Abstract - Research objective is to survey Six Sigma implementation in Malaysian Multinational Corporation (MNCs) and identify the Critical Success Factors (CSFs) these companies use in ensuring its successful implementation. Research is anchored to the method of exploratory survey conducted via online among MNCs using Six Sigma in Malaysia. Preliminary findings of influencebreakdown of each CSF results in with ManagementCommitment (85%), Absorption (95%), Cultural Influence(85%), Project/Process Assessment (100%) Training &Awareness (100%). Detailed statistical analysis concluded CSFs that have direct impact in Six Sigma implementation are Management Commitment, Absorption, Project/ProcessAssessment and Training & Awareness.Wehave through this study established a clear guideline on CSFs necessary to adopt in order to ensure the correct implementation of Six Sigma in organizations. It is envisaged that local Malaysian companies will use this thesis findings as reference on the initiative of implementing Six Sigma methodologies in their business.

Key words: Six Sigma, Critical Success Factors (CSFs), Total Quality Management (TQM), Continuous Improvement (CI), Research Method (RM)

I. INTRODUCTION

Malaysia is visioned to be a fully developed status country by year 2020 [1]. To achieve the planned progression there is a fundamental need for the business organization operating in the country to deliver consistent and quality productivity throughput. This requirement is a must to ensure our competitiveness in the business world which has become more integrated and globalized [2].

Thus there is an increasing need for companies in Malaysia to embrace global productivity methods and work cultures that have proven to bring success to MNCs in their operations around the world as shown in companies such as GE, Motorola and Toyota [3, 4, 5].

Implementation of productivity tools in multinational companies in ensuring successful business is well documented [6]. Two fundamental methods used by these companies to improve their productivity are to eliminate waste and to reduce variations in their processes by applying appropriate productivity tools such as TQM, Six Sigma and Lean methodologies [7].

Earlier studies into the field of productivity methodology and tools in Malaysia touched on the application of TQM in Malaysia. In a literature review published on TQM implementation in Malaysia by Lau

and Idris [8] concluded that though the TQM is a proven systematic approach to the improvements in global business, the lack of information and data on CSFs were hindering the implementation of TQM effectively and successfully. Thiagarajan [9] concluded that a framework should provide useful advice in the critical first two to three years of TQM implementation as a practical and systematic tool for assessing, measuring, and evaluating the progress made.

This research is embarked with vision to bring clarity on productivity methodologies and identify the key Critical Success Factors (CSFs) that is essential for the successful implementation of the tools in local organizations. In ensuring a firm grip on the research path, this study uses the following procedures [10]:

a) Assessment of the relevant existing knowledgeb) Formulation of the concepts and proportions.c) Statement of hypothesisd) Design of research to test the hypothesise) Meaningful data collectionf) Analysis and evaluation of the datag) Conclusion of the factual findings.

II. LITERATURE REVIEW AND THEORETHICAL FRAMEWORK

CSFs is defined as an element that is necessary for an organization or project to achieve its mission and it is a critical factor or activity required for ensuring the success of a company or an organization [11,12]. CSFs are required to ensure success of an organization; therefore it must be given special and continual attention to bring about high performance. CSFs include issues vital to an organization's current operating activities and to its future success [13].

The method of identifying CSFs as a basis for determining the information needs was proposed by Daniel [11]. The idea mooted was that in any organization certain factors will be critical to the success of that organization, in the sense if objectives associated with the factors are not achieved the organization will fail [14].Huotari and Wilson [14] wrote that the value of the CSFsapproach is in identifying organizational objectives and relating the information needs of personnel in various positions to achieve those objectives. Its further stressed that proposed CSFs approach should be used as integralpart of thought process methods in determining the needs

Critical Success Factors in Six Sigma Implementation A Case Study of MNCs in Malaysia

S.Sivakumar and K.MuthusamyOpen University Malaysia, Kuala Lumpur. Malaysia

(sivakumar.suppremaniam@gmail.com)

978-1-4577-0628-8/11/$26.00 2011 IEEE 536

of the organization and in contributing to the design of systems that aid competitive advantage.

Six Sigma was developed at Motorola in 1980 [15].2000). Wyper and Harrison [16] interpreted Six Sigma as a useful management philosophy and problem-solving methodology that is a direct extension of TQM. Further research studies by Bailey [17] concluded that it is in fact that Six Sigma has a much better record of effectiveness than TQM, lean enterprise and re-engineering. Bhuiyan and Baghel [18] on continuous improvements (CI)concluded that there is always a need for research in the field of hybrid CI methodologies that are developed in present years such as Six Sigma Plus which is a combination of Six Sigma and Lean tools to ensure productivity tools effectiveness are continuously improved to provide improved results to an organization implementing it.

This research was guided by a theoretical framework as shown in Figure 1. Its gathered from previous concluded research studies of fellow researchers in this field [3, 7, 19,20, 21, 22].

Fig. 1. Theoretical Framework

The hypotheses will be analysed as per the following fiveCSFs framework:

a) Management commitment involvement , (MC)b) Six Sigma level of absorption into the

organization i.e. departments, clients and supplier involvements, (AB)

c) Assessment process of all Six Sigma projects within the organizations. i.e. Project management and selection, reviews, tracking and after completion monitoring, (AS)

d) Training structure for continuous awareness, (TR)

e) Cultural Influence, (CI)

One resultant output or outcome of this research that is to be concluded will be which one individual CSF or multiple CSFs of the abovementioned CSFs will contribute significantly to the Six Sigma implementation within the organization. The above mentioned theoretical

model will be used as benchmarking reference against the survey results to ensure consistency in processing the data acquired. Our working hypothesis as such will be:Hypothesis 1Ho: Six Sigma implementation successes in Malaysia aredirectly impacted by the Management Commitment and involvements.Ha: Management Commitment and involvements does not contribute to Six Sigma implementation success in Malaysia.Hypothesis 2Ho: Six Sigma implementation successes in Malaysia aredirectly impacted by the Six Sigma level of Absorptioninto the organization.Ha: Six Sigma level of Absorption into the organization does not contribute to Six Sigma implementation success in Malaysia.Hypothesis 3Ho: Six Sigma implementation successes in Malaysia aredirectly impacted by the Assessment process of all Six Sigma projects within the organization.Ha: Assessment process of all Six Sigma projects within the organization does not contribute to Six Sigma implementation success in Malaysia.Hypothesis 4Ho: Six Sigma implementation successes in Malaysia aredirectly impacted by the Training and Awareness.Ha: Training and Awareness does not contribute to Six Sigma implementation success in Malaysia.Hypothesis 5Ho: Six Sigma implementation successes in Malaysia aredirectly impacted by the Cultural Influence.Ha: Cultural Influence does not contribute to Six Sigma implementation success in Malaysia.

III. METHODOLOGY

The path of this research will be anchored to the method of exploratory study on the topic focusing on web based survey internet and email corresponded questionnaire method[7, 20].

The questionnaires developed were look into two main aspects of the MNCs:

a) The company profile such as duration of operationand percentage of local content within its operations etc.

b) Implementations of Six Sigma application in the companies.

To ensure the objective of the research is obtained in timely manner and meets all its goals and to have acorrect basis to design a questionnaire for this survey, we took out a very valuable guide by Robert [23] an extract of his guide to design of questionnaire. With this guide, from the literature review and theoretical framework, a 13items questionnaire on a Likerts scale of 1 to 5 was developed.

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A. Pilot run Survey Questionnaire

To ensure core objective of reducing the amount of uncertainty in exploratory studies in this research, a pilot run was done for this questionnaire on four individual members from different departments in a same organization. To ensure validity of these replies a Master Black belt from MNC organisation was interviewed to help confirm the findings and fine tune the questionnaire further. Upon confirmation of the questionnaire survey completion, the questionnaires were then revised to include all the comments received.

B. Population and Sample Size

This first step helped this research to identify all the local MNCs in Malaysia and create a reference contact database for survey deployment. Internet search for MNCs worldwide using Six Sigma application was done from which a database of 104 companies was compiled.The database was further filtered by cross referencing to their affiliates operating in Malaysia to define the population size of the subject researched. The cross reference exercise results a list of 25 companies operating in Malaysia. These companies were then contacted via phone to determine the focal contact person for Six Sigma initiative respectively. Upon completing the interviews with the focal person identified, the list was reduced to 22because 3 of these companies only have small sales offices located in Malaysia.

Due to the small size of the population studied for this research, further literature studies were undertook to understand the effect of small population studies and howother similar studies were conducted and what analytical methods were used. Sample-size problems are context-dependent, how important it is to increase the sample size to account for such uncertainty depends on practical and ethical criteria. Moreover, sample size is not always the main issue; it is only one aspect of the quality of a study design[24]. Israel[25]suggests thatusing the entire population as the sample as census is attractive for small populations (e.g. 200 or less).Thus we remodelled our research from a survey to census study.Online questionnaires were sent to all 22 companies that represent the entire population from which 20 completed census responses were received that translates to 91% return rate [26].

IV. RESULTS AND DISCUSSION

Figure 2 represents census findings graphically for the five CSFs. It provides the influence breakdown of each CSF with Management Commitment (85%), Absorption (95%), Cultural Influence (85%), and Project/Process Assessment (100%) Training & Awareness (100%).

Fig. 2. Graphical Representation of census results

Next, a two-level full factorial designwith five CSFs (MC, AS, AB, TR & CI) was designed [27].Five factors powered by two testing produced 32 factorial points (25=32).

Table 1 summaries the results from the test conducted. Preliminary finding from this data indicates that Training and Awareness (TR) has the most significant effect while Cultural Influence (CI) has the least significant effect. Agraphical analysis was used to understand and identify the significant of the factors in influencing the data measured.

A normal effects plot in Figure 3 was drawn to compare the relative magnitude and the statistical significance of both main and interaction effects. The cut-off line is where the points would be expected to fall if all effects were zero. The factors that do not fall near the line usually signal significant effects. These factor effects are larger and generally further from the fitted line than unimportant effects. From this graph, the significant factors are labeled in square block. There are four significant effects identified graphically, namely MC, AB, AS and TR. Training and Awareness(TR) has the largest effect because it lies furthest from the cut off line.

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TABLE IEFFECTS AND COEFFICIENT TABLE

50403020100-10-20-30-40

99

95

90

80

7060504030

20

10

5

1

Effect

Percen

t

A MCB C IC A BD A SE TR

Factor Name

Not SignificantSignificant

Effect Type

E

D

CA

Normal Plot of the Effects(response is SUCCESS, Alpha = 0.05)

Lenth's PSE = 14.0625

Fig. 3. Normal Plot of the Effects

Next, Cultural Influence (CI) was removed and refitsthe model by excluding all related non-significant interaction terms. Table II summaries the results from the test conducted. The results concluded that only the main effects (MC, AS, AB& TR) are significant.

The P column in Table III contains p-values for each of the possible interaction of the factors that were the most significant CSFs in the earlier analysis in Table II. All these factors have p-values less than the level of 0.05;as such the factors identified are correct as good CSFs for the successful implementation of the Six Sigma in the Malaysias MNCs. However, it was observed that there are no interaction factors which are significant as there is no evidence that the effect of any factor depends on the level of any other factor, therefore there is no significant interaction effect as reflected by the statistical result in Table III.

TABLE IIESTIMATED EFFECTS AND COEFFICIENT FOR SUCCESS

Term Effect Coeff. PConstant 54.688 0MC 34.375 17.188 0.012AB 34.375 17.188 0.012AS 46.875 23.437 0.001TR 34.375 17.187 0.012MC*AB -3.125 -1.563 0.8MC*AS -3.125 -1.563 0.8MC*TR -3.125 -1.563 0.8AB*AS -3.125 -1.563 0.8AB*TR -3.125 -1.562 0.8AS*TR -3.125 -1.562 0.8MC*AB*AS -15.625 -7.812 0.215

MC*AB*TR -3.125 -1.562 0.8

MC*AS*TR -15.625 -7.812 0.215

AB*AS*TR -15.625 -7.813 0.215

MC*AB*AS*TR 9.375 4.687 0.45

TABLE IIIANALYSIS OF VARIANCE FORSUCCESS

Source DF Seq SS F PMain Effects 4 45937.5 9.8 0

2-Way Interactions

6 468.8 0.07 0.998

3-Way Interactions

4 5937.5 1.27 0.324

4-Way Interactions

1 703.1 0.6 0.45

Residual Error 16 18750

Pure Error 16 18750Total 31 71796.9

In conclusion, a mathematical model was created toreflect the current research results of the CSFs in Six Sigma Implementation. The model was created using the coefficients from Table I to construct an equation representing the relationship between the response and the factors. The concluding regression equation is as below:

Six Sigma Implementation Strength = 54.688 + 17.188(Management Commitment)+ 17.188(Absorption) + 23.437(Assessment) + 17.187(Training& Awareness)

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V. CONCLUSION

The mathematical formula confirms our earlier hypothetical reference that in order to successful Six Sigma implementation, these four criterias are essential:

a) Management Commitment,b) Absorption,c) Project/Process Assessment andd) Training& Awareness

While Training and Awareness, Management Commitment and Absorption forms the three pillars in the implementation of Six Sigma stage, continuous Project/Process Assessment of all stage of implementation ensures its implementation consistency. By concluding the above, it also has proven through statistical analysis that Cultural Influence does not have significant impact to this implementation phase. It can be concluded that embracement of productivity methodology such as Six Sigma in our local organization can be done effectively if these four CSFs identified as significant are present consistently.

Six Sigma methodologies as reviewed and concluded by many fellow researchers and peers will help to position a business into a prudent competitive Model [3,7].However its widely also known that most of the productivity or business improvement model has failedduring or after early phase of implementation mainly due to lack of understanding of the tools, cultural rejection of the idea or partial implementations for quick return of the bottom line savings [3].

It is envisaged that the results from this research will be used as a foot print for local Malaysian companies such as SMEs in applying Six Sigma and other best practices derived from fellow research studies into their business model. This will help to increase our local SMEs competitiveness, product quality, lean and efficient processes. This will in turn make the business more profitable with prudent cost management [28].

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