INTEGRATION OF LEAN AND SIX SIGMA

METHODOLOGY TO IMPROVE QUALITY

PERFORMANCE IN HEALTHCARE
ORGANISATIONS

OPERATIONS MINI PROJECT

Submitted by

D.PRINCE JOSHUA DEVAKUMAR

In Partial Fulfilment of the Requirements

for the Degree of

MASTER OF BUSINESS ADMINISTRATION

SCHOOL OF MANAGEMENT

FACULTY OF MANAGEMENT

SRM INSTITUTE OF SCIENCE AND TECHNOLOGY

KATTANKULATUR – 603 203

 DECLARATION

I, D. PRINCE JOSHUA DEVAKUMAR, hereby declare that the work which is being
presented in the report which is entitled,” INTEGRATION OF LEAN AND SIX SIGMA
METHODOLOGY TO IMPROVE QUALITY PERFORMANCE IN HEALTHCARE
ORGANISATIONS INTEGRATION OF LEAN AND SIX SIGMA METHODOLOGY TO
IMPROVE QUALITY PERFORMANCE IN HEALTHCARE ORGANISATIONS
INTEGRATION OF LEAN AND SIX SIGMA METHOD”, in partial fulfilment of the
requirements for the award of the degree of Master of Business Administration is my own work
carried out by me under the supervision of Dr. K. Sadasivan (Supervisor) in the School of
Management, Faculty of Management, SRM Institute of Science and Technology,
Kattankulathur. I declare that I have faithfully acknowledged, given credit to and referred to
the research works which have been cited in the text and the body of the report. I further certify
that I have not wilfully lifted up some other’s work, para, text, data, results, etc., reported in
the journals, books, magazines, reports, dissertations etc., or available at web-sites and have
not included them in this report and cited as my own work.

Place : Kattankulathur

Date : 13-11-2019 D.PRINCE JOSHUA DEVAKUMAR

Certificate from the Supervisor

This is to certify that the above statement made by the candidate is correct to the best of my

knowledge. Certified that a check for plagiarism has been made on the software.

Name and Signature of the Supervisor

 BONAFIDE CERTIFICATE

This is to certify that Mr. D. PRINCE JOSHUA DEVAKUMAR, (RA1852001010092) School

of Management, Faculty of Management of SRM Institute of Science and Technology, a
bonafide student registered for the MBA Degree under the supervision of Dr. K. SADASIVAN,
has satisfactorily completed all the requirements for the submission of Report for the award of
MBA degree as per provisions of the MBA Regulations. He has successfully completed the
report and well defended the presentation before the examiners.

Place: Kattankulathur

Date:13-11-2019
 ACKNOWLEDGEMENT

I wish to take this opportunity to express my sincere expression of gratitude to each and
everyone who helped me in the completion of this work.

First of all I thank God almighty for giving me all the grace and assistance throughout my
work.

I am very glad to express my gratitude to Dr. Michael J Barnes, Director, SRM School of
Management Studies, for his guidance through my study.

I would like to extend my gratitude to Dr. V.M. Ponniah, Dean, SRM School of Management
Studies, for his timely help for his work.

I would like to extend my gratitude to Dr. K. Sadasivan, Head of Operations Department, SRM
School of Management Studies, for his major contribution of help throughout my Project.

I express my deep gratitude to my dear friends for their co-operation and helping hands, who
were always friends in need.

D.PRINCE JOSHUA DEVAKUMAR

 ABSTRACT

Social protection is a help industry with stand-out qualities. In healthcare, customers are the
speedy patients sought after by their families and maybe their buddies, as the consequence of
the healthcare service possibly impacts for their whole lives. Any bumble or blunder can be
obliterating to individuals and social occasions equivalent to lives and individual fulfillment
are at possibility. In 1999, the Institute of Medicine surveyed that up to around 98 ,000
people die annually in the United States alone due to medical errors. To overcome restorative
patient security and quality issues, healthcare organizations need to execute the lean six sigma
way to deal with improve quality execution. The coordination of Lean and Six Sigma
approach helps social insurance associations wipe out waste, variety and work imbalance in
the administration forms. This methodology additionally disposes of the unnecessary long
cycle or holding up time between esteem added exercises to improve clinics' exhibition. This
part characterizes Lean and Six Sigma exclusively and examines their relationship towards
quality performance in medicinal services associations.
 INTRODUCTION

In the mid 1950s, Taiichi Ohno presented the "Lean Production System" idea to decrease
squander from generation preparing. The idea was first executed by the Toyota Company to
lessen pointless generation squanders and to improve creation quality (Dahlgaard and
Dahlgaard-Park, 2006). By actualizing the Lean Production System, Toyota had the option to
build esteem included parts in the vehicle generation and decreased all other non-esteem
included assignments. In 2004, Toyota beat Ford and turned into the world's second biggest
vehicle maker after General Motors (GM). In 2006, Toyota's benefits expanded to $USD 12
billion, which was about twofold GM's most elevated yearly income of $USD 6.9 billion of
every 1995. Interestingly, GM lost $USD 3.4 billion in the quarter finishing June 2006 and
Ford lost $USD 12.7 billion (Chalice, 2007). In 2008, Toyota beat General Motors (GM) and
turned into the world's biggest and most dominant car maker.

The 'Lean' approach improves execution by lessening activity costs. Toyota's prosperity is
somewhat because of its fruitful execution of the Lean Production System. In the late 1990,
Xerox Corporation received Lean way to deal with increment quality generation by
diminishing waste and cost. After Lean approach was effectively executed by Xerox
Corporation, many assistance associations (i.e., training, banking and the travel industry)
including social insurance associations began to receive lean way to deal with decrease waste
and expenses to improve their quality execution towards consumer loyalty.

Not withstanding the Lean methodology, medicinal services associations likewise embraced
the Six Sigma procedure to consistently improve execution and administration quality (Rohini
and Mallikarjun, 2011; Plonien, 2013). Human services specialist organizations grasped the
Six Sigma idea after it was completely created, tried, and received in the assembling segment
by organizations, for example, Motorola, Allied Signal, and General Electric (Ganti and Ganti,
2004). The joining of Lean and Six Sigma techniques can improve quiet care and fulfillment
through quality execution and administrations (Heuvel et al., 2006a; Hina-Syeda et al., 2013).
The Lean and Six Sigma strategies guarantee the achievement of social insurance associations
by lessening the quantity of deficiencies, for example, understanding holding up time and
conveyance of restorative test reports, alongside superfluous medicinal expenses (Gijo and
Antony, 2013). These strategies additionally help medicinal services associations set up a
culture of consistent improvement in social insurance administration to guarantee exact
outcomes in an opportune manner (Heuvel et al., 2006a; Neufeld et al., 2013).

WHAT IS SIX SIGMA?

Sigma is a Greek letter of the letter set used to depict inconstancy, or in scientific terms,
standard deviation of an arbitrary variable. It is a factual unit of measure that mirrors the
probability that a blunder will happen. Six Sigma depends on thorough factual techniques, and
executes control systems, so as to integrate quality, cost, procedure, individuals, and
responsibility (Taner et al., 2007). Six Sigma was initially an idea for extensive quality
improvement previously presented and actualized by Motorola in 1987. It has been broadly
utilized inside organizations, for example, General Electric (GE), Allied Signal (previous
Honeywell), ABB, Texas Instruments, Caterpillar, Sony, Toshiba, City Bank, Bank of
America, and JP Morgan among others (Koning et al., 2006). The more elevated level of sigma
implies the more significant level of execution in the hierarchical framework. For example, a
three sigma process has a deformity pace of 6.7 percent though a Six Sigma process has under
4 imperfections (i.e., 3.4 imperfections) per million chances. Deformities in forms cause
increment in costs because of scrap, improve, fix, retest, etc. (Taner et al., 2007).
Six Sigma tasks can be driven by Black or Green Belt ninjas (specialists) who are very much
prepared for quality critical thinking. Ace Black Belt ninjas generally fill in as consultants to
the venture heads while neighbourhood champions advance Six Sigma in their associations.
There are two fundamental strategies of Six Sigma

• DMAIC (Define, Measure, Analyze, Improve, and Control) for existing processes; and
• DFSS (Design for Six Sigma) for designing new products/processes.

DMAIC is a five stage improvement cycle with the intend to persistently decrease blunders
through characterizing the task by recognizing issues, explaining degree, and characterizing
objectives (Taner et al., 2007). Each step has three sub-steps. Then again, DFSS actualize the
Six Sigma quality into item or procedures from the plan arrange (Bandyopadhyay and
Coppens, 2005).

The Six Sigma philosophy is an all around restrained and organized methodology for
upgrading the exhibition procedure to accomplish the most elevated level of value and the
least degree of changeability. To accomplish the most significant level of value execution, the
Six Sigma procedure can be applied with the lean approach (Salah et al., 2010). The Lean
system is utilized for wiping out waste, variety, and work awkwardness. The Lean
methodology likewise dispenses with the superfluous long cycle or holding up times between
esteem included exercises. In light of the connection among Lean and Six Sigma, waste can
be limited from the improving or scrap, which adds to lessening inconstancy (Salah et al.,
2010).

BENEFITS OF SIX SIGMA

There are numerous advantages for utilizing the Six Sigma philosophy in authoritative
execution exercises. It diminishes venture costs, venture span, and improves authoritative
exhibitions. It might upgrade item improvement cycles and procedure plan, and diminish item
lead times by decreasing the process duration of the general assembling or administration
process. It very well may be utilized to discover and dispense with the underlying drivers of
the issue, in this manner diminishing the fluctuation in the process so as to forestall surrenders
(Tjahjono et al., 2010).
The Six Sigma approach gives rules that assist laborers with seeing how to do their business to
take care of the potential issues. It likewise improves the proficiency of the creation line and
generation limit, including limiting the authoritative waste, for example, expelling pointless
parts and unnecessary developments and diminishing the process duration for fix (Oke, 2007).
The Six Sigma approach additionally causes the association to choose the best venture to
accomplish the hierarchical objectives. As indicated by Sharma and Chetiya (2010), Six Sigma
can guarantee authoritative accomplishment by recognizing the task determination criteria. In
light of their examination, it was seen that 17 elements positively affect the achievement of the
Six Sigma venture.
These 17 factors are:

I. Waste reduction potential;

II. Increasing customer-centricity;
III. Improvement in work flows;
IV. User complaint reduction potential;
V. Scope for cycle time reduction;
VI. Scope for method simplification;
VII. Scope for process reengineering;
VIII. Process mapping;
IX. Asset availability;
X. Transparency of information;
XI. Availability of a good measurement system;
XII. Clearly defined deliverables;
XIII. Availability of innovative and qualified people;
XIV. Deployment of adequate financial resources;
XV. Clear identification of Critical-to-Quality (CTQ) characteristics;
XVI. Presence of top management commitment; and
XVII. Presence of a good communication system.

These 17 variables help decide if the Six Sigma program has a high likelihood of progress or
disappointment by choosing the best venture forms. In addition, it improves the relationship
inside and outside the association.

It cultivates consumer loyalty and steadfastness by living up to their needs and desires
(Tjahjono et al., 2010; Kumar et al., 2006). The Six Sigma application is among the significant
techniques which constantly improve quality execution to accomplish hierarchical objectives.
SIX SIGMA IN HEALTHCARE SERVICE
As referenced before, the idea of Six Sigma was initially presented by Motorola in 1987 and
has been applied in numerous associations, for example, General Electric (GE), Du Pont, Ford,
Allied Signal (previous Honeywell), ABB, Texas Instruments, Caterpillar, Sony, Toshiba, City
Bank, Bank of America, and JP Morgan among others (Koning et al., 2006). In 1998, the initial
Six Sigma emergency clinic was propelled by the Commonwealth Health Corporation (CHC)
in the USA. Following quite a long while, it was seen that uses of Six Sigma were gradually
yet effectively actualized by human services associations the country over regarding decreasing
ER process duration, diminishing superfluous cost from therapeutic administrations, lessening
medicinal blunders, and expanding auspicious finishing of restorative records (Antony et al.,
2007; Feng and Manuel, 2008). As indicated by Heuvel (2006), the Red Cross Hospital in
Netherlands effectively executed Six Sigma approach in their medicinal services
administrations which spared €1.2 million from 44 Six Sigma ventures. The Six Sigma
program improved quality execution, yet in addition diminished the expense generously to
determine the current money related issues in the human services administrations. The Six
Sigma technique additionally expanded patient fulfillment with phenomenal quality help at
negligible cost, viable and productive usage of existing assets, and driving out non-esteem
included exercises (Plonien, 2013). Table 1 underneath shows the advantages of Six Sigma
extends in different medicinal services administrations.

WHAT IS LEAN?

Lean approach is a procedure of streamlining which builds business income, decreases costs,
and improves consumer loyalty by killing superfluous exercises that are viewed as inefficient.
The Lean procedure is quicker, productive, and prudent and conveys acceptable quality to
clients (Jimmerson et al., 2005). This methodology centers around amplifying process speed
of administration, gives a way to evaluating and disposing of the expense of multifaceted
nature, gives apparatuses to dissecting process stream and postpone times at every movement
in a procedure, and makes process speed by decreasing expenses and process duration with
productivity (Azadegan et al., 2013).
To lessen costs and improve consumer loyalty, the administration association needs to execute
Lean and Six Sigma moves toward together in light of the fact that speed and quality can't be
isolated when improving procedures. The two strategies are vital when attempting to improve
consumer loyalty by dispensing with pointless expenses and waste. The Six Sigma application
concentrates more on decrease of variety, though the Lean strategy centers around evacuation
of burn through by diminishing process duration (Nave, 2002). Presently question is the reason
Lean and Six Sigma together are required to improve the business forms.

RELATIONSHIP BETWEEN LEAN AND SIX SIGMA

As indicated by Salah et al. (2010), Lean and Six Sigma appreciate an integral association with
one another. These days, numerous organizations are applying the two systems. The use of
Lean and Six Sigma can be applied together for end of waste and variety through the DMAIC
structure to accomplish consumer loyalty with cost productivity and quality execution. These
two applications center around constant improvement (CI) forms, consumer loyalty, and better
budgetary execution for associations.

Both Lean and Six Sigma devices have a few contrasts in application. As a rule, Lean
apparatuses are superior to anything Six Sigma relying upon the idea of the issue and openings.
Be that as it may, now and again the two strategies can be utilized as regular apparatuses to
take care of authoritative issues, for example, conceptualizing, process mapping,
institutionalization, botch sealing, speculation testing, and estimation examination (see Table
2).

As indicated by Salah et al. (2010), Lean and Six Sigma ought to be utilized in all the while
yet ought not utilize individually or independently. In light of past examinations, the two
systems in isolated procedure can't be effective to take care of hierarchical issues. Nonetheless,
Mader (2008) contended that a conventional Six Sigma application can be utilized in isolated
with a Lean Kaizen occasion way to deal with decline venture span.

EFFECTS OF LEAN SIX SIGMA IN HEALTHCARE PERFORMANCE

As referenced before Lean and Six Sigma have corresponding association with one another to
improve the quality administrations by decreasing expenses and squanders. As per Heuvel et
al. (2006), the Lean technique use the executives structure which depends on Six Sigma
approach. The Six Sigma strategy gives a powerful installing structure as per the venture by-
venture way to deal with apply Lean standards. Be that as it may, the Lean methodology doesn't
break down the money related execution markers of a procedure though the primary target is
to progress the authoritative execution by decreasing pointless costs. Then again, the Six
Sigma's DMAIC approach gives a guide to investigation and determination the hierarchical
exhibition particularly distinguishes the issues/blunders in the process which is driven by useful
assets and procedures. In any case, the Six Sigma strategy is a general critical thinking system
and it has universality of procedure wasteful aspects, particularly the ones seeking after
procedure proficiency improvement and speed which can be illuminated by Lean methodology
(Heuvel et al., 2006b). Therefore, Lean and Six Sigma ought to be coordinated to accomplish
high hierarchical execution through nonstop improvement.

In the late 1990s, the Xerox Corporation initially actualized the idea of Lean and Six Sigma to
work their inventory network the executives in the assembling forms. In 2002, Xerox top
administration chose to coordinate Lean and Six Sigma to build the quantity of value creation
by lessening waste and expenses. From that point forward, Xerox quality execution was bit by
bit expanded by receiving Lean Six Sigma (LSS) approach in the production network the
executive’s procedure.

REFERENCES
Azadegan, A., Patel, P. C., Zangoueinezhad, A., & Linderman, K. (2013). The effect of
environmental complexity and environmental dynamism on lean practices. Journal of
Operations Management, 31, 193–212.

Bandyopadhyay, J. K., & Coppens, K. (2005). Six Sigma approach to healthcare quality and
productivity management. International Journal of Quality & Productivity Management,
5(1), V1-V12.

Gijo, E. V. and Antony, J. (2013). Reducing patient waiting time in outpatient department using
lean six sigma methodology. Quality and Reliability Engineering International, doi:
10.1002/qre.1552.

Heuvel, J. V. D. (2006). The Effectiveness of ISO 9001 and Six Sigma in healthcare. Beaumont
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http://repub.eur.nl/res/pub/8465/070126_Heuvel,%20Jaap%20van
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