REASONS OF FAILURE IN LEAN SIX SIGMA PROJECTS - HVD248

International Journal of Multidisciplinary Thought, CD-ROM. ISSN: 2156-6992 :: 2(3):123–130 (2012) Copyright c 2012 by UniversityPublications.net REASONS OF FAILURE IN LEAN SIX SIGMA PROJECTS Atakan Gerger and Ali Rõza Firuzan Dokuz Eylül University, Turkey In order to obtain the alteration and the improvement in the business processes, several methodologies are used by companies. In this process the companies also allocate their resources for the usage and improvement of these methodologies. Human resources which are the core ones need project budget for its facilities. Lean Six Sigma is one of the favourite methodologies which have been focused on lately. Companies have assigned considerable resources in order to apply the Lean Six Sigma project. But this does not mean that all of the Lean Sigma Six projects fit well and be successfull in application to all companies. For some companies the Lean Six Sigma projects cause the waste of time, loss of money and motivation which result in the failure of application and the methodology. In this study, the reasons of the failure in Lean Six Sigma projects have been identified and examined and the issues which lead to a successful project have been investigated. Keywords: Lean six sigma failures, Lean six sigma, Six sigma, Lean. 1. Introduction For the academic field of quality Lean Six Sigma has become one of the most prominent trends in the past few years. Many large and well known corporations like Motorola, General Electric, American Express, Ford Motor Co. and AlliedSignal, have appealed to the Lean Six Sigma methodology. The results of this methodology have been quite good and beneficial for the companies so this lead to a growing interest and tendency to this method. However, the main problem in the application of this method arose since the companies couldn!t handle the application according to their requirements and needs. Some companies chose to be trendy and followed the herd without questioning, adapting or redesigning the Lean Six Sigma program to their own companies. The hoped for results fail to be seen because of flawed application and expectations -for example; in quality circles, kaizen, ISO 9000 and quality award models-. A similar future scenario for Lean Six Sigma is possible (Sandholm and Sorqvist, 2002: 17). Studies have indicated that as many as 67% of total quality initiatives and 80% of reengineering efforts have failed to produce their promised results (Young, 2001: 19). Therefore, many companies have focused on some factors on Lean Six Sigma for not being unsuccessful. For instance, The Xerox Lean Six Sigma deployment has three dimensions; projects and results, cultural change, and leadership development to continue its progress (Fornari and Maszle, 2004: 16). Key success factors for Six Sigma: x According to Goldstein (2001: 36); Six Sigma success factors are deployment plan, active participation of senior executive, project reviews, technical support (Master Black Belt), fulltime vs. part-time resources, training, communications, and project selection, project tracking, and incentive program, safe environment, and customers. 123 124 Atakan Gerger and Ali Riza Firuzan x According to Kim (2010: 32); Six Sigma success factors are strong leadership of the top management, the driving organization of Six Sigma, education and training for Six Sigma, reward for project results, procuding and securing high quality Black Belt, efficient activities to improve project, ratioanal selection of project themes, computational operational system, enough preparing time, experiences with quality control activities in the past, accurate data management, company-wide participation of members, standardization of Six Sigma improvements and organizational culture. x According to Ho and Chuang (2006: 171-172); the critical success factors for the six sigma quality management system are commitment from senior management level, realized benefits, process structure, buyer! market-focus, dedicated six sigma staff and reward-focus. x According to Antony and Banuelas (2002: 21-23); Key ingredients of Six Sigma program are management involvement and commitment, cultural change, organisation infrastructure, training, project management skills, project prioritization and selection, reviews and tracking, understanding the Six Sigma methodology, tools and techniques, linking Six Sigma to business strategy, linking Six Sigma to the customer, linking Six Sigma to human resources, linking Six Sigma to suppliers. x According to Henderson and Evans (2000: 270-277); Six Sigma success demands organizational infrastructure, training, tools, link to human resources-based actions (promotions, bonuses, etc.) and other componenets of success. Key success factors for Lean Management x According to Nave (2002: 74-75); Six Sigma success factors are identify which features create value, identify the sequence of activities called the value stream, make the activities flow, let the customer pull product or service through the process and perfect the process. x According to Mejabi (2003) Lean Management success factors are executive issues, cultural issues, management issues, implementation issues and technical issues (Taleghani, 2010: ). Key success factors for Lean Six Sigma x According to Snee (2010: 14): Lean Six Sigma factors are streamline process flow to reduce complexity, decrease downtime, shorten cycle, and time and reduce waste, improve product quality, achieve consistency in product delivery, reduce process and product costs, reduce process variation to reduce waste (such as the waste of defective products), improve process control to maintain stable and predictable processes, find the sweet spot in the process operating window, and achieve process and product robustness. Lean Six Sigma efforts have failed in a variety of factors. According to Gerger and Firuzan (2010: 3384): Lean Six Sigma efforts have failed in variety of factors. These factors are lack of top management support and leadership, lack of competence of Lean Six Sigma teams, defect project selecting opportunities, lack of training, cultural change, lack of organizational strategy and voice of the customer. 2.1 Lean Six Sigma Failures Factors There are many possible failures that can occur while trying to implement Lean Six Sigma. These barriers fall into the following categories. 2.1. Lack of Top Management Support and Leadership Michael L. George (2002: 63) said that "I haven•t seen any unsuccessful Lean Six Sigma Project never, if top management gives importance and never seen if top management didn•t give importance, successful Lean Six Sigma Project#. Reasons of Failure in Lean Six Sigma Projects 125 Neither the Lean Six Sigma program nor any major initiative will survive for long without support and commitment from the senior leadership of the organization (Goldstein, 2001: 37). Lean Six Sigma programs are popular, focused and effective, but projects often take months to finish (Smith, 2003: 37). Therefore, a determined stance and a good leadership are needed in the process of the project execution. The leader shouldn•t think that a successful result can be granted through the start of a Lean Six Sigma program. The leader should know that the Lean Six Sigma Program is expanded on a large period of progress and should motivate the team in this way. If the leader doesn•t do a knowledge transfer like this, there will be a lack of motivation both in the crew and the management. Management should be willing to make investment to Lean Six Sigma. Because of Lean Six Sigma Projects require investment. If top management is not willing to invest the money, projects will be failure (Goodman and Theuerkauf, 2005: 38). Even so a firm insists on using Lean Six Sigma Program, the company certainly lose its motivation and time. In order not to confront a loss as stated above, just before starting a Lean Six Sigma Program, it must be known that there is an investment cost of such projects and the calculations about the costs should be done realistic. On the other hand; the firms must know that these expenses of the investment costs will surely be returned in time. The company should precisely calculate the amount of the investment expenses which will ensure the predicted income and then start to the project. Reasons of failure in most of Lean Six Sigma projects have been wasted not due to weak tools or methodologies or statistics but due to lack of management support (Stamatis, 2000: 3). If a company is planning to build up a Lean Six Sigma program and thinking that this program can be achieved by constructing one team and giving all the responsibilities to that specific team; that•s a total delusion, and the probability of failing in the project is really high. As it is the same in the Total Quality Management, in the Lean Six Sigma programs there is a need of crew and executive staff participation. The managements should give a total support in the attendance and calling the shots while sharing this point of view with all its employees. In the Lean Six Sigma studies all the staff should be informed about support - especially including the masters and the apprentices• green belt (GBs) and black belt (BBs). When the staff is informed in such way, the Lean Six Sigma team will be convenient and successful in accessing, gaining and gathering the information which is needed in the latter studies. Since there will be the usage of statistical techniques, there is a need for a leader to support and lead the masters and apprentices. These leaders are generally the master black-belt (MBBs) staff. The MBBs staff should have the capacity and ability to lead and teach. The companies should not only evaluate the MBBs staffs• ability in their technical knowledge, but also evaluate their capacity to teach and train. Because the MBBs will lead to the apprentices, GBs and the other masters in the following processes of the task; the evaluation and the choice of the MBBs should be meticulous. 2.2. Lack of Competence of Lean Six Sigma Teams According to Young (2001: 19): !About 80% of project initiatives fail because of the human variable. If we were to categorize all the failure points, the major causal factor would be due to the human variable, not the technical variable of a major change effort". Some of the tools, particularly the statistical tools, are sophisticated. Therefore, Lean Six Sigma is not for amateurs. These very powerful techniques require sophisticated leadership, management, and analytical skills (Jacobson and Johnson, 2006: 145). Lean Six Sigma encompasses an organization. Project should be adopt and support from every worker. However, a Lean Six Sigma Project manages from core team. These some main roles and competence levels in project: x Project leaders, which are called Black Belts or Green Belts, are trained in project management, problem solving methodology, and statistical methods (Heuvel, Does and Verver, 2005: 382). 126 Atakan Gerger and Ali Riza Firuzan x The Center Manager is the Champion, who facilitates the implementation / deployment of the Lean Six Sigma Program. The Champion creates the vision, defines the path to Lean Six Sigma Quality, measures the progress and sustains improvements. x Experts on the Lean Six Sigma methodology are called Master Black Belts and they are responsible for managing the Lean Six Sigma organization (Heuvel and Fri., 2005: 382). When defining and determining the abilities of the team members, the competence levels of the staff should carefully be recognized. They should be competent in understanding, commending and using the statistical data. Especially when choosing from the GBs and BBs, they should be qualified according to their cognition, interpretation and analyzing abilities. If a Lean Six Sigma team which has a low competence is built up, the whole project will surely fail. Because of this fact, a fully capable BBs and GBs staff which have analytical competence, should be elected and chosen. Moreover, the selected BBs and GBs staff should be willing to construct and carry out a project. When selecting a reluctant staff just for the sake of their analytical ability and leadership will cause a fail in the project. Thus, the staffs that are in the position of BBs and GBs should see the project as their own possession. In addition; the team should be composed of 5 to 10 members and periodically or non-periodically convene knowledge promotion review meeting. Doing so, the promotion results will be very evident (Ho and Chuang, 2006: 173). 2.3. Defect Project Selecting Opportunities The selection of right projects in a Lean Six Sigma program is a major factor in the early success and long-term acceptance within any organization. Projects must be selected based on realistic and good metrics. Project objectives must be: clear, succinct, specific, achievable, realistic and measurable. The project selection process should be listening to three important voices: the voice of the process, the voice of the customer and the voice of the strategic business goals (Antoy, 2004: 1010-1011). Voice of process is; ability to explain the process and reach the data. If process does not control, the projects made or will be made unrealistic and unsuccessful. Lean Six Sigma work strategies should provide correct metrics for every position. Selection of a process improvement methodology is dependent on the culture of your organization. More and more organizations are trying to determine what improvement method will work best and fit best with their culture (Nave, 2002: 78). Project selection must usually base on a translation of the company strategy into operational goals (Koning, Verver, Heuvel, Bisgaard and Does, 2006: 5). Project selection linked to business strategies and customer value (Fornari and Maszle, 2004: 16). One of the problems in Lean Six Sigma project election is; Lean Six Sigma projects only think can use in production sector. Lean Six Sigma has never been a manufacturing program (Wheat, Mills and Carnell, 2003: 34). It can be applied through all the stages of the job process. Because of this fact, when choosing the projects in application, all the levels of the process and progress should be taken into consideration. The reason of failure in some selected projects is the difficulties in gathering the data. Some of these difficulties in gathering the data are listed below (George and fri., 2005: 71): x The data have never been gathered before. x Since the pre or past-gathered data are not restored appropriately, there is a lack of accessing the data. x There may be too many data which lead to the misunderstanding or problems due to choosing the data according to their having primary or secondary information. Reasons of Failure in Lean Six Sigma Projects 127 2.4. Lack of Training Lean Six Sigma trains agents all over the organization BBs and GBs in the use of statistical and nonstatistical methods for investigation, and trains them in a scientific attitude towards problem solving. Lean Six Sigma enables an effective utilization of specific knowledge by delegating decisions to the agents who collect the required specific knowledge (BBs, GBs) (Mast, 2006: 460). Statistical thinking and statistical methodologies constitute the backbone of Lean Six Sigma (Goh, 2002: 405). For this reason Lean Six Sigma applicators should educate about statistical thinking and statistical methods. If it doesn•t be, there will be problems in analyze, comment, and compilation. It will be obtained unsuccessful results in Lean Six Sigma Projects. Nonetheless; Lean Six Sigma can fail if an organization places too much emphasis on the mechanics and technical aspects of the methodology. 2.5. Cultural Change In a mature organization, employees grow with organizational successes. In people-centered operations, in particular, staff development should go hand-in-hand with prevailing Lean Six Sigma applications. This will help reap the benefits of continuous learning, knowledge accumulation, group innovation and creativity. At the collective level, conscious efforts could also be made to meet the requirements of the organization•s social mission and obligations. The synergy of such endeavors and Lean Six Sigma based activities and programs could lead to results larger than the sum of isolated or unconnected efforts, and help ensure maintenance or improvement of overall organizational performance in uncertain times (Goh, 2002: 409). In summary, when Lean Six Sigma projects are adopted by all employees will be more succesfull. Another area of study regarding Lean Six Sigma implementation issues is to investigate the impact of national culture. Several researchers have studied national culture as a key construct to explain a particular phenomenon in the organization, specifically in the implementation of programs such as TQM, ERP and MRP. These authors have empirically validated the importance of culture on the implementation process in various countries. Lean Six Sigma needs to be adapted to allow for cultural issues (Hendry, 2005: 4). Firms must be willing to toss out old procedures and methods completely and replace them with new ones (Plotkin, 1999: 3). In the application of Lean Six Sigma Projects; the methods and tools are easy part; changing culture is hard. When you start by creating successful projects, it will be easy to change the culture, because the culture will adopt and adapt Lean Six Sigma on its own. When you start by trying to force Lean Six Sigma down everybody•s throat with endless training, changing the culture can get hard, if not impossible (Arthur, 2006: 23). The transition from the existing culture within any enterprise to a Lean Six Sigma culture requires three components: leadership, participants, and training (Larson, 2003: 170). 2.6. Lack of Organizastional Strategy Lean Six Sigma is likely to fail if it is not directly linked to the organizational strategy. According to Dahlgaard and Dhlgaard-Park (2006: 277): •The first aim of a quality strategy is to build quality into people. The quality strategy should always be implemented both through a top-down and a bottom-up strategy. The strategy should follow the policy deployment approach, which has both the top-down and the bottom-up strategy included. Such an approach provides a frame for building quality into the following three levels: x individual level; x team level; and x organisational level!. 128 Atakan Gerger and Ali Riza Firuzan If an organization does not apply Lean Six Sigma techniques wisely, it will fail. When this occurs there is the tendency to believe that the statistical techniques are not useful, when in fact the real problem is how the program was implemented and/or how the techniques were not effectively applied. A good Lean Six Sigma implementation plan defines Lean Six Sigma projects in critical areas of the business (Breyfogle, 1999: 2). According to Arthur (2006: 25-26); •Lean Six Sigma applications will not require any complex computer software. The best works will be made by using post-it notes and flipcharts. Lean Six Sigma power can be seen by looking at a well known example. When looking at Dell!s company, we can see the power of Lean Six Sigma. Dell can make more successful and good delivery than the other firms in own industry. It is also more successful increasing the number of customers". 2.7. Voice of the Customer Six Sigma places a much stronger emphasis on the customers; and at every stage of a Six Sigma project, there is a focus on the customers. So as to underscore this, Six Sigma introduces a concept called !Critical to Quality" (CTQ) in which only process, outcome, or service characteristics vital to customer satisfaction are investigated for improvement. Six Sigma teams work only on things that are important to the customers (Black and Revere, 2006: 264). The first step of using the six sigma quality system as the measurement standard is to identify what the customers# true expectations are. In another words, the system requires users to identify factors which are critical to quality. Six Sigma places customers in the most important position (CTQ) (Ho and Chuang, 2006: 167-468). Lean Six Sigma has been labeled as a metric, a methodology, and now, a management system (McCarty, Bremer and Daniels, 2004: 3). A metric is the measurement of performance; an improvement metric is the measurement of performance over time. Improvement metrics require that data be maintained on the defect rate reaching customers or data from internal inspection or evaluation points (Larson, 2003: 57). Lean Six Sigma as a metric; Sigma is the measurement used to assess process performance and the results of improvement efforts - a way to measure quality (McCarty and fri., 2004: 3). Customer needs are dynamic (Breyfogle, 2003: 54). In such an environment where there is a dynamic customer demand, there is a need for a fast and accurate analysis of the data. With the usage of its statistical methods the Lean Six Sigma program can support the companies rapidly and accurately. In order to earn money, the companies are producing products and services according the needs of the customers. For this reason, there is a close connection between the needs of the customers and the job progress. The tasks which don#t have relation with the customer needs and the company profitability are not-value-added jobs. At this point the success of the company is directly related to the corresponding the needs of the customers. Most primarily, the customers wish to obtain their demands on time, accurately, in perfect condition and cheaply. On the other hand; the manufacturers try to work with low cost, flawlessly, and quickly in their inner-operations. The stronger connection between these two integrations, the healthier and more value-added job there is. Thereby, the understanding of the customers# needs and wishes accurately and dynamically is an important key to the success (Polat, Cömert and Ariturk, 2005: 61$62). 3. Result There may be many reasons for a Lean Six Sigma Project to fail. The important thing in here is to identify and dispose the problems in failure. The main role in solving the problems which cause failure in the projects is in the hands of the senior management. As the owner of the project the senior managers are responsible for removing the interferences and handicaps standing in the way of Lean Six Sigma crew. In order to be successful in a Lean Six Sigma Project, the information about !the aim of the study, the management staff and the probable results of the work" should be shared with all the staff by the Reasons of Failure in Lean Six Sigma Projects 129 management. With the help of this attitude, the other staff will feel the respect to themselves and to their opinions, and this will lead them to see the whole project as their own possession and work for it. The employees who are going to work in and for Lean Six Sigma should be selected according to their competence. When selecting the staff for the positions of BBs and GBS, not only the analytical abilities but also the leadership skills should be taken into consideration for the sake of the project success. When the GBs/BBs staff - which are in the position of project leader- are not employed as full time worker, it is seen that the Lean Six Sigma project fails. The main reason for this is that these workers are carrying out their own jobs in the project as well. Since the GBs/BBs staff obtains too much responsibility, they have problems with concentration and focusing on the job which lead to the failure in the project. For a successful Lean Six Sigma Project the GBs/BBs staff should be departed from their other-responsibilities and they should be led to concentrate to the project fulltime. In order to motivate the staff, with the help of the profit which is gained through the crew members of the Lean Six Sigma Project, a monetary and moral rewarding system should be put into practice. Without a rewarding system the GBs/BBs staff may not choose to take part in latter tasks. Moreover, when these staff is employed in latter tasks there may be failures in the project caused from the lack of motivation. Because of this, not only the competence of the project leader staff but also the willingness and volunteering of is important in carrying out the project as a whole. In Lean Six Sigma Projects, the company should build up realistic projects considering their inner dynamics. 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