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Research effect of lean six sigma
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Lean Six Sigma Approach to Improve Overall Equipment Effectiveness Performance: A Case Study in the Indian Small Manufacturing Firm
Introduction:
SMEs are the backbone of the Indian manufacturing sector and became engine of economic growth in India. It is estimated that SMEs account for almost 40% of value addition in the manufacturing sector and 90% of industrial units in India. Small scale industry has been one of the major flat of India 's economic development strategy since Independence. From very beginning India accorded high priority to small and medium enterprises (SMEs) and followed support policies to make these enterprises vibrant, visible and over time, these had become major contributors to the growth of GDP rate. At present, SME occupies a position of strategic importance in the Indian economic value due to its significant contribution in terms of employments, exports and outputs. SMEs industry accounts for 50% of total manufacturing exports and 40% of gross industrial value addition. More than 3.2 million units were spread all over the country producing about 8000 items, from very basic products to highly sophisticated products. SMEs are the biggest employment-providing area next to agriculture area, providing employment to 29.4 million people. The growth of
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SMEs are capable of creating jobs with less amount of capital and in locations which makes SMEs attractive to policy makers. They remain as a heterogeneous group, in which different organizational structures ranking from proprietorship to corporate, engages in factories to service organizations activities and in some countries they differ from industry to industry. The SMEs development agencies such as Small Business Administration (SBA) of the US, SIDO (Small Industries Development Organization) in India and Small Business Service (SBS) of United Kingdom are the intermediaries set up by the Government (Chandra,
In today’s marketplace and world of business it is critical that customers receive a quality product in a timely manner from the supplier. It is also critical as a supplier and business that waste is reduce in all categories including inventory, time, facility space, storage, and also transportation. Several methods have been created and adopted over the past 20 years from top companies with successful track records such as Toyota, GE, and Motorola. One method or process that has proving to be successful is none other than Lean Six Sigma. Lean Six Sigma evolved as a concept in the early years of the 2000s which combines the Lean manufacturing method and also the concept of Six Sigma. When you blend both processes together, you have in return a better delivery schedule, better quality, outstanding employees, satisfied customers and last but not least profit. Profitability as we all know is the goal for any business, organization, or manufacturing company as well as to increase throughput while reducing inventory and operational expense (Eliyahu M. Goldratt).
1) Six Sigma should not be viewed as a quality program that is commissioned to reduce defects but as a methodology that helps companies better meet the needs of their business. KM shares this goal.
As you can see from the figure the lean six sigma is customer driven, targets variation, focuses
In July of 1953 the United States Congress amended an act called the Small Business Act. Many believed that the essence of the American economic system of private enterprise is free competition. Also, that only through full and free competition can free markets, free entry into business, and opportunities for expression and growth of personal initiative and individual judgment can be assured. Thus, the Small Business Act was amended. In order to carry out the policies of this Act there was hereby created an agency under the name "Small Business Administration". The United States Small Business Administration, more commonly known as the SBA, is a federal agency to protect and assist America's greatest resource, the small business. Since American enterprise is the backbone of our economy and the driving force behind economic growth and prosperity.
There is a lot of literature on the concept of continuous improvement (CI). Studies show that CI is very important to creating competitive advantages in highly competitive industries such as the automobile industry (Bhuiyan & Baghel 2005; Li et al. 2009; Schaeffer, Cadavid, & Backström 2010). These studies suggest that manufacturing firms use CI to eliminate waste in all organisational systems and processes (Bhuiyan & Baghel 2005; Li et al. 2009). Currently, manufacturing firms use lean manufacturing, six sigma, lean six sigma, and the Kaizen methods of CI methodologies to reduce wastages, simplify the production line, and improve quality (Swink & Jacobs 2012).
Sitnikov, C. (2012). Six sigma as a strategic tool for companies. Young Economists Journal / Revista Tinerilor Economisti, 94-102.
Lean Six Sigma is a methodology that creates processes within an organization to cut waste and improve the company’s performance. However, studies have shown that over the past decade applying Lean Manufacturing and Six Sigma can create problems for companies financially and potential problems for employees. Companies should take great care before implementing a Lean Six Sigma solution because in some instances, going lean can do more harm than good both financially for the organization as well as destroying employee loyalty and moral.
In this study, work was completed in a substantial organization situated in the US and India in the matter of changing over printed paper from clients into electronic duplicates. It is a continuation of the prior contextual analysis entitled "Six Sigma Case Study: Converting Paper to Electronic Documents." For this situation study, seven stages were distinguished, which plainly identified with lean manufacturing. The strides included, characterizing and measuring the issue, breaking down the issue, thought era, thought adjustment, actualizing change, checking the outcome, advertisement institutionalizing the control. Taking everything into account, the joined impact of Lean Manufacturing and Six Sigma has prompted upgrades in item quality (98% decrease in blunders) and turnaround time (half lessening). These upgrades have come about in expense decrease, as well as the likelihood of introducing these change stories to the client, constructing the notoriety of the organization as a main supplier of value, and accordingly expanding the probability of getting higher volumes of business. (Goyal,
The Six Sigma approach was designed by Motorola in 1986. The primary objective of the concept was to develop a tool for tallying the process defects and, as the result, improving business operations. The foundations of the approach are the customer needs, statistical analysis of data and facts, and timely execution. The method promises numerous benefits such as increasing performance and profitability of an organization, improving product or service quality and employee morale, decreasing costs, the growth of market share, the higher level of satisfying customer needs, etc. (Meredith & Shafer, 2013). The primary advantage
Barnard, W., De Feo, J. (2004). Juran Institute’s Six Sigma Breakthrough and Beyond. New York, NY: The McGraw-Hill Companies
Although small businesses do not make a lot of major deals with large investors, most small businesses create profit revenue greater than large corporations. Small business creators are very brave considering only ten percent of small businesses survive. Unfortunately, some communities do not support local small businesses; they only support the large brand name and force small businesses to die out. Since small businesses will not have a name brand known around the world, many people from communities will not support them because they are not known on a national scale. “This, in turn will affect the local economy and drive capital out of their local economy. On average, for every one hundred dollars spent in an economy, if spent on a
In conclusion, a precise and more appropriate definition that reflects the size, the nature and needs of SMEs is essential and advantageous not only for a particular SME itself, but also for policy makers and supporting agencies in planning and nurturing the proper growth and development of the SMEs sector in Malaysia as a whole.
As a massive provider of consumer goods in India, Hindustan Lever Limited (HLL), is attempting to penetrate the rural markets where there is a massive opportunity for growth. HLL’s current operating sectors are becoming increasingly competitive and crowded. Their best opportunities now lie in developing new markets and rising to the top of that market. They are attempting to do this with a program for developing entrepreneurs, named Shaktis. Met with initial success the program now needs to grow without increasing costs.
The business environment is increasingly becoming competitive and challenging. In the recent past, manufacturers have found themselves facing the threat of dwindling profit margins due to unfortunate global events such as the 2007 global financial crisis and the on going Europe economic crisis. The need to improve operation efficiency so as to ensure current and future investment yield the highest rate of return has therefore become extremely important. Manufacturers are now actively engaged in, managing their costs, Research and Development, adopting best procurement strategies, among other Actions. While such actions might eventually lead to positive results, additional business value can be achieved through proper management of the supply chain (Waymer, Ivanaj & Mussa 2009; Krivda 2004).
Small, medium enterprises (SMEs) are largest types business in the world, making up an estimated 99.7% of business. According to the Federation of Small Businesses (FSB) there are nearly five million existing businesses in the UK as of 2013. SMEs are a key contributor towards economic growth in terms of creating more employment, stimulating innovation and promoting social unity. SMEs are responsible for 47% of private sector employment, yet despite such global present there is still no agreed definition of a SME (Storey 1994). Bolton (1971) attempted to define them through a statistical and economic analysis. Classifications which are based on criteria, such as number of employees or annual turnover, however, do not remain consistent across borders. Given their size, smaller companies tend to be more intent on survival rather than expansion and profit maximisation. Smaller sized firms have always felt that the current reporting framework for IFRS is tailored more for the needs of larger companies and that the heavy cost burden it imposes upon them may not be entirely justified. In response to these concerns, the IASB subsequently issued the IFRS for Small and Medium-sized Entities (IFRS for SMEs) in July 2009. This standard offers an alternative framework which can be adopted by entities in place of the already extant full set of IFRSs or local national requirement standards.(Holt 2010) This essay will critically evaluate the impact of the IFRS for SME’s and whether or not it stands as the most suitable framework available for SMEs to use.