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1 IMPACT OF DIGITAL ERA ON LEAN SIX SIGMA THE IMPACT OF THE DIGITAL ERA ON THE IMPLEMENTATION OF LEAN SIX SIGMA Submitted By Group 17 Muhammad Fayyez Gilani (33048680) Nassar Iqbal (33020196) Muhammad Daniyal Iqbal (33019966) Muhammad Umar Pervaiz Bhuta (33026482) Sufian Ghulam (32082905) Instructor Prof Sameh Saad Module Lean Operations and Six Sigma 55-704588 MSc Advanced Engineering and Management, Department of Engineering and Mathematics, Sheffield Hallam University
2 IMPACT OF DIGITAL ERA ON LEAN SIX SIGMA Abstract The fourth industrial revolution has introduced innovative technologies that are defining the scientific, academic and practical approaches, to implementing programs and processes. Lean Six Sigma has been used for a number of years to improve functioning and productivity in industries including, manufacturing, production, and services. LSS has mostly been associated with the managerial and leadership part of the industry, but when integrated with Industry 4.0 the overall working and performance is expected to revolutionize. This paper is the literature review of the recent research done in the industry about the effects of digital transformation on the implementation of LSS. This research evaluates the amount of work done to determine the role of digital technologies on LSS and the practical work done to integrate I4.0 and LSS. The paper discusses motivators, enablers and barriers amalgamation of both concepts and analyses the effectiveness of the theoretical and practical work done in this regard. Keywords: Industry 4.0 (I4.0), Lean Six Sigma (LSS), Fourth Industrial Revolution (4IR), digital transformation, digital era
3 IMPACT OF DIGITAL ERA ON LEAN SIX SIGMA The impact of the digital era on the implementation of Lean Six sigma IntroductionWith the world going digital today, industry calls for the inclusion and implementation of the techniques and standards that provide assistance in improving the performance and ensuring the quality of the procedures and systems. Lean Six Sigma (LSS) has long been providing the toolkit to not only minimize the number of defects in processes and products, but also the improvement in the performance of the companies themselves. Digitalization has introduced numerous advanced technologies that has maximized the effectiveness of manufacturing and services industry and Industry 4.0 (I4.0) has certainly affected the way in which LSS is implemented. This paper will illuminate the role that digital transformation has played in the practicing of Lean Six Sigma in Fourth Industrial Revolution (4IR). Literature Review Consumer, technology and the processes have been considered as the main components of the industrial revolutions and they are the factors that influence the overall working and the result generation of the system (Sodhi, 2020). The demands of the market or consumers and the changes with time determine the quality assurance and quality management tools and technologies that are needed to be utilized in the industry to minimize the costs and maximize the excellence of products. Earlier, the systems and technologies that were used mainly focused on for-casting of the new industrial revolution has introduced real-time planning and dynamic self-optimization in planning and production processes. With the emergence of Industry 4.0 (I4.0) complex models are designed to ensure that the concepts like Internet of things (IoT), big data, data analytics, cloud computing and other digital concepts like these are included to provide real time data in the systems (Park, Dahlgaard-Park, & Kim, 2020).
4 IMPACT OF DIGITAL ERA ON LEAN SIX SIGMA Pongboonchai-Empl et al. (2023) confer that the introduction of new technologies in I4.0 are suitable for enchancing the functioning of LSS tools and to derieve best results. (Rifqi, Zamma, & Souda, 2023). Rifqi et al. (2023) Industry 4.0 has numerous impacts on data processing, DMAIC cycle. All five phases i.e. define, measure, analyse, identify and control are affected by the technologies of Industry 4.0. since the data collected in I4.0 is of high quality and in lage amount, so the traditional tools of LSS like DOE, ANOVA no more remain effective i.e. due to the time they take to analayse big data. Pongboonchai-Empl et al. (2023) mentioned that data mining, process mining and Internet of Things can enhance DMAIC process of LSS. The tools or technologies of I4.0 used for implemenation of LSS will be entirely dependent on the tyie of problem and the availability &amount of data. IoTs in I4.0 deal with automated big data collection and manipulation at consumers’ and manufacturers’ ends and in this case the selection of LSS methodologies should comply with global supply chains and competitive businesses making it possible to optimize the process and ensure quality products (Sodhi, 2020). Numerous factors that are essential for the successful implementation of LSS in era with new digital technologies. Some of them include operational excellence methods lead by the vibrant leadership, reorganizing the training programs of Lean Six Sigma, the innovation in implementation methodologies for LSS led projects, thus making them more iterative, adaptive and proficient, in accordance with changing demands of the digital industry (Lameijer, Pereira, & Antony, 2021). Industry 4.0 itself considered as enabler of application of lean practices in manufacturing and is considered to be a crucial factor in increasing the performance in “sustainable organizational performance”(Kamble, Gunasekaran, & Dhone, 2020). Skalli et al. (2023) discuss on numerous scales how LSS and I4.0 can integrate, interact or collaborate with each other to
5 IMPACT OF DIGITAL ERA ON LEAN SIX SIGMA increase the functioning of industry. It is explained that LSS can act as a facilitator for the complete implementation of 4IR, I4.0 itself can act as enabler of Lean Six Sigma or industry 4.0 and modern technological improvements act as driving forces for complete implementation of LSS in industry. Research Methods The purpose of this study is to determine the influence of digital transformation on the implementation of Lean Six Sigma in current i.e. Fourth Industrial Revolution and to analyze the most recent and pertinent articles to identify the enablers, barriers and plan for integration. In this study numerous research papers are analyzed to determine the present application of LSS in current industries and its impact on overall systems. The research identifies, analyzes and evaluates the situation of adoption of LSS in present industry and the role of researchers in developing the complete framework of LSS and I4.0 integration. The papers selected for this research focused on presenting the concepts for the transforming and application of LSS in digital domain. Mainly the digital database of Sheffield Hallam University, sources like Taylor & Francis, Emerald Insight and others were used for locating and extracting the studies, in full text. The inquiry of database was used to identify and collect initial sample. The inclusion criteria for the use of literature in this study is based on most recent peer reviewed journal publications, articles, case studies and survey studies, related to production and manufacturing industry and the four year mark i.e. 2020 to 2023. The main keywords searched for this study include: Lean Six Sigma, LSS, Industry 4.0, I4.0, 4IR, Fourth Industrial Revolution, digital era, digital transformation or digitalization. The articles which selected depended on articles’ accessibility in full text and having relevance to the subject
6 IMPACT OF DIGITAL ERA ON LEAN SIX SIGMA matter. The articles that did not fulfill above mentioned criteria were excluded from final assessment and evaluation. The independent review of selected articles was conducted to ensure that they fulfill the criteria of year of publication, advantages of amalgamation of LSS and Industry 4.0, motivators of integration and the challenges in this regard. Most of the articles were selected for the year 2022 and 2023 to ensure that the most recent and current information is available about the work going on in scientific community to provide digital integration of industry 4.0 and Lean Six Sigma. The reviews and case studies presented the examples of the area in which effort is made to implement this concept at some degree, whereas, multiple frameworks are presented to give future roadmap for the working of the system in which LSS become adaptive to the new digital technologies and give maximum performance in production, productivity and customer satisfaction. The detailed literature review done in this research outlines the resent state of research in the field and the implementation criteria and difficulties involved in it. Latest development and Impact of digitalisation on the Six Sigma implementation In digital era, LSS toolsets can be adapted to align with technologies used in I4.0 and to enhance the performance of the industry. In manufacturing industry, UK-Alpha has developed an action plan to integrate I4.0 technologies, IoT and Automated Guided Vehicles (AGV) to achieve automation in lean operations. Although numerous issues like performance issues in AGV were faced due to implementation of lean automation, but it is a step forward to develop economical, smart and automated systems and products (Vlachos, Pascazzi, Zobolas, Repoussis, & Giannakis, 2023). Use of Big Data Analytics, along with LSS can improve working practices and efficiency in organization. Service supply chain resilience can be achieved by retrieving big data, analyzing and evaluating it to determine correlation among numerous factors and as a
7 IMPACT OF DIGITAL ERA ON LEAN SIX SIGMA result minimizing waste of services, time and products (Citybabu & Yamini, 2023). Mishra et al. (2021) studied the role, effects and challenges of implementation of LSS in MSMEs, during COVID. Application of LSS in MSME assures the reduction in defects and costs, increase in customer satisfaction and companies’ image and productivity. But 74.02% respondents opinioned that the implementation cost and complexity of LSS it is feasible to use tools like PDCA and Kaizen. Digital transformation of Industry 4.0 require holistic approach to achieve profitability, quality, and product’s life cycle efficiency, customization of the products, security, productiveness and competitiveness in the market (Calabrese, Dora, Ghiron, & L. Tiburzi, 2022). Macias-Aguayo et al. (2022) discussed that although LSS has now long been part of the industry but, I4.0 is making it challenging for LSS to work in accordance with demands of the market. 4IR is all about internet of things and Cyber-Physical systems (CSFs) and these systems are involve concepts of cloud computing, data analytics, assimilation of physical objects and machine learning and that is challenging the integration of LSS in industry 4.0. Financial, technological, cultural and operational barriers exist for complete incorporation of LSS in I4.0, as it is mainly focused on all going digital. Technological misalliance, capital expenditure, resistance to change and difficulties in skill acquisition is creating hindrance in complete adaptation of LSS in digital era. Conceptual framework defined for integration of I4.0 and LSS provide numerous enablers that can assist in efficacious implementation. Macias-Aguayo et al. (2022) presented numerous enablers that increase the portability of successful digital transformation. Enabling technologies may include: Augmented Reality (AR), virtual Reality (VR), Enterprise Resource Planning (ERP), big data and many more. Integration of LSS and I4.0 has long been discussed
8 IMPACT OF DIGITAL ERA ON LEAN SIX SIGMA and thirteen contact points (CP), in manufacturing industry, are presented in the research. These CPS determine how LSS can transform manufacturing industry after collaboration with Industry 4.0 (Sordan, Oprime, Pimenta, Silva, & González, 2022). Inclusion of smart digital technologies in Industry 4.0 has not only created technological incompatibility between LSS and I4.0 but introduced new types of wastes including: long learning curves, compromised supplier’s quality, inaccurate information management and under-utilization of the talent, in addition to the seven traditional wastes in industry (Reyes, Mula, & Díaz-Madroñero, 2023). Implementation of LSS principles mainly focus on the interaction and co-operation between employees and innovation and this process is usually slow in comparison with the rapid technological advancements and the automated and adaptive changes required in I4.0 (Antony, McDermott, Powell, & Sony, 2023). Although till now more research has been done on the soft skills, organizational culture and structure and leadership and lesser on the technical aspects for amalgamation on Lean and I4.0. The research done is mostly generic and less focused on the technical aspects for integration. Big data, vertical and horizontal integration and the cyber-security have proved to be the facts that has have maximum impact on integration process and overall performance (Narula, et al., 2023). Lesson learned and Conclusion Lesson Learned Frameworks have been developed for theoretical implementation of LSS 4.0, but there exist barriers in execution process. Detailed roadmap for integration process is not yet available and most of the studies and researches conducted on LSS and I4.0 integration took place in developed countries that created compatibility issues, with the technologies that are not yet available in developing nations. The frameworks have not defined key performance indicators
9 IMPACT OF DIGITAL ERA ON LEAN SIX SIGMA and proper testing, experimentations and validations have toy taken place to check the validity of the concept of LSS 4.0 (Skalli, Charkaoui, Cherrafi, Antony, & Shokri, 2023). Most of the research has been done on adapting Lean or Six Sigma to industrial 4.0 and the detailed research and testing needed to be implemented in case of LSS (Antony, McDermott, Powell, & Sony, 2023). The research that has been conducted in theoretical and the extent of usability of LSS and I4.0’s assimilation is discussed, but no practical measures have been taken because of complexity, financial plausibility and technological incompatibilities. Conclusion Digitization culture is dynamically advancing the processes and ensuring customization of the products, and the availability of smart technologies in Industry 4.0 calls for the adaptation of quality assurance mechanisms to changing times. LSS is adopted as the most effective process improvement standard and its integration with smart technologies is highly recommended. This concept is enticing for manufacturing, production and services sectors and the researchers have discussed barriers and enablers for this process. An appropriate research and implementation strategy is required to achieve operational excellence by combining the features of LSS and I4.0. Though productivity, proficiency and profitability are the ultimate goals of this integration, but technical as well as soft factors are needed to be addressed, to achieve these objectives.
10 IMPACT OF DIGITAL ERA ON LEAN SIX SIGMA Six Sigma Analysis of Pharmacy’s Waiting TimeDefine The pharmacy was originally working at the average mean waiting time to be 40 minutes that is a really long. Thus six sigma principles were applied to reduce waiting time and increase the performance of the pharmacy. The long waiting queues and the cumulative time that patients spent in pharmacy was causing bottlenecks and decreasing throughput. Although lean operations were applied the target here now is to further reduce the waiting time by 25%. Measure The data after the application of the lean operations and application of two bin kanban system was collected and presented in the table. Number of samples were ten and the sample size was 5. The data is already measured and thus we have to analyze it to determine the performance and suggesting further actions. Analyze Impact of Lean Six Sigma implementation on pharmacy service time and variability Figure 1: waiting time before applying lean Figure 2: waiting time before applying lean In accordance with the data provided of 5 samples and sample size of 20 before applying lean and 10 samples and sample size of 5, after lean; these histograms, made in Minitab show the
11 IMPACT OF DIGITAL ERA ON LEAN SIX SIGMA frequency of the wait time before and after application of Lean and Kanban to achieve the efficiency of pharmacy. Before application of Lean Principles, the average waiting time in pharmacy was 40.33 and the standard deviation of 11.03, taking variance to 123 (i.e.11.032, square of standard deviation), which is a very large values. These values indicate lack of organization, absence of standardized process, uneven work flow and many more in the pharmacy. When lean principles were applied the mean waiting time reduced to 20.23 which is approximately half, thus increasing the efficiency and improving patient experience in pharmacy. After lean, standard deviation is found to be 5.58, which is also approximately half and also the variance is 31.13, which shows remarkable improvement in variance i.e. approximately 75%. Mean ad variance show that the service time in pharmacy has improved by 50% and the variance has decreased by 75%. Pictures below show Sixpack analysis done in Minitab, of the data provided, 5 samples and sample size of 20 before applying lean (100 data points) and 10 samples and sample size of 5 (50 data points), after lean. Xbar charts shows the average of each subgroup, there are 5 points on the chart (in first figure) i.e. we have 5 samples before lean. Only one point which is sample # 2 that is near to the average of all subgroups. Whereas, variability is much lesser after application of lean i.e. more data points are near to the collective mean, which shows better performance after application of lean principles. However, in both cases data is within the control limit. Here, S chart and R chart are used to measure variability among subgroups. In Data before lean Minitab has used S chart because it uses S chart for subgroup size (i.e. sample size) greater than nine and in our case it was 20. Whereas, in case of data available after application of lean, the subgroup size was 5 and thus R chart is used. S chart makes use of Standard Deviation to measure spread of the data
12 IMPACT OF DIGITAL ERA ON LEAN SIX SIGMA whereas, R chart uses range. Like Xbar chart lesser points are near the central value in S chart and more near to R chart, thus reinforcing the fact that data is showing lesser variability after application of lean. Figure 3: control chart for data after applying leadImpact of Lean Six Sigma implementation on the pharmacy's capabilities The capacity histogram of wait time before lean shows that data is not normally distributed and most of the data points lie on left side of the graph i.e. the average mean time to be really high, also the spread of data is wider on the histogram. Although the process is stable and the subgroups closely align with one another. In normal probability plot, the value of p=0.07 and since 0.07>0.05 and <0.2. So more data points are needed to decide whether data is normally distributed or not. The point at the bottom show that it does not quite fit normal distribution. Before application of lead the cpk=0.75 which is less than minimum acceptable value i.e. 1.33, so the process is not capable. Data has large variability, so the value of variability need to be adjusted in order to improve the value of cpk in order to make process capable.
13 IMPACT OF DIGITAL ERA ON LEAN SIX SIGMA Figure 4:Six sigma analysis before applying lean Figure 5:Six sigma analysis after applying lean In above picture, data after application of lean, histogram shows that data is distributed normally along the mean. The spread of the graph is much lesser and the mean has decreased thus
14 IMPACT OF DIGITAL ERA ON LEAN SIX SIGMA decreasing the average wait time. Although the process is stable and the subgroups closely align with one another. In normal probability graph, p=0.582 that shows that data is normally distributed, but there points lie far away from the center. After application of lean, cpk=0.83, although the value of cpk has improved but, still the process is not capable. The process should ideally achieve cpk=2, but it should also not be less than 1.33. Thus moving the mean or decreasing variability can improve it and here mean is the average waiting time. Impact of employing the Kanban system on the waiting time Two bin Kanban system is introduced by the team to improve scheduling and processing in pharmacy. Kanban system applied in pharmacy helps to reduce over production which means that more than required amount of medicines are not available at a time and thus cluttering is decreased. In addition, Kanban helps in the pharmacy to reduce work in progress (WIP) and number of idle material, because they decrease throughput by increasing bottleneck, i.e. a sequence in ordering and production is generated to ensure that most suitable number of medicines are available. The most important contribution that Kanban played in pharmacy is decreasing over processing, which in turn helps to reduce number of defects and ultimately decrease waiting time of each patient. For the data provided in the assignment to calculate number of required kanban cards, calculation is as follows: Formula for calculating number of Kanban cards N = DL(1+X)/C N=# of cards
15 IMPACT OF DIGITAL ERA ON LEAN SIX SIGMA D= daily demand 500units L= lead time (withdrawal time=1.05/day, production time=0.65/day i.e. L=1.7/day) X=safety factor efficiency=85% i.e. safety=15% C=container size 50 units N=500*1.70(1+.15)/50=19.44≈20 It means that 20 Kanban cards are needed to manage inventory of this medicine. Improve The analysis of and comparison of system before application of lean suggest that overall waiting time of the patients is decreasing, but the process capabilities are not ideal i.e. remain to be less than cpk=1.33 that is the acceptable value for the process to be capable. Although, the waiting time is decreasing but the system is no achieving its maximum capacity. The spread of data and the variability in the process is limiting the capacity of process and in order to further decrease it, the factors other than arranging the pharmacy’s work flow are necessary. Factors that should also be considered include: •Hand written prescriptions that make it difficult to read or misread the prescription and increasing probability of error and increase waiting time. •Lack of human resources i.e. nurses, doctors and pharmacists•Increase in number of patients inflow in the pharmacy•Time of collection of data should be considered because the waiting time will also be time sensitive•Issues related to insurance and reimbursement
16 IMPACT OF DIGITAL ERA ON LEAN SIX SIGMA Control Control processes should be established to ensure that the variability of the waiting time is decreased. The issues discussed in improve section establish the fact that the policies and procedures are required to bring changes in above mentioned factors and to control them. Digitization of the system will play an important role in increasing the performance of pharmacy The digital prescriptions will limit the probability of the error and the appointment times, ordering medications online, keeping track of the stock digitally can help to improve the sequential and organizational process in pharmacy thus increasing the throughput and decreasing wait time further. Automation will play a key role in pharmacy’s performance and thus improving the customer satisfaction.
17 IMPACT OF DIGITAL ERA ON LEAN SIX SIGMA References Antony, J., McDermott, O., Powell, D., & Sony, M. (2023). The evolution and future of lean Six Sigma 4.0. The TQM Journal, 35(4), 1030-1047. Calabrese, A., Dora, M., Ghiron, N. L., & L. Tiburzi, L. (2022). Industry’s 4.0 transformation process: how to start, where to aim, what to be aware of. Production Planning & Control, 33(5), 492-512. Citybabu, G., & Yamini, S. (2023). Lean Six Sigma 4.0–a framework and review for Lean Six Sigma practices in the digital era. Benchmarking: An International Journal. Kamble, S., Gunasekaran, A., & Dhone, N. C. (2020). Industry 4.0 and lean manufacturing practices for sustainable organisational performance in Indian manufacturing companies. International journal of production research, 58(5), , 1319-1337. Kumar, P., Bhadu, J., Singh, D., & Bhamu, J. (2021). Integration between lean, six sigma and industry 4.0 technologies. International Journal of Six Sigma and Competitive Advantage, 13(1-3), 19-37. Lameijer, B. A., Pereira, W., & Antony, J. (2021). The implementation of Lean Six Sigma for operational excellence in digital emerging technology companies. . Journal of Manufacturing Technology Management, 32(9), 260–284. Macias-Aguayo, J., Garcia-Castro, L., Barcia, K. F., McFarlane, D., & Abad-Moran, J. (2022). Industry 4.0 and Lean Six Sigma Integration: A Systematic Review of Barriers and Enablers. Applied Sciences, 12(22), 11321. Mishra, M. N., Mohan, A., & Sarkar, A. (2021). Role of lean six sigma in the Indian MSMEs during COVID-19. International Journal of Lean Six Sigma,12(4), 697-717. Narula, S., Puppala, H., Kumar, A., Luthra, S., Dwivedy, M., Prakash, S., & Talwar, V. (2023). Are Industry 4.0 technologies enablers of lean? Evidence from manufacturing industries. International Journal of Lean Six Sigma, 14(1), , 115-138. Park, S. H., Dahlgaard-Park, S. M., & Kim, D. C. (2020). New Paradigm of Lean Six Sigma in the 4th Industrial Revolution Era. Quality Innovation Prosperity, 24(1), 1-16. Pongboonchai-Empl, T., Antony, J., Garza-Reyes, J. A., Komkowski, .., & G. L. (2023). Integration of Industry 4.0 technologies into Lean Six Sigma DMAIC: A systematic review. Production Planning & Control, 1-26. Reyes, J., Mula, J., & Díaz-Madroñero, M. (2023). Development of a conceptual model for lean supply chain planning in industry 4.0: multidimensional analysis for operations management. Production Planning & Control, 34(12), 1209-1224.
18 IMPACT OF DIGITAL ERA ON LEAN SIX SIGMA Rifqi, H., Zamma, A., & Souda, S. B. (2023). Lean Six Sigma and Industry 4.0 Integration: LSS 4.0. In T. Masrour, I. E. Hassani, & N. Barka, Artificial Intelligence and Industrial Applications: Smart Operation Management(pp. 282-). Switzerland: Springer. Skalli, D., Charkaoui, A., Cherrafi, A., Antony, J. A.-R., & Shokri, A. (2023). Industry 4.0 and Lean Six Sigma integration in manufacturing: A literature review, an integrated framework and proposed research perspectives. Quality Management Journal, 30(1), 16-40. Sodhi, H. S. (2020). When Industry 4.0 Meets Lean Six Sigma: A Review. Industrial Engineering Journal, 13(1), 1-12. Sordan, J. E., Oprime, P. C., Pimenta, M. L., Silva, S. L., & González, M. O. (2022). Contact points between Lean Six Sigma and Industry 4.0: A systematic review and conceptual framework. International Journal of Quality & Reliability Management, 39(9), 2155-2183. Vlachos, I. P., Pascazzi, R. M., Zobolas, G., Repoussis, P., & Giannakis, M. (2023). Lean manufacturing systems in the area of Industry 4.0: A lean automation plan of AGVs/IoT integration. Production planning & control, 34(4), , 345-358.