A Lean Six Sigma framework for the reduction of ship loading commercial time in the iron ore pelletising industry

Jose Arturo Garza-Reyes,Mustafa Al-Balushi,Jiju Antony,Vikas Kumar

doi:10.1080/09537287.2016.1185188

Abstract

Evidence suggests that specifically designed frameworks to implement Lean Six Sigma (LSS) projects to tackle particular problems are more effective than ‘generic’ versions. This paper proposes an implementation framework to effectively deploy LSS to improve a key operation and performance indicator, i.e. ship loading commercial time, of one of the largest world producer of iron ore. This article therefore contributes with a refined framework to effectively implement LSS, and documents its successful application and effectiveness within the context of the case organisation. The LSS framework and project contributed in helping the studied organisation to improve both the capability of its ship loading process and commercial time by more than 30%, resulting in operational savings in the range of $300,000 USD per year. The systematic nature of the framework proposed also helped the organisation to establish a standardised routine to improve its operations. Managerial implications exposing the challenges faced during the implementation of LSS are also discussed to serve as lessons learnt to be considered in other LSS projects. Managers and engineers incharge of improving operations and processes can benefit from this paper as it can be used as a guide to direct the conduction of LSS projects and the empirical application of its principles and tools.

Highlights

Volatile economies and market environments have a direct effect on the demand of commodities, which in turn have an impact on the profit margin of their producers
There seems to be a large amount of Lean and/or Six Sigma projects deployed in the iron ore industry (e.g. Paloma Consulting, 2016; Jacobsen, 2016; Implementation Engineers, 2016; Shinka Management, 2012, etc.), scientific published evidence of the application of their principles and tools still remains limited in this specific industrial sector (Indrawati and Ridwansyah, 2015; Hokoma et al, 2010; Chinbat and Takakuwa, 2008)
No evidence exists of the combination and integration of Lean and Six Sigma principles and tools i.e., through Lean Six Sigma, in the iron ore industry

Summary

Introduction

Volatile economies and market environments have a direct effect on the demand of commodities, which in turn have an impact on the profit margin of their producers. This paper presents an action research-based case study where a specific implementation framework was designed, following the five traditional stages of DMAIC and defining the sequence of some activities and application of some LSS tools, to reduce the commercial loading time of ships of a large producer of iron ore. In the case of this research, and as suggested by Coughlan and Coghlan (2002), the action research approach proved to be a valuable method to test the proposed LSS implementation framework and draw conclusions regarding its effectiveness and to document and report the experiences and lessons learnt by the authors while conducting the improvement of the ship loading commercial time. Action research was an ideal research strategy that contributed in enriching the body of knowledge in the LSS field

Organisation’s background

The Define phase

The Measure phase

The Control phase

Findings

Discussion and Managerial