Analyzing the Lean Six Sigma enabled organizational performance to enhance operational efficiency

Abstract

PurposeThe aim of this analysis is to review the Indian manufacturing organizations practicing Lean Six Sigma (LSS) tools/techniques with an objective of monitoring the performance of an organization and to develop recommendation for strategies to benchmark organizational operational efficiency.Design/methodology/approachThis study offers insights of the LSS performance measurement aspects of the Indian manufacturing organizations based on Data envelopment analysis (DEA) approach. The five inputs and two outputs are considered on the basis of literature review and discussed with the practitioners.FindingsIn this analysis, the relative efficiency score of 18 Indian manufacturing organizations has been determined in order to assist evaluation of the impact of monetary investment on the outputs. The present analysis not only investigates the optimum level of input variables but also lays down a significant observation that an organization having higher profit and inventory turnover ratio is not necessarily an efficient organization.Practical implicationsThe results assist to determine the best practice units, potential source of inefficiency and deliver beneficial data for the consistent enhancement of the operational efficiency. The DEA results assist managers and decision makers to derive appropriate strategies to enhance their performance with reference to the efficient organization and to regard it as their role model.Originality/valueThis analysis renders a DEA based framework of LSS practicing Indian manufacturing organizations. The framework is unique in terms of its input-outputs variable selection and measurement procedure.