Identifying the key organisational factors for
introducing Lean Six Sigma in distribution
centres
An exploratory case study
MASTER: Engineering management THESIS WITHIN: General management
AUTHOR: Mallikarjuna Reddy Mukkara & Borja Marin Boillos TUTOR: Jonas Dahlqvist
i
Identifying
the key organizational factors for introducing Lean
Six Sigma in distribution centres
Abstract:
Purpose: Lean Six Sigma has been playing a vital role in numerous organizations to enhance the productivity of the Supply Chain by reducing “waste and variance”. During Lean Six Sigma implementation, a change is introduced in the organization, the purpose is to understand the organizational change in this context in order not to end up failing in the implementation of this technique. Different factors affect organizational change, such as communication, successful implementation of ideas, training, empowerment of employees, the impact of unions, and support from the management. However, out of these factors, from the workforce perspective, which ones act as facilitators, and which ones act as barriers?
Method: The approach that has been followed is the abductive approach as an interchange between theory and method, by combining deduction and induction. In the abductive research method, the research process starts with surprising facts or puzzling situations, and the research process is dedicated to their explanation.
Findings -The study has identified if communication, successful implementation of ideas, developmental training of the workforce, empowerment of employees, management support, and employee unions act either as a barrier or a facilitator during the implementations of lean six sigma methods.
Implications - By studying how these factors are acting (barriers or facilitators) there would be a certain help for the organizations in understanding the perspective of the employees in adapting to the change. This will ease the process, which would, in turn, help the organizations in an efficient implementation of Lean Six Sigma methods. Furthermore, it was found that the inclusion of Employees in decision making from an early stage will lead to efficiency in the implementation. Another implication that was found is that informal communication is as important as formal during the implementation of lean six sigma methods.
Limitations – This study is based on one company.
Acknowledgments
The Master Thesis was carried out during at IKEA CDC, Torsvik, Jönköping, Sweden.
Firstly, we would like to express our sincere gratefulness to the thesis research supervisor Mr. Jonas Dahlqvist, Professor in Business Administration at JIBS, and the thesis examiner Mr. Anders Melander, Professor in Business Administration, Jönköping International Business School, who has provided advices and support whenever we got a question regarding our research. They have consistently propelled this thesis research to be our endeavour and they steered us in the right path whenever we required it.
We would like to thank IKEA, Jönköping for allowing us to conduct our thesis in their organization. We express our gratitude to Mr. Labinot, Warehouse Manager of IKEA CDC, Torsvik, Jönköping, whose continuous encouragement and support have led us to complete this research work. Our special appreciation goes to, Group Managers and Co-workers of IKEA CDC, Torsvik who were involved in this research project and for their unflagging effort and support towards to completion of this research work. Without their unfailing participation and elaborated input, the research project could not have been successfully conducted.
We would also like to thank and acknowledge our fellow students at Engineering management, the staff of the Business Administration Department, Jönköping International Business School. Special thanks go to Luis Blazquez and Sai Madhavi, Shiva Prasad Reddy and our friends who helped with their feedback and valuable comments on this research project.
Finally, we must express our weighty gratitude, and indebtedness to our parents and family for providing us unsurpassable support, encouragement throughout our study and research work. This consummation would not have been possible without them. Thank you.
March 2016.
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Table of Contents
1.
Introduction ... 1
1.1
Background ... 1
1.2
Research Problem ... 3
1.3
Research Purpose ... 3
2
Theoretical Framework ... 4
2.1
Lean ... 4
2.2
Six-Sigma ... 5
2.3
Lean Six Sigma (LSS) ... 9
2.4
Organizational Change ... 12
2.4.1
Communication ... 12
2.4.2
Successful Implementation of Ideas ... 12
2.4.3
Developmental Training of the Workforce ... 13
2.4.4
Empowerment of Employees ... 13
2.4.5
Commitment and Support From Management. ... 13
2.4.6
Impact of Existing Employee Unions ... 14
3
Research Model ... 15
3.1
Research Questions ... 16
4
Methodology ... 17
4.1
Research Purpose ... 17
4.2
Research Approach ... 17
4.3
Research Strategy ... 18
4.4
Method ... 19
4.5
Respondent Selection ... 19
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4.5.1
Order Pickers ... 20
4.5.2
Middle-Level Managers ... 20
4.5.3
Warehouse Manager ... 20
4.6
Data Collection ... 20
4.7
Data Analysis: ... 21
4.8
Trustworthiness ... 22
4.9
Ethical Issues ... 22
5
Empirical Results ... 24
5.1
Communication ... 24
5.2
Successful Implementation of Ideas ... 25
5.3
Developmental Training of the Workforce ... 26
5.4
Empowerment of Employees ... 26
5.5
Commitment and Support From the Management ... 27
5.6
Impact of Existing Employee Unions ... 28
6
Analysis ... 29
6.1
Research Question ... 29
6.1.1
Communication ... 29
6.1.2
Successful Implementation of Ideas ... 30
6.1.3
Developmental Training of the workforce. ... 30
6.1.4
Empowerment of Employees ... 31
6.1.5
Commitment and Support From the Management ... 32
6.1.6
Impact of Existing Employee Unions ... 33
7
Conclusions ... 33
7.1
Discussion ... 33
v
7.1.2
Informal Communication Is as Important as Formal ... 34
7.2
Limitation of the Study ... 35
7.3
Future Research ... 35
8
References ... 36
vi
Figures
Figure 1
Five-step thought process for implementation of LEAN techniques
5
Figure 2
DMAIC Methodology ... 7
Figure 3
Six Sigma and lean common tools. ... 10
Figure 4
Improvement objectives of the LSS. Source: Snee (2010). ... 11
Figure 5
Research model. ... 15
Figure 6
Abductive Research Approach. ... 17
Figure 7
Holistic and Embedded multiple units of analysis. Yin, R.K. (2009)
18
Tables
Table 1. Clarification of the DMAIC process (Harrington et al., 2013). ... 8
Table 2. Clarification of DMDV process(Harrington et al., 2013). ... 8
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1. Introduction
The Thesis addresses the study of different elements that would act as barriers or helpers for the duration of the implementation of Lean Six Sigma in a supply chain management environment. Research work is carried out at IKEA, Jönköping.
In this section, the authors introduce the study to the readers. First, the background is set for the readers to understand the environment of organizational models followed by the problem existing in the system, and the need for the research is explained. Then the authors have explained the research purpose.
1.1 Background
Logistics and Supply Chain Management has a crucial part in addressing the difficulty of agile and quickly responsive supply Chain of an Organization. An efficient Supply chain management is an Organization’s core standard of performance. The research and it’s literature on Supply Chain Management has progressed precipitously in the last few decades, according to Christopher (2011), Supply chain management (SCM) is a “management of upstream and downstream relationships with suppliers and customers in order to deliver superior customer value at less cost to the supply chain as a whole”. The supply chain has become the value chain, there is a drive to increase value. The focus of the companies should be to create value delivery systems. Supply chain integrators form a single” virtual organization” with a global approach of maximizing the profits, meet the customer demands, and reduce the total operating cost. (Chauhan & Proth, 2005).
SCM is the management of the interrelation of businesses and customers to provide efficient and excellent consumer value and with cost-effectiveness to the supply chain as a unit. According to Martin (2016) holding the competitive advantage compared to an organization’s competitors be found in characterising itself positively and operating at a lower cost, hence it encourages revenue of that organization. This ties with the thinking that “A firm gains competitive advantage by performing these strategically important activities more cheaply or better than its competitors”(Satya Sekhar, 2009, pg. 128).
To manage supply chains, there are several techniques and Lean is one such technique. Early stages of introducing Lean principles in japan, experts recommended that any operation that does not add value ought to be withdrawn. Lean is an ideology of removing excess waste from production processes (Womack & Jones, 1996) and Toyota is regarded as responsible for the creation and implementation of this idea (Womack & Jones, 1996). The Lean concept was not an overnight success and was developed after years of implementation and corrections (Holweg, 2007). Lean is primarily used by organizations for value-adding organizational processes (i.e. activities inside the organization that are valuable for the customer).
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The prime aim of Lean is to provide the right product on time with greater quality throughout the process by keeping the cost low (Pascal, 2002). However, this is not the only use for Lean ideologies as shown by Alukal and Manos (2006) where they studied a supply chain process and found out that Lean ideology aids in reducing and optimizing the various non-value adding activities. For example, corridors in distribution centres must be clean in order not to have accidents or stops in the automatic crane. This cleaning task despite not adding any value to the customer could be improved through Lean methods. When describing Lean as an aid in removingorganizational waste, the various forms of this waste in the supply chain context were described by Teich and Faddoul (2013) as one of the following: overproduction of a product, unreasonable inventory stocking, too much motion due to poor designing of the production area, unrequited transportation, over-processing, defects, waiting and under-utilized workforce.
The Lean Six Sigma technique is another practice of the Lean Principles with emphasis on measurement, which has been in practice by organizations for process improvements (Carter, 2010). The Six Sigma methodology is a practice developed by Motorola and it can be defined as a business process improvement strategy to identify and remove root causes of defects and errors during the business operations and units by focusing on steps that are key to the end product (Snee, 2000). According to Voehl et al. (2013) and Knapp (2015) pg. 856., “Lean Six Sigma is a comprehensive system for achieving and sustaining business success through understanding customer needs, data discipline; adding value by reducing waste, and diligent attention to managing and improving processes”.
There is an interlinkage within the application of lean six-sigma principles and organizational change. When you introduce lean six sigma you are introducing a change in the company and most of these organizational changes bring entail changes in practices, methodologies, and overall environment of the company. Cordery and Clegg (2002) state that changes in operational activities creates uncertainty among employees concerning job security and requirements. The literature pins down certain factors that the organizations must consider while designing these changes as many organizations with great ideas can end up failing in the implementation. Communication, successful implementation of ideas, training, empowerment of employees, the impact of unions, and support from the management are considered some of the main cornerstones of successful implementation of organizational changes in different business processes.
It must be understood in this regard that the change can be of any form, it can vary from different a working model to alterations of the complete process flow or it could concern time management or simply the introduction of new machinery into the work culture. Whatever the change might be, it causes ripples into the pre-set working conditions and threatens to imbalance the work culture and hence is an important consideration of management.
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1.2 Research Problem
Lean Six Sigma is a technique being applied in the logistics and supply chain management field. During the process of Lean Six Sigma execution, a change is initiated in an organization. The main issue would be to analyse the organizational change in this setting in order not to turn out to be failing in the implementation of this technique. The manpower is important in the process of carrying out Lean Six Sigma as grass root level workers are the ones who put the organizational change into place and work with it. They are the foremost subjects for understanding the workings of the implementation of Lean Six Sigma. The employees hence make for an important part of the study set in an environment where employee involvement is extremely high, and the scope of improvement is high as well. Despite some authors have been looking into the employee impact during the implementation of lean six sigma methods (De Koeijer et al., 2014; Sreedharan et al., 2020) and active employee perspective has been neglected to give to the authors the chance to research in this direction.
As explained above, the adoption of Lean Six Sigma methodology brings a waste reduction agenda along with it, a change in organizational functions for maximum profit but it is
interesting to know what the workers feel about it as they are the ones who deal with the change. Wall et al. (2002) mention that employees might harbor feelings of uncertainty towards the new change, which might affect their work ethics and therefore management must be aware of this since empowered and satisfied employees are crucial for effective implementation of an intended organizational change (Charalambous et al., 2015).
The main factors of organizational change that we are going to focus on are communication, successful Implementation of ideas, developmental training of employees, empowerment of employees, commitment from the management, and impact of unions. By studying the employee perspective about the role of these factors (as being barriers or facilitators) there will be implications for organizations by creating an understanding of the employee perspective when adapting to changes. This can ease the process, which, in turn, can help organizations in their efficient realization of the Lean Six Sigma technique.
All the things considered, once Lean Six Sigma is introduced a change happens in an organization's operational behaviour. Different factors affect organizational change, such as communication, successful implementation of ideas, training, empowerment of employees, the impact of unions, and support from the management. But out of these factors, from the workforce perspective, which one acts as a facilitator and which one’s act as a barrier?
1.3 Research Purpose
The objective of this study is to understand by what means these factors of concern for organizational change act as a barrier or facilitator while introducing Lean Six Sigma methodology in a supply chain environment.
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2
Theoretical Framework
With this section, the researchers put forward the literature attributed to the research at hand and formulate a theoretical framework. The chapter starts with the clarification of the two primary topics at hand and then move on to the amalgamation of the concepts. This is followed by the factors in organizational change.
2.1 Lean
Lean can be described as the idea of maximizing customer value while minimizing waste. Lean manufacturing is an ideology, the origin of which is attributed to the fall of the Japanese market post the World War II aftermath (Womack & Jones, 1996). To regain production as well as productivity, a systematic process rose to prominence which went ahead to achieve this target by banishing wastes (Womack & Jones 1996). Toyota is primarily attributed to the concept of Lean and the benefits of the same for the company were primarily highlighted in 1990 when the term ‘Lean’ was coined (Womack, Jones & Roos, 1990).
Lean is of prime importance to the organizations for the fact that it revolves around creating standardized and uniform methods of working in the organization and achieves the same by keeping the employees involved in the process and planning, making them committed, keeping the customers’ demands in focus, delivering the right product on time with greater quality maintaining the costs at low in all of the time (Pascal, 2002). Alukal and Manos (2006) on the other hand focus on the no-worth adding operations and units in an organizational supply chain and defines lean as the principles which help to reduce and optimize all the mentioned activities. Lean manufacturing is also defined as the most successful production optimization and development philosophy developed by Toyota since it focuses on reducing organizational wastes and focuses on improving efficiency (Liker et al., 2006).
On the issue of implementing Lean into an organization, Holweg (2007) states that Lean is a dynamic and continuous learning process. It does not simply provide resources to be implemented but is a model which when followed and imbibed by organizations, helps them in having a clear set of improvements for achieving the goal. Furlan et al. (2011) also agree with this ideology and states that Lean does not provide a universal set of guidelines that would help each organization, and cannot be treated as a resource package. They state that for implementation of this ideology, it is of prime importance to adapt techniques that are in synchronization with the characteristics of the organization itself, the clients, and the suppliers.
Lean implementation is highly beneficial for organizations. Chen et al. (2010) identified that with the initiation of Lean methodology, an organization can increase its flexibility along with its competitiveness. Teresko (2005) asserts that from the 1960s to 1980s, the productive capacity of American industries improved approximately 23.6%, on the other hand, Japanese industries have a proven growth of 89.10%.
Lean is not a unidimensional concept but requires complex planning by the organization, effective implementation, and effort at various levels at the same time. In the view of Lean experts, the implementation should also be sustainable in the long term.
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In figure 1. The necessary processes to implement the lean methodology is explained:
Figure 1 Five-step thought process for implementation of LEAN techniques
1. “Identify the value” from the end customer’s viewpoint.
2. “Mapping the value stream” for each process and removing possible non-value adding activities.
3. “Create flow” to add value-creating processes and units for the flow of product from supplier to customer.
4. “Establish pull” to let the customers draw the value from the upstream activity.
5. As the value is identified, streams are mapped, reduce and waste variances are eliminated, flow and pull are established, reiterate the process till the forecasted state is achieved to the stage which with zero waste and maximum values is created.
2.2 Six-Sigma
The Six Sigma process ensures that quality is achieved throughout the business processes and units. Six sigma intends to eliminate all defects by employing tested and proven mathematical procedures.
Six-sigma is a methodology that is primarily used by organizations for process improvement in other words it can be stated that ‘the six-sigma process is used to eliminate various defects or inefficiencies in either a process or a service’ (Carter, 2010). The introduction of the six-sigma method is credited to Motorola around 1987 when the company was working towards its focus on strategies to reduce product defects (Carter, 2010). In 1988, the Malcolm Bridge National Quality price was awarded to Motorola and Six Sigma gained a reputation internationally for being the propelling force behind the company’s success (Drohomeretski et al., 2014). The company gained around 2.2 billion dollars as a result, of the implementation of the Six Sigma methodology (Drohomeretski et al., 2014). General Electric also helped increase the popularity of the model after Jack Welch committed to achieving the six sigma capabilities for the company (Carter, 2010). Identify Value Map the Value Stream Create Flow Establish Pull Seek Perfection
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Snee (2000) claims that Six Sigma is an approach for improvement of the business process setting the focus on identifying and eliminating the root causes of errors in operational units and processes that are relevant to the end product. Apart from this, the success of the Six Sigma methodology is also based on various elements. A few of the key components are the commitment of the management, supporting framework, training the employees, and performance indicators (Henderson & Evans, 2000; Van Iwaarden et al., 2008; Brun, 2011; Gutiérrez, 2012; Drohomeretski et al., 2014).
Six Sigma works around the primary goal of eliminating all the extra things that do not meet the customers’ needs (Carter, 2010). It has been observed that many times there is a gross miscommunication between the process owners and the customers over what is needed from the final product. This miscommunication makes it harder to make the process efficient and the quality of the final product top notch. Hence, one of the most important tasks of Six Sigma is to establish what is the customer's needs (Carter, 2010). This implies what the end customers consider is of paramount and crucial for assessing the quality of the product or the service s and this information is known as “critical to quality” (CTQ) (Carter, 2010).
Since Six Sigma is an organized and well-structured approach to improve the different processes in organizations, experts and statisticians use this methodology for customer success, to reduce variation in the processes, and subsequently for achieving strategic objectives (Schroeder et al., 2008). Although Six Sigma is originated from the cause of quality improvement, it is differing from the other quality methodologies due to its limitations such as time frame, performance indicators, project structure, and quantifiable goals. (Andersson et al., 2006; Dahlgaard et al., 2006).
In accordance with Chakravorty (2009) the Six Sigma’s six steps model has been examined by several researchers in the following manner: firstly, analysis of existing process strategies; Secondly, team acquisition which is capable of implementing the improvements; third and fourth, selection of right tools and exploring possibilities for improvement; fifth is the execution of framework followed by sixth which is control of obtained results with reiteration till perfection is achieved (Drohomeretski et al., 2014).
The Six-sigma technique is a systematic data-oriented approach. It is generally comprised of two distinct defined distinct methodologies as follows: “Define, measure, analyze, improve, and control” (DMAIC) and “Define, Measure, Analyze, Design, and Verify” (DMADV).
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Below-shown figure 2 represents the DMAIC methodology that gives a defined flow of structure and guidance to enhance productivity and to improve the existing processes in the work environments. The DMAIC is the most used method out of two variants of Six Sigma. The DMADV method differs from DMAIC in specific aspects.
While the former focuses on optimization of existing processes or activities, in contradistinction the latter focuses on formulating a new process with an optimized design. Given this it can be defined as DMAIC acts as a “Correction methodology” and DMADV is a “Prevention methodology”.
Figure 2 DMAIC Methodology
The above figure.2 shows the particulars of DMAIC methodology schematically, and each phase of the process with a set of tools has been explained in the below stated table 1 and 2.
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The main objective set of two together is a quantitatively systematic approach to improve the process and process design, respectively. The basic design and focal point of each of these practices are identifying and deletion of discrepancy in both process improvement and process design ( Harrington et al., 2013).
Table 1. Clarification of the DMAIC process (Harrington et al., 2013).
Table 2. Clarification of DMDV process(Harrington et al., 2013).
The above-shown tables 1 and 2 are the detailed representation of both DMAIC and DMADV processes.
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2.3 Lean Six Sigma (LSS)
The competition in the organizational world is at an all-time high. The fluctuating economies across the globe and the interdependency between them couples with the client getting more and more demanding in terms of quality as well as value created by the product, this all leads to organizations having to adapt to an all-time changing environment. Hence all the organizations are working towards finding a solution or an operations strategy that allows them to run the operations of the organization itself at a lower cost. Lower cost although is not the only prerogative among companies, it must be accompanied by the accuracy of the operations themselves, the speed with which the products can be delivered with the current set of operations, and finally, the ability to adapt to change based on differing and altering market demands (Hayes & Pisano, 1996; Ward & Duray, 2000).
Although it is stated that the implementation of these models is beneficial to the organizations’ flexibility, they are not always easy to implement (Chen et al., 2010). There are too many different models available for organizations to adopt like Total Quality Management (TQM), Lean manufacturing, or Six Sigma. But sometimes, these models are not enough to help the organization in need and hence this dilemma has given rise to hybrid programs like Lean Six Sigma (Drohomeretski et al., 2014). This form of ever improving or continuous improvement methodology, which makes an organization able to withstand the oncoming changes of the market is present in models like six sigma and lean manufacturing.
Continuous improvement is a broader term primarily focused upon incremental innovation which involves the organization in its entirety (Caffyn, 1999). This inclination towards continual improvement leads to the incorporation of the two models, Lean and Six sigma. Lean six sigma (LSS) emerges from the enhanced lean manufacturing production system and the efficient Six Sigma improvement methodology (Drohomeretski et al., 2014). LSS is also defined as the business strategy which works towards improving the business operations which eventually results in the clients having greater satisfaction and also better results overall (Snee, 2010). From a more theoretical standpoint, Arnheiter and Maleyeff (2005) describe LSS as a model that leads to an incremental quality boost of the products and also makes the operational processes more reliable while supporting lean practices like Kanban, TPM, and others implementation.
Various authors have stated in the same manner that Lean Six Sigma i.e. the amalgamation of the two models, leads to lessening of the wastes and errors and makes the process more adaptable to change. Also, LSS contributes towards reduced rework time, improves productivity, and majorly affects the reduction of inventory movement between different work stations (Chen et al., 2010).
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Four Common tools, as illustrated in Figure 3 have been identified by Antony et al. (2003), Pepper and Spedding (2010), and Salah et al. (2010) by evaluating the explicit and also the common tools of Lean and Six Sigma models.
Figure 3 Six Sigma and lean common tools.
Source: Antony et al. (2003), Pepper and Spedding (2010), Salah et al. (2010).
There are numerous benefits attributed to the model, the integration of the two concepts permits better operational process autonomy for the employees and hence aids greatly in making the continuous improvement an actual reality in the organization (Pepper & Spedding, 2010). The only prerequisite for the integration of the process is that the organization should have a culture focused on continuous improvement (Pepper & Spedding, 2010).
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Enhanced organizational performance is another major benefit of this combination, as the continuous improvement of the operational process is supported by tools application. One example of such benefits of the combination is that while Six Sigma enhances the quality of products. Lean facilitates the process of reducing inventory (Pepper & Spedding, 2010). Snee (2010) mentioned that even the main objectives that the two processes are aligned i.e. towards seeking and improving performance.
Figure 4
Improvement objectives of the LSS. Source: Snee (2010).
Corbett (2011) identified through his study from two Baldrige Quality awarded companies that the LSS practices allowed them to integrate continuous improvement culture in all the sectors comprising employee training & participation, management contribution, and understanding value, that resulted in cost drop and enhanced quality.
The two models, although like each other in many aspects, do have certain differences from each other. Antony (2011) in his study, researched to find the primary differences between the two models:
Six Sigma involves a longer training period and greater capital spending compared to Lean.
Lean pursues to lower the process wastefulness, while Six Sigma intends to enhance the usefulness of the process.
Six Sigma strives to remove the process defects and Lean aims to improve the ability and permanence of the process.
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2.4 Organizational Change
Change in today’s market is inevitable, hence the organizations must always be open to change. But the most important part of this transition is employee acceptance of the new depends upon the type of change, which could be organizational, structural, work process-related, etc. Employee satisfaction is one of the primary concerns of the management, and unrest in the workforce can severely hinder productivity (Charalambous et al., 2015). Since the scope of the study limits the practices the management must encapsulate in its ideologies and practices, the authors focus upon the necessary points of concern for the management while bringing in organizational change in its work practices.
2.4.1
Communication
Communication is the primary pillar which exists in the organizational environment and holds all the different strata of organizational hierarchy together (Tang & Gao, 2012; Elving, 2005). Lack of communication can destroy the organization faster than any external stimuli. Researchers agree that effective communication is helpful as well as mandatory while letting the employees know why, how, when, and what changes are going to come into effect (Wanberg & Banas, 2000). Communication should be used for two main reasons, first one is to let know the employee what to do and the second is to creates a sense of belonging to the organization (Ridder, 2004). It has been shown in different researches that the organizations which have a well-founded and formal channel of communication amongst its ranks, while introducing organizational changes, face reduced uncertainty and enhanced commitment from the employees (Wanberg & Banas, 2000; Hobman et al., 2004; Bordia et al., 2004). It also has been found that if you tell employees about the change before it happens, this change will be embraced easily. (Jones et al., 2005; Jimmieson et al., 2008).
2.4.2
Successful Implementation of Ideas
While there is an almost continuous barrage of organizational changes in various organizations due to ever-changing market demands and situations, implementation of these changes is not always successful (Simpson, 2017) and many times companies fail in this endeavour (Charalambous et al., 2015). Companies try to keep up with the competition for maintaining an edge over their competitors but sometimes fail to rein in the human factor i.e. how to understand the human involvement in the implementation of the change and the future imbibing of the idea itself among the workforce and hence end up failing despite having a novel idea to begin with (Charalambous et al., 2015).
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2.4.3
Developmental Training of the Workforce
Developmental training of the workforce must be a vital factor of interest for the management (Olsen et al., 2014; Neirotti & Paolucci, 2013) for the expected changes in the organization. Chung (1996) and Boyer et al., (1997) suggest that the development of the workforce during the implementation of new processes in the organization helps in increasing the organizational performance and effective use of the process. While talking about the tool of study, which is a Lean manufacturing model or Just-in-Time technique, employee training and education is cited as one of the most important factors contributing to the successful implementation of these models (Waldeck, 2014).
2.4.4
Empowerment of Employees
While talking about the implementation of various technological changes, the employees play an all-important role as these are the people ending up with using the new implementation (Lamm et al., 2010; Wooddell, 2009).
The accompanying literature in this regard suggests that for successful implementation, the companies must undertake a more flexible organizational structure which allows the lower-level employees to be able to make the decision, i.e. decision making should be decentralized and employees like operators must have more say in such matters (Zammuto & O'Connor,1992; Griffin et al., 2007; Quinn, 1988). When an employee is empowered about the job and is allowed to make decisions regarding his or her tasks, it assists them to understand the task requirements better and also it aids in understanding the system better (Wall et al., 2002). Hence it can be stated that a flexible organizational structure is beneficial to organizations whereby employees have a higher role in decision making.
2.4.5
Commitment and Support from Management.
Typically, senior management is the one responsible for bringing in the change and hence are responsible for the effective implementation (Pardo-Del-Val et al., 2012; Hornstein, 2015). Any initiative in an Organization is bound to fail without appropriate senior management support., without agreeable senior management, projects end even before they start (Somers & Nelson, 2001; Bamber & Dale, 2000; Womack & Jones, 1996). Studies suggest that all employees intentionally or otherwise, look up to the senior management as role models, and hence whatever behaviour the management projects in front of the workforce acts as a tool to the employees’ perception of the upcoming change and its importance (Brockner & Higgins, 2001; Kark & Van Dijk, 2007; Neubert et al., 2008). Studies also show that the successful implementation of models like Lean needs appropriate backing by senior management (Worley & Doolen, 2006). Hence, whatever decision the senior management takes about the change required, it must always be strongly committed to the same and must always display that to the workforce as it would help the implementation and success of the intended change.
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2.4.6
Impact of Existing Employee Unions
Unions are employee bodies that work towards the benefits of the employees of the organization and are mostly unique to individual organizations. These unions are formed from the existing employees only. Since the change in organizational structure could also raise uncertainty in the employment status, unions keep a close vigil on these organizational changes and their effects (Bryson et al., 2013; Levesque & Murray, 2005; Charalambous et al., 2015). Often it is assumed that the organization which has strong and thriving unions will have hindrances in implementing the change (Shah & Ward, 2003). One stream of philosophy suggests that since the union works towards the betterment of working situations of the employees and looks at their benefit, it challenges the implementation of total quality management elements (Jayaram et al., 2010). Whereas the other body of literature denounces this ideology and states that unions are the enablers of implementation of organizational changes (Drago & Katz, 1988; Cappelli & Sherer, 1989; Pagell & Handfield, 2000). Hence whatever the philosophy might state, it can be construed that unions take a crucial part in the successful implementations of the said organizational changes.
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3
Research Model
This chapter is to clarify the research model how it can acknowledge the intended research to answer the research questions by showing relations between various parts of the research from the literature review, data collection, analysis of data, variables and drawing conclusions from results and as such through pictorial or diagrammatical representation.
For developing this framework, a two-sided approach has been adopted. Firstly, a literature review has been performed which provides insights about the Lean Six Sigma methodology, what it represents, and how it can be implemented. The next step was to get further knowledge of the various organizational factors which the management must keep in focus while introducing an organizational change. The complete set of organizational factors were narrowed down into six primary themes based on the literature review. These were a) 1) communication, 2) successful implementation of ideas, 3) developmental training of the workforce, 4) empowerment of employees, 5) management, and 6) employee unions. Since the nature of the study is a qualitative approach, the case study method has been chosen as it is suiting the requirement of the study in order to give a response to the research questions. The principal source of data collection will be performed by semi-structured interviews subsequently the template analysis would be appropriate for data analysis to identify the common themes.
The below Figure 5 below represents the research model to carry out the study to verify how various organizational factors would act as facilitators or barriers towards the implementation of Lean Six Sigma in Logistical and supply chain-oriented organizations.
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3.1 Research Questions
As it is described earlier in the theoretical framework, how various factors affect organizational change through Lean Six Sigma implementation, such as communication, implementation of ideas, training, empowerment of employees, the impact of unions, and support from the management. By considering the mentioned factors, the below research questions have been formulated in perspective to learn what factors act as facilitators and barriers during the implementation of Lean Six Sigma. Thus, our framed research questions are:
RQ1:
Research Question 1: How communication can affect implementing Lean Six Sigma in a supply chain environment, either by acting as a facilitator or a barrier?
RQ2:
Research Question 2: Exactly how the implementation of ideas can act as a facilitator or a barrier during the process of implementing Lean Six Sigma in a supply chain environment?
RQ3:
Research Question 3: Whether developmental training of the workforce facilitates or hinders the Lean Six Sigma implementation in a supply chain environment?
RQ4:
Research Question 4: How implementing Lean Six Sigma in a supply chain environment can be facilitated or hindered by the empowerment of employees?
RQ5:
Research Question 5: In what manner the commitment and support from the management will facilitate or obstructs implementing Lean Six Sigma in a supply chain environment?
RQ6:
Research Question 6: In what way the existing employee union act as a facilitator or as a barrier while implementing Lean Six Sigma in a supply chain environment?
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4
Methodology
As discussed in the previous chapter, In the methodology part, the authors provide a summary of the research approach founded on the literature background followed by design and strategy for conducting the research. The methodology chapter continues with data collection. And then moves on to the data analysis methodology and is followed by the selection of respondents. Finally, we answer the ethical qualms regarding the research.
4.1 Research Purpose
The Lean Six Sigma in distribution centres is a new phenomenon in the Swedish supply chain context. Our study intentions to add up on this new phenomenon and, therefore, the level of uncertainty when we started the research was high. We could not simply apply a descriptive approach, as in the beginning we did not know which organizational change factor was applicable in this case, nor were we able to explain presumed causal relationships between the organizational change factors and the introduction of lean six sigma. The exploratory study is the preferred choice where the element being researched has not an obvious, single set of outcomes (Yin, 2003). The main reason to select an exploratory study is that it gives the chance for the researchers to be open and able to adapt when newly discover issues came. The study was started with an open and broad view of the topic trying to narrow it down to the organizational change factors that applied to our study. This was the best possible approach for us to gain an understanding of the key organizational factors for introducing Lean Six Sigma in distribution centres.
4.2 Research Approach
Performing a pure deductive or inductive research approach was not considered as fitting this research as not being flexible enough for our study. The approach that has been followed is the abductive approach as the interplay between theory and method, by combining deduction and induction. “In the abductive approach, the research process starts with ‘surprising facts’ or ‘puzzles’, and the research process is devoted to their explanation” Bryman and Bell (2015). pg. 26.
Figure 6 Abductive Research Approach.
An abductive approach has been applied consisting of three steps. The first step was researching the literature about lean six sigma and organizational change. Grounded on the current literature a theoretical framework was built and a conceptual model to make sense of the theories.
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The second step was to increase the knowledge in this respect through an empirical investigation in the distribution centre. In this step, a model was developed on the organizational change factors that affect the study. In the last step, we were looking for the relationship among the theoretical framework and the empirical data to articulate new interpretative theories (Alvesson & Kärreman, 2007) between the factors and how they act as enabler or barrier.
4.3 Research Strategy
The case study was the selected strategy in our study as it appears “Data” is an inspiration for critical dialogues between theoretical frameworks and empirical works (Alvesson & Kärreman, 2007) to be the finest possible way as it allows us to understand by exploring the process of supply chain management in a distribution centre and its influences within its real-life context (Yin, 2003).
Extracting conclusions from only one company’s case has limited results to generalize our findings but as we have at our disposal a limited time allocation for the study it has been the selected one. Moreover, it is possible to conduct case studies in a short period (Yin, 2003). Thus, a single case study is a suitable approach to explore such a present topic. Focusing on only one company allowed us to gain an in-depth knowledge of the case.
In addition to this Yin (2003) asserts that the basis of choosing the right approach from different kinds of case studies is dependent on the nature of questions that the researcher is aiming to answer through the research. Since this case study can be identified as exploratory in nature and holistic in approach, according to Gummeson (2007) an exploratory holistic single-case study has been considered to address the research questions. The most important gain of this holistic single-case study is it will furnish greater comprehension of the phenomenon. In preparation to assess the available qualitative data obtained in the semi-structured interviews, a template analysis method was executed to distinguish key themes.
Figure 7 Holistic and Embedded multiple units of analysis. Yin, R.K. (2009)
The above figure. 7 diagrammatical representation of holistic and embedded case studies. Since the nature of the study is a single-case, a holistic case study has been favoured to carry out the research.
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4.4 Method
The method choice was made between qualitative and quantitative studies. Quantitative analysis bases its approach on measuring numerical data, but this does not fulfil our purpose as our purpose is to gain more understanding about which factors and how they affect the lean six sigma implementation. Therefore, our study was qualitative.
Additionally, the combination of qualitative methods such as interviews and observations provided us with the advantage to gain access to detailed information from different standpoints (Saunders et al., 2009). This facilitated us to grow a deeper knowledge of the factors and in what way they act as a barrier or as an enabler throughout the implementation of lean six sigma methods. According to Bricki and Green (2007), the triangulation of the information during the investigation increases the consistency of the findings and enhances the trustworthiness of the overall results.
4.5 Respondent Selection
In this section, the selection process of the respondents is explained. This process was driven primarily from the organizational structure of the company under consideration. The respondents were selected from every echelon of the organization’s hierarchy in the ‘Order Picking’ operation. This varied from the order pickers doing the actual assembly to the warehouse manager. These candidates were chosen for various reasons as would be explained under each separate heading but all the respondents under question contribute towards the implementation of a new work process. Table 3 provides an overview of the individuals included in our study.
ID Name Gender Age Experience in the company (years) 1. Ms. 1 Female 24 3 2. Mr. 2 Male 27 3 3. Ms. 3 Female 42 15 4. Ms. 4 Female 27 1 5. Mr. 5 Male 35 10 6. Mr. 6 Male 45 25 7. Ms. 7 Female 23 1 8. Mr. 8 Male 24 2 9. Mr. 9 Male 27 3 10. Ms. 10 Female 42 17 11. Mr. 11 Male 27 5 12. Ms. 12 Female 35 9 13. Mr. 13 Male 45 20 14. Mr. 14 Male 23 5 15 Mr. 15 Male 50 30 16 Mr. 16 Female 23 1 17 Mr. 17 Male 24 1 18 Ms. 18 Female 20 1 19 Mr. 19 Male 33 3 20 Mr. 20 Male 41 10 21 Mr. 21 Male 25 5
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4.5.1
Order Pickers
The respondents falling under this category were the actual workers who would always work with the new work process. These were considered primary respondents and their selection was done based on a mix of various factors namely, the type of contracts, both temporary and permanent, experience, age, and gender. Since the data from these respondents were of prime importance in answering the research question, the number of respondents was the highest among the three categories. A total of 17 respondents were interviewed under this category.
4.5.2
Middle-Level Managers
These were the respondents which worked right over the order pickers and were responsible for the flow between top management and the workers. These respondents were in the position where the top management decisions were handed over to the worker and acted as a bridge between the two. The respondents chosen were 3 in number and were the ones involved in the ‘order picking’ function of the warehouse. Another common denominator between the respondents was that all of them were involved in KPIs of different departments.
4.5.3
Warehouse Manager
This is considered as a special case as this was only one respondent and was the primary supervisor and the one responsible for implementing new work processes. Another reason this can be considered a special case was because there was a discussion held between the authors and the person mentioned. This respondent was kept under consideration to keep all the steps in the hierarchy under the scope of the research.
4.6 Data Collection
As the research questions involve the search for organizational factors, the authors agreed upon interviews as the prime source of data collection as the interviews permit the authors the advantage of getting the direction from the people responsible for the said operation as well as the flexibility to delve deeper into the concepts which come to the fore during the process. The interviews are semi-structured one-on-one interactions (see Appendix A for the questionnaire). This approach provides the authors with a way to know about personal experiences and accounts of the respondents. Since the research question deals with the human behavioural aspects of the change in work processes, this approach is both flexible and impactful.
Interviews carry the stigma of being subjective and hard to standardize and might give different results in the hands of different interpreters (Poulou & Norwich, 2001). The authors kept this issue in mind while asking them questions and tried to keep the conversation linear and not too leaning towards the emotional aspect too much of the respondents. Another method used to minimize the occurrence of the problem was dividing the interviews into general themes rather than direct questions and the respondents were encouraged to be descriptive. The interviewer explored a theme as long as the helpful data surfaced within the time constraint. Although subjectivism is a bias with the process of interview conduction in the case of the research at hand, subjectivism was not viewed as an object of avoidance but was welcomed towards creating a theme for the solution.
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The conversations were done face to face to maintain the truthfulness of the research as high as possible with each interview lasting close to 40 minutes. The data collection mode was noted during the interview where important facets of replies were noted down instead of voice recording as the respondent might feel threatened. Authors divided the job amongst themselves as one taking notes while the other interviewing to keep the conversational flow going.
The interviewees were started by asking for their opinions and views about efficiency in the plant. After this, the respondents were taken into the theme of quality of work. After setting the base with these concepts, the respondents were then interviewed for their opinions about warehouse optimization and finally, the last theme explored was project implementation.
With the warehouse manager, the discussion was carried on more as an informal discussion rather than an interview. The same themes were explored but the tone of the interaction was informal due to time constraints primarily.
4.7 Data Analysis:
The data collection process was designed in a way that it could be analyzed for answering the research questions.
Brooks and King (2014) stated that the crucial in the “Template analysis” method was the transcription of the interviews. This allows the researchers to transcribe the answers of the interview in-depth and make a well-outlined form to allow full concentration in the data for analysis. This transcription of interview technique best and achieves the intention of the study and analysis due to its relative clearness, enabling further efficient identification and insight into the subject matter and significance of the data.
As per Kvale (2007) the organization of the collected data was the key step to perform analyzation of the data. Subsequently, the identification of themes, expressions, phrases which are common among the respondents will be performed. In accordance with Oliver et al. (2005), the qualitative interview responses can be analyzed into codes and then identify the common themes which are important and related to our study of Identifying the key organizational factors for introducing Lean Six Sigma in distribution centres.
To perform the analysis of qualitative that is obtained from interviews will be analyzed by choosing a template analysis method as per the references of practice guide for Qualitative methods and analysis in organizational research (King,1998). The usage of template analysis intends to investigate the relationship between the established themes and emergent themes. Thus, using this particular data gathering and analysis approach will check the foundation of the identified factors during the literature review and also the new themes from which can influence the implementation of Lean Sig-Sigma in organizations (Minichielle et al.,2008).
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4.8 Trustworthiness
Trustworthiness has been assured through four points (Lincon, 1995; Guba, 1981; Shenton, 2014): Credibility: Credibility was assured by prolonged engagement, preliminary visits to the company, and 2 months of continuous presence in the company. Moreover, one of the researchers has been working in the place for 2 years. This assured trust with the interviews and inside knowledge of the company. We have taken advantage of the peer review and scrutiny of our peers.
Transferability: Transferability was assured through the thick description. Describing the organization where the study was based, information about the people that contributed to the data, the number of co-workers involved, and the specific area of lean implementation. The methods employed and the duration period for gathering the data.
Dependability: The questionnaire is in appendix A for further review.
Confirmability: The questions were planned in such a manner in order not no personal remark was projected to the respondent and utmost care was taken to keep the interviews as neutral as possible also the researchers were reflective about the project, appraising the efficacy of the process during the whole duration of the thesis was undertaken.
4.9 Ethical Issues
Since the data collection methodology was primarily interviewing and primarily the study was done in one organization, extra attention was paid to the ethical issues. Bryman and Bell (2007) have gathered ten principles of ethical considerations:
1. “Research participants should not be subjected to harm in any way whatsoever.”
Every Interviewee was informed orally, before the interview about their right to withdraw from the research at any time.
2. “Respect for the dignity of research participants should be prioritized.”
Interviewees were informed that if they considered any question offensive, they should communicate that to us as soon as possible, during the thesis interviewing process no notification about offensive questions was given.
3. “Full consent should be obtained from the participants before the study.”
Interviewees were notified about the purpose of the study at the beginning itself. Consent was given by management, unions, and employees.
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4. “The protection of the privacy of research participants must be ensured.”
Discretion was paid to the identity of the respondents and a fictitious author-defined identity was provided to the data collected so that the respondent can be free about their views
5. “An adequate level of confidentiality of the research data should be ensured.” Since the research is organizational, confidentiality was given prime importance.
6. “The anonymity of individuals and organizations participating in the research must be ensured.”
As previously mentioned, a fictitious author-defined identity was provided to the data collected so that the respondent can be free about their views.
7. “Any deception or exaggeration about the aims and objectives of the research must be avoided.”
Information was provided to the company about the thesis topic and the expected thesis outcome before the initiation of the thesis.
8. “Affiliations in any form, sources of funding, as well as any possible conflicts of interest must be declared.”
No conflicts of interest were found. The company was informed that this is a research project for JIBS.
9. “Any type of communication concerning the research should be done with honesty and transparency.”
Appropriate reference was given when needed, acknowledging the work of other authors. 10. “Any type of misleading information, as well as the representation of primary data
findings in a biased way, must be avoided.”
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5
Empirical Results
The section shows the interviewee's responses. Questions theme has been divided into 6 factors. In the beginning, communication is noted down as the primary broad theme of responses. This is followed by the Training and Development of the Workforce continues which employee empowerment dimension as well. This is followed by Commitment and support from the management and finally affect the employee unions.
5.1 Communication
As previously mentioned, communication is the primary pillar which exists in the organizational environment and holds all the different members in the organization. Lack of communication can be harmful. This was reflected in some respondent’s answers:
“We really value that they are trying to explain to us what it means and why are they going to do…not only in this case, in every case” (Interviewee 4).
Another topic that was brought up by interviewees was the idea of engagement, this is the case of interviewee 5:
“I like it when they tell us what is going to happen or what is going to come next. In my opinion, it means that they are taking us into account. In my opinion, it is also important that they listen about what we say, and they consider our comments”
Another topic that was brought up by the respondents was the formal and informal channel of communicating, it was a common suggestion:
“I was discussing it in a coffee break with a colleague and the manager and it was much clearer… it was more difficult when the manager was just giving a speech to everybody” (Interviewee 7).
In many cases, we came across some doubts about the effectiveness and implications of the communications as in the case of interviewees eight and seven.
“In my opinion, I am not sure about the benefit of this project and the effect that this is going to have in the future” (Interviewee 8).
Another respondent in the organization gave us an answer in this sense:
“We believe that communication is good. Managers and colleagues always try to help when something new comes up” (Interviewee 1).
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On some occasions the respondents were not convinced about the language being used when implanting this process:
“They have been trying to explain what the pros and the cons of are implementing these ideas…I think that at some point it gets so “technical” that it is difficult to understand what they are saying” (Interviewee 2).
5.2 Successful Implementation of Ideas
The idea behind framing the interview questions was to ask the respondents about what are the primary factors that the organization could take to not let the implementation fail. The respondents were given a free hand at what they believed were the reasons for an implementation failing. As one of the respondents mentioned that being set in one way of doing the job is a primary factor that the organization cannot neglect. The respondent mentioned that since the job is laborious, it is the employee who has better knowledge to perform it and a new working system disturbs the routine and is a bit difficult to adapt to.
“When I am used to something is it difficult for me to change to another thing, you know when I have my ways of doing the job and I have a lot of experience on the site I know what is better” (Interviewee 10).
“New ideas should come from the floor work level; we are the ones working always here so we know what is going on” (Interviewee 10).
Another set of respondents mentioned the exact opposite of this justification and mentioned that management is responsible for these decisions and hence the respondents mentioned that they were more comfortable if there was a properly laid-out plan from the top management for them to just follow.
“I don’t understand the question… we are told what to do and it is difficult when something new comes you just do it” (Interviewee 20).
“Change and new things are always there…work is something that changes, and you have to adapt to it” (Interviewee 13).
“You don’t realize that somethings have changed sometimes you just follow what your manager told you to do and that’s it”. (Interviewee 2).
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5.3 Developmental Training of the Workforce
Employee training and education contribute primarily to the successful implementation of these models as cited in the literature review. Most respondents were aligned with this idea and this is the case of interviewee number 12:
“Training has been something important in this company…and is something important but sometimes I doubt about the usefulness of the training they are giving us” (Interviewee 12) “In other occasions when we tried new processes within running the order picking system, we had training before doing the actual job. You get a better grasp of everything” (Interviewee 12) A lot of comments about personal experiences and personal relationships to other co-workers were brought up as in the case of interviewee 11:
“I haven’t done the training myself, but I have listened to my colleagues on the coffee break and it was pretty interesting” (Interviewee 11)”
Another point that was common among the interviewees is about the effectiveness of the training. This is the case of interviewee number two and number seven.
“Obviously, training is important…if they don’t train us how are we going to learn, but in some cases, the quality of the training is not good enough” (Interviewee 2)
“It is more about what you learn by yourself in the day to day job…I don’t really understand the usefulness of this courses when our job is picking and doing it as fast as possible” (Interviewee 7)
5.4 Empowerment of Employees
As has been mentioned in various studies that successful implementation of an organizational change requires the decision-making process to be decentralized (Zammuto & O'Connor,1992; Griffin et al.,2007), the respondents echoed the sentiment.
Respondents mentioned that just taking pointers from the employees is not enough, these should also be taken into practice:
“They asked for advice as always, it is really important that they consider our comments but sometimes we feel that our comments are not taken into account” (Interviewee 4).
“When we are important, you feel it, you don’t need anyone all the time telling you that they are going to take you into account…if you do it you don’t need to say it” (Interviewee 4).
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The respondents echoed the theoretical standpoint on the matter and went on to add that the inclusion in this regard makes for an empowering feeling for the employees as they might feel more committed to the proposed operational change.
“When they (the managers) ask you, what do you think about it and what would you change, you feel more committed to it” (Interviewee 7).
But at the same time, some respondents did not agree with the idea and felt that the move is immaterial for them as for them it is easier to accept and follow orders from the top-down as they believe they do not have new ideas to add and are content with the non-inclusion in the decision-making process.
“I really think that I don´t have many things to add, I just want to do my job” (Interviewee 5).
5.5 Commitment and Support from the Management
As mentioned by Somers and Nelson (2001); Bamber and Dale (2000); Womack and Jones (1996), managers perform a crucial part in the new processes’ implementation. Most respondents highlighted the importance of management to bring change and doing it effectively as in the case of the next example:
“Management always have to try to do something new and try to improve things…that´s their work” (Interviewee 11)
In this trend interview number 16 also highlighted the importance of management support: “I understand that they can also have their bosses too but is important that they support us, at the end of the day we are the ones lifting the furniture” (Interviewee 16).
Another respondent brought up the importance of the commitment of senior management: “It depends a lot on the manager, some of them are less helpful than others but in general there are quite useful” (Interviewee 10)
In the literature review also is mentioned that senior management is taken as a role model and someone that this is the case of Interviewee 15
“You can see with someone is really into the project…In my opinion is really difficult to fake this.” (Interviewee 15)
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Some respondents brought up the idea of symbiotic relationship and accountability for the reactions. It is not important that management is committed but that also consider their answers and that it is a bidirectional relationship, as an example here are the answers of interviewee 15 and Interviewee 3:
“Sometimes I feel that floor level employees are not on the same track as managers” (Interviewee 15)
“In my opinion, they don’t take our opinion into account many times…but when they consider our opinion, it is clear that it is very useful” (Interviewee 3)
5.6 Impact of Existing Employee Unions
As mentioned in the literature review Unions are employee bodies that work towards the benefits of the employees of the organization and are mostly unique to individual organizations. That was a shared vision among respondents:
“Unions are there to defend our rights …I think they should be always involved “(Participant 11) Also was a common theme in the point in which unions should be involved in the process: “In my opinion unions work in the best interest of everybody in the floor…therefore the sooner they are aware of the situation the better” (Participant 4)
Some of the respondents brought up the idea that there is a common goal:
“In my opinion unions have been very constructive in our case…I think they know that there is a common goal between management and employees” (Participant 1)
