
Figure 26: Experts’ evaluations about the Question J ............................................ 121
Figure 27: Experts’ evaluations about the Question G ........................................... 123
Figure 28: Experts’ evaluations about the Question K ........................................... 125
Figure 29: Experts’ evaluations about the Question H ........................................... 129
x
LIST OF TABLES
Table 1: The comparison between Clean Slate Reengineering and Technology-
enabled Reengineering ............................................................................................... 9
Table 2: Costs of an ERP Implementation- 2007 Aberdeen Group Survey .............. 13
Table 3: Lean Manufacturing Adoption ..................................................................... 30
Table 4: Lean and Six Sigma .................................................................................... 34
Table 5: Three Phases of Lean Six Sigma ............................................................... 36
Table 6: Define Phase’s steps ................................................................................. 50
Table 7: Measure Phase’s steps .............................................................................. 51
Table 8: Analyse Phase’s steps ................................................................................ 53
Table 9: Improve Phase’s steps .............................................................................. 54
Table 10: Control Phase’s steps ............................................................................... 54
Table 11: Experts’ opinions about the Question A .................................................. 109
Table 12: Experts’ opinions about the Question B .................................................. 111
Table 13: Experts’ opinions about the Question C .................................................. 113
Table 14: Experts’ opinions about the Question D .................................................. 116
Table 15: Experts’ opinions about the Question E .................................................. 117
Table 16: Experts’ opinions about the Question F .................................................. 119
Table 17: Experts’ opinions about the Question J .................................................. 122
Table 18: Experts’ opinions about the Question G ................................................. 123
Table 19: Experts’ opinions about the Question K .................................................. 125
Table 20: Experts’ opinions about the Question H .................................................. 129
xi
GLOSSARY
AHP: Analytic Hierarchy Process
BI: Business Intelligence
BPR: Business Process Reengineering
CEO: Chief Executive Officer
CTQ: Critical-to-Quality
DMAIC: Define-Measure-Analyse-Improve-Control
ERP: Enterprise Resource Planning
FMEA: Failure Modes and Effects Analysis
I-MR: Individuals and Moving Range
LSL: Lowe Specification Limit
LSS: Lean Six Sigma
MOC: Mind of the Customers
MRP I: Material Requirements Plnning
MRP II: Manufacturing Resource Planning
OEE: Overall Equipment Effectiveness
OLAP: Online Analytic Processing
OLTP: Online Transaction Processing
OTIF: On Time in Full
QFD: Quality Function Deployment
RACI: Responsible-Accountable-Consulted-Informed
RCCA: Root Cause and Corrective Action
RFT: Right First Time
RMS: Requirements Management System
SIPOC: Supplier-Input-Process-Output-Customer
SMED: Single Minute Exchange of Die
xii
SOP: Standard Operating Procedure
SPC: Statistical Process Control
SQC: statistical Quality Control
TPM: Total Productive Maintenance
TQM: Total Quality Management
USL: Upper Specification Limit
VOB: Voice of the Business
VOC: Voice of the Customers
VOE: Voice of the Employees
VOP: Voice of the Process
VSM: Value Stream Mapping
WIP: Work in Process
1
Section One: Introduction
1. SECTION ONE: INTRODUCTION
1.1. BACKGROUND FOR THE PROJECT
Today’s highly competitive business world requires successful
implementations from organisations because their supplies should not be fallen
behind customers’ accelerating demands. For that reason, information management
systems are developed with each passing day for meeting customers’ needs
expeditiously as well as conduct business processes successfully. Also, information
technology is tried to be penetrated in organisational operations. In that case, it might
be observed that some tools and/ or strategies might be integrated in order to acquire
optimisation for improving companies’ transactions and building winning corporate
cultures.
In terms of this dissertation’s research area, functionalities of Enterprise
Resource Planning (ERP) as an information management system and Lean Six
Sigma (LSS) as a business improvement strategy have been researched. According
to the explanations mentioned in the previous paragraph, the possibility of their
combination has been investigated. Therefore, their relationship has been thoroughly
analysed throughout the project. It did seem that they were both exceedingly useful
initiatives for the companies before this research study. However, their integration in
practice is difficult to encounter in the real business life. This project’s purpose is to
reveal their mutual relationship. Thus, “How could benefits be obtained from the
combination of ERP and LSS?” has been questioned during the study.
1.2. OUTLINE OF THE PROJECT
After reviewing literature, a model about Six Sigma DMAIC method has been
constructed and some propositions have been put on it based on the literature.
Subsequently, ERP systems’ and Lean Thinking’s contributions have been analysed
step by step with the experts in ERP and/or LSS. After that, the idea of their mutual
2
Section One: Introduction
support to each other has been discussed with the experts and their advice about the
sequence of these two implementations has been asked afterwards.
After giving background of the project, following sections are indicated below.
Literature Review: In the Literature Review section, ERP and some auxiliary
tools such as Business Intelligence tools are explained in detail.
Subsequently, Lean Thinking, Six Sigma strategy and their combination as the
Lean Six Sigma strategy are explicated. At the end of this section, explored
relationships between ERP and LSS have are mentioned.
Research Methodology: Deciding the research methodology follows the
Literature Review. After reviewing the research methods, the most appropriate
one has been selected. This research study adopts the mixture of
interpretivism and positivism with radical humanist paradigm. Conducting
semi-structured interviews with the experts in a qualitative way is the type of
this project’s case study.
Data Analysis: After the selection of the method, data collected from semi-
structured interviews are analysed.
Discussion: The specialists’ opinions are evaluated and some critical points
are discussed in this section. The discussion is divided into three sub-sections
which are “Discussion for the DMAIC Method”, “Discussion for the
Relationship between ERP and LSS” and “Discussion for the sequence of
ERP and LSS”.
Conclusion: Finally, conclusion is drawn according to the results and findings
of the case study.
All of those steps just stated above are visualised below.
3
Section One: Introduction
SECTION: 2
LITERATURE
REVIEW
SECTION: 3
RESEARCH
METHODOLOGY
SECTION: 4
DATA
ANALYSIS
SECTION: 5
DISCUSSION
ERP
LEAN
SIX
SIGMA
Interpretivist
Positivist
philosophies
Radical
humanist
paradigm
Qualitative
Research
Case Study
Semi-
structured
interviews
9 experts’
opinions
about the
model
developed
DMAIC
Method
(Each phase)
Relationship
between
ERP and LSS
Sequence of
ERP and LSS
INTRODUCTION
CONCLUSION
4
Section Two: Literature Review
2. SECTION TWO: LITERATURE REVIEW
2.1. ERP AS AN INFORMATION-ORIENTED BUSINESS
Accelerating business growth requires companies to overcome fierce competition
in this age of technology, because there are many opportunities for customers to
provide any product or service in the market. That is the reason why companies have
been seeking state-of-the-art technology for their businesses in order to update their
technical infrastructures. The more a company is up-to-date across the
technology, the more it fulfils its customers’ expectations. Technology penetration
does not only improve tangible assets, it also enhances intangible tools such as
information-oriented activities. It is because all information, which companies need,
could be effortlessly collected, analysed by using statistical software programs and
disseminated to the relevant parts of the business through the technology. In that
case, Enterprise Resource Planning (ERP) Systems allow the companies to monitor
their entire supply chains and manage them in an organised way.
2.1.1. What is ERP?
Enterprise Resource Planning (ERP) is an automated system which integrates
the majority of business processes, provides all information about intra-corporate
transactions and common data about the businesses and also offers real-time
information and access (Sumner, 2005). According to Sheldon (2005), “ERP is a
business model that involves all levels of the organisation”. It is a software package
which endeavours to merge a company’s each department and function onto a single
computer system that can fulfil each individual department’s requirements
(Tambovcevs, 2012). Similarly, Shanks and his colleagues (2003) evaluated ERP
System as a “packaged business software system” which automates and integrates a
company’s business processes, provides common platform for data-sharing while
producing real-time data and access.
5
Section Two: Literature Review
In addition to these exhaustive definitions, Harwood (2003) summarised that
system as an “integrated information system” which serves “all aspect of the
business”. Additionally, Monk and Wagner (2006) considered ERP from a different
angle by saying “company-wide computing environment” within that sentence: “It can
integrate a company’s operations by acting as a company-wide computing
environment that includes a database that is shared by all functional areas”.
However, the basis of the definitions addresses the same benefits of the ERP
systems.
2.1.2. Evolution of the ERP
Every company aims to manage their supply chains properly and fulfil their
customers’ expectations. In order to deal with increasing complexity within the
companies’ supply chains due to successive demand of today’s sophisticated
business environment, they need to automate all different activities of their
businesses. That is the reason why companies have been looking for a computerised
system for their business processes since 1960s.
Manufacturing managers’ focus has revolved around inventory in 1960s; therefore
“Inventory Control Packages” have been used for managing manufacturing.
Subsequently, they have inclined to the view that material requirement for each
product was also essential. Thus, a new approach called “Material Requirements
Planning (MRP)” has been emerged in 1970s. After obtaining MRP, it was not
satisfied for the companies though being integrated with sales planning, customer
order management system and capacity planning. Therefore, “Manufacturing
Resource Planning (MRP- II)” has developed in 1980s by adding accounting system
to the MRP. Material and capacity requirements planning were enhanced with
providing financial information about the businesses by virtue of MRP- II. In that
case, a new tendency towards an integrated business system has revealed. Finally,
“Enterprise Resource Planning (ERP)” has materialised in 1990s (Sumner, 2005). All
activities from suppliers to the end customers have been integrating since the
invention of ERP. According to Shanks and his colleagues (2003), “today’s ERP
systems have evolved from packaged software for supporting for Material
6
Section Two: Literature Review
Requirements Planning (MRP) and Manufacturing Resource Planning (MRP- II)”.
There is a schema below which illustrates ERP transition.
Figure 1: Evolution of the ERP approach (drawn by the author)
2.1.3. ERP Implementation
Enterprise Resource Planning is an approach which encourages companies to be
integrated into e-business environment. Although electronic business activities
streamline business processes, there is usually resistance to technology adoption
due to human nature. It is because new technologies expect you to do what you are
used to do in a different way. Therefore, there are some key points which should be
thoroughly considered by organisations before the e-business implementations. Ash
and Burn (2003) draw people’s attention to those key points by emphasizing “the
organisational environment with ready culture, a willingness to share knowledge,
balanced network relationships and a capacity to learn”. Importantly, breakthroughs
should be incorporated into the organisations with the help of change management
because people are not accustomed to sharing knowledge with the other
organisations such as sharing inventory data with suppliers. That means a company
culture might not be ready to implement a new technology into their business. In
order to overcome that problem, people should be trained to deal with the technology
requirements and also need to be willing to learn and capable. In that way,
customers’ expectations could be properly conceived and fulfilled.
7
Section Two: Literature Review
ERP, as an e-business activity, is a back-end application which supports front-
end services. It provides exhaustive data to the front-end functions (Ash and Burn,
2003). According to Shanks and his colleagues (2003), it captures deep and detailed
data about the businesses. In that case, information accuracy is important therefore it
should be cautiously implemented into the business. Thus, ERP system penetration
is manipulated into three sections (Tambovcevs, 2012);
“Pre-implementation Process”
“Implementation Experience”
“ERP system configuration, benefits and future directions”
In pre-implementation process, the focused company’s infrastructure is analysed
for if it is ready to be integrated with ERP or not. Reengineering plays an important
role in this section which is explained below in detail.
2.1.3.1. Pre-Implementation Process of ERP: Business Process
Reengineering and Best Practices
Business Process Reengineering (BPR) is a method of identification the best way
that provides the companies to develop their integrated information systems (Olson,
2004). Grover and Kettinger (1998) defined BPR as “typically involves the use of
information technology to enable new ways of working”. The most important
challenge within BPR process is to forget what you are used to do previously and
become open-minded about the new technologies (Yakovlev, 2002). That is
evaluated as “socio-cultural challenge” that results people’s reaction against the
changes. There is another challenge called “technical challenge” which presents
difficulties while developing a process design that could be a significant improvement
for the current design (Reijers and Mansar, 2004). After overcoming these
challenges, BPR works well in improving effectiveness of the technology.
Olson (2004) mentioned that BPR predates before the ERP implementation.
While ERP is providing high level of flexibility to the companies in order to meet their
customers’ demands and integrating their entire business processes, BPR prepares
8
Section Two: Literature Review
them to adopt this new technology and utilise it properly. There is two ways to
implement reengineering;
Clean Slate Business Process Reengineering
Technology-enabled Business Process Reengineering
The former one is the certain way of being responsive to organisational needs
because an enterprise resource planning software could be changed in conformity
with business requirements (Olson, 2004). In essence, clean slate means that
“everything is designed from scratch” (Yingjie, 2005). In other words, there is no
improvement on any system. Business needs are firstly identified and the business
requirements are meticulously fulfilled afterwards in such reengineering processes
(Olson, 2004). In that case, ERP implementation is manipulated to the last because a
company’s current situation should be evaluated at first and the selected software,
which fits the focused company’s business processes, should be subsequently
adjusted according to its requirements (Subramoniam et al. 2009). That
customisation could provide an optimisation of ERP implementation. However,
attempting an optimal system creation through clean slate BPR might increase the
companies’ general expenses because you will be supposed to invest more in an
ERP software if you expect its vendor to customise it according to your business
requirements. Also, it will yield results in the long term (Yingjie, 2005). That the clean
slate BPR might be exceedingly expensive must be one of the reasons why the
companies struggle with the custom-built software implementations. That is the
reason why Technology-enabled Business Process Reengineering is the most
popular option in practice (Olson, 2004).
The latter one is the cheapest and fastest way to implement business process
reengineering (Olson, 2004). According to this modality, an ERP system is selected
at first and then reengineering is conducted (Olson, 2004). In that case, the
reengineering process is limited by the selected system (Olson, 2004). That means
the business processes should be adjusted for the chosen ERP system instead of
customising the software according to their requirements. Yingjie (2005) mentioned
that “since the systems are ready and it is not necessary to change them, this
approach is faster and cheaper than clean slate reengineering” and added afterwards
9
Section Two: Literature Review
as “on the negative side, it also requires a lot of change and training within the
organisation”.
Companies will encounter some advantages and disadvantages if they are
interested in conducting one of these reengineering methods into their businesses.
They could retain competitive advantage by changing their ways of doing business in
order to be more responsive to organisations’ needs through clean slate
reengineering, when technology enabled reengineering facilitates the business
processes due to reducing costs and saving time (Olson, 2004). In that case, there
seems to be different conditions for the selection. Although beginning from scratch
brings strategic advantages to the companies (Subramoniam et al. 2009) and
provides for them to be based on their own business experiences during the ERP
implementation, it requires considerable amount of investment and lingering attention
on it due to producing long term outcomes. Hence, clean slate reengineering seems
to be available for the big companies in order to construct their own ERP processes
whereas technology-enabled reengineering produces short term solutions for the
smaller companies during the ERP implementation.
There are some differences between clean slate BPR and technology-enabled
BPR illustrated below;
Table 1: The comparison between Clean Slate Reengineering and Technology-enabled
Reengineering (drawn by the author)
Clean Slate Business Process
Reengineering
Technology-enabled Business
Process Reengineering
The identification of business
requirements first
The selection of an ERP system first
Significant changes in the selected ERP
software
Small changes in the selected ERP
software
Slower and harder to apply Faster and easier to implement
Expensive Cheaper
10
Section Two: Literature Review
The reason why Business Process Reengineering is exceedingly important in
order to properly utilise the ERP systems’ existed capacity is because staffs
responsible for the ERP implementation focus on its technical aspect of a project that
prevents them to deliver value-adding processes to the supply chain (Kimberling,
2012). It looks as if the success of an ERP implementation is not just based on
excellent and mistake-free software. Concurrently, companies’ infrastructures and
customer expectations should be considered, which in turn top managers could
understand their businesses’ requirements. That can be provided by business
process reengineering which is why “the most common approach was to undertake
BPR simultaneously with the implementation of SAP R/3 that is one of the ERP
systems” (Olson, 2004). Briefly, business processes could be simplified and
streamlined by means of BPR methodologies which can also provide the companies
to be aware of changeable markets and competitor strategies with the ERP systems
(Sumner, 2005).
In terms of best practices, “a best practice is a method that has been judged to
be superior to other methods” (Olson.2004). Olson (2004) mentioned that “BPR is
designed to identify a best practice” and he added that that identification could be
provided by benchmarking which is based on comparison with the other companies
in a market.
Figure 2: Technology Capability Ladder (Mantri, 2008). (Taken from http://www.proteusadvisors.com/labels/Best%20Practices.htm)
11
Section Two: Literature Review
As can be observed from the Figure 2 above, obtaining benefits of a technology
cannot happen immediately. Success in this process could be achieved step by step.
As mentioned before, best practices are best-resulted through benchmarking that
allows the companies to utilise ERP system’s capacity as far as possible. Therefore,
best practices should be considered besides ERP acquisition. Following that, ERP
adaptation is provided, although this technology should always be up-to-date across
new improvements. Finally, the best results could be received.
2.1.3.2. Implementation Process of ERP
After pre-implementation process, ERP implementation phase should be well-
managed by all the company members. That is deliberately said as “all members”
because employees and top managers are encouraged to be involved in the ERP
implementation phase. This situation has been stated by Ash and Burn (2003) as a
team-based structure allows employees to be more productive. In other words,
employees of a company could actively participate in the company’s ERP software
installation and thereby improve its information flow, which in turn increase quality of
the implementation process. According to Sumner (2005), all employees of a
company should be included into a new process which is designed through an ERP
system. That they need to contribute to the new system’s success should be taught
them as their tasks from that time on (Sumner, 2005).
As illustrated below on the Figure 3, common understanding fills the knowledge
gaps. You need to understand your existing business model and swap it with the
new, improved one if you intend to install an ERP software on your company. That
could produce the best results through common understanding about technical
aspects of your company and also common understanding of the business model.
This perception helps IT staffs and partners utilising the technology correctly and
meeting the customer’s needs.
12
Section Two: Literature Review
Figure 3: Driving to a Common Understanding (Beaubouef, 2010). (Taken from http://panorama-
consulting.com/generating-business-to-it-alignment-for-a-successful-erp-implementation/)
As mentioned before, ERP is not a standalone methodology which deals with
everything in order to provide continuous improvement within the businesses. It is
just a system that integrates real-time and precise operation flows (Tambovcevs,
2012). Software capacity should be understood well at first and customising the
software or changing the organisational processes according to the selected software
should be manipulated afterwards. That is the central challenge of the system
implementation (Shanks et al. 2003). Shanks and his colleagues (2003) draw
people’s attention to this point: “an enterprise system imposes its own logic on the
company’s strategy, culture and organisation”. It implies that inputs of an ERP
system, which consists of sequence of information processes, prevail upon the
business on which is installed. That is the reason why every business is an
“information business” nowadays. Therefore, information accuracy and quality play
crucial roles; that is stated by Sheldon (2005) as “accuracy of data is an asset for
process improvement as well as process predictability in all high performance
organisations”.
In terms of function of an ERP system, it provides internal and external
integration that are mentioned by Tambovcevs (2012). He explained their differences
by emphasising their contributions. Providing common data to all the company
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Section Two: Literature Review
members is evaluated as internal integration, while “connecting the computer
network of an enterprise” is perceived as a definition of external integration. In this
way, entering the information onto the system once whenever the data is acquired
(one time entry) and making it accessible from any place and at any time and also
enabling to share that repository by multiple users for multiple purposes improves the
organisational activities within the company. That is the reason why this process is
named as internal integration. Additionally, the ERP system could create a linkage
between suppliers and customers by sharing necessary information and exchanging
it that shows how it integrates the business processes externally.
On the other hand, creating a computer environment through an ERP software
costs the companies a great deal of money. It needs four-fold investment more than
the other software licences (Shanks et al. 2003). Unfortunately, the majority of the
businesses recently struggle with ERP implementation due to falling short of budget
(Kimberling, 2012). He thinks that “over-investing in shelfware” is a bad habit of the
organisations. That situation illustrates that they are not expert in implementing ERP
software, which in turn waste their time and money (Kimberling, 2012). Thus, top
managers should consider their own reasonable budget based on their size in order
to implement an ERP software. In other words, cost of an ERP implementation
depends on the company’s revenue that is shown below in Table 2.
Table 2: Costs of an ERP Implementation- 2007 Aberdeen Group Survey (Tambovcevs, 2012)
Finally, that an investment of an ERP system produces long term outcomes
should be borne in mind by top managers. Sumner (2005) indicated that if the
COMPANY SIZE COST OF AN ERP SOFTWARE
Revenue < $50 million on average of $384,295
$50 million< Revenue< $100 million on average or just over $1 million
$500 million< Revenue< $1 billion just over $3 million
Revenue> $1 billion on average of $6 million
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Section Two: Literature Review
implementation phase takes three years, five years will be necessary to meet the
expected benefits. Also, if there is a large-scale project, improvement of the system
and return on investment for the software could be observed in ten years.
2.1.4. Benefits of an ERP system
Computer technology does not only bring facilities to individuals’ lives, but it also
allows various industries to meet their complex challenges and respond to them
(Tambovcevs, 2012). An ERP system’s objective is to automate business processes
of an enterprise and then enable the company to encounter its benefits
(Tambovcevs, 2012). It appears that development of the ERP systems takes the
place of middle managers because they were previously employed for gathering the
business processes and people and they are also responsible for managing these
components in order to run the businesses effectively. However, it seems that
expedited processes and considerable amount of cost reduction could be provided
by means of computational approach if this automation is managed well. Therefore, it
could be said that the companies have been reaping diverse benefits from the e-
business environment since the ERP systems were developed. The advantages
gained from that information technology can be collected into two groups. The first
one is evaluated as “transactional benefits”, when the other one is entitled as
“managerial benefits”.
2.1.4.1. Transactional benefits of an ERP system
Planning an enterprise’s resources could simplify the way of doing business by
increasing value-added functions, facilitating people’s work and improving
information flow. These contributions were mentioned by some experts in a similar
way: According to Ash and Burn (2003), the ERP systems provide performance gains
to the companies by enhancing quality of working life and bettering customer
interaction. They touched on “minimising of delays in customer orders” and
“effectiveness gains from optimising employee/ staff time” which were attributed to
online real-time data access. Besides, cost savings and reduced cycle time are the
15
Section Two: Literature Review
benefits of the ERP systems (Ash and Burn, 2003). Tambovcevs (2012) indicated
the advantages of the ERP implementations as “shorter intervals between order and
payments, lower back-office staff requirements, reduced inventory, reduced costs
and improved customer service”. He mentioned that this technology provides shared
data and knowledge which can make “moving data from application to application
without re-entry by integrating these applications” possible (Tambovcevs, 2012). In
this way, labour productivity is improved through precise documentation
(Tambovcevs, 2012).
Moreover, Mary Sumner (2005) defined an ERP system’s benefits as information
flow improvement, reduction of supplier and response time and minimising the
decision-making time. Also, Harwood (2003) stated that “if an ERP implementation is
successful, then the rewards are bountiful” and added its benefits as “speedily
processed transactions” and “positive payback on the bottom line” afterwards. He
summarised the advantages of that technology by saying that: “ERP handles
transactions, maintain records, provides real-time information and facilitates planning
and control”.
As can be understood from the explanations above, an ERP system plays an
important role in managing a company. It streamlines the business processes as well
as paves the way for making more focused, improved and quality production lines or
services. There is a figure below which shows technology effects upon a supply
chain. It emphasises that if the technology is aligned well with the performance
management, efficiency and quality of the supply chain will increase while mitigating
risks and supply disruptions. This theory is also valid for the ERP systems.
16
Section Two: Literature Review
Figure 4: Technology effects upon a supply chain (Visionet Systems, 2012) (taken from
http://www.visionetsystems.com/supplier-performance-management.html)
2.1.4.2. Managerial benefits of an ERP system
ERP systems provide exhaustive and historical data to the companies that allows
the top managers to analyse the business processes, identify their shortages and
improve them. Also, they can forecast forthcoming conditions which are possible to
encounter in future. In this way, they can make provision against misfortunes and
understand customer expectations clearly. When the customer needs are conceived
by the company managers, the businesses could be properly run. In that case, the
businesses and their quality could be enhanced and their revenues could be also
increased.
Ash and Burn (2003) commented on what the managerial benefits of an ERP
system are as “it is primarily a diagnostic tool for identifying factors contributing to
success of new business models. It is not seen as a prognostic tool.” Therefore, this
information technology should not be perceived as if it is a miracle formula to
manage the companies’ limited resources. However, it undeniably helps the top
17
Section Two: Literature Review
managers in order to generate the best results to the organisations. That is to say,
top managers’ decisions drive business progress which could be streamlined by
means of ERP tools because of having direct connection with the activities
happening (Sheldon, 2005). Tambovcevs (2012) also stated that management of the
business processes were improved through that technology. Furthermore, timely
information enabled by an ERP system allows people to know what happens in an
organisation all the time (Harwood, 2003). In this way, “actions become more
productive” (Harwood, 2003) due to the fact that while they are monitoring, they
could be intervened in a timely manner if there is something wrong in the processes.
“ERP process disciplines allow organisations to link customers and top
management decisions all the way through to execution in the supply chain and the
factory floor” (Sheldon, 2005). In other words, customer voice is taken into
consideration by the top managers of the companies through ERP technology.
Therefore, one of the reasons why organisations could fail while implementing an
ERP software is because the top managers might not be sufficiently involved in the
implementation process (Sheldon, 2005). According to Sheldon, “ERP systems link
top management thinking and planning with marketing, sales, capacity planning,
procurement, manufacturing and customer service” and he added that if the top
management thinking cannot be directly penetrated into execution of a company’s
plans, the planning engine is worthless. Admittedly, if the top management planning
is executed properly, this process’ outputs will be inputs of master production
scheduling (MPS) and materials management (Sheldon, 2005). MPS is an
automated scheduling system that consists of a firm’s known and forecasted
requirements and also it is reinforced with material requirements planning (MRP)
tools (Sheldon, 2005). Thus, MPS occupies an important position within the
organisations for both the ERP and management processes (Sheldon, 2005).
As can be understood from the explanations above, top management’s
involvement is more important than the other staffs in a company during the ERP
implementation and its management. If there is misunderstanding about the
execution of the ERP it might not produce expected results to the companies. For
instance, top managements might evaluate this process as technical part of the
businesses rather than focusing on its strategy as mentioned by Kimberling (2012).
In that case, they might suppose that IT managers and staffs are more responsible
18
Section Two: Literature Review
for this technology. However, ERP implementation should be based on a project
strategy which could put the business strategy into practice in real life. All in all, the
most important key is to provide top management support while implementing ERP
systems. In Koh and his colleagues’ research (2008), “the literature is united in
advocating top management support and initiation responsibility for ensuring ERP
success”. There is the figure shown below which is constituted by them and it proves
the importance of the top management involvement.
Figure 5: ERP Initiation Responsibility (Koh et al. 2008)
19
Section Two: Literature Review
Business Intelligence:
There is another crucial notion, which is known as “Business Intelligence”, in
helping the companies in order to produce streamlined business processes. Olson
(2004) had a comment about Business Intelligence as “ERP Systems and Business
Intelligence operations are mutually supportive” and he added that “Both can exist
without the other; but both can be much more profitable if used together”. What is
more, data warehouses, which are the most important tools of business intelligence
methodologies, allow the companies to efficiently store large amount of data for their
ERP systems (Olson, 2004). To understand how Business Intelligence influences the
ERP systems, its functionality should be learned. That is the reason why it is
explained in detail below.
“ERP systems offer powerful tools to better measure and control organisational
operations” (Olson, 2004). However, they are not magic solutions that can straighten
everything else in the companies as mentioned before. It should be reinforced an
intelligent management that requires to combine different tools in the company.
Therefore, Business Intelligence tools are used as complements to the ERP systems.
Business Intelligence is also “supported by storing data (data warehouses and
related systems) and conducting studies using this data to solve business problems
(one means to do this through data mining)” (Olson, 2004). There are some Business
Intelligence tools indicated below and explained respectively in depth afterwards.
Data Storage Systems
o Data warehousing
o Data Marts
Online Analytic Processing (OLAP)
Data Mining
Data storage systems are the extensions to the ERP systems from which data
warehouses are the most popular ones (Olson, 2004). Olson (2004) mentioned that
“one major user of massive storage capacity is ERP Systems, which have large
storage requirements due to their comprehensive nature”. Data warehouses as an
“orderly and accessible repository of known facts and related data” are used by the
staffs responsible such as top managers and IT staffs in order to improve the
companies’ decision-making mechanisms. Besides, Velicanu (2007) evaluated the
20
Section Two: Literature Review
data warehouse concept as “logical architectural approach to extracting operational
data and transforming it into accurate historical information to support the decision
making process.
On the other hand, there is a conceptual confusion between data warehouses
and database. At that point, it should be understood that “database is an application-
oriented collection of data that is organised, structured and coherent, with minimum
and controlled redundancy, which may be accessed by several users in due time”
(Velicanu, 2007). However, “a data warehouse is a subject-oriented collection of
data that is integrated, time-variant, non-volatile, which may be used to support the
decision-making process” (Velicanu, 2007). Apparently, “ERPs generate massive
amounts of data, and often data warehouses are used to support ERPs” (Olson,
2004).
In terms of Data Marts, even though they are used for storing the data needed,
specific information for particular operations is focused by means of them. In this
way, business processes, which require short term solutions and thereby need
immediate information at any given time, could be driven quicker and less expensive
through Data Marts (Olson, 2004). Data marts are the reasonable options for data
mining, which will be explained subsequently, activities because of conducting
particular investigations (Olson, 2004).
There is another important notion needed for the ERP systems that is known as
“Online Analytic Processing (OLAP)”. According to Olson (2004), OLAP systems,
which are based on multidimensional databases, are designed to make it easy to
analyse the data” and he added that “they display data in one or more of a number of
different dimensions”. Arias (2011) commented on OLAP systems as “they deal with
Historical Data or Archival Data, and it is characterized by relatively low volume of
transactions”. On the other hand, there is another approach, which is confused with
OLAP systems, that is called “On-line Transaction Processing (OLTP)”. To enlighten
that point, Arias (2011) mentioned that “OLTP systems deal with operational data,
which is data involved in the operation of a particular system and it is characterized
by a large number of short on-line transactions”.
How to aggregate the data about company processes, store it and retrieve any
information needed when necessary are explained so far. In terms of how this data
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Section Two: Literature Review
could be used, it seems that data mining tools play an important role. Olson (2004)
mentioned that “micromarketing” initiatives are feasible by means of data mining
tools which allow the companies to target small groups in order to treat their
customers properly. “One of the most prominent applications of data mining is
support of CRM (Customer Relationship Management)” (Olson, 2004). Olson (2004)
particularly touched on that point: “Support of customer relationship management is
the form of data mining most commonly associated with ERP.”
That market segmentation could be conducted through data mining tools is
undeniably useful for the companies’ management team. Data mining provides a
platform in which “exploratory data analysis” (Olson, 2004) could be performed. Data
mining tools could be encountered in three different forms in today’s business
environment. These forms are indicated below;
Hypothesis testing which is about “relationship between actions and
outcomes” (Olson, 2004).
Knowledge discovery (“preconceived notion may not be presented but rather
be seen by looking at the data”) (Olson, 2004)
Visualisation tools “which display data through fundamental statistical
analysis such as correlation analysis”
In terms of data mining tools, they can be categorised as regression, decision
trees, neural networks, cluster detection and market basket analysis that are “the
major categories of methods applied” (Olson, 2004).
As could be understood from the explanations above, many benefits could be
derived from data mining strategies. They are briefly indicated below;
“Blue-chip customers could be identified and provided the service needed to
retain them.” (Olson, 2004)
“The most profitable customers could be maintained.” (Olson, 2004)
“High competition has led to the use of data mining.” (Olson, 2004) It seems
that the companies which use data mining tools effectively could hold elevated
position in today’s competitive business environment.
All in all, it seems that the business intelligence is a way for the companies’ top
managers to improve the company strategies. It provides a platform to them through
22
Section Two: Literature Review
which they could gain the customer loyalty. In that case, intelligent business
processes could be culminated in business excellence. Olson (2004) drew people’s
attention to that point: “Intelligence is required on the part of the analyst in selection
of model types, in selection and transformation of the data relating to the specific
problem and in interpreting results.” In that case, the aim of providing intelligence
within the business processes should be reinforced by some auxiliary tools such as
data warehouses, data marts and data mining that are explained briefly above. Data
warehouses could contain a variety and larger amount of information, while data
marts focus on a particular activity/ subject though being repositories similar to data
warehouses. Finally, information kept by data warehouses or data marts is used for
generally understanding the voice of the customers. After that perception, business
processes could be adjusted for the customers’ satisfaction. In that way, customers
retentions could be gained, which in turn the companies could make more and more
profit, eliminate waste throughout their business processes, reduce their costs, and
establish unrivalled reputation. “Retaining specific customers is accomplished by
having all relevant information readily available that is needed for planning, product
and service throughout the customer life cycle” (Olson, 2004). At that point, this aim
is supported by the business intelligence tools.
2.1.5. Challenges of the ERP Systems
ERP systems are crucial breakthroughs for the companies which streamline the
business processes of those companies. However, they could be dangers if they are
not implemented properly. In order to understand requirements of the ERP systems,
requirements of the each business that is attempted to be improved through an ERP
system should be perceived because one of the main challenges of those systems is
ignoring the companies’ own needs. The majority of the businesses –especially
international ones– prefer to use “standardised global templates” (Hawking, 2007).
According to Hawking (2007), although global templates prove “standardised
definitions of organisational structures”, more enhanced and less flexible “master
data” and improved “business processes”, there are some experts who object this
idea “due to the lack of flexibility at the local level to take advantages of regional
opportunities and to account cultural differences”. While this point might be evaluated
23
Section Two: Literature Review
as a technical challenge, cultural differences in the way of doing work (“The majority
of reports in European-based ERP systems tend to be online while Asian workers
prefer paper-based reports.” (Hawking, 2007)) might be evaluated social challenge.
2.2. LEAN SIX SIGMA (LSS) APPROACH
Launching a business which is based on brilliant idea does not guarantee
success. Business processes should be monitored while conducting the business
and each problem should be tried to be prevented before they degrade its workflow.
In that case, some continuous improvement strategies such as six sigma and lean
thinking have been developed by Japanese business managers. The reason why
they have been needed is because productivity in today’s global business world is
one of the most important issues which all of the companies should take into
consideration. Lean manufacturing approach focused on eliminating waste and Six
Sigma strategy for business excellence allow top managers to streamline the
business processes while increasing the quality of business processes, products or
services, which in turn increase the productivity. In this way, companies become
profitable in a competitive business environment. However, there are insufficiencies
within each individual methodology according to Girenes (2006). Girenes (2006)
stated that while lean focuses on removing defects from the business processes,
quality aspects of those businesses are not commensurately taken notice of. At that
point, six sigma remedies that deficiency. These approaches and reasons of their
benefits to the businesses are explained in detail below.
2.2.1. What is Lean Thinking?
“Lean is a philosophy that is focused on shortening the timeline between the
customer request and the delivery of the service by eliminating waste.” (Shaffie and
Shahbazi, 2012) According to Sunder (2013), “lean thinking increases production
efficiency by consistently and thoroughly eliminating waste”. Similarly, Girenes (2006)
indicated that lean management is a result of that investigation: How could customer
demand be responded to in the shortest time by using minimum resources and
24
Section Two: Literature Review
providing the cheapest and defect-free manufacturing. Also, she added that it is also
an answer to the question: How could a company’s potential benefits all be utilised
by using all manufacturing components and avoiding waste. Nauhria and his
colleagues (2009) defined lean manufacturing as “identification and elimination/
minimising of all kinds of manufacturing wastes” as well. They emphasised that lean
manufacturing “synchronises production levels to actual customer demand”.
Sheldon (2005) drew people’s attention to that point: “Lean thinking within a
business is about looking at all processes as opportunities for cost reduction and
customer service improvement”. According to him, “without lean, efficient supply
chain management cannot exist”.
All in all, it seems that there are two kinds of Lean approaches that are indicated
below;
Waste-based Lean
Flow-based Lean
No matter which approach stated above is used, Lean thinking might help a
company’s managers streamline their business processes. It seems that Lean
thinking provides a company to improve its responsiveness while expediting its
business processes, removing non-value-added components of the processes,
decreasing its expenditure and enhancing its customer relationship management.
These targets are “normally done through rigorous process evaluations using
mapping and other problem-solving tools” (Sheldon, 2005) that are indicated below.
Value organisation alignment mapping which is “a mapping exercise to
track information or decision making through an organisational chart”
(Sheldon, 2005).
25
Section Two: Literature Review
Figure 6: Value Organisation Alignment Mapping (Sheldon, 2005)
Time value mapping “which is a methodology used to map both activity and
time duration of a process” (Sheldon, 2005).
Figure 7: Time Value Mapping (Sheldon, 2005)
26
Section Two: Literature Review
Swim lane flow charts “which show activities separated by lanes of functions
in the process map” (Sheldon, 2005).
Figure 8: Swim Lane Flow Charts (Sheldon, 2005)
Physical process maps “which are maps of building layouts showing material
flow, people movement, or information flow mapped on the blue print”
(Sheldon, 2005).
Figure 9: Physical Process Maps (Sheldon, 2005)
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Section Two: Literature Review
Logical process flow maps “which are simple process maps depicting all
activities in a line with decision points and various alternative routes shown
with specific shapes” (Sheldon, 2005).
Figure 10: Logical Process Flow Maps (Sheldon, 2005)
The maps and problem-solving tools illustrated above might allow the
company managers to visualise the business processes, monitor them during
processing, identify the wastes and attempt to eliminate them in order to improve the
way of doing the businesses.
According to Wheat (2003), seven types of waste could be occurred in a
business environment if they are not under control. They are indicated below;
1. Overproduction
2. Inventory
3. Waiting
4. Motion
5. Conveyance (Transportation)
6. Rework (Correction)
7. Over-Processing
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Section Two: Literature Review
Figure 11: 7 Wastes of Lean Manufacturing (Lean Manufacturing Tools, 2013) (Taken from http://leanmanufacturingtools.org/)
Those wastes stated above could be removed by means of 5S strategy as a
kind of lean thinking. 5Ss which are Sifting, Sorting, Sweeping and washing,
Standardising and Self-discipline “improve safety and workflow and allow the
company managers to better manage the processes as a whole” (Wheat, 2003).
Additionally, those wastes could be partly or mainly eliminated with the help of many
other lean manufacturing tools some of which are explained briefly below.
Kaizen which is “the chief mechanism used to fully incorporate Lean and
provide employees a means of making improvements to their individual jobs.
(much more than an instrument for small continuous improvements)” (Davis,
2011).
Poka Yoke which is known as “mistake proofing”. “The technology of mistake
proofing is very closely associated with lean manufacturing because of its
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Section Two: Literature Review
great ability to enhance the improvement efforts of front-line teams in simple
and effective ways.” (Floyd, 2010).
Total Productive Maintenance which is “to increase the productivity of plant
and equipment with a modest investment in maintenance” (Prabhuswamy et
al. 2013).
Value Stream Mapping which is “an integral part of lean manufacturing that
identifies the activities that add value” (Shararah, 2013).
Just in Time which is “a set of management practices aimed at continuous
improvement through the elimination of all wastes and full utilisation of human
resources” (White et al. 2010).
Cellular Manufacturing that is “an application of the Group Technology (GT)
concepts, which is a manufacturing concept that seeks to identify and group
similar parts to take advantage of their similarities in manufacturing and
design, to factory reconfiguration and shop floor layout design” (Irani, 1999).
Even though they might track different ways of fulfilling a company’s lean
initiatives, all of those approaches focus on the same target: excluding non-value
added activities from the business processes. In other words, they constitute
continuous improvement in the companies all together.
According to Sunder (2013), there are 4 lean principles that are explained
below;
Value which “is defined as the right capability provided to the customer at the
right time and at the right place” (Sunder, 2013).
Value stream which is “understanding end-to-end value adding and non-
value-adding activities from the customer’s perspective” (Sunder, 2013).
Flow which is “eliminating queues and stops and improving process flexibility
and reliability (Sunder, 2013).
Pull system which is “reacting and fulfilling the customer demand just-in-time
without trying to push the products to the customer” (Sunder, 2013).
In addition to the explanations above, waste is not value-added components of
the company (Sunder, 2013). Therefore, Lean Thinking focuses on “eliminating
waste and non-value adding activities across the entire supply chain” (Sunder, 2013).
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Section Two: Literature Review
At that point, Sunder (2013) mentioned that Lean is a useful enabler in order to
achieve rapid improvements. However, he indicated that there is a contradiction
because Lean Six Sigma approach, which is explained in detail hereafter, is a long
term solution for the company even though lean thinking is beneficial for short term
rapid improvements. In that case, company managers might institute rapid
improvements, which are probably needed during the business processes, through
lean thinking during the Lean Six Sigma processes by bearing in mind that lean
manufacturing could produce long term solutions to the companies.
Finally, the benefits of the lean adoption are illustrated below (Nauhria et al.
2009).
Operational Improvements
Administrative Improvements
Strategic Improvements
reduction of lead time
increase in
productivity
reduction in work-in-
process inventory
reduction in order-
processing errors
streamlining of customer
service functions
reduced costs
competitive advantage
Table 3: Lean Manufacturing Adoption (Nauhria et al. 2009)
2.2.2. What is Six Sigma?
In today’s highly competitive business environment, quality is primarily
considered by the customers while purchasing products and services because of the
fact that there are many options for them to purchase for a same product or service.
In that case, their purchases are based on their satisfaction from the quality of what
they want to buy. At that point, the companies should focus on increasing quality of
their products/ services in order to retain their customers. Even though lean thinking
provides the companies to eliminate waste from their business processes, it falls
short of increasing quality of the products and services because of focusing more on
speed of the business processes (Girenes, 2006).
“Six Sigma is a statistical problem-solving methodology and a management
philosophy, one that dictates that business and process decisions should be based
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Section Two: Literature Review
on data” (Shaffie and Shahbazi, 2012). According to Shaffie and Shahbazi (2012),
“Six Sigma’s fundamental goal is to reduce operational variance by improving the
overall quality and performance levels of business processes”. Also, Cavanagh and
his colleagues (2005) defined it as “a measure of the variation of a process, product
or service from customer requirements”. Similarly, Nauhria and his colleagues (2009)
mentioned that “Six Sigma is an improvement program for reducing variation on a
product or service” and they added “the purpose is to satisfy customers”. Defects
elimination from the business processes could be possible through Six Sigma
methodologies (Nauhria et al. 2009).
In addition to these, Sunder (2013) drew people’s attention to the same points
as the others by saying “Six Sigma is a continuous improvement methodology that
focuses on reduction of variation”. He indicated that it is a statistical tool due to the
fact that there are statistics in the quality paradigm. Broadly, 3.4 defects per million
opportunities could only be acceptable in the Six Sigma strategy.
There are two roots of Six Sigma which are Total Quality Management (TQM)
and Six Sigma Statistical Metric (Sunder, 2013). “Total Quality Management (TPM)
and Total Productive maintenance (TPM) systems are considered as the key
operational activities of the quality management system” (Prabhuswamy et al. 2013).
TPM, which is explained in the lean thinking part, increases the productivity of plant
and equipment while “TQM looks at the overall quality measures used by a company
including managing quality design and development, quality control and
maintenance, quality improvement, and quality assurance” (Murray, 2012). In that
case, “implementing TQM and TPM together results in synergy” (Prabhuswamy et al.
2013).
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Section Two: Literature Review
Figure 12: Customers’ perception of a company’s quality (Oakland, 1997)
That “a company’s reputation is based upon the customers’ perception of its
quality” (Oakland, 1997) is delineated by means of cartoon above. Also, Oakland
(1997) emphasised that “the successful business meets all its customers’
requirements”.
Beyond Six Sigma approach, there is another strategy which is called “Design
for Six Sigma (DFSS)” that reinforces effectiveness of six sigma methodologies.
“DFSS is a proven, robust approach to designing new products and services and
redesigning the flaws out of existing offerings” (Cavanagh et al.2005). Cavanagh and
his colleagues (2005) drew people’s attention to the point: “DFSS can be applied to
building new competitive capabilities that go beyond current customer expectations.”
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Section Two: Literature Review
According to them, “Six Sigma emphasizes six themes that are also the primary
tenets of DFSS”. These themes are indicated below;
“Genuine Focus on the Customer” (Cavanagh et al. 2005)
“Data and Fact-Driven Management” (Cavanagh et al. 2005)
“Focus on the Process” (Cavanagh et al. 2005)
“Proactive Management” (Cavanagh et al. 2005)
“Boundaryless Collaboration” (Cavanagh et al. 2005)
“Driving Toward Perfection, Tolerating Honest Failure” (Cavanagh et al. 2005)
Six Sigma strategy requires from the companies to use two key methodologies
which are DMAIC (Define, Measure, Analysis, Improve and Control) and DMADV
(Define, Measure, Analyse, Design and Verify) (Pillai et al. 2012). DMAIC is “ a way
of making incremental improvements in processes and products” whilst DMADV
focuses on “identifying and clarifying what will be worked on, deciding how it will be
measured, analysing the situation, detailing the design and testing and deploying the
new process, product or service” (Cavanagh et al. 2005). In that case, it seems that
existing business processes could be improved through the DMAIC methodology (Six
Sigma) while planning project could be ensured for the quality by means of the
DMADV methodology (Design for Six Sigma). At that point, Pillai and his colleagues
(2012) indicated that “every stage of Six Sigma project requires a mix of both”.
As could be understood from the explanations above, Six Sigma is a
“structured problem solving methodology” and also “well-structured data-driven
approach”. These features provide the companies to “improve manufacturing
process” and “eliminate defects” (Pillai et al. 2012).
2.2.3. Why should Lean and Six Sigma be combined?
Lean Six Sigma is a successive approach that produces the best results to the
companies which intend to bring continuous improvement to their business
processes. According to Shaffie and Shahbazi (2012), “Lean with its simple approach
that focuses on improving the speed and efficiency of processes, provides breadth in
problem solving” and “On the other hand, Six Sigma is more sophisticated and offers
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Section Two: Literature Review
a method for drilling deep into complex issues”. They emphasised that “Six Sigma
also has a very structured approach to problem solving that is absent in Lean”.
Additionally, they summarised as “Six Sigma is about enhancing the quality and
accuracy of processes by reducing variation, while Lean focuses on achieving faster
response times by eliminating waste. As a result, these two methodologies offer
complementary tool kits; they help address the root cause of different business
challenges.”
Similarly, Lean Six Sigma defined by Sunder (2013) as “combination of two
popular continuous improvement methodologies”. According to him, that they
complement each other results in “improving the production and transactional
processes of an organisation”. However, there are still some companies which might
prefer just Lean or just Six Sigma (Sunder, 2013). At that point, that the
implementation of both could produce the best results because of their compatibility
should be borne in mind by the company top managers.
On the other hand, Pillai and his colleagues (2012) explained that situation in
depth by saying “Lean is an agile methodology for managing change while Six Sigma
approach emphasises continuous improvement as part of a defect reduction
strategy”. They indicated that “both continuity and change under a flexible
management system and illustrate the application of continuity and change
framework using an integrating Lean Six Sigma”. Flexible management is “a strategy
for maximising profitability at project level and organisation level that includes Lean
Manufacturing and Lean Six Sigma” and “it makes defect free products/ models in a
shorter cycle time (Pillai et al. 2012). In this way, “newer models provide higher
predictability and risk reduction by ensuring that business deadlines are met” (Pillai et
al. 2012). Additionally, Pillai and his colleagues (2012) drew people’s attention to the
point: “A lean measure of flexibility entails planning and capacity building that is
based not on forecasts but on real customer demand”.
Lean Representative of “change” forces
Six Sigma Representative of “continuity” forces
Table 4: Lean and Six Sigma (Pillai et al. 2012)
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Section Two: Literature Review
In that case, “Lean Six Sigma encapsulates twin paradigms of continuity and
change by managing business developments in a rapidly changing environment with
an objective of consistently delivering” (Pillai et al. 2012). Also, “Lean Six Sigma
maximises stakeholders’ value by achieving the fastest rate of improvement in
customer satisfaction, cost, quality, process speed and invested capital” (Pillai et al
2012).
Indeed, it seems that Lean Six Sigma approach is based on DMAIC which is
the most essential method in Six Sigma strategy. DMAIC method consists of five
steps in some of which Lean tools should be used in order to solve identified
problems and enhance business processes. While “Define”, “Measure” and “Analyse”
phases are related to Six Sigma tenets, Lean manufacturing tools are used in mostly
“Improve” and also “Control” phases. Additionally, it is clearly to see that ERP
systems are auxiliary tools for the Lean Six Sigma projects because “DMAIC is a
structured, data-based and problem-solving process” (George et al. 2004). DMAIC
method is explained in more depth below.
2.2.3.1. Implementation Overview of Lean Six Sigma
That Lean and Six Sigma are combined together is attempted in order to
achieve a resounding success as far as possible within a business process. “The
most successful rollouts have the following criteria in common. If these criteria are
not met, your implementation is likely to encounter resistance and/ or complications”
(Shaffie and Shahbazi, 2012):
“The initiative uses a top-down approach.” (Shaffie and Shahbazi, 2012)
“The organisation develops an infrastructure to support the Lean Six Sigma
rollout.” (Shaffie and Shahbazi, 2012)
“Systems for obtaining customer input are established.” (Shaffie and
Shahbazi, 2012)
“There is effective training within the organisation- all parties, who would be
affected, are trained.” (Shaffie and Shahbazi, 2012)
“Meaningful expectations are set with leaders and employees.” (Shaffie and
Shahbazi, 2012)
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Section Two: Literature Review
“Key metrics are identified.” (Shaffie and Shahbazi, 2012)
“There is a clear link between business processes and the key metrics.”
(Shaffie and Shahbazi, 2012)
Subsequently, implementation manipulated into three phases that are
indicates in Table 5 below.
First Phase Second Phase Third Phase
Quality leader,
aligns the effort with the company’s mission
selects a focus area
forms the organisation
Champions are trained
Metrics are developed
Projects are identified
Black and Green Belts
are trained
Start executing the
projects
Table 5: Three Phases of Lean Six Sigma (Shaffie and Shahbazi, 2012)
“For long-lasting success of the Lean Six Sigma initiative, the organisation will
need to have a formal structure for its deployment. This formal structure will include
Green Belts, Black Belts and Master Belts as well as Champions or Sponsors.”
(Shaffie and Shahbazi, 2012) This hierarchical structure is explained briefly below.
Green Belts which are “employees who have been trained in the Lean Six
sigma methodology” (Shaffie and Shahbazi, 2012).
Black Belts which “lead larger Lean Six Sigma Projects” (Shaffie and
Shahbazi, 2012).
Master Black Belt which “will lead the Lean Six Sigma effort within one
segment of a company” (Shaffie and Shahbazi, 2012). According to Shaffie
and Shahbazi (2012), “one Master Black Belt is assigned to each business
unit” and “Master Black Belts are responsible for working with the Green and
Black Belts in completing projects”.
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Section Two: Literature Review
Champion or Sponsor which “leads the Lean Six Sigma effort within the
entire organisation” (Shaffie and Shahbazi, 2012). This person is responsible
for “setting the overall quality strategy, which will require having a keen
understanding of areas that are in need of improvement and/or additional
resources” (Shaffie and Shahbazi, 2012).
In terms of the way of implementing the Lean Six Sigma, DMAIC
methodology, which is usually conducted for Six Sigma projects, is used for this
combined continuous improvement strategy as well. “To truly achieve excellence,
there has to be a standard quality culture.” (Shaffie and Shahbazi, 2012) At that
point, Lean Six Sigma might be enabler for an organisation in order to attain that
culture. The additional elements for achieving excellence are also mentioned by
Shaffie and Shahbazi (2012) as:
“Organisational commitment”
“Becoming a data-rich organisation”
“Developing unbiased and predictable business metrics”
“Creating a culture of accountability and acceptance”
As can be seen on the Figure 12 below, service excellence is based on
continuous improvement culture and Six Sigma Quality culture. As could be
understood from the explanations stated so far, Six Sigma is a project-oriented
vigorous methodology which focuses on tackling major projects while Lean thinking
provides continuous improvement to companies within those projects. In that case,
Six Sigma approach could enhance process quality as well as product or service
quality. Additionally, Lean thinking within Six Sigma projects provides Six Sigma
teams to streamline those projects’ processes and improve their efficiencies. At that
point this combination is called Lean Six Sigma approach. Lean thinking and Six
Sigma strategy could be implemented to companies separately and they might
improve their business processes individually. However, it seems that they could
produce the best results when they are combined together.
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Section Two: Literature Review
Figure 13: The four Pillars of a quality culture (Shaffie and Shahbazi, 2012)
Nonetheless, business excellence requires more than Lean Six Sigma. That is
to say, it also needs organisational commitment, data-rich organisation, predictable
metrics and accountability. As could be perceived from the explanation just
mentioned, these additional features characterise the ERP systems. In other words, it
can be said that data-rich organisation and predictable metrics after ensuring
organisational commitment and accountability could be provided through ERP
systems according to the explanations about the ERP systems mentioned before.
The reason why ERP systems could improve the Lean Six Sigma projects is because
DMAIC is a data-based process by reason of “gathering data in nearly every phase
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Section Two: Literature Review
to help people make decisions” (George et al. 2004). At that point, an ERP system
provides a Lean Six Sigma team a platform which enable improved information flows,
databases and easy access to data warehouses.
2.2.3.2. DMAIC Methodology into Lean Six Sigma Projects
DMAIC is “the most effective problem-solving methods ever used” according
to George and colleagues. They explained the reason of that definition by saying “it
forces teams to use data to…
confirm the nature and extent of the problem
identify true causes of problems
find solutions that evidence shows are linked to the causes
establish procedures for maintaining the solutions even after the project is
done”.
Before discussing the similarities, commonalities and differences between
Lean Six Sigma and ERP systems, how DMAIC methodology explained briefly above
is implemented into Lean Six Sigma projects is explained in detail below. Each
DMAIC phase, which is shown below what stands for, is explained respectively.
Define
Measure
Analyse
Improve
Control
2.2.3.2.1. Define Phase
At that phase understanding the voice of the customers (VOC) and identifying
the value-added components of an organisation are the main targets for the Lean Six
Sigma promoters (Pillai et al. 2012). In order to achieve those targets, there must be
three deliverables that could be created. They are shown below;
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Section Two: Literature Review
“Develop the project charter” (Neil, 2013). This is “the first step in the Six
Sigma methodology which is for specifying necessary resources and
boundaries” (Swinney, 2010). According to Neil (2013), it is an important
document that “summarises the purpose, current scenario & goal, measures
of success (CTQ-Critical-to-Quality), project’s scope, quantitative and
indicative project benefits and team members.”
“Identify the Project CTQ” (Neil, 2013). Neil (2013) mentioned that it is “a
measure of success for the projects” and he added that “there is only one
CTQ for DMAIC projects”.
“Create process maps” (Neil, 2013). Process maps are defined by Neil (2013)
by “end-to-end process documentation”.
Similarly, Shaffie and Shahbazi (2012) indicated four steps in this phase;
1. “Define the project CTQ or the item or area in need of improvement” (Shaffie
and Shahbazi, 2012) As a result of this initiative, identification of customers,
products/ services and processes could be made. Additionally, customers and
their needs could be clearly analysed through VOC (Voice of Customers) as a
tool (Shaffie and Shahbazi, 2012).
2. “Outline the business case” (Shaffie and Shahbazi, 2012). In this way, “a team
charter with a problem statement, goal and financial benefits, scope and
required resources” (Shaffie and Shahbazi, 2012) could be produced.
Identifying project milestones might be exemplified as a way of doing that
step.
3. “Develop a high level process map” (Shaffie and Shahbazi, 2012). In that
case, definition of “project boundaries” and “an outline of areas of risk” could
be provided through mapping (Shaffie and Shahbazi, 2012). SIPOC
(Suppliers, Inputs, Process, Outputs and Customers) and Product
Synchronisation might be tools of that step (Shaffie and Shahbazi, 2012).
4. “Define and execute a change management strategy” (Shaffie and Shahbazi,
2012). This attempt results in “creating a shared vision and gaining consensus
from key stakeholders” (Shaffie and Shahbazi, 2012). Threat vs Opportunity
matrix for “creating a shared need”, Elevator Speech for “creating a vision that
must outline the future state” and Stakeholder Analysis for “determining the
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Section Two: Literature Review
key stakeholders’ current level of support” are the tools for this step (Shaffie
and Shahbazi, 2012).
In terms of the tools mentioned above, SIPOC is used for two purposes that
are “providing a macro overview of the process or service flow and the interrelations
within a business” and “ defining the process boundaries- the start and end points of
the process in need of improvement” (Shaffie and Shahbazi, 2012). On the other
hand, product synchronisation is “a lean tool that is typically used to better
understand the “P” in the SIPOC map” and also “helps define the major process
milestones and the critical path” (Shaffie and Shahbazi, 2012).
Differently, George and his colleagues (2004) emphasised the project
charter’s importance in a Lean Six Sigma project. They defined it as a compass for
the project by saying “A project charter captures the essence of a project. It
describes what the team should accomplish, who will work on the project and in what
roles, time lines and other key information.” They also drew people’s attention to why
those steps mentioned above should be done. According to them, it is for…
“developing a shared understanding of the business priorities for a project”
“confirming the opportunity”
“reaching agreement with management on a realistic scope for the project”
“agreeing on how success will be measured”
To sum up, it might be said that this phase is the most important phase of
DMAIC method because if the real problem and the goals are not precise, the
solutions will probably not be workable. For that reason, Shaffie and Shahbazi (2012)
stated that “Define phase is more challenging step”. They also added that “Green
Belt or Black Belt should clearly outline the need for change”. In this way, “the project
leader can better facilitate discussion and remove emotion by using data in problem
and goal statements” (Shaffie and Shahbazi, 2012).
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Section Two: Literature Review
2.2.3.2.2. Measure Phase
All possible causes are identified within this phase of DMAIC methodology. In
order to achieve the aimed improvement(s) through a Lean Six Sigma project, data
collection plan should be prepared after “ascertaining that the measurement system
that is based on Measurement System Analysis (MSA) is good” (Neil, 2013). The
deliverables of this phase are illustrated below;
“Identify all possible causes (Cause and Effect Diagram)” (Neil, 2013).
“Validate measurement system, data collection and sampling” (Neil, 2013).
“Establish process capability” (Neil, 2013).
In detail, Shaffie and Shahbazi (2012) mentioned that this phase is about
“deep understanding of what your customer wants from you” and it focuses on “the
type of data needed”. The measurement which is focused on in this phase is that if a
company has “the correct mechanism for gathering these data” (Shaffie and
Shahbazi, 2012). It consists of four steps that are explained below.
5. “Define the CTQ (Critical-to-Quality) characteristics” (Shaffie and Shahbazi,
2012). In this step, value-added components of the processes should be
identified based on customer satisfaction because business outputs should
satisfy the customer. This philosophy might be adopted by each business due
to the fact that all of their profitability is based on the customers’ purchasing
decision. For instance, there is an “Iron Triangle” which consists of Quality,
Cost and Delivery (Time) (Atkinson, 1999). According to this philosophy, the
success of project management is related to these three components. Thus,
critical to quality should be defined as an aspect of Six Sigma, delivery
improvement and cost reduction are provided afterwards through Lean
thinking. CTQ characteristics include observing macro business which could
be manipulated by X-functional Process Mapping, total product cycle time,
causes and their effects provided by Fishbone diagrams and reasons of the
failures that could be analysed by Failure Mode and Effects Analysis (FMEA)
(Shaffie and Shahbazi, 2012).
6. “Outline performance standard that translates a customer need into a clear
and measurable characteristics” (Shaffie and Shahbazi, 2012).
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Section Two: Literature Review
7. “Develop a data collection plan that provides a clear, documented strategy for
gathering reliable data for the project and gives all the members of the team a
common reference point for the collection” (Shaffie and Shahbazi, 2012).
8. “Validate the measurement system” (Shaffie and Shahbazi, 2012).
On the other hand, George and his colleagues (2004) emphasised that
“combining data with knowledge and experience is what separates true improvement
from just tinkering with a process”. They mentioned that “evaluating the existing
measurement system, observing the process, gathering data and mapping the
process in depth” are done in this phase. In this way, these following points happen
according to them;
Trustable data
Decisions are based on “facts” and “reality”
Documented process
Understanding the important components that should be primarily enhanced.
2.2.3.2.3. Analyse Phase
As can be understood from its name, this phase is for analysing root causes
and their impacts. These are the deliverables of that phase shown below;
“Statistically validate root causes” (Neil, 2013).
“Perform Value Stream Mapping (VSM) and Process Value Analysis” (Neil,
2013). According to Neil (2013), VSM is a holistic method which “statistically
identifies root causes” and he particularly indicated that “it is used to identify
the 7 types of wastes which are explained before”.
“Control and impact matrix” (Neil, 2013).
George and his friends (2004) stated that “the purpose of the analyse phase is
to make sense of all the information and data collected in ‘Measure’ and to use that
data to confirm the source of delays, waste and poor quality”. According to Shaffie
and Shahbazi (2012), “the ‘Measure’ phase is the ‘feeder’ to the problem-solving
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Section Two: Literature Review
(Analyse) and solution-finding phases (Improve)”. They thought that these following
components should be done up to now:
“The business case for the project has been approved” (Shaffie and Shahbazi,
2012).
“Potential resistance from key stakeholders has been reduced” (Shaffie and
Shahbazi, 2012).
“The process has been mapped” (Shaffie and Shahbazi, 2012).
“Critical process data have been collected” (Shaffie and Shahbazi, 2012).
Subsequently, they added that “the end goal of this phase is to take all
collected information and data and identify the root cause of the problem”. They
divided this phase into three steps that are indicated below.
9. “Baseline the process’s current capability” (Shaffie and Shahbazi, 2012). It
might be essential to observe the improvement which might be achieved after
making some changes within the process. Therefore, it seems that this first
step of the phase should be conducted. Shaffie and Shahbazi (2012)
mentioned that there are many tools for presenting this capability such as
Histogram for “providing information about the shape, central tendency and
variability of a process”, Run Chart for “tracking the performance of a process
over time and displaying trends in the performance of that process”, Box Plot
for “comparing the distribution of multiple processes” and Pareto Analysis for
“separating the vital few causes (X) from the trivial by comparing the
frequency of occurrence”. Additionally, normality plot for “determining how
closely the data follow a normal distribution” (Gygi, 2005) which in turn leads
to “analysing continuous normal data and discrete data” (Shaffie and
Shahbazi, 2012) and z table for defining the capability are also tools of that
step. Z score, which is also known as “the sigma score”, allows people to
“determine the performance of the processes relative to the customer needs
and wants” (Shaffie and Shahbazi, 2012). According to Shaffie and Shahbazi
(2012), “the higher the sigma score, the more capable the performance of our
process”.
10. “Define the performance objective for the process that could be attained
through benchmarking” (Shaffie and Shahbazi, 2012).
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Section Two: Literature Review
11. “Identify sources of variation” (Shaffie and Shahbazi, 2012). Some statistical
tools such as Value-Add and Non-Value-Add analysis for “reducing process
cycle time, standardisation or stabilisation” (Shaffie and Shahbazi, 2012), takt
time calculations which are “the targeted rate that request or service need to
be completed in order to meet customer demand” (Shaffie and Shahbazi,
2012), correlation studies which “help explore the possibility of a relationship
between two variables” (Shaffie and Shahbazi, 2012) and hypothesis testing
which “allows the comparison of two or more process attributes” (Shaffie and
Shahbazi, 2012) are the tools of this step.
All in all, Lean Six Sigma teams “start exploring all the possible root causes
that can affect the performance of the processes and/or the products” (Shaffie and
Shahbazi, 2012). According to Shaffie and Shahbazi (2012), there could be “short list
of critical factors that need to be improved in order to meet project goals by the end
of this phase”.
2.2.3.2.4. Improve Phase
After identifying the root causes and understanding the reasons why they
occur and result in non-value-added activities, business processes are improved by
eliminating waste or ameliorating those causes at that phase. This phase’s
deliverables are indicated below;
“Identify solutions to overcome the impact of root causes” (Neil, 2013).
“Refine solutions” (it could be manipulated through Poka Yoke mentioned
before or Failure Modes and Effect Analysis) (Neil, 2013).
“Pilot Solutions” (Neil, 2013).
“Statistically validate results” (Neil, 2013).
Similarly, Shaffie and Shahbazi (2012) mentioned that the role of this phase is
to “identify the vital problems (Xs) and implementable solutions” (12th step of DMAIC
method based on their view). In order to achieve that goal, 5S strategy which is
based on 5S principles of Japanese management system (Seiton-Seiri-Seiso-
Seiketsu-Shitsuke=Tidiness-Organisation-Cleanliness-Purity-Discipline), Line
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Section Two: Literature Review
Balancing for “avoiding a build-up of work in progress and beginning identifying the
number of sources required to run the ‘line’” and Kaizen philosophy which “is based
on continuous improvement” are the tools of this phase (Shaffie and Shahbazi,
2012). According to Kaizen strategy, the ideal solution cannot be arrived at in one
step (Shaffie and Shahbazi, 2012). That is the reason why improvements could be
achieved at the end of rigorous works which are continuously done step by step.
Additionally, if the projects are more complex, Six Sigma tools such as regression
analysis come into play at that point in order to understand variables’ relationships
(Shaffie and Shahbazi, 2012).
All in all, “the sole purpose of ‘Improve’ is to make changes in a process that
will eliminate the defects, waste and cost that are linked to the customer need
identified in the ‘Define’ stage” as mentioned by George and his colleagues (2004).
2.2.3.2.5. Control Phase
This phase is based on monitoring the processes controlling the Lean Six
Sigma initiatives. Neil (2013) stated that Lean Six Sigma projects disappear a few
years after the implementation because of poor control. Therefore, that phase should
be thoroughly taken into consideration by the top managers. There are deliverables
illustrated below;
“Prepare Control Plan” (Neil, 2013).
“Final implementation” (Neil, 2013).
“Establish Statistical Process Control (SPC)” (Neil, 2013).
“Benefits Computation and Closure” (Neil, 2013).
According to Shaffie and Shahbazi (2012), this phase consists of three steps
that are indicated below.
13. “Validate measurement system analysis on the Xs (variables= causes or
problems)” (Shaffie and Shahbazi, 2012). It ensures that “having an adequate
and reliable way of measuring the critical Xs of the process” (Shaffie and
Shahbazi, 2012).
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Section Two: Literature Review
14. “Determine the process capability” (Shaffie and Shahbazi, 2012). This step
assures that identified goals have been actually achieved (Shaffie and
Shahbazi, 2012).
15. “Implement process control” (Shaffie and Shahbazi, 2012). Shaffie and
Shahbazi (2012) defined a process control system as “a strategy for
maintaining the improved process performance over time”.
Shafie and Shahbazi (2012) emphasised that “there are several ways to
develop a control system” that are mentioned below:
Risk Management
Poka Yoke (Mistake-proofing devices)
Statistical Process Control (SPC)
Data Collection Plans
Outgoing Measurements
Audit Plans
Process Documentation
Process Ownership
Quality Plan
Poka Yoke, Statistical Process Control and Quality Plan among those
methods indicated above are the most popular tools of this phase (Shaffie and
Shahbazi, 2012).
Consequently, “the purpose of control is to make sure that any gains your
team makes will last” (George et al. 2004). Shaffie and Shahbazi (2012) mentioned
the same thing in a different way by saying “this phase ensures that the
improvements will stay in place long after the team has been disbanded”.
These five phases are summarised into a table that is shown below by Pillai
and his colleagues (2012). In that figure, they similarly touched on what Neil
explained in his article.
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Section Two: Literature Review
Figure 14: Lean Six Sigma Integration (Pillai et al. 2012)
2.2.4. Challenges of Lean Six Sigma
Lean Six Sigma is a peerless tool for the continuous improvement of a
company. Its results could be exceedingly bountiful if it is implemented properly.
However, there are inevitable some challenges that could be known and adequate
provisions should be made in order to be successful within the Lean Six Sigma
projects.
According to Hudgik (2013), “most of implementations are not successful
because management underestimates the amount of time and effort required to
implement and maintain Lean”. As mentioned just before, “if sufficient time and
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Section Two: Literature Review
resources are not provided, the likelihood of failure is high” (Hudgik, 2013). In that
case, the top managers could sometimes misunderstand what the project requires in
order to maintain Lean Six Sigma strategy and they choose to “hire consultants” and
“pour resources into this initiative” (Hudgik, 2013). This also seems waste of money
that is a considerable drawback for a company.
Furthermore, he emphasised that even only Lean implementation takes more
than two years, which in turn its combination with Six Sigma could be more
complexity and takes more time. In that case, ignoring that point could be a serious
challenge for the companies.
On the other hand, Sunder (2013) argued that “ownership is important to
sustain the results reaped out of a successful project” and added “lack of ownership
makes the projects unsuccessful many times”. He also stated that “lack of top
management involvement”, “wrong selection of projects” and “narrow project-only
perspective” are also reasons for failure of Lean Six Sigma.
Finally, Montero (2010) listed some unsuccessful results which are illustrated
below;
“Unclear link between strategy and LSS projects” (Montero, 2010).
“Lack of key process structure into the organisation” (Montero, 2010).
“Flavour of the Month” (Montero, 2010).
“Misunderstand of Lean and Six Sigma relationship” (Montero, 2010).
“Immature firm readiness to apply Lean Six Sigma” (Montero, 2010).
“Deficient stock of knowledge and monetary resources” (Montero, 2010).
As could be perceived from the explanations above, many of these challenges
stated before are emanated from lack of data or data control even though there are
some independent ones of data. In that case, there should be a system which can
provide an information flow from supplier to customers. In this way, Lean Six Sigma
implementations could be facilitated and enhanced.
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Section Two: Literature Review
2.3. CORRELATION OF ERP SYSTEMS AND LEAN SIX SIGMA
STRATEGIES
As mentioned before, ERP systems facilitate Lean Six Sigma projects. In
order to observe their contribution to DMAIC processes, its phases are visualised
below respectively;
Steps of Define Phase
Deliverables Tools
1. Project CTQ identify an opportunity identify the customer define CTQ
VOC
2. Outline Business Case
develop team charter Project milestones
3. Process Mapping define project boundaries
SIPOC & Product synchronisation
4. Change Management
create a shared vision gain consensus from key stakeholders
Threat vs Opportunity matrix, elevator speech and key stakeholder analysis
Table 6: Define Phase’s steps (Shaffie and Shahbazi, 2012)
According to the Table 6 illustrated above, it seems that an ERP system is one
of the most essential tools in the first step because an activity of VOC (Voice of
Customers) requires current and historical information about the customers. As
mentioned so far, ERP systems are generally integrated with Business Intelligence
tools in order to improve each other’s efficiency. In that case, VOC could be ideally
provided through Business Intelligence tools such as Data Mining. Therefore, ERP
systems are related with VOC indirectly by supporting Business Intelligence tools and
directly by being an activity that is regarding information. Additionally, Shaffie and
Shahbazi (2012) stated that “Product Synchronisation shows the relationships among
ERP
ERP
ERP Lean
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Section Two: Literature Review
various process steps (flow and applies labour) that need come together in order to
build a service or product”. At that point, it seems that “showing the relationships
among various process steps” needs a huge data manipulation which is exactly what
the ERP systems do. Also, stakeholders analysis requires data management as
happened in VOC (Voice of Customers) activities.
On the other hand, Shaffie and Shahbazi (2012) emphasised that “Product
Synchronisation is a Lean tool that is typically used to better understand the ‘P’ in the
SIPOC (Supplier, Input, Process, Output, and Customer) map. It standardises a
process and reduces its cycle time” (Shaffie and Shahbazi, 2012). In that case, it
seems that there is a lean contribution to the “Define” phase. When thinking outside
the box, it could be said that an ERP system might reinforce this Lean tool.
All of those three considerations mentioned just before are the contributions of
ERP and Lean thinking to this first phase. They will be analysed in depth after the
literature review part.
Steps of Measure Phase
Deliverables Tools
5. Define CTQ Characteristics
link customer CTQ to measurable process/ service characteristics
X-functional process map, Total product cycle time, Fishbone, FMEA
6. Outline Performance Standards
define defect and specification limits for project Y
7. Data Collection
develop a data collection plan
8. Validate Measurement System
ensure reliable and accurate data
Table 7: Measure Phase’s steps (Shaffie and Shahbazi, 2012)
Lean ERP
ERP
ERP
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Section Two: Literature Review
It is apparent to see from the table above that an ERP system could be an
enabler to produce a streamlined “Measure phase” to a Lean Six Sigma team due to
the fact that this phase includes many activities which are based on “information”. As
mentioned at the outset, any activity regarding information should be integrated with
ERP systems in order to improve the information flow and data accuracy and quality.
In the fifth step within the DMAIC method indicated above, business flow should be
expedited and non-value added activities should be removed. At that point, Lean
thinking comes into play.
Briefly, defining CTQ (critical to quality) characteristics could be provided
through some tools such as Functional process mapping, Fishbone diagrams and
Failure Mode and Effect Analysis (FMEA). These tools either need to extract some
information from the transactional processes currently conducted or require saving
what is produce during those activities (results of these implementations).
Informational needs appear again. That is the reason why the ERP systems might be
beneficial in fifth step as well. Furthermore, “a performance standard translates a
customer need into a clear and measurable characteristic.” (Shaffie and Shahbazi,
2012) It seems that the sixth step also needs an information management. Thus,
ERP systems help people to do it in a better way. In addition to these, that data
collection might be facilitated through the ERP systems in the seventh step within the
“Measure” phase is indicated on the Table 7 above.
On the other hand, “FMEA allows a team to identify defect(s) in the process
that should be eliminated and/or reduced.” (Shaffie and Shahbazi, 2012) That is what
exactly Lean should do. Therefore, this step is also related to the Lean Thinking.
Those reasons explained above which will be analysed in more depth in the
Methodology section are flagged on Table 7.
In terms of Analyse phase, although it is a phase that is mainly driven by
statistical tools and based on Six Sigma tenets, contributions of the ERP systems
and Lean thinking might be observed during it. For instance, Shaffie and Shahbazi
(2012) emphasised that “after the improve phase, what have been found from the
‘Analyse’ phase can help you compare the historical performance of a business with
the improved one”. In that case, historical data will be needed and thereby required
53
Section Two: Literature Review
an ERP system’s help. On the other hand, “the goal is reducing process cycle time,
standardisation or stabilisation” (Shaffie and Shahbazi, 2012). Additionally, when
“Value-Add, Non-Value-Add and Necessary Non-Value-Add Analysis” are taken into
consideration, it seems that Lean Thinking could provide what exactly is expected
from the eleventh step shown below.
Steps of Analyse Phase
Deliverables Tools
9. Baseline Process Capability
graphical representation of capability continuous normal data analysis discrete data analysis first-pass yield calculation
Histogram, Run chart, Box plot & Pareto Normality plot, z table and data indicators First-pass yield
10. Define Performance Objective
develop attainable goals
Benchmarking
11. Identify Sources of Variation
identify process inefficiencies (cycle time/ capacity) graphical analysis (optimisation/ quality) numerical analysis
Value-add (VA)/ Non-value-add (NVA) analysis, takt time, effective hours Correlation & Scatter plot Hypothesis testing
Table 8: Analyse Phase’s steps (Shaffie and Shahbazi, 2012)
In improve phase, everything is related to Lean Thinking because problems
have been identified, measured and analysed up to now. Then, it is time to improve
all of them. For that reason, the improve phase mainly requires lean tools to improve
those detected problems. Therefore, it could be said that Lean contribution is
observed in the “Improve” phase as illustrated on the Table 9 below.
Six Sigma
&
Statistical
Tools ERP
Lean
Stat. T.
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Section Two: Literature Review
Steps of Improve Phase
Deliverables Tools
12. Identify the vital Xs and implementable solutions
reduce cycle time, improve flow more complex projects, where the relationships between variables are not well understood, will rely on Six Sigma tools like regression
5S, Line Balancing, Kaizen
Table 9: Improve Phase’s steps (Shaffie and Shahbazi, 2012)
Steps of Control phase
Deliverables Tools
13. Validate Measurement Systems on the Xs
ensure that an adequate and reliable way of measuring the critical Xs of the process.
14. Determine the Process Capability
ensure that goals are actually achieved
15. Implement Process Control
A process control system is a strategy for maintaining the improved process performance over time
The most popular ones: Poka Yoke (mistake proofing devices), Statistical Process Control (SPC) and Quality Plan
Table 10: Control Phase’s steps (Shaffie and Shahbazi, 2012)
Finally, the DMAIC method is culminated with the “Control” phase. When a
process improvement is conducted, it should be maintained in days to come.
Therefore, this important phase should be reinforced by Lean thinking such as
mistake proofing devices (Poka Yoke) and an ERP system for providing information
Lean
Lean
ERP
55
Section Two: Literature Review
management in it. If need for an ERP system is exemplified, Quality Plan could be
revealed by defining it as a “documented plan and ensure that each product or
service characteristic or process requirement stays in conformance” (Shaffie and
Shahbazi, 2012). It seems that this activity also needs data manipulation. Hence, the
ERP systems play an important role at that point. Contributions of the ERP systems
and Lean Six Sigma Strategy are shown on the Table 10 above and they are
discussed in the forthcoming sections.
2.4. CONCLUSION OF THE LITERATURE REVIEW
Streamlining business processes and thereby increasing productivity,
eliminating waste of time and resources and also reducing costs are the key
considerations of a company. They could be provided by using some appropriate
tools and techniques such as ERP Systems and Lean Six Sigma Methodologies.
Their internal benefits for a company have been separately explained thus far.
Even though they are also useful for the companies individually in order to
achieve the business excellence, both ERP Systems and Lean Six Sigma
Methodologies have deficiencies in themselves. In that case, it seems that they could
complement each other. For instance, an ERP system might be evaluated as a
sophisticated information technology tool by a company’s top managers. Then, just
its technical aspects might be focused on during the course of its implementation.
However, it probably needs to be taken into consideration in terms of that company’s
system requirements. As mentioned before, the way of an ERP System’s installation
could be performed according to the business process reengineering strategy if
necessary which includes two kinds of way that are “Clean Slate Reengineering” and
“Technology-enabled Reengineering”. While the former one requires an ERP system
configuration from an ERP vendor according to the company’s structure because of
starting from the scratch, the latter one expects the company to adapt the selected
ERP system’s own logic. There might be some problems/ challenges in this adoption
process mentioned before. At that point, they might be solved through Lean Six
Sigma Methodologies and the company’s implementation process might be
streamlined. In that case, Kimberling (2012) indicated that although the companies
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Section Two: Literature Review
which have six sigma teams adopt lean principles, they cannot utilise their ERP
system properly because of not being able to deliver measurable business value.
They just spend their time and money to their ERP systems. In this situation, Lean
Six Sigma tools might be helpful for the company staffs responsible in order to
measure the business value of an ERP system and its shortcomings’ effects to the
implementation process. Also, Lean Six Sigma approach allows them to remove or
reduce those shortcomings. Hence, combination of ERP systems and Lean Six
Sigma Methodologies could be the best idea for the companies to enhance their
system at the highest level.
jhkn
Figure 15: Comparison between ERP Systems and Lean Six Sigma Methodologies
ERP
SYSTEMS
LEAN
SIX
SIGMA
IN
MANUFACTURING
ENVIRONMENT
Facilitates
detailed
data
about
productivity
quality
and yields
Maximise
stakeholders’
value by
achieving
fastest
rate of
improvement
Inventory level
Margins
Costs
Process Conditions
Customer
Satisfaction
Cost/ Quality
Process Speed
Invested Capital
57
Section Two: Literature Review
On the other hand, an ERP system might be powerful a repository that could
provide a platform to a Lean Six Sigma team for monitoring their state of affairs.
Alternatively, they could also access the historical data that could allow them and top
managers to compare after-implementation situation and before-implementation
situation. In this way, “how much could the Lean Six Sigma project improve the
business?” could be measured both qualitatively and quantitatively.
In this project, those points indicated above the Figure 14 will be investigated.
In addition to these, there are some challenges of both ERP Systems and Lean Six
Sigma Strategies mentioned before. Since any project’s aim is to find the most
effective and efficient way to streamline the business processes by meeting minimum
costs and boosting productivity at the shortest time and in the highest quality, “could
they compensate their challenges if they are combined” is therefore analysed in order
to have a deep understanding of their utilisation.
The Figure 14 above is constituted according to Nauhria and his colleagues’
(2009) comments about ERP and Lean Six Sigma combination which are “In a
manufacturing environment, ERP facilitates detailed data about productivity, quality
and yields, which can be correlated with other parameters such as inventory level,
margins, costs and process conditions” and “Lean Six Sigma is a methodology that
maximizes stake holder’s value by achieving fastest rate of improvement in customer
satisfaction, cost, quality, process speed, and invested capital”. Finally, they added
and emphasised that point: “A well implemented ERP system is the foundation on
which an effective lean six sigma program can be built.”
In order to observe what is explained thus far, this two approaches’ benefits
and challenges based on the literature of this project are indicated in brief on the next
two pages.
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Section Two: Literature Review BENEFITS OF ERP BENEFITS OF LEAN SIX SIGMA
providing and improving information flow
(moving data from application to application
without re-entry by integrating applications)
providing internal and external integration
common platform for all levels of
organisation in order to share deep and
detailed data
enabling to share that repository by
multiple users for multiple purposes
producing real-time data and enabling to
access it (if online, from any place at any
time)
integrates real time and precise operation
flows
increasing information accuracy (process
improvement and process predictability)
simplifying the way of doing business and
streamlining the business processes
providing exhaustive data to the front-end
functions
both employees’ and managers’
involvement (increasing the people’s
productivity)
facilitating people’s work
enhancing the quality of working life
minimising of delays in customer orders
indirectly understanding the voice of
customer by using historical data (bettering
customer interaction)
reducing supplier response time
cost reduction
increasing value added functions
reducing cycle time (shorter intervals
between order and payments)
decreasing back office staff requirements
reducing inventory
providing exhaustive and historical data
(for top managers)
minimising decision making time
facilitating planning and control
eliminating waste (or minimising all kind of
wastes)
removing defects from the business processes
streamlining business processes
increase in productivity
shortening the timeline between the customer
request and the delivery of service (by eliminating
waste)
increasing production efficiency (by consistently
and thoroughly eliminating waste)
providing the cheapest and defect-free
manufacturing
cost reduction
decreasing expenditure
maximising profitability
customer service improvement
provides the companies’ responsiveness
expediting the processes
enhancing customer relationship (improvement in
customer satisfaction)
providing to retain customers
improve the way of doing businesses
improving the production and transactional
processes of an organisation
eliminating non-value adding activities
providing continuous improvement for the
companies
increasing the quality of the companies’
products and services
reducing operational variance
improving overall quality and performance levels
of business processes.
quality improvement and quality assurance
providing proactive management
enabling the boundaryless collaboration
higher predictability
risk reduction by ensuring that business
deadlines are met
reduction of lead time
reduction in work-in process inventory
reduction in order-processing errors
competitive advantage
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Section Two: Literature Review
SHORTCOMINGS OF ERP CHALLENGES OF LEAN SIX SIGMA
people’s resistance against the technology
adoption
demanding long term for giving its results
though higher investments
possibility of inadequate budget
not being expert enough in implementing
an ERP software
failure to reflect business processes
effectively in ERP system
ignoring the companies’ own needs
because of preferring to use “standardised
global templates” of ERP systems
lack of flexibility at the local level to take
advantages of regional opportunities
cultural differences in the way of doing
work
underestimating the amount of time and effort
required to implement and maintain Lean
misunderstanding what the project requires in
order to maintain Lean Six Sigma Strategy
hiring consultants and pouring resources into this
initiative which in turn wasting of so much money
demanding long term for giving its results though
higher investments
increasing complexity when combining Lean and
Six Sigma
lack of ownership
lack of top management involvement
wrong selection of projects
failure to understand which processes to apply
Lean to – lack of effective prioritisation
narrow project-only perspective
Unclear link between strategy and LSS projects
Lack of key process structure into the
organisation
Flavour of the Month
Misunderstand of Lean and Six Sigma
relationship
Immature firm readiness to apply Lean Six
Sigma
Deficient stock of knowledge and monetary
resources
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Section Three: Research Methodology
3. SECTION THREE: RESEARCH METHODOLOGY
“The purpose of the method section is to provide a rationale and detailed
description of the research design.” (Rocco, 2011) In order to reinforce the project
direction, research philosophy and approaches will be explained at first.
Subsequently, the research design will be formulated and subsections of the
research methodology will be analysed afterwards.
3.1. RESEARCH PHILOSOPHIES AND APPROACHES
Research philosophy is “overarching term related to the development of
knowledge and the nature of that knowledge” (Saunders et al. 2007). Also,
“development of research background” could be added to that definition (Saunders et
al. 2007). According to Saunders and his colleagues (2007), there are “three major
ways of thinking about research philosophy which are epistemology, ontology and
axiology”. Those ways are explained in detail and which ones are the ways of this
project is indicated below.
Saunders and his colleagues (2007) mentioned that “epistemology concerns
what constitutes acceptable knowledge in a field of study” and they added “For that
researcher, reality is represented by objects that are considered to be ‘real’, such as
computers, trucks and machines.” It includes three different approaches that are
positivism, realism and interpretivism.
“If your research philosophy reflects the principles of positivism, then you will
probably adopt the philosophical stance of the natural scientist. You will prefer
working with an observable social reality and that the end product of such research
can be law-like generalisations similar to those produced by the physical and natural
scientist.” (Saunders et al. 2007) Realism is regarding “scientific enquiry” which is
“similar to positivism and in that it assumes a scientific approach to the development
of knowledge” (Saunders et al. 2007). In terms of interpretivism, “it is an
epistemology that advocates that it is necessary for the researcher to understand
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Section Three: Research Methodology
differences between humans in our role as social actors. This emphasises the
difference between conducting research among people rather than objects such as
trucks and computers” (Saunders et al. 2007).
“Ontology is concerned with nature of reality. To a greater extent than
epistemological considerations, this raises questions of the assumptions researchers
have about the way the world operates and the commitment held to particular views.”
(Saunders et al. 2007) It also includes three other approaches that are objectivism,
subjectivism and pragmatism.
While objectivism “portrays the position that social entities exist in reality
external to social actors”, subjectivist view is that “social phenomena are created
from the perceptions and consequent actions of social actors (Saunders et al. 2007).
On the other hand, “pragmatism argues that the most important determinant of the
research philosophy adopted is the research question- one approach may be better
than the other for answering particular questions. Moreover, if the research question
does not suggest unambiguously that either a positivist or interprevist philosophy is
adopted, this confirms pragmatists’ view that it is perfectly possible to work with both
philosophies.” (Saunders et al. 2007)
“Axiology is a branch of philosophy that studies judgements about value.”
(Saunders et al. 2007) It is defined in Saunders and his colleagues’ book (2007) as
“researchers demonstrate axiological skill by being able to articulate their values as a
basis for making judgements about what research they are conducting and how they
go about doing it”.
When all of the philosophies explained above are taken into consideration,
positivism and interpretivism seems to be adopted for this project. It is because while
the ERP systems are based on the computers as the provable objects, Lean Six
Sigma projects are driven by people and thereby depend upon the social factors
(humans). As mentioned in pragmatism, a mixture of positivism and interpretivism for
the research philosophy could be embraced during the research process and this
situation might produce the best results by proving variable options to researchers.
Hence, positivism and interpretivism are adopted for this project according to
pragmatism’s logic.
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Section Three: Research Methodology
3.2. RESEARCH PARADIGMS
“Paradigm is a way of examining social phenomena from which particular
understandings of these phenomena can be gained and explanations attempted.”
(Saunders et al. 2007) Cohen and his colleagues (2007) also defined it as “the broad
framework which comprises perception, beliefs and understanding of several theories
and practices that are used to conduct a research”. There are four different
paradigms such as radical humanist, radical structuralist, interpretive and
functionalist that are shown below.
Figure 16: Research Paradigms (Saunders et al. 2007)
As can be seen from the figure above, those paradigms “are arranged to
correspond to four conceptual dimensions which are radical change & regulation and
subjectivist & objectivist. Their aims are indicated in Saunders and his colleagues’
book (2007) as:
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Section Three: Research Methodology
“helping researchers clarify their assumptions about their view of the nature of
science and society” (Saunders et al.2007)
“offering a useful way of understanding the way in which other researchers
approach their work” (Saunders et al.2007)
“helping researchers plot their own route through their research; to understand
where it is possible to go and where they are going” (Saunders et al.2007)
In interpretive paradigm, “the concern you would have working within this
paradigm would be to understand the fundamental meanings attached to
organisational life” (Saunders et al. 2007). In Saunders and his colleagues’ book this
point is emphasised: “Everyday life is accorded the status of a miraculous
achievement. Your concern here would not be to achieve change in the order of
things, it would be to understand and explain what is going on.” (Saunders et al.
2007)
When radical humanist paradigm is taken into consideration, Saunders and
his colleagues (2007) stated that “working within this paradigm you would be
concerned with changing the status quo”. In other words, this paradigm is to
“articulate ways in which humans can transcend the spiritual bonds and fetters which
tie them into existing social patterns and thus realise their full potential” (Saunders et
al. 2007).
In terms of radical structuralist paradigm, “here your concern would be to
approach your research with a view to achieving fundamental change based upon an
analysis of such organisational phenomena as power relationships and patterns of
conflict” (Saunders et al. 2007).
Finally, functionalist paradigm is “regulatory in that you will probably be
more concerned with a rational explanation of why a particular organisational
problem is occurring and developing a set of recommendations set within the current
structure of the organisation’s current management” (Saunders et al. 2007).
According to the explanations above, this project tends to adopt the radical
humanist paradigm because although it requires some changings from the
organisations (integrating an improvement strategy such as Lean Six Sigma with a
computational system such as an ERP system), those changings are still dependent
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Section Three: Research Methodology
upon the people (Lean Six Sigma teams are comprised of people). That is the reason
why the mixture between positivist and interpretivist philosophies (pragmatist view)
prevails in this project to the accompaniment of radical humanist paradigm.
3.3. RESEARCH APPROACHES
According to Saunders and his colleagues (2007), “theory may or may not be
made explicit in the design of the research, although it will usually be made explicit in
your presentation of the findings and conclusions” and they added that “the extent to
which you are clear about the theory at the beginning of your research raises an
important question concerning the design of your research project”. In that case, two
different approaches are surfaced that are deductive approach and inductive
approach.
In deductive approach, “you develop a theory and hypothesis and design a
research strategy to test the hypothesis” (Saunders et al. 2007). In terms of
inductive approach, “you collect data and develop data and develop theory as a
result of data analysis” (Saunders et al. 2007).
In that case, inductive approach is likely to be adopted in this project because
data about the ERP systems and Lean Six Sigma methodologies are elaborately
collected at first and some inferences are made afterwards. In that case, this tactic
could be evaluated as inductive an approach. However, Saunders and his colleagues
(2007) mentioned that “deduction” is based on positivism, whilst “induction” is based
on interpretivism. Since this project adopt the mixture of positivism and interpretivism,
deductive approach is also adopted in some cases such as mooting an idea about
the ERP systems’ contribution to the Lean Six Sigma projects at the outset.
3.4. CLASSIFICATION ABOUT RESEARCH PURPOSE
Saunders and his colleagues (2007) stated that there are three diverse
research studies that are illustrated below.
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Section Three: Research Methodology
Exploratory studies
Descriptive studies
Explanatory studies
Saunders and his colleagues (2007) defined exploratory study by saying that
“it is a valuable means of finding out what is happening; to seek new insights; to ask
questions and to assess phenomena in a new light” and they emphasised that “it is
particularly useful if you wish to clarify your understanding of a problem, such as if
you are unsure of the precise nature of the problem”. They stated that there are
“three principle ways of conducting exploratory research” that are mentioned below.
“A research of literature” (Saunders et al. 2007)
“Interviewing experts in the subject” (Saunders et al. 2007)
“Conducting focus group interviews” (Saunders et al. 2007)
On the other hand, “the emphasis in explanatory studies is on studying a
situation or a problem in order to explain the relationships between variables”
In terms of descriptive studies, the object of descriptive research is “to
portray an accurate profile of persons, events or situations” (Saunders et al. 2007).
Saunders and his colleagues (2007) commented that “this may be an extension of a
piece of exploratory research and explanatory research”.
In that case, it seems that exploratory and descriptive studies are adopted in
this project. Explaining the ERP systems and Lean Six Sigma strategy in detail by
utilising primary and secondary resources might be evaluated as a descriptive study,
while interviewing with the experts is based on an exploratory study.
3.5. RESEARCH STRATEGY
There are various research strategies indicated below (Saunders et al. 2007)
and some of the most popular ones are explained in detail afterwards.
Experiment
Survey
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Section Three: Research Methodology
Case Study
Action Research
Grounded Theory
Ethnography
Archival Research
“The purpose of an experiment is to study casual links; whether a change in
one dependent variable produces a change in another dependent variable”
(Saunders et al. 2007) However, if you adopt that strategy it would be probably more
costly and complex than the others because you need to observe two groups that are
experimental group in order to change the systems according to your research
question(s) and control group in which the systems are maintained without making
any change. In that case, it is easy to observe differences (Saunders et al. 2007).
In terms of survey, “its strategy is usually associated with the deductive
approach and it is most frequently used to answer who, what, where, how much and
how many questions” (Saunders et al. 2007).
Case study is defined by Saunders and his colleagues (2007) as “it is a
strategy for doing research which involves an empirical investigation of a particular
contemporary phenomenon within its real life context using multiple sources of
evidence”. They emphasised that “the case study strategy will be of particular interest
to you if you wish to gain a rich understanding of the context of the research and the
processes being enacted”.
As can be understood from the explanations above, the most appropriate
strategy for this project is case study by means of semi-structured interviews that are
explained in “Data Collection” below. The reason why case study is adopted for this
project is because after putting some propositions on the implementation processes
of ERP systems and Lean Six Sigma projects, the possibility of their combination are
sought in the real life. Therefore, being involved in some discussions with those
experts mentioned before across this new perspective enriches the idea of the
project on occasions.
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Section Three: Research Methodology
3.6. DATA COLLECTION
3.6.1. Literature Resources
Resources utilised while reviewing the literature could change according to
requirements of the project focused on. For that reason, resources are divided into
three types which are primary resources, secondary resources and tertiary resources
that are explained in depth and shown on the figure below.
Primary Resources: “Primary resources of information include first-hand
accounts of experimentation and investigation (articles in professional
journals, monographs, doctoral theses, interviews and questionnaires), original
works (letters, diaries, eyewitness accounts, poems, novels, autobiographies)
and reports (proceedings of parliament, court testimony, reports of
government departments and agencies, annual reports, minutes).” (Anderson
and Pode, 2001)
Secondary Resources: “Secondary resources of information are summaries
of information gathered from primary sources. These include translations,
summaries and reviews of research (for example, encyclopaedia articles),
guide books, other publications containing information and commentaries.”
(Anderson and Pode, 2001)
Tertiary Resources: “Textbooks are usually examples of tertiary sources of
information, since these are generally compiled from secondary sources.”
(Anderson and Pode, 2001)
Sunders and his colleagues (2007) visualised resource types on the Figure 16
below that shows types of the primary, secondary and tertiary resources. According
to the figure below constituted by Saunders and his colleagues (2007), primary and
secondary resources are mainly used for the literature, even though tertiary
resources are partially utilised as well. Text books are mainly utilised for the project
even though journals, online resources, theses and abstracts are also made use of
during the literature review process.
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Section Three: Research Methodology
Figure 17: Literature Resources (Saunders et al. 2007)
3.6.2. Data Collection Methods
There are five kinds of data collection methods that are based on quantitative
and qualitative approaches (Saunders et al. 2007). Quantitative “is predominantly
used as a synonym for any data collection technique (such as questionnaire) or data
analysis procedure (such as graphs or statistics) that generates or uses numerical
data” while qualitative “is used predominantly as a synonym for any data collection
technique (such as an interview) or data analysis procedure (such as categorising
data) that generates or use non-numerical data.” (Saunders et al. 2007)
Data collection methods are indicated below explained briefly.
Mono method research: “If you choose to use a mono method you will
combine either a single quantitative data collection technique, such as
questionnaires, with quantitative data analysis procedures; or a single
qualitative data collection technique, such as in-depth interviews, with
qualitative data analysis procedures.” (Saunders et al. 2007)
Multi-method quantitative study: As mentioned its name, it consists of more
than one quantitative approach (Saunders et al. 2007).
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Section Three: Research Methodology
Multi-method qualitative study: It is also comprised of a couple of qualitative
research methods as happened in multi-method quantitative study (Saunders
et al. 2007).
Mixed method research: “It uses quantitative and qualitative data collection
techniques and analysis procedures either at the same time (parallel) or one
after the other (sequential) but does not combine them.” (Saunders et al.
2007)
Mixed model research: “It combines quantitative and qualitative data
collection techniques and analysis procedures as well as combining
quantitative and qualitative approaches at other phases of the research such
as research question generation.” (Saunders et al. 2007) All of those research
methods just mentioned above are shown on the Figure 17 below.
According to the explanations above, this project adopts mono method by
conducting in-depth interviews as a qualitative study.
Figure 18: Research choices (Saunders et al. 2007)
In terms of the interview types, there are three kinds of interviews which are
explained in brief below.
“Structured interviews use questionnaires based on a predetermined and
standardised or identical set of questions and we refer to them as interviewer-
administered questionnaires.” (Saunders et al. 2007)
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Section Three: Research Methodology
“In semi-structured interviews the researcher will have a list of themes and
questions to be covered, although these may vary from interview to interview.”
(Saunders et al. 2007)
“Unstructured interviews are informal. You would use these to explore in
depth a general area in which you are interested.” (Saunders et al. 2007)
According to the explanations above, semi-structured interviewing is selected
for this project. Some questions have been produced based on the literature and
asked nine experts in Lean Six Sigma strategy and ERP systems in order to benefit
from their experiences. These interviews with those specialists are analysed in depth
in the Data Analysis and Discussion sections. The experts are introduced below.
1. Dr. David Scrimshire who is the director at TEC. (Techno-Economic
Consultants Ltd) This company provides consulting and training to the other
companies which conduct the Lean Six sigma strategy them.
1. Ton Van Esch who is a Lean Six Sigma Blackbelt and works for Xerox as a
Manufacturing and Supply Chain Manager.
2. Mike James-Moore who is senior fellow at University of Warwick.
3. Kim Stansfield who is QFD (Quality Function Deployment) Practitioner at
Energy Technologies Institute.
4. Mete Mazlum who is Business Analyst Specialist at Industrial Development
Bank of Turkey.
5. Serkan Mahir who is Senior Organisational Development Specialist & Lean
Six Sigma Master Blackbelt at Turkcell Superonline
6. Dr. Angela Clarke who is Lean Six Sigma Blackbelt and Module Tutor at
University of Warwick.
7. Greg J. Hughes who is Supply Chain Project Leader at AstraZeneca.
8. Dr. Terra Vanzant-Stern who is Six Sigma Master Blackbelt and Lead
Facilitator at System Service & Delivery, Inc. (SSD Global Solutions). She is
also the author of Lean Six Sigma Practical Bodies of Knowledge and Lean
Six Sigma International Standards and Global Guidelines.
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Section Three: Research Methodology
3.6.3. Ethics
In this project, the interviews have been conducted based on University of
Warwick’s policy. They are allowed to be used within the project by all of the
respondents introduced above.
3.7. TIME HORIZONS
There are two kinds of time-based studies that are cross-sectional studies and
longitudinal studies. While the former one could be evaluated as “the snapshot time
horizon”, the latter one is based on “diary perspective”. (Saunders et al. 2007) These
approaches are briefly explicated below.
Cross-sectional Studies: Saunders and his colleagues (2007) mentioned
that “these research projects are time constrained and may be seeking to
describe the incidence of a phenomenon or to explain how factors are related
in different organisations” and they added that “many case studies are based
on interviews conducted over a short period of time”.
Longitudinal Studies: “The main strength of longitudinal research is the
capacity that has to study change and development. In observing people or
events over time, the researcher is able to exercise a measure of control over
variables being studied, provided that they are not affected by the research
process itself.” (Saunders et al. 2007)
According to the definitions above, this project is a cross-sectional study that
includes the semi-structured interviews in the limited time. In this process, “how the
various factors’ effects change in different organisations” is also well-observed
because the specialists work in different sectors and companies.
As can be observed from the Figure 18 below, a research study’s all steps are
visualised by Saunders and his colleagues (2007) as “The Research Onion”. After
deciding which component(s) of it is/are appropriate for the project (adopting the right
philosophy and the right paradigm, deciding the type of research approach and
research purpose, identifying the time horizon), data collection has been done by
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Section Three: Research Methodology
conducting the semi-structured interviews and all the data acquired from the experts
are analysed in the Analysis section.
Figure 19: The Research Onion (Saunders et al. 2007)
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Section Four: Data Analysis
4. SECTION FOUR: DATA ANALYSIS
ERP systems and Lean Six Sigma Philosophy have been explained in detail
thus far, semi structured interviews have been conducted according to the literature
review and some critical points have been discussed with the experts on the Lean
Six Sigma and ERP systems. The respondents comprised of the experts have
agreed with the idea of the project at some points although they were not quite sure if
it could happen in the real world.
In this section, the data acquired from that interview process are analysed
question by question. In order to understand questions’ logic, the tables of a DMAIC
method are visualised below once again and analysed. Additionally, the relationship
between ERP systems and Lean Six Sigma strategy is investigated and sequence of
their implementation are focused on afterwards.
4.1. ANALYSING THE DMAIC METHOD
As mentioned before in depth, some propositions have been put on this
method about the ERP and Lean contribution. Although the DMAIC method is based
on Six Sigma strategy, it seems that Lean thinking and the ERP systems support it
according to the literature. There are also other tools that could be used instead of
them, however it seems that they are the most powerful and appropriate tools that
might streamline and enhance the DMAIC processes. For that reason, some
questions based on the propositions put have been asked to the experts. Thus, each
phase of DMAIC is analysed in their entireties below.
4.1.1. Analysing the Define Phase of the DMAIC Method
In Define phase, three questions about the ERP contribution and one question
regarding the Lean contribution have been asked to the specialists. Each individual’s
answer is analysed below question by question.
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Section Four: Data Analysis
Steps of Define Phase
Deliverables Tools
1. Project CTQ identify an opportunity identify the customer define CTQ
VOC
2. Outline Business Case
develop team charter Project milestones
3. Process Mapping define project boundaries
SIPOC & Product synchronisation
4. Change Management
create a shared vision gain consensus from key stakeholders
Threat vs Opportunity matrix, elevator speech and key stakeholder analysis
ERP Contribution
Question A: It seems that an ERP system is one of the most essential tools at that
point because VOC (Voice of Customers) activities require current and historical
information about the customers. As mentioned in the Literature Review section,
ERP systems are generally integrated with Business Intelligence tools in order to
improve each other’s efficiency. In that case, VOC could be ideally provided through
Business Intelligence tools such as Data Mining. Therefore, ERP systems are related
with VOC indirectly by supporting Business Intelligence tools and directly by being an
activity that is regarding information. What do you think about this consideration?
1. Dr. David Scrimshire: The linkage of VOC with ERP systems reinforces the “D”
step of Six Sigma. Without customer focus ERP systems may be efficient –
but they will not be effective in delivering VOC.
Note: in this context “customer” refers to all ‘stakeholders’ – which includes
final customers, shareholders, and internal departments, etc.
2. Ton Van Esch: VOC is a different exercise where their voice needs to be
collected by interview, focus group or survey. These then need to be skilfully
translated into CTQ’s (Critical to Quality). Voice of the process can be
ERP
ERP
ERP Lean
A
B
C
I
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Section Four: Data Analysis
facilitated by business intelligence, data mining tools but not VOC. You need
to collect VOC through direct customer contact.
3. Mike James-Moore: I agree with your proposition; however it requires a
positive management action to ensure this is done. ERP itself will only identify
VOC as far as demand goes such things as styling or functionality is not a
normal part of an ERP suite however, at a cost it can accommodate any
information you wish to load it with.
4. Kim Stansfield: I agree that the integration of ERP with Business Intelligence
tools can provide useful information in determination of historical and current
VoC data. In particular the data mining of trends in number of times customers
request products/ components, complain, or request changes to products/
processes can be very useful information for VoC analysis and provide one
level of prioritisation/ importance assessment. There are active DMAIC
processes that are needed above and beyond this potential source of
information such as prioritisation of requirements (AHP- Analytical Hierarchy
Process), categorisation of requirements vs features (Kano Analysis) which
requires direct interaction with the customers that is not normally available in
BI or ERP systems.
5. Mete Mazlum: I think the ERP integration with the Business intelligence tools
is an effective approach for a project’s success. Business intelligence tools like
data mining give us a fresh viewpoint about the customers during the Lean Six
Sigma projects.
6. Serkan Mahir: VOC activities provide the main input to the Lean Six Sigma
projects conducted. “What and when do the customers want?” and “How and
how much/ many they want what they demand?” could be answered through
the VOC activities. Surveys, questionnaires, interviews and data analysis are
used in order to understand the VOC. In that case, the ERP systems could
actively be utilised. However, ERP is differently restricted to be accessed by
different level of people. Therefore, just voice of the internal customers could
be acquired through an ERP system.
7. Dr. Angela Clarke: ERP systems will help with understanding the voice of our
current customers, because you have a lot of data and you can manipulate the
data. In Six Sigma, often, it helps to get voice of the customers who are not
your current customers but who are potential customers. Therefore, you would
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Section Four: Data Analysis
not get that from the ERP systems. If you ask a customer, you will get an
answer. If you ask a customer a different question (may be slightly the same
but slightly different), you might get a completely different response because it
depends on how clearly you ask the question. Thus, the advantage of using
ERP is for data that has already been collected about the customers while
disadvantage placed in the VOC activities is for the potential customers.
Sometimes, the data you are collecting is not really the right question you
want to ask anyway. Therefore, the voice of the customer is capturing data
that may not be actually the right question.
There is another approach that is called MOC (Mind of the Customer). In that
case, I ask the customers to fill out some information and I get the Voice of the
Customers. However, I do not actually know what is going on in the mind.
They are just answering my questions. It is hard to get inside the mind of the
customers. If you go and look at Six Sigma information, they will tell you that
the mind of the customers is really important as well. So again, ERP systems
would not help you there. Therefore, for limited help, yes it is a good place to
do it.
8. Greg J. Hughes: ERP systems can generate and capture a lot of data, and BI
tools such as data warehouses and the applications that carry out data
capture, storage, manipulation, reporting and analysis are widely used to turn
this data into useful information. I question how much of this actually
represents the ‘voice of the customer’. Much ERP data is derived processes
and transactions within an enterprise, managing its internal activities. There
are CRM tools (customer relationship management) that are used to capture
data more directly related to customers and their behaviours. These can be
linked to ERP systems, but are normally considered as distinct systems.
There is also an argument that the only true ‘voice of the customer’ is actually
anecdotal input direct from customers – not data captured about customer
transactions, but rich information about their requirements and perceptions of
products and services available to them. In practice though many businesses
do not rely on this type of information but instead make significant use of data
captured from sales to customers, customer surveys and their interactions
with the business’ website.
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Section Four: Data Analysis
9. Dr. Terra Vanzant-Stern: Many ERP systems focus on automating functions
that don’t directly impact the customer. However, I certainly see how tools
such as data mining could be expanded from capturing critical data to
incorporating VOC as well as CTQs.
Question B: According to the Literature Review, “Product Synchronisation shows the
relationships among various process steps (flow and applies labour) that need come
together in order to build a service or product” (Shaffie and Shahbazi, 2012). At that
point, it seems that “showing the relationships among various process steps” needs a
huge data manipulation which is exactly what the ERP systems do. What do you
think about it?
1. Dr. David Scrimshire: Again – this aspect of ERP aligns well the initial work
undertaken in a Six Sigma ‘breakthrough’ project – analysing processes using
SIPOC (Supplier, Input, Process, Output, Customer).
2. Ton Van Esch: Agree
3. Mike James-Moore: Yes, that is why at the start of our little book we included
the quote about ERP being the company. However as I have already said it
"pushes" the data through the five lean principles start from the point of
customer value how to define it and how to deliver it.
Define customer value
Identify the value stream
Make the value flow
Let the customer pull the value
Pursue perfection
The objective is to minimise waste and maximise added value. One of the
values is only to provide what the customer wants when he wants it.
Six Sigma comes from the concept that waste and quality can be reduced by
minimising variability. It does not come from the viewpoint of delivering
customer value when the customer wants it-the pull principle is not the key.
ERP comes from the viewpoint that if all the information systems are aligned,
accurate and the communications fast then it should be possible to ensure all
processes work in harmony again increasing value and eliminating waste,
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Section Four: Data Analysis
however despite recent developments ERP assumes that there is infinite
resource to carry out any process and that they are always available. Again, it
is not really ‘addressing the issue of pull’.
Our little booklet tried to see how this potential conflict could be handled and
suggested good practice for ERP implementation. It shows failure to do these
results in sub optimal performance with a major amount of variability.”
4. Kim Stansfield: Generation of ‘As Is’ process maps/ SIPOCs is a fundamental
step of any Lean Six Sigma improvement project, which is then developed by
comparison with customer CTQs for process performance to prioritise
improvements to develop ‘To Be’ process configurations. ERP systems could
be beneficial to this activity IF they support the rapid representation and
performance modelling of the ‘As Is’ SIPOC/ process configuration, and
enable comparison with customer expectations i.e. help define which areas of
SIPOC the team should focus on. My understanding is that ERP systems
provide a ‘Best In Class’ representation of process configurations, if this is the
case they would be less useful in helping Six Sigma improvement teams
Defining which aspects of complex ‘As Is’ processes to improve.
5. Mete Mazlum: Yes I totally agree with relationships among various process
steps need a data manipulation that ERP systems overcome this situation.
6. Serkan Mahir: An ERP system could be effectively used in order to show the
relationships among the process steps. At that point, the main constraint is
workforce requirement in translating the information about the process steps
into the ERP system.
7. Dr. Angela Clarke: I think where you have got lots of data and there is some
manipulation. At that point, ERP systems can help.
8. Greg J. Hudjes: I’m not sure what you mean by ‘data manipulation’ in this
context. However, in order to set up an ERP system it is essential to define
the business processes that it is intended to operate, in great detail. ERP
systems rely on people carrying out intended transactions in a define
sequence, with accurate data to control material & resource requirements
planning, procurement and use. Processing steps are usually controlled by
carefully defined Bills of Materials and Recipes, which are combined in the
execution of a sequence of work units or operations.
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Section Four: Data Analysis
To build and maintain an ERP system requires these business processes to
be defined, and described in documentation. It is usually a significant
challenge to create this documentation in the first place, to update it as the
design evolves through the design-build-test process, and then to maintain the
documentation to a reasonable level of accuracy as the system is developed
during the lifetime of its use.
There are now IT tools available which can ‘reverse engineer’ the process
design from an existing ERP system – although I do not have direct
experience of these.
9. Dr. Terra Vanzant-Stern: I agree that “showing the relationships among
various process steps” needs a great deal data manipulation as well as and
understanding of dependencies. An ERP would be perfectly suited to create
this picture.
Question C: Key stakeholder analysis also needs data management as happened in
Part A (Voice of Customers). Therefore, it seems that this activity also needs ERP
contribution. What do you think?
1. Dr. David Scrimshire: Certainly, many of the Six Sigma ‘breakthrough’ projects
I have mentored had had to rely entirely on ‘historical’ data. The archive data
held by ERP systems (e.g. SAP) are the only source of this ‘data treasure-
trove’.
2. Ton Van Esch: No, Stakeholder analysis is a team activity where motivators
and political factors are evaluated as well as a communication plan that needs
to support the outcome of the stakeholder analysis.
3. Mike James-Moore: Again ERP systems are very powerful and at a cost can
provide data management even to the engineering and design systems.
Development of massive computer memory has enabled this to be more
practical over the last decade.
However most ERP systems are still quite rigid- you follow their way and
process. Implementation of an ERP system is a massive exercise as you
suggest and the more complex the requirements are made on it the bigger the
risk.
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Section Four: Data Analysis
Several major companies almost went bankrupt introducing ERP a decade
ago and some smaller companies went bust.
4. Kim Stansfield: There are useful Stakeholder analysis data that an ERP
system could provide e.g. historical trends in change requests, complaints,
supplier performance data, internal process management staff performance,
compliance performance trends. This can provide stakeholder insight and
likely support or opposition of stakeholders to change. It also can provide
further useful information in customer segmentation analyses, in terms of
providing trends vs customer segments, a key aspect of prioritising/ selecting
customer programmes for Six Sigma/ Lean enhancements.
5. Mete Mazlum: I think key stakeholder analysis necessitate ERP contribution.
6. Serkan Mahir: Yes, it is the same with the question A.
7. Dr. Angela Clarke: I think, only in that, you may have some data there.
However, again, when you are looking at change management, you do not
know who the key stakeholders are because it is not captured. Therefore, it is
not in the ERP systems. There is no existing data to manipulate. Thus, the
issue is that ERP systems are only good for analysing the existing data. If you
get anything else, yes you can use the ERP systems. However, you will not
probably have this information. You have to collect it at fist. Change
management includes a lot of unknown data and you will have to go out and
get that information. However once you get the information, it could be
potentially fed into the ERP systems for the next time you do it.
8. Greg J. Hughes: I disagree. Key stakeholders are those who hold resource
required to execute a project, or have a strong interest in its outcome.
Stakeholder analysis first requires identification of these stakeholders, which
would be done by consulting with project sponsors, by understanding the
scope and scale of the proposed project and considering who will be impacted
by it and who will need to support the project to enable it to be carried out and
to succeed. Stakeholder analysis then requires these stakeholders to be
consulted directly, to discuss with them the project, what it will mean to them,
and what is required of them. I do not feel that ERP systems will make any
contribution to this.
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Section Four: Data Analysis
9. Dr. Terra Vanzant-Stern: Agreed. What ERP would bring to the party in
addition to a more VOC information would be the Voice of the Process (VOP).
If the process could speak, what would it say to the stakeholders?
Lean Contribution
Question I: “Product Synchronisation is a Lean tool that is typically used to better
understand the ‘P’ in the SIPOC (Supplier, Input, Process, Output, Customer) map. It
standardises a process and reduces its cycle time” (Shaffie and Shahbazi, 2012).
How effectively does ERP reinforce this Lean tool?
1. Dr. David Scrimshire: The methodology for “computerizing” manufacturing
scheduling is complex – and several models have been proposed over the
past 20-years. I am not aware that ERP systems adopt any single
methodology. Consideration should include: One-piece synchronous flow;
Production smoothing (Heijunka); Takt time; etc.
2. Ton Van Esch: ERP implementation should have documented work flows –
hence it could provide input into a SIPOC.
3. Mike James-Moore: Again I may be out of date but in my view ERP should
only be used at the macro process level and should be stopped from
managing at operational level- see the case study in our booklet.
4. Kim Stansfield: My understanding is that ERP Systems provide standardised,
best practice process configurations and models. One of the biggest causes of
implementation failures of ERP systems is reported to be ‘poor understanding
of needed process changes prior to starting implementation.’ As stated , a key
requirement of Lean Six Sigma projects is to provide accurate representations
of the full SIPOC value chain, including the Process steps. ERP’s provision of
‘standardised processes’ ‘can’ help with this – assuming the standardisation
improves reduced cycle times compared with existing ‘non-standardised
processes’. This suggests ERP could be effective in reinforcing the Product
Synchronisation tool.
5. Mete Mazlum: ERP provide us to have more robust data which increase
visibility for SIPOC.
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6. Serkan Mahir: If all components of the project are gathered under the umbrella
an ERP system could make sense. Otherwise, it seems that it is unnecessary.
7. Dr. Angela Clarke: I am not sure if I can see how it would do that. How ERP
will help reinforce a Lean tool. I think, there is computer software which could
help but not ERP, because it is not data. If I am looking at particularly a whole
Lean SIPOC, it helps by understanding value added, non-value added
activities and so on. That kind of data is not usually held in ERP systems.
In terms of extracting some data from the transactional processes, you tend to
find, again, there are software tools which are more suitable for the jobs. They
are better because of being particularly integrated with Lean.
8. Greg J. Hughes: As described in B above, an ERP system requires well
defined and operated processes. Running a process in conjunction with an
ERP system therefore tends to enforce standardisation of processes.
However, in order to improve the process and reduce cycle time, it is likely
that the process will need to be changed; this is often not trivial in ERP
systems. By their very nature, ERP systems integrate processes across a
business, and so to make a change in one part of a process or business we
have to understand the impact in other parts of the business.
9. Dr. Terra Vanzant-Stern: I think the ERP’s role would simple be, in this case, a
reliable way to measure. In some cases it might be able to help in calibration
efforts related to measurement tools. It could make things such as horizontal
analysis easier or point in time control charts easier to access.
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Section Four: Data Analysis
4.1.2. Analysing the Measure Phase of the DMAIC Method
Steps of Measure Phase
Deliverables Tools
5. Define CTQ Characteristics
link customer CTQ to measurable process/ service characteristics
X-functional process map, Total product cycle time, Fishbone, FMEA
6. Outline Performance Standards
define defect and specification limits for project Y
7. Data Collection develop a data collection plan
8. Validate Measurement System
ensure reliable and accurate data
As happened in Define phase, three questions about the ERP and also one
question for the Lean are responded by the experts.
ERP Contribution
Question D: At the D point, defining CTQ characteristics could be provided through
some tools such as Functional process mapping, Fishbone diagrams and Failure
Mode and Effect Analysis (FMEA). These tools either need to extract some
information from the transactional processes or require saving what is produced
during those activities (Results of these implementations). Informational needs
appear again. That is the reason why I think that the ERP systems are beneficial in
this step as well. What do you think?
1. Dr. David Scrimshire: CT‘X’ analysis had to be based on facts which implies
data. It is always advisable to obtain quantitative measures of CT‘X’ – for
example actual RFT and OTIF data is preferable to simply asking a customer
“are you satisfied?”
Lean ERP
ERP
ERP
E
F
D J
I
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Section Four: Data Analysis
2. Ton Van Esch: Yes, ERP systems can support a DMAIC improvement process
with outputs like you mention above.
3. Mike James-Moore: You are certainly theoretically right providing the data is
correct and the actual processes are as the system says-often not so.
4. Kim Stansfield: I agree that a system that captures and makes accessible
performance data from the transactional processes are naturally beneficial to
the ‘Measurement’ phase of DMAIC. This is also very beneficial if it includes
capture of production process configuration and performance information i.e.
not just transactional processes.
5. Mete Mazlum: Using ERP systems in order to extract information needed for
FMEA and Ishakawa (Fishbone) diagrams makes the processes more
productive.
6. Serkan Mahir: Critical-to-quality (CTQ) is intensely used within the Measure
phase of the DMAIC method. There is no project conducted by us without
CTQ. However, I do not think so that an ERP system is necessary at that point
if cost and benefit analysis is taken into consideration.
7. Dr. Angela Clarke: Yes, in particular, it is good to collect historical data relating
to warranty data. A lot of the time, you will have warranty data and information
on historical performance. That is good information to feed into there because
it provides quantitative support to these things you do. The using of the Lean
tools like Functional Process Maps, Fishbone diagrams and FMEAs is
qualitative data. The good thing is the ERP could validate them by providing
quantitative data such as warranty data, historical performance, number of
design defects and so on. After using experts in order to conduct Lean tools
like Fishbone diagrams and FMEA in a qualitative manner, the way I would
validate is “looking at the evidence for learning if they support these activities”.
At that point, ERP could be used to help you for accessing this evidence
through warranty data and historical design data. Historical design data is
regarding “how many mistakes were there” and “how long did they take”. All of
those could be captured by an ERP system.
8. Greg J. Hughes: Sounds like a reasonable conclusion, but I am not familiar
with the term CTQ.
9. Dr. Terra Vanzant-Stern: I would totally agree
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Section Four: Data Analysis
Question E: “A performance standard translates a customer need into a clear and
measurable characteristic.” (Shaffie and Shahbazi, 2012) It seems to me that this
process also needs an information management. Thus, ERP systems help people to
do it in a better way. What do you think?
1. Dr. David Scrimshire: To monitor any metric (e.g. RFT and OTIF) requires that
both a Goal (i.e. the actual performance required) and a Target (the
performance level to be attained by a specified date).
ERP ‘extracted data’ will provide the actual performance data to compare with
the Goals and Targets.
Adverse variance should then trigger RCCAs that must be implemented. After
resulting performance data captured by the ERP system, it will be used to test
the statistical significance (IMPROVE Stem activity) of the ‘new’ performance.
2. Ton Van Esch: I think it needs a skilful team that can synthesize VOC to
CTQ’s. But I do not see how ERP would figure in this.
3. Mike James-Moore: I don't know if it is necessarily a better way. Obviously the
whole idea behind ERP is that in theory the CEO of any organisation should
be able to access any part of his/her business and know what is going on-that
is the golden bullet all top people are looking for. So again I would ask, is it
worth the effort?
Once you incorporate any of these information streams within an ERP system
you reduce the opportunity for innovation in my opinion. So be careful.
4. Kim Stansfield: In the past I’ve carried out the management of this information
through a requirements management system (RMS) e.g. DOORS, which
maintains the relationships between requirements and responses which
include product and process features as well as their performance
characteristics and relative priorities. It is possible that ERP systems are
defined to include such systems as part of Product Lifecycle Systems. The
RMS approach is particularly used in the context of system design and
improvement, which includes process improvement and lean six sigma
projects. As said, ERP could be defined to incorporate RMS systems which
are a critical sub-system for enterprises and Six Sigma/ System improvement
programmes i.e we should confirm whether RMS systems are significant
components of ERP systems, and their critical role. The other aspect where
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Section Four: Data Analysis
ERP is useful in this aspect is their ability to capture and communicate existing
process performance. As for earlier answers this is a powerful way of storing/
managing valuable process information.
5. Mete Mazlum: Yes, ERP systems gather more trustable data that can make
the processes more measurable.
6. Serkan Mahir: This is actually what happens in VOC activities. Therefore, the
answer is “Yes”.
7. Dr. Angela Clarke: I do not think so. I think the collection of data once you
have those standards is fine; however I do not see that how an ERP system
can help you to find what those standards are.
Translating customer needs into a clear and measurable characteristic that
might be provided VOC is related to the ERP systems, however you can do it
through much more simple tools such as excel spread sheets than the ERP
systems. However, this process is more than data; it is about thinking process
that should be conducted by experts (into a clear and measurable
characteristic). However, you might be able to interrogate an ERP system to
see “OK, what do you measure?” For example, if I go to my ERP system and
there are 200 measurement systems the company makes to “D”, I can look
through that list and see & decide the useful one. The useful one is a prompt
but it does not take away from the fact this is a thinking process rather than
the ERP will do it for you.
8. Greg J. Hughes: I understand this stage to about defining the desired outcome
of a process, as a service or product, with measurable parameters. Later
stages will be about measuring actual performance vs this standard, and
identifying the best ways to achieve the standard.
Then I think that when selecting which parameters to use to describe the
standard, we would consider parameters which best define the standard, and
which are possible to measure in a practical and economic way. The
measurements may include data which is readily captured through an ERP
system (e.g. the quantity of a material input to the process), or confirmation
that certain key process steps have been completed in the required sequence
/ time etc. However, I think other data-capture systems are more likely to be
used in this than ERP.
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Section Four: Data Analysis
It is also important to ensure that the correct parameters are measured; those
that really do define the successful outcome of the process, and not just
parameters which are convenient to measure or easy to record.
9. Dr. Terra Vanzant-Stern: Absolutely. In this case the performance standard
could be measured by VOC, VOP and also the Voice of the Employee. VOB
which means Voice of the Business is really translated as Voice of the
Industry. An ERP would be more involved in bench marks from the various
voices.
Question F: According to the Literature Review, it seems that data collection is
undeniably an activity which is ERP Systems’ responsibility. What do you think?
1. Dr. David Scrimshire: The ERP system can capture data that is generated by
the ERP system. There will still be a ‘manual’ element where data has to be
gathered and input. We must not neglect ‘man-in-the-loop!
2. Ton Van Esch: Yes, but in “Measure” we need to know 2 things:
Is the data right
Do we have the right data
3. Mike James-Moore: Not quite sure what you mean. Certainly ERP is a way to
ensure that data is recorded reliably. Data should only be captured when it is
needed otherwise it is a waste. What checks are there to remove data not
required from the system?
4. Kim Stansfield: My understanding is that the ERP system stores existing
process configuration and performance information that has been cleansed
and captured in a structured manner. If this is correct then this is a significant
assistance during the Measurements phase of DMAIC/ Lean Six Sigma where
much time and effort is spent setting up data capture and measurement plans
and then running the measurement studies. This is a non-trivial exercise. If the
ERP system does not hold existing business process and performance data
i.e. it just stores standardised, best practice processes, then this greatly
reduces the value of the information to Measurement phase which focuses on
establishes what is ‘actually’ happening.
5. Mete Mazlum: Yes, of course data collection, which could be driven through
the ERP systems, is a very important activity for the Lean Six Sigma projects.
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Section Four: Data Analysis
6. Serkan Mahir: I definitely agree with you. An ERP system could be used in
aggregating the data and disseminating them to the right places at the right
times.
7. Dr. Angela Clarke: Yes, I agree with you.
8. Greg J. Hughes: Data collection is a key benefit of ERP systems; but as
described above for E, it is very likely that parameters which define the
performance standard will include parameters which cannot be measured by
the ERP system. It is possible to use the ERP system data warehouse to
store data from other systems, either by entering data through interfaces, or
manually, and thus to consolidate all the required data storage into one data
warehouse. It is often not trivial to implement this however, so may not be
appropriate for a project like this. If may be more appropriate to collect data
sourced from outside the ERP system in other simpler ways, at least during
any experimental phase. Once the project has proven which factors must be
controlled to ensure successful process control, then it may be appropriate to
implement automated data collection and consolidation into the ERP data
warehouse – if this is the most efficient and robust way to collect the data and
report from it.
9. Dr. Terra Vanzant-Stern: Agree, again. The advantage is that the ERP may
be able to offer a more sophisticated data collection strategy as well. Often in
a data collection plan, the “why are we collecting this data” is not considered.
Lean Contribution
Question J: “FMEA allows a team to identify defect(s) in the process that should be
eliminated and/or reduced.” (Shaffie and Shahbazi, 2012) That is what exactly Lean
should do. Therefore, this step is also related to the Lean Thinking. What do you
think?
1. Dr. David Scrimshire: Any form of Risk management and mitigation is
welcome! FMEA is one methodology that is widely used for both Processes
and Design. For ERP systems other methodologies could be considered such
as QFD.
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2. Ton Van Esch: FMEA is actually a proactive planning around potential defects
from the new solution (typically). Can also be done as a risk assessment of
current process + then on to counter measures, Poke Yoke or process
improvement.
3. Mike James-Moore: Again yes- this is one of the key issues in lean design, try
and get rid of waste before you start.
4. Kim Stansfield: I think that FMEA as a core process and product design
improvement method is fundamental to any programme aiming to improve the
status quo. As it focuses improvement teams on the high priority
improvements plus the likely mitigations to high ‘risk priority number (RPN)’
failures, it should be a core process for lean six sigma improvements – it
avoids wasting time on low RPN failures.
5. Mete Mazlum : If we know failures and effects within the processes, this
information is used as inputs for the Lean Thinking .
6. Serkan Mahir: FMEA could be conducted through Microsoft Excel. Therefore, I
think that it is unnecessary.
7. Dr. Angela Clarke: I agree with you.
8. Greg J. Hughes: Yes, exactly right.
9. Dr. Terra Vanzant-Stern: I subscribe to what I refer to as FMEA thinking. Take
the heart of the form and looking at the task. What would happen if the task
did not occur? Based on this what impact would it have on the customer?
Why would it happen and what controls are in place to keep it from
happening? Therefore, FMEA can expand Lean Thinking from identifying
defects only to considering the culture, who is empowered to change as well
as near-misses and things that could go wrong in the future.
4.1.3. Analysing the Analyse Phase of the DMAIC Method
Although statistical tools are mainly used in the Analyse phase, there are
some contributions made by the ERP systems and Lean Thinking. They are
investigated below.
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Section Four: Data Analysis
Steps of Analyse Phase
Deliverables Tools
9. Baseline Process Capability
graphical representation of capability continuous normal data analysis discrete data analysis first-pass yield calculation
Histogram, Run chart, Box plot & Pareto Normality plot, z table and data indicators First-pass yield
10. Define Performance Objective
develop attainable goals
Benchmarking
11. Identify Sources of Variation
identify process inefficiencies (cycle time/ capacity) graphical analysis (optimisation/ quality) numerical analysis
Value-add (VA)/ Non-value-add (NVA) analysis, takt time, effective hours Correlation & Scatter plot Hypothesis testing
ERP Contribution
Question G: “After the improve phase, what have been found from the ‘Analyse’
phase can help you compare the historical performance of a business with the
improved one” is emphasised in the improved one.” (Shaffie and Shahbazi, 2012) is
mentioned in the Literature Review. In that case, historical data is needed and
thereby requiring an ERP system’s help. What do you think?
1. Dr. David Scrimshire: As previously stated, performance data captured by the
ERP system will then be used to test the statistical significance (IMPROVE
Stem activity) of the ‘new’ performance.
2. Ton Van Esch: It can be a data source. Most effective method id Control
Charting before vs after (or with different phases in the same graph)
3. Mike James-Moore: Yes if the system was running during the historical period
and that the form of the data is compatible.
Six Sigma
&
Statistical
Tools ERP
Lean
Stat. T.
G
K
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4. Kim Stansfield: I don’t know whether ERP captures historical SPC results and
the results of process capability measurements (yield, process variance, USL,
LSL etc), but if it was able to provide historical trends for these it would be
very useful. This is of significance to E & F as well. The challenge with many
Six Sigma/ Lean Six Sigma projects is capturing process data in a way that
can be used for lessons learned/ improvement development. ERP would be
very useful if it provides historical data specific to defined, historical process
configurations.
5. Mete Mazlum: In my opinion, historical data are needed during a project’s
implementation. At that point, ERP systems could help, however using some
statistical instruments instead of ERP mostly happens in this phase.
6. Serkan Mahir: I agree with you. It is like “data collection” as you mentioned
before.
7. Dr. Angela Clarke: ERP systems on their own, my answer is “no”, however
most of the ERP systems have the data intelligence or business intelligence
interface like Cognos. For those, yes it will definitely help. However, an ERP
system on its own does not usually help. Therefore, as long as the ERP
system is linked to business intelligence system then yes it will definitely help.
8. Greg J. Hughes: Yes, an ERP data warehouse may be the best place to have
captured and retained historical data. However, as described above in F, it
can be complicated to capture all data into the ERP system, so it is quite likely
that the historical data you are interested in will not all have been captured in
the past.
9. Dr. Terra Vanzant-Stern: Generally speaking, I look at historical performance
in Define but I can see where an ERP would be helpful.
Lean Contribution
Question K: It is indicated in this step that “the goal is reducing process cycle time,
standardisation or stabilisation” Additionally, when “Value-Add, Non-Value-Add and
Necessary Non-Value-Add Analysis” are taken into consideration, it seems to me that
Lean Thinking could provide what exactly is expected from this step. What do you
think?
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1. Dr. David Scrimshire: VSM should capture the following –
Trigger – what starts the step
Setup time and Cycle (Processing) time/unit
Takt time (rate of customer demand)
Percent defects and/or scrap and/or re-work
Number of operators
Downtime %
WIP downstream and upstream
Cost of links to IT, warehouse(s), etc
Batch size, etc
Clearly much of this data could be routinely captured by the ERP system.
2. Ton Van Esch: I agree with you.
3. Mike James-Moore: If you look at the 5 lean principles this is just what it does.
Obviously differing specific tools will be used in different circumstance.
It is interesting if you start from reducing cycle time as your goal, let us say to
a batch of one then you cannot do this unless you have very low variability i.e.
excellent quality.
If you go the other way and aim for excellent right first time quality you will find
it automatically enables very small batches-if the customer wants them.
You can't do one without the other.
4. Kim Stansfield: If these are the criteria that are studied effectively in Lean
Thinking then I agree that they could provide what is needed in the ‘Analyse’
stage of DMAIC Six Sigma. That said, Lean Thinking often focuses on cycle
time reduction and ignores many of the high priority CTQs of the customers. I
believe this is the reason that many Lean Improvement projects are not seen
to significantly increase business value. The tools deployed in DMAIC Six
Sigma are there to ensure the focus does not stay on ‘cycle time reduction’ to
the exclusion of more important customer CTQs.
5. Mete Mazlum: These activities provide us to gain the customers. Therefore,
Lean Thinking is very useful for this step through those activities mentioned
above.
6. Serkan Mahir: While conducting process map, Visio or Excel could provide
what are expected in this phase. Thus, it could be unnecessary.
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Section Four: Data Analysis
7. Dr. Angela Clarke: Agree for sure. That is one of the main values of Lean. This
would probably be the single biggest thing that Lean tools could help.
However, those analyses mentioned above are better to us before that step
such as in the SIPOC mapping even though they are a lot more complex than
SIPOC.
8. Greg J. Hughes: Correct.
9. Dr. Terra Vanzant-Stern: Tools typically used in Lean such as Tim Woods and
SIPOC can be manipulated to identify these characteristic so I am agreeing,
Typically the VSM would be the tool and again an ERP would definitely be
useful in activities such as a Gemba walk.
4.1.4. Analysing the Improve Phase of the DMAIC Method
During the literature review process, that the improve phase might be
overcome through mostly Lean tools has been observed. Therefore, this phase has
been also discussed with the experts. These evaluations acquired from them are also
indicated below.
Steps of Improve Phase
Deliverables Tools
12. Identify the vital Xs and implementable solutions
reduce cycle time, improve flow more complex projects, where the relationships between variables are not well understood, will rely on Six Sigma tools like regression
5S, Line Balancing, Kaizen
Lean Contribution
Question L: In improve phase, everything is related to Lean Thinking because
problems have been identified, measured and analysed up to now. Then, it is time to
Lean
L
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improve these problems. In that case, could you state any critical points based on
your experiences?
1. Dr. David Scrimshire: Critical to developing innovative (and effective)
improved processes/systems is the use of various Lean (and other) tools in
concert. For example: Creative Thinking techniques; Brainstorming; White-
light Thinking; 5 Whys and so on.
From Lean Enterprise come tool that include –
Value stream mapping – with particular focus on Lead Time and NVA
Time reduction
Rapid changeover (SMED- Single Minute Exchange of Die) – internal
and external changeover times using the SMED methodology
TPM (total productive maintenance)
OEE (overall equipment effectiveness)
Manufacturing Flow and Takt Time – with particular focus on One-piece
synchronous flow; Production smoothing; Takt time; Cycle time; etc.
Also the adoption of the KANBAN system as a structured approach to
creating a true “pull” manufacturing system.
2. Ton Van Esch: Typically Brainstorming and Benchmarking are also used to
generate an “idea bank”. Then selection tools to identify the best solution.
3. Mike James-Moore: The critical issue is maintaining the lean mind-set- no
amount of improvement is enough-Dan Jones.
Japanese experience shows that it takes up to 15 years to establish lean in a
sustainable way in an organisation.
The other key issue often overlooked is that people must be given time for
improvement work, it is not a leisure activity. Management often forget this.
4. Kim Stansfield: The internal, process focus of lean thinking can preclude the
willingness of teams to consider more strategic solutions. As a result many
lean improvements are conducted on processes that should be replaced, or
are unable to match ‘low cost’ competitors. As an example, the drive to
produce a lean process can be detrimental if the organisation should focus on
providing a higher value product that better satisfies their customer’s market
drivers i.e. that enables the company to compete more effectively. Care
therefore has to be taken to ensure that Improvements are focused on
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Section Four: Data Analysis
enhancing ‘true competitive edge. An example is a subsidiary of a large UK
defence contractor, that adopted the parent company’s Lean Thinking to
tackle high cost cycle time of its products to the parent. Quick review of their
situation showed they were trying to use Lean to help them compete with far
east companies who had themselves gone lean and commoditised their
products. There were more advanced forms of their products which addressed
agility requirements of the parent, but which would not be identified using pure
‘Lean Thinking’, but would be identified using design for six sigma thinking.
Successful Lean Thinking requires that processes being leaned are the
required processes for the future to avoid resources being spent on processes
that should be retired.
5. Mete Mazlum: Thinking as a customer makes our operations more effective
and result-oriented. In this way, we can realize the burden of our
responsibilities within the business processes before the implementation of
Lean Six Sigma projects.
6. Serkan Mahir: The Improve phase is directly related to the Measure phase. If
the root causes are identified properly by particularly using FMEA, many
opportunities could appear in order to well-drive the business processes.
7. Dr. Angela Clarke: I do not think the answer is always Lean. Lean is helpful.
Therefore, in terms of identifying the improvements, you can make and be
able to implement them. Sometimes, they are about people, training and
changing people’s roles or responsibilities to get the answer. At those points,
Lean does not help you, but common sense helps you. However, although the
Lean tools you have got here will help, some other implementations will be
additionally needed.
8. Greg J. Hughes: It is essential to standardise processes first, then to measure
and identify problems and sources of variability, and to implement changes
one step at a time and to measure the outcome before making further
changes. Do not change multiple variables at the same time.
It may be necessary to carefully consider the ‘design of your experiments’ in
order to ensure that the correct output and input parameters are being
measured, and that changes are being managed carefully.
If the outcome of the improve phase is clear – the process parameters that
require careful control in future have been clearly identified – then care needs
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to be taken to ensure that these are measured and exceptions (deviations
from the target) are made visible quickly to those who can then affect a
reaction or adjustment.
To standardise the new or changed process, it may be necessary to carefully
document the process, to ensure that all staff involved with it are well trained
and can successfully execute the process, and to ensure that the reason for
any change is well understood and accepted by those involved. It is important
to carefully plan how to make the change sustainable, and to ensure that it is
implemented and sustained successfully. Too often, changes are
implemented, but with time the reasons for the change are forgotten, and
processes evolve away from the new standard, perhaps ‘drifting back to the
old way of doing things’
9. Dr. Terra Vanzant-Stern: At the beginning of improve it is imperative that the
project manager can present 3-5 solutions tied to Define, Measure and
Analyze phases. This provides the credibility and logic for your process
solutions.
4.1.5. Analysing the Control Phase of the DMAIC Method
Steps of Control phase
Deliverables Tools
13. Validate Measurement Systems on the Xs
ensure that an adequate and reliable way of measuring the critical Xs of the process.
14. Determine the Process Capability
ensure that goals are actually achieved
15. Implement Process Control
A process control system is a strategy for maintaining the improved process performance over time
The most popular ones: Poka Yoke (mistake proofing devices), Statistical Process Control (SPC) and Quality Plan
Lean
ERP
H
M
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Section Four: Data Analysis
According to the Literature Review section, the Lean Six Sigma (LSS) teams
must implement the strategy of LSS logic in the companies focused on until the
Control phase. In this phase, new improvements should be maintained after each
member of the teams disperses.
ERP Contribution
Question H: Quality plan is a “documented plan and ensure that each product or
service characteristic or process requirement stays in conformance” (Shaffie and
Shahbazi, 2012). It seems that this activity also needs data manipulation. Hence,
ERP systems play an important role at that point. What do you think?
1. Dr. David Scrimshire: Incorrect definition – see BS EN ISO 9000:2005- 3.7.5
quality plan: “document (3.7.2) specifying which procedures (3.4.5) and
associated resources shall be applied by whom and when to a specific project
(3.4.3), product (3.4.2), process (3.4.1) or contract”
In this respect, the quality plan would specify the procedure within the ERP
system for data manipulation.
2. Ton Van Esch: Yes, as a data source
3. Mike James-Moore: Of course it could, whether the integration is worth it
would need to be evaluated. For example, SPC charts can provide this data
often very simply and importantly people not the system run it. Does ERP
have to be "big brother" for everything? Perhaps there is an issue of
granularity here.
4. Kim Stansfield: In the past, I have used the requirements management plan
and requirements management schema for the requirements management
system to develop the quality management plan during the Improvement
phase. If the ERP system provides the functionality to have an integrated
Requirements management plan plus the analyses results from the preceding
stages, then it would provide a powerful support tool for developing prioritised
Improvement plan & associated Quality Management Plans.
5. Mete Mazlum: Instead of ERP systems, lessons learned documents in which
we can find organizational process assets that are more useful for quality plan.
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Section Four: Data Analysis
6. Serkan Mahir: If it means that that the ERP systems could be used for
collecting data, then the answer is “yes”.
7. Dr. Angela Clarke: I agree with you. In terms of on-going implementations
offer the control side so far.
8. Greg J. Hughes: As described above, an ERP data warehouse may well be
the best place to capture the required data, store and manipulate it, and make
it available for reporting and analysis. The data will be centrally stored, will be
accessible to many people, and data quality can be sustained because it is
being stored in a system that is usually managed and controlled centrally.
However, it is not always easy to get all data linked into an ERP data
warehouse, and it is usually not easy to change the way that the data is
manipulated or reported. It takes significant up-front investment of time and
resource, to set up data feeds, and data manipulation and reporting, and to
validate the accuracy of the outcome. Once it has been established in this
way, it is then accessible to many people, possibly in multiple locations.
However, ERP data warehouses usually require training and experience to
carry out successful reporting and data analysis. They are unlikely to be
accessed by shop-floor staff. Successful process control often requires data
to be made visible at the ship-floor – so that operational staff can monitor the
process in good time (‘real time’, ideally) and make appropriate adjustments to
sustain control.
9. Dr. Terra Vanzant-Stern: Often quality plans end up being a quality audit sheet
that is more of a compliance document. I can see where an ERP would help
get more to the core CTQs and ensure the customer’s needs are being met.
Lean Contribution
Question M: In control phase, It is indicated that Poka-Yoke as a Lean tool should
be used. Are there any other Lean tools in order to conduct an efficient “Control”
phase?
1. Dr. David Scrimshire: Yes, many!
For example I have deployed the following on a regular basis –
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Section Four: Data Analysis
Process dashboard; monitoring/ authorizing new method; Process
management chart; Control plans; Visual work instructions; etc.
Statistical reconfirmation that improvements are being sustained is essential –
re-confirm the process is still normally distributed (Anderson-Darling)
measure and re-confirm that process capability is being achieved
at the predicted ‘improved’ levels
ensure no ‘mission drift’
assignable causes of (excessive) variation identified and eliminated
Demonstrating a process improvement requires the use of recognized
statistical methods –
Data gathering – ‘categorical’ data (as provided by the ERP System)
Data visualization must be used such as – Run Charts; Histograms; Individual
‘value plots’; Box plots; etc.
Statistical demonstration of improvement will use – Tukey’s test; Two sample
‘t’ test; Two sample ‘F’ test; etc.
The Control step is usually when the principles and practices of SPC are
introduced, including –
SPC charting – individual values
SPC charting – Xbar and R
‘out-of-control signals’
points beyond range control limits
long runs above or below average
long runs up or down
The Control step must also ensure on-going conformance with work standards
and process control –
conducting routine ‘manufacturing process audits’
inputs to for management review
2. Ton Van Esch: FMEA, Control Plan, RACI chart, SOP’s into checklists,
Review and Control checkpoint schedule
3. Mike James-Moore: Poka-Yoke is, as you know, a preventive measure to
proof against mistakes. There are many other tools which help like SPC and
importantly people should know about what is going wrong to enable all
brains, not just some can be involved.
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4. Kim Stansfield: The other main tools supporting Control Phase are:
Control Planning
Statistical Process Control
Regular FMEA/ Root Cause Analysis reviews
Configuration Management, and
Structured Lessons Learned – where process performance
achievements and trends are assessed versus process improvement
targets
5. Mete Mazlum: We use SMED and Kanban.
6. Serkan Mahir: IMR chart (graphical method in order to display the process
performance), statistical control charts such as X Bar Chart and X bar S Chart
could be used. Indeed, Poka Yoke is not directly related to the Six Sigma
strategy. It could be used for simple improvements. If there is a problem that
could be solved through Poka Yoke, conducting a Six Sigma project for that
will be waste of resource.
7. Dr. Angela Clarke: Statistical Process Control (SPC) mentioned on the table
and SQC (Statistical Quality Control) that is measuring the outputs’ quality at
the end will help. Kaizen also very effective for the control processes. Some of
the simple things are not Lean do things like documentation (simple but time
consuming). At that point, documentation can be related to ERP systems,
knowledge-based systems and internet. It is not exactly related to ERP but it
might link in it.
8. Greg J. Hughes: I am not familiar with all Lean tools – but you have mentioned
SPC which may be important. I would also include other ‘visible factory’
principles – visible measurement of performance and issues, clarity of
processes, management attention ‘at the line’ to support operating staff with
problem solving skills, short-cycle time measurement and reaction to
problems. Keeping standardised business processes will be important, but so
too will be a focus on continuous improvement of those processes.
Lean organisation principles may also be important; such as having all the
resources orientated around supporting the core process of the business, with
timely access to any support teams.
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9. Dr. Terra Vanzant-Stern: Transition plans (even though you may be the one
continuing the project); SIPOC again to help identify all the resources that
need to know that the process improvement is completed and will now go into
continuous improvement mode; Control charts if there are items that need to
be tracked.
4.2. THE POSSIBILITY OF CROSS RELATIONSHIP BETWEEN THE
ERP SYSTEMS AND LEAN SIX SIGMA STRATEGIES
The benefits of the ERP systems and Lean Six Sigma projects are elaborately
explicated thus far. In addition to these, their challenges are also indicated
respectively. In that case, besides analysing the DMAIC steps separately, this project
also aims to investigate if one of them (ERP systems and Lean Six Sigma strategy)
can ameliorate the other one’s challenges and thereby they can be combined
mutually or not. In order to come to a feasible conclusion, this point has been also
discussed with the experts. While investigating this point, the summary of the their
benefits and challenges that is shown at the end of the Literature Review section as
a table have been illustrated to the specialists and then it has been analysed with
particularly Ton Van Esch and Dr. Angela Clarke.
Question about their relationship: It seems that they (ERP Systems and Lean Six
Sigma Strategy separately) might have some problems within their individual work
cycles though their benefits to the companies’ business processes. For example,
”ignoring the companies’ own needs because of preferring to use ‘standardised
global templates’ of ERP systems and lack of flexibility at the local level to take
advantages of regional opportunities” are the shortcomings of ERP while “deficient
stock of knowledge and monetary resources ,unclear link between strategy and LSS
projects, misunderstanding what the project requires in order to maintain Lean Six
Sigma Strategy and underestimating the amount of time and effort required to
implement and maintain Lean” are the Lean Six Sigma projects challenges. Do you
think that “one of them might ameliorate the other’s shortcoming(s)”? Could you
evaluate this point based on your experiences?
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1. Dr. David Scrimshire: This is a complex problem. In my experience – too much
effort is given to getting the ERP system “up and running” and far too little on
BPR, Six Sigma-based process analysis and incorporation of accepted Lean
Enterprise tools and techniques.
2. Ton Van Esch: I think there is synergy but one deployment has to “take the
lead”. Lean thinking can aid an ERP rollout or project as ERP data +
implementations can aid a LSS project (DMAIC).
3. Mike James-Moore: I'm not sure if ameliorate is the right word. Both have a
part to play. Care must be taken however not to overload the organisation. It is
a big job to implement ERP and will use much management resource. To
implement Lean Six Sigma, doing it effectively will also take much resource. If
approach is in place and effective then the benefits should help more effective
implementation.
4. Kim Stansfield: I think that the Lean Six Sigma methods and tools focus on
helping businesses understand how to make their processes more efficient is
central to process improvements which are very beneficial to organisations.
Big challenges occur in confirming process performance and process
definitions. ERP benefits from the process definition and improvement
capabilities of Lean Six Sigma, but offers a potential enabler, and provides
potential standard processes and information management systems that
support efficient deployment of Lean Six Sigma projects. Using the ERP
together WITH Lean Six Sigma offers potential to accelerate Lean Six Sigma
deployments, to help transfer lessons and process data across the
corporation, and help with corporate process standardisation and
interoperability across divisions.
5. Mete Mazlum: I think integrating both of them makes the business processes
more effective because one of them is related to “data change” while the other
one is regarding “the changing ideas”. Both of them are very important for a
reengineering.
6. Serkan Mahir: They might compensate each other within particularly “Ticketing
Systems (issue tracking system)”.
7. Dr. Angela Clarke: I can see how Lean Six Sigma might help you with some of
these shortcomings. For example, there is a point that is people’s resistance
against having technology adoption. If you go back to benefits of the Lean Six
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Sigma strategy and look at the change management aspect by addressing this
properly, you would potentially help. Therefore, I can see some links from
what you are saying. Again, if we consider people’s resistance against having
technology adoption, the answer is “Yes, it could be helped by Lean Six
Sigma”. In terms of the long term investment that the ERP systems take, Lean
Six Sigma might help you to focus on some quick wings. I want to
demonstrate that I am getting some return on my investment and start using
Lean Six Sigma to help me focus on these things where I see some good and
quick benefits. ERP implementation is not a Lean Six Sigma project, you can
use some of its tools to help you be more effective but it is not a project its
own. You can have it as a huge program about lots of projects. Indeed, all of
these things are possible, however only because Lean Six Sigma at the
conceptual level helps you with identifying the problems and making
improvements on them, the answer is not always Lean Six Sigma. For every
change that company has to make or every improvement a company has to
make, it helps at those points a lot because it is a good methodology.
However, the answer is not always “yes”. I am Lean Six Sigma Blackbelt,
however I would not always use Lean Six Sigma for making some
improvements. Thus, they can help, but they are not the whole picture (about
ameliorating ERP systems’ shortcomings). They would not solve all of the
problems, they would contribute the improvement. Appointing someone in a
new position might overcome it or asking some data document might fix the
problem. You do not have to go through a Lean Six Sigma project to do it,
because it will be more expensive than the simpler tools.
In terms of the question of “Can ERP help you with some of the challenges of
Lean Six Sigma projects?” underestimating the amount of time and effort
required to implement and maintain LSS (Lean Six Sigma) could be helped by
the ERP systems if you have got some data to hand. Having some data to
hand through the ERP systems possibly help in the case of hiring consultants
and pouring resources into this initiative which in turn wasting of so much
money. The ERP systems could also help this challenge of LSS by providing
secure and big amount of data: “deficient stock of knowledge and monetary
resources”. It is not possible to say that all of those challenges that you have
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mentioned could or could not resolved through the ERP systems. Yes, they
can improve them, however it might not.
All in all, ERP systems can help the LSS projects and LSS can also help the
ERP implementation to be more effectively. The combination of the ERP
systems and LSS projects could be advantageous, however not cost effective.
8. Greg J. Hughes: I agree with the shortcomings and challenges you have
identified for each..
To some extent the implementation of an ERP system can help – for example
it is necessary to clearly define the business processes before they can be
built into the ERP set-up. This then helps to sustain standardised processes.
However, once built, it is hard work to change and evolve the processes with
the ERP system, because the inherent integration of many processes across
the business means that there is increased likelihood that a change in one
process will have some kind of impact in another process. This therefore
makes it harder to adopt ‘continuous improvement’ which is a core principle of
Lean.
An ERP system can make it possible to capture large volumes of data, and
make it accessible to many people for analysis and reporting; this could
improve the visibility of process performance, and this support the Lean
principles of measuring performance. However, this data is often not readily
accessible to the ‘shop floor teams’ themselves – and ideally it is they who
should be able to see the outcome of the measurement of their process, so
that they can react in real time to any signals of deviation from the target
control ranges. It is more likely that a ‘Manufacturing Execution System’
(which sits below the level of an ERP system, in the IT architecture) will
contain the process-level data that a shop floor team needs, and will give them
ready access to this data.
I have experienced the significant efforts required to measure a large process
(e.g. through factory lead-time for complex multi-process units) and to make
this meaningful and visible: in theory, if this can be successfully established
then it will make the performance of a large-scale process measureable and
visible to management who can then identify and prioritise where intervention
is necessary in order to restore process control, or to focus on opportunities
for improvement. This would be a clear demonstration of how ERP can
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support Lean – but it does require significant investment of time and resource
to achieve this.
9. Dr. Terra Vanzant-Stern: Since one size rarely fits all a new trend of adding
Agile processes to enhance some process improvement efforts seems to be
successful. Building flexibility into environments that are Lean Six Sigma as
opposed to straight Six Sigma seems to be more receptive. This is because
Six Sigma looks at the DMAIC as a waterfall methodology and LSS typically
sees it as a circle.
4.3. SEQUENCE OF THEIR IMPLEMENTATION (ERP & LSS)
After considering their contributions to each other, that which one should be
implemented at first springs to mind. Also, there might be a possibility to implement
together. In order to enlighten this point, the question stated below is also discussed
with the experts.
Question about the sequence of their implementation: Should both ERP systems
and Lean Six Sigma Strategy be implemented simultaneously or should one of them
be a prerequisite for the other one?
1. Dr. David Scrimshire: A computerized ‘bad practice’ is still a bad practice!
Systems and their constituent processes should be analysed and improved
first. The ERP processes should then mirror the new (and improved)
methods. Proving that the new/improved methods are actually delivering on
the bottom line can then be quantitatively assessed with data abstracted form
the ERP system.
2. Ton Van Esch: I think “it depends….” Based on corporate culture one is likely
press one ahead of the other. So pragmatically, I do not think that you can
plan it that well. Both are large investments in time, resources, money and are
unlikely to be undertaken simultaneously.
3. Mike James-Moore: See the question asked just before. Lean six sigma can
however be used at local level to solve issues but I would be careful to have a
major programme to do both at once. Although an ERP system needs tidiness
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Section Four: Data Analysis
(perfect plan for its implementation) and thereby tends to be quite structured
while LSS is partially dealing with mess, they are helping each other in much
sense. ERP is useful for sustainability in terms of Lean Six Sigma projects.
The ERP systems are not used to be adaptable to changing conditions
because they tend to push their logics to the systems and therefore they are
rigid, however Lean Six Sigma project are based on change management. In
that case, the answer of this question depends on the situations which are
encountered.
4. Kim Stansfield: As stated previously, one of the biggest causes of
implementation failures of ERP systems is reported to be ‘poor understanding
of needed process changes prior to starting implementation.’ This is precisely
where Lean Six Sigma focuses. So, in my opinion, the initial stage of Lean Six
Sigma should precede the ERP implementation, such that it ‘Defines’ critical
requirements for the programmes. The ERP follows shortly after as it will
provide many of the information management systems and information
sources that will enable the Lean Six projects. In effect Lean Six Sigma
provides the methods of analysis and a process approach, the ERP system
provides the many information sources and management systems required for
Lean Six Sigma success.
5. Mete Mazlum: I think one of them is not a prerequisite for the other but don’t
forget that the lean thinking is much slower and troublesome than ERP
implementation.
6. Serkan Mahir: They are actually independent of each other. If we conduct a
correlation analysis for them, it will be probably 0.1. I have come across with
many companies without having an ERP system which have effectively
implemented Lean Six Sigma strategy within their system and have been
successful. I think, ERP could be utilised in the Measurement phase in order
to collect the data and disseminate them when necessary and also in Analyse
phase.
7. Dr. Angela Clarke: Without knowing more about what the strategy of the
company is, it could not be answered. If I have an IT company, I should focus
on IT and therefore it is easier to adopt ERP before the Lean Six Sigma. If I
make a lot of improvements or have a parent company, Lean Six Sigma
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should be focused at first. The decision is not very easy to be made. There are
so many external and internal factors before making the decision.
In terms of the possibility of concurrent implementation, it is possible to do
them together. You can see the big change programs here. It is often hard to
implement two big things. As I said just before, it is possible to do in parallel;
however they should be kept separated. If there is a big enough company with
enough resources, it could implement both at the same time. If there is a small
company or SME (Small-to-Medium), there is no chance because you have
limited resources. This idea is resource-hungry that means it takes a lot of
resources.
8. Greg J. Hughes: It is best to define standard business processes, to improve
them and optimise them (through Lean techniques) before implementing an
ERP system which brings with it inherently reduced flexibility but improved
ability to keep a process standardised. In my experience there are very
different skill-sets required to implement ERP, from those required to
implement Lean techniques onto business processes; therefore it is very
difficult to use one project team to carry out both – it is better to run these as
distinct but connected, sequential projects.
9. Dr. Terra Vanzant-Stern: Personally I think that LSS strategy would still be the
main consideration and ERP is a tool.
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Section Five: Discussion
5. SECTION FIVE: DISCUSSION
Literature has been critically reviewed, research methodology has been
decided and subsequently semi-structured interviews based on the selected
methodology have been conducted thus far. In discussion section, all of the experts’
evaluations about the propositions put are discussed. As a result of this discussion,
the critical points which are focused on and tried to be revealed during the project will
be validated if they totally or partially make sense from the specialists’ point of view.
DMAIC process is discussed at first and the relationship based on experts’ opinions
about ERP systems and Lean Six Sigma projects is considered afterwards. Finally,
the sequence of their implementation is evaluated by taking into consideration again
the specialists’ views.
5.1. DISCUSSION FOR THE DMAIC METHOD
5.1.1. Discussion for the Define Phase
Question A: In this question, the importance of the VOC (Voice of Customers) is
focused on within the DMAIC method. The idea that ERP could support the VOC
activities is defended while interviewing with the experts. The relevance with the ERP
systems in conducting VOC might be demonstrated by considering the ERP systems’
collaboration with the BI (Business Intelligence) because the most popular tool for
VOC is data mining that is one of the BI tools. Without taking into consideration the
BI systems, it seems that VOC activities are also based on “information”. As
mentioned many times during the project, ERP is a system that provides “information
flow” to the companies. Therefore, anywhere in which data collection and
manipulation is required, an ERP system might play an important role and overcome
complicated systems. Those evaluations mentioned just before have been made in
advance of the semi-structured interviews. Some different viewpoints have been
presented by respondents. According to their assessment of this question, some
results are obtained that are discussed below.
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Section Five: Discussion
Figure 20: Experts’ evaluations about the Question A
Dr. David Scrimshire Agree
Ton Van Esch Disagree
Mike James-Moore Partially Agree
Kim Stansfield Partially Agree
Mete Mazlum Agree
Serkan Mahir Partially Agree
Dr. Angela Clarke Partially Agree
Greg J. Hughes Partially Agree
Dr. Terra Vanzant-Stern Partially Agree
Table 11: Experts’ opinions about the Question A
As can be seen the Figure 19 and Table 11 above, the majority (64%) of the
respondents are partially agree with the idea of Question A. Nevertheless, there are
some people among them who are totally agree (22%) and disagree (11%) with it.
According to the semi-structured interviews’ result, they have generally reached a
consensus about the ERP systems’ support to the VOC activities even though some
disadvantages are likely to appear during the Define phase of the DMAIC method.
For instance, there are three customer types that are old customers, current
customers and potential customers. In that case, some of the old customers would
also be potential customers. It seems that while acquiring the old customers’ voice
for observing the trends happened in the past and existing (current) customers’ voice
Question A
Totally Agree
Partially Agree
Disagree
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Section Five: Discussion
for understanding their current needs could be acquired by the collaboration of the
ERP Systems and Business Intelligence (BI) Systems, potential customers’ voice in
order to understand their need for attracting them could not be captured through this
combination (ERP & BI). However, Six Sigma strategy also requires procuring the
voice of the potential customers. Under these circumstances, ERP is undeniably a
useful tool for providing information about the customer data that have been already
had (historical & current) and thereby reinforce the Define phase, while it is
disadvantageous in terms of potential customers.
In some cases, the data collected are not the data expected. It might happen
because of the difficulty for understanding the Mind of the Customers (MOC). That is
to say, asking the questions to the customers is restricted by the questions, however
there are more data than the answers received in the customers’ mind. Also, slight
changes in the questions’ structure might produce enormous differences in the
results while conducting VOC. Those problems could not be bettered by using ERP
tools -even they are related to information. At that point, VOC activities are based on
the interviews that are done with the respondents face to face. As Ton Van Esch
mentioned, this kind of VOC activity cannot be implemented by means of ERP
systems.
Although it seems that those challenges mentioned above hide ERP
contribution to the VOC activities, ignoring an ERP system’s support for data
manipulation is not possible because it plays an important role while analysing the
customer data had for the VOC activities. These data needed for the VOC could be
provided by tracking surveys, sales of customers and their interactions within the
businesses’ websites that could be accesses from the ERP systems. Also, positive
management involvement could improve the ERP systems’ efficiency.
Question B: In this question, Product Synchronisation is focused on. “Showing the
relationships among various process steps” is defined as this tool’s task. Those
relationships are based on information and therefore ERP systems could reinforce
this tool. This proposition is evaluated below by taking the specialists’ opinions into
consideration.
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Section Five: Discussion
Figure 21: Experts’ evaluations about the Question B
Dr. David Scrimshire Agree
Ton Van Esch Agree
Mike James-Moore Agree
Kim Stansfield Partially Agree
Mete Mazlum Agree
Serkan Mahir Agree
Dr. Angela Clarke Agree
Greg J. Hughes Partially Agree
Dr. Terra Vanzant-Stern Agree
Table 12: Experts’ opinions about the Question B
As could be observed from the Figure 20 and Table 11 above, all of the
specialists have nearly the same opinion about the ERP support to the Product
Synchronisation Lean Six Sigma tool. The majority of them (78%) totally agree with
this idea indicated in Question B while the others (22%) are suspicious at some
points though believing in the benefits of ERP at this stage.
As mentioned in the Literature Review section, ERP systems usually push
their logic to the companies. Therefore, “Best Practices” are used by many
companies because it seems that configuring ERP systems according to the
Question B
Totally Agree
Partially Agree
Disagree
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Section Five: Discussion
companies’ needs is much more expensive and difficult to be integrated with the
suppliers’ and customers’ systems. In that case, ERP might not help the Lean Six
Sigma projects due to the fact that particular and detailed information about the
intended project are required within their implementation process. However, if “Best
in Class” is used as an ERP system, it might not provide what expected.
On the other hand, ERP is undeniably a powerful tool for presenting the
transactional information about the business processes. However, that the
information kept in the ERP systems are based on human beings should be borne in
mind. Whatever, however and whenever they put the data in the ERP systems, they
could access those data in that speed and quality that have been already generated
by themselves. At that point, ERP systems provide the information (particularly
transactional information) for the process mapping. However, they could be enriched
by encouraging the staffs to do their best while using the ERP systems. In that case,
positive management involvement might be also helpful to provide the link between
technology and people.
Question C: In this question, that the data is needed for the key stakeholder analysis
is defended as happened in Question A for VOC activities. Those activities (Key
stakeholder analysis & Voice of customers) seem to need similar way to track.
Therefore, it seems that the ERP contribution appears again. This is asked to the
specialists while the data collection process and discussed below according to the
interviews’ results.
Figure 22: Experts’ evaluations about the Question C
Question C
Totally Agree
Partially Agree
Disagree
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Section Five: Discussion
Dr. David Scrimshire Agree
Ton Van Esch Disagree
Mike James-Moore Partially Agree
Kim Stansfield Agree
Mete Mazlum Agree
Serkan Mahir Agree
Dr. Angela Clarke Partially Agree
Greg J. Hughes Disagree
Dr. Terra Vanzant-Stern Agree
Table 13: Experts’ opinions about the Question C
As illustrated in Figure 21 and Table 13 above, more than half of this group
comprised of the experts in focused subject (56%) agree with the idea of ERP
contribution to the stakeholder analysis in providing existing and historical data to the
Lean Six Sigma teams. For example, Kim Stansfield mentioned while interviewing
that “historical trends in change requests, complaints, supplier performance data,
internal process management staff performance and compliance performance
trends” could be provided through the ERP systems. In that case, a key stakeholder
analysis could be effectively conducted.
On the other hand, Ton Van Esch and Greg J. Hughes disagreed with this
idea because the activity of key stakeholder analysis is a team activity and it requires
high level (experienced) staffs’ involvement in order to draw a conclusion for this
activity according to them. In terms of understanding who the key stakeholders are,
projects sponsors probably play important roles. After deciding the project scope and
scale, the project might require to be discussed with those critical key stakeholders
identified by the project sponsors in person in order to conduct the key stakeholder
analysis properly.
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Section Five: Discussion
Question I: In this question, Product Synchronisation is evaluated again as a Lean
tool. It is indicated that this Lean tool focus on “P” (Process) in the SIPOC (Supplier,
Input, Process, Output, Customer) map. In that case, the question of “How effectively
does ERP reinforce this Lean tool?” has been asked to the experts. Although it
seems that it is the same as the question B, it is focused on Lean Thinking more. In
Question B, the objective is to draw people’s attention to the data that should be
provided for SIPOC maps. However, “how Lean Thinking is affected from the ERP
systems while conducting together” has been tried to be learned. According to the
experts’ evaluations, this situation is discussed below.
While interviewing with the specialist, many different perspectives have been
encountered. Even though they present opposite ideas, all of those viewpoints are
proper in their entirety. For example, Dr. Angela Clarke could not see how ERP
would reinforce the Lean tool. She mentioned that there are special software
programs for Lean Six Sigma projects which could provide what exactly the Lean
tools expect because they are particularly developed for Lean projects. Therefore,
using these software programs instead of much more expensive EPR systems is
better at that stage. Also, David Scrimshire emphasised that “computerising
manufacturing scheduling is complex” and he added that “ERP systems do not adopt
any single method”. In that case, it seems that the reason is because ERP systems
are already the systems that expect the companies to adopt their own logic. Thus, it
might not be able to be properly configured for the proposed projects. In that case,
selecting the software programs designed for the LSS projects might be the better
option in order to reinforce this Lean tool.
On the other hand, Kim Stansfield and Greg J. Hughes touched on the same
point which is “standardised processes by means of the ERP systems”. In other
words, ERP systems provide the LSS projects standardization because the aim of
LSS projects is to improve value of the processes while reducing cycle times as
mentioned in the Literature Review section and also stated by the experts. At that
point, the ERP systems regulate the whole data which are already had by the
companies, put them in a well-structured and granular platform and provide the
people to access these data whenever needed. This situation standardises the
business processes. In Lean Six Sigma logic, having standardised and tidy business
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Section Five: Discussion
processes is the first aim to achieve an improvement within the project. In this sense,
ERP might make the LSS projects more effective and efficient.
In addition to these, that observing macro process level of the LSS projects
could be conceivable through the ERP systems should not be forgotten. In order to
observe the all processes linked each other for mapping, there must be a system
which gathers the whole components of a business under an umbrella that could be
exactly driven by the ERP systems.
5.1.2. Discussion for the Measure Phase
Question D: There is a proposition again about “defining the CTQ (Critical-to
Quality) characteristics. In order to implement some LSS tools such as FMEA,
Fishbone diagrams and Functional Process Mapping, transactional data are needed.
After implementation of those tools mentioned just before, their results should be also
saved in somewhere in order to compare before-implementation of a LSS project
versus after-implementation of it. Therefore, that this step also needs an ERP
system’s contribution is defended in this question and discussed below.
Figure 23: Experts’ evaluations about the Question D
Question D
Totally Agree
Partially Agree
Disagree
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Section Five: Discussion
Dr. David Scrimshire Agree
Ton Van Esch Agree
Mike James-Moore Partially Agree
Kim Stansfield Agree
Mete Mazlum Agree
Serkan Mahir Disagree
Dr. Angela Clarke Agree
Greg J. Hughes Agree
Dr. Terra Vanzant-Stern Agree
Table 14: Experts’ opinions about the Question D
As can be shown in Figure 22 and Table 14 above, the majority of the
respondents (78%) agree with the ERP contribution at that point. However, one of
them (11%) disagrees with this idea, while the other one (11%) partially agrees. It
seems that it provides information about transactional processes and historical
performance as warranty data for LSS projects. After obtaining qualitative
measurement by using those tools mentioned above, ERP could support quantitative
support to them by validating their results.
On the other hand, if the cost and benefit analysis is conducted, ERP systems
at this stage will not probably advantageous for the companies. There might be
cheaper systems that could manipulate those tools even though they would not be as
efficient as the ERP systems because the ERP systems gather the all company
levels within one platform and integrate them. Therefore, it might be easy to access
the data needed through the ERP systems. In that case, the reason why companies
do not implement the theoretical bases for their actual processes though ERP
systems’ undeniable helps to those tools (as Mike James-Moore mentioned) is
because they might be evaluated by the companies as expensive software for the
LSS projects.
Question E: In this question, translating the customer needs into the clear and
measurable characteristics by the performance standards is concentrated on. It is
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Section Five: Discussion
claimed that this activity needs ERP support as well. Deliberating on this case with
the experts has enriched the idea of this question that is evaluated below.
Figure 24: Experts’ evaluations about the Question E
Dr. David Scrimshire Agree
Ton Van Esch Disagree
Mike James-Moore Disagree
Kim Stansfield Agree
Mete Mazlum Agree
Serkan Mahir Agree
Dr. Angela Clarke Disagree
Greg J. Hughes Partially Agree
Dr. Terra Vanzant-Stern Agree
Table 15: Experts’ opinions about the Question E
As illustrated Figure 23 and Table 15 above, the majority of the people among
this group (56%) agree with the idea of this question. The people who disagree with
this proposition (33%) explicitly explained why they oppose to it by emphasising that
this activity is based on a thinking process and thereby is dependent on the qualified
people’s work. Also there is another approach made by Mike James-Moore that
Question E
Totally Agree
Partially Agree
Disagree
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Section Five: Discussion
draws people’s attention to a disadvantage of ERP contribution to this step. LSS is a
strategy that is open to new ideas and implementations, while ERP is a rigid system
that you cannot appropriately align it with the innovative systems because new
enforcements are not able to immediately adapt the existing stiff systems’
regularities. In that case, integrating these new ideas produced by LSS teams with
the ERP systems might cause the companies to reduce the LSS projects’
opportunities.
On the other hand, even though Dr. Angela Clarke mentioned that this is a
thinking process rather than the ERP systems’ responsibility, ERP could be possibly
utilised after producing data as a result of the brain storming (thinking process).
These data might be manipulated through the ERP systems well, however there are
many different data-capturing systems as Greg J. Hughes mentioned. He mentioned
that they could well-manage this process rather than ERP systems, however that
ERP systems could aggregate all level of the business processes of a company and
have ability to integrate them according to any business requirements should not be
forgotten. Therefore, it seems that ERP provides broader perspective to the
companies although the other alternatives might seem more advantageous when
cost and benefits are taken into consideration.
In addition to these, ERP systems’ support cannot be repudiated when
Requirements Management Systems (RMS- the relationships between requirements
and responses as Kim Stansfield mentioned) is considered. RMS is also related to
customer needs’ translation into the business characteristic. At that point, ERP has
all the data RMS might need and ability to manipulate them.
Also, Dr. Terra Vanzant-Stern mentioned that all the information about Voice
of the Customers (VOC), Voice of the Employees (VOE), Voice of the Processes
(VOP) and Voice of the Business (VOB) could be reinforced by an ERP system
which might also manipulate benchmarking activities. In that case, ERP systems
might be interrogated about the measurement systems had within a company in
order to select the most proper one after thinking process as Dr. Angela Clarke
emphasised. Additionally, benchmarking activities might provide the companies to
choose the right measurement system for their businesses because the companies
may have various systems some of which might just produce ideal solutions for
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Section Five: Discussion
particular situations. In that case, the most effective measurement system might be
recognised by means of benchmarking activities. As can be understood from the
explanations just offered before, ERP indirectly manages those activities
(interrogation and benchmarking) and thereby reinforce this step as well.
Question F: Shaffie and Shahbazi (2012) stated in their book that data collection is
needed in the Measure phase of the DMAIC method as indicated in the Literature
Review section. When an activity about data comes into question, EPR springs to
mind. Therefore, an activity of data collection as one of the LSS steps could be
supported or totally managed by ERP systems. This point has been discussed with
the specialists and indicated below.
Dr. David Scrimshire Partially Agree
Ton Van Esch Partially Agree
Mike James-Moore Partially Agree
Kim Stansfield Partially Agree
Mete Mazlum Agree
Serkan Mahir Agree
Dr. Angela Clarke Agree
Greg J. Hughes Partially Agree
Dr. Terra Vanzant-Stern Agree
Table 16: Experts’ opinions about the Question F
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Section Five: Discussion
Figure 25: Experts’ evaluations about the Question F
As can be perceived Figure 24 and Table 16 above, even though all of they
agree with the idea of this question, forty-four per cent of them have some doubts
about it. They mainly emphasised that the data collected in the ERP systems are
generated by the human beings. Thus, ignoring the human factor within this well-
organised and standardised system is not possible even though the EPR systems
provide the holistic and sophisticated data to the companies. Thus, the data might
not be accurate, right, detailed or enough. However, LSS projects require more
detailed and accurate information about the focused problems in order to have deep-
understanding about their root causes. At that point, the possibility of mistakes made
by the people should be taken into consideration.
During this data collection process, any information about the companies/
businesses is put in the ERP systems as soon as it is acquired. This point was
positively evaluated as being sophisticated data that includes everything about a
company by Dr. Terra Vanzant-Stern, while that capturing unnecessary data is a
waste is mentioned by Mike James-Moore. In that case, it should be remembered
that ERP systems have large capacities and also able to capture all the data a
company need according to the literature. Hence, having as much data as possible
might be useful for the companies because the information put in an ERP system is
related to company even if it is not directly regarding the particular problem(s)
Question F
Totally Agree
Partially Agree
Disagree
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Section Five: Discussion
identified by a LSS team. The information which seems irrelevant for the focused
problem(s) might be helpful for the forthcoming phases of the LSS project because it
is about the “focused” company.
In addition to these, Kim Stansfield mentioned that data collection for the LSS
projects is “a non-trivial exercise”. If an ERP system includes standardised, best
practise business processes, “then this greatly reduces the value of the information
to Measure phase”, because the target in LSS projects is to access the data about
“what is actually happening”. In that case, all staffs of the companies might be well-
trained about the data accuracy and reality if their ERP systems are tried to be
integrated with any other systems and/or strategies. At that point, an ERP system’s
integration with the LSS projects also requires thorough attention.
Question J: In this question, FMEA’s definition is focused. Shaffie and Shahbazi
(2012) emphasised that its aim is to reduce or eliminate the identified problems. That
is what is expected in Lean Thinking. Therefore, that FMEA is a helpful tool for LSS
projects is claimed. The discussions with the experts are evaluated below.
Figure 26: Experts’ evaluations about the Question J
Question J
Totally Agree
Partially Agree
Disagree
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Section Five: Discussion
Dr. David Scrimshire Agree
Ton Van Esch Agree
Mike James-Moore Agree
Kim Stansfield Agree
Mete Mazlum Agree
Serkan Mahir Disagree
Dr. Angela Clarke Agree
Greg J. Hughes Agree
Dr. Terra Vanzant-Stern Agree
Table 17: Experts’ opinions about the Question J
As can be perceived from the Figure 25 and Table 17, the overwhelming
majority of the group that consists of the specialists (89%) have a consensus about
proposition above. They all agree that FMEA could be used as a Lean tool for
improving the processes. It is “a proactive planning around the potential defects from
the new solution” (Kim Stansfield). Analysing the current processes by undertaking
risk assessments through FMEA activities provides the new projects to be started
with minimum defects. In that case, potential wastes could be eliminated/ reduced.
This approach might expedite the LSS teams’ works by preventing to encounter
defects occurred previously.
Also, Dr. Terra Vanzant-Stern emphasised that “FMEA can expand Lean
Thinking from identifying defects only to considering the culture”. At that point, Lean
teams might easily adapt the company focused by means of FMEA activities and
could produce better solutions by understanding the company requirements and
needs better.
On the other hand, Serkan Mahir touched on the ERP contribution to this
activity and he mentioned that it could be manipulated by Microsoft Excel. Therefore,
using ERP at that stage seems unnecessary. According to his idea, thinking FMEA
as just a Lean tool in a LSS project might not be a good idea because it could be
conducted for any condition needed by simply using Excel. Thus, it could be
implemented without adopting Lean strategy.
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Section Five: Discussion
5.1.3. Discussion for the Analyse Phase
Question G: After defining problems and identifying them within the business
processes, “what is actually happening in the business” must be measured thus far.
In order to provide quantitative data for comparing the improved system and previous
system (before LSS implementation), some statistical tests are done in the Analyse
phase as mentioned in the Literature Review section. Those data acquired as a
result of those tests should be saved in a common platform as historical data or
warranty data. In that case, ERP contribution might enhance this step. This point
evaluated below has been discussed with the specialists.
Figure 27: Experts’ evaluations about the Question G
Dr. David Scrimshire Agree
Ton Van Esch Agree
Mike James-Moore Agree
Kim Stansfield Agree
Mete Mazlum Partially Agree
Serkan Mahir Agree
Dr. Angela Clarke Partially Agree
Greg J. Hughes Partially Agree
Dr. Terra Vanzant-Stern Partially Agree
Table 18: Experts’ opinions about the Question G
Question G
Totally Agree
Partially Agree
Disagree
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Section Five: Discussion
As shown in Figure 26 and Table 18 above, all people with whom the semi-
structured interviews are conducted have subscribed to the view that ERP could
support the Analyse phase of the DMAIC method by saving the statistical tools’
results as historical data. Nevertheless, some doubts occur again (44% of people
from the group shown above indicated those doubts). As a result of their criticism, it
cannot be said that ERP systems definitely capture all data needed because the data
held in them are based on people as mentioned before. Thus, expecting everything
from the ERP systems might disappoint the LSS teams if the ERP systems are tried
to be unquestioningly aligned with the LSS.
According to Angela Clarke, ERP systems are not able to manage that
process on their own. If they are integrated with the business intelligence systems
explained in the Literature Review section, then they could support that phase of the
DMAIC method as she mentioned. As mentioned previously in the literature of this
project, Business Intelligence systems and ERP systems could be implemented
individually. However, if they are implemented together, they could develop their
abilities and thereby produce more effective solutions to the companies. This
approach might be also operative for the combination of ERP systems and LSS
projects. In that case, the more information systems such as ERP systems are
integrated with the efficient strategies such as LSS methodology and/ or other
information systems such as Business intelligence (BI) systems, the more productive
they could be. Therefore, being sophisticated make the ERP systems more effective.
As could be perceived from the Dr. Clarke’s explanation, if they could be integrated
with the BI tools, they could support the Analyse phase of the DMAIC method.
Therefore, it seems that consolidating the powerful business systems should not be
avoided in today’s highly competitive business world.
Finally, Kim Stansfield mentioned that LSS projects focuses on to captire the
process data that is generated from the “lessons learned”. Therefore, historical data
such as information about the company focused before the LSS implementation are
not captured by the LSS teams. That situation is a challenge for the LSS approach.
At that point, ERP might compensate that deficiency. As mentioned in the previous
paragraph, if the ERP systems are integrated with intelligent systems more, their
unknown benefits might be discovered.
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Section Five: Discussion
Question K: While interviewing with the experts, Lean contribution to the Analyse
phase of the DMAIC method is evaluated in this question. That Lean Thinking might
support this phase by conducting Value-Add and Non-Value-Add Analysis is claimed
to the specialists. Their opinions are discussed above.
Figure 28: Experts’ evaluations about the Question K
Dr. David Scrimshire Agree
Ton Van Esch Agree
Mike James-Moore Partially Agree
Kim Stansfield Partially Agree
Mete Mazlum Agree
Serkan Mahir Disagree
Dr. Angela Clarke Agree
Greg J. Hughes Agree
Dr. Terra Vanzant-Stern Agree
Table 19: Experts’ opinions about the Question K
Question K
Totally Agree
Partially Agree
Disagree
126
Section Five: Discussion
Agreement percentage of the specialists to this question is shown in Figure 27
and Table 19 above. The majority of them (67%) agree with the idea of this question.
Twenty-two per cent of them emphasised the same point which is that just
considering Lean Thinking such as reducing cycle time does not improve the LSS
projects due to ignoring the quality of the business processes (it is because of not
deeming the variations within the organisations). That is the reason why business
value cannot be increased when Six Sigma and Lean Thinking are deemed
separately. Therefore, “the goal is reducing process cycle time, standardisation or
stabilisation” as indicated by Shaffie and Shahbazi (2012). At that point, Ton Van
Esch emphasised that standardisation and stabilisation could be provided by Six
Sigma strategy while process cycle time reduction could be achieved through Lean
thinking and you cannot do without the other because you need to provide quality
and satisfying products/ services to the customers as well as reduce the process
cycle time in order to add value to the business. As could be clearly perceived from
the evaluation made by Ton Van Esch, the combination of Six Sigma and Lean
Thinking is also observed here. Again, benefits of the systems’ and/ or strategies’
combinations could not be repudiated while that case is taken into consideration.
In terms of those Lean tools’ relevance with the ERP systems, Serkan Mahir
mentioned that conducting this kind of process maps could be possible through the
simpler tools such as Visio and Excel. Therefore, ERP seems unnecessary to be
used at that point. If Value-Add and Non-Value-Add analyses are taken into
consideration, they should not be thought just “Lean tools” as happened for FMEA
activities mentioned in Question J.
5.1.4. Discussion for the Improve Phase
Question L: Specialists’ opinions about the Improve phase of the DMAIC method
have been investigated with the help of this question. They have individually
evaluated this phase based on their personal experiences. These perspectives are
discussed below.
Firstly, Serkan Mahir indicated that the Measure phase plays an important role
for taking opportunities of the existing processes within the Improve phase. In that
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Section Five: Discussion
case, identified problems might guide a LSS team to propose the best solutions to
the company focused. Also, Greg J. Hughes mentioned that if the Improve’ phase’s
outputs are explicit, the Control phase could be conducted more effectively
afterwards. If everything is successfully managed until the Improve phase, improved
processes’ deviations from the target could also be detectable after the LSS project
teams finish their works (after the Improve phase). As can be understood from those
explanations, each phase of the DMAIC is dependent on one another.
According to David Scrimshire, using diverse Lean tools such as Value stream
mapping, Rapid Changeover through SMED (Single Minute Exchange of Die), Total
Productive Maintenance (TPM), Overall Equipment Maintenance (OEM) and Takt
Time in concert could provide the better results to the Improve phase because they
might complement each other in order to achieve holistic business success. In
addition to these, brainstorming and benchmarking also reinforce this phase and
thereby might be also evaluated as a type of improvement tool.
What is more, Terra Vanzant-Stern recommended that project managers can
demonstrate a few solutions for the problems identified in the Define phase in order
to guide their team members to arrive at the better solutions. “This situation provides
credibility and logic for the process solutions.” (Terra Vanzant-Stern)
Greg J Hughes also mentioned that the ways of doing businesses should be
thoroughly and slowly changed and multiple variables should not be concurrently
changed in this phase. It should be assured that inputs and outputs of this phase are
correctly measured during the change management process and those changes
should be well-managed.
On the other hand, Kim Stansfield emphasised some challenges of the Lean
implementations. According to his explanations, just focusing on Lean Thinking within
the organisations might prevent people to take into consideration the customers’
satisfaction and thereby make strategic decisions. In this sense, essential
requirements might be overlooked and this situation might result in many other
problems. In that case, Lean mind-set should be sustained instead of directly trying
to implement theoretic Lean method. After leaning the companies’ culture
(understanding the Lean basis), this strategy might be combined with any system
and/ or strategy and subsequent rewards might be bountiful. However, it should be
128
Section Five: Discussion
borne in mind that establishing Lean mind-set might take many years (Mike James-
Moore stated that it takes up to 15 years). At that point, immediate adaption to this
strategy and achieving instantaneous improvement should not be expected from the
people.
Conversely, Dr. Angela Clarke emphasised that this process is not always
overcome through the Lean strategy even though it plays crucial role in the Improve
phase. It might be regarding people, training or people’s responsibilities. Greg J.
Hughes also touched on the same point. According to him, documentation might be
required in addition to these. For example, that the reasons of the changes are well-
perceived should be ensured. At that point, documentation might present structured
plan to the organisations.
As can be understood from the explanations above, this phase is dependent
on many different variables. Therefore, all of them should be managed in harmony. In
the ERP part of the Literature Review section, BPR (Business Process
Reengineering) has been mentioned. It is explicated that BPR is regarding pre-
implementation of the systems/ strategies (relevance of the ERP systems has
explained there). In that case, the Improve phase of the DMAIC might be evaluated
as a BPR process due to the fact that new implementations to the systems will start
to be supervised after this phase. Therefore, this phase is a period of change that is
exactly what BPR’s logic is. New solutions are designed instead of the processes’
deficiencies and some auxiliary activities such as documentation and human
resource management are needed while conducting this process. As can be clearly
seen, data management, business improvement, waste reduction, people’s
management, cost reduction and business excellence are expected from a
successful business. In that case, some strategies such as Lean Thinking, Six Sigma
strategy, BPR (Business Process Reengineering) and some systems/ technologies
such as the ERP systems and data mining tools might expedite and streamline the
business processes. Thus, they could be used within the organisations and
combined to the best of these companies’ abilities. However, cost and benefit
analysis should not be ignored while attempting that.
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Section Five: Discussion
5.1.5. Discussion for the Control Phase
Question H: In this question, the quality plan needed in the Control phase is focused
on. According the Shaffie and Shahbazi’s definition (2012), it is a documented plan
and therefore seems to be related to the ERP systems. That point has been
discussed with the specialists and is stated below.
Figure 29: Experts’ evaluations about the Question H
Dr. David Scrimshire Agree
Ton Van Esch Agree
Mike James-Moore Agree
Kim Stansfield Agree
Mete Mazlum Disagree
Serkan Mahir Agree
Dr. Angela Clarke Agree
Greg J. Hughes Partially Agree
Dr. Terra Vanzant-Stern Agree
Table 20: Experts’ opinions about the Question H
Question H
Totally Agree
Partially Agree
Disagree
130
Section Five: Discussion
The perceptions of experts’ agreement and disagreement are shown above.
The majority of them (78%) agree with the idea of this question while one of them
partially agrees and one of them disagrees with it. The reasons why some of them
still have doubts about the ERP contribution are because the DMAIC method is
mainly based on people due to being dependent on thinking processes and the ERP
systems requires considerable up-front investment of time and resources. For the
former one, it could be said that ERP systems’ integration with the LSS projects does
not mean to expect the information systems (ERP) to do everything instead of
people. It cannot be possible because ERP systems’ data and their structures are
also based on the human beings. Therefore, bypassing human factor from that
combination seems impossible. For the latter one, it should not be forgotten that the
ERP systems’ implementations cost the companies substantial amount of money
even though they take the companies’ appreciable amount of time (as mentioned in
the Literature Review section).
Question M: In this question, Control phase is evaluated with the specialists.
Additional Lean tools for this phase are investigated by discussing with those
qualified people. Some inferences drawn from their considerations are stated below.
In terms of Control phase, the experts expressed their ideas about how the
LSS-implemented business processes could be controlled. After analysing their
ideas, it is observed that the changes (from before-implementation to after-
implementation) within the organisations are revolved around. Visualisation tools
should be used for monitoring these new systems, root causes identified at the
beginning of the DMAIC should be reviewed in order to learn if they are resolved or
not, improved processes’ compatibility with the existing businesses should be
measured and the business processes’ performance should be audited after the
Improve phase. While doing these activities, structured lessons learned from the LSS
implementations might provide the organisations to compare their new systems and
previous systems. At that point, the ERP systems might save the data created by the
LSS teams and provide the staffs responsible these data that could be useful in the
future in order to maintain Lean mind-set. It is because Lean Thinking must be
adopted by all members of the companies after the LSS strategy implementation in
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Section Five: Discussion
order to obtain the LSS projects’ rewards. Otherwise, high investment in LSS
implementations might be waste of time and money. In this sense, ERP systems
might hold the data about the LSS implementations as mentioned above and
manage them centrally. In this way, all staffs interested in these data could access
them from any place and whenever they want. This approach might facilitate
transitions of the business processes and concatenate them.
Additionally, Dr. Angela Clarke mentioned that Lean tools are not always
sufficient for the Control phase. Documentation, knowledge-based systems and the
Internet are also needed within this phase. As can be understood from this
explanation, some supportive tools’ requirements (such as the ERP systems, expert
opinion) might arise. Therefore, consolidating different components of the businesses
should not be avoided if necessary. However, cost and benefit analysis should be
also done in order to decide if the integration is advantageous and profitable or not.
5.2. DISCUSSION FOR THE RELATIONSHIP BETWEEN ERP & LSS
In this part, relationship between the ERP systems and the LSS strategy is
discussed with those qualified people. They all found this approach interesting. After
diligent evaluation with them, some conclusions about the idea of this project have
been drawn that are stated in detail below.
Firstly, it should not be forgotten that ERP is a neatly structured system that
are likely to be based on consummate plan. Also, ERP systems are unlikely to be
adjusted for the other strategies and/ or systems. They usually impose their logic
upon the organisations. On the other hand, LSS strategy deals with the mess in the
business processes. Therefore, they seem to be exceedingly different from each
other when looking from the outside. Nonetheless, they could perfectly support each
other in some cases.
If their relationship is considered, the aim of LSS strategy is to improve the
business processes by understanding the best conditions for the business
requirements. At that point, LSS strategy provides process definition to the
companies. In that case, ERP systems might benefit from this definition and the
132
Section Five: Discussion
improvement capability of LSS strategy during their pre-implementation and
implementation process (mentioned in the Literature Review section). On the other
hand, ERP systems could be potential enabler for disseminating these data collected
from the business processes and provide standardised processes and information
management systems to the organisations in order to support the LSS projects and
any other business activities. As can be seen from the explanations just proposed
before, there is a mutual relationship between the ERP systems and the LSS
strategy.
In terms of remedying challenges of the ERP systems, Ton Van Esch and Dr.
Angela Clarke have thoroughly analysed the Benefits/Challenges tables about the
ERP and LSS. According to Angela Clarke, the one’s benefits possibly ameliorate the
other one’s challenges. However this situation might not always happen. That is to
say, LSS strategy is not always the solution for the shortcomings of ERP and also
ERP might not be always used for resolving the LSS projects’ challenges. For
example, she mentioned that people’s resistance against having technology adoption
could be resolved through change management which is one of the LSS steps. As
mentioned in the Literature Review section, ERP is evaluated as a long-term
initiative. At that point, LSS might help you to focus on some quick wins that produce
good and quick benefits. Ton Van Esch added to those points mentioned just
mentioned above that having insufficient budget across the ERP implementations
could be made better through LSS strategy by increasing production efficiency,
expediting the processes and improving the way of doing businesses (that are
indicated on the Benefits/Challenges tables in the Literature Review). There is also
one important point that is stated in those tables as “ignoring the companies’ own
needs because of preferring to use ‘standardised global templates’ of the ERP
systems”. This situation could be also improved with the help of LSS strategy by
providing the companies’ responsiveness and enhancing the customer relationship
management according to Ton Van Esch.
On the other hand, ERP could be also beneficial for the LSS projects
according to the experts. It could accelerate LSS deployments by providing entire
data about the company, transfer lessons learned and process data across the
corporation and offer direct interoperability with the other projects or business
activities to the LSS teams as mentioned by Kim Stansfield. Once the data needed
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Section Five: Discussion
are captured by the ERP systems, “underestimating the amount of time and effort
needed for LSS projects” and “hiring consultants and pouring resources into the LSS
projects” could be ameliorated by the ERP systems according to Dr. Angela Clarke.
She also emphasised that deficient stock of knowledge could be improved through
the ERP contribution by providing master data to the LSS teams.
All in all, LSS strategy at the conceptual level is beneficial for each change
and/ or improvement; however there might be other simpler tools that could provide
the same opportunity(s) with the lower cost. On the other hand, LSS projects might
be more sustainable with the help of the ERP systems. In this sense, they can
enhance each other although one of them should be prioritised. It is because they
are both significant investments, thus the organisations should not be overloaded by
putting these two big jobs in the centre of their businesses.
5.3. DISCUSSION FOR THE SEQUENCE OF THEIR
IMPLEMENTATION
In this part of the project, sequence of the ERP and LSS implementations is
investigated by listening to the experts while they are mooting their ideas about that
point. Some conclusions drawn based on these discussions are evaluated below.
While interviewing with them about that point with those specialists, different
viewpoints have been presented. The prevailing viewpoint is that one of them could
be implemented without adopting the other one and this distinct implementation
might perfectly provide success to the companies. However, they undeniably support
each other. Therefore, their combination makes their separate success more
effective by redeeming their challenges.
Even though the majority of them think that deciding this sequence depends
on the focused company’s sector, there are some people who prioritised ERP or
LSS. In that case, the company’s strategy should be known more in order to decide
which one should be implemented first. There are internal and external factors for
their sequence. If a company is an IT company, it will probably focus on the
information systems more. Thus, implementing ERP at first might be logical in this
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Section Five: Discussion
case. However, if the focused company requires so many improvements within the
business processes, then implementing LSS project before the ERP implementation
seems more appropriate. Additionally, corporate culture should not be overlooked at
that point. Human nature tends to prioritise one thing and concentrate on the
selected task (according to the importance). Therefore, it should be deemed that
there are many constraints such as human factor, time, resources and money in
order to decide which one should be implemented first.
Nevertheless, two different approaches emerged from those discussions with
the specialists. In one hand, misunderstanding about changes of the business
processes, which might cause ERP systems’ failures, could be enlightened if the LSS
projects firstly implement. On the other hand, ERP systems could provide master
data to LSS projects if the ERP systems are established previously: the more
historical and transactional data about the company, the more effective
improvements. In that case, it seems that this question does not have a definite
answer.
In terms of implementing them concurrently, it might be possible though
involving high investment requirements. Hence, if there is a big company with
sufficient resources and money, they could be implemented simultaneously to this
company. However, expecting a group of people to be qualified Lean Six Sigma Belt
and ERP specialist does not seem sensible. If there are such kinds of people and the
company managers would like to employ them, it will be probably more and more
expensive than appointing the people who are expert in just one area. In that case, if
the company managers do not care the cost of this initiative and are able to afford it,
significant change program might be observed at that point. Therefore, it might be
exceedingly advantageous for the big companies if they have sufficient resource to
spend for this integrated implementation. However, it might not be profitable for the
smaller ones due to the probability of being insufficient against this cost-effective
attempt.
135
Section Six: Conclusion
6. SECTION SIX: CONCLUSION
6.1. SUMMARY OF THE PROJECT OUTCOMES
Enterprise Resource Planning (ERP) within Lean Six Sigma (LSS) strategy
has been investigated throughout the project. “How could benefits be obtained from
the combination of ERP systems and Lean Six Sigma strategies?” has been tried to
be answered.
In order to draw a conclusion from this research study, semi-structured
interviews have been conducted with the nine experts in the ERP systems and/or
LSS projects. A model has been constructed by putting some propositions on the
tables of the DMAIC method which were taken from the literature. In addition to this,
some critical questions have been produced. The purpose of this case study is to
validate those propositions and benefit from the specialists’ experience by discussing
some critical points with them.
Firstly, ERP systems and LSS strategy have been explained individually and
the possibility of their combination has been examined afterwards in the Literature
Review section. Subsequently, the model about the DMAIC method has been shown
to the experts and discussed with them. Secondly, benefits and challenges of the
ERP systems and LSS strategy have been illustrated on the tables that are shown at
the end of the Literature Review section as a summary of the literature. According to
these tables, “could the one’s benefits ameliorate the other one’s drawbacks?” has
been tried to be learned. Thirdly, the sequence of their implementation if decided to
be integrated has been analysed. Those considerations just mentioned above have
been discussed with the specialists as well. In that case, three different research
questions have emerged which are indicated below.
To what extent could ERP systems support Six Sigma DMAIC method?
This question is comprised of thirteen sub-questions (semi-structured
interview questions). The majority of them expect the specialists to express
their viewpoints as agreement, partially agreement and disagreement. Some
additional information about those systems and strategies is expected through
136
Section Six: Conclusion
the rest of these thirteen questions. When their opinions about the whole
DMAIC process are considered, the overwhelming majority of them agree with
the propositions put, though arising partial agreement in some cases and
slight disagreement. They have occasionally emphasised that ERP systems
could undeniably support the LSS projects because the basis of ERP is
“information management” and those projects also need data management
systems. In that case, their collaboration seems feasible. However, it might
cost the companies a great amount of money.
Could ERP systems and Lean Six Sigma strategy be mutually supportive? If
so, how?
According to the experts’ evaluations, even though there are some obvious
shortcomings that could be compensated with the help of the other one’s
benefits, most of those challenges indicated on the tables might be
ameliorated. However, some of them might require another solutions. ERP
systems could provide information management to the LSS projects which
need historical data and transactional data. On the other hand, LSS strategy
improves the ERP implementations by defining the business processes. In this
way, organisations’ languages might be understood better by the ERP
systems and thereby the probability of the ERP systems’ failures could be
reduced. As can be clearly seen from those explanations just mentioned
above, these interrelated approaches could together offer better solutions to
the organisations.
Which one of them should be implemented at first if they are decided to be
combined? ERP first or LSS first?
This question’s aim is to decide the best way to utilise the integration of these
big implementations. The specialists generally stated that the answer of this
question might depend upon the companies’ needs and conditions
encountered. That is to say, if a company needs information technology more
than business improvements, the implementation of an ERP system might be
prioritised. Likewise, if a lot of requirements are expected from a business,
Lean Six Sigma strategy should be adopted at first.
137
Section Six: Conclusion
In terms of implementing them simultaneously, it might be possible, however it
will probably exploit the companies’ resources such as time, money and effort.
Also, it requires super-experienced people to be appointed for this
sophisticated work that is comprised of the ERP systems and LSS strategy.
Obviously, those people should be expert in both LSS and ERP for the
concurrent implementation and this situation might cost the companies a great
deal of money. In that case, if there is a big enough company to undertake
those challenging conditions, ERP and LSS could do their best through this
integration. At that point, it seems that ERP and LSS together might be
exceedingly advantageous if the companies’ resources are sufficient.
6.2. PRACTICAL APPLICATION OF THE RESEARCH IDEA
These systems and strategies analysed thus far are not only academic
subjects but they are also implemented on an individual basis in practice. Therefore,
all of those experts have been interested in the idea of this project. They have
evaluated this combination as useful for the companies. However, they have been in
doubt about the cost and benefits. If the cost and benefit analysis shows that the
implementation is feasible, the initiative of the combination of those approaches will
undeniably be beneficial for the companies. Therefore, if a company has either an
ERP system or adopts LSS strategy within the structure of it, it should definitely try to
consolidate them. In this way, this combination might be less expensive than those
which have just one of them or none of them. However, even if it seems costly for
any company when looking from the outside, implementing and subsequently
integrating them should be attempted on the back of cost and benefit analysis. Its
advantages might be much more than its disadvantages. Therefore, hesitating to
launch a trial for the combination does not seem sensible.
6.3. LIMITATIONS FOR THIS RESEARCH
As mentioned before, the idea of this project is implementable. However, even
though all specialists agree or partially agree with all propositions put about the
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Section Six: Conclusion
DMAIC method, ERP contribution to this method is not offered by the companies
which have adopted LSS. Therefore, it is recently discussed in theory although there
are many people who research the relationship between ERP and LSS and
encourage the company managers to integrate them. In that case, people’s
hesitation against the new implementations is a limitation for this study. That is to say
experimental research could not be conducted even though it might present their
benefits better.
6.4. RECOMMENDATIONS FOR FUTURE RESEARCHES
This research subject is hotly debated issue for the business life. Therefore, it
has not grown yet in order to convince the companies that it is beneficial. That is the
reason why it needs be developed with the help of more research studies. In that
case, their relationship should be focused on more and analysed in depth in the
future. The questions of “Which obvious points could be made better by which
benefits?”, “To what extent they can help each other?”, “To what extent could ERP’s
effectiveness be increased through LSS strategy?” and “To what extent could LSS
projects be streamlined and expedited?” might be investigated by the researchers.
139
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