International Journal of Mechanical Engineering and Technology (IJMET), ISSN 0976 INTERNATIONAL JOURNAL OF MECHANICAL ENGINEERING 6340(Print), ISSN

N 0976 6359(Online) Volume 4, Issue 3, May - June (2013) IAEME AND TECHNOLOGY (IJMET)

ISSN 0976 6340 (Print) ISSN 0976 6359 (Online) Volume 4, Issue 3, May - June (2013), pp. 32-46 IAEME: www.iaeme.com/ijmet.asp Journal Impact Factor (2013): 5.7731 (Calculated by GISI) www.jifactor.com

IJMET
IAEME

THE ADVANCEMENT & EFFECT OF SIX SIGMA APPROACH IN A MODERN INDUSTRY AND CURRENT BUSINESS ENTERPRISE
Prabhat Kumar Sinha, Nikhlesh Noel Singh * Shepherd School of Engineering & Technology, Department of Mechanical Engineering & Applied Mechanics, Sam Higginbottom Institute of Agriculture Technology & Sciences, Allahabad, Uttar Pradesh UP 211007, India.

ABSTRACT Six Sigma has been well applied in manufacturing Industries through improving processes that use the DMAIC methodology. Some larger corporations have integrated Six Sigma so well into the corporate culture that it can be considered the DNA of the company. A number of successful cases have been reported of six-sigma-based management activities dramatically enhancing a companys strategic performance over study periods of several years. However there are number of case studies in the literature regarding Six Sigma, there is a lack of empirical studies that adopt statistical approaches. This study proposes a research model based on Six Sigma to test whether management activities improve corporate competitiveness. Empirical results showing that six sigma activities do indeed contribute to process management refreshment, quality improvement, and finally corporate competitiveness. In addition the possible changes and outcomes which occour by applying this concept of six sigma in various Industries. We hope that this study enables further rigorous studies investigating six sigma as a major strategic activity. Keywords: Six sigma management activities, corporate competitiveness, Project management; Lessons learned; Organizational culture; Quality; Business systems improvement. 1. INTRODUCTION In the pursuit of higher operational effectiveness an organizational performance, scholars and practitioners are looking for new approaches to improve operational
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International Journal of Mechanical Engineering and Technology (IJMET), ISSN 0976 6340(Print), ISSN 0976 6359(Online) Volume 4, Issue 3, May - June (2013) IAEME

performance, boost profitability, and enhance competitiveness. Six sigma management is a quality management method recently adopted by many leading companies. Six sigma is a data-driven method that focuses on the customer and leads a company to attain the best quality level. A leading company is one with the ability to forecast uncertainties and maintain competitiveness in this fast changing environment. Six sigma is a very basic and systematic approach based on statistical data, which provides companies with a way to reduce these uncertainties. Companies are applying six sigma for successful business operation and are carrying out properly set strategies faster and more effectively than their competitors. In addition, six sigma is a method that gives priority to preventive measures that remove the root cause of the defects rather than searching for defects after they occur. In addition, it performs an important role in providing a common language for organizations that are trying to form a sustainable improvement culture. Six sigma is also a systematic change management process that uses data to measure and analyze the deviation of a certain process from its goals. Standardization of the measurement process can be achieved, and six sigma also provides the knowledge and technology needed for change. Although companies that apply six sigma to achieve business innovation can improve their corporate competitiveness through quality improvement. Besides, as the studies considering the results of six sigma business activities that have been introduced domestically and internationally were mostly focused on case studies, a strict statistical and empirical analysis is now required. Companies that are applying six sigma business activities also need an objective measurement of the affects of the six sigma management activities on their corporate competitiveness. However, in order to accomplish these goals it will be necessary to develop factors that can empirically verify six sigma management activities and create a systematic research model of how those factors affect corporate competitiveness. Considering these requirements, we propose the following research goals for this study: First, we propose proper factors (or constructs) that will make six sigma management activities statistically significant. Second, by setting a structural equation model among the appropriate factors, we empirically analyze the affects of six sigma management activities on corporate competitiveness. Third, based on the empirical analysis results, we establish the practical significance of six sigma management activities. Due to the paucity of previous research in this area, it was difficult to conduct research about six sigma. Therefore, in this study we have introduced some factors from the total quality management (TQM) performance measurement method in order to explore the basis for the factor formation of six sigma management. 2. TWO PERSPECTIVES OF SIX SIGMA PROCESSES 2.1. Statistical viewpoint Six sigma method has two major perspectives. The origin of six sigma comes from statistics and statisticians. Hahn et al. (1999), Hoerl and Snee (2002), and Montgomery (2001) discuss the six sigma method from a statistical, probabilistic, and quantitative point of view. From the statistical point of view, the term six sigma is defined as having less than 3.4 defects per million opportunities or a success rate of 99.9997% where sigma is a term used to
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International Journal of Mechanical Engineering and Technology (IJMET), ISSN 0976 6340(Print), ISSN 0976 6359(Online) Volume 4, Issue 3, May - June (2013) IAEME

represent the variation about the process average (Antony and Banuelas, 2002). If an organization is operating at three sigma level for quality control, this is interpreted as achieving a success rate of 93% or 66,800 defects per million opportunities. Therefore, the six sigma method is a very rigorous quality control concept where many organizations still performs at three sigma level (McClusky, 2000). 2.2Business viewpoint In the business world, six sigma is defined as a business strategy used to improve business profitability, to improve the effectiveness and efficiency of all operations to meet or exceed customers needs and expectations (Antony and Banuelas, 2001). The six sigma approach was first applied in manufacturing operations and rapidly expanded to different functional areas such as marketing, engineering, purchasing, servicing, and administrative support, once organizations realized the benefits. Particularly, the widespread applications of six sigma were possible due to the fact that organizations were able to articulate the benefits of six sigma presented in financial returns by linking process improvement with cost savings. 3. UNDERSTANDING SIX SIGMA 3.1. Six sigma strategies, tools, techniques, and principles Six sigma is a systematic, data-driven approach using the define, measure, analysis, improve, and control (DMAIC) process and utilizing design for six sigma method (DFSS) (GE 2004). The fundamental principle of six sigma is to take an organization to an improved level of sigma capability through the rigorous application of statistical tools and techniques (Antony et al., 2003). It generally applies to problems common to production. 3.2. Six sigma strategies, tools, techniques, and principles applied to achieve Business Anbari (2002) pointed out that six sigma is more comprehensive than prior quality initiatives such as Total Quality Management (TQM) and Continuous Quality Improvement (CQI). The six sigma method includes measured and reported financial results, uses additional, more advanced data analysis tools, focuses on customer concerns, and uses project management tools and methodology. He summarized the six sigma management method as follows: Six Sigma= TQM+CStronger Customer Focus +Additional Data Analysis Tools +Financial ResultsCProject Management 3.3. DMAIC process DMAIC is a closed-loop process that eliminates unproductive steps, often focuses on new measurements, and applies technology for continuous improvement.

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Define

Measure

Control

Analyze

Improve
Fig.1 DMAIC Phase

3.4. DFSS methodology DFSS is a systematic methodology utilizing tools, training and measurements to enable the organization to design products and processes that meet customer expectations and can be produced at Six Sigma quality levels (Mader, 2002). The goal of DFSS is to achieve minimum defect rates, six sigma level, and maximize positive impact during the development stage of the products. It is used to develop new products or services with a six sigma criteria, capability, and performance (Tennant, 2002). It utilizes variety of quality oriented tools and techniques to meet customer requirements and has shown an increase in life cycle profits. As Treichler et al. (2002) noted the essence of DFSS is predicting design quality up front and driving quality measurement and predictability improvement during the early design phases. Essentially, the DFSS process is focused on new or innovative designs that yield a higher level of performance. De Feo and Bar-El (2002) summarize seven elements of DFSS as follows. 1. Drives the customer-oriented design process with six sigma capability 2. Predicts design quality at the outset 3. Matches topdown requirements flow down with capability flow up 4. Integrates cross-functional design involvement 5. Drives quality measurement and predictability improvement in early design phases 6. Uses process capabilities in making final decisions 7. Monitors process variances to verify that customer requirements are met DFSS has been used and proven successful at Dow Chemical (Buss and Ivey, 2001), W.R. Grace, (Rajagopalan et al., 2004), Delphi Automotive (Treichler et al., 2002), NCR Corporation (McClusky, 2000), General Electric (Weiner, 2004), and other process oriented industries.
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International Journal of Mechanical Engineering and Technology (IJMET), ISSN 0976 6340(Print), ISSN 0976 6359(Online) Volume 4, Issue 3, May - June (2013) IAEME

DESIGN FOR SIX SIGMA

Initiate and Plan the Project Capture Customer Needs Develop design Concepts Develop detailed design Implement full scale processes.

Define

Measure

Analyze

Design

Verify

DELIVERABLES
Team Charter Chief Technology Officer High Level Design Detailed Design Pilot Product

TOOLS

Management Leadership Failure Project Management Customer Research Design Scorecards Benchmarking

Mode and Effect Analysis (FMEA) Business Process Simulation Quality Function Deployment Rapid Product Prototyping ETC

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4. REPORTED BENEFITS OF IMPLEMENTING SIX SIGMA 4.1. Manufacturing sector Motorola was the first organization to use the term six sigma in the 1980s as part of its quality performance measurement and improvement program. Six sigma has since been successfully applied in other manufacturing organizations such as General Electric, Boeing, DuPont, Toshiba, Seagate, Allied Signal, Kodak, Honeywell, Texas Instruments, Sony, etc. The reported benefits and savings are composed and presented from investigating various literatures in six sigma (Weiner, 2004; de Feo and Bar-El, 2002; Antony and Banuelas, 2002; Buss and Ivey, 2001; McClusky, 2000). 4.2. Financial sector In recent years, finance and credit department are pressured to reduce cash collection cycle time and variation in collection performance to remain competitive. Typical six sigma projects in financial institutions include improving accuracy of allocation of cash to reduce bank charges, automatic payments, improving accuracy of reporting, reducing documentary credits defects, reducing check collection defects, and reducing variation in collector performance. Bank of America (BOA) is one of the pioneers in adopting and implementing six sigma concepts to streamline operations, attract and retain customers, and create competitiveness over credit unions. It has hundreds of six sigma projects in areas of cross-selling, deposits, and problem resolution. BOA reported a 10.4% increase in customer satisfaction and 24% decrease in customer problems after implementing six sigma (Roberts, 2004). American Express applied six sigma principles to improve external vendor processes, and eliminate non-received renewal credit cards. The result showed an improved sigma level of 0.3 in each case (Bolt et al., 2000). Other financial institutions including, GE Capital Corp., JP Morgan Chase, and SunTrust Banks are using six sigma to focus on and improve customer requirements and satisfaction (Roberts, 2004). 4.3. Healthcare sector Six sigma principles and the healthcare sector are very well matched because of the healthcare nature of zero tolerance for mistakes and potential for reducing medical errors. Some of the successfully implemented six sigma projects include improving timely and accurate claims reimbursement (Lazarus and Butler, 2001), streamlining the process of healthcare delivery (Ettinger, 2001), and reducing the inventory of surgical equipment and related costs (Revere and Black, 2003). The radiology film library at the University of Texas MD Anderson Cancer Center also adopted six sigma and improved service activities greatly (Benedetto, 2003). Also in the same institutions outpatient CT exam lab, patient preparation times were reduced from 45 min to less than 5 min in many cases and there was a 45% increase in examinations with no additional machines or shifts (Elsberry, 2000). 4.4. Engineering and construction sector In 2002, Bechtel Corporation, one of the largest engineering and construction companies in the world, reported savings of $200 million with an investment of $30 million in its six sigma program to identify and prevent rework and defects in everything from design to construction to on-time delivery of employee payroll (Eckhouse 2004). For example, six sigma was implemented to streamline the process of neutralizing chemical agents, and in a
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national telecommunications project to help optimize the management of cost and schedules (Moreton, 2003). 4.5. Research and development sector The objectives of implementing six sigma in R&D organizations are to reduce cost, increase speed to market, and improve R&D processes. To measure the effectiveness of six sigma, organizations need to focus on data driven reviews, improved project success rate, and integration of R&D into regular work processes. One survey noted that as of 2003 only 37% of the respondents had formally implemented six sigma principles in their R&D organization (Johnson and Swisher, 2003). Rajagopalan et al. (2004) reported that the development and manufacturing of the new prototype at W.R. Grace (Refining Industry) was cut to 89 months from 1112 months by implementing the DFSS process. Fig. 2 shows the conceptual benefits and improvement of implementing six sigma in R&D projects. 5. KEY FACTORS FOR IMPLEMENTING A SUCCESSFUL SIX SIGMA PROGRAM Antony and Banuelas (2002) and Banuelas Coronado and Antony (2002) presented the key ingredients for the effective introduction and implementation of six sigma in UK manufacturing and services organizations as the following. 1. Management commitment and involvement. 2. Understanding of six sigma methodology, tools, and techniques. 3. Linking six sigma to business strategy. 4. Linking six sigma to customers. 5. Project selection, reviews and tracking. 6. Organizational infrastructure. 7. Cultural change. 8. Project management skills. 9. Liking six sigma to suppliers. 10. Training. 11. Linking six sigma to human resources (Wyper and Harrison, 2000). Johnson and Swisher (2003) provided useful implementation tips for successful six sigma applications as: A. Sustained and visible management commitment. B. Continuing Education and training of managers and participants. C. Setting clear expectations and selecting project leaders carefully for leadership skills. D. Picking and selecting strategically important projects. Starbird (2002) argued that six sigma process is part of a management system to achieve business excellence in organizations and presented keys to six sigma success as: (1).Start process management: identify core processes, customer needs, and measures. (2).Drive performance through reporting: Leaders must maintain and report opportunity lists, status of active projects/resources, and results from finished projects. (3).Integrate championing of active projects: Select and charter projects and require updates during existing staff meetings.

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Based on various literature reviews and discussions with six sigma leaders in organizations that adopted the six sigma method, the authors identified four key elements of successful six sigma applications. Six Sigma, process management, and innovation The development and introduction of any innovation initiative (such as Six Sigma as a process management program) can be viewed as a mechanism for organizational adaptations since they are used or reinforced by organizations in response to environmental changes (Brown and Eisenhardt, 1997). Despite the differences among process management programs (such as TQM, Baldrige Award, Six Sigma) in terms of scope, methodology and their approach all of them have a common mission: improving organizational processes (Hammer and Champy, 1993; Ittner and Larcker, 1997; Harry and Schroeder, 2000). Because of the focus of process management programs in variance reduction (efficiency) efforts for improving the operations and continuous improvement of activities in a firm, over-emphasis on these programs affects the balance between exploitation and exploration (Benner and Tushman, 2003). In other words, too much focus on process management will have negative effects on innovation, which may negatively affect the long-term performance of the firm (Garvin, 1991; Hill, 1993). To find the impact of process management on firm performance in both short term and long-term, we need to take a closer look on the effect of process management on innovation. 6. PROCESS MANAGEMENT AND INNOVATION Process management influences innovation of the firm in several ways. First, it attempts to balance the allocation of resources to activities across the firm (Christensen and Bower, 1996; Klassen and Menor, 2007). Second, process management deals with minimizing sources of variability in internal and external activities (Pannirselvam et al., 1999; Silver, 2004). This may result in focusing on specific types of innovations that are consistent with reducing variability in the processes (Henderson and Clark, 1990). That is the case with Six Sigma programs where it is aimed at innovation in design and development processes (Harry and Schroeder, 2000). To understand the effect of Six Sigma on innovation we need to be familiar with different types of innovations. Researchers have looked at innovation from different perspectives. Innovations could affect the technological base of the firm, the subsystems/routines/procedures, and the markets/customers the firm is serving. Abernathy and Clark (1985) classify technological innovation into two dimensions: (1) The degree to which they are close to current technological path and (2) Their degree of closeness to existing markets/customers. While incremental changes are built upon the current technological capabilities of the firm, by fundamentally changing the current technological base firms can exhibit radical change (Green et al.,1995). Technological innovations affect the systems and processes within a firm (Tushman and Murmann, 1998). They may affect the subsystems, routines or processes without affecting the integration and interconnectedness among processes and routines, which results in modular innovation. On the other hand, they may bring architectural innovation, change the way subsystems, routines, and procedures are linked, and totally restructure the configuration and interconnectedness among procedures and
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International Journal of Mechanical Engineering and Technology (IJMET), ISSN 0976 6340(Print), ISSN 0976 6359(Online) Volume 4, Issue 3, May - June (2013) IAEME

routines of the firm. Technological innovations can also affect the market/ customers the firm is serving. They may address the needs of the existing customers/markets or the new/emerging customers and/or markets (Christensen and Bower, 1996). While improvement in current technological base are suitable for addressing the needs of existing customers/market, products and/or services designed for new customers/markets need different type of technological capabilities, technologies that are fundamentally different from the current technological trajectory of the firm (Christensen, 1998). Since Six Sigma programs translate the voice of customers into independent process improvement projects, they enhance the technological innovation of the firm. Accordingly, it is proposed that P: Six Sigma programs significantly improve technological innovation of a firm. The key decision regarding Six Sigma programs is to determine their impact on (1) The technological base of the firm (incremental vs. radical), (2) The processes, procedures, and routines within the firm (modular vs. architectural), and (3) New customers/markets or existing customer/markets (sustaining vs. disruptive technologies). 6.1. The effect of Six Sigma on innovation and firm performance Six Sigma programs attempt to improve the processes with the firm with the focus on reducing variability in organizational processes and routines (Linderman et al., 2003; Schroeder et al., 2008). A popular framework for Six Sigma is DMAIC which encompasses Design, Measure, Analyze, Improve, and Control phases (Hammer, 2002; Linderman et al., 2003, 2006; Knowles et al., 2005). This structured methodology helps Six Sigma programs to identify the root causes of the problem, look for solution, and improve the process. It should be noted that in the search for improvement in organizational routines and procedures, Six Sigma efforts are primarily focused on improving efficiency within an existing technological base of the firm (Benner and Tushman, 2003). Because of the focus of process improvement programs on continuous and incremental change, they are best suited for improving the existing technological trajectory of the firm. In the pursuit of reducing variability and increasing efficiency, Six Sigma programs ensure that the new technological innovation (in processes or systems) are very close to the current technological base of the firm. Accordingly, P1: Six Sigma programs positively affect incremental innovation of the firm. Six Sigma programs improve organizational procedures and routines. Six Sigma assumes that the current organizational processes are sound but they need minor (incremental) improvement to be efficient (Hammer, 2002). Six Sigma does not change the integrity and interconnectedness of organizational processes; rather, in improves them. Therefore, P2: Six Sigma programs positively affect modular innovation in the firm. According to Douglas and Erwin (2000) Six Sigma is a concept that concentrates on the customer rather than the product. The primary target for Six Sigma improvement efforts are the existing customers. Information and data from the existing customers are collected and analyzed, and Six Sigma projects are defined to improve the processes in order to meet customer requirements. Organizations strive to reduce or eliminate the number of customer complaints received with the perceptions that fewer complaints equate to increased customer satisfaction. This will result in introducing new products and/or services which is targeted to the existing customers. Therefore, P3: Six Sigma programs positively improve innovation for the existing customers. Knowledge about customers perceptions and attitudes regarding an organization, and its products and/or services will greatly enhance its opportunity to make better business
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decisions. Harry (1998) states that Six Sigmas philosophy recognizes that there is a direct correlation between the number of defects, wasted operating costs, and the level of customer satisfaction. The focus of Six Sigma has been to address the needs of the exiting customers (Linderman et al., 2003; Evans and Lindsay, 2005). Customer requirement are translated into quantifiable goals. Kwak and Anbari (2012) argue that effective implementation of Six Sigma projects requires strong customer focus. In fact, within the DMAIC process (Design, Measure, Analyze, Improve, and Control) understanding the requirements and expectations of customers needs to be addressed. Pande et al. (2000) recommend that organizations first look at the problem from the customer side when dealing with a problem. It is believed that a customer- oriented firm will focus on integrating the input from customers into its Six Sigma projects, where it will tackle projects that have the highest impact on customer satisfaction (Johnson, 2005). All of the above confirms the focus of Six Sigma on addressing the voice of the existing customers. Accordingly, P4: Six Sigma programs improve customer satisfaction for the existing customers. As indicated earlier Six Sigma projects focus on reducing variability of the organizational processes and routines. Organizations use Six Sigma initiatives to deal with a specific problem. In that regards, they tailor their process improvement efforts to address a specific problem raised by existing customers. In their pursuit for process improvement, organizations improve their existing products/services to meet or exceed customers expectation. Such incremental improvements could have two benefits for the firm; first, it improves customer satisfaction for their existing customers, and second, it could attract new customers due to the changes they have made to the products. Accordingly, at the early stage of Six Sigma implementation, firms have the opportunity to enhance their customer base through either focusing on their existing customers or addressing the needs of new customers. The challenge for the firms at their early stage of Six Sigma initiative is to whether continue their efforts on improving their existing products/services (focusing on existing customers) or restructure their existing processes (aiming at new customers). Therefore, it is expected that at the early stage of Six Sigma project organizations develop the capabilities to develop new products or services; these products could be either within the existing technological trajectory of the firm (incremental innovation) or follow an entirely new technological trajectory (radical innovation). In fact, due to the way they translate and integrate customer requirements, Six Sigma projects provide firms with a foundation to either incrementally develop their existing processes or radically change their entire processes. In that regards, as firms devote their resources and attention to improving their existing processes and routines with focus on their existing customers, they may ignore radical innovation. In other words, while at the early stage of Six Sigma firms may be motivated to restructure their processes and routines to achieve radial innovation, too much emphasis on Six Sigma projects shifts the direction of the firms to incrementally improve their current technological trajectory. Therefore, P5: Six Sigma programs have a bi-polar effect on radical innovation of the firm. The customer orientation of the firm (existing vs. emerging customers) moderates the effect of Six Sigma on radical innovation. Consistent with the previous proposition, Six Sigma projects (at their early stage of implementation) provide firms with the foundation to address the needs of both existing customers and the new customers (i.e. the opportunity to address process improvement and innovation). However, as organizations focus too much on Six Sigma projects, they systematically focus on the needs of their existing customer base. Therefore, one could expect that too much emphasis on Six Sigma projects may paralyze organizations to develop new products/services for their new customers. Accordingly, P6: Six Sigma programs have a
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International Journal of Mechanical Engineering and Technology (IJMET), ISSN 0976 6340(Print), ISSN 0976 6359(Online) Volume 4, Issue 3, May - June (2013) IAEME

bi-polar effect on innovation for new customers. Focus on existing customers moderates the effect of Six Sigma on innovation for new customers. The relationship among Six Sigma, innovation and firm performance has been presented in Fig. 1. Six Sigma projects have a positive effect on incremental innovation of the firm (P1). Customer satisfaction for existing customers is increased as organizations invest more on their Six Sigma projects (P4). As the result of improvement in customer satisfaction along with incremental innovation firm performance will be enhanced. 7. SIX SIGMA AND FIRM PERFORMANCE The degree to which Six Sigma programs are effective can be contingent upon the stability of the customer base or the environment. When organizations are serving a specific customer base and the customer base is expected to remain stable over time, Six Sigma programs can maintain a strong focus on translating the voice of customers into improvement projects. This is due to the fact that within stable customer base, customer requirements are expected to remain stable over time. The same pattern could be envisioned within stable markets/environments. In such an environment, the rate of innovation and change is predictable, and patterns of innovation and change can be easily projected. More specifically, the focus of innovation and change is on improving organizational processes (efficiency) rather than improving new products (innovation). Petroleum industry could be a good example of a stable customer base. While the price of oil fluctuates dramatically over time, the gas stations provide standard and specific products. To improve organizational effectiveness in such an environment firms need to focus on improving their operational effectiveness to reduce the operational cost, resulting in reducing variability in their processes and procedures. In contrast, in consumer electronics new products and services are offered so frequently that requires restructuring, redesigning and reevaluating organizational processes and routines by organizations. Accordingly, it is proposed that P7: To the extent that the customer base is stable, Six Sigma programs positively affect firm performance. In other words, customer base moderates the effect of Six Sigma programs on firm performance. It has been shown that contextual variables such as industry structure and competition affect the implementation of process management programs (Das et al., 2000; Lai and Cheng, 2003; Zhao et al., 2004). While within evolving markets the rate of innovation and change is dramatic stable markets exhibit little change in industry structure and intensity of the competition. Constantly evolving markets require constant change in developing new products and services, where firms are forced to introduce new products and service to remain competitive. The locus of innovation in dynamic markets is product/service innovation. This inclination toward competitiveness requires exploration and learning rather than exploitation and control. In contrast, stable markets/environments are characterized by established products/services, where little attention is given to developing new products and/or services. In such environments, organizations need to focus on process improvement and efficiency rather than innovation since the sources of competitive advantage is process improvement. Therefore, it is proposed that P8: To the extent that the environment is stable, Six Sigma programs positively affect firm performance. In other words, the environment moderates the effect of Six Sigma programs on firm performance.

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Customer Satisfaction for existing Customers Firm Performance Incremental Innovation

Fig. 2 The effect of Six Sigma projects on firm performance 8. Limitations and future research The paper addressed the effect of Six Sigma approach in an Industry and Business Enterprise using theories from process management and innovation. It is believed that empirical research is needed to further validate the propositions. It is recommended that the type of industry (service, manufacturing), the environment (stable, dynamic) and the customer base (stable, evolving) be taken into account. In addition, the size of the organization should be considered as a control variable in future research. One of the challenges in conducting research in Six Sigma is to clearly distinguish between Six Sigma projects and other process improvement initiatives. Organizations may refer to their process improvement programs as Six Sigma programs, where in reality they may not be true Six Sigma projects. Therefore, attention should be devoted to carefully select organizations that implement Six Sigma programs. Another possible avenue for research is to determine the effect of other quality initiatives on the success of Six Sigma projects. The implementation of quality management programs (such as lean or the Baldrige model) provides organizations with the ability to more systematically focus on organizational processes so that they can effectively implement total quality philosophy. Therefore, it would be interesting to see if there is any difference in terms of performance between organizations which have implemented other quality programs with those which only focused on Six Sigma. Their focus on the viewpoint of customers, they systematically translate critical-to-quality characteristics into improvement projects. While it has been argued that Six Sigma programs enable firms to become more ambidextrous through their dual focus on efficiency (exploitation) and innovation (exploration) review of the literature on process management reveals that they may impede the ability of the firm for radical innovation, forcing the firm to pursue the current technological trajectory. In addition, as firms heavily capitalize on their Six Sigma programs, their ability in indentifying, monitoring, and understanding the needs of their future customers may be paralyzed. To get the best out of Six Sigma programs, organizations need to carefully address the needs of their current customers while monitoring
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Six Sigma

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the formation of new markets and/or customers. In its current form, Six Sigma programs do not guarantee a sustainable competitive advantage for the firms due to their focus on existing processes, products, and customers. This is due to the fact that they have not been developed to address radical improvement in organizational processes and routines. There is no doubt that organizations can benefit from Six Sigma programs; however, such benefits are not sustainable until Six Sigma programs develop mechanisms to address product innovation, pattern of change in customer base, and environmental uncertainty while improving organizational processes. 9. CONCLUSION Six Sigma is now according to many business development and quality improvement experts, the most popular management methodology in history. Six Sigma is certainly a very big industry in its own right, and is now an enormous 'brand' in the world of corporate development. Six Sigma began in 1986 as a statistically-based method to reduce variation in electronic manufacturing processes in Motorola Inc in the USA. Today, twenty-something years on, Six Sigma is used as an all-encompassing business performance methodology, all over the world, in organizations as diverse as local government departments, prisons, hospitals, the armed forces, banks, and multi-nationals corporations. While Six Sigma implementation continues apace in many of the world's largest corporations, many organizations and suppliers in the consulting and training communities have also seized on the Six Sigma concept, to package and provide all sorts of Six Sigma 'branded' training products and consultancy and services. Six Sigma has also spawned many and various business books on the subject. Six Sigma, it might seem, is taking over the world. Omar Rabeea Mahdi AL Mfraji, Mahmoud Khalid Almsafir (Sustainable Competitive Advantage Using Six Sigma Methodology) (2012). Interestingly while Six Sigma has become a very widely used 'generic' term, the name Six Sigma is actually a registered trademark of Motorola Inc., in the USA, who first pioneered Six Sigma methods in the 1980's. The original and technically correct spelling seems to be Six Sigma, rather than 6 Sigma. Although in recent years Motorola and GE have each since developed their own Six Sigma logos using the number six and the Greek sigma character. Six Sigma is now a global brand and something of a revolution. REFERENCES (1). Hahn et al. (1999), Hoerl and Snee, (2002) and Montgomery (2001). Six Sigma Method and Its Applications in Project Management, Proceedings of the Project Management Institute Annual Seminars and Symposium [CD], San Antonio, Texas. Management Institute, Newtown Square, PA. Antony and Banuelas 2002, Mc Clusky 2000. A strategy for survival. Manufacturing Engineer 80 (3), 119121. (2).Antony, J., Banuelas, R., 2001. Key ingredients for the effective implementation of six sigma program. Measuring Business Excellence 6 (4), 2027. (3).Anbari (2002), J.L. Mader, (2002). Lean Sigma. Manufacturing Engineer 82 (4), 4042. Tennant (2002), 2009. Critical success factors for the successful implementation of six sigma projects in organizations. The TQM Magazine 14 (2), 9299.

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(4). Treichler et al 2002, Buss and Ivey 2001. Adapting manufacturing-based six sigma methodology to the service environment of a radiology film library. Journal of Healthcare Management 48 (4), 263280. (5).Rajagopalan et al 2004, Treichleretet al 2002. Service Quality Six Sigma Case Studies, ASQs 54th Annual Quality Congress Proceedings 2010 pp. 225231. (6). Mc. Clusky, 2000. Dow Chemical Design for Six Sigma Rail Delivery Project, Proceedings of the 2000 Winter Simulation Conference 2001 pp. 12481251. (7).Weiner, 2004; de Feo and Bar-El, 2002. Whats different about Six Sigma. Manufacturing Engineer 81 (8), 186189. (8).Antony and Banuelas 2002; Buss and Ivey 2001; Mc Clusky 2000, Leadership for Quality: An Executive Handbook, the Free Press, New York, NY. (9).Roberts 2004, (2004) "Lean Six Sigma getting better all the time", International Journal of Lean Six Sigma, Vol. 1 Iss: 1, pp.9 29 (10) Bolt et al 2000, Roberts 2004 Lean Six Sigma, creativity, and innovation, International Journal of Lean Six Sigma, Volume: 1 Issue: 1 (11).Lazarus and Bulter 2001., How constraints management enhances lean and six sigma, Supply Chain Management Review, Vol.10 No.1, pp.42-7. (12).Ettinger (2001). Reducing exposed copper on annular rings in a PCB factory through implementation of a Six Sigma project. Total Qual. Manage., 20(8): 863-876. (13).Ettinger (2001). Six Sigma: A goal-theoretic perspective. Revere and Black 2003, 21(2): 193-203. (14).Benedetto (2003), Elsberry (2000) and Eckohouse (2004). DMAIC failure modes, ASQ Six Sigma Forum Mag., 4(3): 30-34. (15).Moreton (2003); Johnson and Swisher, (2003). Exploring the six sigma phenomenon using multiple case study evidence. Int. J. Oper. Prod. Manage. 28(3): 279-303. (16).Rajgopalan et al 2004; Antony and Banvelas (2002) and Banuelas Coronado & Antony (2002) Wyper and Harisson (2000). Six Sigma: concepts, tools, and applications. Ind. Manage. Data Syst., 105(4): 491-505.Starbird (2002); Brown and Eisenhardt(1997) Measuring Effectiveness of Food Quality Management in the Bakery Sector. Total Qual. Manage., 17(6): 691-708. (17).Hamner and Champy (1993); Itner and Larcker (1997); Harry and Shroeder, (2000). Business excellence: Six Sigma as a management system: A DMAIC approach to improving Six Sigma management processes. Annual Quality Congress Proceedings, Milwaukee, pp. 47-55. (18).Benny and Tushman(2003); Garvin and Hill (1991),Christensen and Bower (1996); Klassen and Mennor (2007); Pannirselvan et al (1999); Silver (2004)METHODOLOGY AND THEORY Developing a Six Sigma maintenance model. J. Qual. Mainten. Eng., 14(3): 262-271. (19).USOCDD Henderson and Clark (1990), Harry and Shroeder (2000); Abernathy and Clark (1985). Cooperatives Pathways to Economics Green et al (1995); Tushman and Murenamn (1998), Christenen and Bower (1996); Christenen (1998); Linderman et al (2003); Schroeder et al (2008). Widening the Six Sigma concept: An approach to improve organizational leaning. Total Qual. Manage., 13(6): 233-252. (20). Hammer(2002); Linderman et al 2003; Knowler et al (2005); Benner and Tushman,(2003); Hammer (2002); Douglas ans Erwin (2000); Harry (1998) The evolving theory of quality management: the role of Six Sigma. 26(3): 630-650.
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(21). Linderman et al (2003); Evans and Lindsay (2005); Kwak and Anbari (2012); Johnson (2005); Dasetal (2000); Lai and Cheng (2003); Zhao et al (2004). Design for six sigma: 15 lessons learned. Deployment of six sigma methodology in human resource function: a case study. Total Quality Management and Business Excellence 11 (4 and 5), S720S727. (22). Omar Rabees Mahdi AL Mfrajia, Mahmoud Khalid Sustainable Competitive Advantage (2012). (23) U. D. Gulhane, C.A.Nalawade, K.P.Sohani and V.S.Shirodkar, Six Sigma Implementation Model for File Manufacturing Industry, International Journal of Mechanical Engineering & Technology (IJMET), Volume 3, Issue 2, 2012, pp. 59 - 66, ISSN Print: 0976 6340, ISSN Online: 0976 6359. (24) A.R.Prathipa and Dr.S.Balasubramanian, Six Sigma and its Component of Continuous Improvement, International Journal of Production Technology and Management (IJPTM), Volume 1, Issue 1, 2010, pp. 1 - 12, ISSN Print: 0976- 6383, ISSN Online: 0976 6391. (25) Dr Z Mallick, Mr Shahzad Ahmad and Lalit Singh Bisht, Barriers and Enablers in Implementation of Lean Six Sigma in Indian Manufacturing Industries, International Journal of Advanced Research in Management (IJARM), Volume 3, Issue 1, 2012, pp. 11 - 19, ISSN Print: 0976 6324, ISSN Online: 0976 6332.

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