A Lean Six Sigma framework to enhance the competitiveness in selected automotive component manufacturing organisations

Abstract

The South African automotive sector is often plagued with complex and competitive business challenges owing to globalisation, economic uncertainty and fluctuating market demands. These challenges prompt business leaders in South Africa to improve their operations and to enhance innovations in processes, products and services in a very reactive manner. Literature shows that one such initiative that can assist the automotive sector to compete with the rest of the world where productivity, quality and operational costs reduction are crucial for economic success is the adoption of the integrated Lean Six Sigma tool. The automotive sector, which purports to be at the forefront of best industry manufacturing practices in South Africa, is certainly lacking in this area. The purpose of this thesis was to assess Lean and Six Sigma techniques as standalone systems, the integration of Lean and Six Sigma as a unified approach to continuous improvement and to develop a proposed Lean Six Sigma framework for the automotive component manufacturing organisations in KwaZulu-Natal (KZN), South Africa. Due to the nature and complexity of this project, it was decided to adopt the action-based research strategy and include both qualitative and quantitative techniques. Two hypotheses were formulated to guide the research. The study was confined to the greater Durban region in KZN, which formed the target population of forty two organisations within the Durban Automotive Cluster (DAC). A survey questionnaire was designed in measurable format to gather practical information from the sample organisations on the status of their existing business improvement programs and quality practices. This information was necessary to critique the sample organisations for Lean and Six Sigma requirements and compare it to the literature in terms of the KZN context. A pilot study was conducted with senior management at five automotive manufacturing organisations to determine if the participants encountered any problems in answering the questionnaire and if the methodology adopted would meet the objectives of this project. The results of the pilot study indicated high reliability scores which were sustainable for the main study. The survey questionnaire was reviewed by Lean and Six Sigma Experts, Academics and members of the DAC executive team to ensure the validity of the questionnaire to the KZN context. The logistics of the main study followed a similar format as the pilot study and the questionnaires were distributed within the DAC over a three month period. A census sample was used in the field study to collect primary data. A response rate of 75% was achieved. The results of the empirical findings revealed that the sample organisations had a very low success rate of Lean and Six Sigma adoption as standalone systems. The sample organisations only practiced certain Lean and Six Sigma tools and techniques as they found it difficult to maintain the complete transition from theory to practice. The synergies that emerged from the study of Lean and Six Sigma that affect manufacturing performance suggested that they complemented and supported each other by tailoring the deficiencies to the given environment. This information was translated into practical considerations for constructing the proposed Lean Six Sigma framework from a KZN perspective. The conclusion of the main study was that if an organisation wants improvement to happen on an ongoing basis, it needs to recognise that there are significant interactions between their management system and the improvement technique. When the organisations understand the characteristics of the environment in which they operate, they will be able to configure appropriate follow up processes to sustain their management systems. The study demonstrated that Lean Six Sigma integration repackages the stronger focus areas of Lean and Six Sigma to create its own unique approach on improving an organisation’s performance. It is anticipated that organisations which implement the proposed Lean Six Sigma framework could contribute significantly to the growth of the South African economy in terms of increased productivity, improved international competition and job creation. The value of this research is that the proposed Lean Six Sigma framework affords the KZN automotive sector a unique opportunity to create its own brand of quality that compliments its management style and industry demands. Future research should focus on testing the applicability of the proposed Lean Six Sigma framework in a real case scenario to ensure that the critical outcomes are adequately ingrained to achieve perceived organisational performance. Lastly, it is recommended that a list of performance evaluators is developed and follow up procedures to monitor the progress of the Lean Six Sigma technique is implemented.