Lean Six Sigma Assignment: Challenges Faced While Supporting Shift Towards Greener Supply Chains

Question

Task: Lean Six Sigma Approach used in Industry (~3000 words)
Lean intends to minimise waste, increases speed, maximise value; Six Sigma helps the organisation to measure, analyse, reduce and control defects. An integrated approach can help the firm to reap the benefits of process excellence faster. The present body of knowledge reports both success and failures of such integrated philosophy. The success primarily on the macro-environment (including social, political and environmental dimensions) and micro-environment (including leadership, skill, culture) of the firm. This task will develop your skills and the application of Lean and/or Six Sigma approaches and theories in a real world context or firm (manufacturing or service industries) in which you are regularly involved. Specifically,
you are expected to select and answer one of the following topics of interest (choose one):-

Q1: How can firms align, adapt and deploy Lean/Six Sigma Strategies to effectively response and support the current environmental challenges without jeopardising their business success?
Q2: Discuss the challenges of Lean Six Sigma application to support the shift towards greener operations and supply chains.
Q3: Discuss the management of Lean Six Sigma with environmental oriented focus on specific sectors (e.g. manufacturing, construction, healthcare, etc.)

Answer

Executive Summary
The concept of Lean Six Sigma explored in this Lean six sigma assignment can be explained as a method which has heavy reliance on collaborative team effort for the purpose of improving performance with the help of systematic reduction of waste and variation. It is basically the integrated approach that results from the combination of continuous improvement methods namely sig sigma and lean. The main purpose of lean is to increase speed, minimise waste along with maximizing the overall value. On the other hand, six sigma provides assistance to the organization in the analysis, measurement, reduction and controlling of defects. This report will discuss the challenges related to the application of Lean Six Sigma to support the shift towards greener supply chains and operations.

Introduction
Operations management discussed in this Lean Six Sigma Assignment can be explained as that area of management which is concerned with the planning and controlling of manufacturing process and redesigning of several business operations in the production of products and services. It is mainly the organization of business practices for the creation of highest efficiency levels in an organization (Reid & Sanders, 2015). The concept of Lean Six Sigma has gained popularity in the past few years. Lean Six Sigma can be explained as a method which have heavy reliance on collaborative team effort for the purpose of improving performance with the help of systematic reduction of waste and variation. The elimination of eight kinds of waste (i.e. inventory, transportation, non- utilized talent, waiting, defects, over- production, extra- processing and motion) is undertaken by Lean Six sigma by way of combining six sigma and lean enterprise/ lean manufacturing. It not only results in the reduction of wastage and process defects but also offers a framework for making changes in the overall organizational culture. This report will focus on the challenges related to the application of lean six sigma for supporting the shift towards greener supply chains and operations.

Challenges in the Application of Lean Six Sigma for Supporting Shift towards Greener Supply Chains and Operations
Lean Six Sigma is basically the integrated approach that results from the combination of continuous improvement methods namely sig sigma and lean. The main purpose of lean is to increase speed, minimise waste along with maximizing the overall value. On the other hand, six sigma provides assistance to the organization in the analysis, measurement, reduction and controlling of defects. The integrated approach, lean six sigma, can assist the firms in reaping the advantages of the process excellence more rapidly (Lu, Laux & Antony, 2017).

Environmental concerns such as toxic substance usage, global warming and decreasing non- renewable resources have become the top most concern for social, political and business world. During the recent years, the organizations across the globe have started to address the environmental issues throughout the supply chain and operations as the issues are being induced as a result of the industrial development undertaken by them (Habidin, Mohd Yusof & Mohd Fuzi, 2016). It is mentioned in this Lean Six Sigma Assignment that such organizations further agreed to undertake an effective and collaborative approach for the purpose of tackling the environmental issues. This resulted in the emergence of the concept known as green supply chain management. Moreover, the operations will be made green by focusing on the cost efficiency and productivity of the day to day activities in a way such that it creates less impact and supports sustainability (Antony, Rodgers & Cudney, 2017).

All the elements of manufacturing supply chain including raw materials, process of manufacturing, distribution, end of life disposal or end customer usage are a reason behind waste, pollution and other hazards to environment. Therefore, the organizations belonging to different industries are under immense pressure for taking active steps towards the implementation of green methods across all these areas. In simple words, green operations and supply chain is a long- term and enhanced sustainability oriented view of traditional operations and supply chain of an organization. The focus is on the ecological and economic impacts and the target is set towards the optimization of both type of impacts. For example, in case of high tech manufacturing industry, in view is critical as it has a sheer nature and involves the transformational processes of the materials and undertakes operations that directly impact the environment (Albliwi, Antony & Lim, 2015).

An organization is required to overcome a number of challenges in their way towards greener operations and supply chain. This can be explained through an example of the company IBM mentioned in this Lean Six Sigma Assignment.  International Business Machines Corporation (IBM) is an information technology company from America whose head office is located in New York and operations are spread over 170 countries. The company functions as a manufacturer by producing and selling products such as computer hardware, software and middleware. Along with this, the company also works as a service provider as it provides consulting and hosting facilities in different areas relating to nanotechnology and mainframe computers. IBM undertakes Green Sigma Coalition, which is an industry alliance among the same type of companies. Green Sigma can be defined as an approach in which the doctrines and practices of Lean Six Sigma are applied to waste, energy, greenhouse emissions and waste throughout the operations of the company including manufacturing, distribution centre operations, transportation as these are the elements of the value chain of the product. The key focus areas in greener operations and supply chain management for enabling the transition towards the green organization are: product life cycle management, logistics and supply chain network optimization, process optimization and green reporting. However, there are challenges involved in all these key areas (Abu Bakar, Subari & Mohd Daril, 2015).

Product Life Cycle Development in Lean Six Sigma Assignment - since IBM belongs to the technology industry; it faces a challenge relating to the increasing demand for products which innovation and lower prices. Moreover, the demand is for quality products that ensures their compliance with various regulations. Therefore, product introduction and innovation are required to be accelerated by the high- tech and electronics companies for the purpose of meeting these demands along with maintaining profitability. This is further required to be undertaken for the minimization of costs and management of risks that arises as a result of changes taking place in the regulatory scenario. The companies are suffering from the consequences of increasing amount of regulations as it is threatening the overall life cycle of the products. The companies that are unable to manage the compliance of the products with various regulations face costly business interruptions such as delayed market launches, product redesigns, product recalls and product returns. The compliances of the various environmental regulations become difficult for the business and therefore, Lean Six Sigma becomes a challenge for them. Therefore, it is important for the businesses to employ an effective lifecycle management as key differentiator that will provide it an edge over the competitors (Yadav, Seth & Desai, 2017).

Logistics and Supply Chain Network Optimization- Three main topics are covered within this Lean Six Sigma Assignment under this broad focus area namely transportation, strategic supply chain optimization and reverse logistics. In technology companies like IBM, transportation is regarded as an important element after manufacturing. This is due to the fact that high number of players are involved in his chain such as component manufacturers, semi- conductor players, component distributors, electronics manufacturing services (EMS)/ contract manufacturer, product distributors, original equipment manufacturers (OEM), service and software providers and end customers. Therefore, any product can take any route/ path to market. However, the modern supply chain suffers from the problem of inefficient transportation methods which constitutes an important segment of the ecological problem. A report by “Eyes for Transport” provides that approximately 75 per cent of the carbon footprint produced by the company comes from logistics and transportation alone.

Reverse logistics is involved in the management of handling and disposition of the goods returned, and in the improvement of company’s ability for putting the returned goods back in the market. There is a challenge faced by the companies as mentioned in this Lean Six Sigma Assignment while undertaking reverse logistics due to the existence of strict norms relating to the disposition of the goods in the industry. Moreover, optimum supply chain network is also required to be put in place for the sustainability of the areas such as carbon emissions, fuel usage, etc. (Antony, Snee & Hoerl, 2017)

Process Optimization- The industry in which IBM operates, benefits can be attracted by way of setting the focus on the areas such as Manufacturing and Procurement through their restructuring into a leaner production mode. Lean manufacturing provides assistance to the companies in improving the synchronization of production with supplier capacity and customer demand. On the other hand, lean procurement are the valuable gains that can be realized from the improvement in the transparency of the supplier processes and products by making the identification of the areas where improvements are required. The companies need to have proper understanding of the practices associated in the entire supply chain (Antony, Setijono & Dahlgaard, 2016).

For example, Arrow Electronics, which as a global electronics company, applied Lean Six Sigma for the efficient management of its warehousing and shipping departments. Its success can be demarcated by the awards won by the company in the context of operational excellence and digital business transformation. One of the award was given for a project in which a use of video was made for the purpose of increasing the productivity by 56% along with bringing a reduction in the walking steps for the workers by 6.8 million which is around 3,400 miles. The insights of these quantitative outcomes provides that lean sigma increased productivity by reducing the walking time of the employees. The focus of lean was on reduction of wasted movements of the employees. Such time can be utilized for other productive purposes thereby improving the operations of the company. For the purpose of detailed analysis of case applications mentioned in this Lean Six Sigma Assignment, a conceptual model is suggested for recognizing the most important opportunities and decisions that will offer competitive advantage to the organization in the global market. The model will consider different elements including the different stages of operation value chain, competitive advantages and the performance of the operating system. However, the limitations are that there is no sustained efforts. It means that the productivity have increased through reduction of steps but after this, more efforts are to be made for increasing the productivity further. Another limitation provide that lean six sigma do not provide quick solution and is too structured (Six Sigma Daily, 2018).

Green Reporting- If an organization undertakes to reduce the environmental impact of its practices, it is first required to measure and report it on continuous basis. It will offer direct benefits to the business as it offers a proper understanding of its exposure to climate change risks. The companies that have their focus on the green initiatives are searching for ways through which environmental progress reports can be created. However, they face the challenge relating to the quantification and reporting of the environmental footprints and emissions. This is due to the fact that it is a expensive and time consuming method that requires the data to be extracted from multiple systems, which is further required to be manipulated for arriving at the desired reports (de Freitas, Costa & Ferraz, 2017).

There are a number of challenges confronted by the companies during the implementation of Lean Six Sigma even when it offers various benefits to them. Some of the challenges have been discussed below in this Lean Six Sigma Assignment:

Involvement of Advanced Mathematics and Lots of Statistics- The key challenges faced by the organizations in the execution of Lean Six Sigma in their processes and supply chain is that it involves advanced mathematics and lots of statistics. In simple words, most of the employees working in the manufacturing organizations are the front line operators and therefore, they are unable to perform such functions which are capable of being performed by the engineers. Hence, the non- cooperation from the employees is the major challenges which is experienced by the organizations as they do not want to come out of their comfort zone. They are further afraid of the fact that their performance will now be measured by implementing DMAIC Framework (Arcidiacono, Costantino & Yang, 2016). DMAIC stands for Define- Measure- Analyse- Improve- and Control. It is because the concept Lean Six Sigma is entirely based on the reduction of wastage, variations and redundant processes. It is sometimes also misunderstood that Lean Six Sigma is only meant for large manufacturing companies and not for small and medium scale organizations (Garza- Reyes, 2015).

The DMAIC framework is the methodology that is responsible for governing Six Sigma and is a method that lead to the creation of the steps for every project.

Define- It provides the executive directives or the customer requirements that are to be met by the business.

Measure- This step is responsible for establishing the current baselines which will act as the basis for improvement in the future. It will focus on the current happenings and the changes required to be made for reaching the desired goals.

Analyze- This step performs the examination of the root causes of the difficulty. In this way, this step provides the changes that can be made for reaching the desired goals.

Improve- This step aims at improving the overall process such that the goals can be achieved.

Control- This step aims at having the control over the process by embedding changes and ensuring sustainability (Swarnakar & Vinodh, 2016).

This can be linked to the transformation model of operations management. The transformation model discussed in this Lean Six Sigma Assignment provides that there are three main components of the operations namely inputs, transformational processes and the outputs. The systematic direction and controlling of the processes are involved in operations management that perform the function of converting the resources (inputs) into end products or services for the clients or the consumers. The transformation model is applicable equally in case of service and manufacturing organizations and in not- for- profit and private sectors (Lande, Shrivastava & Seth, 2016).

Costs of Implementing Lean Six Sigma Program are High- Another challenge faced by the businesses in putting lean six sigma program into practice is that the costs involved are way too high. The costs are really high but the businesses should look upon costs as an investment. It is that investment that has the capability of yielding returns around 5- 10 times in a year with the help of the right projects. Moreover, the businesses are still not aware of the benefits offered by Lean Six Sigma to them. By not implementing Lean Six Sigma, they are wasting or throwing away a resource which is irreplaceable. Also, there is a lot of difference in wastage of time and the wastage of materials as there can be no salvage. Therefore, even if this strategy is costly, the businesses should implement it for the benefit of the society and their own business (Laureani & Antony, 2018).

Failure in Application- Some of the businesses have significantly failed in the successful execution of Lean Six Sigma. The reason behind such failure noted in this Lean Six Sigma Assignment can be either the processes people or technology. Sometimes, the organization is not itself mature enough for the implementation of the program. Moreover, there are times when the employees are not aware of the reason behind the starting of such program. The way towards green supply chain and operations is difficult but it the process should still be undertaken for the customers, business, employees and the future of the entire society. Lean Six Sigma is an approach that will provide answers to a number of questions and solve the problems being faced by the business (Sunder, 2016).

Fear of the Unknown- Fear of failure or fear of the unknown is a factor that can be paralysing for the business. The organizations are often prevented from learning new skills and implementation of the programs like Lean Six Sigma due to the fear of failure or fear of the unknown. The organizations are required to drive out such fears in order to thrive and innovate. The organizations should aim at process optimization through lean manufacturing and lean procurements such that the wastage can be minimized to the extent possible (Mason, Nicolay & Darzi, 2015).  

The major obstacle suffered by Lean Six Sigma also involves the lack of solid stakeholder buy- in. therefore, the process excellence should be viewed differently i.e. in the form of an experience and the way of life adopted by the company. Lean Six Sigma further struggles from cases where the handlers are unable to relate the improvements in the project to the bottom line. The projected annualized savings are measured in $ value but sometimes the numbers doesn’t seem to impact the P & L, therefore, the partners of the business can object that the project appears to be like a fluff (Furterer, 2016).

Some of the latest trends in operations management will play a useful role in dealing with the problems faced by the organizations in the employment of Lean Six Sigma. Firstly, a number of companies are focusing on the establishment of “Operational Excellence” department or program. The aim of these departments discussed in this Lean Six Sigma Assignment will be to focus on process improvements and quality initiatives within the organizations. Secondly, Lean Six Sigma techniques and tools act as the foundation of such type of internal programs. The familiarity of the business leaders with DMAIC steps along with the responsibilities and roles of Lean Six Sigma Black Belts and Green Belts is also being noticed in the businesses. Moreover, process thinking has become a norm these days. Now business leaders expect data based decision making from the management team rather than reactive decision making. Therefore, Lean Six Sigma is expected to become the foundational aspect for the management systems of the companies (Hitt, Xu & Carnes, 2016).

Therefore, the challenges faced by the organizations can be overcome through the adoption of certain strategies. Firstly, the best and qualified team should be selected in the organization and then they should be trained and mentored o become Green Belts or Black Belts. Secondly, the employees should be convinced that they will not lose their jobs through the implementation of Lean Six Sigma and their participation in the process will bring additional rewards to them in the form of financial bonuses.   Thirdly, the management of the organization should be convinced regarding the return on investment on the basis of the productivity efficiency and operation costs.

Conclusion
Therefore, it can be concluded after analysing the Lean six sigma assignment that operations management is that area of management which is concerned with the planning and controlling of manufacturing process and redesigning of several business processes in the production of products and services. Lean Six Sigma can be explained as a method which has heavy reliance on collaborative team effort for the purpose of improving performance with the help of systematic decline of waste and variation. This report focused on the challenges related to the application of lean six sigma for supporting the transformation towards greener supply chains and operations.

Lean Six Sigma is basically the integrated approach that results from the combination of continuous improvement methods namely sig sigma and lean. During the recent years, the organizations across the globe have started to address the environmental issues throughout the supply chain and operations as such issues are being induced as a result of the industrial development undertaken by them. The challenges are faced by the organization during product life cycle development as they are required to comply with various regulations. It is also illustrated in this Lean Six Sigma Assignment that the organizations further face challenges due to huge expenses involved in employing Lean Six Sigma, involvement of advanced mathematics and lots of statistics, failures in application and fear of the unknown.

References
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