The critical success factors of Lean Six Sigma
An empirical study at TNT post
Date: 21-01-2011
Master thesis, MscBA, specialisation Change Management University of Groningen, Faculty of Economics and Business
Ivo Bastiaan Haverkate Student number: s1842846 Radijsstraat 5 9741 BJ Groningen Tel.: +31(6)43229977 Email: ivohaverkate@gmail.com Supervisors:
University of Groningen TNT post
1st Supervisor: 1st Supervisor
dr. C. Reezigt Mr. E. van der Werff
2nd Supervisor: 2nd Supervisor:
prof. dr. ir. J. Slomp B.Eng. M. van Asperen
Acknowledgements:
ABSTRACT
TNT post, initiator of this research, is struggling with the issue whether to change top down (Project-based) solely, or bottom-up (continuous) as well. This research tackles the issue from a project-based Lean Six Sigma (LSS) perspective. The following objective was formulated: “This research seeks to discover the factors that make Lean Six Sigma
successful as a continuous improvement strategy for TNT post”. To achieve
understanding of the critical success factors (CSFs) influencing LSS implementation success, an extensive literature study is performed. The literature study has resulted in a shortlist of the top 10 most important CSFs. The shortlist is validated by a pilot study executed within TNT post. The outcome is a seven-point shortlist of the most important CSFs for TNT post influencing implementation success. The next step was to investigate which CSFs have already proven to be valuable. To this extent the following research question was formulated: “Which CSFs promote effectiveness of LSS project
implementation?”. Four cases are investigated by examining archival records and
conducting semi-structured interviews. It was concluded that management engagement and commitment, understanding LSS methodology, effective LSS training program, and review and communication on the results have proven to promote effective LSS project implementation.
CONTENTS 1. INTRODUCTION ...4 1.1 Field of research ...4 1.2 Reason of research...4 1.3 Focus of research ...4 1.4 Contribution to literature ...5 2. THEORY ...6
2.1 LSS, the integration of Lean and Six Sigma ...6
2.2 Critical success factors ...7
2.2.1 Literature review ...10
2.2.2 Pilot study ...12
2.2.3 Shortlists evaluation ...13
2.2.4 Elaboration on the variables ...14
2.3 Implementation success ...17 2.4 Research Design ...18 2.4.1 Research question ...18 2.4.2 Conceptual model ...18 3. METHODOLOGY ...19 3.1 Unit of analysis ...19 3.2 Sample size ...19 3.3 Framework of measurement ...19 3.4 Interviews ...19
3.5 Methods for analysis ...20
4. DESCRIPTION OF THE KAIZEN EVENTS ...22
4.1 Project BUBA ...22
4.2 Project SOSMA ...22
4.3 Project HB ...23
4.4 Project Opzetterij ...23
5. RESULTS ...24
5.1 Management engagement & commitment ...24
5.2 Customer focus ...25
5.3 Linking LSS to business strategy ...26
5.4 Understanding of LSS methodology ...27
5.5 Effective LSS training program ...27
5.6 Financial capabilities ...28
5.7 Review and communication on the results ...29
6. DISCUSSION ...30
6.1 Existing metrics ...30
6.2 Employee satisfaction...31
6.3 Conclusion ...32
APPENDICES ...38
Appendix A: Bar chart of the results ...38
Appendix B: Integrated concept Six Sigma ...39
Appendix C: Integrated concept LSS ...39
Appendix D: Pilot study sent to LSS employees of TNT post Zwolle ...40
Appendix E: Results pilot study ...42
Appendix F: LSS toolset ...43
Appendix G: Team Roles ...44
Appendix H: Interview format (Dutch version) ...45
Appendix I: Table presenting the results of the interviews ...47
1. INTRODUCTION 1.1 Field of research
Organizations these days are facing ongoing unprecedented pressure to improve their performances across the organization. This has resulted in a large variety of continuous improvement strategies. As a result of increased competition and a decreasing volume of mail, TNT post also faces the pressure to improve its performance. To deal with this pressure, TNT post makes use of Lean Six Sigma (LSS) since the end of 2007. Although LSS is executed based on projects, LSS is in the long run considered to be a continuous improvement (CI) strategy, because projects are executed on a continuous basis (George, 2002; Andersson et al., 2006; Bhuiyan and Baghel, 2005). Furthermore, LSS is a top-down initiative that also includes input from the workplace. Management designates the biggest opportunities to improve the organization. The biggest opportunities are explored by DMAIC projects (Define-Measure-Analyse-Improve-Control) in single departments, after which they are multiplied throughout the whole organization.
1.2 Reason of research
Recently, TNT post Zwolle started a pilot with another CI-strategy called Gemba Kaizen. Gemba Kaizen is in many ways the counterpart of LSS, meaning that Gemba Kaizen implies incremental change, executed by employees in the workplace. This pilot was initiated, because TNT post Zwolle is uncertain about the capabilities of LSS solely. There are doubts whether LSS could generate sufficient change to handle the improvement pressure, or that Gemba Kaizen is complementary or even more appropriate for TNT post.
1.3 Focus of research
Currently, TNT post Zwolle wonders what factors determine the implementation success of “LSS” or “Gemba Kaizen”. To this extent the following research objective can be formulated:
Complementary research, executed by Bart van Ommeren (2011), will focus on the factors that make Gemba Kaizen successful as a CI-strategy for TNT post Zwolle. In literature it is common to speak of “critical success factors” (CSFs) when an author indicates the factors that are essential for a successful implementation of a change strategy. To this extent, this research will continue using the term CSFs.
1.4 Contribution to literature
2. THEORY
In the previous chapter, a research objective was presented. This chapter aims at developing a theoretical framework to cover the research objective. To this extent, literature about LSS, CSFs, and implementation success is elaborated. This chapter will end up with a research design that will describe the research question and the conceptual model.
2.1 LSS, the integration of Lean and Six Sigma
LSS is the linkage between the two most powerful continuous improvement tools developed during the last decades: Lean and Six Sigma (George, 2002). According to El-Haik and Al-Aomar (2006) both methods are effective on their own, but synergy will occur when integrating these methods. In addition, Spector (2006) states that LSS is the most effective business improvement technique currently available.
Lean manufacturing is about reducing/removing “muda” (waste) to enhance effectiveness, whereas Six Sigma is focussed on reducing variation to increase quality (Nave, 2002). So, it is Lean that identifies the value and non-value-added steps in order to remove the non-value-added steps, whereas Six Sigma adds value to the value-added steps (Kiemele, 2004). The integration of Lean and Six Sigma could be reflected in a conceptual model for Lean Six Sigma (Figure 1).
Figure 1: Conceptual model for Lean Six Sigma
Lean thinking identifies the value-added steps, so called “hot spots”, while Six Sigma metrics increases the value of these steps (Pepper and Spedding, 2010).
2.2 Critical success factors
Boynton and Zmud (1984, pp. 17) define CSFs as “those few things that must go well to ensure success for a manager or an organization, and therefore, they represent those managerial or enterprise areas that must be given special and continual attention to bring about high performance”. According to Brotherton and Shaw (1996, pp. 114) the “essence of the CSFs approach to management is, what we would call, Focused Specialisation, i.e. the concentration of resources and effort upon those factors capable of providing the greatest competitive leverage”. To this extent, both authors (Boynton and Zmud, 1984; Brotherton and Shaw, 1996) refer to CSFs not as major goals or objectives, but rather as processes or actions that can be controlled in order to reach the organizational objectives and goals. In line with this argument, Antony and Banuelas (2002) state that CSFs are the key input variables that mostly influence the output. Input variables could be influenced by management and therefore CSFs are manageable.
There are several authors that have investigated the CSFs of LSS. These studies differ based on methodology and the context in which research was performed. Some authors focus on the CSFs of Lean, some on the CSFs of Six Sigma, and others on the CSFs of total quality management (TQM). Some authors verify their theoretical findings by empirical research, others do not. Furthermore, the empirical studies were all performed in a different context. Distinctions can be made between large and small/medium companies (SMEs), between manufacturing and service organisations, and based on geographical location of the companies examined. However, all authors have in common that they all present a shortlist of CSFs. The authors reviewed for this research are presented in table 1.
Title article Lean Six Sigma: Combining Six Sigma quality with Lean speed
A conceptual framework for critical success factors of Lean Six Sigma. Author 9. George (2002) 10. Jeyaraman and Leam Kee Teo (2010) Methodology/
Context
- CSFs of LSS
- literature research supported by experiences of some companies - Both manufacturing and service companies
- CSFS of LSS
- Literature review followed by empirical research to rank the CSFs - Manufacturing SMEs in Malaysia CSFs (descending order when indicated) Management engagement LSS infrastructure Company wide vision
Selecting the right people and the right projects
Institutionalizing LSS philosophy LSS training
Project tracking Customer focus
Management engagement & commitment Reward and recognition system Organisational belief and culture Frequent communication on LSS result Project prioritization, selection, reviews, and tracking
Effective LSS training program
Project success stories and best practice sharing
Company financial capability
Establish LSS dashboard (infrastructure) Competency of master black belt and black belt
2.2.1 Literature review
The concepts, shown in table 1, are all based on the examination of a different change method. Distinction can be made between Lean, Six Sigma, TQM, and LSS. Although TQM is not directly related to LSS, it is considered to be applicable for this research since Lean and Six Sigma are described as roadmaps for achieving total quality (Dahlgaard and Dahlgaard-Park, 2006). To this extent, TQM is considered to be the umbrella term for strategies that seek world-class quality such as Lean and Six Sigma (Dahlgaard and Dahlgaard-Park, 2006).
At first sight, it is expected that the LSS concepts (George, 2002; Jeyaraman and Leam Kee Teo, 2010) are most valuable for this research, because the method that is examined is the same as the one examined in this research. Furthermore, the LSS concepts are empirically tested in a LSS context, therefore it can be considered as an advantage over Lean and Six Sigma concepts solely. However, these two LSS concepts are built on the same theoretical foundation as the concepts of Lean and Six Sigma (mentioned in table 1). Another drawback of these LSS concepts is that they were not tested in a service context, which is expected to be an important factor. Despite the disadvantages it is assumed that the LSS concepts are slightly in favour of the Lean and Six Sigma concepts solely.
Taking all the differences between the concepts into account, it should be examined what elements are most influential in determining the shortlists.
Jiju Antony is involved in four studies examining the CSFs of Six Sigma. Because these studies are all based on the same theoretical groundwork, the CSFs that were empirically tested are almost similar. The context in which the CSFs were examined is different. Notable is that two studies were focussing on service organisations (Antony et al., 2007; Antony, 2004(4)). The top-five CSFs presented in these studies reveal a similar descending order. The other two concepts of Antony (2002; 2004(5)) did not focus specifically on service organization and as a consequence, they reveal a different sequence of CSFs. This supports the assumption made earlier, that the context is an important factor in determining the most relevant CSFs. Besides Jiju Antony, Spanyi & Wurtzel (2003) and Henderson & Evans (2000) also conducted research on the CSFs of Six Sigma. These studies were not supported by empirical evidence and as a consequence the CSFs are not presented in a certain order. In addition, the research wasn’t conducted in a service context. Nevertheless, Spanyi & Wurtzel (2003) and Henderson & Evans (2000) largely subscribe the shortlists of Jiju Antony (et al., 2004; 2007). The core business of TNT post is transferring goods from A to B (www.tnt.com)1. Although the distribution centres of TNT post are considered to be the production facilities of TNT post, they are actually delivering a (customized) service to their customers. So, TNT post can be considered as a service organisation. Taking this into account it is supposed that the concepts of Antony (2004) and Antony et al. (2007), which were empirically tested in a service context, are most appropriate for this research and will be used for making a shortlist. Though these concepts represent a slightly different order of CSFs, it is chosen to integrate the concepts based on mean averages (Appendix B).
empirical evidence. In order to integrate these lists it is chosen to add the distinctive variables of George (2002) to the concept of Jeyaraman and Leam Kee Teo (2010). Two variables, “company wide vision” and “customer focus”, are acknowledged to be distinctive and will be added to the concept of Jeyaraman and Leam Kee Teo (2010) (Appendix C).
The final step towards a shortlist that is appropriate for this research is integrating the four concepts each representing a different change method. Among these concepts there are a lot of similarities, but also some differences. It can be stated that all CSFs proposed by the different concepts should be considered as important. However, it can be assumed that the CSFs, which all authors agree on, should be considered as most important. The goal of this review is to shortlist the top 10 CSFs, which is accomplished by selecting the variables that occur most frequently and are highly ranked in the descending lists. The CSFs are listed in descending order based on two criteria; congruency among the CSFs and shortlists that are empirically tested in a service context prevail (Table 2).
CSFs (Descending order)
1. Management engagement & commitment 2. Customer focus
3. Linking LSS to business strategy 4. LSS structure
5. Understanding of LSS methodology 6. Management of cultural change 7. Effective LSS training program 8. Financial capabilities
9. Review and communication on the results 10. Project management skills
2.2.2 Pilot study
It was chosen to conduct a pilot study to validate the outcome of the literature review in its context. From the concepts shown in table 1, twenty-four (24) unique CSFs were identified and processed into a questionnaire (Appendix D). The objective of this pilot study is to discover which CSFs are considered to be most essential for LSS implementation success in the context of TNT post. To this extent respondents were asked to rate the CSFs on a seven-point Likert scale from 1 being “highly unimportant” to 7 being “highly important”. The questionnaire was sent to twenty-three (23) LSS Table 2:
Table 3: Top 10 CSFs Extracted from pilot study
practitioners from TNT post to shortlist the top 10 CSFs. Out of the 23 respondents, 15 responded (65 percent). The results of the pilot study are shown in appendix E. Based on face validity; the top ten CSFs have been selected (Table 3).
2.2.3 Shortlists evaluation
The outcome of the pilot study is very similar to the outcomes of the literature review. Seven CSFs are mentioned in both shortlists (literature as well as the pilot study).
In order to create an integrated framework that represents the most important variables that determine the implementation success of LSS, the top 10 CSFs from the literature review that are validated by the pilot study, are selected. This has resulted in a list of seven CSFs (Table 4).
CSFs (Descending order)
1. Management engagement & commitment 2. Customer focus
3. Linking LSS to business strategy 4. Understanding of LSS methodology 5. Effective LSS training program 6. Financial capabilities
7. Review and communication on the results No. Question CSF
Mean
Std. Deviation
1 Q14 Management engagement 6.83 .375
2 Q15 Linking LSS to the business strategy 6.51 .619
3 Q3 LSS training 6.49 .752
4 Q10 Honesty in measuring current performance 6.37 .839 5 Q21 Project tracking and reviews 6.22 .675 6 Q13 LSS tools and techniques 6.14 .751
7 Q12 Company wide vision 6.08 .553
8 Q16 Customer focus 6.03 1.105
9 Q2 Financial capabilities 5.99 .674
10 Q8 Communicating success stories 5.94 .610
Table 4:
Integrated shortlist of the CSFs for the successful
2.2.4 Elaboration on the variables
The variables presented in table 4 are subject of research and therefore need some elaboration. Every CSF will be discussed in detail in the following subsections.
Management engagement & commitment
The Six Sigma culture includes management engagement that starts with management commitment to the initiative (George, 2002). Just endorsing the Six Sigma projects is insufficient (George, 2002). Engagement is also about getting and remaining all people excited about LSS (George, 2003). To this extent there has to be a sense of urgency, a clear “burning platform” is needed (George, 2003, pp. 203). The engagement of Jack Welch, CEO of General Electrics, “has strongly influenced and enabled the restructuring of the business organization and the cultural change in attitudes of individual employees toward quality possible in a short implementation period” (Henderson and Evans, 2000, pp. 269). Pande et al. (2000, pp. 381) argue that without the engagement of top-management, “the true importance of the initiative will be in doubt and the energy behind it will be weakened”. Managers need to understand the importance of quality and quality improvement and need to include it in the long-term business plan (Antony et al. 2002). They should accept their quality responsibilities, participate in quality functions, and support the quality functions of the organisation (Antony et al. 2002).
Customer focus
“Customer focus can be defined as the degree to which a firm continuously satisfies customer needs and expectations” (Zhang, 2001, pp. x). According to Deming (1986) the customer is the most important part of the production line, therefore the product should focus on the customer needs. George (2002) states that the goal of LSS is to satisfy customers. “The quality of the product is measured from a customer’s perspective, by its contribution to their success” (George, 2002, pp. 17). This focus is the result of several Six Sigma drivers:
[…]
“Voice of the customer: What the customers say they want.
Critical to quality (CTQ): Requirements that are most important to customers. Defect: Failing to deliver to a customer’s CTQ.
Design for Six Sigma: Designing products and processes based on customers requirements.”
[…] (George, 2002, pp. 18 )
Significant increase in value can be created when there is a gap between what the customers desire and what you can currently deliver (George, 2002). So, Six Sigma is focussed on addressing these gaps and therefore focuses on customers.
Linking LSS to the business strategy
Successful implementing LSS requires adherence to a whole philosophy rather than using just a few techniques and tools of quality improvement (Dale, 2000). George (2002) acknowledges that the business strategy will be the starting point for selecting improvement projects relevant to the goals as formulated in this business strategy. Furthermore, George (2002) states that, if projects are not aligned with the business strategy and therefore will not receive sufficient management support, it is impossible to implement the project successfully. Antony and Banuelas (2002) argue that in every project, the link between the business strategy and project objectives should be identified.
Understanding of LSS methodology
Training in methodology and tools of LSS involves learning the principles behind DMAIC methodology (Antony and Banuelas, 2002). When you pose, for example, a lead-time problem to employees, that have not been trained in LSS tools, they initially cannot believe that quality improvement or a reduction in lead time is possible (George, 2002). Employees should learn about three different groups of tools and techniques: process improvement tools, leadership tools, and team tools (Antony and Banuelas, 2002).
analysis, I: mistake proofing, Kaizens, and C: check sheets, control charts, pareto charts, and poka-yoke (George, 2002).
Leadership tools are aimed at increasing trust, facilitating knowledge sharing, and arranging high-performance teamwork to develop synergistic solutions (George, 2002). Leadership tools that are essential in a LSS context are: interactive workshops, tollgate reviews, and tools named under the control step of the DMAIC process (Appendix F) (George, 2002).
According to George (2002), Belbin’s (1993) concept of team roles is considered to be an effective team tool. Belbin (1993) found that there are nine different roles, based on personality types, to be identified (see appendix G). Belbin (1993) stated that every person has one or more preferred role(s). For a team to be effective, these roles should be balanced accurately (Belbin, 1993; George, 2002). Team dynamics are often reflected in a “roles report” that reflects the relative representation of all nine roles among a team (George, 2002). Such a “roles report” gives a team insight into their strengths and weaknesses and how individuals can contribute to the team (George, 2002).
Effective LSS training program
Financial capabilities
Every single LSS project implemented should at least increase the operating profit and the shareholder value (George, 2002). SMEs fear the financial investment for continuous improvement strategies like LSS (Achanga et al., 2006). According to Achanga et al. (2006) implementation success is strongly related to allocating resources to the projects on a continuous basis. In order to require sufficient resources, it is expected that the project has the capability to be financially beneficial.
Review and communication on the results
This variable includes two different parts. Firstly, it is about reviewing and tracking the implementation process. Secondly, it is about communicating in an honest way the results of the project. It is necessary to conduct project reviews on a regularly scheduled basis in order to successfully complete and close the projects (Antony and Banuelas, 2002).
2.3 Implementation success
According to literature the CSFs, mentioned above, determine implementation success. An important question though that has to be answered: what is implementation success?
Traditionally, one of the most common approaches to project success is to consider it successful when the project meets its time and budget goals (Freeman and Beale, 1992). However, according to Shenhar et al. (2002) there is more to project success than time and budget. Project success is no longer a judgement of the success of the project solely (Shenhar et al., 2002). Projects are part of the strategic management of a company and therefore should be measured in a broader context than time and budget (Shenhar et al., 2002). Based on a two staged study, consisting of both quantitative and qualitative methods, Shenhar et al. (2002) developed a multidimensional framework for assessing project success. The framework consists of four dimensions: project efficiency, impact on the customer, direct business and organizational success, and preparing for the future (Shenhar et al., 2002).
LSS implementation success “should be measured using existing metrics, voice of the customer, and employee satisfaction” (O’Rourke, 2005; p.69). The existing metrics are about the bottom-line benefits realized, in terms of increased efficiency and cost reduction (O’Rourke, 2005). “The voice of the customer will indicate the external reaction to the continuous improvement initiative’s implementation” (O’Rourke, 2005; p.69). Finally, employee satisfaction is an important factor that will drive the culture of changing on a continuous basis throughout the organisation (O’Rourke, 2005). Although the terminology used by Shenhar et al. (2002) and O’Rourke (2005) is different, both refer to project success in a wider perspective. The effect on the customer, the efficiency of the project and the long term effect of the project is taken into account. Given that O’Rourke has specified his model to LSS this model will be used to determine implementation success
2.4 Research Design
Following from the theory, this section will first formulate the research question, after which the conceptual model is presented.
2.4.1 Research question
This research will examine the CSFs that make LSS successful as a continuous improvement strategy for TNT post. The following research question is formulated:
“Which CSFs promote successful LSS project implementation?”
2.4.2 Conceptual model
The following conceptual model reflects the research question as proposed.
Figure 2: Conceptual model
Critical Success Factors:
Management engagement & commitment
Customer focus
Linking LSS to business strategy
Understanding of LSS methodology
Effective LSS training program
Financial capabilities
Review and communication on the results
Implementation Success of LSS:
Existing metrics
Voice of the customer
3. METHODOLOGY
The aim of this chapter is providing research methods for answering the research question.
3.1 Unit of analysis
Due to a restriction of resources it was not possible to analyse LSS projects. Instead, it was chosen to evaluate Kaizen events from a LSS perspective. To this extent, Kaizen events are the units of analysis.
3.2 Sample size
Four Kaizen events, selected by TNT post, were analysed. This research seeks to analyse two successful projects and two unsuccessful projects. However, it was found that all projects were classified as successful by TNT post. Although all were classified as successful, distinction can be made in the degree of institutionalisation. The Kaizen events will be explained in more detail in chapter 4.
3.3 Framework of measurement
From the different ways to collect data it is chosen to analyse first the archival records of the Kaizen events. Every Kaizen event was evaluated and discussed by TNT post in an “implementation-review”. The implementation-reviews are the starting point for analysing the relation as proposed in the conceptual model. Thereafter, in-depth interviews were conducted to get a deeper understanding of the influence of the CSFs on LSS implementation success. It will be taken into account whether the institutionalisation of the project was successful or not and what CSFs caused the success or lack of implementation success during the project.
3.4 Interviews
Twelve employees were interviewed; three for every Kaizen event. A project leader and two employees from the workplace were consulted. The interview is structured along four parts; introduction on the project, the influence of the CSFs on the project, the extent to which the CSF influences the project-outcome, and which distinction can be made between LSS and Kaizen (See Appendix H for the interview protocol). For every interview an hour was available.
In consultation with TNT post it is decided that the data retrieved from the interviews is confidential. Therefore, only a censored version will be made public.
Every interview started with the introduction part. The objective of this part was to get familiar with the process, getting insight in the composition of the project team, and learn about the changes realized. When the picture was clear, the CSFs were linked to the project. It was tested what the influence of the CSFs on the project was. The next step was verifying how the influence of the CSFs could be related to the project outcome. At last it was tested whether the outcome would be different using another methodology (LSS vs. Kaizen).
3.5 Methods for analysis
Chapter 5 presents the results as interpreted. It was chosen to subdivide the results along the seven CSFs found in chapter 2. To give a clear overview of the results every paragraph starts with a table that indicates the presence of the CSF in the projects. The qualitative data retrieved from the respondents is translated into a score based on a five-point-scale, from -- to ++. The format of the result-table is presented in table 5. An overview of the total results can be found in appendix I.
CSF Project BUBA Project SOSMA Project HB Project Opzetterij Mean
Object of research (CSF) Project
mean Project mean Project mean Project Mean CSF mean Opinion of the respondents
P ro je ct l ea d er Emp lo y ee Emp lo y ee P ro je ct l ea d er Emp lo y ee Emp lo y ee P ro je ct l ea d er Emp lo y ee Emp lo y ee P ro je ct l ea d er Emp lo y ee Emp lo y ee
4. DESCRIPTION OF THE KAIZEN EVENTS
This chapter provides information about four different Kaizen events which are analysed. The projects came into existence between 2006 and 2009. The manager of TNT post Zwolle has initiated the Kaizen events, the projects were facilitated by McKinsey. From every project it will be shortly described what the reason was to start the event, what the goal was of the event, the composition of the project team, the change tools used, and the results of the Kaizen events in terms of existing metrics. An extended version of the Kaizen event description can be found in appendix J.
4.1 Project BUBA
Reason: The BUBA department was not efficient enough and as a consequence the
department frequently exceeded estimated time and budget.
Goal: The goal of the Kaizen event was to increase efficiency, to increase productivity,
and to improve ergonomics at the workplace. Increased productivity is desirable, so that in the future other BUBA’s could be closed.
Project team: Both a multi-functional and multi-hierarchical team was formed. The event
was facilitated by consultants of McKinsey.
Change tools: The PDCA tool (Plan-Do-Check-Act) was leading in the process; based on
trial and error several ideas were tested. Furthermore, the 5S tool (Sort-Straighten-Shine Standardize-Sustain) was used to order the workplace of the employees. Equipment has a standard position, all positions are marked, and only the equipment frequently used is within reach.
Results: The Kaizen event has resulted in a new split-table that is more efficient and
ergonomic. The event has realized an increased productivity of 22% with an identified potential of another 63% increase in productivity. Fields were marked on the floor, all for specific types of containers. Rearrangement of the tasks has resulted in a reduction in employee motion.
4.2 Project SOSMA
Reason: The reason for the Kaizen event at the SOSMA was undersized productivity. Goal: The main goal of the Kaizen event was to increase productivity and efficiency.
Project team: A cross-functional and cross-hierarchical team was formed. The project
was facilitated by McKinsey from the side-line.
Change tools: The PDCA-cycle was used to achieve improvements. Based on trial and
error initiatives of the employees were tested and implemented when proven to be valuable. Also the workplace was rearranged using the 5S tool.
Results: An improved productivity of 45%. The process was also more efficient, because
seven instead of eight people are needed to run the SOSMA process.
4.3 Project HB
Reason: The HB department made losses and was inefficient. Goal: The goal was to become more efficient.
Project team: The team formed was multi-hierarchical and multi-functional. Also two
women from the headquarter were part of the team.
Change tools: Again PDCA and 5S were the tools used in the event.
Results: The efficiency increased by 20%. The main reason for the improvement can be
found in the organized workspace and the rearrangement of job tasks.
4.4 Project Opzetterij
Reason: The flow of mail was not stable and employee performance was not transparent. Goal: Increasing efficiency and productivity by redesigning the process.
Project team: The project team was both cross-functional and cross-hierarchical.
McKinsey facilitated the process.
Change tools: The PDCA-cycle was used to generate initiatives. Based on trial and error
the initiatives were tested.
Results: The event has resulted in a new piece of sorting furniture. Along with the new
5. RESULTS
This section will reflect the outcomes of the interviews. During the interviews it became clear that the distinction between LSS projects and Kaizen events is not sharp. Four Kaizen events were examined. Respondents that are experienced in both Kaizen events and LSS projects, state that the main difference between these methods is the tool that is used. LSS is based on DMAIC, whereas Kaizen is based on PDCA. Other characteristics are very similar, like: project-based execution and top down implementation. Furthermore, respondents were questioned about both LSS and Kaizen. Taken into account that LSS and Kaizen share a lot of characteristics and that the interviews cover both the perspective of LSS and Kaizen, it is possible to extract LSS data out of Kaizen event analysis.
In this section the outcomes are ordered based on CSF. Every subsection starts with a table in which the presence of the success factor during the projects is indicated. A five-point scale is used, reaching from “--“ to “++”.
5.1 Management engagement & commitment
CSF Project BUBA Project SOSMA Project HB Project Opzetterij Mean
Management engagement &
commitment
++
++
+
++ ++
++ ++ ++ ++ ++ ++ ++ + + ++ ++ +
Table 6: Results management engagement & commitment
Management engagement is promoted by the managers in the top of the organisation. Mid-level managers and project leaders also show a high level of commitment during the projects. As you can see in table 6, all respondents are unanimously about the presence of management engagement and commitment during the project.
Quote: “When management is engaged to the project you get the feeling that something
can actually be achieved.”
Quote: “Obtaining resources is easier when the management is engaged”
state that their managers lose their attention for implemented change projects as soon as the “Standard Operating Procedures” (SOP) are formulated. It is seen that SOPs are not fully complied and the effect of the change projects decreases gradually due to a lack of management engagement.
Quote: “Long term engagement is desirable to sustain the feeling that the changes made
are still important/necessary”.
It was acknowledged by the respondents that management engagement was essential for the success of the project in terms of efficiency and cost reduction. Management inspired and committed employees to the project. It was also indicated that when management engagement slacks, the effect decreases. Employee satisfaction increases when the management is engaged. The employees felt that they were important and able to really change something. 5.2 Customer focus CSF Project BUBA Project SOSMA Project HB Project Opzetterij Mean Customer focus
-
+
+
+
+-
+ - -- ++ + + ++ +- + ++ + +Table 7: results customer focus
The following section will take into account that there is a difference between internal and external customers (consumers). Respondents state that the projects did not specifically focus on the external customer. They state that consumer expectations are translated into a business strategy, to which every project should contribute. More usual is the focus on the internal customer. Although the work floor employees are not fully aware of the customer focus, the project leader and management do consider the internal customer expectations.
Quote: “We go to our customers and ask how and at what time they would like to receive
their mail”.
Quote: “A lack in meeting the customer expectations was the reason for starting this
It was found that customer focus did not directly influence the existing metrics of the process that the project focussed on, but improvements in this process do affect the internal customer and affect their efficiency and costs as well. Furthermore, customer focus did not directly influence employee satisfaction, but it was stated by the respondents that seeking customer satisfaction positively influence the culture of CI. Quote: “Customer focus during the project causes a specific view on the process that
lasts longer than the duration of the project”.
5.3 Linking LSS to business strategy
CSF Project BUBA Project SOSMA Project HB Project Opzetterij Mean Linking LSS to business strategy
+/-
--
-
+
-
+ +- +- - -- -- +- - - + + +-Table 8: results linking LSS to business strategy
Respondents state that they don’t see a direct link between LSS and the business strategy, although they can imagine that it is somehow related to it. For every project, a goal was formulated. The goal was leading during the projects.
Quote: “The goal was to increase efficiency and productivity, sure it contributes to the
business strategy”.
Quote: “We suppose that the management translates the business strategy to a project
goal”.
However, employees do not feel that the project they work on is directly related to the business strategy, because it is not explained by management how it is related. They state that when the link between the project and the business strategy is indicated, it will give them the feeling that the project is even more important.
5.4 Understanding of LSS methodology CSF Project BUBA Project SOSMA Project HB Project Opzetterij Mean Understanding of LSS methodology
+/-
+/-
+/-
-
+/-
+ +- +- + + - + +- +- + -- --Table 9: results understanding of LSS methodology
Employees are well trained in LSS methodology, they have the knowledge of the tools and techniques relevant to their position. LSS methodology includes both the DMAIC and PDCA tool. It was noticed that although the respondents were trained in LSS, and as a consequence are familiar with both DMAIC and PDCA, they preferred the Kaizen approach (PDCA).
Quote: “PDCA appeals to the imagination, whereas DMAIC is more statistic and hard to
understand”.
It was stated that McKinsey had an important role in leading and guiding the team process. The facilitating role McKinsey performed was important in the understanding of LSS methodology.
Quote: “McKinsey supported us in using and understanding LSS methodology”.
Using LSS methodology currently does not affect the CI culture of TNT post. However, LSS methodology did positively influence the existing metrics. Due to the extensive toolbox of LSS it was possible to generate significant efficiency improvements and cost reductions. So, the influence of understanding LSS methodology on implementation success of LSS was twofold.
5.5 Effective LSS training program
CSF Project BUBA Project SOSMA Project HB Project Opzetterij Mean Effective LSS training program
+/-
+/-
+/-
+/- +/-
+ +- +- +- + +- +- +- +- + +- +-Within TNT post there is a significant populations is trained in LSS methodology. However, there are vacancies for higher LSS employees available since the start of LSS within TNT post. At TNT post Zwolle, a high percentage of the employees are trained in the LSS and Kaizen philosophy. Although employees are trained in LSS methodology, they state that it is hard to translate the tools and techniques learned to a practical situation. It is also indicated that they work with the methodology on an infrequent basis that knowledge about the tools and techniques drains.
Quote: “I followed a one day awareness training of LSS, but I do not know how to bring
it in practice”.
Training is essential for implementation success of LSS, but only when the employees have the ability to practice the things learned. If so, employees indicate that they will be more satisfied and a culture for CI is more likely.
Quote: “Practising LSS tools stimulate me to continuously focus on improvement, during
a LSS project and during the execution of my operational tasks”.
Moreover, projects will be more effective when team members are well trained in using LSS tools and techniques. Training the right tools and techniques is indicated as essential for implementation success of LSS.
5.6 Financial capabilities CSF Project BUBA Project SOSMA Project HB Project Opzetterij Mean Financial capabilities
++
++
+
++ ++
++ ++ ++ ++ ++ ++ ++ + + ++ ++ ++Table 11: results financial capabilities
It was seen that only projects of which is expected to be financial capable were executed. LSS projects of which is expected that the financial capabilities are insufficient are terminated after the analysing stage of the DMAIC-process. To this extent, LSS projects are measured and analysed before ideas of improvement are generated and implemented. Quote: “Extensive measures have indicated the capabilities of the project, it gives us
confidence and as a consequence most often we’re exceeding the expectations”.
It was pretty obvious to the employees that selecting the financial capable projects contribute to an improved existing metrics, because only the projects that are capable of realizing an increased efficiency, cost reduction, or increased productivity are implemented. However, the respondents argue that because selecting financially capable projects implies a top-down implementation, this doesn’t contribute to the establishment of a CI culture.
5.7 Review and communication on the results
CSF Project BUBA Project SOSMA Project HB Project Opzetterij Mean
Review and communication
on the results
+/-
+
-
+/- +/-
+- - +- ++ + + - - -- +- - +-
Table 12: results review and communication on the results
During the D-M-A-I steps of the DMAIC process, communication on the results is frequent. After the improvements are realized, the changes should be institutionalized and controlled. During the Control phase it is recognized that there is a shortage of communication. After the changes were implemented it was forgotten to evaluate the situation in the long run. Respondents feel that communication is essential to preserve the energy of the change project. Project leaders state that “productie team leiders” (PTL-ers) have a crucial role in reviewing and communicating the results of the project. PTL is the first managerial level that is responsible for institutionalisation of changes.
Quote: “The PTL-er is responsible for compliance of the changes realized, but is most
often incapable of doing it”.
Quote: “Initiatives to adjust the project most often won’t succeed since employees
struggle with bureaucracy”.
6. DISCUSSION
The aim of this chapter is to discuss the results presented in chapter 4 and 5 to give an answer on the research question. The research question as formulated in chapter 2 is:
“Which CSFs promote successful LSS project implementation?”
As discussed in chapter 2, three factors determine implementation success, of which two factors are taken into consideration in this research. Existing metrics will be discussed first, after which employee satisfaction is discussed. This chapter will be completed by formulating general conclusions and giving a reflection.
6.1 Existing metrics
It was seen in chapter 4 that the Kaizen events all have resulted in improved operational performance in terms of efficiency, productivity, and cost reduction. To this extent it can be concluded that the Kaizen projects have contributed to increased existing metrics. In light of the research question, chapter 5 gives insight in the way the CSFs have contributed to an increased existing metrics.
It was found that management engagement is most decisive in influencing the existing metrics. Although, management engagement, during the projects, already has led to increased performance, it was also indicated that the lack of continuous engagement by the management after the projects is the main reason for a declining change effect.
Understanding of LSS methodology is also acknowledged to be an important factor in realizing improved existing metrics. Although the extensive toolbox of LSS caused this improvement, not every LSS employee (most often green belts) is familiar with the complex statistical tools. Therefore, the full potential of the LSS toolbox is not used optimally. Training of employees and support of LSS professionals is desirable for TNT post.
training program rarely practice their new knowledge and as a consequence they lose their feeling with LSS.
Due to a focus on financial capable projects, improved existing metrics is most often assured. To this extent, focussing on financially capable projects positively influences implementation success.
Review and communication on the results has also contributed to implementation success of LSS, but would be more effective if long term evaluation and communication on the results is assured. To this extent long term evaluation should be integrated into a fixed program.
Other factors like; customer focus and linking LSS to the business strategy did not contribute to an improved existing metrics.
6.2 Employee satisfaction
Employee satisfaction was measured during the interviews, the results are included in chapter 5. Following from these results, it will be discussed which CSF influenced employee satisfaction. It was found that currently only a few CSFs influence employee satisfaction.
It was found that management engagement is essential for employee satisfaction. Management engagement is important to realise commitment and as a consequence satisfied people, but management engagement is even more essential in building a culture for continuous improvement.
Understanding of LSS methodology did not contribute to employee satisfaction. However, it was acknowledged that understanding of the tools and techniques should be a precondition of employee satisfaction, because ambiguity of the methodology leads to uncertainty and dissatisfied employees. When there is ambiguity of the methodology, a culture for continuous improvement will be a utopia.
Review and communication on the results is important for employee satisfaction. It was found that projects where the communication went well performed better then projects where communication was ineffective. For a long lasting employee satisfaction, long term evaluation of the results is necessary.
There was no significant relation found between customer focus, linking LSS to the business strategy, financial capabilities and employee satisfaction.
6.3 Conclusion
Taking the dimensions of implementation success of LSS into account, it was found that four CSFs promote successful LSS project implementation; management engagement and commitment (considered to be the most important factor), understanding of LSS methodology, effective LSS training program, and review and communication on the results.
Selecting financial capable projects partly causes implementation success of LSS for TNT post. No relation is found between on the one hand customer focus and linking LSS to the business strategy and on the other hand implementation success of LSS. It is remarkable that not every CSF resulted from the pilot study promote successful LSS implementation. To this extent there is a gap between what employees state is desirable and the performance of LSS.
Comparing the outcome of the empirical study within TNT post with the literature it can be stated that not all CSFs, as proposed by literature, have proven to be valuable. Four factors, mentioned above, are supported by this empirical research. To this extent, this research has strengthened theory towards these CSFs. However, three variables were not supported by this research. It raises questions about the importance of these variables. To get a better understanding of the factors that determine implementation success for TNT, additional research is desirable. It is recommended to conduct open-ended interviews to identify all variables that have influenced implementation success, before placing them in a descending order.
As assumed in the theory section, context of the organization seems to be an important factor. The context is considered to be an important variable in determining the importance of the different success factors. To this extent it is also recommended to conduct an explorative research about the importance of context in declaring the factors determining implementation success.
6.4 Restrictions and validation
As noticed in chapter 3, this research is limited, because of a restriction in resources. Since there was no possibility to examine LSS projects, it was chosen to evaluate Kaizen events as an alternative. Making this choice has a lot of consequences for the validity of this research. Most obvious is the lack of construct validity, because the construct measured is not directly related to the theory as presented.
Although the construct validity is in dispute, the conclusions and advises are not worthless. During the interviews the perspective of LSS was also questioned. Due to questions like: “would the same results be realized using LSS instead of Kaizen, or should it be better/worse”, and “would the role of the CSFs be different when a LSS project was executed instead of a Kaizen event” the conclusions are considered to be valuable for TNT post.
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APPENDICES Appendix A: Bar chart of the results
Appendix B: Integrated concept Six Sigma
Author Integrating:
Jiju Antony et al. (2007) and Jiju Antony (2004) CSFs
(Descending order)
Linking SS to business strategy (4.55) Customer focus (4.40)
Project management skills (4.40)
Management commitment and involvement (4.21) Organisational infrastructure (4.15)
Project selection and prioritisation (4.05) Management of cultural change (3.80) Understanding of SS methodology (3.63)
Integration of SS with financial accountability (3.60) Training and education (3.18)
Project tracking and reviews (3.06) Incentive program (2.93) Company-wide commitment (2.83)
Integration based on mean averages.
Appendix C: Integrated concept LSS
Author Integrating:
George (2002) and Jeyaraman and Leam Kee Teo (2010)
CSFs (Non Descending order)
Management engagement & commitment Reward and recognition system Organisational belief and culture Frequent communication on LSS result
Project prioritization, selection, reviews, and tracking
Effective LSS training program
Project success stories and best practice sharing Company financial capability
Establish LSS dashboard (infrastructure) Competency of master black belt and black belt Company wide vision
Appendix D: Pilot study sent to LSS employees of TNT post Zwolle
Deze pilotstudie heeft als doel te verifiëren wat voor TNT post de belangrijkste succesfactoren zijn met betrekking tot de implementatie van Lean Six Sigma (LSS). Voorafgaand aan deze pilotstudy is er een uitgebreide literatuurstudie naar de succesfactoren van de implementatie van LSS uitgevoerd. Deze studie heeft geleid tot de identificatie van 24 verschillende succesfactoren (zie onderstaande lijst).
U wordt gevraagd kritisch te kijken naar onderstaande succesfactoren en aan te geven in welke mate u vindt dat ze belangrijk zijn voor het implementatiesucces van LSS. De schaalverdeling loopt van heel erg onbelangrijk voor het implementatiesucces van LSS tot erg belangrijk voor het implementatiesucces van LSS. Geef telkens één antwoord. Algemene informatie:
Uw huidige
Functie:________________________________________________________
Uw ervaring met LSS (in jaren/maanden):______________________________________ 1= Heel erg onbelangrijk, 2= Erg onbelangrijk, 3= Onbelangrijk, 4= Neutraal,
5= Belangrijk, 6= Erg belangrijk, 7=Heel erg belangrijk. Nr. Door de literatuur geïdentificeerde
succesfactoren Totaal onbelangrijk tot Erg belangrijk
1. Werken in teams
1. 2. 3. 4. 5. 6. 7. 2. De organisatie stelt financiële middelen
beschikbaar voor LSS projecten 1. 2. 3. 4. 5. 6. 7. 3. Medewerkers zijn of worden getraind in
LSS methodiek 1. 2. 3. 4. 5. 6. 7.
4. Organisatie cultuur is afgestemd op LSS
1. 2. 3. 4. 5. 6. 7. 5. LSS medewerker heeft inzicht in
klantbehoeften 1. 2. 3. 4. 5. 6. 7.
6. Gedeeld besef van de kernprocessen en
de belangrijkste klantengroepen 1. 2. 3. 4. 5. 6. 7. 7. Erkenning en/of beloning van goede
prestaties 1. 2. 3. 4. 5. 6. 7.
8. Verspreiden van succesverhalen
1. 2. 3. 4. 5. 6. 7. 9. Rangschikken van LSS projecten op
1= Heel erg onbelangrijk, 2= Erg onbelangrijk, 3= Onbelangrijk, 4= Neutraal, 5= Belangrijk, 6= Erg belangrijk, 7=Heel erg belangrijk.
Nr. Door de literatuur geïdentificeerde
succesfactoren Totaal onbelangrijk tot Erg belangrijk
10. Eerlijkheid over prestaties van LSS
1. 2. 3. 4. 5. 6. 7. 11. LSS infrastructuur (Champion, MBB,
BB, enz.) naast operationele structuur 1. 2. 3. 4. 5. 6. 7. 12. De visie van de organisatie wordt
organisatiebreed uitgedragen 1. 2. 3. 4. 5. 6. 7. 13. Medewerkers beschikken over
voldoende LSS middelen en technieken 1. 2. 3. 4. 5. 6. 7. 14. Leiderschap en aanhoudende actieve
steun van het management 1. 2. 3. 4. 5. 6. 7. 15. LSS projecten zijn in lijn met de
strategie van de organisatie 1. 2. 3. 4. 5. 6. 7. 16. De wensen van de klanten vormen een
belangrijke spil voor LSS 1. 2. 3. 4. 5. 6. 7. 17. LSS medewerkers beschikken over
voldoende projectvaardigheden 1. 2. 3. 4. 5. 6. 7. 18. Belangen van de leveranciers verbinden
met LSS projecten 1. 2. 3. 4. 5. 6. 7.
19. Alle medewerkers participeren in LSS
1. 2. 3. 4. 5. 6. 7. 20. Financiële verantwoording van LSS
projecten 1. 2. 3. 4. 5. 6. 7.
21. *
LSS projecten volgen en frequent de
voortgang evalueren 1. 2. 3. 4. 5. 6. 7.
22. Alle medewerkers voelen zich
verbonden met LSS 1. 2. 3. 4. 5. 6. 7.
23. *
Evaluatie van het implementatieproces
en hier lering uit trekken 1. 2. 3. 4. 5. 6. 7. 24. Klanten zijn betrokken bij LSS projecten
1. 2. 3. 4. 5. 6. 7.
Appendix F: LSS toolset
Appendix G: Team Roles
Appendix H: Interview format (Dutch version) 1. Introductie op het project:
Wat is het project precies?
Hoe is het project tot stand gekomen, waarom Kaizen?
Wie heeft de beslissingsbevoegdheid tot het uitvoeren van een Kaizen? Wat was het doel van het project?
Welke stakeholders zijn gebaat bij het project en wat was hun rol? Voor welke stakeholders heeft het project waarde toegevoegd? Wat zijn de resultaten van het project (succes)?
Heeft het project bijgedragen aan de strategie van TNT? Hoe zijn de resultaten geborgd? Wat is hiervan gerealiseerd?
Hoe worden de resultaten gedeeld/overgebracht op andere vestigingen? 2. Invloed CSFs op project/events:
Uit de pilotstudie zijn een aantal factoren gekomen die het succes van een Kaizen-event zouden beïnvloeden, graag hebben we het over het effect van deze factoren op dit project. Hoe hebben de volgende factoren bijgedragen aan het succes van de Kaizen-events?:
Management engagement & commitment Customer focus
Linking SS to business strategy Understanding of SS methodology Effective LSS training program Financial capabilities
Review and communication on the results
Hoe beïnvloeden de CSFs het resultaat?
Hoe hebben de CSFs de resultaten van het project beïnvloed?
Was het project minder succesvol geweest als er een andere gradatie van een CSF aanwezig was?
Wat heeft precies tot het succes van het project geleid, of wat heeft er voor gezorgd dat het project niet succesvol is geworden?
Waar onderscheidt Kaizen zich van LSS?
Hadden dezelfde resultaten bereikt kunnen worden met een LSS project?
Waren de resultaten beter geweest als de een onafhankelijk team het proces geanalyseerd en vervolgens veranderd had?
Had het resultaat ook in kleinere projecten/ stappen bereikt kunnen worden? Als de continu-verbetertrajecten op basis van LSS projecten georganiseerd zouden worden, zouden dezelfde resultaten behaald zijn?
Appendix I: Table presenting the results of the interviews CSF Project BUBA Project SOSMA Project HB Project Opzetteri j Mean
Management engagement &
commitment
++
++
+
++ ++
Customer focus-
++
+
+
+
Linking LSS to business strategy+/-
--
-
+
-
Understanding of LSS methodology-
+/-
-
-
-
Effective LSS training program+/-
+/-
+/-
+/- +/-
Financial capabilities++
++
+
++ ++
Review and communication
Appendix J: Kaizen events description
This chapter provides information about four different Kaizen projects which are analyzed. The projects came into existence between 2006 and 2009. All projects are visualized with some photos.
Project BUBA
Explanation of the project
Goal
Goal of this BUBA project was to eliminate waste in the production process, and to make processes more fluent and efficient.
Project team
The project team consists of people from TNT and McKinsey. In this project, McKinsey was a very large stakeholder with several roles in this project. TNT provided the team with 3 employees and a team coach, one area manager and two employees who supported the project as part of their Black-belt Training. This project team was supplemented by six consultants of McKinsey.
Change/improvement methods
During the start of the project in the first brainstorm session, the PDCA cycle had a huge impact for the BUBA project.
Plan Observe starting point
Do Identify improvement opportunities Check Test and refine changes
Act Implement
Besides the PDCA cycle, there was another improvement method that played a very important role, the 5S-tool. A theoretical explanation of 5S is given in chapter 2 but in this project, the method is used in order to clearly mark parking lots for all stations, containers, and floor scales. Also 5S is used in order to organize the sequence of containers to balance fill-up time.
Picture 2: Situation during the project
Picture 3: Situation at the end of the project
