Lean Six Sigma, strategic control systems, and organizational performance for automotive suppliers

TLDR: In this paper, the authors developed a model that incorporated lean six sigma (LSS) implementation, strategic control system (SCS) and organizational performance (OP) in Malaysian automotive suppliers.

Abstract: Purpose The aim of this paper is to develop a model that incorporate lean six sigma (LSS) implementation, strategic control system (SCS) and organizational performance (OP) in Malaysian automotive suppliers. Design/methodology/approach A survey through questionnaire was conducted to determine the level of LSS implementation, SCS and OP measurement. In all, 252 sets of questionnaire were successfully collected that brought to 64.3 per cent response rate. Structural equation modeling (SEM) technique was adopted to analyze the data gathered from the survey. Exploratory factor analysis, reliability analysis and confirmatory factor analysis for testing the construct validity, test for reliability and model measurement were carried out. Findings This study has provided a comprehensive measurement instrument to implement the LSS practices, SCS and OP for Malaysian automotive suppliers. As a result, seven LSS constructs, four for SCS and four measures for OP have been identified. This research model is a mediator model in which it investigates whether the presence of SCS mediates the relationship between LSS and OP. The analysis result through the SEM method showed that SCS does not affect the relationship between LSS and OP. However, SCS is improving OP when coupled with LSS. Research limitations/implications This study has only focused on the structured relationship between LSS Construct, SCS and OP measures. It is possible for other factors in the LSS practices to be studied in future experiments such as total productive maintenance, culture change, role structure and project management skills. Originality/value Future researchers could apply the LSS, SCS and OP measurement as a benchmark for use and can be replicated in other industry or country in the world with minor modifications on the critical factors necessary to suit the goals of the organization, culture and business environment. It could also be used as a business excellence and supplier selection tool for practitioners and researchers.