Implementation of Lean Six Sigma in small- and medium-sized manufacturing enterprises in the Netherlands

Abstract

In this paper we provide an exploration and analysis of Lean Six Sigma (LSS) implementation in Dutch manufacturing/engineering small- and medium-sized enterprises (SMEs). Critical success factors (CSFs) and impeding factors are identified and analysed. Exploratory empirical evidence about LSS implementation in Dutch SMEs was collected from a survey study on Dutch SMEs. Statistical testing was applied to validate the ranking of the CSFs. To deepen insight in how organizations translate CSFs into practice and cope with impeding factors, additional in-depth qualitative information was gathered from six case studies. Linking to customer, vision and plan statement, communication and management involvement and participation are the highest ranked CSFs. Internal resistance, the availability of resources, changing business focus and lack of leadership are the strongest impeding factors. The case studies confirmed the importance of the CSFs and revealed three new CSFs: personal LSS-experience of Top management, development of the project leader's soft skills and supply chain focus. SMEs in the Netherlands make no distinct separation between lean manufacturing and Six Sigma, but rather apply both approaches intertwined.

Keywords:

• Lean Six Sigma
• manufacturing/engineering SME
• critical success factors
• impeding factors

Notes

1 In the study ‘Small and medium enterprises across the globe’ (Ayyagari et al, 2007) the classification SME250 is used for the share of the SME sector in the total formal labour force in manufacturing when 250 employees are taken as the cut-off for the definition of an SME. For a company to be classified under the SME250 classification, the SME sector cut-off could range from 200 to 300 employees. The Ayyagari study reports that in the countries of the European Union more than 50% of the employees in manufacturing companies are working in SMEs. In Mediterranean countries (Italy, Spain, Portugal) the share of SME employment is even close to 80%. The share of SMEs with respect to Gross Domestic Product (GDP) is lowest in Sweden (39%) and highest in Portugal (67%). The GDP data are not limited to manufacturing, but at least the data indicate that SMEs of all the economic sectors contribute strongly to the national GDP.

2 The reason for choosing an upper limit of 300 employees was that we expected that the real number of employees would in general be somewhat lower, because of the rather pessimistic economic situation at the time of the study. As a consequence a small number of companies might not comply completely with the formal criteria for SMEs.