dissertation- rukiye kırgıl - copy

PROJECT SUBMISSION PRO-FORMA

NAME : Rukiye KIRGIL

Student ID: 1158834

I wish the dissertation to be considered for:

MSc in Cybersecurity & Management

MSc in e-Business Management

MSc in Engineering Business Management

MSc in Engineering Business Management for Defence & Security

MSc in Enterprise Integration Management

MSc in Innovation & Entrepreneurship

MSc in International Technology Management

MSc in Management for Business Excellence

MSc in Manufacturing Systems Engineering

MSc in Process Business Management

MSc in Programme & Project Management

MSc in Supply Chain & Logistics Management

I have checked that my modules meet the requirements of the above award

I confirm that I have included in my dissertation:

An abstract of the work completed

A declaration of my contribution to the work and its suitability for the degree

A table of contents

A list of figures & tables (if applicable)

A glossary of terms (where appropriate)

A clear statement of my project objectives

A full reference list

I am willing for my marked dissertation to be used for staff training purposes

Signed: Rukiye KIRGIL Date: 19.09.2013

ENTERPRISE RESOURCE PLANNING SYSTEMS’

INTEGRATION WITH THE LEAN SIX SIGMA STRATEGY

by

Rukiye KIRGIL

Supervisor:

Graham WARREN

Dissertation submitted in partial fulfilment for the Degree of

Master of Science in E-Business Management (e-BM)

The University of Warwick

Warwick Manufacturing Group

Submitted: September 2013

iv

ABSTRACT

Organisations are becoming more demanding day by day because information

technology has increased business standards with the advent of computer

technology. Business processes have been streamlined since the computers came

into the business life. In this sense, the most popular Japanese business

improvement strategy, Lean Six Sigma (LSS), is focused on this dissertation. The

possibility of its integration with Enterprise Resource Planning (ERP) systems is

investigated. In that case, ERP systems might expedite LSS projects and enhance

their effectiveness. When looking from the outside, ERP systems provide software

programs to companies for managing their information systems while LSS strategy

helps the companies to achieve business excellence by eliminating waste from their

organisations, improving quality of their processes’ outputs and streamlining their

business processes. In this project, it is claimed that even though they seem different

from each other, they might be mutually supportive.

In order to reveal the benefits of their combination, some questions have been

produced based on the literature. After that, these questions have been discussed

with nine experts from the real business life. Subsequently, the data aggregated

through semi-structured interviews with those experts have been analysed and

evaluated in Discussion section.

Finally, some conclusions have been drawn after the interviews’ evaluations.

Although all specialists agree with the idea of this project, some doubts have

emerged in some critical cases. Therefore, advantages and disadvantages of their

relationship are indicated in the Conclusion chapter. The sequence of their

implementation in case of their integration is also evaluated in the Conclusion.

All in all, if all conditions are taken into consideration, their collaboration

seems profitable for the companies which implement ERP and/or LSS to their

organisations.

v

ACKNOWLEDGEMENTS

I would like to express my deepest appreciation to my supervisor –Graham Warren–

who has always supported me to produce my best throughout MSc program and

made me motivated, happy and concentrated.

I would like to thank Dr. Adrian Watt who has helped me to find specialists in my

research subject from the industry. Also, many thanks for all of these experts who

have kindly accepted my interview request. I would like to articulate their names

again: Dr. Angela Clarke, Ton Van Esch, Kim Stansfield, Mike James-Moore, Greg J.

Hughes, Dr. Terra Vanzant-Stern, Serkan Mahir, Dr. David Scrimshire and Mete

Mazlum. I am really grateful to those people.

Additionally, I would like to thank my friends who have been with me at all times and

also made me happy. Finally, a big thank to my family who have been always

supportive to me materially and morally throughout my life.

vi

DECLARATION

I have read and understood the rules on cheating, plagiarism and appropriate referencing as

outlined in my handbook and I declare that the work contained in this assignment is my own,

unless otherwise acknowledged.

No substantial part of the work submitted here has also been submitted by me in other

assessments for this or previous degree courses, and I acknowledge that if this has been

done an appropriate reduction in the mark I might otherwise have received will be made.

Signed candidate: Rukiye KIRGIL

The project should normally be related to the management of:

1. Companies in the engineering sector,

2. The engineering function within a non-engineering company or

3. The supply chain within the engineering sector.

The project could address many different aspects such as operational, financial, human

resource, technical or strategic management issues.

Where the project is of a technical nature, there must be clear evidence of business benefit

from this technology.

If the focus of the project is outside the above industrial spectrum it MUST contain

considerable comparative analysis of practices in the engineering sector.

My project relates to this definition in the following way: The project examines the relationship between the Enterprise Resource Planning (ERP) Systems and Lean Six Sigma (LSS) strategy. Firstly, how effectively could ERP and Lean Thinking contribute to the DMAIC method which is based on Six Sigma strategy has been investigated. Subsequently, the relationship between ERP and LSS has been analysed. Finally, which one should be implemented at first if they are decided to be implemented together has been researched. All of those explanations just mentioned above indicate that this research study is not only related to information management systems, but it also focus on some engineering tools such as Lean Thinking and Six Sigma strategy.

The above shows the relevance of the work to the degree for which it is submitted

Signed Agree Disagree

Supervisor

Second Assessor

vii

TABLE OF CONTENTS

1. SECTION ONE: INTRODUCTION ....................................................................... 1

1.1. BACKGROUND FOR THE PROJECT .......................................................... 1

1.2. OUTLINE OF THE PROJECT ....................................................................... 1

2. SECTION TWO: LITERATURE REVIEW ............................................................ 4

2.1. ERP AS AN INFORMATION-ORIENTED BUSINESS .................................. 4

2.1.1. What is ERP? .......................................................................................... 4

2.1.2. Evolution of the ERP ............................................................................... 5

2.1.3. ERP Implementation ................................................................................ 6

2.1.4. Benefits of an ERP system .................................................................... 14

2.1.5. Challenges of the ERP Systems............................................................ 22

2.2. LEAN SIX SIGMA (LSS) APPROACH ........................................................ 23

2.2.1. What is Lean Thinking? ......................................................................... 23

2.2.2. What is Six Sigma? ............................................................................... 30

2.2.3. Why should Lean and Six Sigma be combined? ................................... 33

2.2.4. Challenges of Lean Six Sigma .............................................................. 48

2.3. CORRELATION OF ERP SYSTEMS AND LEAN SIX SIGMA STRATEGIES

50

2.4. CONCLUSION OF THE LITERATURE REVIEW ........................................ 55

3. SECTION THREE: RESEARCH METHODOLOGY ........................................... 60

3.1. RESEARCH PHILOSOPHIES AND APPROACHES .................................. 60

3.2. RESEARCH PARADIGMS .......................................................................... 62

3.3. RESEARCH APPROACHES ....................................................................... 64

3.4. CLASSIFICATION ABOUT RESEARCH PURPOSE .................................. 64

3.5. RESEARCH STRATEGY ............................................................................ 65

3.6. DATA COLLECTION ................................................................................... 67

3.6.1. Literature Resources ............................................................................. 67

3.6.2. Data Collection Methods ....................................................................... 68

3.6.3. Ethics ..................................................................................................... 71

3.7. TIME HORIZONS......................................................................................... 71

4. SECTION FOUR: DATA ANALYSIS ................................................................. 73

4.1. ANALYSING THE DMAIC METHOD ........................................................... 73

viii

4.1.1. Analysing the Define Phase of the DMAIC Method ............................... 73

4.1.2. Analysing the Measure Phase of the DMAIC Method ............................ 83

4.1.3. Analysing the Analyse Phase of the DMAIC Method ............................. 89

4.1.4. Analysing the Improve Phase of the DMAIC Method ............................. 93

4.1.5. Analysing the Control Phase of the DMAIC Method .............................. 96

4.2. THE POSSIBILITY OF CROSS RELATIONSHIP BETWEEN THE ERP

SYSTEMS AND LEAN SIX SIGMA STRATEGIES ............................................. 101

4.3. SEQUENCE OF THEIR IMPLEMENTATION (ERP & LSS) ...................... 105

5. SECTION FIVE: DISCUSSION ........................................................................ 108

5.1. DISCUSSION FOR THE DMAIC METHOD ............................................... 108

5.1.1. Discussion for the Define Phase.......................................................... 108

5.1.2. Discussion for the Measure Phase ...................................................... 115

5.1.3. Discussion for the Analyse Phase ....................................................... 123

5.1.4. Discussion for the Improve Phase ....................................................... 126

5.1.5. Discussion for the Control Phase ........................................................ 129

5.2. DISCUSSION FOR THE RELATIONSHIP BETWEEN ERP & LSS .......... 131

5.3. DISCUSSION FOR THE SEQUENCE OF THEIR IMPLEMENTATION .... 133

6. SECTION SIX: CONCLUSION ......................................................................... 135

6.1. SUMMARY OF THE PROJECT OUTCOMES ........................................... 135

6.2. PRACTICAL APPLICATION OF THE RESEARCH IDEA ........................ 137

6.3. LIMITATIONS FOR THIS RESEARCH ..................................................... 137

6.4. RECOMMENDATIONS FOR FUTURE RESEARCHES ............................ 138

7. REFERENCES ................................................................................................. 139

ix

LIST OF FIGURES

Figure 1: Evolution of the ERP approach .................................................................. 6

Figure 2: Technology Capability Ladder ................................................................... 10

Figure 3: Driving to a Common Understanding ....................................................... 12

Figure 4: Technology effects upon a supply chain ................................................... 16

Figure 5: ERP Initiation Responsibility .................................................................... 18

Figure 6: Value Organisation Alignment Mapping .................................................... 25

Figure 7: Time Value Mapping ................................................................................. 25

Figure 8: Swim Lane Flow Charts ............................................................................ 26

Figure 9: Physical Process Maps ............................................................................. 26

Figure 10: Logical Process Flow Maps .................................................................... 27

Figure 11: 7 Wastes of Lean Manufacturing ............................................................ 28

Figure 12: Customers’ perception of a company’s quality ........................................ 32

Figure 13: The four Pillars of a quality culture .......................................................... 38

Figure 14: Lean Six Sigma Integration ..................................................................... 48

Figure 15: Comparison between ERP Systems and Lean Six Sigma Methodologies

.................................................................................................................................. 56

Figure 16: Research Paradigms .............................................................................. 62

Figure 17: Literature Resources ............................................................................... 68

Figure 18: Research choices ................................................................................... 69

Figure 19: The Research Onion .............................................................................. 72

Figure 20: Experts’ evaluations about the Question A ........................................... 109

Figure 21: Experts’ evaluations about the Question B ........................................... 111

Figure 22: Experts’ evaluations about the Question C ........................................... 112

Figure 23: Experts’ evaluations about the Question D ........................................... 115

Figure 24: Experts’ evaluations about the Question E ........................................... 117

Figure 25: Experts’ evaluations about the Question F ............................................ 120

Figure 26: Experts’ evaluations about the Question J ............................................ 121

Figure 27: Experts’ evaluations about the Question G ........................................... 123

Figure 28: Experts’ evaluations about the Question K ........................................... 125

Figure 29: Experts’ evaluations about the Question H ........................................... 129

x

LIST OF TABLES

Table 1: The comparison between Clean Slate Reengineering and Technology-

enabled Reengineering ............................................................................................... 9

Table 2: Costs of an ERP Implementation- 2007 Aberdeen Group Survey .............. 13

Table 3: Lean Manufacturing Adoption ..................................................................... 30

Table 4: Lean and Six Sigma .................................................................................... 34

Table 5: Three Phases of Lean Six Sigma ............................................................... 36

Table 6: Define Phase’s steps ................................................................................. 50

Table 7: Measure Phase’s steps .............................................................................. 51

Table 8: Analyse Phase’s steps ................................................................................ 53

Table 9: Improve Phase’s steps .............................................................................. 54

Table 10: Control Phase’s steps ............................................................................... 54

Table 11: Experts’ opinions about the Question A .................................................. 109

Table 12: Experts’ opinions about the Question B .................................................. 111

Table 13: Experts’ opinions about the Question C .................................................. 113

Table 14: Experts’ opinions about the Question D .................................................. 116

Table 15: Experts’ opinions about the Question E .................................................. 117

Table 16: Experts’ opinions about the Question F .................................................. 119

Table 17: Experts’ opinions about the Question J .................................................. 122

Table 18: Experts’ opinions about the Question G ................................................. 123

Table 19: Experts’ opinions about the Question K .................................................. 125

Table 20: Experts’ opinions about the Question H .................................................. 129

xi

GLOSSARY

AHP: Analytic Hierarchy Process

BI: Business Intelligence

BPR: Business Process Reengineering

CEO: Chief Executive Officer

CTQ: Critical-to-Quality

DMAIC: Define-Measure-Analyse-Improve-Control

ERP: Enterprise Resource Planning

FMEA: Failure Modes and Effects Analysis

I-MR: Individuals and Moving Range

LSL: Lowe Specification Limit

LSS: Lean Six Sigma

MOC: Mind of the Customers

MRP I: Material Requirements Plnning

MRP II: Manufacturing Resource Planning

OEE: Overall Equipment Effectiveness

OLAP: Online Analytic Processing

OLTP: Online Transaction Processing

OTIF: On Time in Full

QFD: Quality Function Deployment

RACI: Responsible-Accountable-Consulted-Informed

RCCA: Root Cause and Corrective Action

RFT: Right First Time

RMS: Requirements Management System

SIPOC: Supplier-Input-Process-Output-Customer

SMED: Single Minute Exchange of Die

xii

SOP: Standard Operating Procedure

SPC: Statistical Process Control

SQC: statistical Quality Control

TPM: Total Productive Maintenance

TQM: Total Quality Management

USL: Upper Specification Limit

VOB: Voice of the Business

VOC: Voice of the Customers

VOE: Voice of the Employees

VOP: Voice of the Process

VSM: Value Stream Mapping

WIP: Work in Process

1

Section One: Introduction

1. SECTION ONE: INTRODUCTION

1.1. BACKGROUND FOR THE PROJECT

Today’s highly competitive business world requires successful

implementations from organisations because their supplies should not be fallen

behind customers’ accelerating demands. For that reason, information management

systems are developed with each passing day for meeting customers’ needs

expeditiously as well as conduct business processes successfully. Also, information

technology is tried to be penetrated in organisational operations. In that case, it might

be observed that some tools and/ or strategies might be integrated in order to acquire

optimisation for improving companies’ transactions and building winning corporate

cultures.

In terms of this dissertation’s research area, functionalities of Enterprise

Resource Planning (ERP) as an information management system and Lean Six

Sigma (LSS) as a business improvement strategy have been researched. According

to the explanations mentioned in the previous paragraph, the possibility of their

combination has been investigated. Therefore, their relationship has been thoroughly

analysed throughout the project. It did seem that they were both exceedingly useful

initiatives for the companies before this research study. However, their integration in

practice is difficult to encounter in the real business life. This project’s purpose is to

reveal their mutual relationship. Thus, “How could benefits be obtained from the

combination of ERP and LSS?” has been questioned during the study.

1.2. OUTLINE OF THE PROJECT

After reviewing literature, a model about Six Sigma DMAIC method has been

constructed and some propositions have been put on it based on the literature.

Subsequently, ERP systems’ and Lean Thinking’s contributions have been analysed

step by step with the experts in ERP and/or LSS. After that, the idea of their mutual

2


support to each other has been discussed with the experts and their advice about the

sequence of these two implementations has been asked afterwards.

After giving background of the project, following sections are indicated below.

Literature Review: In the Literature Review section, ERP and some auxiliary

tools such as Business Intelligence tools are explained in detail.

Subsequently, Lean Thinking, Six Sigma strategy and their combination as the

Lean Six Sigma strategy are explicated. At the end of this section, explored

relationships between ERP and LSS have are mentioned.

Research Methodology: Deciding the research methodology follows the

Literature Review. After reviewing the research methods, the most appropriate

one has been selected. This research study adopts the mixture of

interpretivism and positivism with radical humanist paradigm. Conducting

semi-structured interviews with the experts in a qualitative way is the type of

this project’s case study.

Data Analysis: After the selection of the method, data collected from semi-

structured interviews are analysed.

Discussion: The specialists’ opinions are evaluated and some critical points

are discussed in this section. The discussion is divided into three sub-sections

which are “Discussion for the DMAIC Method”, “Discussion for the

Relationship between ERP and LSS” and “Discussion for the sequence of

ERP and LSS”.

Conclusion: Finally, conclusion is drawn according to the results and findings

of the case study.

All of those steps just stated above are visualised below.

3


SECTION: 2

LITERATURE

REVIEW

SECTION: 3

RESEARCH

METHODOLOGY

SECTION: 4

DATA

ANALYSIS

SECTION: 5

DISCUSSION

ERP

LEAN

SIX

SIGMA

Interpretivist

Positivist

philosophies

Radical

humanist

paradigm

Qualitative

Research

Case Study

Semi-

structured

interviews

9 experts’

opinions

about the

model

developed

DMAIC

Method

(Each phase)

Relationship

between

ERP and LSS

Sequence of

ERP and LSS

INTRODUCTION

CONCLUSION

4

Section Two: Literature Review

2. SECTION TWO: LITERATURE REVIEW

2.1. ERP AS AN INFORMATION-ORIENTED BUSINESS

Accelerating business growth requires companies to overcome fierce competition

in this age of technology, because there are many opportunities for customers to

provide any product or service in the market. That is the reason why companies have

been seeking state-of-the-art technology for their businesses in order to update their

technical infrastructures. The more a company is up-to-date across the

technology, the more it fulfils its customers’ expectations. Technology penetration

does not only improve tangible assets, it also enhances intangible tools such as

information-oriented activities. It is because all information, which companies need,

could be effortlessly collected, analysed by using statistical software programs and

disseminated to the relevant parts of the business through the technology. In that

case, Enterprise Resource Planning (ERP) Systems allow the companies to monitor

their entire supply chains and manage them in an organised way.

2.1.1. What is ERP?

Enterprise Resource Planning (ERP) is an automated system which integrates

the majority of business processes, provides all information about intra-corporate

transactions and common data about the businesses and also offers real-time

information and access (Sumner, 2005). According to Sheldon (2005), “ERP is a

business model that involves all levels of the organisation”. It is a software package

which endeavours to merge a company’s each department and function onto a single

computer system that can fulfil each individual department’s requirements

(Tambovcevs, 2012). Similarly, Shanks and his colleagues (2003) evaluated ERP

System as a “packaged business software system” which automates and integrates a

company’s business processes, provides common platform for data-sharing while

producing real-time data and access.

5


In addition to these exhaustive definitions, Harwood (2003) summarised that

system as an “integrated information system” which serves “all aspect of the

business”. Additionally, Monk and Wagner (2006) considered ERP from a different

angle by saying “company-wide computing environment” within that sentence: “It can

integrate a company’s operations by acting as a company-wide computing

environment that includes a database that is shared by all functional areas”.

However, the basis of the definitions addresses the same benefits of the ERP

systems.

2.1.2. Evolution of the ERP

Every company aims to manage their supply chains properly and fulfil their

customers’ expectations. In order to deal with increasing complexity within the

companies’ supply chains due to successive demand of today’s sophisticated

business environment, they need to automate all different activities of their

businesses. That is the reason why companies have been looking for a computerised

system for their business processes since 1960s.

Manufacturing managers’ focus has revolved around inventory in 1960s; therefore

“Inventory Control Packages” have been used for managing manufacturing.

Subsequently, they have inclined to the view that material requirement for each

product was also essential. Thus, a new approach called “Material Requirements

Planning (MRP)” has been emerged in 1970s. After obtaining MRP, it was not

satisfied for the companies though being integrated with sales planning, customer

order management system and capacity planning. Therefore, “Manufacturing

Resource Planning (MRP- II)” has developed in 1980s by adding accounting system

to the MRP. Material and capacity requirements planning were enhanced with

providing financial information about the businesses by virtue of MRP- II. In that

case, a new tendency towards an integrated business system has revealed. Finally,

“Enterprise Resource Planning (ERP)” has materialised in 1990s (Sumner, 2005). All

activities from suppliers to the end customers have been integrating since the

invention of ERP. According to Shanks and his colleagues (2003), “today’s ERP

systems have evolved from packaged software for supporting for Material

6


Requirements Planning (MRP) and Manufacturing Resource Planning (MRP- II)”.

There is a schema below which illustrates ERP transition.

Figure 1: Evolution of the ERP approach (drawn by the author)

2.1.3. ERP Implementation

Enterprise Resource Planning is an approach which encourages companies to be

integrated into e-business environment. Although electronic business activities

streamline business processes, there is usually resistance to technology adoption

due to human nature. It is because new technologies expect you to do what you are

used to do in a different way. Therefore, there are some key points which should be

thoroughly considered by organisations before the e-business implementations. Ash

and Burn (2003) draw people’s attention to those key points by emphasizing “the

organisational environment with ready culture, a willingness to share knowledge,

balanced network relationships and a capacity to learn”. Importantly, breakthroughs

should be incorporated into the organisations with the help of change management

because people are not accustomed to sharing knowledge with the other

organisations such as sharing inventory data with suppliers. That means a company

culture might not be ready to implement a new technology into their business. In

order to overcome that problem, people should be trained to deal with the technology

requirements and also need to be willing to learn and capable. In that way,

customers’ expectations could be properly conceived and fulfilled.

7


ERP, as an e-business activity, is a back-end application which supports front-

end services. It provides exhaustive data to the front-end functions (Ash and Burn,

2003). According to Shanks and his colleagues (2003), it captures deep and detailed

data about the businesses. In that case, information accuracy is important therefore it

should be cautiously implemented into the business. Thus, ERP system penetration

is manipulated into three sections (Tambovcevs, 2012);

“Pre-implementation Process”

“Implementation Experience”

“ERP system configuration, benefits and future directions”

In pre-implementation process, the focused company’s infrastructure is analysed

for if it is ready to be integrated with ERP or not. Reengineering plays an important

role in this section which is explained below in detail.

2.1.3.1. Pre-Implementation Process of ERP: Business Process

Reengineering and Best Practices

Business Process Reengineering (BPR) is a method of identification the best way

that provides the companies to develop their integrated information systems (Olson,

2004). Grover and Kettinger (1998) defined BPR as “typically involves the use of

information technology to enable new ways of working”. The most important

challenge within BPR process is to forget what you are used to do previously and

become open-minded about the new technologies (Yakovlev, 2002). That is

evaluated as “socio-cultural challenge” that results people’s reaction against the

changes. There is another challenge called “technical challenge” which presents

difficulties while developing a process design that could be a significant improvement

for the current design (Reijers and Mansar, 2004). After overcoming these

challenges, BPR works well in improving effectiveness of the technology.

Olson (2004) mentioned that BPR predates before the ERP implementation.

While ERP is providing high level of flexibility to the companies in order to meet their

customers’ demands and integrating their entire business processes, BPR prepares

8


them to adopt this new technology and utilise it properly. There is two ways to

implement reengineering;

Clean Slate Business Process Reengineering

Technology-enabled Business Process Reengineering

The former one is the certain way of being responsive to organisational needs

because an enterprise resource planning software could be changed in conformity

with business requirements (Olson, 2004). In essence, clean slate means that

“everything is designed from scratch” (Yingjie, 2005). In other words, there is no

improvement on any system. Business needs are firstly identified and the business

requirements are meticulously fulfilled afterwards in such reengineering processes

(Olson, 2004). In that case, ERP implementation is manipulated to the last because a

company’s current situation should be evaluated at first and the selected software,

which fits the focused company’s business processes, should be subsequently

adjusted according to its requirements (Subramoniam et al. 2009). That

customisation could provide an optimisation of ERP implementation. However,

attempting an optimal system creation through clean slate BPR might increase the

companies’ general expenses because you will be supposed to invest more in an

ERP software if you expect its vendor to customise it according to your business

requirements. Also, it will yield results in the long term (Yingjie, 2005). That the clean

slate BPR might be exceedingly expensive must be one of the reasons why the

companies struggle with the custom-built software implementations. That is the

reason why Technology-enabled Business Process Reengineering is the most

popular option in practice (Olson, 2004).

The latter one is the cheapest and fastest way to implement business process

reengineering (Olson, 2004). According to this modality, an ERP system is selected

at first and then reengineering is conducted (Olson, 2004). In that case, the

reengineering process is limited by the selected system (Olson, 2004). That means

the business processes should be adjusted for the chosen ERP system instead of

customising the software according to their requirements. Yingjie (2005) mentioned

that “since the systems are ready and it is not necessary to change them, this

approach is faster and cheaper than clean slate reengineering” and added afterwards

9


as “on the negative side, it also requires a lot of change and training within the

organisation”.

Companies will encounter some advantages and disadvantages if they are

interested in conducting one of these reengineering methods into their businesses.

They could retain competitive advantage by changing their ways of doing business in

order to be more responsive to organisations’ needs through clean slate

reengineering, when technology enabled reengineering facilitates the business

processes due to reducing costs and saving time (Olson, 2004). In that case, there

seems to be different conditions for the selection. Although beginning from scratch

brings strategic advantages to the companies (Subramoniam et al. 2009) and

provides for them to be based on their own business experiences during the ERP

implementation, it requires considerable amount of investment and lingering attention

on it due to producing long term outcomes. Hence, clean slate reengineering seems

to be available for the big companies in order to construct their own ERP processes

whereas technology-enabled reengineering produces short term solutions for the

smaller companies during the ERP implementation.

There are some differences between clean slate BPR and technology-enabled

BPR illustrated below;

Table 1: The comparison between Clean Slate Reengineering and Technology-enabled

Reengineering (drawn by the author)

Clean Slate Business Process

Reengineering

Technology-enabled Business

Process Reengineering

The identification of business

requirements first

The selection of an ERP system first

Significant changes in the selected ERP

software

Small changes in the selected ERP

software

Slower and harder to apply Faster and easier to implement

Expensive Cheaper

10


The reason why Business Process Reengineering is exceedingly important in

order to properly utilise the ERP systems’ existed capacity is because staffs

responsible for the ERP implementation focus on its technical aspect of a project that

prevents them to deliver value-adding processes to the supply chain (Kimberling,

2012). It looks as if the success of an ERP implementation is not just based on

excellent and mistake-free software. Concurrently, companies’ infrastructures and

customer expectations should be considered, which in turn top managers could

understand their businesses’ requirements. That can be provided by business

process reengineering which is why “the most common approach was to undertake

BPR simultaneously with the implementation of SAP R/3 that is one of the ERP

systems” (Olson, 2004). Briefly, business processes could be simplified and

streamlined by means of BPR methodologies which can also provide the companies

to be aware of changeable markets and competitor strategies with the ERP systems

(Sumner, 2005).

In terms of best practices, “a best practice is a method that has been judged to

be superior to other methods” (Olson.2004). Olson (2004) mentioned that “BPR is

designed to identify a best practice” and he added that that identification could be

provided by benchmarking which is based on comparison with the other companies

in a market.

Figure 2: Technology Capability Ladder (Mantri, 2008). (Taken from http://www.proteusadvisors.com/labels/Best%20Practices.htm)

http://www.proteusadvisors.com/labels/Best%20Practices.htm

11


As can be observed from the Figure 2 above, obtaining benefits of a technology

cannot happen immediately. Success in this process could be achieved step by step.

As mentioned before, best practices are best-resulted through benchmarking that

allows the companies to utilise ERP system’s capacity as far as possible. Therefore,

best practices should be considered besides ERP acquisition. Following that, ERP

adaptation is provided, although this technology should always be up-to-date across

new improvements. Finally, the best results could be received.

2.1.3.2. Implementation Process of ERP

After pre-implementation process, ERP implementation phase should be well-

managed by all the company members. That is deliberately said as “all members”

because employees and top managers are encouraged to be involved in the ERP

implementation phase. This situation has been stated by Ash and Burn (2003) as a

team-based structure allows employees to be more productive. In other words,

employees of a company could actively participate in the company’s ERP software

installation and thereby improve its information flow, which in turn increase quality of

the implementation process. According to Sumner (2005), all employees of a

company should be included into a new process which is designed through an ERP

system. That they need to contribute to the new system’s success should be taught

them as their tasks from that time on (Sumner, 2005).

As illustrated below on the Figure 3, common understanding fills the knowledge

gaps. You need to understand your existing business model and swap it with the

new, improved one if you intend to install an ERP software on your company. That

could produce the best results through common understanding about technical

aspects of your company and also common understanding of the business model.

This perception helps IT staffs and partners utilising the technology correctly and

meeting the customer’s needs.

12


Figure 3: Driving to a Common Understanding (Beaubouef, 2010). (Taken from http://panorama-

consulting.com/generating-business-to-it-alignment-for-a-successful-erp-implementation/)

As mentioned before, ERP is not a standalone methodology which deals with

everything in order to provide continuous improvement within the businesses. It is

just a system that integrates real-time and precise operation flows (Tambovcevs,

2012). Software capacity should be understood well at first and customising the

software or changing the organisational processes according to the selected software

should be manipulated afterwards. That is the central challenge of the system

implementation (Shanks et al. 2003). Shanks and his colleagues (2003) draw

people’s attention to this point: “an enterprise system imposes its own logic on the

company’s strategy, culture and organisation”. It implies that inputs of an ERP

system, which consists of sequence of information processes, prevail upon the

business on which is installed. That is the reason why every business is an

“information business” nowadays. Therefore, information accuracy and quality play

crucial roles; that is stated by Sheldon (2005) as “accuracy of data is an asset for

process improvement as well as process predictability in all high performance

organisations”.

In terms of function of an ERP system, it provides internal and external

integration that are mentioned by Tambovcevs (2012). He explained their differences

by emphasising their contributions. Providing common data to all the company

13


members is evaluated as internal integration, while “connecting the computer

network of an enterprise” is perceived as a definition of external integration. In this

way, entering the information onto the system once whenever the data is acquired

(one time entry) and making it accessible from any place and at any time and also

enabling to share that repository by multiple users for multiple purposes improves the

organisational activities within the company. That is the reason why this process is

named as internal integration. Additionally, the ERP system could create a linkage

between suppliers and customers by sharing necessary information and exchanging

it that shows how it integrates the business processes externally.

On the other hand, creating a computer environment through an ERP software

costs the companies a great deal of money. It needs four-fold investment more than

the other software licences (Shanks et al. 2003). Unfortunately, the majority of the

businesses recently struggle with ERP implementation due to falling short of budget

(Kimberling, 2012). He thinks that “over-investing in shelfware” is a bad habit of the

organisations. That situation illustrates that they are not expert in implementing ERP

software, which in turn waste their time and money (Kimberling, 2012). Thus, top

managers should consider their own reasonable budget based on their size in order

to implement an ERP software. In other words, cost of an ERP implementation

depends on the company’s revenue that is shown below in Table 2.

Table 2: Costs of an ERP Implementation- 2007 Aberdeen Group Survey (Tambovcevs, 2012)

Finally, that an investment of an ERP system produces long term outcomes

should be borne in mind by top managers. Sumner (2005) indicated that if the

COMPANY SIZE COST OF AN ERP SOFTWARE

Revenue < $50 million on average of $384,295

$50 million< Revenue< $100 million on average or just over $1 million

$500 million< Revenue< $1 billion just over $3 million

Revenue> $1 billion on average of $6 million

14


implementation phase takes three years, five years will be necessary to meet the

expected benefits. Also, if there is a large-scale project, improvement of the system

and return on investment for the software could be observed in ten years.

2.1.4. Benefits of an ERP system

Computer technology does not only bring facilities to individuals’ lives, but it also

allows various industries to meet their complex challenges and respond to them

(Tambovcevs, 2012). An ERP system’s objective is to automate business processes

of an enterprise and then enable the company to encounter its benefits

(Tambovcevs, 2012). It appears that development of the ERP systems takes the

place of middle managers because they were previously employed for gathering the

business processes and people and they are also responsible for managing these

components in order to run the businesses effectively. However, it seems that

expedited processes and considerable amount of cost reduction could be provided

by means of computational approach if this automation is managed well. Therefore, it

could be said that the companies have been reaping diverse benefits from the e-

business environment since the ERP systems were developed. The advantages

gained from that information technology can be collected into two groups. The first

one is evaluated as “transactional benefits”, when the other one is entitled as

“managerial benefits”.

2.1.4.1. Transactional benefits of an ERP system

Planning an enterprise’s resources could simplify the way of doing business by

increasing value-added functions, facilitating people’s work and improving

information flow. These contributions were mentioned by some experts in a similar

way: According to Ash and Burn (2003), the ERP systems provide performance gains

to the companies by enhancing quality of working life and bettering customer

interaction. They touched on “minimising of delays in customer orders” and

“effectiveness gains from optimising employee/ staff time” which were attributed to

online real-time data access. Besides, cost savings and reduced cycle time are the

15


benefits of the ERP systems (Ash and Burn, 2003). Tambovcevs (2012) indicated

the advantages of the ERP implementations as “shorter intervals between order and

payments, lower back-office staff requirements, reduced inventory, reduced costs

and improved customer service”. He mentioned that this technology provides shared

data and knowledge which can make “moving data from application to application

without re-entry by integrating these applications” possible (Tambovcevs, 2012). In

this way, labour productivity is improved through precise documentation

(Tambovcevs, 2012).

Moreover, Mary Sumner (2005) defined an ERP system’s benefits as information

flow improvement, reduction of supplier and response time and minimising the

decision-making time. Also, Harwood (2003) stated that “if an ERP implementation is

successful, then the rewards are bountiful” and added its benefits as “speedily

processed transactions” and “positive payback on the bottom line” afterwards. He

summarised the advantages of that technology by saying that: “ERP handles

transactions, maintain records, provides real-time information and facilitates planning

and control”.

As can be understood from the explanations above, an ERP system plays an

important role in managing a company. It streamlines the business processes as well

as paves the way for making more focused, improved and quality production lines or

services. There is a figure below which shows technology effects upon a supply

chain. It emphasises that if the technology is aligned well with the performance

management, efficiency and quality of the supply chain will increase while mitigating

risks and supply disruptions. This theory is also valid for the ERP systems.

16


Figure 4: Technology effects upon a supply chain (Visionet Systems, 2012) (taken from

http://www.visionetsystems.com/supplier-performance-management.html)

2.1.4.2. Managerial benefits of an ERP system

ERP systems provide exhaustive and historical data to the companies that allows

the top managers to analyse the business processes, identify their shortages and

improve them. Also, they can forecast forthcoming conditions which are possible to

encounter in future. In this way, they can make provision against misfortunes and

understand customer expectations clearly. When the customer needs are conceived

by the company managers, the businesses could be properly run. In that case, the

businesses and their quality could be enhanced and their revenues could be also

increased.

Ash and Burn (2003) commented on what the managerial benefits of an ERP

system are as “it is primarily a diagnostic tool for identifying factors contributing to

success of new business models. It is not seen as a prognostic tool.” Therefore, this

information technology should not be perceived as if it is a miracle formula to

manage the companies’ limited resources. However, it undeniably helps the top

http://www.visionetsystems.com/supplier-performance-management.html

17


managers in order to generate the best results to the organisations. That is to say,

top managers’ decisions drive business progress which could be streamlined by

means of ERP tools because of having direct connection with the activities

happening (Sheldon, 2005). Tambovcevs (2012) also stated that management of the

business processes were improved through that technology. Furthermore, timely

information enabled by an ERP system allows people to know what happens in an

organisation all the time (Harwood, 2003). In this way, “actions become more

productive” (Harwood, 2003) due to the fact that while they are monitoring, they

could be intervened in a timely manner if there is something wrong in the processes.

“ERP process disciplines allow organisations to link customers and top

management decisions all the way through to execution in the supply chain and the

factory floor” (Sheldon, 2005). In other words, customer voice is taken into

consideration by the top managers of the companies through ERP technology.

Therefore, one of the reasons why organisations could fail while implementing an

ERP software is because the top managers might not be sufficiently involved in the

implementation process (Sheldon, 2005). According to Sheldon, “ERP systems link

top management thinking and planning with marketing, sales, capacity planning,

procurement, manufacturing and customer service” and he added that if the top

management thinking cannot be directly penetrated into execution of a company’s

plans, the planning engine is worthless. Admittedly, if the top management planning

is executed properly, this process’ outputs will be inputs of master production

scheduling (MPS) and materials management (Sheldon, 2005). MPS is an

automated scheduling system that consists of a firm’s known and forecasted

requirements and also it is reinforced with material requirements planning (MRP)

tools (Sheldon, 2005). Thus, MPS occupies an important position within the

organisations for both the ERP and management processes (Sheldon, 2005).

As can be understood from the explanations above, top management’s

involvement is more important than the other staffs in a company during the ERP

implementation and its management. If there is misunderstanding about the

execution of the ERP it might not produce expected results to the companies. For

instance, top managements might evaluate this process as technical part of the

businesses rather than focusing on its strategy as mentioned by Kimberling (2012).

In that case, they might suppose that IT managers and staffs are more responsible

18


for this technology. However, ERP implementation should be based on a project

strategy which could put the business strategy into practice in real life. All in all, the

most important key is to provide top management support while implementing ERP

systems. In Koh and his colleagues’ research (2008), “the literature is united in

advocating top management support and initiation responsibility for ensuring ERP

success”. There is the figure shown below which is constituted by them and it proves

the importance of the top management involvement.

Figure 5: ERP Initiation Responsibility (Koh et al. 2008)

19


Business Intelligence:

There is another crucial notion, which is known as “Business Intelligence”, in

helping the companies in order to produce streamlined business processes. Olson

(2004) had a comment about Business Intelligence as “ERP Systems and Business

Intelligence operations are mutually supportive” and he added that “Both can exist

without the other; but both can be much more profitable if used together”. What is

more, data warehouses, which are the most important tools of business intelligence

methodologies, allow the companies to efficiently store large amount of data for their

ERP systems (Olson, 2004). To understand how Business Intelligence influences the

ERP systems, its functionality should be learned. That is the reason why it is

explained in detail below.

“ERP systems offer powerful tools to better measure and control organisational

operations” (Olson, 2004). However, they are not magic solutions that can straighten

everything else in the companies as mentioned before. It should be reinforced an

intelligent management that requires to combine different tools in the company.

Therefore, Business Intelligence tools are used as complements to the ERP systems.

Business Intelligence is also “supported by storing data (data warehouses and

related systems) and conducting studies using this data to solve business problems

(one means to do this through data mining)” (Olson, 2004). There are some Business

Intelligence tools indicated below and explained respectively in depth afterwards.

Data Storage Systems

o Data warehousing

o Data Marts

Online Analytic Processing (OLAP)

Data Mining

Data storage systems are the extensions to the ERP systems from which data

warehouses are the most popular ones (Olson, 2004). Olson (2004) mentioned that

“one major user of massive storage capacity is ERP Systems, which have large

storage requirements due to their comprehensive nature”. Data warehouses as an

“orderly and accessible repository of known facts and related data” are used by the

staffs responsible such as top managers and IT staffs in order to improve the

companies’ decision-making mechanisms. Besides, Velicanu (2007) evaluated the

20


data warehouse concept as “logical architectural approach to extracting operational

data and transforming it into accurate historical information to support the decision

making process.

On the other hand, there is a conceptual confusion between data warehouses

and database. At that point, it should be understood that “database is an application-

oriented collection of data that is organised, structured and coherent, with minimum

and controlled redundancy, which may be accessed by several users in due time”

(Velicanu, 2007). However, “a data warehouse is a subject-oriented collection of

data that is integrated, time-variant, non-volatile, which may be used to support the

decision-making process” (Velicanu, 2007). Apparently, “ERPs generate massive

amounts of data, and often data warehouses are used to support ERPs” (Olson,

2004).

In terms of Data Marts, even though they are used for storing the data needed,

specific information for particular operations is focused by means of them. In this

way, business processes, which require short term solutions and thereby need

immediate information at any given time, could be driven quicker and less expensive

through Data Marts (Olson, 2004). Data marts are the reasonable options for data

mining, which will be explained subsequently, activities because of conducting

particular investigations (Olson, 2004).

There is another important notion needed for the ERP systems that is known as

“Online Analytic Processing (OLAP)”. According to Olson (2004), OLAP systems,

which are based on multidimensional databases, are designed to make it easy to

analyse the data” and he added that “they display data in one or more of a number of

different dimensions”. Arias (2011) commented on OLAP systems as “they deal with

Historical Data or Archival Data, and it is characterized by relatively low volume of

transactions”. On the other hand, there is another approach, which is confused with

OLAP systems, that is called “On-line Transaction Processing (OLTP)”. To enlighten

that point, Arias (2011) mentioned that “OLTP systems deal with operational data,

which is data involved in the operation of a particular system and it is characterized

by a large number of short on-line transactions”.

How to aggregate the data about company processes, store it and retrieve any

information needed when necessary are explained so far. In terms of how this data

21


could be used, it seems that data mining tools play an important role. Olson (2004)

mentioned that “micromarketing” initiatives are feasible by means of data mining

tools which allow the companies to target small groups in order to treat their

customers properly. “One of the most prominent applications of data mining is

support of CRM (Customer Relationship Management)” (Olson, 2004). Olson (2004)

particularly touched on that point: “Support of customer relationship management is

the form of data mining most commonly associated with ERP.”

That market segmentation could be conducted through data mining tools is

undeniably useful for the companies’ management team. Data mining provides a

platform in which “exploratory data analysis” (Olson, 2004) could be performed. Data

mining tools could be encountered in three different forms in today’s business

environment. These forms are indicated below;

Hypothesis testing which is about “relationship between actions and

outcomes” (Olson, 2004).

Knowledge discovery (“preconceived notion may not be presented but rather

be seen by looking at the data”) (Olson, 2004)

Visualisation tools “which display data through fundamental statistical

analysis such as correlation analysis”

In terms of data mining tools, they can be categorised as regression, decision

trees, neural networks, cluster detection and market basket analysis that are “the

major categories of methods applied” (Olson, 2004).

As could be understood from the explanations above, many benefits could be

derived from data mining strategies. They are briefly indicated below;

“Blue-chip customers could be identified and provided the service needed to

retain them.” (Olson, 2004)

“The most profitable customers could be maintained.” (Olson, 2004)

“High competition has led to the use of data mining.” (Olson, 2004) It seems

that the companies which use data mining tools effectively could hold elevated

position in today’s competitive business environment.

All in all, it seems that the business intelligence is a way for the companies’ top

managers to improve the company strategies. It provides a platform to them through

22


which they could gain the customer loyalty. In that case, intelligent business

processes could be culminated in business excellence. Olson (2004) drew people’s

attention to that point: “Intelligence is required on the part of the analyst in selection

of model types, in selection and transformation of the data relating to the specific

problem and in interpreting results.” In that case, the aim of providing intelligence

within the business processes should be reinforced by some auxiliary tools such as

data warehouses, data marts and data mining that are explained briefly above. Data

warehouses could contain a variety and larger amount of information, while data

marts focus on a particular activity/ subject though being repositories similar to data

warehouses. Finally, information kept by data warehouses or data marts is used for

generally understanding the voice of the customers. After that perception, business

processes could be adjusted for the customers’ satisfaction. In that way, customers

retentions could be gained, which in turn the companies could make more and more

profit, eliminate waste throughout their business processes, reduce their costs, and

establish unrivalled reputation. “Retaining specific customers is accomplished by

having all relevant information readily available that is needed for planning, product

and service throughout the customer life cycle” (Olson, 2004). At that point, this aim

is supported by the business intelligence tools.

2.1.5. Challenges of the ERP Systems

ERP systems are crucial breakthroughs for the companies which streamline the

business processes of those companies. However, they could be dangers if they are

not implemented properly. In order to understand requirements of the ERP systems,

requirements of the each business that is attempted to be improved through an ERP

system should be perceived because one of the main challenges of those systems is

ignoring the companies’ own needs. The majority of the businesses –especially

international ones– prefer to use “standardised global templates” (Hawking, 2007).

According to Hawking (2007), although global templates prove “standardised

definitions of organisational structures”, more enhanced and less flexible “master

data” and improved “business processes”, there are some experts who object this

idea “due to the lack of flexibility at the local level to take advantages of regional

opportunities and to account cultural differences”. While this point might be evaluated

23


as a technical challenge, cultural differences in the way of doing work (“The majority

of reports in European-based ERP systems tend to be online while Asian workers

prefer paper-based reports.” (Hawking, 2007)) might be evaluated social challenge.

2.2. LEAN SIX SIGMA (LSS) APPROACH

Launching a business which is based on brilliant idea does not guarantee

success. Business processes should be monitored while conducting the business

and each problem should be tried to be prevented before they degrade its workflow.

In that case, some continuous improvement strategies such as six sigma and lean

thinking have been developed by Japanese business managers. The reason why

they have been needed is because productivity in today’s global business world is

one of the most important issues which all of the companies should take into

consideration. Lean manufacturing approach focused on eliminating waste and Six

Sigma strategy for business excellence allow top managers to streamline the

business processes while increasing the quality of business processes, products or

services, which in turn increase the productivity. In this way, companies become

profitable in a competitive business environment. However, there are insufficiencies

within each individual methodology according to Girenes (2006). Girenes (2006)

stated that while lean focuses on removing defects from the business processes,

quality aspects of those businesses are not commensurately taken notice of. At that

point, six sigma remedies that deficiency. These approaches and reasons of their

benefits to the businesses are explained in detail below.

2.2.1. What is Lean Thinking?

“Lean is a philosophy that is focused on shortening the timeline between the

customer request and the delivery of the service by eliminating waste.” (Shaffie and

Shahbazi, 2012) According to Sunder (2013), “lean thinking increases production

efficiency by consistently and thoroughly eliminating waste”. Similarly, Girenes (2006)

indicated that lean management is a result of that investigation: How could customer

demand be responded to in the shortest time by using minimum resources and

24


providing the cheapest and defect-free manufacturing. Also, she added that it is also

an answer to the question: How could a company’s potential benefits all be utilised

by using all manufacturing components and avoiding waste. Nauhria and his

colleagues (2009) defined lean manufacturing as “identification and elimination/

minimising of all kinds of manufacturing wastes” as well. They emphasised that lean

manufacturing “synchronises production levels to actual customer demand”.

Sheldon (2005) drew people’s attention to that point: “Lean thinking within a

business is about looking at all processes as opportunities for cost reduction and

customer service improvement”. According to him, “without lean, efficient supply

chain management cannot exist”.

All in all, it seems that there are two kinds of Lean approaches that are indicated

below;

Waste-based Lean

Flow-based Lean

No matter which approach stated above is used, Lean thinking might help a

company’s managers streamline their business processes. It seems that Lean

thinking provides a company to improve its responsiveness while expediting its

business processes, removing non-value-added components of the processes,

decreasing its expenditure and enhancing its customer relationship management.

These targets are “normally done through rigorous process evaluations using

mapping and other problem-solving tools” (Sheldon, 2005) that are indicated below.

Value organisation alignment mapping which is “a mapping exercise to

track information or decision making through an organisational chart”

(Sheldon, 2005).

25


Figure 6: Value Organisation Alignment Mapping (Sheldon, 2005)

Time value mapping “which is a methodology used to map both activity and

time duration of a process” (Sheldon, 2005).

Figure 7: Time Value Mapping (Sheldon, 2005)

26


Swim lane flow charts “which show activities separated by lanes of functions

in the process map” (Sheldon, 2005).

Figure 8: Swim Lane Flow Charts (Sheldon, 2005)

Physical process maps “which are maps of building layouts showing material

flow, people movement, or information flow mapped on the blue print”

(Sheldon, 2005).

Figure 9: Physical Process Maps (Sheldon, 2005)

27


Logical process flow maps “which are simple process maps depicting all

activities in a line with decision points and various alternative routes shown

with specific shapes” (Sheldon, 2005).

Figure 10: Logical Process Flow Maps (Sheldon, 2005)

The maps and problem-solving tools illustrated above might allow the

company managers to visualise the business processes, monitor them during

processing, identify the wastes and attempt to eliminate them in order to improve the

way of doing the businesses.

According to Wheat (2003), seven types of waste could be occurred in a

business environment if they are not under control. They are indicated below;

1. Overproduction

2. Inventory

3. Waiting

4. Motion

5. Conveyance (Transportation)

6. Rework (Correction)

7. Over-Processing

28


Figure 11: 7 Wastes of Lean Manufacturing (Lean Manufacturing Tools, 2013) (Taken from http://leanmanufacturingtools.org/)

Those wastes stated above could be removed by means of 5S strategy as a

kind of lean thinking. 5Ss which are Sifting, Sorting, Sweeping and washing,

Standardising and Self-discipline “improve safety and workflow and allow the

company managers to better manage the processes as a whole” (Wheat, 2003).

Additionally, those wastes could be partly or mainly eliminated with the help of many

other lean manufacturing tools some of which are explained briefly below.

Kaizen which is “the chief mechanism used to fully incorporate Lean and

provide employees a means of making improvements to their individual jobs.

(much more than an instrument for small continuous improvements)” (Davis,

2011).

Poka Yoke which is known as “mistake proofing”. “The technology of mistake

proofing is very closely associated with lean manufacturing because of its

http://leanmanufacturingtools.org/

29


great ability to enhance the improvement efforts of front-line teams in simple

and effective ways.” (Floyd, 2010).

Total Productive Maintenance which is “to increase the productivity of plant

and equipment with a modest investment in maintenance” (Prabhuswamy et

al. 2013).

Value Stream Mapping which is “an integral part of lean manufacturing that

identifies the activities that add value” (Shararah, 2013).

Just in Time which is “a set of management practices aimed at continuous

improvement through the elimination of all wastes and full utilisation of human

resources” (White et al. 2010).

Cellular Manufacturing that is “an application of the Group Technology (GT)

concepts, which is a manufacturing concept that seeks to identify and group

similar parts to take advantage of their similarities in manufacturing and

design, to factory reconfiguration and shop floor layout design” (Irani, 1999).

Even though they might track different ways of fulfilling a company’s lean

initiatives, all of those approaches focus on the same target: excluding non-value

added activities from the business processes. In other words, they constitute

continuous improvement in the companies all together.

According to Sunder (2013), there are 4 lean principles that are explained

below;

Value which “is defined as the right capability provided to the customer at the

right time and at the right place” (Sunder, 2013).

Value stream which is “understanding end-to-end value adding and non-

value-adding activities from the customer’s perspective” (Sunder, 2013).

Flow which is “eliminating queues and stops and improving process flexibility

and reliability (Sunder, 2013).

Pull system which is “reacting and fulfilling the customer demand just-in-time

without trying to push the products to the customer” (Sunder, 2013).

In addition to the explanations above, waste is not value-added components of

the company (Sunder, 2013). Therefore, Lean Thinking focuses on “eliminating

waste and non-value adding activities across the entire supply chain” (Sunder, 2013).

30


At that point, Sunder (2013) mentioned that Lean is a useful enabler in order to

achieve rapid improvements. However, he indicated that there is a contradiction

because Lean Six Sigma approach, which is explained in detail hereafter, is a long

term solution for the company even though lean thinking is beneficial for short term

rapid improvements. In that case, company managers might institute rapid

improvements, which are probably needed during the business processes, through

lean thinking during the Lean Six Sigma processes by bearing in mind that lean

manufacturing could produce long term solutions to the companies.

Finally, the benefits of the lean adoption are illustrated below (Nauhria et al.

2009).

Operational Improvements

Administrative Improvements

Strategic Improvements

reduction of lead time

increase in

productivity

reduction in work-in-

process inventory

reduction in order-

processing errors

streamlining of customer

service functions

reduced costs

competitive advantage

Table 3: Lean Manufacturing Adoption (Nauhria et al. 2009)

2.2.2. What is Six Sigma?

In today’s highly competitive business environment, quality is primarily

considered by the customers while purchasing products and services because of the

fact that there are many options for them to purchase for a same product or service.

In that case, their purchases are based on their satisfaction from the quality of what

they want to buy. At that point, the companies should focus on increasing quality of

their products/ services in order to retain their customers. Even though lean thinking

provides the companies to eliminate waste from their business processes, it falls

short of increasing quality of the products and services because of focusing more on

speed of the business processes (Girenes, 2006).

“Six Sigma is a statistical problem-solving methodology and a management

philosophy, one that dictates that business and process decisions should be based

31


on data” (Shaffie and Shahbazi, 2012). According to Shaffie and Shahbazi (2012),

“Six Sigma’s fundamental goal is to reduce operational variance by improving the

overall quality and performance levels of business processes”. Also, Cavanagh and

his colleagues (2005) defined it as “a measure of the variation of a process, product

or service from customer requirements”. Similarly, Nauhria and his colleagues (2009)

mentioned that “Six Sigma is an improvement program for reducing variation on a

product or service” and they added “the purpose is to satisfy customers”. Defects

elimination from the business processes could be possible through Six Sigma

methodologies (Nauhria et al. 2009).

In addition to these, Sunder (2013) drew people’s attention to the same points

as the others by saying “Six Sigma is a continuous improvement methodology that

focuses on reduction of variation”. He indicated that it is a statistical tool due to the

fact that there are statistics in the quality paradigm. Broadly, 3.4 defects per million

opportunities could only be acceptable in the Six Sigma strategy.

There are two roots of Six Sigma which are Total Quality Management (TQM)

and Six Sigma Statistical Metric (Sunder, 2013). “Total Quality Management (TPM)

and Total Productive maintenance (TPM) systems are considered as the key

operational activities of the quality management system” (Prabhuswamy et al. 2013).

TPM, which is explained in the lean thinking part, increases the productivity of plant

and equipment while “TQM looks at the overall quality measures used by a company

including managing quality design and development, quality control and

maintenance, quality improvement, and quality assurance” (Murray, 2012). In that

case, “implementing TQM and TPM together results in synergy” (Prabhuswamy et al.

2013).

32


Figure 12: Customers’ perception of a company’s quality (Oakland, 1997)

That “a company’s reputation is based upon the customers’ perception of its

quality” (Oakland, 1997) is delineated by means of cartoon above. Also, Oakland

(1997) emphasised that “the successful business meets all its customers’

requirements”.

Beyond Six Sigma approach, there is another strategy which is called “Design

for Six Sigma (DFSS)” that reinforces effectiveness of six sigma methodologies.

“DFSS is a proven, robust approach to designing new products and services and

redesigning the flaws out of existing offerings” (Cavanagh et al.2005). Cavanagh and

his colleagues (2005) drew people’s attention to the point: “DFSS can be applied to

building new competitive capabilities that go beyond current customer expectations.”

33


According to them, “Six Sigma emphasizes six themes that are also the primary

tenets of DFSS”. These themes are indicated below;

“Genuine Focus on the Customer” (Cavanagh et al. 2005)

“Data and Fact-Driven Management” (Cavanagh et al. 2005)

“Focus on the Process” (Cavanagh et al. 2005)

“Proactive Management” (Cavanagh et al. 2005)

“Boundaryless Collaboration” (Cavanagh et al. 2005)

“Driving Toward Perfection, Tolerating Honest Failure” (Cavanagh et al. 2005)

Six Sigma strategy requires from the companies to use two key methodologies

which are DMAIC (Define, Measure, Analysis, Improve and Control) and DMADV

(Define, Measure, Analyse, Design and Verify) (Pillai et al. 2012). DMAIC is “ a way

of making incremental improvements in processes and products” whilst DMADV

focuses on “identifying and clarifying what will be worked on, deciding how it will be

measured, analysing the situation, detailing the design and testing and deploying the

new process, product or service” (Cavanagh et al. 2005). In that case, it seems that

existing business processes could be improved through the DMAIC methodology (Six

Sigma) while planning project could be ensured for the quality by means of the

DMADV methodology (Design for Six Sigma). At that point, Pillai and his colleagues

(2012) indicated that “every stage of Six Sigma project requires a mix of both”.

As could be understood from the explanations above, Six Sigma is a

“structured problem solving methodology” and also “well-structured data-driven

approach”. These features provide the companies to “improve manufacturing

process” and “eliminate defects” (Pillai et al. 2012).

2.2.3. Why should Lean and Six Sigma be combined?

Lean Six Sigma is a successive approach that produces the best results to the

companies which intend to bring continuous improvement to their business

processes. According to Shaffie and Shahbazi (2012), “Lean with its simple approach

that focuses on improving the speed and efficiency of processes, provides breadth in

problem solving” and “On the other hand, Six Sigma is more sophisticated and offers

34


a method for drilling deep into complex issues”. They emphasised that “Six Sigma

also has a very structured approach to problem solving that is absent in Lean”.

Additionally, they summarised as “Six Sigma is about enhancing the quality and

accuracy of processes by reducing variation, while Lean focuses on achieving faster

response times by eliminating waste. As a result, these two methodologies offer

complementary tool kits; they help address the root cause of different business

challenges.”

Similarly, Lean Six Sigma defined by Sunder (2013) as “combination of two

popular continuous improvement methodologies”. According to him, that they

complement each other results in “improving the production and transactional

processes of an organisation”. However, there are still some companies which might

prefer just Lean or just Six Sigma (Sunder, 2013). At that point, that the

implementation of both could produce the best results because of their compatibility

should be borne in mind by the company top managers.

On the other hand, Pillai and his colleagues (2012) explained that situation in

depth by saying “Lean is an agile methodology for managing change while Six Sigma

approach emphasises continuous improvement as part of a defect reduction

strategy”. They indicated that “both continuity and change under a flexible

management system and illustrate the application of continuity and change

framework using an integrating Lean Six Sigma”. Flexible management is “a strategy

for maximising profitability at project level and organisation level that includes Lean

Manufacturing and Lean Six Sigma” and “it makes defect free products/ models in a

shorter cycle time (Pillai et al. 2012). In this way, “newer models provide higher

predictability and risk reduction by ensuring that business deadlines are met” (Pillai et

al. 2012). Additionally, Pillai and his colleagues (2012) drew people’s attention to the

point: “A lean measure of flexibility entails planning and capacity building that is

based not on forecasts but on real customer demand”.

Lean Representative of “change” forces

Six Sigma Representative of “continuity” forces

Table 4: Lean and Six Sigma (Pillai et al. 2012)

35


In that case, “Lean Six Sigma encapsulates twin paradigms of continuity and

change by managing business developments in a rapidly changing environment with

an objective of consistently delivering” (Pillai et al. 2012). Also, “Lean Six Sigma

maximises stakeholders’ value by achieving the fastest rate of improvement in

customer satisfaction, cost, quality, process speed and invested capital” (Pillai et al

2012).

Indeed, it seems that Lean Six Sigma approach is based on DMAIC which is

the most essential method in Six Sigma strategy. DMAIC method consists of five

steps in some of which Lean tools should be used in order to solve identified

problems and enhance business processes. While “Define”, “Measure” and “Analyse”

phases are related to Six Sigma tenets, Lean manufacturing tools are used in mostly

“Improve” and also “Control” phases. Additionally, it is clearly to see that ERP

systems are auxiliary tools for the Lean Six Sigma projects because “DMAIC is a

structured, data-based and problem-solving process” (George et al. 2004). DMAIC

method is explained in more depth below.

2.2.3.1. Implementation Overview of Lean Six Sigma

That Lean and Six Sigma are combined together is attempted in order to

achieve a resounding success as far as possible within a business process. “The

most successful rollouts have the following criteria in common. If these criteria are

not met, your implementation is likely to encounter resistance and/ or complications”

(Shaffie and Shahbazi, 2012):

“The initiative uses a top-down approach.” (Shaffie and Shahbazi, 2012)

“The organisation develops an infrastructure to support the Lean Six Sigma

rollout.” (Shaffie and Shahbazi, 2012)

“Systems for obtaining customer input are established.” (Shaffie and

Shahbazi, 2012)

“There is effective training within the organisation- all parties, who would be

affected, are trained.” (Shaffie and Shahbazi, 2012)

“Meaningful expectations are set with leaders and employees.” (Shaffie and

Shahbazi, 2012)

36


“Key metrics are identified.” (Shaffie and Shahbazi, 2012)

“There is a clear link between business processes and the key metrics.”

(Shaffie and Shahbazi, 2012)

Subsequently, implementation manipulated into three phases that are

indicates in Table 5 below.

First Phase Second Phase Third Phase

Quality leader,

aligns the effort with the company’s mission

selects a focus area

forms the organisation

Champions are trained

Metrics are developed

Projects are identified

Black and Green Belts

are trained

Start executing the

projects

Table 5: Three Phases of Lean Six Sigma (Shaffie and Shahbazi, 2012)

“For long-lasting success of the Lean Six Sigma initiative, the organisation will

need to have a formal structure for its deployment. This formal structure will include

Green Belts, Black Belts and Master Belts as well as Champions or Sponsors.”

(Shaffie and Shahbazi, 2012) This hierarchical structure is explained briefly below.

Green Belts which are “employees who have been trained in the Lean Six

sigma methodology” (Shaffie and Shahbazi, 2012).

Black Belts which “lead larger Lean Six Sigma Projects” (Shaffie and

Shahbazi, 2012).

Master Black Belt which “will lead the Lean Six Sigma effort within one

segment of a company” (Shaffie and Shahbazi, 2012). According to Shaffie

and Shahbazi (2012), “one Master Black Belt is assigned to each business

unit” and “Master Black Belts are responsible for working with the Green and

Black Belts in completing projects”.

37


Champion or Sponsor which “leads the Lean Six Sigma effort within the

entire organisation” (Shaffie and Shahbazi, 2012). This person is responsible

for “setting the overall quality strategy, which will require having a keen

understanding of areas that are in need of improvement and/or additional

resources” (Shaffie and Shahbazi, 2012).

In terms of the way of implementing the Lean Six Sigma, DMAIC

methodology, which is usually conducted for Six Sigma projects, is used for this

combined continuous improvement strategy as well. “To truly achieve excellence,

there has to be a standard quality culture.” (Shaffie and Shahbazi, 2012) At that

point, Lean Six Sigma might be enabler for an organisation in order to attain that

culture. The additional elements for achieving excellence are also mentioned by

Shaffie and Shahbazi (2012) as:

“Organisational commitment”

“Becoming a data-rich organisation”

“Developing unbiased and predictable business metrics”

“Creating a culture of accountability and acceptance”

As can be seen on the Figure 12 below, service excellence is based on

continuous improvement culture and Six Sigma Quality culture. As could be

understood from the explanations stated so far, Six Sigma is a project-oriented

vigorous methodology which focuses on tackling major projects while Lean thinking

provides continuous improvement to companies within those projects. In that case,

Six Sigma approach could enhance process quality as well as product or service

quality. Additionally, Lean thinking within Six Sigma projects provides Six Sigma

teams to streamline those projects’ processes and improve their efficiencies. At that

point this combination is called Lean Six Sigma approach. Lean thinking and Six

Sigma strategy could be implemented to companies separately and they might

improve their business processes individually. However, it seems that they could

produce the best results when they are combined together.

38


Figure 13: The four Pillars of a quality culture (Shaffie and Shahbazi, 2012)

Nonetheless, business excellence requires more than Lean Six Sigma. That is

to say, it also needs organisational commitment, data-rich organisation, predictable

metrics and accountability. As could be perceived from the explanation just

mentioned, these additional features characterise the ERP systems. In other words, it

can be said that data-rich organisation and predictable metrics after ensuring

organisational commitment and accountability could be provided through ERP

systems according to the explanations about the ERP systems mentioned before.

The reason why ERP systems could improve the Lean Six Sigma projects is because

DMAIC is a data-based process by reason of “gathering data in nearly every phase

39


to help people make decisions” (George et al. 2004). At that point, an ERP system

provides a Lean Six Sigma team a platform which enable improved information flows,

databases and easy access to data warehouses.

2.2.3.2. DMAIC Methodology into Lean Six Sigma Projects

DMAIC is “the most effective problem-solving methods ever used” according

to George and colleagues. They explained the reason of that definition by saying “it

forces teams to use data to…

confirm the nature and extent of the problem

identify true causes of problems

find solutions that evidence shows are linked to the causes

establish procedures for maintaining the solutions even after the project is

done”.

Before discussing the similarities, commonalities and differences between

Lean Six Sigma and ERP systems, how DMAIC methodology explained briefly above

is implemented into Lean Six Sigma projects is explained in detail below. Each

DMAIC phase, which is shown below what stands for, is explained respectively.

Define

Measure

Analyse

Improve

Control

2.2.3.2.1. Define Phase

At that phase understanding the voice of the customers (VOC) and identifying

the value-added components of an organisation are the main targets for the Lean Six

Sigma promoters (Pillai et al. 2012). In order to achieve those targets, there must be

three deliverables that could be created. They are shown below;

40


“Develop the project charter” (Neil, 2013). This is “the first step in the Six

Sigma methodology which is for specifying necessary resources and

boundaries” (Swinney, 2010). According to Neil (2013), it is an important

document that “summarises the purpose, current scenario & goal, measures

of success (CTQ-Critical-to-Quality), project’s scope, quantitative and

indicative project benefits and team members.”

“Identify the Project CTQ” (Neil, 2013). Neil (2013) mentioned that it is “a

measure of success for the projects” and he added that “there is only one

CTQ for DMAIC projects”.

“Create process maps” (Neil, 2013). Process maps are defined by Neil (2013)

by “end-to-end process documentation”.

Similarly, Shaffie and Shahbazi (2012) indicated four steps in this phase;

1. “Define the project CTQ or the item or area in need of improvement” (Shaffie

and Shahbazi, 2012) As a result of this initiative, identification of customers,

products/ services and processes could be made. Additionally, customers and

their needs could be clearly analysed through VOC (Voice of Customers) as a

tool (Shaffie and Shahbazi, 2012).

2. “Outline the business case” (Shaffie and Shahbazi, 2012). In this way, “a team

charter with a problem statement, goal and financial benefits, scope and

required resources” (Shaffie and Shahbazi, 2012) could be produced.

Identifying project milestones might be exemplified as a way of doing that

step.

3. “Develop a high level process map” (Shaffie and Shahbazi, 2012). In that

case, definition of “project boundaries” and “an outline of areas of risk” could

be provided through mapping (Shaffie and Shahbazi, 2012). SIPOC

(Suppliers, Inputs, Process, Outputs and Customers) and Product

Synchronisation might be tools of that step (Shaffie and Shahbazi, 2012).

4. “Define and execute a change management strategy” (Shaffie and Shahbazi,

2012). This attempt results in “creating a shared vision and gaining consensus

from key stakeholders” (Shaffie and Shahbazi, 2012). Threat vs Opportunity

matrix for “creating a shared need”, Elevator Speech for “creating a vision that

must outline the future state” and Stakeholder Analysis for “determining the

41


key stakeholders’ current level of support” are the tools for this step (Shaffie

and Shahbazi, 2012).

In terms of the tools mentioned above, SIPOC is used for two purposes that

are “providing a macro overview of the process or service flow and the interrelations

within a business” and “ defining the process boundaries- the start and end points of

the process in need of improvement” (Shaffie and Shahbazi, 2012). On the other

hand, product synchronisation is “a lean tool that is typically used to better

understand the “P” in the SIPOC map” and also “helps define the major process

milestones and the critical path” (Shaffie and Shahbazi, 2012).

Differently, George and his colleagues (2004) emphasised the project

charter’s importance in a Lean Six Sigma project. They defined it as a compass for

the project by saying “A project charter captures the essence of a project. It

describes what the team should accomplish, who will work on the project and in what

roles, time lines and other key information.” They also drew people’s attention to why

those steps mentioned above should be done. According to them, it is for…

“developing a shared understanding of the business priorities for a project”

“confirming the opportunity”

“reaching agreement with management on a realistic scope for the project”

“agreeing on how success will be measured”

To sum up, it might be said that this phase is the most important phase of

DMAIC method because if the real problem and the goals are not precise, the

solutions will probably not be workable. For that reason, Shaffie and Shahbazi (2012)

stated that “Define phase is more challenging step”. They also added that “Green

Belt or Black Belt should clearly outline the need for change”. In this way, “the project

leader can better facilitate discussion and remove emotion by using data in problem

and goal statements” (Shaffie and Shahbazi, 2012).

42


2.2.3.2.2. Measure Phase

All possible causes are identified within this phase of DMAIC methodology. In

order to achieve the aimed improvement(s) through a Lean Six Sigma project, data

collection plan should be prepared after “ascertaining that the measurement system

that is based on Measurement System Analysis (MSA) is good” (Neil, 2013). The

deliverables of this phase are illustrated below;

“Identify all possible causes (Cause and Effect Diagram)” (Neil, 2013).

“Validate measurement system, data collection and sampling” (Neil, 2013).

“Establish process capability” (Neil, 2013).

In detail, Shaffie and Shahbazi (2012) mentioned that this phase is about

“deep understanding of what your customer wants from you” and it focuses on “the

type of data needed”. The measurement which is focused on in this phase is that if a

company has “the correct mechanism for gathering these data” (Shaffie and

Shahbazi, 2012). It consists of four steps that are explained below.

5. “Define the CTQ (Critical-to-Quality) characteristics” (Shaffie and Shahbazi,

2012). In this step, value-added components of the processes should be

identified based on customer satisfaction because business outputs should

satisfy the customer. This philosophy might be adopted by each business due

to the fact that all of their profitability is based on the customers’ purchasing

decision. For instance, there is an “Iron Triangle” which consists of Quality,

Cost and Delivery (Time) (Atkinson, 1999). According to this philosophy, the

success of project management is related to these three components. Thus,

critical to quality should be defined as an aspect of Six Sigma, delivery

improvement and cost reduction are provided afterwards through Lean

thinking. CTQ characteristics include observing macro business which could

be manipulated by X-functional Process Mapping, total product cycle time,

causes and their effects provided by Fishbone diagrams and reasons of the

failures that could be analysed by Failure Mode and Effects Analysis (FMEA)

(Shaffie and Shahbazi, 2012).

6. “Outline performance standard that translates a customer need into a clear

and measurable characteristics” (Shaffie and Shahbazi, 2012).

43


7. “Develop a data collection plan that provides a clear, documented strategy for

gathering reliable data for the project and gives all the members of the team a

common reference point for the collection” (Shaffie and Shahbazi, 2012).

8. “Validate the measurement system” (Shaffie and Shahbazi, 2012).

On the other hand, George and his colleagues (2004) emphasised that

“combining data with knowledge and experience is what separates true improvement

from just tinkering with a process”. They mentioned that “evaluating the existing

measurement system, observing the process, gathering data and mapping the

process in depth” are done in this phase. In this way, these following points happen

according to them;

Trustable data

Decisions are based on “facts” and “reality”

Documented process

Understanding the important components that should be primarily enhanced.

2.2.3.2.3. Analyse Phase

As can be understood from its name, this phase is for analysing root causes

and their impacts. These are the deliverables of that phase shown below;

“Statistically validate root causes” (Neil, 2013).

“Perform Value Stream Mapping (VSM) and Process Value Analysis” (Neil,

2013). According to Neil (2013), VSM is a holistic method which “statistically

identifies root causes” and he particularly indicated that “it is used to identify

the 7 types of wastes which are explained before”.

“Control and impact matrix” (Neil, 2013).

George and his friends (2004) stated that “the purpose of the analyse phase is

to make sense of all the information and data collected in ‘Measure’ and to use that

data to confirm the source of delays, waste and poor quality”. According to Shaffie

and Shahbazi (2012), “the ‘Measure’ phase is the ‘feeder’ to the problem-solving

44


(Analyse) and solution-finding phases (Improve)”. They thought that these following

components should be done up to now:

“The business case for the project has been approved” (Shaffie and Shahbazi,

2012).

“Potential resistance from key stakeholders has been reduced” (Shaffie and

Shahbazi, 2012).

“The process has been mapped” (Shaffie and Shahbazi, 2012).

“Critical process data have been collected” (Shaffie and Shahbazi, 2012).

Subsequently, they added that “the end goal of this phase is to take all

collected information and data and identify the root cause of the problem”. They

divided this phase into three steps that are indicated below.

9. “Baseline the process’s current capability” (Shaffie and Shahbazi, 2012). It

might be essential to observe the improvement which might be achieved after

making some changes within the process. Therefore, it seems that this first

step of the phase should be conducted. Shaffie and Shahbazi (2012)

mentioned that there are many tools for presenting this capability such as

Histogram for “providing information about the shape, central tendency and

variability of a process”, Run Chart for “tracking the performance of a process

over time and displaying trends in the performance of that process”, Box Plot

for “comparing the distribution of multiple processes” and Pareto Analysis for

“separating the vital few causes (X) from the trivial by comparing the

frequency of occurrence”. Additionally, normality plot for “determining how

closely the data follow a normal distribution” (Gygi, 2005) which in turn leads

to “analysing continuous normal data and discrete data” (Shaffie and

Shahbazi, 2012) and z table for defining the capability are also tools of that

step. Z score, which is also known as “the sigma score”, allows people to

“determine the performance of the processes relative to the customer needs

and wants” (Shaffie and Shahbazi, 2012). According to Shaffie and Shahbazi

(2012), “the higher the sigma score, the more capable the performance of our

process”.

10. “Define the performance objective for the process that could be attained

through benchmarking” (Shaffie and Shahbazi, 2012).

45


11. “Identify sources of variation” (Shaffie and Shahbazi, 2012). Some statistical

tools such as Value-Add and Non-Value-Add analysis for “reducing process

cycle time, standardisation or stabilisation” (Shaffie and Shahbazi, 2012), takt

time calculations which are “the targeted rate that request or service need to

be completed in order to meet customer demand” (Shaffie and Shahbazi,

2012), correlation studies which “help explore the possibility of a relationship

between two variables” (Shaffie and Shahbazi, 2012) and hypothesis testing

which “allows the comparison of two or more process attributes” (Shaffie and

Shahbazi, 2012) are the tools of this step.

All in all, Lean Six Sigma teams “start exploring all the possible root causes

that can affect the performance of the processes and/or the products” (Shaffie and

Shahbazi, 2012). According to Shaffie and Shahbazi (2012), there could be “short list

of critical factors that need to be improved in order to meet project goals by the end

of this phase”.

2.2.3.2.4. Improve Phase

After identifying the root causes and understanding the reasons why they

occur and result in non-value-added activities, business processes are improved by

eliminating waste or ameliorating those causes at that phase. This phase’s

deliverables are indicated below;

“Identify solutions to overcome the impact of root causes” (Neil, 2013).

“Refine solutions” (it could be manipulated through Poka Yoke mentioned

before or Failure Modes and Effect Analysis) (Neil, 2013).

“Pilot Solutions” (Neil, 2013).

“Statistically validate results” (Neil, 2013).

Similarly, Shaffie and Shahbazi (2012) mentioned that the role of this phase is

to “identify the vital problems (Xs) and implementable solutions” (12th step of DMAIC

method based on their view). In order to achieve that goal, 5S strategy which is

based on 5S principles of Japanese management system (Seiton-Seiri-Seiso-

Seiketsu-Shitsuke=Tidiness-Organisation-Cleanliness-Purity-Discipline), Line

46


Balancing for “avoiding a build-up of work in progress and beginning identifying the

number of sources required to run the ‘line’” and Kaizen philosophy which “is based

on continuous improvement” are the tools of this phase (Shaffie and Shahbazi,

2012). According to Kaizen strategy, the ideal solution cannot be arrived at in one

step (Shaffie and Shahbazi, 2012). That is the reason why improvements could be

achieved at the end of rigorous works which are continuously done step by step.

Additionally, if the projects are more complex, Six Sigma tools such as regression

analysis come into play at that point in order to understand variables’ relationships

(Shaffie and Shahbazi, 2012).

All in all, “the sole purpose of ‘Improve’ is to make changes in a process that

will eliminate the defects, waste and cost that are linked to the customer need

identified in the ‘Define’ stage” as mentioned by George and his colleagues (2004).

2.2.3.2.5. Control Phase

This phase is based on monitoring the processes controlling the Lean Six

Sigma initiatives. Neil (2013) stated that Lean Six Sigma projects disappear a few

years after the implementation because of poor control. Therefore, that phase should

be thoroughly taken into consideration by the top managers. There are deliverables

illustrated below;

“Prepare Control Plan” (Neil, 2013).

“Final implementation” (Neil, 2013).

“Establish Statistical Process Control (SPC)” (Neil, 2013).

“Benefits Computation and Closure” (Neil, 2013).

According to Shaffie and Shahbazi (2012), this phase consists of three steps

that are indicated below.

13. “Validate measurement system analysis on the Xs (variables= causes or

problems)” (Shaffie and Shahbazi, 2012). It ensures that “having an adequate

and reliable way of measuring the critical Xs of the process” (Shaffie and

Shahbazi, 2012).

47


14. “Determine the process capability” (Shaffie and Shahbazi, 2012). This step

assures that identified goals have been actually achieved (Shaffie and

Shahbazi, 2012).

15. “Implement process control” (Shaffie and Shahbazi, 2012). Shaffie and

Shahbazi (2012) defined a process control system as “a strategy for

maintaining the improved process performance over time”.

Shafie and Shahbazi (2012) emphasised that “there are several ways to

develop a control system” that are mentioned below:

Risk Management

Poka Yoke (Mistake-proofing devices)

Statistical Process Control (SPC)

Data Collection Plans

Outgoing Measurements

Audit Plans

Process Documentation

Process Ownership

Quality Plan

Poka Yoke, Statistical Process Control and Quality Plan among those

methods indicated above are the most popular tools of this phase (Shaffie and

Shahbazi, 2012).

Consequently, “the purpose of control is to make sure that any gains your

team makes will last” (George et al. 2004). Shaffie and Shahbazi (2012) mentioned

the same thing in a different way by saying “this phase ensures that the

improvements will stay in place long after the team has been disbanded”.

These five phases are summarised into a table that is shown below by Pillai

and his colleagues (2012). In that figure, they similarly touched on what Neil

explained in his article.

48


Figure 14: Lean Six Sigma Integration (Pillai et al. 2012)

2.2.4. Challenges of Lean Six Sigma

Lean Six Sigma is a peerless tool for the continuous improvement of a

company. Its results could be exceedingly bountiful if it is implemented properly.

However, there are inevitable some challenges that could be known and adequate

provisions should be made in order to be successful within the Lean Six Sigma

projects.

According to Hudgik (2013), “most of implementations are not successful

because management underestimates the amount of time and effort required to

implement and maintain Lean”. As mentioned just before, “if sufficient time and

49


resources are not provided, the likelihood of failure is high” (Hudgik, 2013). In that

case, the top managers could sometimes misunderstand what the project requires in

order to maintain Lean Six Sigma strategy and they choose to “hire consultants” and

“pour resources into this initiative” (Hudgik, 2013). This also seems waste of money

that is a considerable drawback for a company.

Furthermore, he emphasised that even only Lean implementation takes more

than two years, which in turn its combination with Six Sigma could be more

complexity and takes more time. In that case, ignoring that point could be a serious

challenge for the companies.

On the other hand, Sunder (2013) argued that “ownership is important to

sustain the results reaped out of a successful project” and added “lack of ownership

makes the projects unsuccessful many times”. He also stated that “lack of top

management involvement”, “wrong selection of projects” and “narrow project-only

perspective” are also reasons for failure of Lean Six Sigma.

Finally, Montero (2010) listed some unsuccessful results which are illustrated

below;

“Unclear link between strategy and LSS projects” (Montero, 2010).

“Lack of key process structure into the organisation” (Montero, 2010).

“Flavour of the Month” (Montero, 2010).

“Misunderstand of Lean and Six Sigma relationship” (Montero, 2010).

“Immature firm readiness to apply Lean Six Sigma” (Montero, 2010).

“Deficient stock of knowledge and monetary resources” (Montero, 2010).

As could be perceived from the explanations above, many of these challenges

stated before are emanated from lack of data or data control even though there are

some independent ones of data. In that case, there should be a system which can

provide an information flow from supplier to customers. In this way, Lean Six Sigma

implementations could be facilitated and enhanced.

50


2.3. CORRELATION OF ERP SYSTEMS AND LEAN SIX SIGMA

STRATEGIES

As mentioned before, ERP systems facilitate Lean Six Sigma projects. In

order to observe their contribution to DMAIC processes, its phases are visualised

below respectively;

Steps of Define Phase

Deliverables Tools

1. Project CTQ identify an opportunity identify the customer define CTQ

VOC

2. Outline Business Case

develop team charter Project milestones

3. Process Mapping define project boundaries

SIPOC & Product synchronisation

4. Change Management

create a shared vision gain consensus from key stakeholders

Threat vs Opportunity matrix, elevator speech and key stakeholder analysis

Table 6: Define Phase’s steps (Shaffie and Shahbazi, 2012)

According to the Table 6 illustrated above, it seems that an ERP system is one

of the most essential tools in the first step because an activity of VOC (Voice of

Customers) requires current and historical information about the customers. As

mentioned so far, ERP systems are generally integrated with Business Intelligence

tools in order to improve each other’s efficiency. In that case, VOC could be ideally

provided through Business Intelligence tools such as Data Mining. Therefore, ERP

systems are related with VOC indirectly by supporting Business Intelligence tools and

directly by being an activity that is regarding information. Additionally, Shaffie and

Shahbazi (2012) stated that “Product Synchronisation shows the relationships among

ERP

ERP

ERP Lean

51


various process steps (flow and applies labour) that need come together in order to

build a service or product”. At that point, it seems that “showing the relationships

among various process steps” needs a huge data manipulation which is exactly what

the ERP systems do. Also, stakeholders analysis requires data management as

happened in VOC (Voice of Customers) activities.

On the other hand, Shaffie and Shahbazi (2012) emphasised that “Product

Synchronisation is a Lean tool that is typically used to better understand the ‘P’ in the

SIPOC (Supplier, Input, Process, Output, and Customer) map. It standardises a

process and reduces its cycle time” (Shaffie and Shahbazi, 2012). In that case, it

seems that there is a lean contribution to the “Define” phase. When thinking outside

the box, it could be said that an ERP system might reinforce this Lean tool.

All of those three considerations mentioned just before are the contributions of

ERP and Lean thinking to this first phase. They will be analysed in depth after the

literature review part.

Steps of Measure Phase

Deliverables Tools

5. Define CTQ Characteristics

link customer CTQ to measurable process/ service characteristics

X-functional process map, Total product cycle time, Fishbone, FMEA

6. Outline Performance Standards

define defect and specification limits for project Y

7. Data Collection

develop a data collection plan

8. Validate Measurement System

ensure reliable and accurate data

Table 7: Measure Phase’s steps (Shaffie and Shahbazi, 2012)

Lean ERP

ERP

ERP

52


It is apparent to see from the table above that an ERP system could be an

enabler to produce a streamlined “Measure phase” to a Lean Six Sigma team due to

the fact that this phase includes many activities which are based on “information”. As

mentioned at the outset, any activity regarding information should be integrated with

ERP systems in order to improve the information flow and data accuracy and quality.

In the fifth step within the DMAIC method indicated above, business flow should be

expedited and non-value added activities should be removed. At that point, Lean

thinking comes into play.

Briefly, defining CTQ (critical to quality) characteristics could be provided

through some tools such as Functional process mapping, Fishbone diagrams and

Failure Mode and Effect Analysis (FMEA). These tools either need to extract some

information from the transactional processes currently conducted or require saving

what is produce during those activities (results of these implementations).

Informational needs appear again. That is the reason why the ERP systems might be

beneficial in fifth step as well. Furthermore, “a performance standard translates a

customer need into a clear and measurable characteristic.” (Shaffie and Shahbazi,

2012) It seems that the sixth step also needs an information management. Thus,

ERP systems help people to do it in a better way. In addition to these, that data

collection might be facilitated through the ERP systems in the seventh step within the

“Measure” phase is indicated on the Table 7 above.

On the other hand, “FMEA allows a team to identify defect(s) in the process

that should be eliminated and/or reduced.” (Shaffie and Shahbazi, 2012) That is what

exactly Lean should do. Therefore, this step is also related to the Lean Thinking.

Those reasons explained above which will be analysed in more depth in the

Methodology section are flagged on Table 7.

In terms of Analyse phase, although it is a phase that is mainly driven by

statistical tools and based on Six Sigma tenets, contributions of the ERP systems

and Lean thinking might be observed during it. For instance, Shaffie and Shahbazi

(2012) emphasised that “after the improve phase, what have been found from the

‘Analyse’ phase can help you compare the historical performance of a business with

the improved one”. In that case, historical data will be needed and thereby required

53


an ERP system’s help. On the other hand, “the goal is reducing process cycle time,

standardisation or stabilisation” (Shaffie and Shahbazi, 2012). Additionally, when

“Value-Add, Non-Value-Add and Necessary Non-Value-Add Analysis” are taken into

consideration, it seems that Lean Thinking could provide what exactly is expected

from the eleventh step shown below.

Steps of Analyse Phase

Deliverables Tools

9. Baseline Process Capability

graphical representation of capability continuous normal data analysis discrete data analysis first-pass yield calculation

Histogram, Run chart, Box plot & Pareto Normality plot, z table and data indicators First-pass yield

10. Define Performance Objective

develop attainable goals

Benchmarking

11. Identify Sources of Variation

identify process inefficiencies (cycle time/ capacity) graphical analysis (optimisation/ quality) numerical analysis

Value-add (VA)/ Non-value-add (NVA) analysis, takt time, effective hours Correlation & Scatter plot Hypothesis testing

Table 8: Analyse Phase’s steps (Shaffie and Shahbazi, 2012)

In improve phase, everything is related to Lean Thinking because problems

have been identified, measured and analysed up to now. Then, it is time to improve

all of them. For that reason, the improve phase mainly requires lean tools to improve

those detected problems. Therefore, it could be said that Lean contribution is

observed in the “Improve” phase as illustrated on the Table 9 below.

Six Sigma

&

Statistical

Tools ERP

Lean

Stat. T.

54


Steps of Improve Phase

Deliverables Tools

12. Identify the vital Xs and implementable solutions

reduce cycle time, improve flow more complex projects, where the relationships between variables are not well understood, will rely on Six Sigma tools like regression

5S, Line Balancing, Kaizen

Table 9: Improve Phase’s steps (Shaffie and Shahbazi, 2012)

Steps of Control phase

Deliverables Tools

13. Validate Measurement Systems on the Xs

ensure that an adequate and reliable way of measuring the critical Xs of the process.

14. Determine the Process Capability

ensure that goals are actually achieved

15. Implement Process Control

A process control system is a strategy for maintaining the improved process performance over time

The most popular ones: Poka Yoke (mistake proofing devices), Statistical Process Control (SPC) and Quality Plan

Table 10: Control Phase’s steps (Shaffie and Shahbazi, 2012)

Finally, the DMAIC method is culminated with the “Control” phase. When a

process improvement is conducted, it should be maintained in days to come.

Therefore, this important phase should be reinforced by Lean thinking such as

mistake proofing devices (Poka Yoke) and an ERP system for providing information

Lean

Lean

ERP

55


management in it. If need for an ERP system is exemplified, Quality Plan could be

revealed by defining it as a “documented plan and ensure that each product or

service characteristic or process requirement stays in conformance” (Shaffie and

Shahbazi, 2012). It seems that this activity also needs data manipulation. Hence, the

ERP systems play an important role at that point. Contributions of the ERP systems

and Lean Six Sigma Strategy are shown on the Table 10 above and they are

discussed in the forthcoming sections.

2.4. CONCLUSION OF THE LITERATURE REVIEW

Streamlining business processes and thereby increasing productivity,

eliminating waste of time and resources and also reducing costs are the key

considerations of a company. They could be provided by using some appropriate

tools and techniques such as ERP Systems and Lean Six Sigma Methodologies.

Their internal benefits for a company have been separately explained thus far.

Even though they are also useful for the companies individually in order to

achieve the business excellence, both ERP Systems and Lean Six Sigma

Methodologies have deficiencies in themselves. In that case, it seems that they could

complement each other. For instance, an ERP system might be evaluated as a

sophisticated information technology tool by a company’s top managers. Then, just

its technical aspects might be focused on during the course of its implementation.

However, it probably needs to be taken into consideration in terms of that company’s

system requirements. As mentioned before, the way of an ERP System’s installation

could be performed according to the business process reengineering strategy if

necessary which includes two kinds of way that are “Clean Slate Reengineering” and

“Technology-enabled Reengineering”. While the former one requires an ERP system

configuration from an ERP vendor according to the company’s structure because of

starting from the scratch, the latter one expects the company to adapt the selected

ERP system’s own logic. There might be some problems/ challenges in this adoption

process mentioned before. At that point, they might be solved through Lean Six

Sigma Methodologies and the company’s implementation process might be

streamlined. In that case, Kimberling (2012) indicated that although the companies

56


which have six sigma teams adopt lean principles, they cannot utilise their ERP

system properly because of not being able to deliver measurable business value.

They just spend their time and money to their ERP systems. In this situation, Lean

Six Sigma tools might be helpful for the company staffs responsible in order to

measure the business value of an ERP system and its shortcomings’ effects to the

implementation process. Also, Lean Six Sigma approach allows them to remove or

reduce those shortcomings. Hence, combination of ERP systems and Lean Six

Sigma Methodologies could be the best idea for the companies to enhance their

system at the highest level.

jhkn

Figure 15: Comparison between ERP Systems and Lean Six Sigma Methodologies

ERP

SYSTEMS

LEAN

SIX

SIGMA

IN

MANUFACTURING

ENVIRONMENT

Facilitates

detailed

data

about

productivity

quality

and yields

Maximise

stakeholders’

value by

achieving

fastest

rate of

improvement

Inventory level

Margins

Costs

Process Conditions

Customer

Satisfaction

Cost/ Quality

Process Speed

Invested Capital

57


On the other hand, an ERP system might be powerful a repository that could

provide a platform to a Lean Six Sigma team for monitoring their state of affairs.

Alternatively, they could also access the historical data that could allow them and top

managers to compare after-implementation situation and before-implementation

situation. In this way, “how much could the Lean Six Sigma project improve the

business?” could be measured both qualitatively and quantitatively.

In this project, those points indicated above the Figure 14 will be investigated.

In addition to these, there are some challenges of both ERP Systems and Lean Six

Sigma Strategies mentioned before. Since any project’s aim is to find the most

effective and efficient way to streamline the business processes by meeting minimum

costs and boosting productivity at the shortest time and in the highest quality, “could

they compensate their challenges if they are combined” is therefore analysed in order

to have a deep understanding of their utilisation.

The Figure 14 above is constituted according to Nauhria and his colleagues’

(2009) comments about ERP and Lean Six Sigma combination which are “In a

manufacturing environment, ERP facilitates detailed data about productivity, quality

and yields, which can be correlated with other parameters such as inventory level,

margins, costs and process conditions” and “Lean Six Sigma is a methodology that

maximizes stake holder’s value by achieving fastest rate of improvement in customer

satisfaction, cost, quality, process speed, and invested capital”. Finally, they added

and emphasised that point: “A well implemented ERP system is the foundation on

which an effective lean six sigma program can be built.”

In order to observe what is explained thus far, this two approaches’ benefits

and challenges based on the literature of this project are indicated in brief on the next

two pages.

58

Section Two: Literature Review BENEFITS OF ERP BENEFITS OF LEAN SIX SIGMA

providing and improving information flow

(moving data from application to application

without re-entry by integrating applications)

providing internal and external integration

common platform for all levels of

organisation in order to share deep and

detailed data

enabling to share that repository by

multiple users for multiple purposes

producing real-time data and enabling to

access it (if online, from any place at any

time)

integrates real time and precise operation

flows

increasing information accuracy (process

improvement and process predictability)

simplifying the way of doing business and

streamlining the business processes

providing exhaustive data to the front-end

functions

both employees’ and managers’

involvement (increasing the people’s

productivity)

facilitating people’s work

enhancing the quality of working life

minimising of delays in customer orders

indirectly understanding the voice of

customer by using historical data (bettering

customer interaction)

reducing supplier response time

cost reduction

increasing value added functions

reducing cycle time (shorter intervals

between order and payments)

decreasing back office staff requirements

reducing inventory

providing exhaustive and historical data

(for top managers)

minimising decision making time

facilitating planning and control

eliminating waste (or minimising all kind of

wastes)

removing defects from the business processes

streamlining business processes

increase in productivity

shortening the timeline between the customer

request and the delivery of service (by eliminating

waste)

increasing production efficiency (by consistently

and thoroughly eliminating waste)

providing the cheapest and defect-free

manufacturing

cost reduction

decreasing expenditure

maximising profitability

customer service improvement

provides the companies’ responsiveness

expediting the processes

enhancing customer relationship (improvement in

customer satisfaction)

providing to retain customers

improve the way of doing businesses

improving the production and transactional

processes of an organisation

eliminating non-value adding activities

providing continuous improvement for the

companies

increasing the quality of the companies’

products and services

reducing operational variance

improving overall quality and performance levels

of business processes.

quality improvement and quality assurance

providing proactive management

enabling the boundaryless collaboration

higher predictability

risk reduction by ensuring that business

deadlines are met

reduction of lead time

reduction in work-in process inventory

reduction in order-processing errors

competitive advantage

59


SHORTCOMINGS OF ERP CHALLENGES OF LEAN SIX SIGMA

people’s resistance against the technology

adoption

demanding long term for giving its results

though higher investments

possibility of inadequate budget

not being expert enough in implementing

an ERP software

failure to reflect business processes

effectively in ERP system

ignoring the companies’ own needs

because of preferring to use “standardised

global templates” of ERP systems

lack of flexibility at the local level to take

advantages of regional opportunities

cultural differences in the way of doing

work

underestimating the amount of time and effort

required to implement and maintain Lean

misunderstanding what the project requires in

order to maintain Lean Six Sigma Strategy

hiring consultants and pouring resources into this

initiative which in turn wasting of so much money

demanding long term for giving its results though

higher investments

increasing complexity when combining Lean and

Six Sigma

lack of ownership

lack of top management involvement

wrong selection of projects

failure to understand which processes to apply

Lean to – lack of effective prioritisation

narrow project-only perspective

Unclear link between strategy and LSS projects

Lack of key process structure into the

organisation

Flavour of the Month

Misunderstand of Lean and Six Sigma

relationship

Immature firm readiness to apply Lean Six

Sigma

Deficient stock of knowledge and monetary

resources

60

Section Three: Research Methodology

3. SECTION THREE: RESEARCH METHODOLOGY

“The purpose of the method section is to provide a rationale and detailed

description of the research design.” (Rocco, 2011) In order to reinforce the project

direction, research philosophy and approaches will be explained at first.

Subsequently, the research design will be formulated and subsections of the

research methodology will be analysed afterwards.

3.1. RESEARCH PHILOSOPHIES AND APPROACHES

Research philosophy is “overarching term related to the development of

knowledge and the nature of that knowledge” (Saunders et al. 2007). Also,

“development of research background” could be added to that definition (Saunders et

al. 2007). According to Saunders and his colleagues (2007), there are “three major

ways of thinking about research philosophy which are epistemology, ontology and

axiology”. Those ways are explained in detail and which ones are the ways of this

project is indicated below.

Saunders and his colleagues (2007) mentioned that “epistemology concerns

what constitutes acceptable knowledge in a field of study” and they added “For that

researcher, reality is represented by objects that are considered to be ‘real’, such as

computers, trucks and machines.” It includes three different approaches that are

positivism, realism and interpretivism.

“If your research philosophy reflects the principles of positivism, then you will

probably adopt the philosophical stance of the natural scientist. You will prefer

working with an observable social reality and that the end product of such research

can be law-like generalisations similar to those produced by the physical and natural

scientist.” (Saunders et al. 2007) Realism is regarding “scientific enquiry” which is

“similar to positivism and in that it assumes a scientific approach to the development

of knowledge” (Saunders et al. 2007). In terms of interpretivism, “it is an

epistemology that advocates that it is necessary for the researcher to understand

61


differences between humans in our role as social actors. This emphasises the

difference between conducting research among people rather than objects such as

trucks and computers” (Saunders et al. 2007).

“Ontology is concerned with nature of reality. To a greater extent than

epistemological considerations, this raises questions of the assumptions researchers

have about the way the world operates and the commitment held to particular views.”

(Saunders et al. 2007) It also includes three other approaches that are objectivism,

subjectivism and pragmatism.

While objectivism “portrays the position that social entities exist in reality

external to social actors”, subjectivist view is that “social phenomena are created

from the perceptions and consequent actions of social actors (Saunders et al. 2007).

On the other hand, “pragmatism argues that the most important determinant of the

research philosophy adopted is the research question- one approach may be better

than the other for answering particular questions. Moreover, if the research question

does not suggest unambiguously that either a positivist or interprevist philosophy is

adopted, this confirms pragmatists’ view that it is perfectly possible to work with both

philosophies.” (Saunders et al. 2007)

“Axiology is a branch of philosophy that studies judgements about value.”

(Saunders et al. 2007) It is defined in Saunders and his colleagues’ book (2007) as

“researchers demonstrate axiological skill by being able to articulate their values as a

basis for making judgements about what research they are conducting and how they

go about doing it”.

When all of the philosophies explained above are taken into consideration,

positivism and interpretivism seems to be adopted for this project. It is because while

the ERP systems are based on the computers as the provable objects, Lean Six

Sigma projects are driven by people and thereby depend upon the social factors

(humans). As mentioned in pragmatism, a mixture of positivism and interpretivism for

the research philosophy could be embraced during the research process and this

situation might produce the best results by proving variable options to researchers.

Hence, positivism and interpretivism are adopted for this project according to

pragmatism’s logic.

62


3.2. RESEARCH PARADIGMS

“Paradigm is a way of examining social phenomena from which particular

understandings of these phenomena can be gained and explanations attempted.”

(Saunders et al. 2007) Cohen and his colleagues (2007) also defined it as “the broad

framework which comprises perception, beliefs and understanding of several theories

and practices that are used to conduct a research”. There are four different

paradigms such as radical humanist, radical structuralist, interpretive and

functionalist that are shown below.

Figure 16: Research Paradigms (Saunders et al. 2007)

As can be seen from the figure above, those paradigms “are arranged to

correspond to four conceptual dimensions which are radical change & regulation and

subjectivist & objectivist. Their aims are indicated in Saunders and his colleagues’

book (2007) as:

63


“helping researchers clarify their assumptions about their view of the nature of

science and society” (Saunders et al.2007)

“offering a useful way of understanding the way in which other researchers

approach their work” (Saunders et al.2007)

“helping researchers plot their own route through their research; to understand

where it is possible to go and where they are going” (Saunders et al.2007)

In interpretive paradigm, “the concern you would have working within this

paradigm would be to understand the fundamental meanings attached to

organisational life” (Saunders et al. 2007). In Saunders and his colleagues’ book this

point is emphasised: “Everyday life is accorded the status of a miraculous

achievement. Your concern here would not be to achieve change in the order of

things, it would be to understand and explain what is going on.” (Saunders et al.

2007)

When radical humanist paradigm is taken into consideration, Saunders and

his colleagues (2007) stated that “working within this paradigm you would be

concerned with changing the status quo”. In other words, this paradigm is to

“articulate ways in which humans can transcend the spiritual bonds and fetters which

tie them into existing social patterns and thus realise their full potential” (Saunders et

al. 2007).

In terms of radical structuralist paradigm, “here your concern would be to

approach your research with a view to achieving fundamental change based upon an

analysis of such organisational phenomena as power relationships and patterns of

conflict” (Saunders et al. 2007).

Finally, functionalist paradigm is “regulatory in that you will probably be

more concerned with a rational explanation of why a particular organisational

problem is occurring and developing a set of recommendations set within the current

structure of the organisation’s current management” (Saunders et al. 2007).

According to the explanations above, this project tends to adopt the radical

humanist paradigm because although it requires some changings from the

organisations (integrating an improvement strategy such as Lean Six Sigma with a

computational system such as an ERP system), those changings are still dependent

64


upon the people (Lean Six Sigma teams are comprised of people). That is the reason

why the mixture between positivist and interpretivist philosophies (pragmatist view)

prevails in this project to the accompaniment of radical humanist paradigm.

3.3. RESEARCH APPROACHES

According to Saunders and his colleagues (2007), “theory may or may not be

made explicit in the design of the research, although it will usually be made explicit in

your presentation of the findings and conclusions” and they added that “the extent to

which you are clear about the theory at the beginning of your research raises an

important question concerning the design of your research project”. In that case, two

different approaches are surfaced that are deductive approach and inductive

approach.

In deductive approach, “you develop a theory and hypothesis and design a

research strategy to test the hypothesis” (Saunders et al. 2007). In terms of

inductive approach, “you collect data and develop data and develop theory as a

result of data analysis” (Saunders et al. 2007).

In that case, inductive approach is likely to be adopted in this project because

data about the ERP systems and Lean Six Sigma methodologies are elaborately

collected at first and some inferences are made afterwards. In that case, this tactic

could be evaluated as inductive an approach. However, Saunders and his colleagues

(2007) mentioned that “deduction” is based on positivism, whilst “induction” is based

on interpretivism. Since this project adopt the mixture of positivism and interpretivism,

deductive approach is also adopted in some cases such as mooting an idea about

the ERP systems’ contribution to the Lean Six Sigma projects at the outset.

3.4. CLASSIFICATION ABOUT RESEARCH PURPOSE

Saunders and his colleagues (2007) stated that there are three diverse

research studies that are illustrated below.

65


Exploratory studies

Descriptive studies

Explanatory studies

Saunders and his colleagues (2007) defined exploratory study by saying that

“it is a valuable means of finding out what is happening; to seek new insights; to ask

questions and to assess phenomena in a new light” and they emphasised that “it is

particularly useful if you wish to clarify your understanding of a problem, such as if

you are unsure of the precise nature of the problem”. They stated that there are

“three principle ways of conducting exploratory research” that are mentioned below.

“A research of literature” (Saunders et al. 2007)

“Interviewing experts in the subject” (Saunders et al. 2007)

“Conducting focus group interviews” (Saunders et al. 2007)

On the other hand, “the emphasis in explanatory studies is on studying a

situation or a problem in order to explain the relationships between variables”

In terms of descriptive studies, the object of descriptive research is “to

portray an accurate profile of persons, events or situations” (Saunders et al. 2007).

Saunders and his colleagues (2007) commented that “this may be an extension of a

piece of exploratory research and explanatory research”.

In that case, it seems that exploratory and descriptive studies are adopted in

this project. Explaining the ERP systems and Lean Six Sigma strategy in detail by

utilising primary and secondary resources might be evaluated as a descriptive study,

while interviewing with the experts is based on an exploratory study.

3.5. RESEARCH STRATEGY

There are various research strategies indicated below (Saunders et al. 2007)

and some of the most popular ones are explained in detail afterwards.

Experiment

Survey

66


Case Study

Action Research

Grounded Theory

Ethnography

Archival Research

“The purpose of an experiment is to study casual links; whether a change in

one dependent variable produces a change in another dependent variable”

(Saunders et al. 2007) However, if you adopt that strategy it would be probably more

costly and complex than the others because you need to observe two groups that are

experimental group in order to change the systems according to your research

question(s) and control group in which the systems are maintained without making

any change. In that case, it is easy to observe differences (Saunders et al. 2007).

In terms of survey, “its strategy is usually associated with the deductive

approach and it is most frequently used to answer who, what, where, how much and

how many questions” (Saunders et al. 2007).

Case study is defined by Saunders and his colleagues (2007) as “it is a

strategy for doing research which involves an empirical investigation of a particular

contemporary phenomenon within its real life context using multiple sources of

evidence”. They emphasised that “the case study strategy will be of particular interest

to you if you wish to gain a rich understanding of the context of the research and the

processes being enacted”.

As can be understood from the explanations above, the most appropriate

strategy for this project is case study by means of semi-structured interviews that are

explained in “Data Collection” below. The reason why case study is adopted for this

project is because after putting some propositions on the implementation processes

of ERP systems and Lean Six Sigma projects, the possibility of their combination are

sought in the real life. Therefore, being involved in some discussions with those

experts mentioned before across this new perspective enriches the idea of the

project on occasions.

67


3.6. DATA COLLECTION

3.6.1. Literature Resources

Resources utilised while reviewing the literature could change according to

requirements of the project focused on. For that reason, resources are divided into

three types which are primary resources, secondary resources and tertiary resources

that are explained in depth and shown on the figure below.

Primary Resources: “Primary resources of information include first-hand

accounts of experimentation and investigation (articles in professional

journals, monographs, doctoral theses, interviews and questionnaires), original

works (letters, diaries, eyewitness accounts, poems, novels, autobiographies)

and reports (proceedings of parliament, court testimony, reports of

government departments and agencies, annual reports, minutes).” (Anderson

and Pode, 2001)

Secondary Resources: “Secondary resources of information are summaries

of information gathered from primary sources. These include translations,

summaries and reviews of research (for example, encyclopaedia articles),

guide books, other publications containing information and commentaries.”

(Anderson and Pode, 2001)

Tertiary Resources: “Textbooks are usually examples of tertiary sources of

information, since these are generally compiled from secondary sources.”

(Anderson and Pode, 2001)

Sunders and his colleagues (2007) visualised resource types on the Figure 16

below that shows types of the primary, secondary and tertiary resources. According

to the figure below constituted by Saunders and his colleagues (2007), primary and

secondary resources are mainly used for the literature, even though tertiary

resources are partially utilised as well. Text books are mainly utilised for the project

even though journals, online resources, theses and abstracts are also made use of

during the literature review process.

68


Figure 17: Literature Resources (Saunders et al. 2007)

3.6.2. Data Collection Methods

There are five kinds of data collection methods that are based on quantitative

and qualitative approaches (Saunders et al. 2007). Quantitative “is predominantly

used as a synonym for any data collection technique (such as questionnaire) or data

analysis procedure (such as graphs or statistics) that generates or uses numerical

data” while qualitative “is used predominantly as a synonym for any data collection

technique (such as an interview) or data analysis procedure (such as categorising

data) that generates or use non-numerical data.” (Saunders et al. 2007)

Data collection methods are indicated below explained briefly.

Mono method research: “If you choose to use a mono method you will

combine either a single quantitative data collection technique, such as

questionnaires, with quantitative data analysis procedures; or a single

qualitative data collection technique, such as in-depth interviews, with

qualitative data analysis procedures.” (Saunders et al. 2007)

Multi-method quantitative study: As mentioned its name, it consists of more

than one quantitative approach (Saunders et al. 2007).

69


Multi-method qualitative study: It is also comprised of a couple of qualitative

research methods as happened in multi-method quantitative study (Saunders

et al. 2007).

Mixed method research: “It uses quantitative and qualitative data collection

techniques and analysis procedures either at the same time (parallel) or one

after the other (sequential) but does not combine them.” (Saunders et al.

2007)

Mixed model research: “It combines quantitative and qualitative data

collection techniques and analysis procedures as well as combining

quantitative and qualitative approaches at other phases of the research such

as research question generation.” (Saunders et al. 2007) All of those research

methods just mentioned above are shown on the Figure 17 below.

According to the explanations above, this project adopts mono method by

conducting in-depth interviews as a qualitative study.

Figure 18: Research choices (Saunders et al. 2007)

In terms of the interview types, there are three kinds of interviews which are

explained in brief below.

“Structured interviews use questionnaires based on a predetermined and

standardised or identical set of questions and we refer to them as interviewer-

administered questionnaires.” (Saunders et al. 2007)

70


“In semi-structured interviews the researcher will have a list of themes and

questions to be covered, although these may vary from interview to interview.”

(Saunders et al. 2007)

“Unstructured interviews are informal. You would use these to explore in

depth a general area in which you are interested.” (Saunders et al. 2007)

According to the explanations above, semi-structured interviewing is selected

for this project. Some questions have been produced based on the literature and

asked nine experts in Lean Six Sigma strategy and ERP systems in order to benefit

from their experiences. These interviews with those specialists are analysed in depth

in the Data Analysis and Discussion sections. The experts are introduced below.

1. Dr. David Scrimshire who is the director at TEC. (Techno-Economic

Consultants Ltd) This company provides consulting and training to the other

companies which conduct the Lean Six sigma strategy them.

1. Ton Van Esch who is a Lean Six Sigma Blackbelt and works for Xerox as a

Manufacturing and Supply Chain Manager.

2. Mike James-Moore who is senior fellow at University of Warwick.

3. Kim Stansfield who is QFD (Quality Function Deployment) Practitioner at

Energy Technologies Institute.

4. Mete Mazlum who is Business Analyst Specialist at Industrial Development

Bank of Turkey.

5. Serkan Mahir who is Senior Organisational Development Specialist & Lean

Six Sigma Master Blackbelt at Turkcell Superonline

6. Dr. Angela Clarke who is Lean Six Sigma Blackbelt and Module Tutor at

University of Warwick.

7. Greg J. Hughes who is Supply Chain Project Leader at AstraZeneca.

8. Dr. Terra Vanzant-Stern who is Six Sigma Master Blackbelt and Lead

Facilitator at System Service & Delivery, Inc. (SSD Global Solutions). She is

also the author of Lean Six Sigma Practical Bodies of Knowledge and Lean

Six Sigma International Standards and Global Guidelines.

71


3.6.3. Ethics

In this project, the interviews have been conducted based on University of

Warwick’s policy. They are allowed to be used within the project by all of the

respondents introduced above.

3.7. TIME HORIZONS

There are two kinds of time-based studies that are cross-sectional studies and

longitudinal studies. While the former one could be evaluated as “the snapshot time

horizon”, the latter one is based on “diary perspective”. (Saunders et al. 2007) These

approaches are briefly explicated below.

Cross-sectional Studies: Saunders and his colleagues (2007) mentioned

that “these research projects are time constrained and may be seeking to

describe the incidence of a phenomenon or to explain how factors are related

in different organisations” and they added that “many case studies are based

on interviews conducted over a short period of time”.

Longitudinal Studies: “The main strength of longitudinal research is the

capacity that has to study change and development. In observing people or

events over time, the researcher is able to exercise a measure of control over

variables being studied, provided that they are not affected by the research

process itself.” (Saunders et al. 2007)

According to the definitions above, this project is a cross-sectional study that

includes the semi-structured interviews in the limited time. In this process, “how the

various factors’ effects change in different organisations” is also well-observed

because the specialists work in different sectors and companies.

As can be observed from the Figure 18 below, a research study’s all steps are

visualised by Saunders and his colleagues (2007) as “The Research Onion”. After

deciding which component(s) of it is/are appropriate for the project (adopting the right

philosophy and the right paradigm, deciding the type of research approach and

research purpose, identifying the time horizon), data collection has been done by

72


conducting the semi-structured interviews and all the data acquired from the experts

are analysed in the Analysis section.

Figure 19: The Research Onion (Saunders et al. 2007)

73

Section Four: Data Analysis

4. SECTION FOUR: DATA ANALYSIS

ERP systems and Lean Six Sigma Philosophy have been explained in detail

thus far, semi structured interviews have been conducted according to the literature

review and some critical points have been discussed with the experts on the Lean

Six Sigma and ERP systems. The respondents comprised of the experts have

agreed with the idea of the project at some points although they were not quite sure if

it could happen in the real world.

In this section, the data acquired from that interview process are analysed

question by question. In order to understand questions’ logic, the tables of a DMAIC

method are visualised below once again and analysed. Additionally, the relationship

between ERP systems and Lean Six Sigma strategy is investigated and sequence of

their implementation are focused on afterwards.

4.1. ANALYSING THE DMAIC METHOD

As mentioned before in depth, some propositions have been put on this

method about the ERP and Lean contribution. Although the DMAIC method is based

on Six Sigma strategy, it seems that Lean thinking and the ERP systems support it

according to the literature. There are also other tools that could be used instead of

them, however it seems that they are the most powerful and appropriate tools that

might streamline and enhance the DMAIC processes. For that reason, some

questions based on the propositions put have been asked to the experts. Thus, each

phase of DMAIC is analysed in their entireties below.

4.1.1. Analysing the Define Phase of the DMAIC Method

In Define phase, three questions about the ERP contribution and one question

regarding the Lean contribution have been asked to the specialists. Each individual’s

answer is analysed below question by question.

74


Steps of Define Phase

Deliverables Tools

1. Project CTQ identify an opportunity identify the customer define CTQ

VOC

2. Outline Business Case

develop team charter Project milestones

3. Process Mapping define project boundaries

SIPOC & Product synchronisation

4. Change Management

create a shared vision gain consensus from key stakeholders

Threat vs Opportunity matrix, elevator speech and key stakeholder analysis

ERP Contribution

Question A: It seems that an ERP system is one of the most essential tools at that

point because VOC (Voice of Customers) activities require current and historical

information about the customers. As mentioned in the Literature Review section,

ERP systems are generally integrated with Business Intelligence tools in order to

improve each other’s efficiency. In that case, VOC could be ideally provided through

Business Intelligence tools such as Data Mining. Therefore, ERP systems are related

with VOC indirectly by supporting Business Intelligence tools and directly by being an

activity that is regarding information. What do you think about this consideration?

1. Dr. David Scrimshire: The linkage of VOC with ERP systems reinforces the “D”

step of Six Sigma. Without customer focus ERP systems may be efficient –

but they will not be effective in delivering VOC.

Note: in this context “customer” refers to all ‘stakeholders’ – which includes

final customers, shareholders, and internal departments, etc.

2. Ton Van Esch: VOC is a different exercise where their voice needs to be

collected by interview, focus group or survey. These then need to be skilfully

translated into CTQ’s (Critical to Quality). Voice of the process can be

ERP

ERP

ERP Lean

A

B

C

I

75


facilitated by business intelligence, data mining tools but not VOC. You need

to collect VOC through direct customer contact.

3. Mike James-Moore: I agree with your proposition; however it requires a

positive management action to ensure this is done. ERP itself will only identify

VOC as far as demand goes such things as styling or functionality is not a

normal part of an ERP suite however, at a cost it can accommodate any

information you wish to load it with.

4. Kim Stansfield: I agree that the integration of ERP with Business Intelligence

tools can provide useful information in determination of historical and current

VoC data. In particular the data mining of trends in number of times customers

request products/ components, complain, or request changes to products/

processes can be very useful information for VoC analysis and provide one

level of prioritisation/ importance assessment. There are active DMAIC

processes that are needed above and beyond this potential source of

information such as prioritisation of requirements (AHP- Analytical Hierarchy

Process), categorisation of requirements vs features (Kano Analysis) which

requires direct interaction with the customers that is not normally available in

BI or ERP systems.

5. Mete Mazlum: I think the ERP integration with the Business intelligence tools

is an effective approach for a project’s success. Business intelligence tools like

data mining give us a fresh viewpoint about the customers during the Lean Six

Sigma projects.

6. Serkan Mahir: VOC activities provide the main input to the Lean Six Sigma

projects conducted. “What and when do the customers want?” and “How and

how much/ many they want what they demand?” could be answered through

the VOC activities. Surveys, questionnaires, interviews and data analysis are

used in order to understand the VOC. In that case, the ERP systems could

actively be utilised. However, ERP is differently restricted to be accessed by

different level of people. Therefore, just voice of the internal customers could

be acquired through an ERP system.

7. Dr. Angela Clarke: ERP systems will help with understanding the voice of our

current customers, because you have a lot of data and you can manipulate the

data. In Six Sigma, often, it helps to get voice of the customers who are not

your current customers but who are potential customers. Therefore, you would

76


not get that from the ERP systems. If you ask a customer, you will get an

answer. If you ask a customer a different question (may be slightly the same

but slightly different), you might get a completely different response because it

depends on how clearly you ask the question. Thus, the advantage of using

ERP is for data that has already been collected about the customers while

disadvantage placed in the VOC activities is for the potential customers.

Sometimes, the data you are collecting is not really the right question you

want to ask anyway. Therefore, the voice of the customer is capturing data

that may not be actually the right question.

There is another approach that is called MOC (Mind of the Customer). In that

case, I ask the customers to fill out some information and I get the Voice of the

Customers. However, I do not actually know what is going on in the mind.

They are just answering my questions. It is hard to get inside the mind of the

customers. If you go and look at Six Sigma information, they will tell you that

the mind of the customers is really important as well. So again, ERP systems

would not help you there. Therefore, for limited help, yes it is a good place to

do it.

8. Greg J. Hughes: ERP systems can generate and capture a lot of data, and BI

tools such as data warehouses and the applications that carry out data

capture, storage, manipulation, reporting and analysis are widely used to turn

this data into useful information. I question how much of this actually

represents the ‘voice of the customer’. Much ERP data is derived processes

and transactions within an enterprise, managing its internal activities. There

are CRM tools (customer relationship management) that are used to capture

data more directly related to customers and their behaviours. These can be

linked to ERP systems, but are normally considered as distinct systems.

There is also an argument that the only true ‘voice of the customer’ is actually

anecdotal input direct from customers – not data captured about customer

transactions, but rich information about their requirements and perceptions of

products and services available to them. In practice though many businesses

do not rely on this type of information but instead make significant use of data

captured from sales to customers, customer surveys and their interactions

with the business’ website.

77


9. Dr. Terra Vanzant-Stern: Many ERP systems focus on automating functions

that don’t directly impact the customer. However, I certainly see how tools

such as data mining could be expanded from capturing critical data to

incorporating VOC as well as CTQs.

Question B: According to the Literature Review, “Product Synchronisation shows the

relationships among various process steps (flow and applies labour) that need come

together in order to build a service or product” (Shaffie and Shahbazi, 2012). At that

point, it seems that “showing the relationships among various process steps” needs a

huge data manipulation which is exactly what the ERP systems do. What do you

think about it?

1. Dr. David Scrimshire: Again – this aspect of ERP aligns well the initial work

undertaken in a Six Sigma ‘breakthrough’ project – analysing processes using

SIPOC (Supplier, Input, Process, Output, Customer).

2. Ton Van Esch: Agree

3. Mike James-Moore: Yes, that is why at the start of our little book we included

the quote about ERP being the company. However as I have already said it

"pushes" the data through the five lean principles start from the point of

customer value how to define it and how to deliver it.

Define customer value

Identify the value stream

Make the value flow

Let the customer pull the value

Pursue perfection

The objective is to minimise waste and maximise added value. One of the

values is only to provide what the customer wants when he wants it.

Six Sigma comes from the concept that waste and quality can be reduced by

minimising variability. It does not come from the viewpoint of delivering

customer value when the customer wants it-the pull principle is not the key.

ERP comes from the viewpoint that if all the information systems are aligned,

accurate and the communications fast then it should be possible to ensure all

processes work in harmony again increasing value and eliminating waste,

78


however despite recent developments ERP assumes that there is infinite

resource to carry out any process and that they are always available. Again, it

is not really ‘addressing the issue of pull’.

Our little booklet tried to see how this potential conflict could be handled and

suggested good practice for ERP implementation. It shows failure to do these

results in sub optimal performance with a major amount of variability.”

4. Kim Stansfield: Generation of ‘As Is’ process maps/ SIPOCs is a fundamental

step of any Lean Six Sigma improvement project, which is then developed by

comparison with customer CTQs for process performance to prioritise

improvements to develop ‘To Be’ process configurations. ERP systems could

be beneficial to this activity IF they support the rapid representation and

performance modelling of the ‘As Is’ SIPOC/ process configuration, and

enable comparison with customer expectations i.e. help define which areas of

SIPOC the team should focus on. My understanding is that ERP systems

provide a ‘Best In Class’ representation of process configurations, if this is the

case they would be less useful in helping Six Sigma improvement teams

Defining which aspects of complex ‘As Is’ processes to improve.

5. Mete Mazlum: Yes I totally agree with relationships among various process

steps need a data manipulation that ERP systems overcome this situation.

6. Serkan Mahir: An ERP system could be effectively used in order to show the

relationships among the process steps. At that point, the main constraint is

workforce requirement in translating the information about the process steps

into the ERP system.

7. Dr. Angela Clarke: I think where you have got lots of data and there is some

manipulation. At that point, ERP systems can help.

8. Greg J. Hudjes: I’m not sure what you mean by ‘data manipulation’ in this

context. However, in order to set up an ERP system it is essential to define

the business processes that it is intended to operate, in great detail. ERP

systems rely on people carrying out intended transactions in a define

sequence, with accurate data to control material & resource requirements

planning, procurement and use. Processing steps are usually controlled by

carefully defined Bills of Materials and Recipes, which are combined in the

execution of a sequence of work units or operations.

79


To build and maintain an ERP system requires these business processes to

be defined, and described in documentation. It is usually a significant

challenge to create this documentation in the first place, to update it as the

design evolves through the design-build-test process, and then to maintain the

documentation to a reasonable level of accuracy as the system is developed

during the lifetime of its use.

There are now IT tools available which can ‘reverse engineer’ the process

design from an existing ERP system – although I do not have direct

experience of these.

9. Dr. Terra Vanzant-Stern: I agree that “showing the relationships among

various process steps” needs a great deal data manipulation as well as and

understanding of dependencies. An ERP would be perfectly suited to create

this picture.

Question C: Key stakeholder analysis also needs data management as happened in

Part A (Voice of Customers). Therefore, it seems that this activity also needs ERP

contribution. What do you think?

1. Dr. David Scrimshire: Certainly, many of the Six Sigma ‘breakthrough’ projects

I have mentored had had to rely entirely on ‘historical’ data. The archive data

held by ERP systems (e.g. SAP) are the only source of this ‘data treasure-

trove’.

2. Ton Van Esch: No, Stakeholder analysis is a team activity where motivators

and political factors are evaluated as well as a communication plan that needs

to support the outcome of the stakeholder analysis.

3. Mike James-Moore: Again ERP systems are very powerful and at a cost can

provide data management even to the engineering and design systems.

Development of massive computer memory has enabled this to be more

practical over the last decade.

However most ERP systems are still quite rigid- you follow their way and

process. Implementation of an ERP system is a massive exercise as you

suggest and the more complex the requirements are made on it the bigger the

risk.

80


Several major companies almost went bankrupt introducing ERP a decade

ago and some smaller companies went bust.

4. Kim Stansfield: There are useful Stakeholder analysis data that an ERP

system could provide e.g. historical trends in change requests, complaints,

supplier performance data, internal process management staff performance,

compliance performance trends. This can provide stakeholder insight and

likely support or opposition of stakeholders to change. It also can provide

further useful information in customer segmentation analyses, in terms of

providing trends vs customer segments, a key aspect of prioritising/ selecting

customer programmes for Six Sigma/ Lean enhancements.

5. Mete Mazlum: I think key stakeholder analysis necessitate ERP contribution.

6. Serkan Mahir: Yes, it is the same with the question A.

7. Dr. Angela Clarke: I think, only in that, you may have some data there.

However, again, when you are looking at change management, you do not

know who the key stakeholders are because it is not captured. Therefore, it is

not in the ERP systems. There is no existing data to manipulate. Thus, the

issue is that ERP systems are only good for analysing the existing data. If you

get anything else, yes you can use the ERP systems. However, you will not

probably have this information. You have to collect it at fist. Change

management includes a lot of unknown data and you will have to go out and

get that information. However once you get the information, it could be

potentially fed into the ERP systems for the next time you do it.

8. Greg J. Hughes: I disagree. Key stakeholders are those who hold resource

required to execute a project, or have a strong interest in its outcome.

Stakeholder analysis first requires identification of these stakeholders, which

would be done by consulting with project sponsors, by understanding the

scope and scale of the proposed project and considering who will be impacted

by it and who will need to support the project to enable it to be carried out and

to succeed. Stakeholder analysis then requires these stakeholders to be

consulted directly, to discuss with them the project, what it will mean to them,

and what is required of them. I do not feel that ERP systems will make any

contribution to this.

81


9. Dr. Terra Vanzant-Stern: Agreed. What ERP would bring to the party in

addition to a more VOC information would be the Voice of the Process (VOP).

If the process could speak, what would it say to the stakeholders?

Lean Contribution

Question I: “Product Synchronisation is a Lean tool that is typically used to better

understand the ‘P’ in the SIPOC (Supplier, Input, Process, Output, Customer) map. It

standardises a process and reduces its cycle time” (Shaffie and Shahbazi, 2012).

How effectively does ERP reinforce this Lean tool?

1. Dr. David Scrimshire: The methodology for “computerizing” manufacturing

scheduling is complex – and several models have been proposed over the

past 20-years. I am not aware that ERP systems adopt any single

methodology. Consideration should include: One-piece synchronous flow;

Production smoothing (Heijunka); Takt time; etc.

2. Ton Van Esch: ERP implementation should have documented work flows –

hence it could provide input into a SIPOC.

3. Mike James-Moore: Again I may be out of date but in my view ERP should

only be used at the macro process level and should be stopped from

managing at operational level- see the case study in our booklet.

4. Kim Stansfield: My understanding is that ERP Systems provide standardised,

best practice process configurations and models. One of the biggest causes of

implementation failures of ERP systems is reported to be ‘poor understanding

of needed process changes prior to starting implementation.’ As stated , a key

requirement of Lean Six Sigma projects is to provide accurate representations

of the full SIPOC value chain, including the Process steps. ERP’s provision of

‘standardised processes’ ‘can’ help with this – assuming the standardisation

improves reduced cycle times compared with existing ‘non-standardised

processes’. This suggests ERP could be effective in reinforcing the Product

Synchronisation tool.

5. Mete Mazlum: ERP provide us to have more robust data which increase

visibility for SIPOC.

82


6. Serkan Mahir: If all components of the project are gathered under the umbrella

an ERP system could make sense. Otherwise, it seems that it is unnecessary.

7. Dr. Angela Clarke: I am not sure if I can see how it would do that. How ERP

will help reinforce a Lean tool. I think, there is computer software which could

help but not ERP, because it is not data. If I am looking at particularly a whole

Lean SIPOC, it helps by understanding value added, non-value added

activities and so on. That kind of data is not usually held in ERP systems.

In terms of extracting some data from the transactional processes, you tend to

find, again, there are software tools which are more suitable for the jobs. They

are better because of being particularly integrated with Lean.

8. Greg J. Hughes: As described in B above, an ERP system requires well

defined and operated processes. Running a process in conjunction with an

ERP system therefore tends to enforce standardisation of processes.

However, in order to improve the process and reduce cycle time, it is likely

that the process will need to be changed; this is often not trivial in ERP

systems. By their very nature, ERP systems integrate processes across a

business, and so to make a change in one part of a process or business we

have to understand the impact in other parts of the business.

9. Dr. Terra Vanzant-Stern: I think the ERP’s role would simple be, in this case, a

reliable way to measure. In some cases it might be able to help in calibration

efforts related to measurement tools. It could make things such as horizontal

analysis easier or point in time control charts easier to access.

83


4.1.2. Analysing the Measure Phase of the DMAIC Method

Steps of Measure Phase

Deliverables Tools

5. Define CTQ Characteristics

link customer CTQ to measurable process/ service characteristics

X-functional process map, Total product cycle time, Fishbone, FMEA

6. Outline Performance Standards

define defect and specification limits for project Y

7. Data Collection develop a data collection plan

8. Validate Measurement System

ensure reliable and accurate data

As happened in Define phase, three questions about the ERP and also one

question for the Lean are responded by the experts.

ERP Contribution

Question D: At the D point, defining CTQ characteristics could be provided through

some tools such as Functional process mapping, Fishbone diagrams and Failure

Mode and Effect Analysis (FMEA). These tools either need to extract some

information from the transactional processes or require saving what is produced

during those activities (Results of these implementations). Informational needs

appear again. That is the reason why I think that the ERP systems are beneficial in

this step as well. What do you think?

1. Dr. David Scrimshire: CT‘X’ analysis had to be based on facts which implies

data. It is always advisable to obtain quantitative measures of CT‘X’ – for

example actual RFT and OTIF data is preferable to simply asking a customer

“are you satisfied?”

Lean ERP

ERP

ERP

E

F

D J

I

84


2. Ton Van Esch: Yes, ERP systems can support a DMAIC improvement process

with outputs like you mention above.

3. Mike James-Moore: You are certainly theoretically right providing the data is

correct and the actual processes are as the system says-often not so.

4. Kim Stansfield: I agree that a system that captures and makes accessible

performance data from the transactional processes are naturally beneficial to

the ‘Measurement’ phase of DMAIC. This is also very beneficial if it includes

capture of production process configuration and performance information i.e.

not just transactional processes.

5. Mete Mazlum: Using ERP systems in order to extract information needed for

FMEA and Ishakawa (Fishbone) diagrams makes the processes more

productive.

6. Serkan Mahir: Critical-to-quality (CTQ) is intensely used within the Measure

phase of the DMAIC method. There is no project conducted by us without

CTQ. However, I do not think so that an ERP system is necessary at that point

if cost and benefit analysis is taken into consideration.

7. Dr. Angela Clarke: Yes, in particular, it is good to collect historical data relating

to warranty data. A lot of the time, you will have warranty data and information

on historical performance. That is good information to feed into there because

it provides quantitative support to these things you do. The using of the Lean

tools like Functional Process Maps, Fishbone diagrams and FMEAs is

qualitative data. The good thing is the ERP could validate them by providing

quantitative data such as warranty data, historical performance, number of

design defects and so on. After using experts in order to conduct Lean tools

like Fishbone diagrams and FMEA in a qualitative manner, the way I would

validate is “looking at the evidence for learning if they support these activities”.

At that point, ERP could be used to help you for accessing this evidence

through warranty data and historical design data. Historical design data is

regarding “how many mistakes were there” and “how long did they take”. All of

those could be captured by an ERP system.

8. Greg J. Hughes: Sounds like a reasonable conclusion, but I am not familiar

with the term CTQ.

9. Dr. Terra Vanzant-Stern: I would totally agree

85


Question E: “A performance standard translates a customer need into a clear and

measurable characteristic.” (Shaffie and Shahbazi, 2012) It seems to me that this

process also needs an information management. Thus, ERP systems help people to

do it in a better way. What do you think?

1. Dr. David Scrimshire: To monitor any metric (e.g. RFT and OTIF) requires that

both a Goal (i.e. the actual performance required) and a Target (the

performance level to be attained by a specified date).

ERP ‘extracted data’ will provide the actual performance data to compare with

the Goals and Targets.

Adverse variance should then trigger RCCAs that must be implemented. After

resulting performance data captured by the ERP system, it will be used to test

the statistical significance (IMPROVE Stem activity) of the ‘new’ performance.

2. Ton Van Esch: I think it needs a skilful team that can synthesize VOC to

CTQ’s. But I do not see how ERP would figure in this.

3. Mike James-Moore: I don't know if it is necessarily a better way. Obviously the

whole idea behind ERP is that in theory the CEO of any organisation should

be able to access any part of his/her business and know what is going on-that

is the golden bullet all top people are looking for. So again I would ask, is it

worth the effort?

Once you incorporate any of these information streams within an ERP system

you reduce the opportunity for innovation in my opinion. So be careful.

4. Kim Stansfield: In the past I’ve carried out the management of this information

through a requirements management system (RMS) e.g. DOORS, which

maintains the relationships between requirements and responses which

include product and process features as well as their performance

characteristics and relative priorities. It is possible that ERP systems are

defined to include such systems as part of Product Lifecycle Systems. The

RMS approach is particularly used in the context of system design and

improvement, which includes process improvement and lean six sigma

projects. As said, ERP could be defined to incorporate RMS systems which

are a critical sub-system for enterprises and Six Sigma/ System improvement

programmes i.e we should confirm whether RMS systems are significant

components of ERP systems, and their critical role. The other aspect where

86


ERP is useful in this aspect is their ability to capture and communicate existing

process performance. As for earlier answers this is a powerful way of storing/

managing valuable process information.

5. Mete Mazlum: Yes, ERP systems gather more trustable data that can make

the processes more measurable.

6. Serkan Mahir: This is actually what happens in VOC activities. Therefore, the

answer is “Yes”.

7. Dr. Angela Clarke: I do not think so. I think the collection of data once you

have those standards is fine; however I do not see that how an ERP system

can help you to find what those standards are.

Translating customer needs into a clear and measurable characteristic that

might be provided VOC is related to the ERP systems, however you can do it

through much more simple tools such as excel spread sheets than the ERP

systems. However, this process is more than data; it is about thinking process

that should be conducted by experts (into a clear and measurable

characteristic). However, you might be able to interrogate an ERP system to

see “OK, what do you measure?” For example, if I go to my ERP system and

there are 200 measurement systems the company makes to “D”, I can look

through that list and see & decide the useful one. The useful one is a prompt

but it does not take away from the fact this is a thinking process rather than

the ERP will do it for you.

8. Greg J. Hughes: I understand this stage to about defining the desired outcome

of a process, as a service or product, with measurable parameters. Later

stages will be about measuring actual performance vs this standard, and

identifying the best ways to achieve the standard.

Then I think that when selecting which parameters to use to describe the

standard, we would consider parameters which best define the standard, and

which are possible to measure in a practical and economic way. The

measurements may include data which is readily captured through an ERP

system (e.g. the quantity of a material input to the process), or confirmation

that certain key process steps have been completed in the required sequence

/ time etc. However, I think other data-capture systems are more likely to be

used in this than ERP.

87


It is also important to ensure that the correct parameters are measured; those

that really do define the successful outcome of the process, and not just

parameters which are convenient to measure or easy to record.

9. Dr. Terra Vanzant-Stern: Absolutely. In this case the performance standard

could be measured by VOC, VOP and also the Voice of the Employee. VOB

which means Voice of the Business is really translated as Voice of the

Industry. An ERP would be more involved in bench marks from the various

voices.

Question F: According to the Literature Review, it seems that data collection is

undeniably an activity which is ERP Systems’ responsibility. What do you think?

1. Dr. David Scrimshire: The ERP system can capture data that is generated by

the ERP system. There will still be a ‘manual’ element where data has to be

gathered and input. We must not neglect ‘man-in-the-loop!

2. Ton Van Esch: Yes, but in “Measure” we need to know 2 things:

Is the data right

Do we have the right data

3. Mike James-Moore: Not quite sure what you mean. Certainly ERP is a way to

ensure that data is recorded reliably. Data should only be captured when it is

needed otherwise it is a waste. What checks are there to remove data not

required from the system?

4. Kim Stansfield: My understanding is that the ERP system stores existing

process configuration and performance information that has been cleansed

and captured in a structured manner. If this is correct then this is a significant

assistance during the Measurements phase of DMAIC/ Lean Six Sigma where

much time and effort is spent setting up data capture and measurement plans

and then running the measurement studies. This is a non-trivial exercise. If the

ERP system does not hold existing business process and performance data

i.e. it just stores standardised, best practice processes, then this greatly

reduces the value of the information to Measurement phase which focuses on

establishes what is ‘actually’ happening.

5. Mete Mazlum: Yes, of course data collection, which could be driven through

the ERP systems, is a very important activity for the Lean Six Sigma projects.

88


6. Serkan Mahir: I definitely agree with you. An ERP system could be used in

aggregating the data and disseminating them to the right places at the right

times.

7. Dr. Angela Clarke: Yes, I agree with you.

8. Greg J. Hughes: Data collection is a key benefit of ERP systems; but as

described above for E, it is very likely that parameters which define the

performance standard will include parameters which cannot be measured by

the ERP system. It is possible to use the ERP system data warehouse to

store data from other systems, either by entering data through interfaces, or

manually, and thus to consolidate all the required data storage into one data

warehouse. It is often not trivial to implement this however, so may not be

appropriate for a project like this. If may be more appropriate to collect data

sourced from outside the ERP system in other simpler ways, at least during

any experimental phase. Once the project has proven which factors must be

controlled to ensure successful process control, then it may be appropriate to

implement automated data collection and consolidation into the ERP data

warehouse – if this is the most efficient and robust way to collect the data and

report from it.

9. Dr. Terra Vanzant-Stern: Agree, again. The advantage is that the ERP may

be able to offer a more sophisticated data collection strategy as well. Often in

a data collection plan, the “why are we collecting this data” is not considered.

Lean Contribution

Question J: “FMEA allows a team to identify defect(s) in the process that should be

eliminated and/or reduced.” (Shaffie and Shahbazi, 2012) That is what exactly Lean

should do. Therefore, this step is also related to the Lean Thinking. What do you

think?

1. Dr. David Scrimshire: Any form of Risk management and mitigation is

welcome! FMEA is one methodology that is widely used for both Processes

and Design. For ERP systems other methodologies could be considered such

as QFD.

89


2. Ton Van Esch: FMEA is actually a proactive planning around potential defects

from the new solution (typically). Can also be done as a risk assessment of

current process + then on to counter measures, Poke Yoke or process

improvement.

3. Mike James-Moore: Again yes- this is one of the key issues in lean design, try

and get rid of waste before you start.

4. Kim Stansfield: I think that FMEA as a core process and product design

improvement method is fundamental to any programme aiming to improve the

status quo. As it focuses improvement teams on the high priority

improvements plus the likely mitigations to high ‘risk priority number (RPN)’

failures, it should be a core process for lean six sigma improvements – it

avoids wasting time on low RPN failures.

5. Mete Mazlum : If we know failures and effects within the processes, this

information is used as inputs for the Lean Thinking .

6. Serkan Mahir: FMEA could be conducted through Microsoft Excel. Therefore, I

think that it is unnecessary.

7. Dr. Angela Clarke: I agree with you.

8. Greg J. Hughes: Yes, exactly right.

9. Dr. Terra Vanzant-Stern: I subscribe to what I refer to as FMEA thinking. Take

the heart of the form and looking at the task. What would happen if the task

did not occur? Based on this what impact would it have on the customer?

Why would it happen and what controls are in place to keep it from

happening? Therefore, FMEA can expand Lean Thinking from identifying

defects only to considering the culture, who is empowered to change as well

as near-misses and things that could go wrong in the future.

4.1.3. Analysing the Analyse Phase of the DMAIC Method

Although statistical tools are mainly used in the Analyse phase, there are

some contributions made by the ERP systems and Lean Thinking. They are

investigated below.

90


Steps of Analyse Phase

Deliverables Tools

9. Baseline Process Capability

graphical representation of capability continuous normal data analysis discrete data analysis first-pass yield calculation

Histogram, Run chart, Box plot & Pareto Normality plot, z table and data indicators First-pass yield

10. Define Performance Objective

develop attainable goals

Benchmarking

11. Identify Sources of Variation

identify process inefficiencies (cycle time/ capacity) graphical analysis (optimisation/ quality) numerical analysis

Value-add (VA)/ Non-value-add (NVA) analysis, takt time, effective hours Correlation & Scatter plot Hypothesis testing

ERP Contribution

Question G: “After the improve phase, what have been found from the ‘Analyse’

phase can help you compare the historical performance of a business with the

improved one” is emphasised in the improved one.” (Shaffie and Shahbazi, 2012) is

mentioned in the Literature Review. In that case, historical data is needed and

thereby requiring an ERP system’s help. What do you think?

1. Dr. David Scrimshire: As previously stated, performance data captured by the

ERP system will then be used to test the statistical significance (IMPROVE

Stem activity) of the ‘new’ performance.

2. Ton Van Esch: It can be a data source. Most effective method id Control

Charting before vs after (or with different phases in the same graph)

3. Mike James-Moore: Yes if the system was running during the historical period

and that the form of the data is compatible.

Six Sigma

&

Statistical

Tools ERP

Lean

Stat. T.

G

K

91


4. Kim Stansfield: I don’t know whether ERP captures historical SPC results and

the results of process capability measurements (yield, process variance, USL,

LSL etc), but if it was able to provide historical trends for these it would be

very useful. This is of significance to E & F as well. The challenge with many

Six Sigma/ Lean Six Sigma projects is capturing process data in a way that

can be used for lessons learned/ improvement development. ERP would be

very useful if it provides historical data specific to defined, historical process

configurations.

5. Mete Mazlum: In my opinion, historical data are needed during a project’s

implementation. At that point, ERP systems could help, however using some

statistical instruments instead of ERP mostly happens in this phase.

6. Serkan Mahir: I agree with you. It is like “data collection” as you mentioned

before.

7. Dr. Angela Clarke: ERP systems on their own, my answer is “no”, however

most of the ERP systems have the data intelligence or business intelligence

interface like Cognos. For those, yes it will definitely help. However, an ERP

system on its own does not usually help. Therefore, as long as the ERP

system is linked to business intelligence system then yes it will definitely help.

8. Greg J. Hughes: Yes, an ERP data warehouse may be the best place to have

captured and retained historical data. However, as described above in F, it

can be complicated to capture all data into the ERP system, so it is quite likely

that the historical data you are interested in will not all have been captured in

the past.

9. Dr. Terra Vanzant-Stern: Generally speaking, I look at historical performance

in Define but I can see where an ERP would be helpful.

Lean Contribution

Question K: It is indicated in this step that “the goal is reducing process cycle time,

standardisation or stabilisation” Additionally, when “Value-Add, Non-Value-Add and

Necessary Non-Value-Add Analysis” are taken into consideration, it seems to me that

Lean Thinking could provide what exactly is expected from this step. What do you

think?

92


1. Dr. David Scrimshire: VSM should capture the following –

Trigger – what starts the step

Setup time and Cycle (Processing) time/unit

Takt time (rate of customer demand)

Percent defects and/or scrap and/or re-work

Number of operators

Downtime %

WIP downstream and upstream

Cost of links to IT, warehouse(s), etc

Batch size, etc

Clearly much of this data could be routinely captured by the ERP system.

2. Ton Van Esch: I agree with you.

3. Mike James-Moore: If you look at the 5 lean principles this is just what it does.

Obviously differing specific tools will be used in different circumstance.

It is interesting if you start from reducing cycle time as your goal, let us say to

a batch of one then you cannot do this unless you have very low variability i.e.

excellent quality.

If you go the other way and aim for excellent right first time quality you will find

it automatically enables very small batches-if the customer wants them.

You can't do one without the other.

4. Kim Stansfield: If these are the criteria that are studied effectively in Lean

Thinking then I agree that they could provide what is needed in the ‘Analyse’

stage of DMAIC Six Sigma. That said, Lean Thinking often focuses on cycle

time reduction and ignores many of the high priority CTQs of the customers. I

believe this is the reason that many Lean Improvement projects are not seen

to significantly increase business value. The tools deployed in DMAIC Six

Sigma are there to ensure the focus does not stay on ‘cycle time reduction’ to

the exclusion of more important customer CTQs.

5. Mete Mazlum: These activities provide us to gain the customers. Therefore,

Lean Thinking is very useful for this step through those activities mentioned

above.

6. Serkan Mahir: While conducting process map, Visio or Excel could provide

what are expected in this phase. Thus, it could be unnecessary.

93


7. Dr. Angela Clarke: Agree for sure. That is one of the main values of Lean. This

would probably be the single biggest thing that Lean tools could help.

However, those analyses mentioned above are better to us before that step

such as in the SIPOC mapping even though they are a lot more complex than

SIPOC.

8. Greg J. Hughes: Correct.

9. Dr. Terra Vanzant-Stern: Tools typically used in Lean such as Tim Woods and

SIPOC can be manipulated to identify these characteristic so I am agreeing,

Typically the VSM would be the tool and again an ERP would definitely be

useful in activities such as a Gemba walk.

4.1.4. Analysing the Improve Phase of the DMAIC Method

During the literature review process, that the improve phase might be

overcome through mostly Lean tools has been observed. Therefore, this phase has

been also discussed with the experts. These evaluations acquired from them are also

indicated below.

Steps of Improve Phase

Deliverables Tools

12. Identify the vital Xs and implementable solutions

reduce cycle time, improve flow more complex projects, where the relationships between variables are not well understood, will rely on Six Sigma tools like regression

5S, Line Balancing, Kaizen

Lean Contribution

Question L: In improve phase, everything is related to Lean Thinking because

problems have been identified, measured and analysed up to now. Then, it is time to

Lean

L

94


improve these problems. In that case, could you state any critical points based on

your experiences?

1. Dr. David Scrimshire: Critical to developing innovative (and effective)

improved processes/systems is the use of various Lean (and other) tools in

concert. For example: Creative Thinking techniques; Brainstorming; White-

light Thinking; 5 Whys and so on.

From Lean Enterprise come tool that include –

Value stream mapping – with particular focus on Lead Time and NVA

Time reduction

Rapid changeover (SMED- Single Minute Exchange of Die) – internal

and external changeover times using the SMED methodology

TPM (total productive maintenance)

OEE (overall equipment effectiveness)

Manufacturing Flow and Takt Time – with particular focus on One-piece

synchronous flow; Production smoothing; Takt time; Cycle time; etc.

Also the adoption of the KANBAN system as a structured approach to

creating a true “pull” manufacturing system.

2. Ton Van Esch: Typically Brainstorming and Benchmarking are also used to

generate an “idea bank”. Then selection tools to identify the best solution.

3. Mike James-Moore: The critical issue is maintaining the lean mind-set- no

amount of improvement is enough-Dan Jones.

Japanese experience shows that it takes up to 15 years to establish lean in a

sustainable way in an organisation.

The other key issue often overlooked is that people must be given time for

improvement work, it is not a leisure activity. Management often forget this.

4. Kim Stansfield: The internal, process focus of lean thinking can preclude the

willingness of teams to consider more strategic solutions. As a result many

lean improvements are conducted on processes that should be replaced, or

are unable to match ‘low cost’ competitors. As an example, the drive to

produce a lean process can be detrimental if the organisation should focus on

providing a higher value product that better satisfies their customer’s market

drivers i.e. that enables the company to compete more effectively. Care

therefore has to be taken to ensure that Improvements are focused on

95


enhancing ‘true competitive edge. An example is a subsidiary of a large UK

defence contractor, that adopted the parent company’s Lean Thinking to

tackle high cost cycle time of its products to the parent. Quick review of their

situation showed they were trying to use Lean to help them compete with far

east companies who had themselves gone lean and commoditised their

products. There were more advanced forms of their products which addressed

agility requirements of the parent, but which would not be identified using pure

‘Lean Thinking’, but would be identified using design for six sigma thinking.

Successful Lean Thinking requires that processes being leaned are the

required processes for the future to avoid resources being spent on processes

that should be retired.

5. Mete Mazlum: Thinking as a customer makes our operations more effective

and result-oriented. In this way, we can realize the burden of our

responsibilities within the business processes before the implementation of

Lean Six Sigma projects.

6. Serkan Mahir: The Improve phase is directly related to the Measure phase. If

the root causes are identified properly by particularly using FMEA, many

opportunities could appear in order to well-drive the business processes.

7. Dr. Angela Clarke: I do not think the answer is always Lean. Lean is helpful.

Therefore, in terms of identifying the improvements, you can make and be

able to implement them. Sometimes, they are about people, training and

changing people’s roles or responsibilities to get the answer. At those points,

Lean does not help you, but common sense helps you. However, although the

Lean tools you have got here will help, some other implementations will be

additionally needed.

8. Greg J. Hughes: It is essential to standardise processes first, then to measure

and identify problems and sources of variability, and to implement changes

one step at a time and to measure the outcome before making further

changes. Do not change multiple variables at the same time.

It may be necessary to carefully consider the ‘design of your experiments’ in

order to ensure that the correct output and input parameters are being

measured, and that changes are being managed carefully.

If the outcome of the improve phase is clear – the process parameters that

require careful control in future have been clearly identified – then care needs

96


to be taken to ensure that these are measured and exceptions (deviations

from the target) are made visible quickly to those who can then affect a

reaction or adjustment.

To standardise the new or changed process, it may be necessary to carefully

document the process, to ensure that all staff involved with it are well trained

and can successfully execute the process, and to ensure that the reason for

any change is well understood and accepted by those involved. It is important

to carefully plan how to make the change sustainable, and to ensure that it is

implemented and sustained successfully. Too often, changes are

implemented, but with time the reasons for the change are forgotten, and

processes evolve away from the new standard, perhaps ‘drifting back to the

old way of doing things’

9. Dr. Terra Vanzant-Stern: At the beginning of improve it is imperative that the

project manager can present 3-5 solutions tied to Define, Measure and

Analyze phases. This provides the credibility and logic for your process

solutions.

4.1.5. Analysing the Control Phase of the DMAIC Method

Steps of Control phase

Deliverables Tools

13. Validate Measurement Systems on the Xs

ensure that an adequate and reliable way of measuring the critical Xs of the process.

14. Determine the Process Capability

ensure that goals are actually achieved

15. Implement Process Control

A process control system is a strategy for maintaining the improved process performance over time

The most popular ones: Poka Yoke (mistake proofing devices), Statistical Process Control (SPC) and Quality Plan

Lean

ERP

H

M

97


According to the Literature Review section, the Lean Six Sigma (LSS) teams

must implement the strategy of LSS logic in the companies focused on until the

Control phase. In this phase, new improvements should be maintained after each

member of the teams disperses.

ERP Contribution

Question H: Quality plan is a “documented plan and ensure that each product or

service characteristic or process requirement stays in conformance” (Shaffie and

Shahbazi, 2012). It seems that this activity also needs data manipulation. Hence,

ERP systems play an important role at that point. What do you think?

1. Dr. David Scrimshire: Incorrect definition – see BS EN ISO 9000:2005- 3.7.5

quality plan: “document (3.7.2) specifying which procedures (3.4.5) and

associated resources shall be applied by whom and when to a specific project

(3.4.3), product (3.4.2), process (3.4.1) or contract”

In this respect, the quality plan would specify the procedure within the ERP

system for data manipulation.

2. Ton Van Esch: Yes, as a data source

3. Mike James-Moore: Of course it could, whether the integration is worth it

would need to be evaluated. For example, SPC charts can provide this data

often very simply and importantly people not the system run it. Does ERP

have to be "big brother" for everything? Perhaps there is an issue of

granularity here.

4. Kim Stansfield: In the past, I have used the requirements management plan

and requirements management schema for the requirements management

system to develop the quality management plan during the Improvement

phase. If the ERP system provides the functionality to have an integrated

Requirements management plan plus the analyses results from the preceding

stages, then it would provide a powerful support tool for developing prioritised

Improvement plan & associated Quality Management Plans.

5. Mete Mazlum: Instead of ERP systems, lessons learned documents in which

we can find organizational process assets that are more useful for quality plan.

98


6. Serkan Mahir: If it means that that the ERP systems could be used for

collecting data, then the answer is “yes”.

7. Dr. Angela Clarke: I agree with you. In terms of on-going implementations

offer the control side so far.

8. Greg J. Hughes: As described above, an ERP data warehouse may well be

the best place to capture the required data, store and manipulate it, and make

it available for reporting and analysis. The data will be centrally stored, will be

accessible to many people, and data quality can be sustained because it is

being stored in a system that is usually managed and controlled centrally.

However, it is not always easy to get all data linked into an ERP data

warehouse, and it is usually not easy to change the way that the data is

manipulated or reported. It takes significant up-front investment of time and

resource, to set up data feeds, and data manipulation and reporting, and to

validate the accuracy of the outcome. Once it has been established in this

way, it is then accessible to many people, possibly in multiple locations.

However, ERP data warehouses usually require training and experience to

carry out successful reporting and data analysis. They are unlikely to be

accessed by shop-floor staff. Successful process control often requires data

to be made visible at the ship-floor – so that operational staff can monitor the

process in good time (‘real time’, ideally) and make appropriate adjustments to

sustain control.

9. Dr. Terra Vanzant-Stern: Often quality plans end up being a quality audit sheet

that is more of a compliance document. I can see where an ERP would help

get more to the core CTQs and ensure the customer’s needs are being met.

Lean Contribution

Question M: In control phase, It is indicated that Poka-Yoke as a Lean tool should

be used. Are there any other Lean tools in order to conduct an efficient “Control”

phase?

1. Dr. David Scrimshire: Yes, many!

For example I have deployed the following on a regular basis –

99


Process dashboard; monitoring/ authorizing new method; Process

management chart; Control plans; Visual work instructions; etc.

Statistical reconfirmation that improvements are being sustained is essential –

re-confirm the process is still normally distributed (Anderson-Darling)

measure and re-confirm that process capability is being achieved

at the predicted ‘improved’ levels

ensure no ‘mission drift’

assignable causes of (excessive) variation identified and eliminated

Demonstrating a process improvement requires the use of recognized

statistical methods –

Data gathering – ‘categorical’ data (as provided by the ERP System)

Data visualization must be used such as – Run Charts; Histograms; Individual

‘value plots’; Box plots; etc.

Statistical demonstration of improvement will use – Tukey’s test; Two sample

‘t’ test; Two sample ‘F’ test; etc.

The Control step is usually when the principles and practices of SPC are

introduced, including –

SPC charting – individual values

SPC charting – Xbar and R

‘out-of-control signals’

points beyond range control limits

long runs above or below average

long runs up or down

The Control step must also ensure on-going conformance with work standards

and process control –

conducting routine ‘manufacturing process audits’

inputs to for management review

2. Ton Van Esch: FMEA, Control Plan, RACI chart, SOP’s into checklists,

Review and Control checkpoint schedule

3. Mike James-Moore: Poka-Yoke is, as you know, a preventive measure to

proof against mistakes. There are many other tools which help like SPC and

importantly people should know about what is going wrong to enable all

brains, not just some can be involved.

100


4. Kim Stansfield: The other main tools supporting Control Phase are:

Control Planning

Statistical Process Control

Regular FMEA/ Root Cause Analysis reviews

Configuration Management, and

Structured Lessons Learned – where process performance

achievements and trends are assessed versus process improvement

targets

5. Mete Mazlum: We use SMED and Kanban.

6. Serkan Mahir: IMR chart (graphical method in order to display the process

performance), statistical control charts such as X Bar Chart and X bar S Chart

could be used. Indeed, Poka Yoke is not directly related to the Six Sigma

strategy. It could be used for simple improvements. If there is a problem that

could be solved through Poka Yoke, conducting a Six Sigma project for that

will be waste of resource.

7. Dr. Angela Clarke: Statistical Process Control (SPC) mentioned on the table

and SQC (Statistical Quality Control) that is measuring the outputs’ quality at

the end will help. Kaizen also very effective for the control processes. Some of

the simple things are not Lean do things like documentation (simple but time

consuming). At that point, documentation can be related to ERP systems,

knowledge-based systems and internet. It is not exactly related to ERP but it

might link in it.

8. Greg J. Hughes: I am not familiar with all Lean tools – but you have mentioned

SPC which may be important. I would also include other ‘visible factory’

principles – visible measurement of performance and issues, clarity of

processes, management attention ‘at the line’ to support operating staff with

problem solving skills, short-cycle time measurement and reaction to

problems. Keeping standardised business processes will be important, but so

too will be a focus on continuous improvement of those processes.

Lean organisation principles may also be important; such as having all the

resources orientated around supporting the core process of the business, with

timely access to any support teams.

101


9. Dr. Terra Vanzant-Stern: Transition plans (even though you may be the one

continuing the project); SIPOC again to help identify all the resources that

need to know that the process improvement is completed and will now go into

continuous improvement mode; Control charts if there are items that need to

be tracked.

4.2. THE POSSIBILITY OF CROSS RELATIONSHIP BETWEEN THE

ERP SYSTEMS AND LEAN SIX SIGMA STRATEGIES

The benefits of the ERP systems and Lean Six Sigma projects are elaborately

explicated thus far. In addition to these, their challenges are also indicated

respectively. In that case, besides analysing the DMAIC steps separately, this project

also aims to investigate if one of them (ERP systems and Lean Six Sigma strategy)

can ameliorate the other one’s challenges and thereby they can be combined

mutually or not. In order to come to a feasible conclusion, this point has been also

discussed with the experts. While investigating this point, the summary of the their

benefits and challenges that is shown at the end of the Literature Review section as

a table have been illustrated to the specialists and then it has been analysed with

particularly Ton Van Esch and Dr. Angela Clarke.

Question about their relationship: It seems that they (ERP Systems and Lean Six

Sigma Strategy separately) might have some problems within their individual work

cycles though their benefits to the companies’ business processes. For example,

”ignoring the companies’ own needs because of preferring to use ‘standardised

global templates’ of ERP systems and lack of flexibility at the local level to take

advantages of regional opportunities” are the shortcomings of ERP while “deficient

stock of knowledge and monetary resources ,unclear link between strategy and LSS

projects, misunderstanding what the project requires in order to maintain Lean Six

Sigma Strategy and underestimating the amount of time and effort required to

implement and maintain Lean” are the Lean Six Sigma projects challenges. Do you

think that “one of them might ameliorate the other’s shortcoming(s)”? Could you

evaluate this point based on your experiences?

102


1. Dr. David Scrimshire: This is a complex problem. In my experience – too much

effort is given to getting the ERP system “up and running” and far too little on

BPR, Six Sigma-based process analysis and incorporation of accepted Lean

Enterprise tools and techniques.

2. Ton Van Esch: I think there is synergy but one deployment has to “take the

lead”. Lean thinking can aid an ERP rollout or project as ERP data +

implementations can aid a LSS project (DMAIC).

3. Mike James-Moore: I'm not sure if ameliorate is the right word. Both have a

part to play. Care must be taken however not to overload the organisation. It is

a big job to implement ERP and will use much management resource. To

implement Lean Six Sigma, doing it effectively will also take much resource. If

approach is in place and effective then the benefits should help more effective

implementation.

4. Kim Stansfield: I think that the Lean Six Sigma methods and tools focus on

helping businesses understand how to make their processes more efficient is

central to process improvements which are very beneficial to organisations.

Big challenges occur in confirming process performance and process

definitions. ERP benefits from the process definition and improvement

capabilities of Lean Six Sigma, but offers a potential enabler, and provides

potential standard processes and information management systems that

support efficient deployment of Lean Six Sigma projects. Using the ERP

together WITH Lean Six Sigma offers potential to accelerate Lean Six Sigma

deployments, to help transfer lessons and process data across the

corporation, and help with corporate process standardisation and

interoperability across divisions.

5. Mete Mazlum: I think integrating both of them makes the business processes

more effective because one of them is related to “data change” while the other

one is regarding “the changing ideas”. Both of them are very important for a

reengineering.

6. Serkan Mahir: They might compensate each other within particularly “Ticketing

Systems (issue tracking system)”.

7. Dr. Angela Clarke: I can see how Lean Six Sigma might help you with some of

these shortcomings. For example, there is a point that is people’s resistance

against having technology adoption. If you go back to benefits of the Lean Six

103


Sigma strategy and look at the change management aspect by addressing this

properly, you would potentially help. Therefore, I can see some links from

what you are saying. Again, if we consider people’s resistance against having

technology adoption, the answer is “Yes, it could be helped by Lean Six

Sigma”. In terms of the long term investment that the ERP systems take, Lean

Six Sigma might help you to focus on some quick wings. I want to

demonstrate that I am getting some return on my investment and start using

Lean Six Sigma to help me focus on these things where I see some good and

quick benefits. ERP implementation is not a Lean Six Sigma project, you can

use some of its tools to help you be more effective but it is not a project its

own. You can have it as a huge program about lots of projects. Indeed, all of

these things are possible, however only because Lean Six Sigma at the

conceptual level helps you with identifying the problems and making

improvements on them, the answer is not always Lean Six Sigma. For every

change that company has to make or every improvement a company has to

make, it helps at those points a lot because it is a good methodology.

However, the answer is not always “yes”. I am Lean Six Sigma Blackbelt,

however I would not always use Lean Six Sigma for making some

improvements. Thus, they can help, but they are not the whole picture (about

ameliorating ERP systems’ shortcomings). They would not solve all of the

problems, they would contribute the improvement. Appointing someone in a

new position might overcome it or asking some data document might fix the

problem. You do not have to go through a Lean Six Sigma project to do it,

because it will be more expensive than the simpler tools.

In terms of the question of “Can ERP help you with some of the challenges of

Lean Six Sigma projects?” underestimating the amount of time and effort

required to implement and maintain LSS (Lean Six Sigma) could be helped by

the ERP systems if you have got some data to hand. Having some data to

hand through the ERP systems possibly help in the case of hiring consultants

and pouring resources into this initiative which in turn wasting of so much

money. The ERP systems could also help this challenge of LSS by providing

secure and big amount of data: “deficient stock of knowledge and monetary

resources”. It is not possible to say that all of those challenges that you have

104


mentioned could or could not resolved through the ERP systems. Yes, they

can improve them, however it might not.

All in all, ERP systems can help the LSS projects and LSS can also help the

ERP implementation to be more effectively. The combination of the ERP

systems and LSS projects could be advantageous, however not cost effective.

8. Greg J. Hughes: I agree with the shortcomings and challenges you have

identified for each..

To some extent the implementation of an ERP system can help – for example

it is necessary to clearly define the business processes before they can be

built into the ERP set-up. This then helps to sustain standardised processes.

However, once built, it is hard work to change and evolve the processes with

the ERP system, because the inherent integration of many processes across

the business means that there is increased likelihood that a change in one

process will have some kind of impact in another process. This therefore

makes it harder to adopt ‘continuous improvement’ which is a core principle of

Lean.

An ERP system can make it possible to capture large volumes of data, and

make it accessible to many people for analysis and reporting; this could

improve the visibility of process performance, and this support the Lean

principles of measuring performance. However, this data is often not readily

accessible to the ‘shop floor teams’ themselves – and ideally it is they who

should be able to see the outcome of the measurement of their process, so

that they can react in real time to any signals of deviation from the target

control ranges. It is more likely that a ‘Manufacturing Execution System’

(which sits below the level of an ERP system, in the IT architecture) will

contain the process-level data that a shop floor team needs, and will give them

ready access to this data.

I have experienced the significant efforts required to measure a large process

(e.g. through factory lead-time for complex multi-process units) and to make

this meaningful and visible: in theory, if this can be successfully established

then it will make the performance of a large-scale process measureable and

visible to management who can then identify and prioritise where intervention

is necessary in order to restore process control, or to focus on opportunities

for improvement. This would be a clear demonstration of how ERP can

105


support Lean – but it does require significant investment of time and resource

to achieve this.

9. Dr. Terra Vanzant-Stern: Since one size rarely fits all a new trend of adding

Agile processes to enhance some process improvement efforts seems to be

successful. Building flexibility into environments that are Lean Six Sigma as

opposed to straight Six Sigma seems to be more receptive. This is because

Six Sigma looks at the DMAIC as a waterfall methodology and LSS typically

sees it as a circle.

4.3. SEQUENCE OF THEIR IMPLEMENTATION (ERP & LSS)

After considering their contributions to each other, that which one should be

implemented at first springs to mind. Also, there might be a possibility to implement

together. In order to enlighten this point, the question stated below is also discussed

with the experts.

Question about the sequence of their implementation: Should both ERP systems

and Lean Six Sigma Strategy be implemented simultaneously or should one of them

be a prerequisite for the other one?

1. Dr. David Scrimshire: A computerized ‘bad practice’ is still a bad practice!

Systems and their constituent processes should be analysed and improved

first. The ERP processes should then mirror the new (and improved)

methods. Proving that the new/improved methods are actually delivering on

the bottom line can then be quantitatively assessed with data abstracted form

the ERP system.

2. Ton Van Esch: I think “it depends….” Based on corporate culture one is likely

press one ahead of the other. So pragmatically, I do not think that you can

plan it that well. Both are large investments in time, resources, money and are

unlikely to be undertaken simultaneously.

3. Mike James-Moore: See the question asked just before. Lean six sigma can

however be used at local level to solve issues but I would be careful to have a

major programme to do both at once. Although an ERP system needs tidiness

106


(perfect plan for its implementation) and thereby tends to be quite structured

while LSS is partially dealing with mess, they are helping each other in much

sense. ERP is useful for sustainability in terms of Lean Six Sigma projects.

The ERP systems are not used to be adaptable to changing conditions

because they tend to push their logics to the systems and therefore they are

rigid, however Lean Six Sigma project are based on change management. In

that case, the answer of this question depends on the situations which are

encountered.

4. Kim Stansfield: As stated previously, one of the biggest causes of

implementation failures of ERP systems is reported to be ‘poor understanding

of needed process changes prior to starting implementation.’ This is precisely

where Lean Six Sigma focuses. So, in my opinion, the initial stage of Lean Six

Sigma should precede the ERP implementation, such that it ‘Defines’ critical

requirements for the programmes. The ERP follows shortly after as it will

provide many of the information management systems and information

sources that will enable the Lean Six projects. In effect Lean Six Sigma

provides the methods of analysis and a process approach, the ERP system

provides the many information sources and management systems required for

Lean Six Sigma success.

5. Mete Mazlum: I think one of them is not a prerequisite for the other but don’t

forget that the lean thinking is much slower and troublesome than ERP

implementation.

6. Serkan Mahir: They are actually independent of each other. If we conduct a

correlation analysis for them, it will be probably 0.1. I have come across with

many companies without having an ERP system which have effectively

implemented Lean Six Sigma strategy within their system and have been

successful. I think, ERP could be utilised in the Measurement phase in order

to collect the data and disseminate them when necessary and also in Analyse

phase.

7. Dr. Angela Clarke: Without knowing more about what the strategy of the

company is, it could not be answered. If I have an IT company, I should focus

on IT and therefore it is easier to adopt ERP before the Lean Six Sigma. If I

make a lot of improvements or have a parent company, Lean Six Sigma

107


should be focused at first. The decision is not very easy to be made. There are

so many external and internal factors before making the decision.

In terms of the possibility of concurrent implementation, it is possible to do

them together. You can see the big change programs here. It is often hard to

implement two big things. As I said just before, it is possible to do in parallel;

however they should be kept separated. If there is a big enough company with

enough resources, it could implement both at the same time. If there is a small

company or SME (Small-to-Medium), there is no chance because you have

limited resources. This idea is resource-hungry that means it takes a lot of

resources.

8. Greg J. Hughes: It is best to define standard business processes, to improve

them and optimise them (through Lean techniques) before implementing an

ERP system which brings with it inherently reduced flexibility but improved

ability to keep a process standardised. In my experience there are very

different skill-sets required to implement ERP, from those required to

implement Lean techniques onto business processes; therefore it is very

difficult to use one project team to carry out both – it is better to run these as

distinct but connected, sequential projects.

9. Dr. Terra Vanzant-Stern: Personally I think that LSS strategy would still be the

main consideration and ERP is a tool.

108

Section Five: Discussion

5. SECTION FIVE: DISCUSSION

Literature has been critically reviewed, research methodology has been

decided and subsequently semi-structured interviews based on the selected

methodology have been conducted thus far. In discussion section, all of the experts’

evaluations about the propositions put are discussed. As a result of this discussion,

the critical points which are focused on and tried to be revealed during the project will

be validated if they totally or partially make sense from the specialists’ point of view.

DMAIC process is discussed at first and the relationship based on experts’ opinions

about ERP systems and Lean Six Sigma projects is considered afterwards. Finally,

the sequence of their implementation is evaluated by taking into consideration again

the specialists’ views.

5.1. DISCUSSION FOR THE DMAIC METHOD

5.1.1. Discussion for the Define Phase

Question A: In this question, the importance of the VOC (Voice of Customers) is

focused on within the DMAIC method. The idea that ERP could support the VOC

activities is defended while interviewing with the experts. The relevance with the ERP

systems in conducting VOC might be demonstrated by considering the ERP systems’

collaboration with the BI (Business Intelligence) because the most popular tool for

VOC is data mining that is one of the BI tools. Without taking into consideration the

BI systems, it seems that VOC activities are also based on “information”. As

mentioned many times during the project, ERP is a system that provides “information

flow” to the companies. Therefore, anywhere in which data collection and

manipulation is required, an ERP system might play an important role and overcome

complicated systems. Those evaluations mentioned just before have been made in

advance of the semi-structured interviews. Some different viewpoints have been

presented by respondents. According to their assessment of this question, some

results are obtained that are discussed below.

109


Figure 20: Experts’ evaluations about the Question A

Dr. David Scrimshire Agree

Ton Van Esch Disagree

Mike James-Moore Partially Agree

Kim Stansfield Partially Agree

Mete Mazlum Agree

Serkan Mahir Partially Agree

Dr. Angela Clarke Partially Agree

Greg J. Hughes Partially Agree

Dr. Terra Vanzant-Stern Partially Agree

Table 11: Experts’ opinions about the Question A

As can be seen the Figure 19 and Table 11 above, the majority (64%) of the

respondents are partially agree with the idea of Question A. Nevertheless, there are

some people among them who are totally agree (22%) and disagree (11%) with it.

According to the semi-structured interviews’ result, they have generally reached a

consensus about the ERP systems’ support to the VOC activities even though some

disadvantages are likely to appear during the Define phase of the DMAIC method.

For instance, there are three customer types that are old customers, current

customers and potential customers. In that case, some of the old customers would

also be potential customers. It seems that while acquiring the old customers’ voice

for observing the trends happened in the past and existing (current) customers’ voice

Question A

Totally Agree

Partially Agree

Disagree

110


for understanding their current needs could be acquired by the collaboration of the

ERP Systems and Business Intelligence (BI) Systems, potential customers’ voice in

order to understand their need for attracting them could not be captured through this

combination (ERP & BI). However, Six Sigma strategy also requires procuring the

voice of the potential customers. Under these circumstances, ERP is undeniably a

useful tool for providing information about the customer data that have been already

had (historical & current) and thereby reinforce the Define phase, while it is

disadvantageous in terms of potential customers.

In some cases, the data collected are not the data expected. It might happen

because of the difficulty for understanding the Mind of the Customers (MOC). That is

to say, asking the questions to the customers is restricted by the questions, however

there are more data than the answers received in the customers’ mind. Also, slight

changes in the questions’ structure might produce enormous differences in the

results while conducting VOC. Those problems could not be bettered by using ERP

tools -even they are related to information. At that point, VOC activities are based on

the interviews that are done with the respondents face to face. As Ton Van Esch

mentioned, this kind of VOC activity cannot be implemented by means of ERP

systems.

Although it seems that those challenges mentioned above hide ERP

contribution to the VOC activities, ignoring an ERP system’s support for data

manipulation is not possible because it plays an important role while analysing the

customer data had for the VOC activities. These data needed for the VOC could be

provided by tracking surveys, sales of customers and their interactions within the

businesses’ websites that could be accesses from the ERP systems. Also, positive

management involvement could improve the ERP systems’ efficiency.

Question B: In this question, Product Synchronisation is focused on. “Showing the

relationships among various process steps” is defined as this tool’s task. Those

relationships are based on information and therefore ERP systems could reinforce

this tool. This proposition is evaluated below by taking the specialists’ opinions into

consideration.

111


Figure 21: Experts’ evaluations about the Question B


Ton Van Esch Agree

Mike James-Moore Agree


Mete Mazlum Agree

Serkan Mahir Agree

Dr. Angela Clarke Agree


Dr. Terra Vanzant-Stern Agree

Table 12: Experts’ opinions about the Question B

As could be observed from the Figure 20 and Table 11 above, all of the

specialists have nearly the same opinion about the ERP support to the Product

Synchronisation Lean Six Sigma tool. The majority of them (78%) totally agree with

this idea indicated in Question B while the others (22%) are suspicious at some

points though believing in the benefits of ERP at this stage.

As mentioned in the Literature Review section, ERP systems usually push

their logic to the companies. Therefore, “Best Practices” are used by many

companies because it seems that configuring ERP systems according to the

Question B

Totally Agree

Partially Agree

Disagree

112


companies’ needs is much more expensive and difficult to be integrated with the

suppliers’ and customers’ systems. In that case, ERP might not help the Lean Six

Sigma projects due to the fact that particular and detailed information about the

intended project are required within their implementation process. However, if “Best

in Class” is used as an ERP system, it might not provide what expected.

On the other hand, ERP is undeniably a powerful tool for presenting the

transactional information about the business processes. However, that the

information kept in the ERP systems are based on human beings should be borne in

mind. Whatever, however and whenever they put the data in the ERP systems, they

could access those data in that speed and quality that have been already generated

by themselves. At that point, ERP systems provide the information (particularly

transactional information) for the process mapping. However, they could be enriched

by encouraging the staffs to do their best while using the ERP systems. In that case,

positive management involvement might be also helpful to provide the link between

technology and people.

Question C: In this question, that the data is needed for the key stakeholder analysis

is defended as happened in Question A for VOC activities. Those activities (Key

stakeholder analysis & Voice of customers) seem to need similar way to track.

Therefore, it seems that the ERP contribution appears again. This is asked to the

specialists while the data collection process and discussed below according to the

interviews’ results.

Figure 22: Experts’ evaluations about the Question C

Question C

Totally Agree

Partially Agree

Disagree

113





Kim Stansfield Agree

Mete Mazlum Agree

Serkan Mahir Agree


Greg J. Hughes Disagree


Table 13: Experts’ opinions about the Question C

As illustrated in Figure 21 and Table 13 above, more than half of this group

comprised of the experts in focused subject (56%) agree with the idea of ERP

contribution to the stakeholder analysis in providing existing and historical data to the

Lean Six Sigma teams. For example, Kim Stansfield mentioned while interviewing

that “historical trends in change requests, complaints, supplier performance data,

internal process management staff performance and compliance performance

trends” could be provided through the ERP systems. In that case, a key stakeholder

analysis could be effectively conducted.

On the other hand, Ton Van Esch and Greg J. Hughes disagreed with this

idea because the activity of key stakeholder analysis is a team activity and it requires

high level (experienced) staffs’ involvement in order to draw a conclusion for this

activity according to them. In terms of understanding who the key stakeholders are,

projects sponsors probably play important roles. After deciding the project scope and

scale, the project might require to be discussed with those critical key stakeholders

identified by the project sponsors in person in order to conduct the key stakeholder

analysis properly.

114


Question I: In this question, Product Synchronisation is evaluated again as a Lean

tool. It is indicated that this Lean tool focus on “P” (Process) in the SIPOC (Supplier,

Input, Process, Output, Customer) map. In that case, the question of “How effectively

does ERP reinforce this Lean tool?” has been asked to the experts. Although it

seems that it is the same as the question B, it is focused on Lean Thinking more. In

Question B, the objective is to draw people’s attention to the data that should be

provided for SIPOC maps. However, “how Lean Thinking is affected from the ERP

systems while conducting together” has been tried to be learned. According to the

experts’ evaluations, this situation is discussed below.

While interviewing with the specialist, many different perspectives have been

encountered. Even though they present opposite ideas, all of those viewpoints are

proper in their entirety. For example, Dr. Angela Clarke could not see how ERP

would reinforce the Lean tool. She mentioned that there are special software

programs for Lean Six Sigma projects which could provide what exactly the Lean

tools expect because they are particularly developed for Lean projects. Therefore,

using these software programs instead of much more expensive EPR systems is

better at that stage. Also, David Scrimshire emphasised that “computerising

manufacturing scheduling is complex” and he added that “ERP systems do not adopt

any single method”. In that case, it seems that the reason is because ERP systems

are already the systems that expect the companies to adopt their own logic. Thus, it

might not be able to be properly configured for the proposed projects. In that case,

selecting the software programs designed for the LSS projects might be the better

option in order to reinforce this Lean tool.

On the other hand, Kim Stansfield and Greg J. Hughes touched on the same

point which is “standardised processes by means of the ERP systems”. In other

words, ERP systems provide the LSS projects standardization because the aim of

LSS projects is to improve value of the processes while reducing cycle times as

mentioned in the Literature Review section and also stated by the experts. At that

point, the ERP systems regulate the whole data which are already had by the

companies, put them in a well-structured and granular platform and provide the

people to access these data whenever needed. This situation standardises the

business processes. In Lean Six Sigma logic, having standardised and tidy business

115


processes is the first aim to achieve an improvement within the project. In this sense,

ERP might make the LSS projects more effective and efficient.

In addition to these, that observing macro process level of the LSS projects

could be conceivable through the ERP systems should not be forgotten. In order to

observe the all processes linked each other for mapping, there must be a system

which gathers the whole components of a business under an umbrella that could be

exactly driven by the ERP systems.

5.1.2. Discussion for the Measure Phase

Question D: There is a proposition again about “defining the CTQ (Critical-to

Quality) characteristics. In order to implement some LSS tools such as FMEA,

Fishbone diagrams and Functional Process Mapping, transactional data are needed.

After implementation of those tools mentioned just before, their results should be also

saved in somewhere in order to compare before-implementation of a LSS project

versus after-implementation of it. Therefore, that this step also needs an ERP

system’s contribution is defended in this question and discussed below.

Figure 23: Experts’ evaluations about the Question D

Question D

Totally Agree

Partially Agree

Disagree

116



Ton Van Esch Agree



Mete Mazlum Agree

Serkan Mahir Disagree


Greg J. Hughes Agree


Table 14: Experts’ opinions about the Question D

As can be shown in Figure 22 and Table 14 above, the majority of the

respondents (78%) agree with the ERP contribution at that point. However, one of

them (11%) disagrees with this idea, while the other one (11%) partially agrees. It

seems that it provides information about transactional processes and historical

performance as warranty data for LSS projects. After obtaining qualitative

measurement by using those tools mentioned above, ERP could support quantitative

support to them by validating their results.

On the other hand, if the cost and benefit analysis is conducted, ERP systems

at this stage will not probably advantageous for the companies. There might be

cheaper systems that could manipulate those tools even though they would not be as

efficient as the ERP systems because the ERP systems gather the all company

levels within one platform and integrate them. Therefore, it might be easy to access

the data needed through the ERP systems. In that case, the reason why companies

do not implement the theoretical bases for their actual processes though ERP

systems’ undeniable helps to those tools (as Mike James-Moore mentioned) is

because they might be evaluated by the companies as expensive software for the

LSS projects.

Question E: In this question, translating the customer needs into the clear and

measurable characteristics by the performance standards is concentrated on. It is

117


claimed that this activity needs ERP support as well. Deliberating on this case with

the experts has enriched the idea of this question that is evaluated below.

Figure 24: Experts’ evaluations about the Question E



Mike James-Moore Disagree


Mete Mazlum Agree

Serkan Mahir Agree

Dr. Angela Clarke Disagree



Table 15: Experts’ opinions about the Question E

As illustrated Figure 23 and Table 15 above, the majority of the people among

this group (56%) agree with the idea of this question. The people who disagree with

this proposition (33%) explicitly explained why they oppose to it by emphasising that

this activity is based on a thinking process and thereby is dependent on the qualified

people’s work. Also there is another approach made by Mike James-Moore that

Question E

Totally Agree

Partially Agree

Disagree

118


draws people’s attention to a disadvantage of ERP contribution to this step. LSS is a

strategy that is open to new ideas and implementations, while ERP is a rigid system

that you cannot appropriately align it with the innovative systems because new

enforcements are not able to immediately adapt the existing stiff systems’

regularities. In that case, integrating these new ideas produced by LSS teams with

the ERP systems might cause the companies to reduce the LSS projects’

opportunities.

On the other hand, even though Dr. Angela Clarke mentioned that this is a

thinking process rather than the ERP systems’ responsibility, ERP could be possibly

utilised after producing data as a result of the brain storming (thinking process).

These data might be manipulated through the ERP systems well, however there are

many different data-capturing systems as Greg J. Hughes mentioned. He mentioned

that they could well-manage this process rather than ERP systems, however that

ERP systems could aggregate all level of the business processes of a company and

have ability to integrate them according to any business requirements should not be

forgotten. Therefore, it seems that ERP provides broader perspective to the

companies although the other alternatives might seem more advantageous when

cost and benefits are taken into consideration.

In addition to these, ERP systems’ support cannot be repudiated when

Requirements Management Systems (RMS- the relationships between requirements

and responses as Kim Stansfield mentioned) is considered. RMS is also related to

customer needs’ translation into the business characteristic. At that point, ERP has

all the data RMS might need and ability to manipulate them.

Also, Dr. Terra Vanzant-Stern mentioned that all the information about Voice

of the Customers (VOC), Voice of the Employees (VOE), Voice of the Processes

(VOP) and Voice of the Business (VOB) could be reinforced by an ERP system

which might also manipulate benchmarking activities. In that case, ERP systems

might be interrogated about the measurement systems had within a company in

order to select the most proper one after thinking process as Dr. Angela Clarke

emphasised. Additionally, benchmarking activities might provide the companies to

choose the right measurement system for their businesses because the companies

may have various systems some of which might just produce ideal solutions for

119


particular situations. In that case, the most effective measurement system might be

recognised by means of benchmarking activities. As can be understood from the

explanations just offered before, ERP indirectly manages those activities

(interrogation and benchmarking) and thereby reinforce this step as well.

Question F: Shaffie and Shahbazi (2012) stated in their book that data collection is

needed in the Measure phase of the DMAIC method as indicated in the Literature

Review section. When an activity about data comes into question, EPR springs to

mind. Therefore, an activity of data collection as one of the LSS steps could be

supported or totally managed by ERP systems. This point has been discussed with

the specialists and indicated below.

Dr. David Scrimshire Partially Agree

Ton Van Esch Partially Agree



Mete Mazlum Agree

Serkan Mahir Agree




Table 16: Experts’ opinions about the Question F

120


Figure 25: Experts’ evaluations about the Question F

As can be perceived Figure 24 and Table 16 above, even though all of they

agree with the idea of this question, forty-four per cent of them have some doubts

about it. They mainly emphasised that the data collected in the ERP systems are

generated by the human beings. Thus, ignoring the human factor within this well-

organised and standardised system is not possible even though the EPR systems

provide the holistic and sophisticated data to the companies. Thus, the data might

not be accurate, right, detailed or enough. However, LSS projects require more

detailed and accurate information about the focused problems in order to have deep-

understanding about their root causes. At that point, the possibility of mistakes made

by the people should be taken into consideration.

During this data collection process, any information about the companies/

businesses is put in the ERP systems as soon as it is acquired. This point was

positively evaluated as being sophisticated data that includes everything about a

company by Dr. Terra Vanzant-Stern, while that capturing unnecessary data is a

waste is mentioned by Mike James-Moore. In that case, it should be remembered

that ERP systems have large capacities and also able to capture all the data a

company need according to the literature. Hence, having as much data as possible

might be useful for the companies because the information put in an ERP system is

related to company even if it is not directly regarding the particular problem(s)

Question F

Totally Agree

Partially Agree

Disagree

121


identified by a LSS team. The information which seems irrelevant for the focused

problem(s) might be helpful for the forthcoming phases of the LSS project because it

is about the “focused” company.

In addition to these, Kim Stansfield mentioned that data collection for the LSS

projects is “a non-trivial exercise”. If an ERP system includes standardised, best

practise business processes, “then this greatly reduces the value of the information

to Measure phase”, because the target in LSS projects is to access the data about

“what is actually happening”. In that case, all staffs of the companies might be well-

trained about the data accuracy and reality if their ERP systems are tried to be

integrated with any other systems and/or strategies. At that point, an ERP system’s

integration with the LSS projects also requires thorough attention.

Question J: In this question, FMEA’s definition is focused. Shaffie and Shahbazi

(2012) emphasised that its aim is to reduce or eliminate the identified problems. That

is what is expected in Lean Thinking. Therefore, that FMEA is a helpful tool for LSS

projects is claimed. The discussions with the experts are evaluated below.

Figure 26: Experts’ evaluations about the Question J

Question J

Totally Agree

Partially Agree

Disagree

122



Ton Van Esch Agree



Mete Mazlum Agree





Table 17: Experts’ opinions about the Question J

As can be perceived from the Figure 25 and Table 17, the overwhelming

majority of the group that consists of the specialists (89%) have a consensus about

proposition above. They all agree that FMEA could be used as a Lean tool for

improving the processes. It is “a proactive planning around the potential defects from

the new solution” (Kim Stansfield). Analysing the current processes by undertaking

risk assessments through FMEA activities provides the new projects to be started

with minimum defects. In that case, potential wastes could be eliminated/ reduced.

This approach might expedite the LSS teams’ works by preventing to encounter

defects occurred previously.

Also, Dr. Terra Vanzant-Stern emphasised that “FMEA can expand Lean

Thinking from identifying defects only to considering the culture”. At that point, Lean

teams might easily adapt the company focused by means of FMEA activities and

could produce better solutions by understanding the company requirements and

needs better.

On the other hand, Serkan Mahir touched on the ERP contribution to this

activity and he mentioned that it could be manipulated by Microsoft Excel. Therefore,

using ERP at that stage seems unnecessary. According to his idea, thinking FMEA

as just a Lean tool in a LSS project might not be a good idea because it could be

conducted for any condition needed by simply using Excel. Thus, it could be

implemented without adopting Lean strategy.

123


5.1.3. Discussion for the Analyse Phase

Question G: After defining problems and identifying them within the business

processes, “what is actually happening in the business” must be measured thus far.

In order to provide quantitative data for comparing the improved system and previous

system (before LSS implementation), some statistical tests are done in the Analyse

phase as mentioned in the Literature Review section. Those data acquired as a

result of those tests should be saved in a common platform as historical data or

warranty data. In that case, ERP contribution might enhance this step. This point

evaluated below has been discussed with the specialists.

Figure 27: Experts’ evaluations about the Question G


Ton Van Esch Agree



Mete Mazlum Partially Agree

Serkan Mahir Agree



Dr. Terra Vanzant-Stern Partially Agree

Table 18: Experts’ opinions about the Question G

Question G

Totally Agree

Partially Agree

Disagree

124


As shown in Figure 26 and Table 18 above, all people with whom the semi-

structured interviews are conducted have subscribed to the view that ERP could

support the Analyse phase of the DMAIC method by saving the statistical tools’

results as historical data. Nevertheless, some doubts occur again (44% of people

from the group shown above indicated those doubts). As a result of their criticism, it

cannot be said that ERP systems definitely capture all data needed because the data

held in them are based on people as mentioned before. Thus, expecting everything

from the ERP systems might disappoint the LSS teams if the ERP systems are tried

to be unquestioningly aligned with the LSS.

According to Angela Clarke, ERP systems are not able to manage that

process on their own. If they are integrated with the business intelligence systems

explained in the Literature Review section, then they could support that phase of the

DMAIC method as she mentioned. As mentioned previously in the literature of this

project, Business Intelligence systems and ERP systems could be implemented

individually. However, if they are implemented together, they could develop their

abilities and thereby produce more effective solutions to the companies. This

approach might be also operative for the combination of ERP systems and LSS

projects. In that case, the more information systems such as ERP systems are

integrated with the efficient strategies such as LSS methodology and/ or other

information systems such as Business intelligence (BI) systems, the more productive

they could be. Therefore, being sophisticated make the ERP systems more effective.

As could be perceived from the Dr. Clarke’s explanation, if they could be integrated

with the BI tools, they could support the Analyse phase of the DMAIC method.

Therefore, it seems that consolidating the powerful business systems should not be

avoided in today’s highly competitive business world.

Finally, Kim Stansfield mentioned that LSS projects focuses on to captire the

process data that is generated from the “lessons learned”. Therefore, historical data

such as information about the company focused before the LSS implementation are

not captured by the LSS teams. That situation is a challenge for the LSS approach.

At that point, ERP might compensate that deficiency. As mentioned in the previous

paragraph, if the ERP systems are integrated with intelligent systems more, their

unknown benefits might be discovered.

125


Question K: While interviewing with the experts, Lean contribution to the Analyse

phase of the DMAIC method is evaluated in this question. That Lean Thinking might

support this phase by conducting Value-Add and Non-Value-Add Analysis is claimed

to the specialists. Their opinions are discussed above.

Figure 28: Experts’ evaluations about the Question K


Ton Van Esch Agree



Mete Mazlum Agree





Table 19: Experts’ opinions about the Question K

Question K

Totally Agree

Partially Agree

Disagree

126


Agreement percentage of the specialists to this question is shown in Figure 27

and Table 19 above. The majority of them (67%) agree with the idea of this question.

Twenty-two per cent of them emphasised the same point which is that just

considering Lean Thinking such as reducing cycle time does not improve the LSS

projects due to ignoring the quality of the business processes (it is because of not

deeming the variations within the organisations). That is the reason why business

value cannot be increased when Six Sigma and Lean Thinking are deemed

separately. Therefore, “the goal is reducing process cycle time, standardisation or

stabilisation” as indicated by Shaffie and Shahbazi (2012). At that point, Ton Van

Esch emphasised that standardisation and stabilisation could be provided by Six

Sigma strategy while process cycle time reduction could be achieved through Lean

thinking and you cannot do without the other because you need to provide quality

and satisfying products/ services to the customers as well as reduce the process

cycle time in order to add value to the business. As could be clearly perceived from

the evaluation made by Ton Van Esch, the combination of Six Sigma and Lean

Thinking is also observed here. Again, benefits of the systems’ and/ or strategies’

combinations could not be repudiated while that case is taken into consideration.

In terms of those Lean tools’ relevance with the ERP systems, Serkan Mahir

mentioned that conducting this kind of process maps could be possible through the

simpler tools such as Visio and Excel. Therefore, ERP seems unnecessary to be

used at that point. If Value-Add and Non-Value-Add analyses are taken into

consideration, they should not be thought just “Lean tools” as happened for FMEA

activities mentioned in Question J.

5.1.4. Discussion for the Improve Phase

Question L: Specialists’ opinions about the Improve phase of the DMAIC method

have been investigated with the help of this question. They have individually

evaluated this phase based on their personal experiences. These perspectives are

discussed below.

Firstly, Serkan Mahir indicated that the Measure phase plays an important role

for taking opportunities of the existing processes within the Improve phase. In that

127


case, identified problems might guide a LSS team to propose the best solutions to

the company focused. Also, Greg J. Hughes mentioned that if the Improve’ phase’s

outputs are explicit, the Control phase could be conducted more effectively

afterwards. If everything is successfully managed until the Improve phase, improved

processes’ deviations from the target could also be detectable after the LSS project

teams finish their works (after the Improve phase). As can be understood from those

explanations, each phase of the DMAIC is dependent on one another.

According to David Scrimshire, using diverse Lean tools such as Value stream

mapping, Rapid Changeover through SMED (Single Minute Exchange of Die), Total

Productive Maintenance (TPM), Overall Equipment Maintenance (OEM) and Takt

Time in concert could provide the better results to the Improve phase because they

might complement each other in order to achieve holistic business success. In

addition to these, brainstorming and benchmarking also reinforce this phase and

thereby might be also evaluated as a type of improvement tool.

What is more, Terra Vanzant-Stern recommended that project managers can

demonstrate a few solutions for the problems identified in the Define phase in order

to guide their team members to arrive at the better solutions. “This situation provides

credibility and logic for the process solutions.” (Terra Vanzant-Stern)

Greg J Hughes also mentioned that the ways of doing businesses should be

thoroughly and slowly changed and multiple variables should not be concurrently

changed in this phase. It should be assured that inputs and outputs of this phase are

correctly measured during the change management process and those changes

should be well-managed.

On the other hand, Kim Stansfield emphasised some challenges of the Lean

implementations. According to his explanations, just focusing on Lean Thinking within

the organisations might prevent people to take into consideration the customers’

satisfaction and thereby make strategic decisions. In this sense, essential

requirements might be overlooked and this situation might result in many other

problems. In that case, Lean mind-set should be sustained instead of directly trying

to implement theoretic Lean method. After leaning the companies’ culture

(understanding the Lean basis), this strategy might be combined with any system

and/ or strategy and subsequent rewards might be bountiful. However, it should be

128


borne in mind that establishing Lean mind-set might take many years (Mike James-

Moore stated that it takes up to 15 years). At that point, immediate adaption to this

strategy and achieving instantaneous improvement should not be expected from the

people.

Conversely, Dr. Angela Clarke emphasised that this process is not always

overcome through the Lean strategy even though it plays crucial role in the Improve

phase. It might be regarding people, training or people’s responsibilities. Greg J.

Hughes also touched on the same point. According to him, documentation might be

required in addition to these. For example, that the reasons of the changes are well-

perceived should be ensured. At that point, documentation might present structured

plan to the organisations.

As can be understood from the explanations above, this phase is dependent

on many different variables. Therefore, all of them should be managed in harmony. In

the ERP part of the Literature Review section, BPR (Business Process

Reengineering) has been mentioned. It is explicated that BPR is regarding pre-

implementation of the systems/ strategies (relevance of the ERP systems has

explained there). In that case, the Improve phase of the DMAIC might be evaluated

as a BPR process due to the fact that new implementations to the systems will start

to be supervised after this phase. Therefore, this phase is a period of change that is

exactly what BPR’s logic is. New solutions are designed instead of the processes’

deficiencies and some auxiliary activities such as documentation and human

resource management are needed while conducting this process. As can be clearly

seen, data management, business improvement, waste reduction, people’s

management, cost reduction and business excellence are expected from a

successful business. In that case, some strategies such as Lean Thinking, Six Sigma

strategy, BPR (Business Process Reengineering) and some systems/ technologies

such as the ERP systems and data mining tools might expedite and streamline the

business processes. Thus, they could be used within the organisations and

combined to the best of these companies’ abilities. However, cost and benefit

analysis should not be ignored while attempting that.

129


5.1.5. Discussion for the Control Phase

Question H: In this question, the quality plan needed in the Control phase is focused

on. According the Shaffie and Shahbazi’s definition (2012), it is a documented plan

and therefore seems to be related to the ERP systems. That point has been

discussed with the specialists and is stated below.

Figure 29: Experts’ evaluations about the Question H


Ton Van Esch Agree



Mete Mazlum Disagree

Serkan Mahir Agree




Table 20: Experts’ opinions about the Question H

Question H

Totally Agree

Partially Agree

Disagree

130


The perceptions of experts’ agreement and disagreement are shown above.

The majority of them (78%) agree with the idea of this question while one of them

partially agrees and one of them disagrees with it. The reasons why some of them

still have doubts about the ERP contribution are because the DMAIC method is

mainly based on people due to being dependent on thinking processes and the ERP

systems requires considerable up-front investment of time and resources. For the

former one, it could be said that ERP systems’ integration with the LSS projects does

not mean to expect the information systems (ERP) to do everything instead of

people. It cannot be possible because ERP systems’ data and their structures are

also based on the human beings. Therefore, bypassing human factor from that

combination seems impossible. For the latter one, it should not be forgotten that the

ERP systems’ implementations cost the companies substantial amount of money

even though they take the companies’ appreciable amount of time (as mentioned in

the Literature Review section).

Question M: In this question, Control phase is evaluated with the specialists.

Additional Lean tools for this phase are investigated by discussing with those

qualified people. Some inferences drawn from their considerations are stated below.

In terms of Control phase, the experts expressed their ideas about how the

LSS-implemented business processes could be controlled. After analysing their

ideas, it is observed that the changes (from before-implementation to after-

implementation) within the organisations are revolved around. Visualisation tools

should be used for monitoring these new systems, root causes identified at the

beginning of the DMAIC should be reviewed in order to learn if they are resolved or

not, improved processes’ compatibility with the existing businesses should be

measured and the business processes’ performance should be audited after the

Improve phase. While doing these activities, structured lessons learned from the LSS

implementations might provide the organisations to compare their new systems and

previous systems. At that point, the ERP systems might save the data created by the

LSS teams and provide the staffs responsible these data that could be useful in the

future in order to maintain Lean mind-set. It is because Lean Thinking must be

adopted by all members of the companies after the LSS strategy implementation in

131


order to obtain the LSS projects’ rewards. Otherwise, high investment in LSS

implementations might be waste of time and money. In this sense, ERP systems

might hold the data about the LSS implementations as mentioned above and

manage them centrally. In this way, all staffs interested in these data could access

them from any place and whenever they want. This approach might facilitate

transitions of the business processes and concatenate them.

Additionally, Dr. Angela Clarke mentioned that Lean tools are not always

sufficient for the Control phase. Documentation, knowledge-based systems and the

Internet are also needed within this phase. As can be understood from this

explanation, some supportive tools’ requirements (such as the ERP systems, expert

opinion) might arise. Therefore, consolidating different components of the businesses

should not be avoided if necessary. However, cost and benefit analysis should be

also done in order to decide if the integration is advantageous and profitable or not.

5.2. DISCUSSION FOR THE RELATIONSHIP BETWEEN ERP & LSS

In this part, relationship between the ERP systems and the LSS strategy is

discussed with those qualified people. They all found this approach interesting. After

diligent evaluation with them, some conclusions about the idea of this project have

been drawn that are stated in detail below.

Firstly, it should not be forgotten that ERP is a neatly structured system that

are likely to be based on consummate plan. Also, ERP systems are unlikely to be

adjusted for the other strategies and/ or systems. They usually impose their logic

upon the organisations. On the other hand, LSS strategy deals with the mess in the

business processes. Therefore, they seem to be exceedingly different from each

other when looking from the outside. Nonetheless, they could perfectly support each

other in some cases.

If their relationship is considered, the aim of LSS strategy is to improve the

business processes by understanding the best conditions for the business

requirements. At that point, LSS strategy provides process definition to the

companies. In that case, ERP systems might benefit from this definition and the

132


improvement capability of LSS strategy during their pre-implementation and

implementation process (mentioned in the Literature Review section). On the other

hand, ERP systems could be potential enabler for disseminating these data collected

from the business processes and provide standardised processes and information

management systems to the organisations in order to support the LSS projects and

any other business activities. As can be seen from the explanations just proposed

before, there is a mutual relationship between the ERP systems and the LSS

strategy.

In terms of remedying challenges of the ERP systems, Ton Van Esch and Dr.

Angela Clarke have thoroughly analysed the Benefits/Challenges tables about the

ERP and LSS. According to Angela Clarke, the one’s benefits possibly ameliorate the

other one’s challenges. However this situation might not always happen. That is to

say, LSS strategy is not always the solution for the shortcomings of ERP and also

ERP might not be always used for resolving the LSS projects’ challenges. For

example, she mentioned that people’s resistance against having technology adoption

could be resolved through change management which is one of the LSS steps. As

mentioned in the Literature Review section, ERP is evaluated as a long-term

initiative. At that point, LSS might help you to focus on some quick wins that produce

good and quick benefits. Ton Van Esch added to those points mentioned just

mentioned above that having insufficient budget across the ERP implementations

could be made better through LSS strategy by increasing production efficiency,

expediting the processes and improving the way of doing businesses (that are

indicated on the Benefits/Challenges tables in the Literature Review). There is also

one important point that is stated in those tables as “ignoring the companies’ own

needs because of preferring to use ‘standardised global templates’ of the ERP

systems”. This situation could be also improved with the help of LSS strategy by

providing the companies’ responsiveness and enhancing the customer relationship

management according to Ton Van Esch.

On the other hand, ERP could be also beneficial for the LSS projects

according to the experts. It could accelerate LSS deployments by providing entire

data about the company, transfer lessons learned and process data across the

corporation and offer direct interoperability with the other projects or business

activities to the LSS teams as mentioned by Kim Stansfield. Once the data needed

133


are captured by the ERP systems, “underestimating the amount of time and effort

needed for LSS projects” and “hiring consultants and pouring resources into the LSS

projects” could be ameliorated by the ERP systems according to Dr. Angela Clarke.

She also emphasised that deficient stock of knowledge could be improved through

the ERP contribution by providing master data to the LSS teams.

All in all, LSS strategy at the conceptual level is beneficial for each change

and/ or improvement; however there might be other simpler tools that could provide

the same opportunity(s) with the lower cost. On the other hand, LSS projects might

be more sustainable with the help of the ERP systems. In this sense, they can

enhance each other although one of them should be prioritised. It is because they

are both significant investments, thus the organisations should not be overloaded by

putting these two big jobs in the centre of their businesses.

5.3. DISCUSSION FOR THE SEQUENCE OF THEIR

IMPLEMENTATION

In this part of the project, sequence of the ERP and LSS implementations is

investigated by listening to the experts while they are mooting their ideas about that

point. Some conclusions drawn based on these discussions are evaluated below.

While interviewing with them about that point with those specialists, different

viewpoints have been presented. The prevailing viewpoint is that one of them could

be implemented without adopting the other one and this distinct implementation

might perfectly provide success to the companies. However, they undeniably support

each other. Therefore, their combination makes their separate success more

effective by redeeming their challenges.

Even though the majority of them think that deciding this sequence depends

on the focused company’s sector, there are some people who prioritised ERP or

LSS. In that case, the company’s strategy should be known more in order to decide

which one should be implemented first. There are internal and external factors for

their sequence. If a company is an IT company, it will probably focus on the

information systems more. Thus, implementing ERP at first might be logical in this

134


case. However, if the focused company requires so many improvements within the

business processes, then implementing LSS project before the ERP implementation

seems more appropriate. Additionally, corporate culture should not be overlooked at

that point. Human nature tends to prioritise one thing and concentrate on the

selected task (according to the importance). Therefore, it should be deemed that

there are many constraints such as human factor, time, resources and money in

order to decide which one should be implemented first.

Nevertheless, two different approaches emerged from those discussions with

the specialists. In one hand, misunderstanding about changes of the business

processes, which might cause ERP systems’ failures, could be enlightened if the LSS

projects firstly implement. On the other hand, ERP systems could provide master

data to LSS projects if the ERP systems are established previously: the more

historical and transactional data about the company, the more effective

improvements. In that case, it seems that this question does not have a definite

answer.

In terms of implementing them concurrently, it might be possible though

involving high investment requirements. Hence, if there is a big company with

sufficient resources and money, they could be implemented simultaneously to this

company. However, expecting a group of people to be qualified Lean Six Sigma Belt

and ERP specialist does not seem sensible. If there are such kinds of people and the

company managers would like to employ them, it will be probably more and more

expensive than appointing the people who are expert in just one area. In that case, if

the company managers do not care the cost of this initiative and are able to afford it,

significant change program might be observed at that point. Therefore, it might be

exceedingly advantageous for the big companies if they have sufficient resource to

spend for this integrated implementation. However, it might not be profitable for the

smaller ones due to the probability of being insufficient against this cost-effective

attempt.

135

Section Six: Conclusion

6. SECTION SIX: CONCLUSION

6.1. SUMMARY OF THE PROJECT OUTCOMES

Enterprise Resource Planning (ERP) within Lean Six Sigma (LSS) strategy

has been investigated throughout the project. “How could benefits be obtained from

the combination of ERP systems and Lean Six Sigma strategies?” has been tried to

be answered.

In order to draw a conclusion from this research study, semi-structured

interviews have been conducted with the nine experts in the ERP systems and/or

LSS projects. A model has been constructed by putting some propositions on the

tables of the DMAIC method which were taken from the literature. In addition to this,

some critical questions have been produced. The purpose of this case study is to

validate those propositions and benefit from the specialists’ experience by discussing

some critical points with them.

Firstly, ERP systems and LSS strategy have been explained individually and

the possibility of their combination has been examined afterwards in the Literature

Review section. Subsequently, the model about the DMAIC method has been shown

to the experts and discussed with them. Secondly, benefits and challenges of the

ERP systems and LSS strategy have been illustrated on the tables that are shown at

the end of the Literature Review section as a summary of the literature. According to

these tables, “could the one’s benefits ameliorate the other one’s drawbacks?” has

been tried to be learned. Thirdly, the sequence of their implementation if decided to

be integrated has been analysed. Those considerations just mentioned above have

been discussed with the specialists as well. In that case, three different research

questions have emerged which are indicated below.

To what extent could ERP systems support Six Sigma DMAIC method?

This question is comprised of thirteen sub-questions (semi-structured

interview questions). The majority of them expect the specialists to express

their viewpoints as agreement, partially agreement and disagreement. Some

additional information about those systems and strategies is expected through

136


the rest of these thirteen questions. When their opinions about the whole

DMAIC process are considered, the overwhelming majority of them agree with

the propositions put, though arising partial agreement in some cases and

slight disagreement. They have occasionally emphasised that ERP systems

could undeniably support the LSS projects because the basis of ERP is

“information management” and those projects also need data management

systems. In that case, their collaboration seems feasible. However, it might

cost the companies a great amount of money.

Could ERP systems and Lean Six Sigma strategy be mutually supportive? If

so, how?

According to the experts’ evaluations, even though there are some obvious

shortcomings that could be compensated with the help of the other one’s

benefits, most of those challenges indicated on the tables might be

ameliorated. However, some of them might require another solutions. ERP

systems could provide information management to the LSS projects which

need historical data and transactional data. On the other hand, LSS strategy

improves the ERP implementations by defining the business processes. In this

way, organisations’ languages might be understood better by the ERP

systems and thereby the probability of the ERP systems’ failures could be

reduced. As can be clearly seen from those explanations just mentioned

above, these interrelated approaches could together offer better solutions to

the organisations.

Which one of them should be implemented at first if they are decided to be

combined? ERP first or LSS first?

This question’s aim is to decide the best way to utilise the integration of these

big implementations. The specialists generally stated that the answer of this

question might depend upon the companies’ needs and conditions

encountered. That is to say, if a company needs information technology more

than business improvements, the implementation of an ERP system might be

prioritised. Likewise, if a lot of requirements are expected from a business,

Lean Six Sigma strategy should be adopted at first.

137


In terms of implementing them simultaneously, it might be possible, however it

will probably exploit the companies’ resources such as time, money and effort.

Also, it requires super-experienced people to be appointed for this

sophisticated work that is comprised of the ERP systems and LSS strategy.

Obviously, those people should be expert in both LSS and ERP for the

concurrent implementation and this situation might cost the companies a great

deal of money. In that case, if there is a big enough company to undertake

those challenging conditions, ERP and LSS could do their best through this

integration. At that point, it seems that ERP and LSS together might be

exceedingly advantageous if the companies’ resources are sufficient.

6.2. PRACTICAL APPLICATION OF THE RESEARCH IDEA

These systems and strategies analysed thus far are not only academic

subjects but they are also implemented on an individual basis in practice. Therefore,

all of those experts have been interested in the idea of this project. They have

evaluated this combination as useful for the companies. However, they have been in

doubt about the cost and benefits. If the cost and benefit analysis shows that the

implementation is feasible, the initiative of the combination of those approaches will

undeniably be beneficial for the companies. Therefore, if a company has either an

ERP system or adopts LSS strategy within the structure of it, it should definitely try to

consolidate them. In this way, this combination might be less expensive than those

which have just one of them or none of them. However, even if it seems costly for

any company when looking from the outside, implementing and subsequently

integrating them should be attempted on the back of cost and benefit analysis. Its

advantages might be much more than its disadvantages. Therefore, hesitating to

launch a trial for the combination does not seem sensible.

6.3. LIMITATIONS FOR THIS RESEARCH

As mentioned before, the idea of this project is implementable. However, even

though all specialists agree or partially agree with all propositions put about the

138


DMAIC method, ERP contribution to this method is not offered by the companies

which have adopted LSS. Therefore, it is recently discussed in theory although there

are many people who research the relationship between ERP and LSS and

encourage the company managers to integrate them. In that case, people’s

hesitation against the new implementations is a limitation for this study. That is to say

experimental research could not be conducted even though it might present their

benefits better.

6.4. RECOMMENDATIONS FOR FUTURE RESEARCHES

This research subject is hotly debated issue for the business life. Therefore, it

has not grown yet in order to convince the companies that it is beneficial. That is the

reason why it needs be developed with the help of more research studies. In that

case, their relationship should be focused on more and analysed in depth in the

future. The questions of “Which obvious points could be made better by which

benefits?”, “To what extent they can help each other?”, “To what extent could ERP’s

effectiveness be increased through LSS strategy?” and “To what extent could LSS

projects be streamlined and expedited?” might be investigated by the researchers.

139

References

7. REFERENCES

Anderson, J. and Pode, M. (2001). Assignment and Thesis Writing. Milton: John

Wiley & Sons.

Arias, E. (2011, December 19). OLTP vs OLAP -Definition and Differences. [online].

(URL http://community.dynamics.com/ax/b/axwonders/archive/2011/12/19/oltp-vs-

olap-definition-and-differences.aspx#.Uc747_kUvQg). (Accessed 29 June 2013).

Ash, C.G. and Burn, J.M. (2003). A Strategic Framework for the Management of ERP

Enabled E-Business Change. European Journal of Operational Research, 146, 374-

387.

Atkinson, R. (1999). Project management: cost, time and quality, two best guesses

and a phenomenon, its time to accept other success criteria. International Journal of

Project Management. 17(6), 337-342.

Beaubouef, B. (2010, July 7). Generating Business to IT Alignment for a Successful

ERP Implementation. [online]. (URL http://panorama-consulting.com/generating-

business-to-it-alignment-for-a-successful-erp-implementation/). (Accessed 23 June

2013).

Cavanagh, R. R., Neuman, R. P. and Pande, P. S. (2005). What is Design for Six

Sigma?. New York: McGraw-Hill.

Cohen, L., Manion, L. and Morrison K.R.B. (2007). Research Methods in Education,

Sixth Edition. New York: Taylor & Francis Ltd.

Davis, J. W. (2011). Progressive Kaizen: The Key to Gaining a Global Competitive

Advantage. New York: Taylor and Francis Group.

Floyd, R. C. (2010). Liquid Lean: Developing Lean Culture in the Process Industries.

New York: Taylor and Francis Group.

George, M., Rowlands, D. and Kastle, B. (2004). What is Lean Six Sigma?. New

York: McGraw-Hill.

Girenes, S.S. (2006). Yalin Alti Sigma Metodolojisi ve Uygulamasi. M.Sc Thesis. Gazi

University.

Grover, V. and Kettinger, W. J. (1998). Business Process Change: Concepts,

Methods and Technologies. London: Idea Group Publishing.

Gygi, C., DeCarlo, N., Williams, B. and Covey, R. S. (2005). Six Sigma for Dummies.

Hoboken, NJ: Wiley Pub.

Harwood, S. (2003). ERP Implementation Cycle. Bodmin: MPG Books.

http://community.dynamics.com/ax/b/axwonders/archive/2011/12/19/oltp-vs-olap-definition-and-differences.aspx#.Uc747_kUvQg

http://community.dynamics.com/ax/b/axwonders/archive/2011/12/19/oltp-vs-olap-definition-and-differences.aspx#.Uc747_kUvQg

http://panorama-consulting.com/generating-business-to-it-alignment-for-a-successful-erp-implementation/

http://panorama-consulting.com/generating-business-to-it-alignment-for-a-successful-erp-implementation/

140

References

Hawking, P. (2007). Implementing ERP Systems Globally: Challenges and Lessons

Learned for Asian Countries. Journal of Business Systems, Governance and Ethichs.

2(1), 21-32.

Hudgik, S. (2013). Lean Six Sigma Methodology. [online]. (URL

http://www.graphicproducts.com/articles/six-sigma-methodology.php). (Accessed 30

July 2013).

Irani, S. A. (1999). Handbook of Cellular Manufacturing Systems. New York: John

Wiley & Sons.

Kimberling, E. (2012). Lean Six Sigma and ERP Software. [online]. (URL

http://panorama-consulting.com/lean-six-sigma-and-erp-software/). (Accessed 6 June

2013).

Koh, S.C.L., Gunasekaran, A. and Rajkumar, D. (2008). ERP II: The involvement,

benefits and impediments of collaborative information sharing. International Journal

of Production Economics. 113(1), 245-268.

Lean Manufacturing Tools. (2013). Lean Manufacturing Tools, Principles and

Implementation. [online]. (URL http://leanmanufacturingtools.org/). (Accessed 21 July

2013).

Mantri, N. (2008, March 16). Best Practices & Capability Convergence. [online]. (URL

http://www.proteusadvisors.com/labels/Best%20Practices.htm). (Accessed 23 June

2013).

Monk, E.F. and Wagner, B.J., eds. (2006). Concepts in Enterprise Resource

Planning . Australia ; Boston, Mass: Thomson Course Technology.

Montero, R. R. (2010). Implementing Lean Six Sigma: Advantages and

Disadvantages. M.Sc. thesis. Manchester University.

Murray, M. (2013). Total Quality Management (TQM). [online]. (URL

http://logistics.about.com/od/qualityinthesupplychain/a/TQM.htm). (Accessed 27 July

2013)

Nauhria, Y., Wadhwa, S. and Pandey, S. (2009). ERP Enabled Lean Six Sigma: A

Holistic Approach for Competitive Manufacturing. Global Journal of Flexible Systems

Management, 10(3), 35-43.

Neil. (2013, April 3). Define/ Measure/ Analyse/ Improve/ Control Phase of Lean Six

Sigma Projects: A Beginner’s Guide. [online]. (URL

http://www.sixsigmacertificationcourse.com/resources/define-phase-of-lean-six-

sigma-project-a-beginners-guide/). (Accessed 2 June 2013).

Oakland, J. S. (1997). TQM: a pictorial guide for managers. Oxford; Boston:

Butterworth-Heinemann.

http://www.graphicproducts.com/articles/six-sigma-methodology.php

http://panorama-consulting.com/lean-six-sigma-and-erp-software/

http://leanmanufacturingtools.org/

http://www.proteusadvisors.com/labels/Best%20Practices.htm

http://logistics.about.com/od/qualityinthesupplychain/a/TQM.htm

http://www.sixsigmacertificationcourse.com/resources/define-phase-of-lean-six-sigma-project-a-beginners-guide/

http://www.sixsigmacertificationcourse.com/resources/define-phase-of-lean-six-sigma-project-a-beginners-guide/

141

References

Olson, D.L. (2004). Managerial Issues of Enterprise Resource Planning Systems.

New York: The McGraw-Hill Companies

Pillai, A. K. R., Pundir, A. K. and Ganapathy, L. (2012). Implementing Integrated

Lean Six Sigma for Software Development: A Flexibility Framework for Managing the

Continuity: Change Dichotomy. Global Journal of Flexible Systems Management.

13(2), 107-116.

Prabhuswamy, M. S., Nagesh, P. and Ravikumar, K.P. (2013). Statistical analysis

and Reliability Estimation of Total Productive Maintenance. UIP Journal of

Operations Management. 12(1), 7-20.

Reijers, H.A. and Mansar,S.L (2004). Best Practices in Business Process Redesign:

An Overview and Qualitative Evaluation of Successful Redesign Heuristics. [online].

(URL www.sciencedirect.com). Omega 33 (2005), 283-306.

Rocco, T. S. (2011). The Handbook of Scholarly Writing and Publishing. Hoboken:

John Willey & Sons.

Saunders, M., Lewis, P. and Thornhill, A. (2007). Research Methods for Business

Students, Fourth Edition. London: Pearson Education

Shaffie, S. and Shahbazi, S. (2012). Lean Six Sigma. United States of America:

McGraw-Hill Publishing.

Shanks, G., Seddon, P.B. and Willcocks, L.P., eds. (2003). Second-Wave Enterprise

Resource Planning Systems: Implementing for Effectiveness. Cambridge: The Press

Syndicate of the University of Cambridge.

Shararah, M. A. (2013). A Value Stream Map in Motion. Industrial Engineer: IE.

45(5), 46-50.

Sheldon, B.H. (2005). Class A ERP Implementation- Integrating Lean and Six Sigma.

Florida: J. Ross Publishing.

Subramoniam, S., Tounsi,M. and Krishnankutty, K.V. (2009). The role of BPR in the

implementation of ERP systems. Emerald Business Process Management Journal.

15(5), 653-668.

Sumner, M. (2005). Enterprise Resource Planning. Upper Saddle River: Prentice

Hall.

Sunder, M. V. (2013). Synergies of Lean Six Sigma. The UIP Journal of Operations

Management. 12(1), 21-31.

Swinney, Z. (2010, February 26). Six Sigma Project Charter (With Template).

[online]. (URL http://www.isixsigma.com/tools-templates/project-charter/six-sigma-

project-charter/). (Accessed 1 June 2013)

http://www.sciencedirect.com/

http://www.isixsigma.com/tools-templates/project-charter/six-sigma-project-charter/

http://www.isixsigma.com/tools-templates/project-charter/six-sigma-project-charter/

142

References

Tambovcevs, A. (2012). ERP System Implementation in Latvian Manufacturing and

Construction Company. Technological and Economic Development of Economy,

18(1), 67-83.

Velicanu, M. (2007). Database Vs Data Warehouses. Revista Informatica

Economica. 3(43), 91-98.

Visionet Systems. (2012). Supplier Performance Management. [online]. (URL

http://www.visionetsystems.com/supplier-performance-management.html). (Accesses

26 June 2013).

Wheat, B. (2003). Learning into Six Sigma: A Parable of the Journey to Six Sigma

and a Lean Enterprise. New York: McGraw-Hill.

White, R. E., Ojha, D and Kuo C. C. (2010). A competitive progression perspective of

JIT systems: evidence from early US implementations. International Journal of

Production Research. 48(20), 6103-6124.

Yakovlev, I.V. (2002). An ERP Implementation and Business Process Reengineering

at a Small University. Educause Quarterly, 25(2), 52-57.

Yingjie, J. (2005). Critical Success Factors in ERP Implementation in Finland. M.Sc.

thesis. The Swedish School of Economics and Business Administration.

http://www.visionetsystems.com/supplier-performance-management.html

dissertation- rukiye kırgıl - copy

Documents

Transcript of dissertation- rukiye kırgıl - copy