The Necessity for Theoretical Comprehension, Knowledge, Sustainability behind Process Improvement Endeavours using Lean Six Sigma.

The peculiarity that we used to see in a particular product or service is quickly depleting day to day. Apple introduces a new technology, the next thing we know, Samsung is also on it. Every other players are always on their feet to keep themselves level at their competitors. Economist used to debate that monopolies and oligopolies would in time wane from an imperfect market advantage they used to enjoy to a perfect competitive market that just meet their break-even point. Profit will soon be a luxury that firms tend to enjoy on diminutive scale should they don’t address the enigma of a randomly changing business economic condition.

Bottom line is what drives businesses, the very essence that firms exist as well. What they are facing in this new era where technology had become an essential necessity of life or survival is the fact where competitive advantage is no longer competitive. Porter and Millar (1985), claim that information technology dictates the entire facade of firms’ products, the physical goods, services and information wherein companies are obliged to fuse value into it consequently for the buyers. Change is an ever evolving subject matter. And most firms find this hard to come by inevitably. Howsoever what needs to be understood is that this flow should not be eluded to avoid circumstance in such cases like Nokia. Firms need to survive not only for competitive advantage per se but the essence of which is to sustain them. But where does this essence lies for organizations? Management theories and firm theories had long had this elongated debate. One of them is the Knowledge Based View of the Firm (KBV) (Grant, 1996; Sveiby, 2001).

Alchian and Demsetz (1972) argued that as much as the possession of heterogeneous resources are important, it is in ‘Knowing’ the relative production capabilities of these resources that matters most as this ‘Knowledge’ is what stands out in understanding the idiosyncratic nature of the resources. This creates the extension to the body of RBV theory which many debate is the case as both has its connection in a macro versus micro context (Balogun & Jenkins, 2003; Grant, 1996; Roos, 1998; Sveiby, 2001).

Quality improvement and management over the years had pervaded the essence of science in management. Making management more methodical and systemic centric to ensure efficacy and innovation through process improvements (such as Lean Six Sigma Methodology) to sustain deliverance of competitive edge a firm requires in this hypercompetitive epoch. Lately there has been lot of emphasis on organizations to price importance on organizations’ intangible assets as tangible ones are easily imitable, not rare and effortlessly substitutable. One of which intangible assets that is deemed as utter imperious is knowledge. Knowledge is seen as source of epitome. Quality improvement induces a learning approach that enables problem solving to take place concurrently which significantly improves and sustain organizational performance (Mukherjee et al., 1998; Sitkin et al., 1994).
The eminent quality management practice in extant and of rising significance is Lean Six Sigma (George, 2002; Pande et al., 2000; Pyzdek, 2003), poised as a critical business tool of the 21st century by some (Mader, 2009; Pepper & Spedding, 2010) and of the most important business or process improvement technique available today (Spector, 2006).

On a scholarly note, apart from business success, engineering enhancement and other technical studies, studies in Six Sigma had span within the context of learning (Arumugam et al., 2013; Choo et al., 2007) and knowledge management (Anand et al., 2010; Linderman et al., 2006; Linderman et al., 2010; Linderman et al., 2003; Molina et al., 2007; Sin et al., 2015). As these research shows, the business economic condition is moving entirely to a direction of a knowledge based industry. Firms in need of sustainability are in need of knowledge workers and equip themselves an arsenal of this ammunition. Lean and Six Sigma to many firms are not alien to and had been in the industry for long and well. However the essence of usage of this principle merely as a tool alone is likely to yield any benefit that sustains competitiveness nor that offers the knowledge sought after. As Edward Deming articulated, constancy with a sense of purpose is imperative. Firms need to comprehend to what drives these principles and methodologies, what are the underlying theories compatible to the functionalities of these, how exactly firms need to utilize these philosophies are all questions in a glass half full or half empty milieu.

By: Dr. Satnam Singh Budwal, PhD (Managing Director MBizM Group Malaysia & Australia)

& Muraliraj Jagantheran (M.Ec, ICBB) (PhD Candidate – PhD (Economics), University Malaya)